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EXHIBIT 10(e)(ii)
CONSOLIDATED STORES CORPORATION
The Company,
and
THE BANK OF NEW YORK
The Trustee,
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FIRST SUPPLEMENTAL INDENTURE
Dated as of January 22, 1997
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$100,000,000
7% Senior Subordinated Notes
due May 4, 2000
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FIRST SUPPLEMENTAL INDENTURE, dated as of January 22, 1997 (the
"Amendment"), among Consolidated Stores Corporation, an Ohio corporation (the
"Company"), and The Bank of New York, a New York banking corporation (the
"Trustee").
RECITALS
WHEREAS, the Company and the Trustee have entered into an Indenture
dated as of May 5, 1996 (the "Indenture") relating to the Company's 7% Senior
Subordinated Notes due May 4, 2000 (the "Securities");
WHEREAS, Section 9.02 of the Indenture specifically authorizes the
Company and the Trustee to amend the Indenture in the circumstances and the
manner provided therein with the consent of the holders of at least a majority
in aggregate principal amount of the Securities at the time outstanding or of
each holder of Securities affected, as the case may be;
WHEREAS, Nashua Hollis CVS, Inc., a New Hampshire corporation ("Nashua
CVS"), the holder of all outstanding Securities, has consented to the Amendment
and evidence of the written consent to this Amendment by Nashua CVS has been
delivered to the Trustee by the Company; and
WHEREAS, all corporate action required to authorize this Amendment has
been duly taken by the Company and the Trustee.
NOW, THEREFORE, the Company and the Trustee hereby agree as follows:
SECTION 1. DEFINITIONS; REFERENCES. Capitalized terms used but not
defined herein shall have the meaning given to such terms in the Indenture.
SECTION 2. AMENDMENTS TO DEFINITIONS. Section 1.01 of the Indenture is
amended by inserting, in their appropriate alphabetical positions, the following
definitions:
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and the rules and regulations promulgated thereunder from time to
time.
"Environmental Laws" means any and all Federal, state, local, and
foreign statutes, laws, regulations, ordinances, rules, judgments,
orders, decrees, permits, concessions, grants, franchises, licenses,
agreements or governmental restrictions relating to pollution and the
protection of the environment or the release of any materials into the
environment, including but not limited to those related to hazardous
substances or wastes, air emissions and discharges to waste or public
systems.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the rules and regulations promulgated
thereunder from time to time in effect.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that is treated as a single employer together with the
Company under section 414 of the Code.
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"Institutional Investor" means (a) any purchaser of a Security pursuant
to the Note Purchase Agreement, (b) any Holder of a Security holding
more than 5% of the aggregate principal amount of the Securities then
outstanding, and (c) any bank, trust company, savings and loan
association or other financial institution, any pension plan, any
investment company, any insurance company, any broker or dealer, or any
other similar financial institution or entity, regardless or legal
form.
"Make-Whole Amount" shall have the meaning set forth in Section 3.08.
"Material Adverse Effect" means a material adverse effect on (a) the
business, operations, affairs, financial condition, assets or
properties of the Company and its Subsidiaries taken as a whole, or (b)
the ability of the Company to perform its obligations under this
Indenture and the Securities, or (c) the validity or enforceability of
this Indenture or the Securities.
"Multiemployer Plan" means any Plan that is a "multiemployer plan" (as
such term is defined in section 4001(a)(3) of ERISA).
"Note Purchase Agreement" means a Purchase Agreement to be entered into
among the Company, Nashua CVS and purchasers of the Securities from
Nashua CVS, whose names will be listed on the signature pages thereof,
as amended or supplemented from time to time.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA or any successor thereto.
"Plan" means an "employee benefit plan" (as defined in Section 3(3) of
ERISA) that is or, within the preceding five years, has been
established or maintained, or to which contributions are or, within the
preceding five years, have been made or required to be made, by the
Company or any ERISA Affiliate or with respect to which the Company or
any ERISA Affiliate may have any liability.
"Senior Financial Officer" means the chief financial officer, principal
accounting officer, treasurer or comptroller of the Company.
SECTION 3. AMENDMENT OF ARTICLE 2 OF THE INDENTURE. Section 2.04 is
amended by adding, immediately following each reference to "premium", the
reference "or Make-Whole Amount".
SECTION 4. AMENDMENT OF ARTICLE 3 OF THE INDENTURE. Article 3 of the
Indenture is amended as follows:
(a) Section 3.01 is amended and restated in its entirety to
read as follows:
Section 3.01. RIGHT TO REDEEM; NOTICES TO TRUSTEE. The Company may, at
its option, upon notice as provided in Section 3.03, redeem at any time, on and
after May 5, 1998, all, or from time to time thereafter any part of, the
Securities, in an amount not less than 5% of the aggregate principal amount of
the Securities then outstanding in the case of a partial redemption, at a
Redemption Price equal to 100% of the principal amount so redeemed, plus the
Make-Whole Amount determined for the Redemption Date with respect to such
principal amount. If the Company elects to redeem Securities, it shall notify
the Trustee in
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writing of the Redemption Date, the principal amount of Securities to be
redeemed and the Redemption Price. The Company shall give the notice to the
Trustee provided for in this Section 3.01 at least 45 days before the Redemption
Date (unless a shorter notice shall be satisfactory to the Trustee).
(b) Section 3.03 of the Indenture is amended by adding the
following paragraph immediately following the end of
subsection (g) of the second paragraph:
The notice shall be accompanied by a certificate of a Senior
Financial Officer as to the estimated Make-Whole Amount due in
connection with such redemption (calculated as if the date of such
notice were the Redemption Date), setting forth the details of such
computation. Two Business Days prior to such redemption, the Company
shall deliver to each Holder of Securities to be redeemed a certificate
of a Senior Financial Officer specifying the calculation of such
Make-Whole Amount as of the specified Redemption Date.
(c) by adding the following Sections 3.07 and 3.08 in their
entirety immediately following Section - 3.06:
Section 3.07. PURCHASE OF SECURITIES. The Company will not and
will not permit any Affiliate to purchase, redeem or otherwise acquire,
directly or indirectly, any of the outstanding Securities except (a)
upon the payment or redemption of the Securities in accordance with the
terms of this Indenture and the Securities or (b) pursuant to an offer
to purchase made by the Company or an Affiliate pro rata to the Holders
of all Securities at the time outstanding upon the same terms and
conditions. Any such offer shall provide each Holder with sufficient
information to enable it to make an informed decision with respect to
such offer, and shall remain open for at least 15 Business Days. If the
Holders of more than 50% of the principal amount of the Securities then
outstanding accept such offer, the Company shall promptly notify the
remaining Holders of such fact (the "Second Notice") and the expiration
date for the acceptance by Holders of Securities of such offer shall be
extended by the number of days necessary to give each such remaining
Holder at least 15 Business Days from its receipt of such Second Notice
to accept such offer. The Company will promptly cancel all Securities
acquired by it or any Affiliate pursuant to any payment, redemption or
purchase of Securities pursuant to any provision of this Agreement and
no Securities may be issued in substitution or exchange for any such
Securities.
Section 3.08. MAKE-WHOLE AMOUNT. The term "Make-Whole Amount"
means, with respect to any Security, an amount equal to the excess, if
any, of the Discounted Value of the Remaining Scheduled Payments with
respect to the Called Principal of such Security over the amount of
such Called Principal, PROVIDED that the Make-Whole Amount may in no
event be less than zero. For the purposes of determining the Make-Whole
Amount, the following terms have the following meanings:
"Called Principal" means, with respect to any
Security, the principal of such Security that is to be
redeemed pursuant to Section 3.01 or has become or is declared
to be immediately due and payable pursuant to Section 6.02, as
the context requires.
"Discounted Value" means, with respect to the Called
Principal of any Security, the amount obtained by discounting
all Remaining Scheduled Payments with respect to such Called
Principal from their respective scheduled due dates to the
Settlement Date with respect to such Called Principal, in
accordance with accepted financial practice and at a discount
factor (ap-
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plied on the same periodic basis as that on which interest on
the Securities is payable) equal to the Reinvestment Yield
with respect to such Called Principal.
"Reinvestment Yield" means, with respect to the Called
Principal of any Security, the yield to maturity implied by
(i) the yields reported, as of 10:00 A.M. (New York City time)
on the second Business Day preceding the Settlement Date with
respect to such Called Principal, on the display designated as
"Page 500" on the Telerate Access Service (or such other
display as may replace Page 500 on Telerate Access Service)
for actively traded U.S. Treasury securities having a maturity
equal to the Remaining Average Life of such Called Principal
as of such Settlement Date, or (ii) if such yields are not
reported as of such time or the yields reported as of such
time are not ascertainable, the Treasury Constant Maturity
Series Yields reported, for the latest day for which such
yields have been so reported as of the second Business Day
preceding the Settlement Date with respect to such Called
Principal, in Federal Reserve Statistical Release H.15 (519)
(or any comparable successor publication) for actively traded
U.S. Treasury securities having a constant maturity equal to
the Remaining Average Life of such Called Principal as of such
Settlement Date plus 0.50%. Such implied yield will be
determined, if necessary, by (a) converting U.S. Treasury xxxx
quotations to bond-equivalent yields in accordance with
accepted financial practice and (b) interpolating linearly
between (1) the actively traded U.S. Treasury security with
the duration closest to and greater than the Remaining Average
Life and (2) the actively traded U.S. Treasury security with
the duration closest to and less than the Remaining Average
Life.
"Remaining Average Life" means, with respect to any Called
Principal, the number of years (calculated to the nearest
one-twelfth year) obtained by dividing (i) such Called
Principal into (ii) the sum of the products obtained by
multiplying (a) the principal component of each Remaining
Scheduled Payment with respect to such Called Principal by (b)
the number of years (calculated to the nearest one-twelfth
year) that will elapse between the Settlement Date with
respect to such Called Principal and the scheduled due date of
such Remaining Scheduled Payment.
"Remaining Scheduled Payments" means, with respect to the
Called Principal of any Security, all payments of such Called
Principal and interest thereon that would be due after the
Settlement Date with respect to such Called Principal if no
payment of such Called Principal were made prior to its
scheduled due date, PROVIDED that if such Settlement Date is
not a date on which interest payments are due to be made under
the terms of the Securities, then the amount of the next
succeeding scheduled interest payment will be reduced by the
amount of interest accrued to such Settlement Date and
required to be paid on such Settlement Date pursuant to
Section 3.01 or 6.02.
"Settlement Date" means, with respect to the Called Principal
of any Security, the date on which such Called Principal is to
be redeemed pursuant to Section 3.01 or has become or is
declared to be immediately due and payable pursuant to Section
6.02, as the context requires.
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SECTION 5. AMENDMENT OF ARTICLE 4 OF THE INDENTURE. Article 4 of the
Indenture is amended as follows:
(a) by replacing the reference in Section 4.03(a) to "The Company
shall deliver to the Trustee within 120 days after the end of
each of the Company's fiscal years" with the reference "Each
set of financial statements filed with the Trustee and
supplied to each Holder of the Securities pursuant to Section
4.02 shall be accompanied by".
(b) by replacing the reference in Section 4.03(c) to "15 days"
with the reference "5 days".
(c) by adding the following Sections 4.03(e) and 4.03(f) in their
entirety, immediately following Section 4.03(d):
(e) The Company shall deliver to the Trustee promptly, and in any
event within five days after an Officer becomes aware of any
of the following, a written notice setting forth the nature
thereof and the action, if any, that the Company or an ERISA
Affiliate proposes to take with respect thereto:
(i) with respect to any Plan, any reportable event, as
defined in section 4043(b) of ERISA and the regulations
thereunder, for which notice thereof has not been
waived pursuant to such regulations as in effect on
the date hereof; or
(ii) the taking by the PBGC of steps to institute, or the
threatening by the PBGC of the institution of,
proceedings under section 4042 of ERISA for the
termination of, or the appointment of a trustee to
administer, any Plan, or the receipt by the Company or
any ERISA Affiliate of a notice from a Multiemployer
Plan that such action has been taken by the PBGC with
respect to such Multiemployer Plan; or
(iii) any event, transaction or condition that could result
in the incurrence of any liability by the Company or
any ERISA Affiliate pursuant to Title I or IV of ERISA
or the penalty or excise tax pro visions of the Code
relating to employee benefit plans, or in the
imposition of any Lien on any of the rights, properties
or assets of the Company or any ERISA Affiliate
pursuant to Title I or IV of ERISA or such penalty or
excise tax provisions, if such liability or Lien, taken
together with any other such liabilities or Liens then
existing, would reasonably be expected to have a
Material Adverse Effect.
(f) The Company shall deliver to each Holder of Securities that is
an Institutional Investor, with reasonable promptness, such
other data and information relating to the business,
operations, affairs, financial condition, assets or properties
of the Company or any of its Subsidiaries or relating to the
ability of the Company to perform its obligations hereunder
and under the Securities as from time to time may be
reasonably requested by any such Holder of Securities.
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(d) by adding the following Sections 4.17 and 4.18, immediately
following the end of Section 4.16:
Section 4.17. COMPLIANCE WITH LAW. The Company shall and shall
cause each of its Subsidiaries to comply with all laws,
ordinances or governmental rules or regulations to which each
of them is subject, including, without limitation,
Environmental Laws, and shall obtain and maintain in effect
all licenses, certificates, permits, franchises and other
governmental authorizations necessary to the ownership of
their respective properties or to the conduct of their
respective businesses, in each case to the extent necessary to
ensure that non-compliance with such laws, ordinances or
governmental rules or regulations or failures to obtain or
maintain in effect such licenses, certificates, permits,
franchises and other governmental authorizations would not
reasonably be expected, individually or in the aggregate, to
have a materially adverse effect on the business, operations,
affairs, financial condition, properties or assets of the
Company and its Subsidiaries taken as a whole.
Section 4.18. INSPECTION. The Company shall permit the
representatives of each Holder of Securities that is an
Institutional Investor: (a) if no Default or Event of Default
then exists, at the expense of such Holder and upon reasonable
prior notice to the Company, to visit the principal executive
office of the Company, to discuss the affairs, finances and
accounts of the Company and its Subsidiaries with the
Company's officers, and, with the consent of the Company
(which consent shall not be unreasonably withheld), to visit
the other offices and properties of the Company and each
Subsidiary, all at such reasonable times and as often as may
be reasonably requested in writing; and (b) if a Default or
Event of Default then exists, at the expense of the Company,
to visit and inspect any of the offices or properties of the
Company or any Subsidiary, to examine all their respective
books of account, records, reports and other papers, to make
copies and extracts therefrom, and to discuss their respective
affairs, finances and accounts with their respective officers
and independent public accountants (and by this provision the
Company authorizes said accountants to discuss the affairs,
finances and accounts of the Company and its Subsidiaries),
all at such times and as often as may be requested.
SECTION 6. AMENDMENT OF ARTICLE 6 OF THE INDENTURE. Article 6 of the
Indenture is amended as follows:
(a) by replacing, in Section 6.01(a)(i), the reference "30
days" with the reference "more than five Business Days".
(b) by adding, in Section 6.01(a)(ii), immediately following
the reference "or premium", the reference "or Make-Whole
Amount".
(c) by replacing, in Section 6.01(c), the reference "60 days"
with the reference "30 days".
(d) by deleting, in Section 6.01(f), the last reference "or".
(e) by adding the following Sections 6.01(h) and 6.01(i)
immediately after the end of Section 6.01(g) and immediately
before the paragraph beginning with "Bankruptcy Law":
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(h) any representation or warranty made in writing by or on behalf
of the Company or by any Officer of the Company in the Note
Purchase Agreement or in any writing furnished in connection
with the transactions contemplated thereby proves to have been
false or incorrect in any material respect on the date as of
which made; or
(i) if (i) any Plan shall fail to satisfy the minimum funding
standards of ERISA or the Code for any plan year or part
thereof or a waiver of such standards or extension of any
amortization period is sought or granted under section 412 of
the Code, (ii) a notice of intent to terminate any Plan shall
have been or is reasonably expected to be filed with the PBGC
or the PBGC shall have instituted proceedings under ERISA
section 4042 to terminate or appoint a trustee to administer
any Plan or the PBGC shall have notified the Company or any
ERISA Affiliate that a Plan may become a subject of any such
proceedings, (iii) the aggregate "amount of unfunded benefit
liabilities" (within the meaning of section 4001(a)(18) of
ERISA) under all Plans, determined in accordance with Title IV
of ERISA, shall exceed $10,000,000, (iv) the Company or any
ERISA Affiliate shall have incurred or is reasonably expected
to incur any liability pursuant to Title I or IV of ERISA or
the penalty or excise tax provisions of the Code relating to
employee benefit plans, (v) the Company or any ERISA Affiliate
withdraws from any Multiemployer Plan, or (vi) the Company or
any Subsidiary establishes or amends any employee welfare
benefit plan that provides post-employment welfare benefits in
a manner that would increase the liability of the Company or
any Subsidiary thereunder; and any such event or events
described in clauses (i) through (vi) above, either
individually or together with any other such event or events,
would reasonably be expected to have a Materially Adverse
Effect.
As used in Section 6.01(i), the terms "employee benefit plan"
and "employee welfare benefit plan" shall have the respective
meanings assigned to such terms in Section 3 of ERISA.
(f) by replacing, in Section 6.02, the reference "If any Event of
Default under clauses (a), (b), (c), (d) or (g)" with the
reference "If any Event of Default under clauses (a), (b),
(c), (d), (g), (h) or (i)".
(g) by adding, in Sections 6.02, 6.03 and 6.07, immediately
following each reference to "premium", the reference "or
Make-Whole Amount".
SECTION 7. AMENDMENT OF ARTICLE 8 OF THE INDENTURE. Article 8 of the
Indenture is amended by adding, in Sections 8.01, 8.02 and 8.03, immediately
following each reference to "premium", the reference "or Make-Whole Amount".
SECTION 8. AMENDMENT OF ARTICLE 9 OF THE INDENTURE. Article 9 of the
Indenture is amended as follows:
(a) by adding, in Section 9.02(b), immediately following the
reference to "make any change to", the reference "the
calculation of the Make-Whole Amount under Section 3.08 or
to".
(b) by adding, in Section 9.02(c), immediately following the
reference "premium", the reference "or Make-Whole Amount".
(c) by adding the following Section 9.08 in its entirety,
immediately following Section 9.07:
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Section 9.08. SOLICITATION OF HOLDERS OF SECURITIES.
(a) The Company will provide each Holder of the Securities
(irrespective of the amount of Securities then owned by it)
with sufficient information, sufficiently far in advance of
the date a decision is required, to enable such Holder to
make an informed and considered decision with respect to any
proposed amendment, waiver or consent in respect of any of
the provisions hereof or of the Securities. The Company will
deliver executed or true and correct copies of each
amendment, waiver or consent effected pursuant to the
provisions of this Article 9 to each Holder of outstanding
Securities promptly following the date on which it is
executed and delivered by, or receives the consent or
approval of, the requisite Holders of Securities.
(b) The Company will not directly or indirectly pay or cause to
be paid any remuneration, whether by way of supplemental or
additional interest, fee or otherwise, or grant any security,
to any Holder of Securities as consideration for or as an
inducement to the entering into by any Holder of Securities
or any waiver or amendment of any of the terms and provisions
hereof unless such remuneration is concurrently paid, or
security is concurrently granted, on the same terms, ratably
to each Holder of Securities then outstanding even if such
Holder did not consent to such waiver or amendment.
SECTION 9. AMENDMENT OF EXHIBIT A. The form of reverse side of
Security, Exhibit A to the Indenture, is amended as follows:
(a) The first sentence of paragraph 4 is amended and restated to
read as follows:
The Company issued the Securities under an Indenture,
dated as of May 5, 1996, as amended by the First Supplemental
Indenture, dated as of January 22, 1997 (the "Indenture"),
between the Company and The Bank of New York (the "Trustee").
(b) Paragraph 5 is amended and restated in its entirety to read
as follows:
The Securities are redeemable at any time, at the option of
the Company, in whole or in part, or from time to time in
part, in an amount not less than 5% of the aggregate
principal amount of the Securities then outstanding in the
case of a partial redemption, at a Redemption Price equal to
100% of the principal amount so redeemed, plus the
Make-Whole Amount determined pursuant to Section 3.08 of
the Indenture for the Redemption Date with respect to such
principal amount.
The Securities are not entitled to the benefit of any
sinking fund.
(c) Paragraph 11(a) is amended by adding, following each
reference to "premium", the reference "or Make-Whole Amount".
SECTION 10. EFFECT OF AMENDMENT. The Securities shall be entitled to
the benefits of and be subject to the terms of this Amendment. The Indenture, as
modified and supplemented by this Amendment, shall remain in full force and
effect.
SECTION 11. COUNTERPARTS. This Amendment may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which so executed shall be deemed to be an original, but all of such
counterparts together shall constitute one and the same instrument.
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SECTION 12. GOVERNING LAW. This Amendment shall be governed by and
construed in accordance with the laws of the State of New York, without giving
effect to the conflicts of laws principles thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed by their respective authorized officers as of the date first above
written.
CONSOLIDATED STORES CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
Title: Chief Financial Officer
THE BANK OF NEW YORK
By: /s/ Xxxxxxx Xxxxxxxxxxx
----------------------------------------
Name: Xxxxxxx Xxxxxxxxxxx
Title: Assistant Vice President
