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EXHIBIT 2.1.1
AMENDMENT NO. 1
TO
AGREEMENT AND PLAN OF MERGER
This Amendment No. 1 (this "Amendment"), dated as of January
12, 1995, to the Agreement and Plan of Merger, dated as of September 14, 1994
(the "Merger Agreement"), is by and among Food 4 Less, Inc., a Delaware
corporation ("F4L"), Food 4 Less Holdings, Inc., a California corporation ("F4L
Holdings"), Food 4 Less Holdings, Inc., a Delaware corporation ("F4L Holdings
Delaware"), Food 4 Less Supermarkets, Inc., a Delaware corporation ("F4L
Supermarkets"), Ralphs Supermarkets, Inc., a Delaware corporation ("Ralphs
Supermarkets"), and The Edward J. DeBartolo Corporation ("EJDC") and the other
stockholders of Ralphs Supermarkets (each a "Selling Stockholder").
Capitalized terms not otherwise defined herein have the meanings given to them
in the Merger Agreement.
WHEREAS, F4L, F4L Holdings, F4L Supermarkets, Ralphs
Supermarkets and the Selling Stockholders previously have entered into the
Merger Agreement, by which the parties agreed to merge F4L Supermarkets with
and into Ralphs Supermarkets (the "Merger") in accordance with the terms and
conditions of the Merger Agreement and Section 251 of the General Corporation
Law of the State of Delaware (the "GCL");
WHEREAS, the parties desire to amend certain provisions of
the Merger Agreement as more fully set forth herein;
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants herein contained, the parties hereto agree as follows:
1. Mergers of F4L into F4L Holdings and F4L Holdings
into F4L Holdings Delaware. Notwithstanding anything to the contrary contained
in the Merger Agreement, the parties acknowledge that on or prior to the
Closing Date, (a) F4L will be merged with and into F4L Holdings, the separate
existence of F4L (except as may be continued by operation of law) shall cease,
and F4L Holdings shall be the surviving corporation in such merger; and (b) F4L
Holdings thereupon will be merged with and into F4L Holdings Delaware, the
separate existence of F4L Holdings (except as may be continued by operation of
law) shall cease, and F4L Holdings Delaware shall continue as the surviving
corporation following such merger. F4L, F4L Holdings and F4L Supermarkets
represent and warrant that F4L Holdings Delaware is a wholly-owned subsidiary
of F4L Holdings having no assets and liabilities, and that the sole purpose of
the merger of F4L Holdings into F4L Holdings Delaware is to change the
jurisdiction of incorporation of F4L Holdings from California to Delaware. By
operation of the foregoing mergers, F4L Holdings Delaware shall assume all
liabilities and obligations of F4L and F4L Holdings under the Merger Agreement,
the Indenture and the Registration Rights Agreement, including without
limitation the obligation to issue the Debentures and to file with the SEC the
Shelf Registration Statement. From and after the merger of F4L Holdings into
F4L Holdings Delaware, all references in the Merger Agreement to "F4L Holdings"
shall be deemed to be references to F4L Holdings Delaware, and all
representations, warranties and covenants of F4L Holdings shall be
representations, warranties and covenants of F4L Holdings Delaware, as fully as
if they originally had been made by F4L Holdings Delaware.
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2. Additional Defined Terms.
(a) The definition of "Closing Date" in Section 1.1 of
the Merger Agreement is hereby amended to read as follows:
"Closing Date" shall mean March 15, 1995 or such
other date as promptly thereafter as of which all of the conditions
set forth in Articles VIII and IX shall have been satisfied or duly
waived or, if F4L and Ralphs Supermarkets shall mutually agree upon a
different date, the date upon which they, with the consent of EJDC,
shall have mutually agreed upon in writing.
(b) Section 1.2 of the Merger Agreement is hereby amended
to include the following terms defined in the amended Sections set forth
opposite such term:
Term Section
---- -------
Accrued Interest Amounts 2.6(e)
Acquisition Consideration 2.6(a)
Constituent Corporations 2.3
EAR 2.7
EAR Plan 2.7
Effective Date 2.4
Fractional Amounts 2.1(b)
Merger Consideration 2.6(a)
Option 2.7
Purchase Consideration 2.1(a)
Share Purchase 2.1(a)
Surviving Corporation 2.2
(c) All references in Articles III through XII of the
Merger Agreement to the "Merger Consideration" are hereby amended to read
"Acquisition Consideration."
(d) All references in the Merger Agreement to the
"Merger" are hereby deemed to incorporate by reference the "Share Purchase"
except where the context otherwise requires.
(e) All references in the Merger Agreement to the
"Agreement" and all references in this Amendment to the "Merger Agreement" are
hereby deemed to incorporate by reference this Amendment.
3. Amendment of Article II. Article II of the Merger
Agreement is hereby amended to read in full as follows:
"ARTICLE II
The Share Purchase and Merger
Section 2.1 The Share Purchase. On the Closing Date,
immediately prior to the filing of the certificate of merger with the Delaware
Secretary of State in accordance with Section 2.4 below:
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(a) F4L Holdings Delaware will purchase 12,184,418.99116
Shares (the "Share Purchase"), pro rata from the Selling Stockholders in
proportion to their respective holdings, for per Share consideration consisting
of $12.31060748 in cash and $8.2074 principal amount of Debentures (or the pro
rata portion of such cash and Debentures, in the case of fractional shares)
(collectively, and together with the cash amounts referred to in Section 2.1(b)
below, the "Purchase Consideration"). The Purchase Consideration payable to
each Selling Stockholder, and the number of shares to be sold by each of them
in the Share Purchase, is set forth in Schedule 2.1.
(b) Debentures will be issued only in denominations of
$1000 and integral multiples of $1000. A Selling Stockholder will not be
entitled to receive Debentures in principal amounts less than $1000, or in
principal amounts in excess of $1000 (or an integral multiple thereof) but less
than the next highest integral multiple ("Fractional Amounts"), but instead
will be entitled to receive cash in lieu of any such Fractional Amount.
(c) F4L Holdings Delaware will immediately contribute the
12,184,418.99116 Shares acquired in the Share Purchase to the capital of F4L
Supermarkets.
Section 2.2 The Merger. At the Effective Date,
immediately following the Share Purchase and in accordance with this Agreement
and the GCL (and subject to the provisions of Section 2.10 hereof), F4L
Supermarkets shall be merged with and into Ralphs Supermarkets, the separate
existence of F4L Supermarkets (except as may be continued by operation of law)
shall cease, and Ralphs Supermarkets shall continue as the surviving
corporation. As constituted from and after the Effective Date, Ralphs
Supermarkets hereinafter sometimes is referred to as the "Surviving
Corporation."
Section 2.3 Effect of the Merger. When the Merger has
been effected, the Surviving Corporation shall thereupon and thereafter possess
all the rights, privileges, immunities and franchises, of a public as well as
of a private nature, of F4L Supermarkets and Ralphs Supermarkets (the
"Constituent Corporations"); all property, real, personal and mixed, and all
debts due on whatever account and all choses in action, and all and every other
interest, of or belonging to or due each of the Constituent Corporations shall
be vested in the Surviving Corporation without further act or deed; and the
title to any real estate, or any interest therein, vested in F4L Supermarkets,
Ralphs Supermarkets or the Surviving Corporation shall not revert or be in any
way impaired by reason of the Merger. The Surviving Corporation shall
thenceforth be responsible and liable for all the liabilities and obligations
of each of the Constituent Corporations so merged; any claim existing or action
or proceeding pending by or against any of the Constituent Corporations may be
prosecuted as if the Merger had not taken place, or the Surviving Corporation
may be substituted in its place. The Surviving Corporation shall have all the
rights, privileges, immunities and powers and shall be subject to all the
duties and liabilities of a corporation organized under the GCL, and neither
the rights of creditors nor any liens upon the respective properties of the
Constituent Corporations and the Surviving Corporation shall be impaired by the
Merger; all with the effect set forth in the GCL.
Section 2.4 Consummation of the Merger. As soon as is
practicable after the satisfaction or waiver of the conditions hereinafter set
forth, the parties hereto will cause the Merger to be consummated by filing
with the Secretary of State of Delaware a certificate of merger in such form as
required by, and executed in accordance with, the relevant provisions of the
GCL (the time of such filing being the "Effective Date").
Section 2.5 Restated Certificate of Incorporation;
Bylaws; Directors and Officers. The Restated Certificate of Incorporation and
Bylaws of the Surviving Corporation shall be the Certificate
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of Incorporation and Bylaws of Ralphs Supermarkets, as in effect immediately
prior to the Effective Date, until thereafter amended as provided therein and
under the GCL, except that the Restated Certificate of Incorporation of the
Surviving Corporation shall provide for the authorized capitalization and for
the number of directors set forth in the certificate of merger filed with the
Delaware Secretary of State.
Section 2.6 Conversion of Securities. At the Effective
Date, by virtue of the Merger and without any action on the part of F4L
Supermarkets, Ralphs Supermarkets, the Surviving Corporation or the holder of
any of the following securities:
(a) Each Share (or fractional Share) issued and
outstanding immediately prior to the Effective Date, except for the Shares held
by F4L Supermarkets, shall be cancelled and extinguished and be converted into
and become a right to receive $20.51800748 in cash (or the pro rata portion of
such cash, in the case of fractional Shares) (collectively, the "Merger
Consideration," and together with the Purchase Consideration and the Accrued
Interest Amounts (as defined in Section 2.6(e) below), the "Acquisition
Consideration"). Each Selling Stockholder hereby waives all dissenters',
appraisal and other rights arising under Section 262 of the GCL (or comparable
provisions of any applicable laws of other jurisdictions) with respect to its
Shares in the Merger. The Merger Consideration payable to each Selling
Stockholder is set forth in Schedule 2.1. At the Effective Date, each Share
(or fractional Share) held by F4L Supermarkets shall be cancelled and
extinguished without payment of consideration.
(b) Each share of Common Stock, par value $0.01 per
share, of F4L Supermarkets issued and outstanding immediately prior to the
Effective Date shall be converted into and become one validly issued, fully
paid and nonassessable share of Common Stock of the Surviving Corporation.
Each share of Preferred Stock, par value $0.01 per share, of F4L Supermarkets
issued and outstanding immediately prior to the Effective Date shall be
cancelled and extinguished without payment of consideration.
(c) All notes and other debt instruments of the
Constituent Corporations which are outstanding at the Effective Date shall
continue to be outstanding subsequent to the Effective Date as debt instruments
of the Surviving Corporation, if permitted by their respective terms and
provisions.
(d) There shall be withheld from the cash consideration
set forth in Sections 2.1(a) and 2.6(a) any amounts lawfully required to be
withheld and paid over to any taxing authority with respect to any Selling
Stockholder (whether by reason of receipt of the Acquisition Consideration or
any other consideration received in, or in connection with, the transactions
contemplated by the Merger Agreement); it being agreed, however, that except as
otherwise required as a result of a change after the date hereof in law
(including court decisions), regulations or administrative interpretation
thereof: (i) if the Company provides a FIRPTA certificate as set forth in
Section 7.1(h) hereof (and F4L Supermarkets has no reason to believe that such
certificate is not true and complete), no portion of the cash consideration
shall be withheld pursuant to sections 897 and 1445 of the Code, and (ii) if
such Selling Stockholder provides an opinion of counsel in form and substance
reasonably satisfactory to F4L Supermarkets and to F4L Supermarkets' counsel to
the effect that no portion of the Acquisition Consideration to be received by
such Selling Stockholder is subject to withholding under sections 1441 or 1442
of the Code, no amount of the cash consideration shall be withheld pursuant to
sections 1441 or 1442 of the Code.
(e) If the Closing shall occur on or after March 16,
1995, the Acquisition Consideration payable to each Selling Stockholder shall
include an additional cash amount equal to the amount of simple interest
accrued on the Purchase Consideration (including the principal amount of Seller
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Debentures) and the Merger Consideration payable to such Selling Stockholder,
calculated on the basis of the number of full days elapsed from 8:00 a.m. (New
York time) March 16, 1995 to the Closing and prorated based on a 360-day year
(collectively, the "Accrued Interest Amounts"). The rate of interest
applicable to the Accrued Interest Amounts shall be (i) the rate announced from
time to time by Bankers Trust Company as then being its prime rate of interest
plus (ii) 1%.
Section 2.7 Ralphs Supermarkets Stock Options and Related
Matters. At or immediately prior to the Effective Date, each then outstanding
stock option (an "Option") to purchase Shares, heretofore granted under the
Ralphs Holding Company Nonqualified Stock Option Plan dated February 3, 1992
(whether or not such Option is then exercisable) shall be cancelled, exercised
or surrendered by the holder thereof, without payment of consideration for such
cancellation or surrender (or payment of Acquisition Consideration with respect
to any Shares acquired upon exercise thereof) in excess of $880,000 (including
the principal amount of any Debentures issued as Acquisition Consideration with
respect to Shares acquired upon exercise thereof). At or immediately prior to
the Effective Date, each then outstanding equity appreciation right (an "EAR")
heretofore granted pursuant to the Company's Equity Appreciation Plan, as
amended through the date hereof (the "EAR Plan"), will be paid in accordance
with its terms. In the event that F4L (or any of its subsidiaries) and the
holders of such options or EARs enter into any agreement to modify or cancel a
portion of the options or EARs held by such person in connection with the
consummation of the Merger, the Company will execute such documentation as may
be reasonably requested by F4L (or any of its subsidiaries) to reflect such
modification or cancellation.
Section 2.8 Closing. The Closing shall take place on the
Closing Date at 10:00 A.M., Los Angeles time, at the offices of Latham &
Watkins, 633 West Fifth Street, Los Angeles, California 90071, or at such other
time and place as shall be agreed upon by the parties. At the Closing (a) the
Selling Stockholders and Ralphs Supermarkets, as applicable, will deliver to
F4L Supermarkets (i) certificates representing 100% of the issued and
outstanding Shares, in accordance with the provisions of Section 2.9, (ii)
corporate minute books, stock transfer books and Bylaws of Ralphs Supermarkets,
(iii) certificates of each Selling Stockholder and of Ralphs Supermarkets
(signed on behalf of such Selling Stockholder or Ralphs Supermarkets, as
applicable, by the Chairman, the President or a Vice President of each of them)
to the effect that the conditions set forth in Article VIII hereof (but only
insofar as such conditions relate to such Selling Stockholder or Ralphs
Supermarkets, as applicable) have been satisfied (except as waived by F4L
Supermarkets), (iv) an opinion of Willkie Farr & Gallagher, counsel to Ralphs
Supermarkets and EJDC, who may rely, as to matters of California and Ohio law,
on an opinion of Troy & Gould, counsel to Ralphs Supermarkets and an opinion of
Squire, Sanders & Dempsey, counsel to EJDC, and an opinion of Milbank, Tweed,
Hadley & McCloy, special tax counsel to Ralphs Supermarkets, relating to the
matters set forth in Exhibit B, and opinions of counsel to each Selling
Stockholder other than EJDC, relating to the matters set forth in Exhibit C,
(v) the certificate of incorporation of Ralphs Supermarkets certified by the
Secretary of State of Delaware and certificates of good standing of Ralphs
Supermarkets in Delaware and California, (vi) incumbency certificates with
respect to the officers of Ralphs Supermarkets and of each Selling Stockholder,
(vii) the resignation of such members of the Board of Directors of Ralphs
Supermarkets and Ralphs Grocery as shall be specified by F4L Supermarkets in
writing at least ten days prior to the Closing Date and (viii) such other
certificates, instruments or other documents as F4L Supermarkets may reasonably
request, in each case in form and substance reasonably satisfactory to F4L
Supermarkets; and (b) F4L Holdings Delaware and F4L Supermarkets, as
applicable, will cause to be delivered to each Selling Stockholder (i) the cash
portion of the Acquisition Consideration due to it by wire transfer in
immediately available funds to an account specified by such Selling
Stockholder, (ii) the Debenture portion of the Acquisition Consideration due to
it by delivery of one or more Debentures in appropriate principal amount, (iii)
certificates of F4L
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Holdings Delaware and F4L Supermarkets (signed on behalf of each of them by the
President or a Vice President of each of them) to the effect that the
conditions set forth in Article IX hereof have been satisfied (except as waived
by Ralphs Supermarkets and the Selling Stockholders), (iv) an opinion of Latham
& Watkins, counsel to F4L Holdings Delaware and F4L Supermarkets relating to
the matters set forth in Exhibit D, (v) the certificates of incorporation of
F4L Holdings Delaware and F4L Supermarkets certified by the Secretary of State
of Delaware and certificates of good standing of F4L Holdings Delaware in
Delaware and F4L Supermarkets in Delaware and California, (vi) incumbency
certificates with respect to the officers of F4L Holdings Delaware and F4L
Supermarkets, (vii) the solvency opinion referred to in Section 9.8, and (viii)
such other certificates, instruments or other documents as Ralphs Supermarkets
or any Selling Stockholder may reasonably request, in each case in form and
substance reasonably satisfactory to Ralphs Supermarkets or such Selling
Stockholder.
Section 2.9 Exchange of Certificates.
(a) From and after the Effective Date, each holder of a
certificate or certificates representing Shares shall surrender such
certificate or certificates to the Surviving Corporation, duly endorsed without
recourse except as provided herein, as the Surviving Corporation may require,
and shall receive in exchange therefor the Acquisition Consideration. At the
Effective Date, the holder of a certificate or certificates representing Shares
shall have no rights with respect to such Shares other than to surrender such
certificate or certificates pursuant to this Section 2.9. No interest shall
accrue on the Acquisition Consideration. If the Acquisition Consideration (or
any portion thereof) is to be delivered to any person other than the person in
whose name the certificate or certificates representing Shares surrendered in
exchange therefor is registered, it shall be a condition to such exchange that
the person requesting such exchange shall pay to the Surviving Corporation any
transfer or other taxes required by reason of the payment of the Acquisition
Consideration to a person other than the registered holder of the certificate
or certificates so surrendered, or shall establish to the satisfaction of the
Surviving Corporation that such tax has been paid or is not applicable.
Notwithstanding the foregoing, neither the Surviving Corporation nor any other
party hereto shall be liable to a holder of Shares for any Acquisition
Consideration delivered to a public official pursuant to applicable abandoned
property, escheat and similar laws.
(b) After the Effective Date, there shall be no transfers
of any Shares on the stock transfer books of the Surviving Corporation. If,
after the Effective Date, certificates formerly representing Shares are
presented to the Surviving Corporation, they shall be cancelled and exchanged
for the Acquisition Consideration in accordance with this Section 2.9.
Section 2.10 Alternative Transaction Structure. At the
election of F4L, the transactions contemplated by this Agreement may be
effected through a merger of a newly-formed shell subsidiary of F4L
Supermarkets with and into Ralphs Supermarkets in lieu of the Merger of F4L
Supermarkets with and into Ralphs Supermarkets, or through such other form of
transaction as F4L may determine to be appropriate, provided that such merger
or other form does not result in any consequences to any Selling Stockholder
which are less favorable to such Selling Stockholder than the consequences
which would have resulted from the Merger, and appropriate conforming changes
to this Agreement satisfactory to the Selling Stockholders are made."
4. Amendment of Section 6.14. Section 6.14 of the
Merger Agreement is hereby amended by deleting the last sentence of the first
paragraph hereof and inserting the following two sentences: "F4L Holdings
agrees that it will, or that it will cause F4L Supermarkets or another
Affiliate to, effective as of the Closing Date, execute a guarantee of the
obligations of Ralphs Supermarkets and
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its subsidiaries in favor of the DIR, which guarantee shall be similar to the
EJDC Guarantee and shall cover the period from and after the Closing Date.
EJDC agrees that it will, immediately prior to the Closing Date, notify the DIR
that the EJDC Guarantee will be terminated as of the Closing Date with respect
to periods on or after the Closing Date, and F4L Holdings agrees that it will,
or that it will cause F4L Supermarkets or another Affiliate to, execute on or
prior to the Closing Date such documents as are reasonably necessary to
effectuate such termination, all in accordance with DIR procedures."
5. Amendment of Article IX. Article IX of the Merger
Agreement is hereby amended to add the following new Section 9.13 at the end
thereof:
"Section 9.13 Ralphs Grocery Merger. The Selling
Stockholders shall have received evidence reasonably satisfactory to them that
all of the conditions precedent to the consummation of the merger of Ralphs
Grocery with and into the Surviving Corporation have been satisfied or waived
and that such merger will be consummated immediately following the
effectiveness of the Merger on the Closing Date."
6. Amendment of Section 11.1(b). Section 11.1(b) of the
Merger Agreement is hereby amended (i) to delete the date "January 16, 1995"
appearing in the second line thereof and to substitute in its place the date
"March 31, 1995" and (ii) to delete the date "March 31, 1995" appearing in the
third line thereof and to substitute in its place the date "April 30, 1995."
7. Schedules. Schedule 2.5(a) of the Merger Agreement
is hereby deleted and the attached Schedule 2.1 is hereby substituted in its
place and incorporated herein by reference.
8. Exhibit A. Exhibit A (Form of Indenture) of the
Merger Agreement is hereby deleted and the attached Exhibit A (Form of
Indenture) is hereby substituted in its place and incorporated herein by
reference.
9. Exhibit G. Exhibit G (Form of Registration Rights
Agreement) of the Merger Agreement is hereby amended as more fully described
below.
(a) The following sentence is hereby added at the end of
Section 2 of the Registration Rights Agreement: "It is understood that a
pledge to an institution or to an agent for one or more institutions made at
any time while the Shelf Registration Statement is effective shall be deemed to
be a pledge pursuant to an effective Registration Statement."
(b) Section 7(l) is hereby amended to read as follows:
"(l) cause all Registrable Securities covered by the Shelf Registration
Statement to be listed on each securities exchange on which similar securities
issued by the Company or any of its subsidiaries are then listed;"
10. Terms and Conditions. Except as specifically
modified herein, all other terms and conditions of the Merger Agreement shall
remain in full force and effect.
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IN WITNESS WHEREOF, this Amendment has been signed by or on
behalf of each of the parties as of the day first above written.
"F4L": FOOD 4 LESS, INC.
By: _________________________
Name:
Title:
"F4L HOLDINGS": FOOD 4 LESS HOLDINGS, INC.
By: _________________________
Name:
Title:
"F4L HOLDINGS DELAWARE": FOOD 4 LESS HOLDINGS, INC.
By: _________________________
Name:
Title:
"F4L SUPERMARKETS": FOOD 4 LESS SUPERMARKETS, INC.
By: _________________________
Name:
Title:
"RALPHS SUPERMARKETS": RALPHS SUPERMARKETS, INC.
By: _________________________
Name:
Title:
"SELLING
STOCKHOLDERS": THE EDWARD J. DEBARTOLO CORPORATION
By: _________________________
Name:
Title:
S-1
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CAMDEV PROPERTIES INC.
By: _________________________
Name:
Title:
BANK OF MONTREAL
By: _________________________
Name:
Title:
BANQUE PARIBAS
By: _________________________
Name:
Title:
FEDERATED DEPARTMENT STORES, INC.
By: _________________________
Name:
Title:
S-2
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SCHEDULE 2.1
CONSIDERATION TO RSI SHAREHOLDERS
# shares purchased # shares convt'd mrgr cash purch price debentures
# RSI shares owned (Section 2.1) (Section 2.6) (Section 2.1(a)) (Section 2.1(a))
------------------ ------------------ --------------------- ----------------- --------------
EJDC 15,440,600.00000 7,352,666.66429 8,087,933.33571 $ 90,515,793.24 $ 60,346,000
Camdev Properties, Inc. 3,276,681.37923 1,560,324.46579 1,716,356.91344 $ 19,208,542.04 $ 12,806,000
Bank of Montreal 2,591,815.11029 1,234,197.67117 1,357,617.43912 $ 15,193,723.08 $ 10,129,000
Banque Paribas 2,591,815.11029 1,234,197.67117 1,357,617.43912 $ 15,193,723.08 $ 10,129,000
Federated Department Stores, Inc. 1,686,368.28990 803,032.51874 883,335.77116 $ 9,885,818.13 $ 6,590,000
---------------- ---------------- ---------------- --------------- ------------
Total 25,587,279.88971 12,184,418.99116 13,402,860.89855 $149,997,599.57 $100,000,000
cash in lieu of fract tot cash purch price cash payable in merger cash total
(Section 2.1(b)) (Section 2.1) (Section 2.6) (purch + mrgr)
--------------------- -------------------- ---------------------- ---------------
EJDC $ 276.38 $ 90,516,069.62 $165,948,276.68 $256,464,346.30
Camdev Properties, Inc. $ 207.02 $ 19,208,749.06 $ 35,216,223.99 $ 54,424,973.05
Bank of Montreal $ 553.97 $ 15,194,277.05 $ 27,855,604.77 $ 43,049,881.82
Banque Paribas $ 553.97 $ 15,194,277.05 $ 27,855,604.77 $ 43,049,881.82
Federated Department Stores, Inc. $ 809.09 $ 9,886,627.23 $ 18,124,289.96 $ 28,010,917.19
--------- --------------- --------------- ---------------
Total $2,400.43 $150,000,000.00 $275,000,000.17 $425,000,000.17
Per share amounts
Purchase price
(Section 2.1)
--------------
cash $12.3106074800
debentures $ 8.2074000000
--------------- --------------
Total $20.5180074800
Merger consideration
(Section 2.6)
--------------------
cash $20.5180074800
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SCHEDULE 2.1
CONSIDERATION TO RSI SHAREHOLDERS
cash purch $150,000,000.00
deb purch $100,000,000.00
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EXHIBIT A
- - -------------------------------------------------------------------------------
FOOD 4 LESS HOLDINGS, INC.
AND
NORWEST BANK MINNESOTA, N.A.
AS TRUSTEE
________
INDENTURE
Dated as of ___________ __, 1995
________
$100,000,000
13% Senior Subordinated Pay-in-Kind Debentures due 2007
- - -------------------------------------------------------------------------------
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CROSS-REFERENCE TABLE
TIA INDENTURE
Section Section
- - ------- ---------
310(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(a)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(a)(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.8; 7.10; 13.2
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
311(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
312(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.5
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.3
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.3
313(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.6
(b)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.6
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.6; 13.2
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.6
314(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.10; 13.2
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.2; 13.4
(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.2; 13.4
(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.5
(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
315(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1(b)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.5; 13.2
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1(a)
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1(c)
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.11
316(a)(last sentence) . . . . . . . . . . . . . . . . . . . . . . . . . . 2.9
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.5
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.4
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.7
317(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.8
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.9
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.4
318(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.1
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.1
- - -----------------------
N.A. means Not Applicable
NOTE: This Cross-Reference Table shall not, for any purpose,
be deemed to be a part of the Indenture.
14
TABLE OF CONTENTS
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ARTICLE I - DEFINITIONS AND INCORPORATION BY REFERENCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2. Incorporation by Reference of TIA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 1.3. Rules of Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE II - THE SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 2.1. Form and Dating . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 2.2. Execution and Authentication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 2.3. Registrar and Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 2.4. Paying Agent To Hold Assets in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 2.5. Securityholder Lists . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 2.6. Transfer and Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 2.7. Replacement Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 2.8. Outstanding Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 2.9. Treasury Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 2.10. Temporary Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 2.11. Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 2.12. Defaulted Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 2.13. CUSIP Number. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE III - REDEMPTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 3.1. Notices to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 3.2. Selection of Securities To Be Redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 3.3. Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 3.4. Effect of Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 3.5. Deposit of Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 3.6. Securities Redeemed in Part . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
ARTICLE IV - COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 4.1. Payment of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 4.2. Maintenance of Office or Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 4.3. Limitation on Restricted Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 4.4. Corporate Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 4.5. Payment of Taxes and Other Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 4.6. Maintenance of Properties and Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 4.7. Compliance Certificate; Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
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Section 4.8. Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 4.9. SEC Reports and Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 4.10. Waiver of Stay, Extension or Usury Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 4.11. Limitation on Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 4.12. Limitation on Incurrences of Additional Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 4.13. Limitation on Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 4.14. Limitation on Change of Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 4.15. Limitation on Asset Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 4.16. Limitation on Senior Subordinated Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 4.17. Limitation on Preferred Stock of Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 4.18. Limitation on Dividend and Other Payment Restrictions Affecting Subsidiaries . . . . . . . . . . . . . 38
ARTICLE V - SUCCESSOR CORPORATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 5.1. When Holdings May Merge, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 5.2. Successor Corporation Substituted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
ARTICLE VI - DEFAULT AND REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 6.1. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 6.2. Acceleration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 6.3. Other Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 6.4. Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 6.5. Control by Majority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 6.6. Limitation on Suits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 6.7. Rights of Holders To Receive Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 6.8. Collection Suit by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 6.9. Trustee May File Proofs of Claim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 6.10. Priorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 6.11. Undertaking for Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
ARTICLE VII - TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 7.1. Duties of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 7.2. Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 7.3. Individual Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 7.4. Trustee's Disclaimer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 7.5. Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 7.6. Reports By Trustee to Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 7.7. Compensation and Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 7.8. Replacement of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
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Section 7.9. Successor Trustee by Merger, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 7.10. Eligibility; Disqualification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 7.11. Preferential Collection of Claims Against Holdings . . . . . . . . . . . . . . . . . . . . . . . . . . 50
ARTICLE VIII - LEGAL DEFEASANCE AND COVENANT DEFEASANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 8.1. Option to Effect Legal Defeasance or Covenant Defeasance . . . . . . . . . . . . . . . . . . . . . . . 50
Section 8.2. Legal Defeasance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 8.3. Covenant Defeasance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 8.4. Conditions to Legal or Covenant Defeasance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 8.5. Deposited Money and U.S. Government Obligations to be Held in Trust;
Other Miscellaneous Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 8.6. Repayment to Holdings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 8.7. Reinstatement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
ARTICLE IX - AMENDMENTS, SUPPLEMENTS AND WAIVERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 9.1. Without Consent of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 9.2. With Consent of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 9.3. Compliance with TIA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 9.4. Revocation and Effect of Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 9.5. Notation on or Exchange of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 9.6. Trustee To Sign Amendments, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
ARTICLE X - MEETINGS OF SECURITYHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 10.1. Purposes for Which Meetings May Be Called . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 10.2. Manner of Calling Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 10.3. Call of Meetings by Holdings or Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 10.4. Who May Attend and Vote at Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 10.5. Regulations May Be Made by Trustee; Conduct of the Meeting; Voting Rights; Adjournment . . . . . . . . 59
Section 10.6. Voting at the Meeting and Record To Be Kept . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Section 10.7. Exercise of Rights of Trustee or Holders May Not Be Hindered or Delayed by Call of Meeting . . . . . . 60
ARTICLE XI - SUBORDINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Section 11.1. Securities Subordinated to Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Section 11.2. No Payment on Securities in Certain Circumstances . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Section 11.3. Securities Subordinated to Prior Payment of All Senior Indebtedness on Dissolution,
Liquidation or Reorganization of Holdings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
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Section 11.4. Holders to Be Subrogated to Rights of Holders of Senior Indebtedness . . . . . . . . . . . . . . . . . 63
Section 11.5. Obligations of Holdings Unconditional . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Section 11.6. Trustee Entitled to Assume Payments Not Prohibited in Absence of Notice . . . . . . . . . . . . . . . 64
Section 11.7. Application by Trustee of Assets Deposited with It. . . . . . . . . . . . . . . . . . . . . . . . . . 65
Section 11.8. Subordination Rights Not Impaired by Acts or Omissions of Holdings or
Holders of Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Section 11.9. Holders Authorize Trustee to Effectuate Subordination of Securities . . . . . . . . . . . . . . . . . 66
Section 11.10. Right of Trustee to Hold Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Section 11.11. Article Eleven Not to Prevent Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Section 11.12. No Fiduciary Duty of Trustee to Holders of Senior Indebtedness . . . . . . . . . . . . . . . . . . . . 66
ARTICLE XII - SATISFACTION AND DISCHARGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Section 12.1. Satisfaction and Discharge of the Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Section 12.2. Conditions to Satisfaction and Discharge of the Indenture . . . . . . . . . . . . . . . . . . . . . . 67
ARTICLE XIII - MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Section 13.1. TIA Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Section 13.2. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Section 13.3. Communications by Holders with Other Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Section 13.4. Certificate and Opinion as to Conditions Precedent . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Section 13.5. Statements Required in Certificate or Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Section 13.6. Rules by Trustee, Paying Agent, Registrar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Section 13.7. Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Section 13.8. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Section 13.9. No Adverse Interpretation of Other Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Section 13.10. No Recourse Against Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Section 13.11. Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Section 13.12. Duplicate Originals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Section 13.13. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
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INDENTURE dated as of ________ __, 1995, between FOOD 4 LESS HOLDINGS, INC., a
Delaware corporation ("Holdings"), and Norwest Bank Minnesota, N.A., a National
Banking Association, as Trustee.
Each party hereto agrees as follows for the benefit of each other party and for
the equal and ratable benefit of the Holders of the 13% Senior Subordinated
Pay-in-Kind Debentures due 2007:
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1. Definitions.
"Acquired Indebtedness" means Indebtedness of a person or any of its
subsidiaries existing at the time such person becomes a Subsidiary or assumed
in connection with the acquisition of assets from such person and not incurred
by such person in connection with, or in anticipation or contemplation of, such
person becoming a Subsidiary or such acquisition.
"Affiliate" means, with respect to any person, any other person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified person. For the purposes of this definition,
"control" when used with respect to any person means the power to direct the
management and policies of such person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"affiliated," "controlling" and "controlled" have meanings correlative to the
foregoing. For purposes of this Indenture, neither BT Securities Corporation
nor any of its Affiliates shall be deemed to be an Affiliate of Holdings or any
of its Subsidiaries.
"Affiliate Obligation" means any contractual obligation (not
constituting Indebtedness) between Holdings and any Affiliate, other than
obligations relating to the purchase or sale of goods in the ordinary course of
business made in compliance with Section 4.11 hereof.
"Affiliate Transaction" shall have the meaning provided in Section 4.11.
"Agent" means any Registrar, Paying Agent or co-Registrar.
"Asset Sale" means, with respect to any person, any sale, 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 Holdings 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
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disposition, or series of related sales, transfers or other dispositions, (i)
involving only Excluded Assets, (ii) resulting in Net Proceeds to Holdings or
any Subsidiary of $500,000 or less or (iii) pursuant to any foreclosure of
assets or other remedy provided by applicable law to a creditor of Holdings or
any Subsidiary with a Lien on such assets, which Lien is permitted under this
Indenture, provided that such foreclosure or other remedy is conducted in a
commercially reasonable manner or in accordance with any Bankruptcy Law.
"Average Life" means, as of any date of determination, with respect to
any debt security, the quotient obtained by dividing (i) the sum of the
products of the number of years from the date of determination to the dates of
each successive scheduled principal payments of such debt security multiplied
by the amount of such principal payment by (ii) the sum of all such principal
payments.
"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, with respect to any person, the Board of
Directors of such person or any committee of the Board of Directors of such
person duly authorized, with respect to any particular matter, to exercise the
power of the Board of Directors of such person.
"Board Resolution" means, with respect to any person, a duly adopted
resolution of the Board of Directors of such person.
"Business Day" means a day that is not a Legal Holiday.
"Capital Stock" means, with respect to any person, any and all shares,
interests, participations or other equivalents (however designated) of
corporate stock, including each class of common stock and preferred stock of
such person, including Preferred Stock.
"Capitalized Lease Obligation" means obligations under a lease that is
required to be capitalized for financial reporting purposes in accordance with
GAAP, and the amount of Indebtedness represented by such obligations shall be
the capitalized amount of such obligations 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 any 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 Investors Service, Inc. and Standard &
Poor's Ratings Group 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) and (v) readily marketable direct
obligations issued by any state of the United States of America or any
political subdivision thereof having one of the two
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highest rating categories obtainable from either Moody's Investors Service,
Inc. or Standard & Poor's Ratings Group.
"Change of Control" means (I) the acquisition after the Issue Date, in
one or more transactions, of beneficial ownership (within the meaning of Rule
13d-3 under the Exchange Act) by (i) any person or entity (other than any
Permitted Holder) or (ii) any group of persons or entities (excluding any
Permitted Holders) who constitute a group (within the meaning of Section
13(d)(3) of the Exchange Act), in either case, of any securities of Holdings
such that, as a result of such acquisition, such person, entity or group
beneficially owns (within the meaning of Rule 13d-3 under the Exchange Act),
directly or indirectly, 40% or more of the then outstanding voting securities
entitled to vote on a regular basis for a majority of the Board of Directors of
Holdings (but only to the extent that such beneficial ownership is not shared
with any Permitted Holder who has the power to direct the vote thereof);
provided, however, that no such Change of Control shall be deemed to have
occurred if (A) the Permitted Holders beneficially own, in the aggregate, at
such time, a greater percentage of such voting securities than such other
person, entity or group or (B) at the time of such acquisition, the Permitted
Holders (or any of them) possess the ability (by contract or otherwise) to
elect, or cause the election, of a majority of the members of Holdings' Board
of Directors or (II) Holdings ceasing to own 100% of the outstanding voting
securities entitled to vote on a regular basis to elect a majority of the Board
of Directors of the Company.
"Change of Control Date" shall have the meaning provided in Section 4.14.
"Change of Control Offer" shall have the meaning provided in Section
4.14.
"Change of Control Payment Date" shall have the meaning provided in
Section 4.14.
"Company" means Food 4 Less Supermarkets, Inc., a Delaware corporation,
and its successors, including, without limitation, Ralphs Supermarkets (to be
renamed Ralphs Grocery Company) following the Merger.
"Consolidated Net Income" means, with respect to any person, for any
period, the aggregate of the net income (or loss) of such person and its
subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided that (a) the net income of any other person in which such
person or any of its subsidiaries has an interest (which interest does not
cause the net income of such other person to be consolidated with the net
income of such person and its subsidiaries in accordance with GAAP) shall be
included only to the extent of the amount of dividends or distributions
actually paid to such person or such subsidiary by such other person in such
period; (b) the net income of any subsidiary of such person that is subject to
any Payment Restriction shall be excluded to the extent such Payment
Restriction actually prevented the payment of an amount that otherwise could
have been paid to, or received by, such person or a subsidiary of such person
not subject to any Payment Restriction, provided, however, that with respect to
the net income of Holdings, the net income of the Company and its subsidiaries
shall not be so excluded, notwithstanding the existence of any such Payment
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Restriction, so long as the terms of any such consensual Payment Restriction
limiting the payment of dividends are not materially more restrictive at the
time of determination of Consolidated Net Income than the most restrictive
Payment Restriction limiting the payment of dividends in effect on the Issue
Date; and (c)(i) the net income (or loss) of any other person acquired in a
pooling of interests transaction for any period prior to the date of such
acquisition, (ii) all gains and losses realized on any Asset Sale, (iii) all
gains realized upon or in connection with or as a consequence of the issuance
of the Capital Stock of such person or any of its subsidiaries and any gains on
pension reversions received by such person or any of its subsidiaries, (iv) all
gains and losses realized on the purchase or other acquisition by such person
or any of its subsidiaries of any securities of such person or any of its
subsidiaries, (v) all gains and losses resulting from the cumulative effect of
any accounting change pursuant to the application of Accounting Principles
Board Opinion No. 20, as amended, (vi) all other extraordinary gains and
losses, (vii) (A) all non-cash charges, (B) up to $10 million of severance
costs and (C) any other restructuring reserves or charges (provided, however,
that any cash payments actually made with respect to the liabilities for which
such restructuring reserves or charges were created shall be deducted from
Consolidated Net Income in the period when made), in each case, incurred by
Holdings or any of its Subsidiaries in connection with the Merger, including,
without limitation, the divestiture of the Excluded Assets, (viii) losses
incurred by Holdings and its Subsidiaries resulting from earthquakes and (ix)
with respect to Holdings and its Subsidiaries, all deferred financing costs
written off in connection with the early extinguishment of any Indebtedness,
shall each be excluded.
"Consolidated Net Worth" means, with respect to any person, the total
stockholders' equity (exclusive of any Disqualified Capital Stock) of such
person and its subsidiaries determined on a consolidated basis in accordance
with GAAP.
"Covenant Defeasance" shall have the meaning provided in Section 8.3.
"Credit Agent" means, at any time, the then-acting Administrative Agent
as defined in and under the Credit Agreement, which initially shall be
____________________. Holdings shall promptly notify the Trustee of any change
in the Credit Agent.
"Credit Agreement" means the Credit Agreement, dated as of the Issue
Date, by and among the Company, certain of its subsidiaries, the Lenders
referred to therein and Bankers Trust Company, as administrative agent, as the
same may be amended, extended, renewed, restated, supplemented or otherwise
modified (in whole or in part, and without limitation as to amount, terms,
conditions, covenants and other provisions) from time to time, and any
agreement governing Indebtedness incurred to refund or refinance the borrowings
and commitments then outstanding or permitted to be outstanding under such
Credit Agreement or such agreement. Holdings shall promptly notify the Trustee
of any such refunding or refinancing of the Credit Agreement.
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
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"Default" means any event which is, or after notice or passage of time
or both would be, an Event of Default.
"Disqualified Capital Stock" means, (i) with respect to any person, any
Capital Stock of such person or its subsidiaries that, by its terms, by the
terms of any agreement related thereto or by the terms of any security into
which it is convertible, puttable or exchangeable, is, or upon the happening of
an event or the passage of time would be, required to be redeemed or
repurchased by such person or its subsidiaries, including at the option of the
holder, in whole or in part, or has, or upon the happening of an event or
passage of time would have, a redemption or similar payment due, on or prior to
the Maturity Date or any other Capital Stock of such person or its subsidiaries
designated as Disqualified Capital Stock by such person at the time of
issuance; provided, however, that if such Capital Stock is either (a)
redeemable or repurchasable solely at the option of such person or (b) issued
to employees of Holdings or its Subsidiaries or to any plan for the benefit of
such employees, such Capital Stock shall not constitute Disqualified Capital
Stock unless so designated; and (ii) with respect to any Subsidiary of
Holdings, any Preferred Stock issued by a Subsidiary of Holdings other than
Preferred Stock issued to Holdings.
"EBDIT" means, with respect to any person, for any period, the
Consolidated Net Income of such person for such period, plus, in each case to
the extent deducted in computing Consolidated Net Income of such person for
such period (without duplication) (i) provisions for income taxes or similar
charges recognized by such person and its consolidated subsidiaries accrued
during such period, (ii) depreciation and amortization expense of such person
and its consolidated subsidiaries accrued during such period (but only to the
extent not included in Fixed Charges), (iii) Fixed Charges of such person and
its consolidated subsidiaries for such period, (iv) LIFO charges (credit) of
such person and its consolidated subsidiaries for such period, (v) the amount
of any restructuring reserve or charge recorded during such period in
accordance with GAAP, including any such reserve or charge related to the
Merger, and (vi) any other non-cash charges reducing Consolidated Net Income
for such period (excluding any such charge which requires an accrual of or a
cash reserve for cash charges for any future period), less, without
duplication, (i) non-cash items increasing Consolidated Net Income of such
person for such period in each case determined in accordance with GAAP and (ii)
the amount of all cash payments made by such person or its subsidiaries during
such period to the extent that such cash payment has been provided for in a
restructuring reserve or charge referred to in clause (v) above (and was not
otherwise deducted in the computation of Consolidated Net Income of such person
for such period).
"Event of Default" shall have the meaning provided in Section 6.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated by the SEC thereunder.
"Excluded Assets" means assets of Holdings or any Subsidiary required to
be disposed of by applicable regulatory authorities in connection with the
Merger.
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"Fixed Charges" means, with respect to any person, for any period, the
aggregate amount of (i) interest, whether expensed or capitalized, paid,
accrued or scheduled to be paid or accrued during such period (except to the
extent accrued in a prior period) in respect of all Indebtedness of such person
and its consolidated subsidiaries (including (a) original issue discount on any
Indebtedness (including (without duplication), in the case of Holdings, any
original issue discount on the Senior Discount Notes and the Securities but
excluding amortization of debt issuance costs and (b) the interest portion of
all deferred payment obligations, calculated in accordance with the effective
interest method, in each case to the extent attributable to such period, but
excluding the amortization of debt issuance costs) and (ii) dividend
requirements on Capital Stock of such person and its consolidated subsidiaries
(whether in cash or otherwise (except dividends payable in shares of Qualified
Capital Stock)) paid, accrued or scheduled to be paid or accrued during such
period (except to the extent accrued in a prior period) and excluding items
eliminated in consolidation. For purposes of this definition, (a) interest on
a Capitalized Lease Obligation shall be deemed to accrue at an interest rate
reasonably determined by the Board of Directors of such person (as evidenced by
a Board Resolution) to be the rate of interest implicit in such Capitalized
Lease Obligation in accordance with GAAP, (b) interest on Indebtedness that is
determined on a fluctuating basis shall be deemed to have accrued at a fixed
rate per annum equal to the rate of interest of such Indebtedness in effect on
the date Fixed Charges are being calculated, (c) interest on Indebtedness that
may optionally be determined at an interest rate based upon a factor of a prime
or similar rate, a eurocurrency interbank offered rate, or other rate, shall be
deemed to have been based upon the rate actually chosen, or, if none, then
based upon such optional rate chosen as Holdings may designate, and (d) Fixed
Charges shall be increased or reduced by the net cost (including amortization
of discount) or benefit associated with Interest Swap Obligations attributable
to such period. For purposes of clause (ii) above, dividend requirements shall
be increased to an amount representing the pretax earnings that would be
required to cover such dividend requirements; accordingly, the increased amount
shall be equal to a fraction, the numerator of which is the amount of such
dividend requirements and the denominator of which is one (1) minus the
applicable actual combined federal, state, local and foreign income tax rate of
such person and its subsidiaries (expressed as a decimal), on a consolidated
basis, for the fiscal year immediately preceding the date of the transaction
giving rise to the need to calculate Fixed Charges.
"Foreign Exchange Agreement" means any foreign exchange contract,
currency swap agreement or other similar agreement or arrangement designed to
protect against fluctuations in currency values.
"Forward Period" shall have the meaning set forth in the definition of
Operating Coverage Ratio contained in this Section 1.1.
"GAAP" means generally accepted accounting principles as in effect in
the United States of America as of the date of this Indenture.
"Holder" means the person in whose name a Security is registered on the
Registrar's books.
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"Holdings" means the party named as such above, until a successor
replaces it in accordance with the terms of this Indenture, and thereafter
means such successor.
"incur" shall have the meaning set forth in Section 4.12.
"Indebtedness" means with respect to any person, without duplication,
(i) all liabilities, contingent or otherwise, of such person (a) for borrowed
money (whether or not the recourse of the lender is to the whole of the assets
of such person or only to a portion thereof), (b) evidenced by bonds, notes,
debentures, drafts accepted or similar instruments or letters of credit or
representing the balance deferred and unpaid of the purchase price of any
property (other than any such balance that represents an account payable or any
other monetary obligation to a trade creditor (whether or not an Affiliate)
created, incurred, assumed or guaranteed by such person in the ordinary course
of business of such person in connection with obtaining goods, materials or
services and due within twelve months (or such longer period for payment as is
customarily extended by such trade creditor) of the incurrence thereof, which
account is not overdue by more than 90 days, according to the original terms of
sale, unless such account payable is being contested in good faith), or (c) for
the payment of money relating to a Capitalized Lease Obligation; (ii) the
maximum fixed repurchase price of all Disqualified Capital Stock of such person
or, if there is no such maximum fixed repurchase price, the liquidation
preference of such Disqualified Capital Stock, plus accrued but unpaid
dividends; (iii) reimbursement obligations of such person with respect to
letters of credit; (iv) obligations of such person with respect to Interest
Swap Obligations and Foreign Exchange Agreements; (v) all liabilities of others
of the kind described in the preceding clause (i), (ii), (iii) or (iv) that
such person has guaranteed or that is otherwise its legal liability; and (vi)
all obligations of others secured by a Lien to which any of the properties or
assets (including, without limitation, leasehold interests and any other
tangible or intangible property rights) of such person are subject, whether or
not the obligations secured thereby shall have been assumed by such person or
shall otherwise be such person's legal liability (provided that if the
obligations so secured have not been assumed by such person or are not
otherwise such person's legal liability, such obligations shall be deemed to be
in an amount equal to the fair market value of such properties or assets, as
determined in good faith by the Board of Directors of such person, which
determination shall be evidenced by a Board Resolution). For purposes of the
preceding sentence, the "maximum fixed repurchase price" of any Disqualified
Capital Stock that does not have a fixed repurchase price shall be calculated
in accordance with the terms of such Disqualified Capital Stock as if such
Disqualified Capital Stock were purchased on any date on which Indebtedness
shall be required to be determined pursuant to this Indenture, and if such
price is based upon, or measured by, the fair market value of such Disqualified
Capital Stock (or any equity security for which it may be exchanged or
converted), such fair market value shall be determined in good faith by the
Board of Directors of such person, which determination shall be evidenced by a
Board Resolution. For purposes hereof, Indebtedness incurred by any person
that is a general partnership (other than non-recourse Indebtedness) shall be
deemed to have been incurred by the general partners of such partnership pro
rata in accordance with their respective interests in the liabilities of such
partnership unless any such general partner shall, in the reasonable
determination of the Board of Directors of Holdings, be unable to satisfy its
pro rata share of the liabilities of the partnership, in which case the pro
rata share of any
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Indebtedness attributable to such partner shall be deemed to be incurred at
such time by the remaining general partners on a pro rata basis in accordance
with their interests.
"Indenture" means this Indenture, as amended or supplemented from time
to time in accordance with the terms hereof.
"Independent Financial Advisor" means a reputable accounting, appraisal
or a nationally recognized investment banking firm that is, in the reasonable
judgment of the Board of Directors of Holdings, qualified to perform the task
for which such firm has been engaged hereunder and disinterested and
independent with respect to Holdings and its Affiliates.
"Initial Public Offering" means an underwritten primary public offering
of common stock of Holdings at a time when Holdings has not previously issued
or sold any equity securities in an underwritten transaction pursuant to a
registration statement filed pursuant to the Securities Act.
"Initial Public Offering Consummation Date" means the first date on
which Holdings or the Company receives any proceeds from an Initial Public
Offering.
"Interest Payment Date" means the stated maturity of an installment of
interest on the Securities.
"Interest Swap Obligation" means any obligation of any person pursuant
to any arrangement with any other person whereby, directly or indirectly, such
person is entitled to receive from time to time periodic payments calculated by
applying either a fixed or floating rate of interest on a stated notional
amount in exchange for periodic payments made by such person calculated by
applying a fixed or floating rate of interest on the same notional amount;
provided that the term "Interest Swap Obligation" shall also include interest
rate exchange, collar, cap, swap option or similar agreements providing
interest rate protection.
"Investment" by any person in any other person means any investment by
such person in such other person, whether by a purchase of assets, in any
transaction or series of related transactions, individually or in the
aggregate, in an amount greater than $5 million, share purchase, capital
contribution, loan, advance (other than reasonable loans and advances to
employees for moving and travel expenses, as salary advances, or to permit the
purchase of Qualified Capital Stock of Holdings or any Subsidiary and other
similar customary expenses incurred, in each case in the ordinary course of
business consistent with past practice) or similar credit extension
constituting Indebtedness of such other person, and any guarantee of
Indebtedness of any other person.
"Issue Date" means the date of first issuance of the Securities under
this Indenture.
"Legal Defeasance" shall have the meaning provided in Section 8.2.
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26
"Legal Holiday" shall have the meaning provided in Section 13.7.
"Letter of Credit Obligations" means Indebtedness of Subsidiaries with
respect to letters of credit issued pursuant to the Credit Agreement, and for
purposes of Section 4.12, the aggregate principal amount of Indebtedness
outstanding at any time with respect thereto, shall be deemed to consist of (a)
the aggregate maximum amount then available to be drawn under all such letters
of credit (the determination of such maximum amount to assume compliance with
all conditions for drawing), and (b) the aggregate amount that has then been
paid by, and not reimbursed to, the issuers under such letters of credit.
"Lien" means any mortgage, pledge, lien, encumbrance, charge or adverse
claim affecting title or resulting in an encumbrance against real or personal
property, or a security interest of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof, any option or
other agreement to sell which is intended to constitute or create a security
interest, mortgage, pledge or lien, any filing of or agreement to give any
financing statement under the Uniform Commercial Code (or equivalent statutes)
of any jurisdiction); provided that in no event shall an operating lease be
deemed to constitute a Lien hereunder.
"Loan Documents" means the Credit Agreement and all promissory notes,
guarantees, security agreements, pledge agreements, deeds of trust, mortgages,
letters of credit and other instruments, agreements and documents executed
pursuant thereto or in connection therewith, including all amendments,
supplements, extensions, renewals, restatements, replacements or refinancings
thereof, or other modifications (in whole or in part, and without limitation as
to amount, terms, conditions, covenants or other provisions) thereof from time
to time.
"Maturity Date" means ________ __, 2007.
"Merger" means (i) the merger of the Company into Ralphs Supermarkets
(with Ralphs Supermarkets surviving such merger) pursuant to the Merger
Agreement and (ii) immediately following the merger described in clause (i) of
this definition, the merger of RGC into Ralphs Supermarkets (with Ralphs
Supermarkets surviving such merger and changing its name to "Ralphs Grocery
Company" in connection with such merger).
"Merger Agreement" means the Agreement and Plan of Merger, dated as of
September 14, 1994, by and among Food 4 Less, Inc., a Delaware corporation,
Holdings, Food 4 Less Holdings, Inc., a California corporation, Ralphs
Supermarkets, the Company and the stockholders of Ralphs Supermarkets, as such
agreement is in effect on the Issue Date.
"Net Cash Proceeds" means Net Proceeds of (i) the sale of Qualified
Capital Stock of Holdings or (ii) any Asset Sale, in each case, in the form of
cash or Cash Equivalents.
"Net Proceeds" means (a) in the case of any Asset Sale or any issuance
and sale by any person of Qualified Capital Stock, the aggregate net proceeds
received by such person
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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) whether such proceeds are in cash or in property (valued at the fair
market value thereof at the time of receipt as determined with respect to any
Asset Sale resulting in Net Proceeds in excess of $5 million in good faith by
the Board of Directors of such person, which determination shall be evidenced
by a Board Resolution) and (b) in the case of any conversion or exchange of any
outstanding Indebtedness or Disqualified Capital Stock of such person for or
into shares of Qualified Capital Stock of Holdings, the sum of (i) the fair
market value of the proceeds received by Holdings in connection with the
issuance of such Indebtedness or Disqualified Capital Stock on the date of such
issuance and (ii) any additional amount paid by the holder to Holdings upon
such conversion or exchange.
"New F4L Senior Notes" means the ___% Senior Notes due 2004 of the
Company, issued pursuant to an indenture dated as of the Issue Date, as the
same may be modified or amended from time to time and refinancings thereof, to
the extent such refinancings are permitted to be incurred under this Indenture.
"New F4L Subordinated Notes" means the 13.75% Senior Subordinated Notes
due 2005 of the Company, issued pursuant to an indenture dated as of the Issue
Date, as the same may be modified or amended from time to time and refinancings
thereof, to the extent such refinancings are permitted to be incurred under
this Indenture.
"New F4L Senior Note Indenture" means the indenture pursuant to which
the New F4L Senior Notes were issued, as amended or supplemented from time to
time in accordance with the terms thereof.
"New F4L Subordinated Note Indenture" means the indenture pursuant to
which the New F4L Subordinated Notes were issued, as amended or supplemented
from time to time in accordance with the terms thereof.
"New Notes" means the ___% Senior Subordinated Notes due 2005 of the
successor to the Company, issued pursuant to an indenture dated as of the Issue
Date, as the same may be modified or amended from time to time and refinancings
thereof, to the extent such refinancings are permitted to be incurred under
this Indenture.
"New Note Indenture" means the indenture pursuant to which the New Notes
were issued, as amended or supplemented from time to time in accordance with
the terms thereof.
"Officer" means, with respect to any person, the Chairman of the Board,
the President, any Vice President, the Chief Financial Officer, the Controller,
or the Secretary of such person.
"Officers' Certificate" means, with respect to any person, a certificate
signed by two Officers or by an Officer and either an Assistant Treasurer or an
Assistant Secretary of such person and otherwise complying with the
requirements of Sections 13.4 and 13.5.
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"Operating Coverage Ratio" means with respect to any person, the ratio
of (1) EBDIT of such person for the period (the "Pro Forma Period") consisting
of the most recent four full fiscal quarters for which financial information in
respect thereof is available immediately prior to the date of the transaction
giving rise to the need to calculate the Operating Coverage Ratio (the
"Transaction Date") to (2) the aggregate Fixed Charges of such person for the
fiscal quarter in which the Transaction Date occurs and the three fiscal
quarters immediately subsequent to such fiscal quarter (the "Forward Period")
reasonably anticipated by the Board of Directors of such person to become due
from time to time during such period. For purposes of this definition, if the
Transaction Date occurs prior to the first anniversary of the Merger, "EBDIT"
for the Pro Forma Period shall be calculated, in the case of Holdings, after
giving effect on a pro forma basis to the Merger as if it had occurred on the
first day of the Pro Forma Period. In addition to, but without duplication of,
the foregoing, for purposes of this definition, "EBDIT" shall be calculated
after giving effect (without duplication), on a pro forma basis for the Pro
Forma Period (but no longer), to (a) any Investment, during the period
commencing on the first day of the Pro Forma Period to and including the
Transaction Date (the "Reference Period"), in any other person that, as a
result of such Investment, becomes a subsidiary of such person, (b) the
acquisition, during the Reference Period (by merger, consolidation or purchase
of stock or assets) of any business or assets, which acquisition is not
prohibited by this Indenture, and (c) any sales or other dispositions of assets
(other than sales of inventory in the ordinary course of business) occurring
during the Reference Period, in each case as if such incurrence, Investment,
repayment, acquisition or asset sale had occurred on the first day of the
Reference Period. In addition, for purposes of this definition, "Fixed
Charges" shall be calculated after giving effect (without duplication), on a
pro forma basis for the Forward Period, to any Indebtedness incurred or repaid
on or after the first day of the Forward Period and prior to the Transaction
Date. If such person or any of its subsidiaries directly or indirectly
guarantees any Indebtedness of a third person, the Operating Coverage Ratio
shall give effect to the incurrence of such Indebtedness as if such person or
subsidiary had directly incurred such guaranteed Indebtedness.
"operating lease" means any lease the obligations under which do not
constitute Capitalized Lease Obligations.
"Opinion of Counsel" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee complying with the requirements of
Sections 13.4 and 13.5. Unless otherwise required by the Trustee, the legal
counsel may be an employee of or counsel to Holdings or the Trustee.
"Other Obligations" has the meaning set forth in Section 11.1 hereof.
"Pari Passu Indebtedness" means, with respect to Holdings, Indebtedness
that ranks pari passu in right of payment to the Securities (whether or not
secured by any Lien).
"Paying Agent" shall have the meaning provided in Section 2.3, except
that, for the purposes of Articles Three and Eight and Section 4.14, the Paying
Agent shall not be Holdings or any Subsidiary.
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"Payment Restriction" means, with respect to a Subsidiary of any person,
any encumbrance, restriction or limitation, whether by operation of the terms
of its charter or by reason of any agreement, instrument, judgment, decree,
order, statute, rule or governmental regulation, on the ability of (i) such
subsidiary to (a) pay dividends or make other distributions on its Capital
Stock or make payments on any obligation, liability or Indebtedness owed to
such person or any other subsidiary of such person, (b) make loans or advances
to such person or any other subsidiary of such person, or (c) transfer any of
its properties or assets to such person or any other subsidiary of such person,
or (ii) such person or any other subsidiary of such person to receive or retain
any such (a) dividends, distributions or payments, (b) loans or advances, or
(c) transfer of properties or assets.
"Permitted Holder" means (i) Food 4 Less Equity Partners, L.P., The
Yucaipa Companies or any entity controlled thereby or any of the partners
thereof, (ii) Apollo Advisors, L.P., Lion Advisors, L.P., or any entity
controlled thereby or any of the partners thereof, (iii) an employee benefit
plan of Holdings or any Subsidiary, or any participant therein, (iv) a trustee
or other fiduciary holding securities under an employee benefit plan of
Holdings or any Subsidiary or (v) any Permitted Transferee of any of the
foregoing persons.
"Permitted Indebtedness" means (a) Indebtedness of the Company and its
subsidiaries pursuant to (i) the term loans under the Credit Agreement in an
aggregate principal amount at any time outstanding not to exceed $750 million,
less the aggregate amount of all principal repayments thereunder pursuant to
and in accordance with the provisions of Section 4.15 subsequent to the Issue
Date, (ii) the revolving credit facility under the Credit Agreement (and the
Company and each Subsidiary (to the extent it is not an obligor) may guarantee
such Indebtedness) in an aggregate principal amount at any time outstanding not
to exceed $325 million, less all permanent reductions thereunder pursuant to
and in accordance with the provisions of Section 4.15, and (iii) any guarantee
by Holdings of the Indebtedness referred to in the foregoing clauses (i) and
(ii); (b) Indebtedness of Holdings or a Subsidiary owed to and held by Holdings
or a Subsidiary; (c) Indebtedness incurred by Holdings or any Subsidiary in
connection with the purchase or improvement of property (real or personal) or
equipment or other capital expenditures in the ordinary course of business
(including for the purchase of assets or stock of any retail grocery store or
business) or consisting of Capitalized Lease Obligations, provided that (i) at
the time of the incurrence thereof, such Indebtedness, together with any other
Indebtedness incurred during the most recently completed four fiscal quarter
period in reliance upon this clause (c) does not exceed, in the aggregate, 3%
of net sales of Holdings and its Subsidiaries during the most recently
completed four fiscal quarter period on a consolidated basis (calculated on a
pro forma basis if the date of incurrence is prior to the first anniversary of
the Merger) and (ii) such Indebtedness, together with all then outstanding
Indebtedness incurred in reliance upon this clause (c) does not exceed, in the
aggregate, 3% of the aggregate net sales of Holdings and its Subsidiaries
during the most recently completed twelve fiscal quarter period on a
consolidated basis (calculated on a pro forma basis if the date of incurrence
is prior to the third anniversary of the Merger); (d) Indebtedness incurred by
Holdings or any Subsidiary in connection with capital expenditures in an
aggregate principal amount not exceeding $150 million, provided that such
capital expenditures relate solely to the integration of the operations of
Ralphs Supermarkets, the Company, and their respective subsidiaries as
described in that certain Registration Statement of Holdings dated ______,
1995; (e) Indebtedness of Holdings or
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any Subsidiary incurred under Foreign Exchange Agreements and Interest Swap
Obligations; (f) guarantees incurred in the ordinary course of business, by
Holdings or a Subsidiary, of Indebtedness of any other person in aggregate not
to exceed $25 million at any time outstanding; (g) guarantees by Holdings or a
Subsidiary of Indebtedness incurred by a wholly-owned Subsidiary so long as the
incurrence of such Indebtedness incurred by such wholly-owned Subsidiary is
permitted under the terms of this Indenture; (h) Refinancing Indebtedness; (i)
Indebtedness for letters of credit relating to workers' compensation claims and
self-insurance or similar requirements in the ordinary course of business; (j)
other Indebtedness outstanding on the Issue Date (after giving effect to the
Merger); (k) Indebtedness arising from guarantees of Indebtedness of Holdings
or any Subsidiary or other agreements of Holdings or a Subsidiary providing for
indemnification, adjustment of purchase price or similar obligations, in each
case, incurred or assumed in connection with the disposition of any business,
assets or Subsidiary, other than guarantees of Indebtedness incurred by any
person acquiring all or any portion of such business, assets or Subsidiary for
the purpose of financing such acquisition; provided that the maximum assumable
liability in respect of all such Indebtedness shall at no time exceed the gross
proceeds actually received by Holdings and its Subsidiaries in connection with
such disposition; (l) obligations in respect of performance bonds and
completion guarantees provided by Holdings or any Subsidiary in the ordinary
course of business; (m) Indebtedness of Holdings with respect to the Senior
Discount Notes and the Securities as in effect on the Issue Date (including the
accretion of the Senior Discount Notes and the issuance of Secondary Securities
in lieu of cash interest payments pursuant to the terms of this Indenture as in
effect on the Issue Date); and (n) additional Indebtedness of Holdings or any
Subsidiary in an amount not to exceed $200 million at any time outstanding.
"Permitted Investment" by any person means (i) any Related Business
Investment, (ii) Investments in securities not constituting cash or Cash
Equivalents and received in connection with an Asset Sale or any other
disposition of assets not constituting an Asset Sale by reason of the $500,000
threshold contained in the definition thereof, (iii) cash and Cash Equivalents,
(iv) Investments existing on the Issue Date, (v) Investments specifically
permitted by and made in accordance with Sections 4.3 and 4.11, (vi)
Investments in any Subsidiary or by any Subsidiary in Holdings or any other
Subsidiary in other Subsidiaries, and (vii) additional Investments in an
aggregate amount not exceeding $5 million.
"Permitted Payments" means any (i) payment by Holdings or any Subsidiary
to The Yucaipa Companies or the principals or any Affiliates thereof for
consulting, management, investment banking or similar services during such
period pursuant to that certain Consulting Agreement, dated as of the Issue
Date, between Holdings, the Company and The Yucaipa Companies, as such
Consulting Agreement may be amended or replaced, so long as any amounts paid
under any amended or replacement agreement do not exceed the amounts payable
under such Consulting Agreement as in effect on the Issue Date, and (ii) any
payment by Holdings or any Subsidiary, (a) in connection with repurchases of
outstanding shares of Holdings' common stock following the death, disability or
termination of employment of management stockholders, and (b) of amounts
required to be paid by Holdings or any Subsidiaries to participants in employee
benefit plans upon any termination of employment by such participants, as
provided in the documents related thereto, in an aggregate amount (for both
clauses (a) and (b)) not to exceed
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$10 million in any Yearly Period (provided that any unused amounts may be
carried over to any subsequent Yearly Period subject to a maximum amount of $20
million in any Yearly Period).
"Permitted Transferees" means, with respect to any person, (i) any
Affiliate of such person, (ii) the heirs, executors, administrators,
testamentary trustees, legatees or beneficiaries of any such person, (iii) a
trust, the beneficiaries of which, or a corporation or partnership, the
stockholders or general or limited partners of which, include only such person
or his or her spouse or lineal descendants, in each case to whom such person
has transferred the beneficial ownership of any securities of Holdings, (iv)
any investment account whose investment managers and investment advisors
consist solely of such person and/or Permitted Transferees of such person, and
(v) any investment fund or investment entity that is a subsidiary of such
person or a permitted transferee of such person.
"Person" or "person" means any individual, corporation, partnership,
joint venture, association, joint-stock company, trust, unincorporated
organization or government or other agency or political subdivision thereof.
"Plan of Liquidation" means, with respect to any person, a plan that
provides for, contemplates or the effectuation of which is preceded or
accompanied by (whether or not substantially contemporaneously, in phases or
otherwise) (i) the sale, lease, conveyance or other disposition of all or
substantially all of the assets of such person otherwise than as an entirety or
substantially as an entirety and (ii) the distribution of all or substantially
all of the proceeds of such sale, lease, conveyance or other disposition and
all or substantially all of the remaining assets of such person to holders of
Capital Stock of such person.
"Preferred Stock" means, with respect to any person, any and all shares,
interests, participations or other equivalents (however designated) of such
person's preferred or preference stock, whether outstanding on the date hereof
or issued after the Issue Date, and including, without limitation, all classes
and series of preferred or preference stock of such person.
"principal" of any Indebtedness (including the Securities) means the
principal of such Indebtedness plus the premium, if any, on such Indebtedness.
"pro forma" means, with respect to any calculation made or required to
be made pursuant to the terms of this Indenture, a calculation in accordance
with Article 11 of Regulation S-X under the Securities Act, as interpreted by
Holdings' chief financial officer or Board of Directors in consultation with
its independent certified public accountants.
"Pro Forma Period" shall have the meaning set forth in the definition of
Operating Coverage Ratio contained in this Section 1.1.
"Qualified Capital Stock" means, with respect to any person, any Capital
Stock of such person that is not Disqualified Capital Stock.
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"Ralphs Supermarkets" means Ralphs Supermarkets, Inc., a Delaware
corporation, until a successor replaces it and thereafter means such successor.
"Record Date" means the Record Dates specified in the Securities;
provided that if any such date is a Legal Holiday, the Record Date shall be the
first day immediately preceding such specified day that is not a Legal Holiday.
"Redemption Date," when used with respect to any Security to be
redeemed, means the date fixed for such redemption pursuant to this Indenture
and the Securities.
"Redemption Price," when used with respect to any Security to be
redeemed, means the price fixed for such redemption pursuant to this Indenture
and the Securities.
"Reference Period" shall have the meaning provided in the definition of
"Operating Coverage Ratio" contained in this Section 1.1.
"Refinancing Indebtedness" means, with respect to any person,
Indebtedness of such person issued in exchange for, or the proceeds from the
issuance and sale or disbursement of which are used to substantially
concurrently repay, redeem, refund, refinance, discharge or otherwise retire
for value, in whole or in part (collectively, "repay"), or constituting an
amendment, modification or supplement to, or a deferral or renewal of
(collectively, an "amendment"), any Indebtedness of such person existing on the
Issue Date or Indebtedness (other than Permitted Indebtedness, except Permitted
Indebtedness incurred pursuant to clauses (a), (c), (d), (h), (j) and (m) of
the definition thereof) incurred in accordance with this Indenture (a) in a
principal amount (or, if such Refinancing Indebtedness provides for an amount
less than the principal amount thereof to be due and payable upon the
acceleration thereof, with an original issue price) not in excess of (without
duplication) (i) the principal amount or the original issue price, as the case
may be, of the Indebtedness so refinanced (or, if such Refinancing Indebtedness
refinances Indebtedness under a revolving credit facility or other agreement
providing a commitment for subsequent borrowings, with a maximum commitment not
to exceed the maximum commitment under such revolving credit facility or other
agreement) plus (ii) unpaid accrued interest on such Indebtedness plus (iii)
premiums, penalties, fees and expenses actually incurred by such person in
connection with the repayment or amendment thereof and (b) with respect to
Refinancing Indebtedness that repays or constitutes an amendment to
Subordinated Indebtedness, such Refinancing Indebtedness (x) shall not have any
fixed mandatory redemption or sinking fund requirement in an amount greater
than or at a time prior to the amounts and times specified in such repaid or
amended Subordinated Indebtedness, except to the extent that any such
requirement applies on a date after the Maturity Date and (y) shall contain
subordination and default provisions no less favorable in any material respect
to Holders than those contained in such repaid or amended Subordinated
Indebtedness.
"Registrar" shall have the meaning provided in Section 2.3.
"Registration Rights Agreement" means the registration rights agreement
dated as of the Issue Date by and among Holdings, the Company and the
stockholders of Ralphs Supermarkets with respect to the Securities.
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"Related Business Investment" means (i) any Investment by a person in
any other person a majority of whose revenues are derived from the operation of
one or more retail grocery stores or supermarkets or any other line of business
engaged in by Holdings or any Subsidiary as of the Issue Date; (ii) any
Investment by such person in any cooperative or other supplier, including,
without limitation, any joint venture which is intended to supply any product
or service useful to the business of Holdings and any Subsidiary as it is
conducted as of the Issue Date and as such business may thereafter evolve or
change; and (iii) any capital expenditure or Investment (without regard to the
$5 million threshold in the definition thereof), in each case reasonably
related to the business of Holdings and any Subsidiary as it is conducted as of
the Issue Date and as such business may thereafter evolve or change.
"Representative" means the indenture trustee or other trustee, agent or
representative for any Senior Indebtedness.
"Restricted Debt Prepayment" means the purchase, redemption, acquisition
or retirement for value by Holdings, prior to the scheduled maturity or prior
to any scheduled repayment of principal or any sinking fund payment in respect
of any Subordinated Indebtedness.
"Restricted Payment" means any (i) Stock Payment or (ii) Investment
(other than a Permitted Investment) or (iii) Restricted Debt Prepayment.
"RGC" means Ralphs Grocery Company, a Delaware corporation, until a
successor replaces it and thereafter means such successor.
"SEC" means the Securities and Exchange Commission.
"Secondary Securities" has the meaning set forth in Section 2.2.
"Securities" means the 13% Senior Subordinated Pay-in-Kind Debentures
due 2007 of Holdings, including any Secondary Securities issued in respect
thereof, as amended or supplemented from time to time in accordance with the
terms hereof, that are issued pursuant to this Indenture.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.
"Senior Discount Notes" means the 15.25% Senior Discount Notes due 2004
of Food 4 Less Holdings, Inc., issued pursuant to an indenture dated as of
December 15, 1992, as the same may be modified or amended from time to time and
refinancings thereof, to the extent such refinancing indebtedness is permitted
to be incurred under this Indenture.
"Senior Discount Note Indenture" means the indenture pursuant to which
the Senior Discount Notes were issued, as amended or supplemented from time to
time in accordance with the terms thereof.
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"Senior Indebtedness" means the principal of, premium, if any, and
interest on (such Senior Indebtedness being deemed to include for all purposes
of Article XI of this Indenture the amount required to fully secure in cash
undrawn Letter of Credit Obligations under the Loan Documents and such interest
on Senior Indebtedness being deemed to include for all purposes of Article XI
interest accruing after the filing of a petition initiating any proceeding
pursuant to any Bankruptcy Law in accordance with and at the rate (including
any rate applicable upon any default, to the extent lawful) specified in any
document evidencing the Senior Indebtedness, whether or not the claim for such
interest is allowed as a claim after such filing in any proceeding under such
Bankruptcy Law) any Indebtedness of Holdings (and, in the case of the Loan
Documents, all obligations of Holdings for fees, expenses, indemnities and
other amounts payable thereunder or in connection therewith), whether
outstanding on the Issue Date or thereafter created, incurred, assumed or
guaranteed or in effect guaranteed by Holdings (including, without limitation,
Indebtedness under the Loan Documents), unless, in the case of any particular
Indebtedness, the instrument creating or evidencing such Indebtedness expressly
provides that such Indebtedness shall not be senior in right of payment to the
Securities. Without limiting the generality of the foregoing, "Senior
Indebtedness" shall include the principal of, premium, if any, and interest on
all obligations of every nature of Holdings from time to time owed or
guaranteed by Holdings with respect to the Credit Agreement and the Senior
Discount Notes. Notwithstanding the foregoing, "Senior Indebtedness" shall not
include (i) any Pari Passu Indebtedness or any Subordinated Indebtedness, (ii)
any Indebtedness constituting Disqualified Capital Stock, (iii) Indebtedness of
Holdings to any Subsidiary, (iv) that portion of any Indebtedness which is
incurred in violation of Section 4.12 of this Indenture, (v) Indebtedness to,
or guaranteed on behalf of, any shareholder, director, officer or employee of
Holdings or of any Subsidiary (including, without limitation, amounts owed for
compensation), (vi) Indebtedness to trade creditors and other amounts incurred
in connection with obtaining goods, materials or services, and (vii) any
liability for federal, state, local or other taxes owed or owing by Holdings.
"Significant Stockholder" means, with respect to any person, any other
person who is the beneficial owner (within the meaning of Rule 13d-3 under the
Exchange Act) of more than 10% of any class of equity securities of such person
that are entitled to vote on a regular basis for the election of directors of
such person.
"Significant Subsidiary" means each Subsidiary that is either (a) a
"significant subsidiary" as defined in Rule 1-02(v) of Regulation S-X under the
Securities Act and the Exchange Act (as such regulation is in effect on the
date hereof) or (b) material to the financial condition or results of
operations of Holdings and its Subsidiaries taken as a whole.
"Stock Payment" means, with respect to any person, (a) the declaration
or payment by such person, either in cash or in property, of any dividend on
(except, in the case of Holdings, dividends payable solely in Qualified Capital
Stock of Holdings), or the making by such person or any of its subsidiaries of
any other distribution in respect of, such person's Qualified Capital Stock or
any warrants, rights or options to purchase or acquire shares of any class of
such Capital Stock (other than exchangeable or convertible Indebtedness of such
person), or (b) the redemption, repurchase, retirement or other acquisition for
value by such person or any of its subsidiaries, directly or indirectly, of
such person's Qualified Capital Stock (and, in
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the case of a Subsidiary, Qualified Capital Stock of Holdings) or any warrants,
rights or options to purchase or acquire shares of any class of such Capital
Stock (other than exchangeable or convertible Indebtedness of such person),
other than, in the case of Holdings, through the issuance in exchange therefor
solely of Qualified Capital Stock of Holdings; provided, however, that in the
case of a Subsidiary, the term "Stock Payment" shall not include any such
payment with respect to its Capital Stock or warrants, rights or options to
purchase or acquire shares of any class of its Capital Stock that are owned
solely by Holdings or a wholly-owned Subsidiary.
"Subordinated Indebtedness" means Indebtedness of Holdings that is
subordinated in right of payment to the Securities.
"subsidiary" of any person means (i) a corporation a majority of whose
Capital Stock with voting power, under ordinary circumstances, to elect
directors is, at the date of determination, directly or indirectly, owned by
such person, by one or more subsidiaries of such person or by such person and
one or more subsidiaries of such person or (ii) a partnership in which such
person or a subsidiary of such person is, at the date of determination, a
general partner of such partnership, but only if such person or its subsidiary
is entitled to receive more than 50% of the assets of such partnership upon its
dissolution, or (iii) any other person (other than a corporation or a
partnership) in which such person, a subsidiary of such person or such person
and one or more subsidiaries of such person, directly or indirectly, at the
date of determination, has (x) at least a majority ownership interest or (y)
the power to elect or direct the election of a majority of the directors or
other governing body of such person.
"Subsidiary" means any subsidiary of Holdings.
"The Yucaipa Companies" means The Yucaipa Companies, a California
general partnership.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code Sections
77aaa-77bbbb), as amended, as in effect on the date on which this Indenture
is qualified under the TIA, except as otherwise provided in Section 9.3.
"Transaction Date" shall have the meaning provided in the definition of
"Operating Coverage Ratio" contained in this Section 1.1.
"Trustee" means the party named as such in this Indenture until a
successor replaces it in accordance with the provisions of this Indenture and
thereafter means such successor.
"Trust Officer" means any officer of the Trustee assigned by the Trustee
to administer its corporate trust matters.
"U.S. Government Obligations" shall have the meaning provided in Section
8.4.
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"U.S. Legal Tender" means such coin or currency of the United States of
America as at the time of payment shall be legal tender for the payment of
public and private debts.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the sum
of the products obtained by multiplying (x) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (y) the
number of years (calculated to the nearest one-twelfth) that will elapse
between such date and the making of such payment, by (b) the then outstanding
principal amount of such Indebtedness.
"wholly-owned Subsidiary" means any Subsidiary all of the shares of
Capital Stock of which (other than permitted Preferred Stock and directors'
qualifying shares) are at the time directly or indirectly owned by Holdings.
"Yearly Period" means each fiscal year of Holdings; provided that the
first Yearly Period shall begin on the Issue Date and shall end on January 28,
1996.
Section 1.2. Incorporation by Reference of TIA.
Whenever this Indenture refers to a provision of the TIA, such provision
is incorporated by reference in, and made a part of, this Indenture. The
following TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means Holdings or any other
obligor on the Securities.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule and not
otherwise defined herein have the meanings assigned to them therein.
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Section 1.3. 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 words in the plural
include the singular;
(5) provisions apply to successive events and transactions; and
(6) "herein," "hereof" and other words of similar import refer to
this Indenture as a whole and not to any particular Article, Section or other
subdivision.
ARTICLE II
THE SECURITIES
Section 2.1. Form and Dating.
The Securities and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A. The Securities may have notations,
legends or endorsements required by law, stock exchange rule or usage or as
required by the Registration Rights Agreement. Holdings and the Trustee shall
approve the form of the Securities and any notation, legend or endorsement on
them. Each Security shall be dated the date of its authentication.
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, Holdings and the Trustee, by their execution and delivery of this
Indenture, expressly agree to such terms and provisions and to be bound
thereby.
Section 2.2. Execution and Authentication.
An Officer or an Assistant Secretary, shall sign (either of whom shall,
in each case, have been duly authorized by all requisite corporate actions) the
Securities for Holdings by manual or facsimile signature.
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, the Security shall be valid nevertheless.
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A Security shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Security. The
signature shall be conclusive evidence that the Security has been authenticated
under this Indenture.
The Trustee shall authenticate Securities, excluding Secondary
Securities, for original issue in the aggregate principal amount of up to
$100,000,000 upon a written order of Holdings in the form of an Officers'
Certificate. The Officers' Certificate shall specify the amount of Securities
to be authenticated and the date on which the Securities are to be
authenticated. The aggregate principal amount of Securities outstanding at any
time may not exceed $100,000,000, except for any Securities that may be issued
pursuant to the immediately following paragraph and except as provided in
Section 2.7 and 2.8. Upon the written order of Holdings in the form of an
Officers' Certificate, the Trustee shall authenticate Securities in
substitution of Securities originally issued to reflect any name change of
Holdings.
Holdings may, on each Interest Payment Date prior to (and including)
[the Interest Payment Date five years after the Issue Date], at its option and
in its sole discretion, pay interest in additional Securities ("Secondary
Securities") in lieu of the payment in whole or in part of interest in cash on
the Securities as provided in paragraph 1 of the Securities. Holdings shall
give written notice to the Trustee of the amount of interest to be paid in
Secondary Securities not less than five Business Days prior to the relevant
Interest Payment Date, and the Trustee or an authenticating agent (upon written
order of Holdings signed by an Officer of Holdings given not less than five nor
more than 45 days prior to such Interest Payment Date) shall authenticate for
original issue (pro rata to each Holder of any Securities of such record date)
Secondary Securities in an aggregate principal amount equal to the amount of
cash interest not paid on such Interest Payment Date. Except as set forth in
the following paragraph each issuance of Secondary Securities in lieu of the
payment of interest in cash on the Securities shall be made pro rata with
respect to the outstanding Securities, and Holdings shall have the right to
aggregate amounts of interest payable in the form of Secondary Securities to a
Holder of outstanding Securities and issue to such Holder a single Secondary
Security in payment thereof. Any Secondary Securities may be denominated a
separate series if Holdings deems it necessary to do so in order to comply with
any law or other applicable regulation or requirement, with appropriate
distinguishing designations.
The Securities shall be issuable only in registered form without coupons
in denominations of $1,000 and any integral multiple thereof except that
Secondary Securities or Securities issued upon registration of transfer of such
Secondary Securities may be in denominations of other than $1,000; provided
that Holdings may at its option pay cash in lieu of issuing Secondary
Securities in any denominations of less than $1,000.
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The Trustee may appoint an authenticating agent reasonably acceptable to
Holdings to authenticate Securities. Unless otherwise provided in the
appointment, an authenticating agent may authenticate Securities whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as an Agent to deal with Holdings and Affiliates of Holdings.
Section 2.3. Registrar and Paying Agent.
Holdings shall maintain an office or agency in the Borough of Manhattan,
The City of New York, 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 Holdings in respect of the Securities and this Indenture may
be served. Holdings may also from time to time designate one or more other
offices or agencies where the Securities may be presented or surrendered for
any or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve Holdings of its obligation to maintain an office or agency in the
Borough of Manhattan, The City of New York, for such purposes. Holdings may
act as its own Registrar or Paying Agent except that for the purposes of
Articles Three and Eight and Sections 4.4 and 4.14, neither Holdings nor any
Subsidiary shall act as Paying Agent. The Registrar shall keep a register of
the Securities and of their transfer and exchange. Holdings, upon notice to
the Trustee, may have one or more co-Registrars and one or more additional
paying agents reasonably acceptable to the Trustee. The term "Paying Agent"
includes any additional paying agent. Holdings initially appoints the Trustee
as Registrar and Paying Agent until such time as the Trustee has resigned or a
successor has been appointed.
Holdings shall enter into an appropriate agency agreement with any Agent
not a party to this Indenture, which agreement shall implement the provisions
of this Indenture that relate to such Agent. Holdings shall notify the
Trustee, in advance, of the name and address of any such Agent. If Holdings
fails to maintain a Registrar or Paying Agent, the Trustee shall act as such.
Section 2.4. Paying Agent To Hold Assets in Trust.
Holdings shall require each Paying Agent other than the Trustee to agree
in writing that each Paying Agent shall hold in trust for the benefit of
Holders or the Trustee all assets and/or Secondary Securities held by the
Paying Agent for the payment of principal of, or interest on, the Securities
(whether such assets have been distributed to it by Holdings or any other
obligor on the Securities), and shall notify the Trustee of any Default by
Holdings (or any other obligor on the Securities) in making any such payment.
If Holdings or a Subsidiary acts as Paying Agent, it shall segregate such
assets and/or Secondary Securities and hold them as a separate trust fund.
Holdings at any time may require a Paying Agent to distribute all assets and/or
Secondary Securities held by it to the Trustee and account for any assets
disbursed and the Trustee may at any time during the continuance of any payment
Default, upon written request to a Paying Agent, require such Paying Agent to
distribute all assets and/or Secondary Securities held by it to the Trustee and
to account for any assets so distributed. Upon
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distribution to the Trustee of all assets that shall have been delivered by
Holdings to the Paying Agent, the Paying Agent shall have no further liability
for such assets and/or Secondary Securities.
Section 2.5. Securityholder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Holders. If the Trustee is not the Registrar, Holdings shall furnish to the
Trustee on or before each Interest Payment Date and at such other times as the
Trustee may request in writing a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of Holders, which
list may be conclusively relied upon by the Trustee.
Section 2.6. Transfer and Exchange.
When a Security is presented to the Registrar or a co-registrar with a
request to register a transfer, the Registrar shall register the transfer as
requested if the requirements of the Registrar are met. The Registrar need not
transfer or exchange any Securities selected for redemption. Also, it need not
transfer or exchange any Securities for a period of 30 days before a selection
of Securities to be redeemed. When Securities are presented to the Registrar
or a co-registrar with a request to exchange them for an equal principal amount
of Securities of other authorized denominations, the Registrar shall make the
exchange as requested if the requirements of the Registrar are met. Holdings
shall cooperate with the Registrar in meeting its requirements. To permit
transfers, registration and exchanges, the Trustee shall authenticate
Securities at the Registrar's request. No service charge shall be made for any
transfer, registration or exchange, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith, but not for any exchange pursuant to Section 2.10, 3.6 or
9.5.
Section 2.7. Replacement Securities.
If a mutilated Security is surrendered to the Trustee or if the Holder
of a Security claims that the Security has been lost, destroyed or wrongfully
taken, Holdings shall issue and the Trustee shall authenticate a replacement
Security if the Trustee's requirements are met. If required by the Trustee or
Holdings, such Holder must provide an indemnity bond or other indemnity,
sufficient in the judgment of both Holdings and the Trustee, to protect
Holdings, the Trustee or any Agent from any loss which any of them may suffer
if a Security is replaced. Holdings may charge such Holder for its reasonable,
out-of-pocket expenses in replacing a Security, including reasonable fees and
expenses of counsel. Every replacement Security shall constitute an additional
obligation of Holdings.
Section 2.8. Outstanding Securities.
Securities outstanding at any time are all the Securities that have been
authenticated by the Trustee, including the Secondary Securities, except those
cancelled by it, those delivered to it for cancellation and those described in
this Section as not outstanding. A
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Security does not cease to be outstanding because Holdings or any of its
Affiliates holds the Security.
If a Security is replaced pursuant to Section 2.7 (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.
If on a Redemption Date or the Maturity Date the Paying Agent (other
than Holdings or any Subsidiary) holds U.S. Legal Tender or U.S. Government
Obligations sufficient to pay all of the principal and interest due on the
Securities payable on that date, then on and after that date such Securities
cease to be outstanding and interest on them ceases to accrue.
Section 2.9. Treasury Securities.
In determining whether the Holders of the required aggregate principal
amount of Securities have concurred in any direction, waiver or consent,
Securities owned by Holdings or any of its Affiliates shall be disregarded,
except that, for the purposes of determining whether the Trustee shall be
protected in relying on any such direction, waiver or consent, only Securities
that the Trustee knows or has reason to know are so owned shall be disregarded.
Notwithstanding the foregoing and except as otherwise provided by the TIA, a
majority of Securities not owned by Holdings or any of its Affiliates shall be
sufficient to approve any such direction, waiver or consent.
Section 2.10. Temporary Securities.
Until definitive Securities are ready for delivery, Holdings may prepare
and the Trustee shall authenticate temporary Securities. Temporary Securities
shall be substantially in the form of definitive Securities but may have
variations that Holdings considers appropriate for temporary Securities.
Without unreasonable delay, Holdings shall prepare and the Trustee shall
authenticate definitive Securities in exchange for temporary Securities.
Section 2.11. Cancellation.
Holdings at any time may deliver Securities to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Securities surrendered to them for transfer, exchange or payment. The
Trustee, or at the direction of the Trustee, the Registrar or the Paying Agent
(other than Holdings or any Subsidiary), and no one else, shall cancel and, at
the written direction of Holdings, shall dispose of all Securities surrendered
for transfer, exchange, payment or cancellation. Subject to Section 2.7,
Holdings may not issue new Securities to replace Securities that it has paid or
delivered to the Trustee for cancellation. If Holdings or any Subsidiary 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.
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Section 2.12. Defaulted Interest.
If Holdings defaults in a payment of interest on the Securities, it
shall, unless the Trustee fixes another record date pursuant to Section 6.10,
pay the defaulted interest, plus (to the extent lawful) any interest payable on
the defaulted interest, to the persons who are Holders on a subsequent special
record date, which date shall be the fifteenth day next preceding the date
fixed by Holdings for the payment of defaulted interest or the next succeeding
Business Day if such date is not a Business Day. At least 15 days before the
subsequent special record date, Holdings shall mail to each Holder, with a copy
to the Trustee, a notice that states the subsequent special record date, the
payment date and the amount of defaulted interest, and interest payable on such
defaulted interest, if any, to be paid.
Section 2.13. CUSIP Number.
Holdings in issuing the Securities may use a "CUSIP" number, and if so,
the Trustee shall use the CUSIP number in notices of redemption or exchange as
a convenience to Holders; provided that any such notice may state that no
representation is made as to the correctness or accuracy of the CUSIP number
printed in the notice or on the Securities, and that reliance may be placed
only on the other identification numbers printed on the Securities.
ARTICLE III
REDEMPTION
Section 3.1. Notices to Trustee.
If Holdings elects to redeem Securities pursuant to Paragraph 5 of the
Securities it shall notify the Trustee of the Redemption Date and aggregate
principal amount of the Securities to be redeemed and whether it wants the
Trustee to give notice of redemption to the Holders (at Holdings' expense) at
least 30 days (unless a shorter notice shall be satisfactory to the Trustee)
but not more than 60 days before the Redemption Date. Any notice given
pursuant to this Section 3.1 may be cancelled at any time prior to notice of
such redemption being mailed to any Holder and shall thereby be void and of no
effect.
Section 3.2. Selection of Securities To Be Redeemed.
If fewer than all of the Securities are to be redeemed, the Trustee
shall select the Securities to be redeemed pro rata, by lot or by such other
method as the Trustee considers to be fair and appropriate and in such manner
as complies with applicable legal and stock exchange requirements, if any.
Securities in denominations of less than $1,000 shall be redeemed first.
Thereafter the Trustee shall make the selection from the Securities outstanding
and not previously called for redemption and shall promptly notify Holdings in
writing of the Securities selected for redemption and, in the case of any
Security selected for partial redemption, the
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aggregate principal amount thereof to be redeemed. Securities in denominations
of $1,000 or less may be redeemed only in whole. The Trustee may select for
redemption portions (equal to $1,000 or any integral multiple thereof) of the
principal of Securities that have denominations larger than $1,000. Provisions
of this Indenture that apply to Securities called for redemption also apply to
portions of Securities called for redemption.
Section 3.3. Notice of Redemption.
At least 30 days but not more than 60 days before a Redemption Date,
Holdings shall mail a notice of redemption by first class mail to each Holder
whose Securities are to be redeemed at such Holder's registered address, with a
copy to the Trustee. At Holdings' request, the Trustee shall give the notice
of redemption in Holdings' name and at Holdings' expense. Each notice for
redemption shall identify the Securities to be redeemed and shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price;
(5) that, unless Holdings defaults in making the redemption payment,
interest on Securities called for redemption ceases to accrue on and after
the Redemption Date, and the only remaining right of the Holders of such
Securities is to receive payment of the Redemption Price upon surrender to
the Paying Agent of the Securities redeemed;
(6) if any Security is being redeemed in part, the portion of the
aggregate principal amount of such Security to be redeemed and that, after
the Redemption Date, and upon surrender of such Security, a new Security or
Securities in aggregate principal amount equal to the unredeemed portion
thereof will be issued; and
(7) if fewer than all the Securities are to be redeemed, the
identification of the particular Securities (or portion thereof to be
redeemed), as well as the aggregate principal amount of Securities to be
redeemed and the aggregate principal amount of Securities to be outstanding
after such partial redemption.
Section 3.4. Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 3.3,
Securities called for redemption become due and payable on the Redemption Date
and at the Redemption Price. Upon surrender to the Trustee or Paying Agent,
such Securities called for redemption shall be paid at the Redemption Price.
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Section 3.5. Deposit of Redemption Price.
On or before the Redemption Date, Holdings shall deposit with the Paying
Agent U.S. Legal Tender sufficient to pay the Redemption Price of all
Securities to be redeemed on that date (other than Securities or portions
thereof called for redemption on that date which have been delivered by
Holdings to the Trustee for cancellation). The Paying Agent shall promptly
return to Holdings any U.S. Legal Tender so deposited which is not required for
that purpose upon the written request of Holdings, except with respect to
monies owed as obligations to the Trustee pursuant to Article Seven.
If Holdings complies with the preceding paragraph, then, unless
Holdings defaults in the payment of such Redemption Price, interest on the
Securities to be redeemed will cease to accrue on and after the applicable
Redemption Date, whether or not such Securities are presented for payment.
If a Security is redeemed on or after a Record Date but on or prior to
the related Interest Payment Date, then any accrued and unpaid interest shall
be paid to the Person in whose name such Security was registered at the close
of business on such Record Date. If any Security called for redemption shall
not be so paid upon surrender for redemption because of the failure of Holdings
to comply with the first paragraph of this Section 3.5, interest shall be paid
on the unpaid principal, from the redemption date until such principal is paid,
and, to the extent lawful, on any interest not paid on such unpaid principal,
in each case at the rate provided in the Securities and in Section 4.1 hereof.
Section 3.6. Securities Redeemed in Part.
Upon surrender of a Security that is to be redeemed in part, the Trustee
shall authenticate for the Holder a new Security or Securities equal in
principal amount to the unredeemed portion of the Security surrendered.
ARTICLE IV
COVENANTS
Section 4.1. Payment of Securities.
Holdings shall pay the principal amount of, premium, if any, and
interest on, as the case may be, the Securities on the dates and in the manner
provided in the Securities. An installment shall be considered paid on the
date it is due if the Trustee or Paying Agent (other than Holdings or a
Subsidiary) holds on that date U.S. Legal Tender and/or, to the extent
permitted by Section 2.2, Secondary Securities designated for and sufficient to
pay the installment.
Holdings shall pay interest on overdue principal (including
post-petition interest in any proceeding under any Bankruptcy Law, to the
extent allowable as a claim in any such proceeding) at the same rate borne by
the Securities and it shall pay interest (including post-
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petition interest in any proceeding under any Bankruptcy Law, to the
extent allowable as a claim in any such proceeding) on overdue installments of
interest (without regard to any applicable grace period) at the same rate borne
by the Securities, to the extent lawful.
Section 4.2. Maintenance of Office or Agency.
Holdings shall maintain in the Borough of Manhattan, The City of New
York, the office or agency required under Section 2.3. Holdings shall give
prior notice to the Trustee of the location, and any change in the location, of
such office or agency. If at any time Holdings 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 13.2.
Section 4.3. Limitation on Restricted Payments.
Holdings shall not, and shall cause each of its Subsidiaries not to,
directly or indirectly, make any Restricted Payment if, at the time of such
Restricted Payment, or after giving effect thereto, (a) a Default or an Event
of Default shall have occurred and be continuing, (b) Holdings or such
Subsidiary could not incur at least $1 of additional Indebtedness (other than
Permitted Indebtedness) pursuant to Section 4.12, or (c) the aggregate amount
expended for all Restricted Payments, including such Restricted Payment (the
amount of any Restricted Payment, if other than cash, to be the fair market
value thereof at the date of payment, as determined in good faith by the Board
of Directors of Holdings, which determination shall be evidenced by a Board
Resolution), subsequent to the Issue Date, shall exceed the sum of (i) 50% of
the aggregate Consolidated Net Income (or if such Consolidated Net Income is a
loss, minus 100% of such loss) of Holdings earned subsequent to the Issue Date
and on or prior to the date the Restricted Payment occurs (the "Reference
Date") plus (ii) 100% of the aggregate Net Proceeds received by Holdings from
any person (other than a Subsidiary) from the issuance and sale (including upon
exchange or conversion for other securities of Holdings) subsequent to the
Issue Date and on or prior to the Reference Date of Qualified Capital Stock
(excluding (A) Qualified Capital Stock paid as a dividend on any Capital Stock
or as interest on any Indebtedness and (B) any Net Proceeds from issuances and
sales financed directly or indirectly using funds borrowed from Holdings or any
Subsidiary, until and to the extent such borrowing is repaid) plus (iii) 100%
of the aggregate net cash proceeds received by Holdings as capital
contributions to Holdings after the Issue Date, plus (iv) $25,000,000.
Notwithstanding the foregoing, if no Default or Event of Default shall
have occurred and be continuing as a consequence thereof, the provisions set
forth in the immediately preceding paragraph will not prevent (1) the payment
of any dividend within 60 days after the date of its declaration if the
dividend would have been permitted on the date of declaration, (2) the
acquisition of any shares of Capital Stock of Holdings or the repurchase,
redemption, or other repayment of any Subordinated Indebtedness in exchange for
or solely out of the proceeds of the substantially concurrent sale (other than
to a Subsidiary) of shares of Qualified Capital Stock of Holdings, (3) the
repurchase, redemption or other repayment of any Subordinated Indebtedness in
exchange for or solely out of the proceeds of the substantially concurrent sale
(other than to a Subsidiary) of Subordinated Indebtedness of Holdings with an
Average Life
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equal to or greater than the then remaining Average Life of the Subordinated
Indebtedness repurchased, redeemed or repaid, and (4) Permitted Payments;
provided that (x) the declaration of each dividend paid in accordance with
clause (1) above, each acquisition, repurchase, redemption or other repayment
made in accordance with, or of the type set forth in, clause (2) above, and
each payment described in clause (ii) of the definition of "Permitted Payments"
shall each be counted for purposes of computing amounts expended pursuant to
subclause (c) in the immediately preceding paragraph, and (y) no amounts paid
pursuant to clause (3) above or clause (i) of the definition of "Permitted
Payments" shall be so counted.
Prior to making any Restricted Payment under the first paragraph of this
Section 4.3, Holdings shall deliver to the Trustee an Officers' Certificate
setting forth the computation by which the amount available for Restricted
Payments pursuant to such paragraph was determined. The Trustee shall have no
duty or responsibility to determine the accuracy or correctness of this
computation and shall be fully protected in relying on such Officers'
Certificate.
Section 4.4. Corporate Existence.
Except as otherwise permitted by Article Five, Holdings shall do or
cause to be done all things necessary to preserve and keep in full force and
effect its corporate existence and the corporate or other existence of each of
its Significant Subsidiaries in accordance with the respective organizational
documents of each such Significant Subsidiary and the rights (charter and
statutory) and franchises of Holdings and each such Significant Subsidiary;
provided, however, that Holdings shall not be required to preserve, with
respect to itself, any right or franchise, and with respect to any of its
Significant Subsidiaries, any such existence, right or franchise, if the Board
of Directors of Holdings or such Significant Subsidiary, as the case may be,
shall determine that the preservation thereof is no longer desirable in the
conduct of the business of Holdings or any such Significant Subsidiary.
Section 4.5. Payment of Taxes and Other Claims.
Holdings shall pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (i) all taxes, assessments and
governmental charges (including withholding taxes and any penalties, interest
and additions to taxes) levied or imposed upon it or any of its Subsidiaries or
properties of it or any of its Subsidiaries and (ii) all lawful claims for
labor, materials and supplies that, if unpaid, might by law become a Lien upon
the property of it or any of its Subsidiaries; provided, however, that Holdings
shall not be required to pay or discharge or cause to be paid or discharged any
such tax, assessment, charge or claim if either (a) the amount, applicability
or validity thereof is being contested in good faith by appropriate proceedings
and an adequate reserve has been established therefor to the extent required by
GAAP or (b) the failure to make such payment or effect such discharge (together
with all other such failures) would not have a material adverse effect on the
financial condition or results or operations of Holdings and its Subsidiaries
taken as a whole.
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Section 4.6. Maintenance of Properties and Insurance.
(a) Holdings shall cause all properties used or useful to the conduct
of its business or the business of any Subsidiaries to be maintained and kept
in good condition, repair and working order and supplied with all necessary
equipment and shall cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in its judgment may
be necessary, so that the business carried on in connection therewith may be
properly and advantageously conducted at all times unless the failure to so
maintain such properties (together with all other such failures) would not have
a material adverse effect on the financial condition or results of operations
of Holdings and its Subsidiaries taken as a whole; provided, however, that
nothing in this Section 4.6 shall prevent Holdings or any Subsidiary from
discontinuing the operation or maintenance of any of such properties, or
disposing of any of them, if such discontinuance or disposal is either (i) in
the ordinary course of business, (ii) in the good faith judgment of the Board
of Directors of Holdings or the Subsidiary concerned, or of the senior officers
of Holdings or such Subsidiary, as the case may be, desirable in the conduct of
the business of Holdings or such Subsidiary, as the case may be, or (iii) is
otherwise permitted by this Indenture.
(b) Holdings shall provide or cause to be provided, for itself and
each of its Subsidiaries, insurance (including appropriate self-insurance)
against loss or damage of the kinds that, in the reasonable, good faith opinion
of Holdings, are adequate and appropriate for the conduct of the business of
Holdings and such Subsidiaries in a prudent manner, with reputable insurers or
with the government of the United States of America or an agency or
instrumentality thereof, in such amounts, with such deductibles, and by such
methods as shall be either (i) consistent with past practices of Holdings or
the applicable Subsidiary or (ii) customary, in the reasonable, good faith
opinion of Holdings, for corporations similarly situated in the industry,
unless the failure to provide such insurance (together with all other such
failures) would not have a material adverse effect on the financial condition
or results of operations of Holdings and its Subsidiaries, taken as a whole.
Section 4.7. Compliance Certificate; Notice of Default.
(a) Holdings shall deliver to the Trustee within 120 days after the
end of Holdings' fiscal year an Officers' Certificate stating that a review of
its activities and the activities of its Subsidiaries during the preceding
fiscal year has been made under the supervision of the signing Officers with a
view to determining whether it 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 knowledge Holdings during
such preceding fiscal year has kept, observed, performed and fulfilled each and
every such covenant and no Default or Event of Default occurred during such
year or, if such signers do know of such a Default or Event of Default, the
certificate shall describe the Default or Event of Default and its status with
particularity. The Officers' Certificate shall also notify the Trustee should
Holdings elect to change the manner in which it fixes its fiscal year end.
(b) So long as not contrary to the then current recommendations of
the American Institute of Certified Public Accountants, Holdings shall deliver
to the Trustee within
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120 days after the end of each fiscal year a written statement by Holdings'
independent certified public accountants stating (A) that their audit
examination has included a review of the terms of this Indenture and the
Securities as they relate to accounting matters, and (B) whether, in connection
with their audit examination, any Default has come to their attention and if
such a Default has come to their attention, specifying the nature and period of
existence thereof.
(c) Holdings shall, so long as the Securities are outstanding,
deliver to the Trustee, within five Business Days after any officer becomes
aware of any Default or Event of Default, an Officer's Certificate specifying
such Default or Event of Default and what action Holdings is taking or proposes
to take with respect thereto.
Section 4.8. Compliance with Laws.
Holdings shall comply, and shall cause each of its Subsidiaries to
comply, with all applicable statutes, rules, regulations, orders and
restrictions of the United States of America, all states and municipalities
thereof, and of any governmental department, commission, board, regulatory
authority, bureau, agency and instrumentality of the foregoing, in respect of
the conduct of their respective businesses and the ownership of their
respective properties, except such as are being contested in good faith and by
appropriate proceedings and except for such noncompliances as would not in the
aggregate have a material adverse effect on the financial condition or results
of operations of Holdings and its Subsidiaries taken as a whole.
Section 4.9. SEC Reports and Other Information.
(a) To the extent permitted by applicable law or regulation, whether
or not Holdings is subject to the requirements of Section 13 or 15(d) of the
Exchange Act, Holdings shall file with the SEC all quarterly and annual reports
and such other information, documents or other reports (or copies of such
portions of any of the foregoing as the SEC may by rules and regulations
prescribe) required to be filed pursuant to such provisions of the Exchange
Act. Holdings shall file with the Trustee, within 5 days after it files the
same with the SEC, copies of the quarterly and annual reports and 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) that it is
required to file with the SEC pursuant to this Section 4.9. Holdings shall
also comply with the other provisions of TIA Section 314(a). If Holdings is
not permitted by applicable law or regulations to file the aforementioned
reports, Holdings (at its own expense) shall file with the Trustee and mail, or
cause the Trustee to mail, to Holders at their addresses appearing in the
register of Securities maintained by the Registrar at the time of such mailing
within 5 days after it would have been required to file such information with
the SEC, all information and financial statements, including any notes thereto
and with respect to annual reports, an auditors' report by an accounting firm
of established national reputation, and a "Management's Discussion and Analysis
of Financial Condition and Results of Operations," comparable to the disclosure
that Holdings would have been required to include in annual and quarterly
reports, information, documents or other reports, including, without
limitation, reports on Forms 10-K, 10-Q and 8-K, if Holdings was subject to the
requirements of such Section 13 or 15(d) of the Exchange Act.
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(b) At any time when Holdings is not permitted by applicable law or
regulations to file the aforementioned reports, upon the request of a Holder of
Securities, Holdings 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 under the Securities
Act.
Section 4.10. Waiver of Stay, Extension or Usury Laws.
Holdings 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 or extension law or any usury law or
other law that would prohibit or forgive Holdings from paying all or any
portion of the principal of or interest on the Securities as contemplated
herein, wherever enacted, now or at any time hereafter in force, or which may
affect the covenants or the performance of this Indenture; and (to the extent
that it may lawfully do so) Holdings hereby expressly waives all benefit or
advantage of any such law, and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Trustee, but will
suffer and permit the execution of every such power as though no such law had
been enacted.
Section 4.11. Limitation on Transactions with Affiliates.
(a) Neither Holdings nor any of its Subsidiaries shall (i) sell,
lease, transfer or otherwise dispose of any of its properties or assets, or
issue securities (other than equity securities which do not constitute
Disqualified Capital Stock) to, (ii) purchase any property, assets or
securities from, (iii) make any Investment in, or (iv) enter into or suffer to
exist any contract or agreement with or for the benefit of, an Affiliate or
Significant Stockholder (or any Affiliate of such Significant Stockholder) of
Holdings or any Subsidiary (an "Affiliate Transaction"), other than (x)
Affiliate Transactions permitted under Section 4.11(b) and (y) Affiliate
Transactions in the ordinary course of business, that are fair to Holdings or
such Subsidiary, as the case may be, and on terms at least as favorable as
might reasonably have been obtainable at such time from an unaffiliated party;
provided, that (A) with respect to Affiliate Transactions involving aggregate
payments in excess of $1 million and less than $5 million, Holdings or such
Subsidiary, as the case may be, shall have delivered an Officers' Certificate
to the Trustee certifying that such transaction or series of transactions
complies with clause (y) above, (B) with respect to Affiliate Transactions
involving aggregate payments in excess of $5 million and less than $15 million,
Holdings or such Subsidiary, as the case may be, shall have delivered an
Officers' Certificate to the Trustee certifying that such Affiliate Transaction
complies with clause (y) above and that such Affiliate Transaction has received
the approval of a majority of the disinterested members of the Board of
Directors of Holdings or the Subsidiary, as the case may be, or, in the absence
of any such approval by the disinterested members of the Board of Directors of
Holdings or the Subsidiary, as the case may be, that an Independent Financial
Advisor has reasonably and in good faith determined that the financial terms of
such Affiliate Transaction are fair to Holdings or such Subsidiary, as the case
may be, or that the terms of such Affiliate Transaction are at least as
favorable as might reasonably have been obtained at such time from an
unaffiliated party and that such Independent Financial Advisor has provided
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written confirmation of such determination to the Board of Directors and (C)
with respect to Affiliates Transactions involving aggregate payments in excess
of $15 million, Holdings or such Subsidiary, as the case may be, shall have
delivered to the Trustee, a written opinion from an Independent Financial
Advisor to the effect that the financial terms of such Affiliate Transaction
are fair to Holdings or such Subsidiary, as the case may be, or that the terms
of such Affiliate Transaction are at least as favorable as those that might
reasonably have been obtained at the time from an unaffiliated party.
(b) The provisions of Section 4.11(a) shall not apply to (i) any
Permitted Payment, (ii) any Restricted Payment that is made in compliance with
the provisions of Section 4.3, (iii) reasonable and customary fees and
compensation paid to, and indemnity provided on behalf of, officers, directors,
employees or consultants of Holdings or any Subsidiary, as determined by the
Board of Directors of Holdings or any Subsidiary or the senior management
thereof in good faith, (iv) transactions exclusively between or among Holdings
and any of its wholly-owned Subsidiaries or exclusively between or among such
wholly-owned Subsidiaries, provided such transactions are not otherwise
prohibited by this Indenture, (v) any agreement as in effect as of the Issue
Date or any amendment thereto or any transaction contemplated thereby
(including pursuant to any amendment thereto) so long as any such amendment is
not disadvantageous to the Holders in any material respect, (vi) the existence
of, or the performance by Holdings or any of its Subsidiaries of its
obligations under the terms of, any stockholder agreement (including any
registration rights agreement or purchase agreement related thereto) to which
it is a party as of the Issue Date and any similar agreements which it may
enter into thereafter; provided, however, that the existence of, or the
performance by Holdings or any of its Subsidiaries of obligations under any
future amendment to, any such existing agreement or under any similar agreement
entered into after the Issue Date shall only be permitted by this clause (vi)
to the extent that the terms of any such amendment or new agreement are not
otherwise disadvantageous to the Holders in any material respect, (vii)
transactions permitted by, and complying with, the provisions of Section 5.1,
and (viii) purchases or sales of goods or services or other transactions with
suppliers, in each case, in the ordinary course of business (including, without
limitation, pursuant to joint venture agreements) and otherwise in compliance
with the terms of this Indenture which are fair to Holdings or any Subsidiary,
in the reasonable determination of the Board of Directors, or are on terms at
least as favorable as might reasonably have been obtained at such time from an
unaffiliated party.
Section 4.12. Limitation on Incurrences of Additional Indebtedness.1/
Holdings will not, and will not permit any Subsidiary, directly or
indirectly, to incur, assume, guarantee, become liable, contingently or
otherwise, with respect to, or otherwise become responsible for the payment of
(collectively "incur") any Indebtedness other than Permitted Indebtedness;
provided, however, that if no Default with respect to payment of principal of,
or interest on, the Securities or Event of Default shall have occurred and be
continuing at the time or as a consequence of the incurrence of such
Indebtedness, (i) Holdings
- - --------------------
1. This Section 4.12 will conform to the covenant in the new public
securities, as appropriately modified to be applicable to Holdings and
its subsidiaries.
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may incur Indebtedness if immediately before and immediately after giving
effect to the incurrence of such Indebtedness the Operating Coverage Ratio of
Holdings would be greater than 2.0 to 1.0 and (ii) the Company or any
subsidiary of the Company may incur Indebtedness if immediately before and
immediately after giving effect to the incurrence of such Indebtedness the
Operating Coverage Ratio of the Company would be greater than 2.0 to 1.0.
Section 4.13. Limitation on Liens.
Holdings will not create, incur, assume or suffer to exist any Lien of
any kind securing any Pari Passu Indebtedness, any Subordinated Indebtedness or
any Affiliate Obligation upon any property or assets of Holdings owned on the
Issue Date or acquired after the Issue Date, or any income or profits
therefrom, unless the Securities are secured equally and ratably with (or prior
to in the case of Subordinated Indebtedness) to the obligation or liability
secured by such Lien, and except for any Lien securing Acquired Indebtedness
created prior to the incurrence of such Indebtedness by Holdings, provided that
any such Lien only extends to the assets that were subject to such Lien
securing such Acquired Indebtedness prior to the related acquisition by
Holdings.
Section 4.14. Limitation on Change of Control.
(a) Upon the occurrence of a Change of Control (the "Change of
Control Date"), each Holder shall have the right to require the repurchase of
such Holder's Securities pursuant to the offer described in paragraph (b),
below (the "Change of Control Offer"), at a purchase price equal to 101% of the
aggregate principal amount thereof plus accrued interest, if any, to the date
of purchase. Prior to the mailing of the notice to Holders provided for in
paragraph (b) below, but in any event within 30 days following the Change of
Control Date, Holdings shall cause the Company to either (a) repay in full and
terminate all commitments under Indebtedness under the Credit Agreement to the
extent the terms thereof require repayment upon a Change of Control (or offer
to repay in full and terminate all commitments under all such Indebtedness
under the Credit Agreement and repay the Indebtedness owed to each lender which
has accepted such offer), or (b) obtain the requisite consents under the Credit
Agreement, the terms of which require repayment upon a Change of Control, to
permit the repurchase of the Securities as provided for in this Section 4.14.
Holdings shall first comply with the covenant in the immediately preceding
sentence before Holdings shall be required to repurchase Securities pursuant to
this Section 4.14, and any failure to so comply shall constitute an Event of
Default under this Indenture. Within 10 days after any Change of Control Date
requiring Holdings to make a Change of Control Offer pursuant to this Section
4.14, Holdings shall so notify the Trustee.
(b) The Change of Control Offer shall be made to all Holders and the
notice to the Holders shall contain all instructions and materials necessary to
enable such Holders to tender Securities pursuant to the Change of Control
Offer. Within 30 days following any Change of Control Date, Holdings shall
send, by first class mail, a notice to each Holder, with copies to the Trustee,
which notice shall govern the terms of the Change of Control Offer. Such
notice shall state:
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(1) that the Change of Control Offer is being made pursuant to this
Section 4.14 and that all Securities tendered will be accepted for payment;
(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 "Change of Control Payment Date");
(3) that any Security not tendered will continue to accrue interest
if interest is then accruing;
(4) that, unless Holdings defaults in making payment therefor, any
Security accepted for payment pursuant to the Change of Control Offer shall
cease to accrue interest after the Change of Control Payment Date;
(5) that Holders electing to have a Security purchased pursuant to a
Change of Control 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 Change
of Control Payment 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 Change
of Control Payment Date, a telegram, telex, facsimile transmission or letter
setting forth the name of the Holder, the aggregate 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 are being purchased only in part
will be issued new Securities equal in principal amount to the unpurchased
portion of the Securities surrendered; provided that each Holder shall tender
Securities, and each Security purchased and each such new Security issued by
Holdings shall be, in a principal amount of $1,000 or integral multiples
thereof (except for Secondary Securities that were issued in denominations
other than $1,000); and
(8) the circumstances and relevant facts regarding such Change of
Control, including information available to Holdings concerning the Person or
Persons acquiring control and such historical or pro forma financial
information as Holdings reasonably deems appropriate under the circumstances.
(c) On or before the Change of Control Payment Date, Holdings shall
(i) accept for payment Securities or portions thereof tendered pursuant to the
Change of Control Offer, (ii) deposit with the Paying Agent U.S. Legal Tender
sufficient to pay the purchase price of all Securities so tendered and (iii)
deliver to the Trustee Securities so accepted together with an Officers'
Certificate stating the Securities or portions thereof being purchased by
Holdings. The Paying Agent shall promptly mail to the Holders of Securities so
accepted payment in an amount equal to the purchase price; provided that each
such new Security shall be in the
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principal amount of $1,000 or integral multiples thereof. Holdings will
publicly announce the results of the Change of Control Offer on or as soon as
practicable after the Change of Control Payment Date. For purposes of this
Section 4.14, the Trustee shall act as the Paying Agent.
(d) Holdings, to the extent applicable and if required by law, will
comply with Rule 14e-1 under the Exchange Act and any other applicable
provisions of the federal securities laws in connection with a Change of
Control Offer.
Section 4.15. Limitation on Asset Sales.
(a) Neither Holdings nor any of its Subsidiaries will consummate an
Asset Sale, unless (a) Holdings or the applicable Subsidiary receives
consideration at the time of such Asset Sale at least equal to the fair market
value of the assets sold; and (b) upon consummation of an Asset Sale, Holdings
or the applicable Subsidiary will, within 365 days of the receipt of the
proceeds therefrom, either: (i) apply or cause its Subsidiary to apply the Net
Cash Proceeds of any Asset Sale to (1) a Related Business Investment (2) an
investment in properties and assets that replace the properties and assets that
are the subject of such Asset Sale, or (3) an investment in properties and
assets that will be used in the business of Holdings and its Subsidiaries
existing on the Issue Date or in a business reasonably related thereto; (ii)
apply or cause to be applied such Net Cash Proceeds to the repayment of Senior
Indebtedness or Pari Passu Indebtedness of Holdings or any Indebtedness of any
Subsidiary; (iii) use such Net Cash Proceeds to secure Letter of Credit
Obligations to the extent the related letters of credit have not been drawn
upon or returned undrawn; or (iv) after such time as the accumulated Net Cash
Proceeds equals or exceeds $20 million, apply or cause to be applied such Net
Cash Proceeds to the purchase of Notes tendered to Holdings for purchase at a
price equal to 100% of the aggregate principal amount thereof, plus accrued
interest to the date of purchase pursuant to an offer to purchase made by
Holdings as set forth below (a "Net Proceeds Offer"), provided, however, that
if at any time any noncash consideration received by Holdings or any Subsidiary
in connection with any Asset Sale is converted into or sold or otherwise
disposed of for cash, then such cash shall constitute Net Cash Proceeds for
purposes of this Section 4.15 and shall be applied in accordance with clause
(b) above within 365 days of the receipt of such cash; and provided further,
however, that if at any time any security deposits or other amounts used to
secure Letter of Credit Obligations pursuant to clause b(iii) above are
returned to Holdings or any Subsidiary, then such security deposits or other
amounts shall constitute Net Cash Proceeds for purposes of this Section 4.15
and shall be applied in accordance with clause (b) above within 365 days of the
receipt of such security deposits or other amounts. A Net Proceeds Offer as a
result of an Asset Sale made by the Company or one of its subsidiaries shall
not be required to be in excess of the Net Cash Proceeds of such Asset Sale
less the Net Cash Proceeds actually applied in accordance with clauses (b)(i),
(ii) or (iii) above; provided, however, that Holdings shall have the right to
exclude from the foregoing provisions Asset Sales subsequent to the Issue Date,
(x) the proceeds of which are derived from the sale and substantially
concurrent lease-back of a supermarket and/or related assets which are acquired
or constructed by Holdings or a Subsidiary subsequent to the Issue Date,
provided that such sale and substantially concurrent lease-back occurs within
180 days following such acquisition or the completion of such construction, as
the case may be, and (y) the proceeds of which in the aggregate do not exceed
$20 million.
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(b) Notice of a Net Proceeds Offer pursuant to this Section 4.15
shall be mailed, by first class mail, by Holdings not less than 305 days nor
more than 335 days after the relevant Asset Sale to all Holders at their last
registered addresses, 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 Proceeds Offer and shall state the following
terms:
(1) that the Net Proceeds Offer is being made pursuant to Section
4.15 and that all Securities tendered will be accepted for payment; provided,
however, that if the aggregate principal amount of Securities tendered in a
Net Proceeds Offer plus accrued interest at the expiration of such offer
exceeds the aggregate amount of the Net Proceeds Offer, Holdings shall select
the Securities to be purchased on a pro rata basis (with such adjustments as
may be deemed appropriate by Holdings so that only Securities in
denominations of $1,000 or multiples thereof shall be purchased, except for
Secondary Securities that were issued in denominations other than $1,000);
(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 Holdings defaults in making payment therefor, any
Security accepted for payment pursuant to the Net 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 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; and
(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.
On or before the Proceeds Purchase Date, Holdings shall (i) accept for
payment Securities or portions thereof tendered pursuant to the Net Proceeds
Offer which are to be purchased in accordance with item (b)(1) above, (ii)
deposit with the Paying Agent U.S. Legal
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Tender sufficient to pay the purchase price of all Securities to be purchased
and (iii) deliver to the Trustee Securities so accepted together with an
Officers' Certificate stating the Securities or portions thereof being
purchased by Holdings. The Paying Agent shall promptly mail to the Holders of
Securities so accepted payment in an amount equal to the purchase price.
Holdings will publicly announce the results of the Net Proceeds Offer on or as
soon as practicable after the Proceeds Purchase Date. For purposes of this
Section 4.15, the Trustee shall act as the Paying Agent.
(c) Holdings will 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 a Net Proceeds Offer.
Any amounts remaining after the purchase of Securities pursuant to a Net
Proceeds Offer shall be returned by the Trustee to Holdings.
Section 4.16. Limitation on Senior Subordinated Indebtedness.
Holdings will not incur, create, issue, assume, guarantee or otherwise
become liable for any Indebtedness that is subordinate or junior in right of
payment to any Senior Indebtedness and senior in right of payment to the
Securities.
Section 4.17. Limitation on Preferred Stock of Subsidiaries.
Holdings will not permit any of its Subsidiaries to issue any Preferred Stock
(other than to Holdings or a wholly-owned Subsidiary), or permit any person
(other than Holdings or a wholly-owned Subsidiary) to own or hold an interest
in any Preferred Stock of any such Subsidiary, unless such Subsidiary would be
entitled to incur Indebtedness in accordance with the provisions of Section
4.12 in the aggregate principal amount equal to the aggregate liquidation value
of such Preferred Stock.
Section 4.18. Limitation on Dividend and Other Payment Restrictions
Affecting Subsidiaries.
Holdings shall not, and shall not permit any Subsidiary to, directly or
indirectly, create or suffer to exist, or allow to become effective any
consensual Payment Restriction with respect to any of its Subsidiaries, except
for (a) any such restrictions contained in (i) the Loan Documents as in effect
on the Issue Date, as any such Payment Restriction may apply to any present or
future Subsidiary, (ii) the Senior Discount Note Indenture, the New F4L Senior
Note Indenture, the New F4L Subordinated Note Indenture, the New Note Indenture
and any other agreement in effect at or entered into on the Issue Date, (iii)
Indebtedness of a person existing at the time such person becomes a Subsidiary
(provided that (x) such Indebtedness is not incurred in connection with, or in
contemplation of, such person becoming a Subsidiary, (y) such restriction is
not applicable to any person, or the properties or assets of any person, other
than the person so acquired and (z) such Indebtedness is otherwise permitted to
be incurred pursuant to Section 4.12), (iv) secured Indebtedness otherwise
permitted to be incurred pursuant to Sections 4.12 and 4.13 that limit the
right of the debtor to dispose of the assets securing such
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Indebtedness; (b) customary non-assignment provisions restricting subletting or
assignment of any lease or other agreement entered into by a Subsidiary; (c)
customary net worth provisions contained in leases and other agreements entered
into by a Subsidiary in the ordinary course of business; (d) customary
restrictions with respect to a Subsidiary pursuant to an agreement that has
been entered into for the sale or disposition of all or substantially all of
the Capital Stock or assets of such Subsidiary; (e) customary provisions in
joint venture agreements and other similar agreements; (f) restrictions
contained in Indebtedness incurred to refinance, refund, extend or renew
Indebtedness referred to in clause (a) above; provided that the restrictions
contained therein are not materially more restrictive taken as a whole, than
those provided for in such Indebtedness being refinanced, refunded, extended or
renewed, and (g) Payment Restrictions contained in any other Indebtedness
permitted to be incurred subsequent to the Issue Date pursuant to the
provisions of Section 4.12; provided that any such Payment Restrictions are
ordinary and customary with respect to the type of Indebtedness being incurred
(under the relevant circumstances) and, in any event, no more restrictive than
the most restrictive Payment Restrictions in effect of the Issue Date.
ARTICLE V
SUCCESSOR CORPORATION
Section 5.1. When Holdings May Merge, Etc.
(a) Holdings, in a single transaction or through a series of related
transactions, shall not (i) consolidate with or merge with or into any other
person, or transfer (by lease, assignment, sale or otherwise) all or
substantially all of its properties and assets as an entirety or substantially
as an entirety to another person or group of affiliated persons or (ii) adopt a
Plan of Liquidation, unless, in either case:
(1) either Holdings shall be the continuing person, or the person (if
other than Holdings) formed by such consolidation or into which Holdings is
merged or to which all or substantially all of the properties and assets of
Holdings as an entirety or substantially as an entirety are transferred (or,
in the case of a Plan of Liquidation, any person to which assets are
transferred) (Holdings or such other person being hereinafter referred to as
the "Surviving Person") shall be a corporation organized and validly existing
under the laws of the United States, any state thereof or the District of
Columbia, and shall expressly assume, by an indenture supplement, all the
obligations of Holdings under the Securities and this Indenture;
(2) immediately after and giving effect to such transaction and the
assumption contemplated by clause (1) above and the incurrence or anticipated
incurrence of any Indebtedness to be incurred in connection therewith, (A)
the Surviving Person shall have a Consolidated Net Worth equal to or greater
than the Consolidated Net Worth of Holdings immediately preceding the
transaction and (B) the Surviving Person could incur at least $1 of
Indebtedness other than Permitted Indebtedness pursuant to Section 4.12; and
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(3) immediately before and immediately after and giving effect to
such transaction and the assumption of the obligations as set forth in clause
(1) above and the incurrence or anticipated incurrence of any Indebtedness to
be incurred in connection therewith, no Default or Event of Default shall
have occurred and be continuing.
(b) For purposes of the foregoing, the transfer (by lease,
assignment, sale or otherwise, in a single transaction or series of
transactions) of all or substantially all of the properties and assets of one
or more Subsidiaries, the Capital Stock of which constitutes all or
substantially all of the properties and assets of Holdings shall be deemed to
be the transfer of all or substantially all of the properties and assets of
Holdings.
Section 5.2. Successor Corporation Substituted.
Upon any consolidation or merger or any transfer of all or substantially
all of the assets of Holdings or any adoption of a Plan of Liquidation by
Holdings in accordance with Section 5.1, the surviving person formed by such
consolidation or into which Holdings is merged or to which such transfer is
made, (or, in the case of a Plan of Liquidation, to which assets are
transferred) shall succeed to, and be substituted for, and may exercise every
right and power of, Holdings under this Indenture with the same effect as if
such surviving person had been named as Holdings herein; provided, however,
that solely for purposes of computing amounts described in subclause (c) of
Section 4.3, any such surviving person shall only be deemed to have succeeded
to and be substituted for Holdings with respect to periods subsequent to the
effective time of such merger, consolidation or transfer of assets. When a
successor corporation assumes all of the obligations of Holdings hereunder and
under the Securities and agrees to be bound hereby and thereby, the predecessor
shall be released from such obligations.
ARTICLE VI
DEFAULT AND REMEDIES
Section 6.1. Events of Default.
An "Event of Default" occurs if:
(1) Holdings defaults in the payment of interest on the Securities
when the same becomes due and payable and the default continues for a period
of 30 days;
(2) Holdings defaults in the payment of the principal of the
Securities when the same becomes due and payable at maturity, upon
acceleration, redemption or otherwise (including the failure to repurchase
Securities tendered pursuant to the requirements set forth in Sections 4.14
and 4.15), whether or not such payment shall be prohibited by the provisions
of Article Eleven hereof;
(3) Holdings fails to comply with any of its other agreements or
covenants in, or provisions of, the Securities or this Indenture and the
default continues for the period and after the notice specified below;
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(4) there shall be a default under any bond, debenture, or other
evidence of Indebtedness of Holdings or of any Significant Subsidiary or
under any mortgage, indenture or other instrument under which there may be
issued or by which there may be secured or evidenced any such Indebtedness,
whether such Indebtedness now exists or shall hereafter be created, if both
(A) such default either (i) results from the failure to pay such Indebtedness
at its stated final maturity (that is, the date of the last principal
installment of any installment Indebtedness under the instrument or agreement
pursuant to or under which such Indebtedness was created or is evidenced) or
(ii) relates to an obligation (including any obligation to pay interest, to
purchase such Indebtedness or to pay the principal of such Indebtedness,
other than the obligation to pay any principal of such Indebtedness at its
stated final maturity) and results in the holder or holders of such
Indebtedness causing such Indebtedness to become due prior to its stated
final maturity) and (B) the principal amount of such Indebtedness, together
with the principal amount of any other such Indebtedness the maturity of
which has been so accelerated, aggregates $25 million or more at any one
time;
(5) Holdings or any Significant Subsidiary (A) commences a voluntary
case or proceeding under any Bankruptcy Law with respect to itself, (B)
consents to the entry of a judgment, decree or order for relief against it in
an involuntary case or proceeding under any Bankruptcy Law, (C) consents to
the appointment of a Custodian of it or for substantially all of its
property, (D) consents to or acquiesces in the institution of a bankruptcy or
an insolvency proceeding against it, (E) makes a general assignment for the
benefit of its creditors, or (F) takes any corporate action to authorize or
effect any of the foregoing;
(6) a court of competent jurisdiction enters a judgment, decree or
order for relief in respect of Holdings or any Significant Subsidiary in an
involuntary case or proceeding under any Bankruptcy Law, which shall (A)
approve as properly filed a petition seeking reorganization, arrangement,
adjustment or composition in respect of Holdings or any Significant
Subsidiary, (B) appoint a Custodian of Holdings or any Significant Subsidiary
or for substantially all of its property or (C) order the winding-up or
liquidation of its affairs; and such judgment, decree or order shall remain
unstayed and in effect for a period of 60 consecutive days;
(7) the lenders under the Credit Agreement shall commence judicial
proceedings to foreclose upon any material portion of the assets of Holdings
and its Subsidiaries; or
(8) any final judgments or order for payment of money in excess of
$25 million shall be rendered against Holdings or any Significant Subsidiary
by a court of competent jurisdiction and shall remain undischarged for a
period of 60 days after such judgment becomes final and nonappealable.
A Default under clause (3) above (other than in the case of any Defaults
resulting from any Default under Section 4.3, 4.14 or 5.1, which Defaults shall
be Events of Default with the notice specified in this paragraph but without
the passage of time specified in this paragraph)
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is not an Event of Default until the Trustee notifies Holdings, or the Holders
of at least 25% in aggregate principal amount of the outstanding Securities
notify Holdings and the Trustee, of the Default, and Holdings does not cure the
Default within 30 days after receipt of the notice. The notice must specify
the Default, demand that it be remedied and state that the notice is a "Notice
of Default." Such notice shall be given by the Trustee if so requested by the
Holders of at least 25% in aggregate principal amount of the Securities then
outstanding. When a Default is cured, it ceases.
Section 6.2. Acceleration.
(a) If an Event of Default (other than an Event of Default specified
in Section 6.1(5) or (6) with respect to Holdings or any Significant
Subsidiary) occurs and is continuing, the Trustee may, by notice to Holdings
(and, if any Indebtedness is outstanding under the Credit Agreement or any Loan
Documents is otherwise in effect, to the Credit Agent), or the Holders of at
least 25% in aggregate principal amount of the Securities then outstanding may,
by written notice to Holdings and the Trustee, and the Trustee shall (with
notice to the Credit Agent if any Indebtedness is outstanding under the Credit
Agreement or any Loan Document is otherwise in effect), upon the request of
such Holders, declare the aggregate principal amount of the Securities
outstanding, together with accrued but unpaid interest thereon to the date of
payment, to be due and payable and, upon any such declaration, the same shall
become and be due and payable; provided, that so long as the Credit Agreement
shall be in force and effect, if any such Event of Default shall have occurred
and be continuing, any such acceleration shall not be effective until the
earlier of (a) five Business Days following a notice of acceleration given to
Holdings and the Credit Agent under the Credit Agreement and only if upon such
fifth Business Day such Event of Default shall be continuing or (b) the
acceleration of any Indebtedness under the Credit Agreement. If an Event of
Default specified in Section 6.1(5) or (6) occurs with respect to Holdings or
any Significant Subsidiary, all unpaid principal and accrued interest on the
Securities then outstanding 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. Upon payment of such principal amount, interest, and premium, if any,
all of Holdings' obligations under the Securities and this Indenture, other
than obligations under Section 7.7, shall terminate. The Holders of a majority
in aggregate principal amount of the Securities then outstanding by notice to
the Trustee may rescind an acceleration and its consequences if (i) all
existing Events of Default, other than the non-payment of the principal and
interest on the Securities which have become due solely by such declaration of
acceleration, have been cured or waived, (ii) to the extent the payment of such
interest is lawful, interest on overdue installments of interest and overdue
principal, which has become due otherwise than by such declaration of
acceleration, has been paid, and (iii) the rescission would not conflict with
any judgment or decree of a court of competent jurisdiction.
(b) In the event of a declaration of acceleration under this
Indenture because an Event of Default set forth in Section 6.1(4) has occurred
and is continuing, such declaration of acceleration shall be automatically
rescinded and annulled if either (i) the holders of the Indebtedness which is
the subject of such Event of Default have waived such failure to pay at
maturity or have rescinded the acceleration in respect of such Indebtedness
within 90 days of such maturity or declaration of acceleration, as the case may
be, and no other Event of Default
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has occurred during such 90-day period which has not been cured or waived, or
(ii) such Indebtedness shall have been discharged or the maturity thereof shall
have been extended such that it is not then due and payable, or the underlying
default has been cured (and any acceleration based thereon of such other
Indebtedness has been rescinded), within 90 days of such maturity or
declaration of acceleration, as the case may be.
Section 6.3. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may pursue
any available remedy by proceeding at law or in equity to collect the payment
of principal of or interest on the 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 Holder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative to the
extent permitted by law.
Section 6.4. Waiver of Past Defaults.
Subject to Sections 6.7 and 9.2, the Holders of at least a majority in
aggregate principal amount of the outstanding Securities by notice to the
Trustee may waive an existing Default or Event of Default and its consequences,
except a Default in the payment of principal of or interest on any Security as
specified in clauses (1) and (2) of Section 6.1. When a Default or Event of
Default is waived, it is cured and ceases.
Section 6.5. Control by Majority.
The Holders of at least a majority in aggregate principal amount of the
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. Subject to Section 7.1, however, the Trustee may refuse
to follow any direction that conflicts with any law or this Indenture that the
Trustee determines may be unduly prejudicial to the rights of another Holder,
or that may involve the Trustee in personal liability; provided that the
Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction.
Section 6.6. Limitation on Suits.
A Holder may not pursue any remedy with respect to this Indenture or the
Securities unless:
(1) the Holder gives to the Trustee notice of a continuing Event of
Default;
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(2) the Holder or Holders of at least 25% in aggregate principal
amount of the 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 to be
incurred in compliance with such request;
(4) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer of indemnity; and
(5) during such 60-day period the Holder or Holders of at least 25%
in aggregate principal amount of the outstanding Securities do not give the
Trustee a direction which, in the opinion of the Trustee, is inconsistent
with the request.
A Holder may not use this Indenture to prejudice the rights of another
Holder or to obtain a preference or priority over such other Holder.
Section 6.7. Rights of Holders To Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any
Holder to receive payment of principal of and interest on a Security, on or
after the respective due dates expressed in such 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 in payment of principal or interest specified in
clause (1) or (2) of Section 6.1 occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against
Holdings or any other obligor on the Securities for the whole amount of
principal and accrued interest remaining unpaid, together with interest on
overdue principal and, to the extent that payment of such interest is lawful,
interest on overdue installments of interest, in each case at the rate per
annum borne by the Securities and such further amount as shall be sufficient to
cover the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel.
Section 6.9. 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
(including any claim for the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel) and the Holders allowed in
any judicial proceedings relating to Holdings or any other obligor upon the
Securities, any of their respective creditors or any of their respective
property and shall be entitled and empowered to collect and receive any monies
or other property payable or deliverable on any such claims and to distribute
the same, and any Custodian in any such judicial proceedings is hereby
authorized by each Holder to make such payments to the Trustee
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and, in the event that the Trustee shall consent to the making of such payments
directly to the Holders, to pay to the Trustee any amount due to it for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, and any other amounts due the Trustee under Section
7.7. Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
Section 6.10. Priorities.
If the Trustee collects any money pursuant to this Article Six, it shall
pay out the money in the following order:
First: to the Trustee for amounts due under Section 7.7;
Second: if the Holders are forced to proceed against Holdings directly
without the Trustee, to the Holders for their collection costs;
Third: to the Holders for amounts due and unpaid on the Securities for
principal and interest, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Securities for principal and
interest, respectively; and
Fourth: to Holdings.
The Trustee, upon prior notice to Holdings, may fix a record date and
payment date for any payment to the Holders pursuant to this Section 6.10.
Section 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court 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 6.11 does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 6.7, or a suit by a Holder or Holders of more than 10% in
aggregate principal amount of the outstanding Securities.
ARTICLE VII
TRUSTEE
The Trustee hereby accepts the trust imposed upon it by this Indenture
and covenants and agrees to perform the same, as herein expressed.
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Section 7.1. Duties of Trustee.
(a) If a Default or 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 could exercise or use under the circumstances in
the conduct of his own affairs.
(b) Except during the continuance of a Default or an Event of Default:
(1) The Trustee need perform only those duties as are specifically
set forth in this Indenture and no covenants or obligations shall be implied
in this Indenture that are adverse to the Trustee.
(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.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) This paragraph does not limit the effect of paragraph (b) of this
Section 7.1.
(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) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
(e) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b), (c) and (d) of this Section 7.1.
(f) The Trustee shall not be liable for interest on any assets
received by it except as the Trustee may agree with Holdings. Assets held in
trust by the Trustee need not be segregated from other assets except to the
extent required by law.
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Section 7.2. Rights of Trustee.
Subject to Section 7.1:
(a) The Trustee may rely on any document believed by it to be genuine
and to have been signed or presented by the proper person. The Trustee need
not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may consult
with counsel and may require an Officers' Certificate or an Opinion of
Counsel, which shall conform to Sections 13.4 and 13.5. The Trustee shall
not be liable for any action it takes or omits to take in good faith in
reliance on such certificate or opinion.
(c) The Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any agent appointed
with due care.
(d) The Trustee shall not be liable for any action that it takes or
omits to take in good faith which it believes to be authorized or within its
rights or powers.
(e) 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.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Holders pursuant to the provisions of this Indenture,
unless such Holders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which may be incurred
therein or thereby.
Section 7.3. 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 Holdings, its
Subsidiaries, or their respective Affiliates with the same rights it would have
if it were not Trustee. Any Agent may do the same with like rights. However,
the Trustee 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 Holdings' use
of the proceeds from the Securities, and it shall not be responsible for any
statement in the Securities other than the Trustee's certificate of
authentication.
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Section 7.5. Notice of Default.
If a Default or an Event of Default occurs and is continuing and if it
is known to the Trustee, the Trustee shall mail to each Holder notice of the
uncured Default or Event of Default within 90 days after such Default or Event
of Default occurs. Except in the case of a Default or an Event of Default in
payment of principal of, premium, if any, or interest on, any Security,
including the failure to make payment on the Change of Control Payment Date
pursuant to a Change of Control Offer, the Trustee may withhold the notice if
and so long as its board of directors, the executive committee of its board of
directors or a committee of its directors and/or Trust Officers in good faith
determines that withholding the notice is in the interest of the Holders.
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, to the extent that any of the events
described in TIA Section 313(a) occurred within the previous twelve months,
but not otherwise, mail to each Holder a brief report dated as of such May 15
that complies with TIA Section 313(a). The Trustee also shall comply with TIA
Sections 313(b) and 313(c).
A copy of each report at the time of its mailing to Holders shall be
mailed to Holdings and filed with the SEC and each stock exchange, if any, on
which the Securities are listed.
Holdings shall notify the Trustee if the Securities become listed on any
stock exchange.
Section 7.7. Compensation and Indemnity.
Holdings shall pay to the Trustee from time to time reasonable
compensation for its services. The Trustee's compensation shall not be limited
by any law on compensation of a trustee of an express trust. Holdings shall
reimburse the Trustee upon request for all reasonable disbursements, expenses
and advances incurred or made by it including, without limitation, any taxes
imposed on the trust or on the income from the Securities. Such expenses shall
include the reasonable compensation, disbursements and expenses of the
Trustee's agents and counsel.
Holdings shall indemnify the Trustee for, and hold it harmless against,
any loss or liability incurred by it except for such actions to the extent
caused by any negligence or bad faith on its part, arising out of or in
connection with the administration of this trust and its rights or duties
hereunder. The Trustee shall notify Holdings promptly of any claim asserted
against the Trustee for which it may seek indemnity. Holdings shall defend the
claim and the Trustee shall cooperate in the defense. The Trustee may have
separate counsel and Holdings shall pay the reasonable fees and expenses of
such counsel; provided that Holdings will not be required to pay such fees and
expenses if it assumes the Trustee's defense and there is no conflict of
interest between Holdings and the Trustee in connection with such defense as
reasonably
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determined by the Trustee. Holdings need not pay for any settlement made
without its written consent. Holdings need not reimburse any expense or
indemnify against any loss or liability to the extent incurred by the Trustee
through its negligence, bad faith or willful misconduct.
To secure Holdings' payment obligations in this Section 7.7, the Trustee
shall have a lien prior to the Securities on all assets held or collected by
the Trustee, in its capacity as Trustee, except assets held in trust to pay
principal of, premium, if any, or interest on particular Securities.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.1(5) or (6) 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.
The Trustee may resign by so notifying Holdings. The Holders of a
majority in aggregate principal amount of the outstanding Securities may remove
the Trustee by so notifying Holdings and the Trustee may appoint a successor
Trustee with Holdings' consent. Holdings 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;
(3) a receiver or other 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, Holdings shall notify each Holder of such
event and shall promptly appoint a successor Trustee. Within one year after
the successor Trustee takes office, the Holders of a majority in aggregate
principal amount of the Securities may appoint a successor Trustee to replace
the successor Trustee appointed by Holdings.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to Holdings. Immediately after that,
the retiring Trustee shall transfer all property held by it as Trustee to the
successor Trustee, subject to the lien provided in Section 7.7, the resignation
or removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. A successor Trustee shall mail notice of its succession to each
Holder.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, Holdings or the
Holders of at least 10% in aggregate principal amount of the outstanding
Securities may petition any court of competent jurisdiction for the appointment
of a successor Trustee.
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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.
Notwithstanding replacement of the Trustee pursuant to this Section 7.8,
Holdings' obligations under Section 7.7 shall continue for the benefit of the
retiring Trustee.
Section 7.9. Successor Trustee by Merger, Etc.
If the Trustee consolidates with, merges or converts into, or transfers
all or substantially all of its corporate trust business to, another
corporation, the resulting, surviving or transferee corporation without any
further act shall, if such resulting, surviving or transferee corporation is
otherwise eligible hereunder, be the successor Trustee.
Section 7.10. Eligibility; Disqualification.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA Sections 310(a)(1) and 310(a)(5). The Trustee shall 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 shall comply with TIA
Section 310(b); provided, however, that there shall be excluded from the
operation of TIA Section 310(b)(1) any indenture or indentures under which
other securities, or certificates of interest or participation in other
securities, of Holdings are outstanding, if the requirements for such exclusion
set forth in TIA Section 310(b)(1) are met.
Section 7.11. Preferential Collection of Claims Against Holdings.
The Trustee shall comply with 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.
ARTICLE VIII
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.1. Option to Effect Legal Defeasance or Covenant Defeasance.
Holdings may, at the option of its Board of Directors evidenced by a
resolution set forth in an Officers' Certificate, at any time, elect to have
either Section 8.2 or 8.3 hereof be applied to all outstanding Securities upon
compliance with the conditions set forth below in this Article Eight.
Section 8.2. Legal Defeasance.
Upon Holdings' exercise under Section 8.1 hereof of the option
applicable to this Section 8.2, Holdings shall, subject to the satisfaction of
the conditions set forth in Section 8.4 hereof, be deemed to have been
discharged from its obligations with respect to all outstanding
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Securities on the date the conditions set forth below are satisfied
(hereinafter, "Legal Defeasance"). For this purpose, Legal Defeasance means
that Holdings shall be deemed to have paid and discharged the entire
Indebtedness represented by the outstanding Securities, which shall thereafter
be deemed to be "outstanding" only for the purposes of Section 8.5 hereof and
the other Sections of this Indenture referred to in (a) and (b) below, and to
have satisfied all its other obligations under such Securities and this
Indenture (and the Trustee, on demand of and at the expense of Holdings, shall
execute proper instruments acknowledging the same), except for the following
provisions which shall survive until otherwise terminated or discharged
hereunder: (a) the rights of Holders of outstanding Securities to receive
solely from the trust fund described in Section 8.4 hereof, and as more fully
set forth in such Section, payments in respect of the principal, of, premium,
if any, and interest on such Securities when such payments are due, (b)
Holdings' obligations with respect to such Securities under Article Two and
Section 4.2 hereof and the rights, powers, trusts, duties and immunities of the
Trustee and Holdings' obligations in connection therewith, and (c) this Article
Eight. Subject to compliance with this Article Eight, Holdings may exercise
its option under this Section 8.2 notwithstanding the prior exercise of its
option under Section 8.3 hereof.
Section 8.3. Covenant Defeasance.
Upon Holdings' exercise under Section 8.1 hereof of the option
applicable to this Section 8.3, Holdings shall, subject to the satisfaction of
the conditions set forth in Section 8.4 hereof, be released from its
obligations under the covenants contained in Sections 4.3 and 4.6 through 4.18
and Article V hereof 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 not "outstanding"
for the purposes of any direction, waiver, consent or declaration or act of
Holders (and the consequences of any thereof) in connection with such
covenants, but shall continue to be deemed "outstanding" for all other purposes
hereunder (it being understood that such Securities shall not be deemed
outstanding for accounting purposes). For this purpose, Covenant Defeasance
means that, with respect to the outstanding Securities, Holdings 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 hereof, but, except as specified above, the
remainder of this Indenture and such Securities shall be unaffected thereby.
In addition, upon Holdings' exercise under Section 8.1 hereof of the option
applicable to this Section 8.3 hereof, subject to the satisfaction of the
conditions set forth in Section 8.4 hereof, Sections 6.1(3) (but only to the
extent it relates to a breach of any of the covenants contained in Sections 4.3
and 4.6 through 4.18 and Article V hereof), 6.1(4) and 6.1(7) hereof shall not
constitute Events of Default.
Section 8.4. Conditions to Legal or Covenant Defeasance.
The following shall be the conditions to the application of either Section
8.2 or 8.3 hereof to the outstanding Securities:
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In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) Holdings must irrevocably deposit with the Trustee,
in trust, for the benefit of the Holders of the Securities, cash in
United States dollars, or direct non-callable obligations of, or
non-callable obligations guaranteed by, the United States of America for
the payment of which obligation or guarantee the full faith and credit
of the United States of America is pledged ("U.S. Government
Obligations"), or a combination thereof, in such amounts and at such
times as will be sufficient, without consideration of the reinvestment
of such interest and after payment of all federal, state and local taxes
or other charges or assessments in respect thereof payable by the
Trustee, in the opinion of a nationally recognized firm of independent
public accountants, to pay the principal of, premium, if any, and
interest on the outstanding Securities to redemption or maturity
provided that the Trustee shall have been irrevocably instructed to
apply such money or the proceeds of such U.S. Government Obligations to
said payments with respect to the Securities on the Maturity Date or
such redemption date, as the case may be;
(b) in the case of an election under Section 8.2 hereof,
Holdings shall have delivered to the Trustee an Opinion of Counsel
stating that (A) Holdings has received from, or there has been published
by, the Internal Revenue Service a ruling or (B) 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 of
Counsel shall confirm that, the Holders of the outstanding Securities
will not recognize income, gain or loss for federal income tax purposes
as a result of such deposit and 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 deposit and Legal
Defeasance had not occurred;
(c) in the case of an election under Section 8.3 hereof,
Holdings shall have delivered to the Trustee an Opinion of Counsel
stating that the Holders of the outstanding Securities will not
recognize income, gain or loss for federal income tax purposes as a
result of such deposit and 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 deposit and such Covenant
Defeasance had not occurred;
(d) no Default or Event of Default shall have occurred
and be continuing on the date of such deposit or insofar as Section
6.1(5) or 6.1(6) hereof is concerned, at any time in the period ending
on the 91st day after the date of deposit (it being understood that this
condition shall not be deemed satisfied until after such 91st day);
(e) such Legal Defeasance or Covenant Defeasance shall
not result in a breach or violation of, or constitute a default under,
this Indenture or
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any other material agreement or instrument to which Holdings is a party
or by which Holdings is bound (and in that connection, the Trustee
shall have received a certificate from the administrative agent under
the Credit Agreement to that effect with respect to such Credit
Agreement if then in effect);
(f) Holdings shall have delivered to the Trustee an
Opinion of Counsel to the effect that, assuming that no Default or Event
of Default shall occur and be continuing under Section 6.1(5) or 6.1(6)
during the period ending on the 91st day after the date of deposit, the
trust funds will not be subject to the effect of any applicable
bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally;
(g) Holdings shall have delivered to the Trustee an
Officers' Certificate stating that the deposit was not made by Holdings
with the intent of preferring the Holders over the other creditors of
Holdings or with the intent of defeating, hindering, delaying or
defrauding creditors of Holdings, or others; and
(h) Holdings shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent provided for relating to the Legal Defeasance or
the Covenant Defeasance have been complied with.
Section 8.5. Deposited Money and U.S. Government Obligations to be Held in
Trust; Other Miscellaneous Provisions.
Subject to Section 8.6 hereof, all money and U.S. Government Obligations
(including the proceeds thereof) deposited with the Trustee pursuant to Section
8.4 hereof 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
(excluding Holdings or any Affiliate thereof) as the Trustee may determine, to
the Holders of such Securities of all sums due and to become due thereon in
respect of principal, premium, if any, and interest, but such money need not be
segregated from other funds except to the extent required by law.
Holdings shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the cash or U.S. Government
Obligations deposited pursuant to Section 8.4 hereof or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding
Securities.
Anything in this Article Eight to the contrary notwithstanding, the
Trustee shall deliver or pay to Holdings from time to time upon the request of
Holdings any money or non-callable U.S. Government Obligations held by it as
provided in Section 8.4 hereof which, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee (which may be the opinion delivered under
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Section 8.4(a) hereof), are in excess of the amount thereof that would then be
required to be deposited to effect an equivalent Covenant Defeasance.
Section 8.6. Repayment to Holdings.
Any money deposited with the Trustee or any Paying Agent in trust for
the payment of the principal of, premium, if any, or interest on any Security
and remaining unclaimed for two years after such principal, and premium, if
any, or interest has become due and payable shall be paid to Holdings on its
request or shall be discharged from such trust; and the Holder of such Security
shall thereafter, as a creditor, look only to Holdings for payment thereof, and
all liability of the Trustee or such Paying Agent with respect to such trust
money shall thereupon cease; provided, however, that the Trustee or such Paying
Agent, before being required to make any such repayment, shall at the expense
of Holdings cause to be published once, in The New York Times and The Wall
Street Journal (national edition), notice that such money remains unclaimed and
that, after a date specified therein, which shall not be less than 30 days from
the date of such notification or publication, any unclaimed balance of such
money then remaining will be repaid to Holdings.
Section 8.7. Reinstatement.
If the Trustee or Paying Agent is unable to apply any United States
dollars or U.S. Government Obligations in accordance with Section 8.2 or 8.3
hereof, as the case may be, by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then Holdings' obligations under this Indenture and the Securities
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 8.2 or 8.3 hereof until such time as the Trustee or Paying Agent is
permitted to apply all such money in accordance with Section 8.2 or 8.3 hereof,
as the case may be; provided, however, that, if Holdings makes any payment of
principal of, premium, if any, or interest on any Security following the
reinstatement of its obligations, Holdings 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 IX
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 9.1. Without Consent of Holders.
Holdings, when authorized by a Board Resolution, and the Trustee,
together, may amend or supplement this Indenture or the Securities without
notice to or consent of any Holder:
(1) to cure any ambiguity, defect or inconsistency; provided that
such amendment or supplement does not adversely affect the rights of any
Holder;
(2) to comply with Article Five;
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(3) to provide for uncertificated Securities in addition to or in
place of certificated Securities; provided, however, that the uncertificated
Securities are issued in registered form for purposes of Section 163(f) of
the Internal Revenue Code of 1986, as from time to time amended, or in a
manner such that the uncertificated Securities are described in Section
163(f)(2)(B) of the Internal Revenue Code of 1986, as from time to time
amended;
(4) to make any other change that does not adversely affect the
rights of any Holders; or
(5) to comply with any requirements of the SEC in connection with the
qualification of this Indenture under the TIA;
provided that Holdings has delivered to the Trustee an Opinion of Counsel
stating that such amendment or supplement complies with the provisions of this
Section 9.1.
Section 9.2. With Consent of Holders.
Subject to Section 6.7, Holdings, when authorized by a Board Resolution,
and the Trustee, together, with the written consent of the Holder or Holders of
at least fifty one percent in aggregate principal amount of the outstanding
Securities, may amend or supplement this Indenture or the Securities, without
notice to any other Holders. Subject to Section 6.7, the Holder or Holders of
at least fifty one percent in aggregate principal amount of the outstanding
Securities may waive compliance by Holdings with any provision of this
Indenture or the Securities without notice to any other Holder. Without the
consent of each Holder affected, however, no amendment, supplement or waiver,
including a waiver pursuant to Section 6.4, may:
(1) change the principal amount of Securities whose Holders must
consent to an amendment, supplement or waiver of any provision of this
Indenture or the Securities;
(2) reduce the rate or extend the time for payment of interest on any
Security;
(3) reduce the principal amount of any Security;
(4) change the Maturity Date of any Security, or alter the redemption
provisions contained in paragraph 5 of the Securities in a manner adverse to
any Holder;
(5) make any changes in the provisions concerning waivers of Defaults
or Events of Default by Holders or the rights of Holders to recover the
principal of, interest on, or redemption payment with respect to, any
Security;
(6) make any changes in Section 6.4, 6.7 or this third sentence of
this Section 9.2; or
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(7) make the principal of, or the interest on any Security payable
with anything or in any manner other than as provided for in this Indenture
and the Securities as in effect on the date hereof.
Without the consent of the Holder or Holders of at least 66 2/3% of the
aggregate principal amount of the outstanding Securities, no change may be made
to the provisions of Article Eleven that adversely affects the rights of any
Holder under Article Eleven.
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment, supplement or
waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section becomes
effective, Holdings shall mail to the Holders affected thereby a notice briefly
describing the amendment, supplement or waiver. Any failure of Holdings to
mail such notice, or any defect therein, shall not, however, in any way impair
or affect the validity of any such supplemental indenture.
In connection with any amendment, supplement or waiver under this
Article Nine, Holdings may, but shall not be obligated to, offer to any Holder
who consents to such amendment, supplement or waiver, or to all Holders,
consideration for such Holder's consent to such amendment, supplement or
waiver.
Holdings agrees that no amendment, supplement or waiver under this
Article Nine may make any change that adversely affects the rights under
Article Eleven of any holders of Senior Indebtedness unless the holders of such
Senior Indebtedness consent to the change.
Section 9.3. Compliance with TIA.
Every amendment, waiver or supplement of this Indenture or the
Securities shall comply with the TIA as then in effect.
Section 9.4. Revocation and Effect of Consents.
Until an amendment, waiver or supplement becomes effective, a consent to
it by a Holder is a continuing consent by the Holder and every subsequent
Holder of a Security or portion of a Security that evidences the same debt as
the consenting Holder's Security, even if notation of the consent is not made
on any Security. However, any such Holder or subsequent Holder may revoke the
consent as to his Security or portion of his Security by notice to the Trustee
or Holdings received before the date on which the Trustee receives an Officers'
Certificate certifying that the Holders of the requisite principal amount of
Securities have consented (and not theretofore revoked such consent) to the
amendment, supplement or waiver.
Holdings may, but shall not be obligated to, fix a record date for the
purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver, which record date shall be at least 30 days prior to the
first solicitation of such consent. If a record date is fixed, then
notwithstanding the last sentence of the immediately preceding paragraph,
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those persons who were Holders at such record date (or their duly designated
proxies), and only those persons, shall be entitled to revoke any consent
previously given, whether or not such persons continue to be Holders after such
record date. No such consent shall be valid or effective for more than 90 days
after such record date.
After an amendment, supplement or waiver becomes effective, it shall
bind every Holder, unless it makes a change described in any of clauses (1)
through (7) of Section 9.2, in which case, the amendment, supplement or waiver
shall bind only each Holder of a Security who has consented to it and every
subsequent Holder of a Security or portion of a Security that evidences the
same debt as the consenting Holder's Security; provided that any such waiver
shall not impair or affect the right of any Holder to receive payment of
principal of and interest on a Security, on or after the respective due dates
expressed in such Security, or to bring suit for the enforcement of any such
payment on or after such respective dates without the consent of such Holder.
Section 9.5. Notation on or Exchange of Securities.
If an amendment, supplement or waiver changes the terms of a Security,
the Trustee may require the Holder of the Security to deliver it to the
Trustee. The Trustee may place an appropriate notation on the Security about
the changed terms and return it to the Holder. Alternatively, if Holdings or
the Trustee so determines, Holdings in exchange for the Security shall issue
and the Trustee shall authenticate a new Security that reflects the changed
terms.
Section 9.6. Trustee To Sign Amendments, Etc.
The Trustee shall execute any amendment, supplement or waiver authorized
pursuant to this Article Nine; provided that the Trustee may, but shall not be
obligated to, execute any such amendment, supplement or waiver which 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 Nine is authorized or
permitted by this Indenture.
ARTICLE X
MEETINGS OF SECURITYHOLDERS
Section 10.1. Purposes for Which Meetings May Be Called.
A meeting of Holders may be called at any time and from time to time
pursuant to the provisions of this Article Ten for any of the following
purposes:
(a) to give any notice to Holdings or to the Trustee, or to give any
directions to the Trustee, or to waive or to consent to the waiving of any
Default or Event of
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Default hereunder and its consequences, or to take any other action
authorized to be taken by Holders pursuant to any of the provisions of
Article Six;
(b) to remove the Trustee or appoint a successor Trustee pursuant to
the provisions of Article Seven;
(c) to consent to an amendment, supplement or waiver pursuant to the
provisions of Section 9.2; or
(d) to take any other action (i) authorized to be taken by or on
behalf of the Holders of any specified aggregate principal amount of the
Securities under any other provision of this Indenture, or authorized or
permitted by law or (ii) which the Trustee deems necessary or appropriate in
connection with the administration of this Indenture.
Section 10.2. Manner of Calling Meetings.
The Trustee may at any time call a meeting of Holders to take any action
specified in Section 10.1, to be held at such time and at such place in New
York, New York or elsewhere as the Trustee shall determine. Notice of every
meeting of Holders, setting forth the time and place of such meeting and in
general terms the action proposed to be taken at such meeting, shall be mailed
by the Trustee, first-class postage prepaid, to Holdings and to the Holders at
their last addresses as they shall appear on the registration books of the
Registrar not less than 10 nor more than 60 days prior to the date fixed for a
meeting.
Any meeting of Holders shall be valid without notice if the Holders of
all Securities then outstanding are present in person or by proxy, or if notice
is waived before or after the meeting by the Holders of all Securities
outstanding, and if Holdings, any Subsidiary and the Trustee are either present
by duly authorized representatives or have, before or after the meeting, waived
notice.
Section 10.3. Call of Meetings by Holdings or Holders.
In case at any time Holdings, pursuant to a Board Resolution, or the
Holders of not less than 10% in aggregate principal amount of the Securities
then outstanding shall have requested the Trustee to call a meeting of Holders
to take any action specified in Section 10.1, by written request setting forth
in reasonable detail the action proposed to be taken at the meeting, and the
Trustee shall not have mailed the notice of such meeting within 20 days after
receipt of such request, then Holdings or the Holders in the amount above
specified may determine the time and place in New York, New York or elsewhere
for such meeting and may call such meeting for the purpose of taking such
action, by mailing or causing to be mailed notice thereof as provided in
Section 10.2, or by causing notice thereof to be published at least once in
each of two successive calendar weeks (on any Business Day during such week) in
a newspaper or newspapers printed in the English language, customarily
published at least five days a week of a general circulation in New York, New
York, the first such publication to be not less than 10 nor more than 60 days
prior to the date fixed for the meeting.
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Section 10.4. Who May Attend and Vote at Meetings.
To be entitled to vote at any meeting of Holders, a person shall (a) be
a registered Holder of one or more Securities, or (b) be a person appointed by
an instrument in writing as proxy for the registered Holder or Holders of
Securities. The only persons who shall be entitled to be present or to speak
at any meeting of Holders shall be the persons entitled to vote at such meeting
and their counsel and any representatives of the Trustee and its counsel and
any representatives of Holdings and its counsel.
Section 10.5. Regulations May Be Made by Trustee; Conduct of the Meeting;
Voting Rights; Adjournment.
Notwithstanding any other provision of this Indenture, the Trustee may
make such reasonable regulations as it may deem advisable for any action by or
any meeting of Holders, in regard to proof of the holding of Securities and of
the appointment of proxies, and in regard to the appointment and duties of
inspectors of votes, and submission and examination of proxies, certificates
and other evidence of the right to vote, and such other matters concerning the
conduct of the meeting as it shall think appropriate. Such regulations may fix
a record date and time for determining the Holders of record of Securities
entitled to vote at such meeting, in which case those and only those persons
who are Holders of Securities at the record date and time so fixed, or their
proxies, shall be entitled to vote at such meeting whether or not they shall be
such Holders at the time of the meeting.
The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by Holdings
or by Holders as provided in Section 10.3, in which case Holdings or the
Holders calling the meeting, as the case may be, shall in like manner appoint a
temporary chairman. A permanent chairman and a permanent secretary of the
meeting shall be elected by vote of the Holders of a majority in aggregate
principal amount of the Securities represented at the meeting and entitled to
vote.
At any meeting each Holder or proxy shall be entitled to one vote for
each $1,000 principal amount of Securities held or represented by him;
provided, however, that no vote shall be cast or counted at any meeting in
respect of any Securities challenged as not outstanding and ruled by the
chairman of the meeting to be not outstanding. The chairman may adjourn any
such meeting if he is unable to determine whether any Holder or proxy shall be
entitled to vote at such meeting. The chairman of the meeting shall have no
right to vote other than by virtue of Securities held by him or instruments in
writing as aforesaid duly designating him as the proxy to vote on behalf of
other Holders. Any meeting of Holders duly called pursuant to the provisions
of Section 10.2 or Section 10.3 may be adjourned from time to time by vote of
the Holders of a majority in aggregate principal amount of the Securities
represented at the meeting and entitled to vote, and the meeting may be held as
so adjourned without further notice.
Section 10.6. Voting at the Meeting and Record To Be Kept.
The vote upon any resolution submitted to any meeting of Holders shall
be by written ballots on which shall be subscribed the signatures of the
Holders of Securities or of their
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representatives by proxy and the principal amount of the Securities voted by
the ballot. The permanent chairman of the meeting shall appoint two inspectors
of votes, who shall count all votes cast at the meeting for or against any
resolution and who shall make and file with the secretary of the meeting their
verified written reports in duplicate of all votes cast at the meeting. A
record in duplicate of the proceedings of each meeting of Holders shall be
prepared by the secretary of the meeting and there shall be attached to such
record the original reports of the inspectors of votes on any vote by ballot
taken thereat and affidavits by one or more persons having knowledge of the
facts, setting forth a copy of the notice of the meeting and showing that such
notice was mailed as provided in Section 10.2 or published as provided in
Section 10.3. The record shall be signed and verified by the affidavits of the
permanent chairman and the secretary of the meeting and one of the duplicates
shall be delivered to Holdings and the other to the Trustee to be preserved by
the Trustee, the latter to have attached thereto the ballots voted at the
meeting.
Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
Section 10.7. Exercise of Rights of Trustee or Holders May Not Be
Hindered or Delayed by Call of Meeting.
Nothing contained in this Article Ten shall be deemed or construed to
authorize or permit, by reason of any call of a meeting of Holders or any
rights expressly or impliedly conferred hereunder to make such call, any
hindrance or delay in the exercise of any right or rights conferred upon or
reserved to the Trustee or to the Holders under any of the provisions of this
Indenture or of the Securities.
ARTICLE XI
SUBORDINATION
Section 11.1. Securities Subordinated to Senior Indebtedness.
Anything herein to the contrary notwithstanding, Holdings, for itself
and its successors, and each Holder, by accepting a Security, agrees, that the
payment of the principal of and interest on and premiums, penalties, fees and
other liabilities (including, without limitation, liabilities in respect of any
indemnity, reimbursement, compensation or contribution obligations, the
occurrence of a Change of Control, any liquidated damage provision, any breach
of representation or warranty, or any rights of redemption or rescission under
this Indenture, the Merger Agreement and the Registration Rights Agreement or
by law or otherwise) ("Other Obligations") with respect to the Securities is
subordinated, to the extent and in the manner provided in this Article Eleven,
to the prior payment in full in cash of all Senior Indebtedness.
This Article Eleven shall constitute a continuing offer to all persons
who become holders of, or continue to hold, Senior Indebtedness, and such
provisions are made for the benefit of the holders of Senior Indebtedness and
such holders are made obligees hereunder and any
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one or more of them may enforce such provisions. Holders of Senior
Indebtedness need not prove reliance on the subordination provisions hereof.
Section 11.2. No Payment on Securities in Certain Circumstances.
(a) No direct or indirect payment or distribution shall be made by or
on behalf of Holdings (other than a payment in Secondary Securities) on account
of principal of or interest on or Other Obligations with respect to the
Securities or to acquire, repurchase, redeem, retire or defease any of the
Securities or on account of the redemption provisions of the Securities (i)
upon the maturity of any Senior Indebtedness by lapse of time, acceleration or
otherwise, unless and until all principal thereof and interest thereon shall
first be paid in full in cash or (ii) upon the happening of any default in
payment of any principal of or interest on any Senior Indebtedness when the
same becomes due and payable (a "Payment Default"), unless and until such
default shall have been cured or waived or shall have ceased to exist.
(b) Without limiting the effect of Section 11.2(a), upon the
happening of a default or event of default (other than a Payment Default)
(including any event which, with the giving of notice or lapse of time, or
both, would become an event of default and including any default or event of
default that would result upon any payment with respect to the Securities) with
respect to any Senior Indebtedness, as such default or event of default is
defined therein or in the instrument or agreement under which it is
outstanding, and upon written notice thereof given to Holdings and the Trustee
by any holders of such Senior Indebtedness or their Representative specifying
an intent to effect a Payment Blockage Period hereunder ("Payment Notice"),
then, unless and until such default or event of default shall have been cured
or waived or shall have ceased to exist, no direct or indirect payment or
distribution (other than of Secondary Securities) shall be made by or on behalf
of Holdings on account of principal of or interest on or Other Obligations with
respect to the Securities or to acquire, repurchase, redeem, retire or defease
any of the Securities or on account of the redemption provisions of the
Securities; provided, however, that this paragraph (b) shall not prevent the
making of any payment for a period of (a "Payment Blockage Period") of more
than 179 days after a Payment Notice shall have been given (or earlier if such
Payment Blockage Period is terminated (i) by written notice to the Trustee and
Holdings from the Credit Agent or the Representative which gave such Payment
Notice, (ii) repayment in full of such Senior Indebtedness or (iii) because the
default specified in the Payment Notice is no longer continuing). Subject to
the provisions contained in Section 11.2(a) above, Holdings may resume payments
on the Securities after such Payment Blockage Period expires. Notwithstanding
the foregoing, (i) not more than one Payment Notice shall be given within a
period of 360 consecutive days, and (ii) a Payment Notice may only be given (A)
if Senior Indebtedness is outstanding under the Credit Agreement at the time of
such notice, by the Credit Agent and (B) if no Senior Indebtedness is
outstanding under the Credit Agreement at the time of such notice, by a holder
or holders (or the Representative of holders) of at least $35,000,000 principal
amount of such Senior Indebtedness. For purposes of this Section, no default
or event of default which existed or was continuing on the date of the
commencement of any Payment Blockage Period with respect to the Senior
Indebtedness initiating such Payment Blockage Period shall be, or be made, the
basis of the commencement of a subsequent Payment Blockage Period by the
Representative of such Senior
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Indebtedness whether or not within a period of 360 consecutive days unless such
default or event of default shall have been cured or waived for a period of not
less than 90 consecutive days.
(c) In furtherance of the provisions of Section 11.1, if,
notwithstanding the foregoing provisions of this Section 11.2, any direct or
indirect payment or distribution other than Secondary Securities on account of
principal of or interest on or Other Obligations with respect to the Securities
or to acquire, repurchase, redeem, retire or defease any of the Securities or
on account of the redemption provisions of the Securities shall be made by or
on behalf of Holdings and received by the Trustee, by any Holder or by any
Paying Agent (or, if Holdings or any Subsidiary or Affiliate of Holdings is
acting as Paying Agent, money for any such payment or distribution shall be
segregated and held in trust), at a time when such payment or distribution was
prohibited by the provisions of this Section 11.2, then, unless and until such
payment or distribution is no longer prohibited by this Section 11.2, such
payment or distribution (subject to the provisions of Sections 11.6 and 11.7)
shall be received, segregated from other funds, and held in trust by the
Trustee or such Holder or Paying Agent, as the case may be, for the benefit of,
and shall be immediately paid over to, the holders of Senior Indebtedness or
their Representative, ratably according to the respective amounts of Senior
Indebtedness held or represented by each, to the extent necessary to make
payment in full in cash of all Senior Indebtedness remaining unpaid, after
giving effect to all concurrent payments and distributions to or for the
holders of Senior Indebtedness. Holdings shall give prompt notice to the
Trustee of any default or event of default or any acceleration under any Senior
Indebtedness or under any agreement pursuant to which Senior Indebtedness may
have been issued. Failure to give such notice shall not affect the
subordination of the Securities to Senior Indebtedness provided in this Article
Eleven. Notwithstanding anything to the contrary contained herein, in the
absence of its gross negligence or willful misconduct, the Trustee shall have
no duty to collect or retrieve monies previously paid by it in good faith;
provided that this sentence shall not affect the obligation of any other party
receiving such payment to hold such payment for the benefit of, and to pay such
payment over to, the holders of Senior Indebtedness or their Representative.
Section 11.3. Securities Subordinated to Prior Payment of All Senior
Indebtedness on Dissolution, Liquidation or Reorganization
of Holdings.
Upon any payment or distribution of assets or securities of Holdings of
any kind or character, whether in cash, property or securities, upon any
dissolution, winding-up, total or partial liquidation or total or partial
reorganization of Holdings (including, without limitation, in bankruptcy,
insolvency or receivership proceedings or upon any assignment for the benefit
of creditors or any other marshalling of assets and liabilities of Holdings and
whether voluntary or involuntary):
(a) the holders of all Senior Indebtedness shall first be entitled to
receive payments in full in cash of the principal thereof and interest
thereon before the Holders are entitled to receive any payment on account of
the principal of or interest on or Other Obligations with respect to the
Securities (whether by payment, acquisition, retirement, defeasance,
redemption or otherwise) or any other payment or distribution of assets or
securities by or on behalf of Holdings;
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(b) any payment or distribution of assets or securities of Holdings
of any kind or character, whether in cash, property or securities, to which
the Holders or the Trustee on behalf of the Holders would be entitled except
for the provisions of this Article Eleven, including any such payment or
distribution that is payable or deliverable by reason of the payment of any
other Indebtedness of Holdings being subordinated to the payment of the
Securities (except for any such payment or distribution (x) authorized by an
order or decree giving effect, and stating in such order or decree that
effect is given, to the subordination of the Securities to the Senior
Indebtedness, and made by a court of competent jurisdiction in a
reorganization proceeding under any applicable bankruptcy law, (y) of
securities that (i) are unsecured, (ii) have a Weighted Average Life to
Maturity and final maturity that are no shorter than the Weighted Average
Life to Maturity of the Securities or any securities issued to the holders of
Senior Indebtedness under the Loan Documents pursuant to a plan of
reorganization or readjustment and (iii) are subordinated, to at least the
same extent as the Securities, to the payment of all Senior Indebtedness then
outstanding or (z) of Capital Stock), shall be paid by the liquidating
trustee or agent or other person making such a payment or distribution,
directly to the holders of Senior Indebtedness or their Representative,
ratably according to the respective amounts of Senior Indebtedness held or
represented by each, until all Senior Indebtedness remaining unpaid shall
have been paid in full in cash, after giving effect to all concurrent
payments and distributions to or for the holders of such Senior Indebtedness;
and
(c) in the event that, notwithstanding the foregoing, any payment or
distribution of assets or securities of Holdings of any kind or character,
whether in cash, property or securities, shall be received by the Trustee or
the Holders or any Paying Agent (or, if Holdings or any Subsidiary or
Affiliate of Holdings is acting as Paying Agent, money, assets or securities
of any kind or character for any such payment or distribution shall be
segregated or held in trust) on account of principal of or interest on or
Other Obligations with respect to the Securities before all Senior
Indebtedness is paid in full in cash, such payment or distribution (subject
to the provisions of Sections 11.6 and 11.7) shall be received, segregated
from other funds, and held in trust by the Trustee or such Holder or Paying
Agent for the benefit of, and shall immediately be paid over to, the holders
of Senior Indebtedness or their Representative, ratably according to the
respective amounts of Senior Indebtedness held or represented by each, until
all Senior Indebtedness remaining unpaid shall have been paid in full in
cash, after giving effect to all concurrent payments and distributions to or
for the holders of Senior Indebtedness. Notwithstanding anything to the
contrary contained herein, in the absence of its gross negligence or wilful
misconduct, the Trustee shall have no duty to collect or retrieve monies
previously paid by it in good faith; provided that this sentence shall not
affect the obligation of any other party receiving such payment to hold such
payment for the benefit of, and to pay over such payment over to, the holders
of Senior Indebtedness or their Representative.
Holdings shall give prompt notice to the Trustee prior to any
dissolution, winding-up, total or partial liquidation or total or partial
reorganization of Holdings or assignment for the benefit of creditors by
Holdings.
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Section 11.4. Holders to Be Subrogated to Rights of Holders of Senior
Indebtedness.
Subject to the payment in full in cash of all Senior Indebtedness, the
Holders of Securities shall be subrogated to the rights of the holders of
Senior Indebtedness to receive payments or distributions of assets of Holdings
applicable to the Senior Indebtedness until all amounts owing on the Securities
shall be paid in full in cash, and for the purpose of such subrogation no
payments or distributions to the holders of Senior Indebtedness by or on behalf
of Holdings, or by or on behalf of the Holders by virtue of this Article
Eleven, which otherwise would have been made to the Holders, shall, as between
Holdings and the Holders, be deemed to be payment by Holdings to or on account
of the Senior Indebtedness, it being understood that the provisions of this
Article Eleven are and are intended solely for the purpose of defining the
relative rights of the Holders, on the one hand, and the holders of Senior
Indebtedness, on the other hand.
If any payment or distribution to which the Holders would otherwise have
been entitled but for the provisions of this Article Eleven shall have been
applied, pursuant to the provisions of this Article Eleven, to the payment of
all amounts payable under the Senior Indebtedness, then the Holders shall be
entitled to receive from the holders of such Senior Indebtedness any payments
or distributions received by such holders of Senior Indebtedness in excess of
the amount sufficient to pay all amounts payable under or in respect of the
Senior Indebtedness in full in cash.
Section 11.5. Obligations of Holdings Unconditional.
Nothing contained in this Article Eleven or elsewhere in this Indenture
or in the Securities is intended to or shall impair, as between Holdings and
the Holders, the obligation of Holdings, which is absolute and unconditional,
to pay to the Holders the principal of and interest on and Other Obligations in
respect of the Securities as and when the same shall become due and payable in
accordance with their terms, or is intended to or shall affect the relative
rights of the Holders and creditors of Holdings other than the holders of the
Senior Indebtedness, nor shall anything herein or therein prevent the Trustee
or any Holder from exercising all remedies otherwise permitted by applicable
law upon default under this Indenture, subject to the rights, if any, under
this Article Eleven, of the holders of Senior Indebtedness in respect of cash,
property or securities of Holdings received upon the exercise of any such
remedy. Upon any payment or distribution of assets or securities of Holdings
referred to in this Article Eleven, the Trustee, subject to the provisions of
Sections 7.1 and 7.2, and the Holders shall be entitled to rely upon any order
or decree made by any court of competent jurisdiction in which any dissolution,
winding-up, liquidation or reorganization proceedings are pending, or a
certificate of the receiver, trustee in bankruptcy, liquidating trustee or
agent or other person making any payment or distribution to the Trustee or to
the Holders for the purpose of ascertaining the persons entitled to participate
in such payment or distribution, the holders of Senior Indebtedness and other
Indebtedness of Holdings, the amount thereof or payable thereon, the amount or
amounts paid or distributed thereon and all other facts pertinent thereto or to
this Article Eleven. Nothing in this Section 11.5 shall apply to the claims
of, or payments to, the Trustee under or pursuant to Section 7.7.
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Section 11.6. Trustee Entitled to Assume Payments Not Prohibited in
Absence of Notice.
The Trustee shall not at any time be charged with knowledge of the
existence of any facts that would prohibit the making of any payment to or by
the Trustee unless and until the Trustee or any Paying Agent shall have
received written notice thereof from Holdings or from one or more holders of
Senior Indebtedness or from any Representative therefor and, prior to the
receipt of any such notice, the Trustee, subject to the provisions of Sections
7.1 and 7.2, shall be entitled in all respects conclusively to assume that no
such fact exists.
Section 11.7. Application by Trustee of Assets Deposited with It.
U.S. Legal Tender or U.S. Government Obligations deposited in trust with
the Trustee pursuant to and in accordance with Section 8.4 shall be for the
sole benefit of Holders and, to the extent allocated for the payment of
Securities, shall not be subject to the subordination provisions of this
Article Eleven. Otherwise, any deposit of assets or securities by or on behalf
of Holdings with the Trustee or any Paying Agent (whether or not in trust) for
the payment of principal of or interest on or Other Obligations with respect to
any Securities shall be subject to the provisions of this Article Eleven;
provided that if prior to the second Business Day preceding the date on which
by the terms of this Indenture any such assets may become distributable for any
purpose (including, without limitation, the payment of either principal of or
interest on any Security) the Trustee or such Paying Agent shall not have
received with respect to such assets the notice provided for in Section 11.6,
then the Trustee or such Paying Agent shall have full power and authority to
receive such assets and to apply the same to the purpose for which they were
received, and shall not be affected by any notice to the contrary received by
it on or after such date. The foregoing shall not apply to the Paying Agent if
Holdings or any Subsidiary or Affiliate of Holdings is acting as Paying Agent.
Nothing contained in this Section 11.7 (except the first sentence of this
Section 11.7) shall limit the right of the holders of Senior Indebtedness to
recover payments as contemplated by this Article Eleven.
Section 11.8. Subordination Rights Not Impaired by Acts or Omissions of
Holdings or Holders of Senior Indebtedness.
No right of any present or future holders of any Senior Indebtedness to
enforce the subordination provisions contained in this Article Eleven shall at
any time in any way be prejudiced or impaired by any act or failure to act on
the part of Holdings or by any act or failure to act, in good faith, by any
such holder, or by any noncompliance by Holdings with the terms of this
Indenture, regardless of any knowledge thereof that any such holder may have or
be otherwise charged with. The holders of Senior Indebtedness may extend,
renew, restate, supplement, modify or amend the terms of the Senior
Indebtedness or any security therefor and release, sell or exchange such
security and otherwise deal freely with Holdings and its Subsidiaries all
without affecting the liabilities and obligations of the parties to this
Indenture or the Holders. No provision in any supplemental indenture that
affects the subordination of the Securities or other provisions of this Article
Eleven shall be effective against the holders of the Senior Indebtedness who
have not consented thereto.
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Each Holder by accepting a Security agrees that the Representative of
any Senior Indebtedness (including without limitation, the Credit Agent), in
its discretion, without notice or demand and without affecting any rights of
any holder of Senior Indebtedness under this Article Eleven, may foreclose any
mortgage or deed of trust covering interests in real property secured thereby,
by judicial or nonjudicial sale; and such Holder hereby waives any defense to
the enforcement by the Representative (including without limitation, the Credit
Agent) of any Senior Indebtedness or by any holder of any Senior Indebtedness
against such Holder of this Article Eleven after a judicial or nonjudicial sale
or other disposition of its interests in real property secured by such mortgage
or deed of trust; and such Holder expressly waives any defense or benefits that
may be derived from California Civil Code Section Section 2808, 2809, 2810,
2819, 2845, 2849 or 2850, or California Code of Civil Procedure Section Section
580a, 580d or 726, or comparable provisions of the laws of any other
jurisdiction or any similar statute in effect in any other jurisdiction.
Section 11.9. Holders Authorize Trustee to Effectuate Subordination of
Securities.
Each Holder by accepting a Security authorizes and expressly directs the
Trustee on his behalf to take such action as may be necessary or appropriate to
effect the subordination provisions contained in this Article Eleven, and
appoints the Trustee his attorney-in-fact for such purpose, including, in the
event of any dissolution, winding up, liquidation or reorganization of Holdings
(whether in bankruptcy, insolvency or receivership proceedings or upon an
assignment for the benefit of creditors or any other marshalling of assets and
liabilities of Holdings) tending towards liquidation or reorganization of the
business and assets of Holdings, the immediate filing of a claim for the unpaid
balance of its or his Securities and Other Obligations in the form required in
said proceedings and cause said claim to be approved. If the Trustee does not
file a proper claim or proof of debt in the form required in such proceeding
prior to 30 days before the expiration of the time to file such claim or
claims, then the holders of the Senior Indebtedness or their Representative is
hereby authorized to file an appropriate claim for and on behalf of the Holders
of said Securities. Nothing herein contained shall be deemed to authorize the
Trustee or the holders of Senior Indebtedness or their Representative to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee or the holders
of Senior Indebtedness or their Representative to vote in respect of the claim
of any Holder in any such proceeding.
Section 11.10. Right of Trustee to Hold Senior Indebtedness.
The Trustee shall be entitled to all of the rights set forth in this
Article Eleven in respect of any Senior Indebtedness at any time held by it to
the same extent as any other holder of Senior Indebtedness, and nothing in this
Indenture shall be construed to deprive the Trustee of any of its rights as
such holder.
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Section 11.11. Article Eleven Not to Prevent Events of Default.
The failure to make a payment on account of principal of or interest on
the Securities by reason of any provision of this Article Eleven shall not be
construed as preventing the occurrence of a Default or an Event of Default
under Section 6.1.
Section 11.12. No Fiduciary Duty of Trustee to Holders of Senior Indebtedness.
The Trustee shall not be deemed to owe any fiduciary duty to the holders
of Senior Indebtedness, and shall not be liable to any such holders (other than
for its willful misconduct or gross negligence) if it shall in good faith
mistakenly pay over or deliver to the Holders of Securities or Holdings or any
other person, money or assets to which any holders of Senior Indebtedness shall
be entitled by virtue of this Article Eleven or otherwise. Nothing in this
Section 11.12 shall affect the obligation of any person other than the Trustee
to hold such payment for the benefit of, and to pay such payment over to, the
holders of Senior Indebtedness or their Representative.
ARTICLE XII
SATISFACTION AND DISCHARGE
Section 12.1. Satisfaction and Discharge of the Indenture.
This Indenture will be discharged and will cease to be of further effect
as to all outstanding Securities when:
(a) all Securities theretofore authenticated and delivered (except
lost, stolen or destroyed Securities which have been replaced or paid and
Securities for whose payment money has theretofore been deposited in trust and
thereafter repaid to Holdings) have been delivered to the Trustee for
cancellation; or
(b) (1) all Securities not theretofore delivered to the Trustee for
cancellation have become due and payable by reason of the making of a notice
of redemption or otherwise and Holdings has irrevocably deposited or caused
to be deposited with the Trustee as trust funds in trust for the purpose an
amount sufficient to pay and discharge the entire indebtedness on the
Securities not theretofore delivered to the Trustee for cancellation for
principal, premium, if any, and accrued interest to the date of maturity or
redemption;
(2) Holdings has paid all sums payable by it under this
Indenture; and
(3) Holdings has delivered irrevocable instructions to the
Trustee to apply the deposited money toward the payment of the Securities at
maturity or the redemption date, as the case may be.
Section 12.2. Conditions to Satisfaction and Discharge of the Indenture.
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Holdings shall deliver an Officers' Certificate and an Opinion of
Counsel to the Trustee stating that all conditions precedent to satisfaction
and discharge have been complied with.
ARTICLE XIII
MISCELLANEOUS
Section 13.1. TIA Controls.
If any provision of this Indenture limits, qualifies, or conflicts with
the duties imposed by operation of Section 3.18(c) of the TIA, the imposed
duties shall control.
Section 13.2. Notices.
Any notices or other communications required or permitted hereunder
shall be in writing, and shall be sufficiently given if made by hand delivery,
by telex, by telecopier or registered or certified mail, postage prepaid,
return receipt requested, addressed as follows:
if to Holdings:
c/o The Yucaipa Companies
10000 Santa Monica Boulevard
Fifth Floor
Los Angeles, California 90067
Attention: Mark A. Resnik
if to the Trustee:
____________________________________
____________________________________
____________________________________
____________________________________
Attention: Corporate Trust Administration
Each of Holdings and the Trustee by written notice to each other such
person may designate additional or different addresses for notices to such
person. Any notice or communication to Holdings and the Trustee shall be
deemed to have been given or made as of the date so delivered if personally
delivered; when answered back, if telexed; when receipt is acknowledged, if
telecopied; and five (5) calendar days after mailing if sent by registered or
certified mail, postage prepaid (except that a notice of change of address
shall not be deemed to have been given until actually received by the
addressee).
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Any notice or communication mailed to a Holder shall be mailed to him by
first class mail or other equivalent means at his address as it appears on the
registration books of the Registrar and shall be sufficiently given to him if
so mailed within the time prescribed.
Failure to mail a notice or communication to a Holder or any defect in
it shall not affect its sufficiency with respect to other Holders. If a notice
or communication is mailed in the manner provided above, it is duly given,
whether or not the addressee receives it.
Section 13.3. Communications 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.
Holdings, the Trustee, the Registrar and any other person shall have the
protection of TIA Section 312(c).
Section 13.4. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by Holdings to the Trustee to take any
action under this Indenture, Holdings shall furnish to the Trustee:
(1) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
Section 13.5. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture, other than the Officers'
Certificate required by Section 4.7, shall include:
(1) a statement that the person making such certificate or opinion
has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
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 each such
person, such condition or covenant has been complied with; provided, however,
that with respect to
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matters of fact an Opinion of Counsel may rely on an Officers' Certificate or
certificates of public officials.
Section 13.6. Rules by Trustee, Paying Agent, Registrar.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Paying Agent or Registrar may make reasonable rules for its
functions.
Section 13.7. Legal Holidays.
A "Legal Holiday" used with respect to a particular place of payment is
a Saturday, a Sunday or a day on which banking institutions in New York, New
York, Los Angeles, California or at such place of payment are not required to
be open. If a payment date is a Legal Holiday at such place, payment may be
made at such place on the next succeeding day that is not a Legal Holiday, and
no interest shall accrue for the intervening period.
Section 13.8. 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. Each of the parties hereto agrees to submit to the
jurisdiction of the courts of the State of New York in any action or proceeding
arising out of or relating to this Indenture.
Section 13.9. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of any of Holdings or any Subsidiary. Any such indenture, loan
or debt agreement may not be used to interpret this Indenture.
Section 13.10. No Recourse Against Others.
A director, officer, employee, stockholder or incorporator, as such, of
Holdings shall not have any liability for any obligations of Holdings under the
Securities or the Indenture or for any claim based on, in respect of or by
reason of such obligations or their creations. Each Holder by accepting a
Security waives and releases all such liability. Such waiver and release are
part of the consideration for the issuance of the Securities.
Section 13.11. Successors.
All agreements of Holdings in this Indenture and the Securities shall
bind their respective successors. All agreements of the Trustee in this
Indenture shall bind its successor.
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Section 13.12. Duplicate Originals.
All parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together shall represent the
same agreement.
Section 13.13. Severability.
In case any one or more of the provisions in this Indenture or in the
Securities shall be held invalid, illegal or unenforceable, in any respect for
any reason, the validity, legality and enforceability of any such provision in
every other respect and of the remaining provisions shall not in any way be
affected or impaired thereby, it being intended that all of the provisions
hereof shall be enforceable to the full extent permitted by law.
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SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the date first written above.
Dated: ________ __, 1995
[SEAL] FOOD 4 LESS HOLDINGS, INC.
Attest: By:
------------------------------------
Name: Mark A. Resnik
Title: Vice President
____________________________
Dated: ________ __, 1995
[SEAL] ----------------------------------------
----------------------------------------
as Trustee
Attest: By:
------------------------------------
Name:
Title:
____________________________
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EXHIBIT A
PURSUANT TO PROVISIONS OF THE INTERNAL REVENUE CODE OF 1986 RELATING TO
ORIGINAL ISSUE DISCOUNT AND TREASURY REGULATIONS PROMULGATED THEREUNDER WITH
RESPECT TO DEBT INSTRUMENTS ISSUED ON OR AFTER APRIL 4, 1994, THE FOLLOWING
INFORMATION IS PROVIDED: (1) THIS SECURITY IS BEING ISSUED WITH ORIGINAL
ISSUE DISCOUNT IN THE AMOUNT OF $____ PER FACE AMOUNT; (2) THE ISSUE PRICE
OF THIS SECURITY IS $___ PER FACE AMOUNT; (3) THE ISSUE DATE OF THIS
SECURITY IS ______ __, ____; AND (4) THE YIELD TO MATURITY OF THIS SECURITY
IS __%.
FOOD 4 LESS HOLDINGS, INC.
13% Senior Subordinated Pay-in-Kind Debentures
due ________ __, 2007
No.
$
Food 4 Less Holdings, Inc., a Delaware corporation ("Holdings," which term
includes any successor entity), for value received promises to pay to
or registered assigns, the principal sum of dollars, on ________ __,
2007.
Interest payment dates: ________________ and _______________
commencing ________ __, ____.
Record dates: _________ and _________.
Reference is made to the further provisions of this security contained
herein, which will for all purposes have the same effect as if set forth at
this place.
IN WITNESS WHEREOF, Holdings has caused this Security to be signed
manually or by facsimile by its duly authorized officers.
Dated: ________ __, 1995
FOOD 4 LESS HOLDINGS, INC.
By:
Name:
Title:
This is one of the Securities described in the within-mentioned
Indenture.
Dated: ________ __, 1995
__________________________________
as Trustee
By:
Title:
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FOOD 4 LESS HOLDINGS, INC.
13% Senior Subordinated Pay-in-Kind Debenture
due ________ __, 2007
1. Interest.
FOOD 4 LESS HOLDINGS, INC., a Delaware corporation ("Holdings"),
promises to pay interest on the principal amount of this Security at the rate
per annum shown above. Holdings may, in its sole discretion, issue additional
Securities ("Secondary Securities") in lieu of a cash payment of any or all of
the interest due on any Interest Payment Date occurring on or prior to [the
Interest Payment Date five years after the Issue Date]. If Holdings issues
Secondary Securities in lieu of cash payment, in whole or in part, of interest
due on any Interest Payment Date occurring on or prior to [the Interest Payment
Date five years after the Issue Date], pursuant to this paragraph, it shall
give notice to the Trustee not less than 5 Business Days prior to the relevant
Interest Payment Date, and shall instruct the Trustee (upon written order of
Holdings signed by an Officer of Holdings given not less than 5 nor more than
45 days prior to such Interest Payment Date) to authenticate a Secondary
Security, dated such Interest Payment Date, in a principal amount equal to the
amount of interest not paid in cash in respect of this Security on such
Interest Payment Date. Each issuance of Secondary Securities in lieu of cash
payments of interest on the Securities shall be made pro rata with respect to
the outstanding Securities. Any such Secondary Securities shall be governed by
the Indenture and shall be subject to the same terms (including the maturity
date and the rate of interest from time to time payable thereon) as this
Security (except, as the case may be, with respect to the title, issuance date
and aggregate principal amount). The term Securities shall include the
Secondary Securities that may be issued under the Indenture.
Holdings will pay interest semi-annually in arrears on ___________ and
_________ of each year (the "Interest Payment Date"), commencing ___________,
____. Interest on this Security will accrue from the date of issuance or from
the most recent date to which interest has been paid. Interest will be
computed on the basis of a 360-day year of twelve 30-day months and actual
number of days elapsed.
Holdings shall pay interest on overdue principal and interest on overdue
installments of interest, to the extent lawful, at the rate per annum borne by
the Securities.
2. Method of Payment.
Holdings shall pay interest on the Securities (except defaulted
interest) to the persons who are the registered Holders at the close of
business on the Record Date immediately preceding the Interest Payment Date
even if the Securities are cancelled on registration of transfer or
registration of exchange after such Record Date. Holders must surrender
Securities to a Paying Agent to collect principal payments. Holdings shall pay
principal and interest in money of the United States that at the time of
payment is legal tender for payment of public and private debts ("U.S. Legal
Tender") (or, pursuant to
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Paragraph 1 hereof, in Secondary Securities). However, Holdings may pay
principal and interest by its check payable in such U.S. Legal Tender or by
wire transfer of federal funds (or, pursuant to Paragraph 1 hereof, in
Secondary Securities). Holdings may deliver any such interest payment to the
Paying Agent or to a Holder at the Holder's registered address.
3. Paying Agent and Registrar.
Initially, Norwest Bank Minnesota, N.A. (the "Trustee"), will act as
Paying Agent and Registrar. Holdings may change any Paying Agent, Registrar or
co-Registrar without notice to the Holders. Holdings or any Subsidiary may,
subject to certain exceptions, act as Paying Agent, Registrar or co-Registrar.
4. Indenture.
Holdings issued the Securities under an Indenture, dated as of ________
__, 1995 (the "Indenture"), between Holdings and the Trustee. This Security is
one of a duly authorized issue of Securities of Holdings designated as its 13%
Senior Subordinated Pay-in-Kind Debentures due 2007. Capitalized terms herein
are used as defined in the Indenture unless otherwise defined herein. The
terms of the Securities include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.
Code Sections 77aaa-77bbbb) (the "TIA"), as in effect on the date of the
Indenture until such time as the Indenture is qualified under the TIA, and
thereafter as in effect on the date on which the Indenture is qualified under
the TIA. Notwithstanding anything to the contrary herein, the Securities are
subject to all such terms, and Holders of Securities are referred to the
Indenture and said Act for a statement of them. The Securities are general
unsecured obligations of Holdings limited in aggregate principal amount to
$100,000,000, except for Secondary Securities and except as otherwise provided
in the Indenture.
5. Optional Redemption.
The Securities may not be redeemed at the option of Holdings prior to
________ __, 2000. Thereafter, upon at least 30 days' but not more than 60
days' notice to the Holders, Holdings may redeem all or any of the Securities
at any time at redemption prices equal to the applicable percentage of the
principal amount thereof set forth below, plus accrued interest, if any, to the
Redemption Date (as defined in the Indenture) if redeemed during the 12-month
period beginning ________ __ of the years indicated below:
Applicable
Year Percentage
---- ----------
2000 . . . . . . . . . . . . . . . . . . . . . . . 106.500%
2001 . . . . . . . . . . . . . . . . . . . . . . . 104.875%
2002 . . . . . . . . . . . . . . . . . . . . . . . 103.250%
2003 . . . . . . . . . . . . . . . . . . . . . . . 101.625%
2004 and thereafter . . . . . . . . . . . . . . . . 100.000 %
Notwithstanding the foregoing, prior to ________ __, 1998, Holdings may
use the Net Proceeds (as defined in the Indenture) of an Initial Public
Offering (as defined in the
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Indenture) of Holdings or the Company to redeem up to 35% of the Securities at
a redemption price equal to 110% of the principal amount thereof plus accrued
interest, if any, to the date of redemption.
In order to effect the foregoing redemption, Holdings shall send the
notice required by Section 3.3 of the Indenture not later than 30 days after
the Initial Public Offering Consummation Date (as defined in the Indenture).
6. Notice of Redemption.
Notice of redemption will be mailed at least 30 days but not more than
60 days before the Redemption Date to each Holder of Securities to be redeemed
at such Holder's registered address. Securities in denominations larger than
$1,000 may be redeemed in part.
Except as set forth in the Indenture, from and after any Redemption
Date, if monies for the redemption of the Securities called for redemption
shall have been deposited with the Paying Agent for redemption on such
Redemption Date, then, unless Holdings defaults in the payment of such
Redemption Price, the Securities called for redemption will cease to bear
interest and the only right of the Holders of such Securities will be to
receive payment of the Redemption Price.
7. Change of Control Offer.
In the event of a Change of Control, upon the satisfaction of the
conditions set forth in the Indenture, Holdings shall be required to offer to
purchase all of the then outstanding Securities pursuant to a Change of Control
Offer at a purchase price equal to 101% of the aggregate principal amount
thereof plus accrued interest, if any, to the date of purchase. Holders of
Securities which are the subject of such an offer to repurchase shall receive
an offer to repurchase and may elect to have such Securities repurchased in
accordance with the provisions of the Indenture pursuant to and in accordance
with the terms of the Indenture.
8. Limitation on Disposition of Assets.
Under certain circumstances Holdings is required to apply the net
proceeds from Asset Sales to the repayment of Indebtedness of Holdings or any
Subsidiary, to make Related Business Investments and certain other investments
or to purchase in a Net Proceeds Offer at a price equal to 100% of the
aggregate principal amount thereof, plus accrued interest, if any, to the date
of purchase, which shall in the aggregate equal the net proceeds required to be
applied thereto.
9. Subordination. The Securities are subordinated in right of payment, in
the manner and to the extent set forth in the Indenture, to the prior payment
in full of Senior Indebtedness of Holdings whether outstanding on the date of
the Indenture or thereafter created, incurred, assumed or guaranteed. Each
Holder, by accepting a Security, agrees to such subordination and authorizes
the Trustee to give it effect.
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10. Denominations; Transfer; Exchange.
The Securities are in registered form, without coupons, in denominations
of $1,000 and integral multiples of $1,000 (other than Secondary Securities
which may be in denominations of less than $1,000). A Holder shall register
the transfer of or exchange Securities in accordance with the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay certain transfer taxes or
similar governmental charges payable in connection therewith as permitted by
the Indenture. The Registrar need not register the transfer of or exchange any
Securities or portions thereof selected for redemption. No service charge
shall be made for any transfer, registration or exchange, but Holdings may
require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith, but not for any exchange pursuant to
Section 2.10, 3.6 or 9.5 of the Indenture.
11. Persons Deemed Owners.
The registered Holder of a Security shall be treated as the owner of it
for all purposes.
12. Unclaimed Money.
If money for the payment of principal or interest remains unclaimed for
one year, the Trustee and the Paying Agents will pay the money back to Holdings
at its request. After that, all liability of the Trustee and such Paying
Agents with respect to such money shall cease.
13. Discharge Prior to Redemption or Maturity.
If Holdings at any time deposits with the Trustee U.S. Legal Tender or
U.S. Government Obligations sufficient to pay the principal of and interest on
the Securities to redemption or maturity and complies with the other provisions
of the Indenture relating thereto, Holdings will be discharged from certain
provisions of the Indenture and the Securities (including the financial
covenants, but excluding its obligation to pay the principal of and interest on
the Securities).
14. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture or the Securities may be
amended or supplemented with the written consent of the Holders of at least a
majority in aggregate principal amount of the Securities then outstanding, and
any existing Default or Event of Default or compliance with any provision may
be waived with the consent of the Holders of fifty one percent in aggregate
principal amount, as the case may be, of the Securities then outstanding.
Without notice to or consent of any Holder, the parties thereto may amend or
supplement the Indenture or the Securities to, among other things, cure any
ambiguity, defect or inconsistency, provide for uncertificated Securities in
addition to or in place of certificated Securities, comply with Article Five of
the Indenture or comply with any requirements of the SEC in connection with the
qualification of the Indenture under the TIA, or make any other
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change that does not adversely affect the rights of any Holder of a Security.
An amendment may not make any change that adversely affects the rights under
Article 11 of the Indenture of any holders of Senior Indebtedness unless the
holders of Senior Indebtedness consent to the change.
15. Successors.
When a successor assumes all the obligations of its predecessor under
the Securities and the Indenture, the predecessor will be released from those
obligations.
16. Defaults and Remedies.
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in aggregate principal amount of Securities then
outstanding may declare all the Securities to be due and payable in the manner,
at the time and with the effect provided in the Indenture. Holders of
Securities may not enforce the Indenture or the Securities except as provided
in the Indenture. The Trustee is not obligated to enforce the Indenture or the
Securities unless it has received indemnity satisfactory to it. The Indenture
permits, subject to certain limitations therein provided, Holders of a majority
in aggregate principal amount of the Securities then outstanding to direct the
Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders of Securities notice of any continuing Default or Event of Default
(except a Default in payment of principal or interest) if it determines that
withholding notice is in their interest.
17. Trustee Dealings with Holdings.
The Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of Securities and may otherwise deal
with Holdings, its Subsidiaries or their respective Affiliates as if it were
not the Trustee.
18. No Recourse Against Others.
No stockholder, director, officer, employee or incorporator, as such, of
Holdings shall have any liability for any obligation of Holdings under the
Securities or the Indenture or for any claim based on, in respect of or by
reason of, such obligations or their creation. Each Holder of a Security by
accepting a Security waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Securities.
19. Authentication.
This Security shall not be valid until the Trustee or authenticating
agent manually signs the certificate of authentication on this Security.
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20. Governing Law.
The Laws of the State of New York shall govern this Security and the
Indenture.
21. Abbreviations and Defined Terms.
Customary abbreviations may be used in the name of a Holder of a
Security or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
22. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, Holdings will cause CUSIP numbers to be
printed on the Securities immediately prior to the qualification of the
Indenture under the TIA as a convenience to the Holders of the Securities. No
representation is made as to the accuracy of such numbers as printed on the
Securities and reliance may be placed only on the other identification numbers
printed hereon.
23. Indenture.
Each Holder, by accepting a Security, agrees to be bound by all of the
terms and provisions of the Indenture, as the same may be amended from time to
time.
Holdings will furnish to any Holder of a Security upon written request
and without charge a copy of the Indenture. Requests may be made to: FOOD 4
LESS HOLDINGS, INC., c/o The Yucaipa Companies, 10000 Santa Monica Boulevard,
Fifth Floor, Los Angeles, California 90067, Attn: Mark A. Resnik.
24. Certain Information Obligations.
To the extent permitted by applicable law or regulation, whether or not
Holdings is subject to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934 (the "Exchange Act"), Holdings shall file with
the SEC all quarterly and annual reports and such other information, documents
or other reports (or copies of such portions of any of the foregoing as the SEC
may by rules and regulations prescribe) required to be filed pursuant to such
provisions of the Exchange Act. Holdings shall file with the Trustee copies of
the quarterly and annual reports and 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) that it is required to file with the SEC
pursuant to the Indenture. At any time when Holdings is not permitted by
applicable law or regulations to file the aforementioned reports, Holdings
shall furnish the Trustee and the Holders with the information that Holdings
would have had to provide to the SEC if Holdings had been subject to Section 13
or 15(d) of the Exchange Act.
25. Holdings Indebtedness.
Each Holder acknowledges that Holdings is the sole obligor of the
Securities and no Subsidiary of Holdings is a co-obligor or a guarantor of the
Securities.
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[FORM OF ASSIGNMENT]
I or we assign this Security to_______________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Print or type name, address and zip code of assignee)
Please insert Social Security or other identifying number of assignee
______________________________________________________________________________
and irrevocably appoint _______________________ agent to transfer this Security
on the books of Holdings. The agent may substitute another to act for him.
Dated:____________________________ Signed:___________________________________
______________________________________________________________________________
______________________________________________________________________________
(Sign exactly as your name appears on the front of this Security)
Signature Guarantee:__________________________________________________________
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[OPTION OF HOLDER TO ELECT PURCHASE]
If you want to elect to have this Security purchased by Holdings
pursuant to Section 4.14 or Section 4.15 of the Indenture, check the box:
Section 4.14 [ ] Section 4.15 [ ]
If you want to elect to have only part of this Security purchased by
Holdings pursuant to Section 4.14 or Section 4.15 of the Indenture, state the
amount:
$
Date:_________________________ Signature:____________________________________
(Sign exactly as your name appears
on the front of this Security)
Signature Guarantee:_________________________________________________________
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