QUALITY FOOD CENTERS, INC.
Issuer,
and
THE GUARANTORS NAMED HEREIN
and
FIRST TRUST NATIONAL ASSOCIATION
Trustee
-------------------------------
INDENTURE
Dated as of March 19, 1997
-------------------------------
$150,000,000
8.70% Senior Subordinated Notes due 2007
TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1. Definitions.............................................. 1
SECTION 1.2. Incorporation by Reference of TIA........................ 29
SECTION 1.3. Rules of Construction.................................... 29
ARTICLE II
THE SECURITIES
SECTION 2.1. Form and Dating.......................................... 30
SECTION 2.2. Execution and Authentication............................. 30
SECTION 2.3. Registrar and Paying Agent............................... 31
SECTION 2.4. Paying Agent to Hold Assets in Trust..................... 32
SECTION 2.5. Securityholder Lists..................................... 32
SECTION 2.6. Transfer and Exchange.................................... 32
SECTION 2.7. Replacement Securities................................... 38
SECTION 2.8. Outstanding Securities................................... 39
SECTION 2.9. Treasury Securities...................................... 39
SECTION 2.10. Temporary Securities.................................... 39
SECTION 2.11. Cancellation............................................ 40
SECTION 2.12. Defaulted Interest...................................... 40
ARTICLE III
REDEMPTION
SECTION 3.1. Right of Redemption...................................... 41
SECTION 3.2. Notices to Trustee....................................... 41
SECTION 3.3. Selection of Securities to Be Redeemed................... 42
SECTION 3.4. Notice of Redemption..................................... 42
SECTION 3.5. Effect of Notice of Redemption........................... 43
SECTION 3.6. Deposit of Redemption Price.............................. 43
SECTION 3.7. Securities Redeemed in Part.............................. 44
ARTICLE IV
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COVENANTS
SECTION 4.1. Payment of Securities.................................... 44
SECTION 4.2. Maintenance of Office or Agency.......................... 44
SECTION 4.3. Limitation on Restricted Payments........................ 45
SECTION 4.4. Corporate Existence...................................... 46
SECTION 4.5. Payment of Taxes and Other Claims........................ 47
SECTION 4.6. Compliance Certificate, Notice of Default................ 47
SECTION 4.7. Reports.................................................. 47
SECTION 4.8. [Reserved]............................................... 48
SECTION 4.9. Limitation on Transactions with Affiliates............... 48
SECTION 4.10. Limitation on Additional Indebtedness and Disqualified
Capital Stock ........................................... 50
SECTION 4.11. Limitation on Dividends and Other Payment Restrictions
Affecting Subsidiaries................................... 50
SECTION 4.12. Limitation on Liens...................................... 51
SECTION 4.13. Limitation on Sale of Assets and Subsidiary Stock........ 52
SECTION 4.14. Limitation on Layering Indebtedness...................... 56
SECTION 4.15. Limitation on Lines of Business.......................... 56
SECTION 4.16. Waiver of Stay, Extension or Usury Laws.................. 56
SECTION 4.17. Reorganization as a Holding Company...................... 56
ARTICLE V
SUCCESSOR CORPORATION
SECTION 5.1. Limitation on Merger, Sale or Consolidation.............. 58
SECTION 5.2. Successor Corporation Substituted........................ 59
ARTICLE VI
EVENTS OF DEFAULT AND REMEDIES
SECTION 6.1. Events of Default........................................ 59
SECTION 6.2. Acceleration of Maturity Date, Rescission and Annulment.. 61
SECTION 6.3. Collection of Indebtedness and Suits for Enforcement by
Trustee ................................................. 62
SECTION 6.4. Trustee May File Proofs of Claim......................... 63
SECTION 6.5. Trustee May Enforce Claims Without Possession of
Securities .............................................. 64
SECTION 6.6. Priorities............................................... 64
SECTION 6.7. Limitation on Suits...................................... 64
SECTION 6.8. Unconditional Right of Holders to Receive Principal,
Premium and Interest .................................... 65
SECTION 6.9. Rights and Remedies Cumulative........................... 65
SECTION 6.10. Delay or Omission Not Waiver............................. 65
SECTION 6.11. Control by Holders....................................... 66
SECTION 6.12. Waiver of Past Default................................... 66
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SECTION 6.13. Undertaking for Costs.................................... 67
SECTION 6.14. Restoration of Rights and Remedies...................... 67
ARTICLE VII
TRUSTEE
SECTION 7.1. Duties of Trustee........................................ 67
SECTION 7.2. Rights of Trustee........................................ 68
SECTION 7.3. Individual Rights of Trustee............................. 69
SECTION 7.4. Trustee's Disclaimer..................................... 70
SECTION 7.5. Notice of Default........................................ 70
SECTION 7.6. Reports by Trustee to Holders............................ 70
SECTION 7.7. Compensation and Indemnity............................... 70
SECTION 7.8. Replacement of Trustee................................... 71
SECTION 7.9. Successor Trustee by ▇▇▇▇▇▇, Etc......................... 72
SECTION 7.10. Eligibility: Disqualification............................ 72
SECTION 7.11. Preferential Collection of Claims Against Company........ 72
ARTICLE VIII
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.1. Option to Effect Legal Defeasance or Covenant Defeasance. 73
SECTION 8.2. Legal Defeasance and Discharge........................... 73
SECTION 8.3. Covenant Defeasance...................................... 73
SECTION 8.4. Conditions to Legal or Covenant Defeasance............... 74
SECTION 8.5. Deposited Cash and U.S. Government Obligations to be
Held in Trust, Other Miscellaneous Provisions............ 75
SECTION 8.6. Repayment to the Company................................. 76
SECTION 8.7. Reinstatement............................................ 76
ARTICLE IX
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.1. Supplemental Indentures Without Consent of Holders....... 77
SECTION 9.2. Amendments, Supplemental Indentures and Waivers with
Consent of Holders....................................... 78
SECTION 9.3. Compliance with TIA...................................... 79
SECTION 9.4. Revocation and Effect of Consents........................ 80
SECTION 9.5. Notation on or Exchange of Securities.................... 80
SECTION 9.6. Trustee to Sign Amendments, Etc.......................... 80
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ARTICLE X
RIGHT TO REQUIRE REPURCHASE
SECTION 10.1. Repurchase of Securities at Option of the Holder
Upon a Change of Control................................ 81
ARTICLE XI
GUARANTEE
SECTION 11.1. Guarantee............................................... 83
SECTION 11.2. Execution and Delivery of Guarantee..................... 85
SECTION 11.3. Additional Guarantors................................... 85
SECTION 11.4. Guarantor May Consolidate, Etc., on Certain Terms;
Release of Guarantors................................... 86
SECTION 11.5. Waiver of Subrogation................................... 87
SECTION 11.6. Certain Bankruptcy Events............................... 88
ARTICLE XII
SUBORDINATION
SECTION 12.1. Securities Subordinated to Senior Debt.................. 88
SECTION 12.2. No Payment on Securities in Certain Circumstances....... 88
SECTION 12.3. Securities Subordinated to Prior Payment of All Senior
Debt on Dissolution, Liquidation or Reorganization...... 89
SECTION 12.4. Securityholders to Be Subrogated to Rights of Holders
of Senior Debt ......................................... 90
SECTION 12.5. Obligations of the Company and the Guarantors
Unconditional .......................................... 91
SECTION 12.6. Trustee Entitled to Assume Payments Not Prohibited in
Absence of Notice....................................... 91
SECTION 12.7. Application by Trustee of Assets Deposited with It...... 91
SECTION 12.8. Subordination Rights Not Impaired by Acts or Omissions
of the Company, the Guarantors or Holders of Senior Debt 92
SECTION 12.9. Securityholders Authorize Trustee to Effectuate
Subordination of Securities............................. 92
SECTION 12.10. Right of Trustee to Hold Senior Debt................... 93
SECTION 12.11. Article XII Not to Prevent Events of Default........... 93
SECTION 12.12. No Fiduciary Duty of Trustee to Holders of Senior Debt. 93
ARTICLE XIII
MISCELLANEOUS
SECTION 13.1. TIA Controls............................................ 93
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SECTION 13.2. Notices................................................. 93
SECTION 13.3. Communications by Holders with Other Holders............ 95
SECTION 13.4. Certificate and Opinion as to Conditions Precedent...... 95
SECTION 13.5. Statements Required in Certificate or Opinion........... 95
SECTION 13.6. Rules by Trustee, Paying Agent, Registrar............... 96
SECTION 13.7. Non-Business Days....................................... 96
SECTION 13.8. Governing Law........................................... 96
SECTION 13.9. No Adverse Interpretation of Other Agreements........... 96
SECTION 13.10. No Recourse against Others.............................. 97
SECTION 13.11. Successors.............................................. 97
SECTION 13.12. Duplicate Originals..................................... 97
SECTION 13.13. Severability............................................ 97
SECTION 13.14. Table of Contents, Headings, Etc........................ 97
SIGNATURES............................................................. 98
Exhibit A..............................................................A-1
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INDENTURE, dated as of March 19, 1997, by and among Quality Food Centers,
Inc., a Washington corporation (the "Company"), the Guarantors referred to below
and First Trust National Association, as Trustee.
In consideration of $1.00 in hand paid and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
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 Company's 8.70% Senior
Subordinated Notes due 2007:
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1. Definitions.
"Acceleration Notice" shall have the meaning specified in Section 6.2.
"Acquired Indebtedness" means Indebtedness or Disqualified Capital Stock
of any person existing at the time such person becomes a Subsidiary of the
Subject Entity or is merged or consolidated into or with the Subject Entity or
any of its Subsidiaries.
"Acquisition" means the purchase or other acquisition of (i) any person,
(ii) all or substantially all of the assets of any person or (iii) all or
substantially all of any division or line of business of any person, in each
case by any other person, whether by purchase, stock purchase, merger,
consolidation or other transfer, and whether or not for consideration.
"Affiliate" means with respect to any specified person, any other person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified person. For purposes of this definition, the
term "control" means the power to direct the management and policies of a
person, directly or through one or more intermediaries, whether through the
ownership of voting securities, by contract, or otherwise, provided, that, a
Beneficial Owner of 10% or more of the total voting power normally entitled to
vote in the election of directors, managers or trustees, as applicable, of a
person shall for such purposes be deemed to have control of such person.
"Affiliate Transaction" shall have the meaning specified in Section 4.9.
"Agent" means any authenticating agent, Registrar, Paying Agent or
transfer agent.
"Asset Sale" shall have the meaning specified in Section 4.13.
"Asset Sale Offer" shall have the meaning specified in Section 4.13.
"Asset Sale Offer Period" shall have the meaning specified in Section
4.13.
"Asset Sale Offer Price" shall have the meaning specified in Section 4.13.
"Average Life" means, as of the date of determination, with respect to any
security or instrument, the quotient obtained by dividing (i) the sum of (a) the
products of the number of years (or fractions thereof) from such date of
determination to the date or dates of each successive scheduled principal (or
redemption) payment of such security or instrument and (b) the amount of each
such respective principal (or redemption) payment by (ii) the sum of all such
principal (or redemption) payments.
"Bankruptcy Law" means Title 11, of the United States Code and any similar
applicable foreign, state or federal law for the relief of debtors generally.
"Beneficial Owner" has the meaning attributed to it in Rules 13d-3 and
13d-5 under the Exchange Act (as in effect on the Issue Date), except that a
person shall be deemed to have "beneficial ownership" of all shares or other
securities that such person has the right to acquire, whether such right is
exercisable immediately or only after the passage of time.
"board of directors" means, with respect to any person, the board of
directors of such person.
"Board of Directors" or "Board" means, with respect to any person, the
board of directors of such person or any committee of the board of directors of
such person 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 each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in New York, New York are
authorized or obligated by law or executive order to close.
"Capital Stock" means, with respect to any person, any and all shares,
interests (including, without limitation, limited and general partnership
interests and joint venture interests), participations, rights or other
equivalents (however designated) in the equity of such person, and any rights
(other than debt securities convertible into or exchangeable for an equity
interest), warrants or options exchangeable for or convertible into an equity
interest in such person.
"Capitalized Lease Obligation" means, with respect to any person, any
obligation of such person under a lease of (or other agreement conveying the
right to use) any property (whether real, personal or mixed, tangible or
intangible) that is required to be classified and accounted for as a capital
lease obligation under GAAP, and the amount of such obligation at any date shall
be the capitalized amount thereof at such date, determined in accordance with
GAAP.
"Cash" or "cash" 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.
"Cash Equivalents" means (a) securities issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof) having maturities of not more
than one year from the date of acquisition; (b) certificates of deposit, time
deposits, eurodollar time deposits, overnight bank deposits or bankers'
acceptances having maturities of not more than one year from the date of
acquisition
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thereof of any domestic commercial bank that is a member of the Federal Reserve
System, the long-term debt of which is rated at the time of acquisition thereof
at least A or the equivalent thereof by Standard & Poor's, a division of The
McGraw Hill Companies, Inc. ("Standard & Poor's"), or at least A or the
equivalent thereof by ▇▇▇▇▇'▇ Investors Service, Inc. ("▇▇▇▇▇'▇") and having
capital and surplus and undivided profits in excess of $500,000,000; (c)
repurchase agreements and reverse repurchase agreements relating to marketable
direct obligations issued or unconditionally guaranteed by the United States of
America or issued by any agency or instrumentality thereof (provided that the
full faith and credit of the United States of America is pledged in support
thereof), in each case maturing within 180 days of the date of acquisition, (d)
commercial paper rated at the time of acquisition thereof at least A-1 or the
equivalent thereof by Standard & Poor's or P-1 or the equivalent thereof by
▇▇▇▇▇'▇, maturing within 270 days after the date of acquisition thereof, and (e)
shares of any money market mutual fund that (i) has at least 95% of its assets
invested continuously in the types of investments referred to in clauses (a)
through (d) above, (ii) has net assets of not less than $500 million and (iii)
has the highest rating obtainable from either Standard & Poor's or Moody's.
"Change of Control" means (i) any merger or consolidation of the Company
or, from and after the date of the Reorganization, of the Company, the Holding
Company or the Parent with or into any person, or any sale, transfer or other
conveyance, whether direct or indirect, of all or substantially all of the
assets of the Company or, from and after the date of the Reorganization, of the
Company, the Holding Company or the Parent, in one transaction or a series of
related transactions, if, immediately after giving effect to such transaction or
series of transactions, any "person" or "group" (as such terms are used for
purposes of Sections 13(d) and 14(d) of the Exchange Act, whether or not
applicable), other than any Excluded Person, is or becomes the Beneficial Owner,
directly or indirectly, of more than 50% of the total voting power in the
aggregate of all classes of Capital Stock of the Company or, from and after the
date of the Reorganization, of the Company, the Holding Company or the Parent
then outstanding normally entitled to vote in the election of directors,
managers or trustees, as applicable, of the transferee or surviving entity, (ii)
any "person" or "group," other than any Excluded Person, is or becomes the
Beneficial Owner, directly or indirectly, of more than 50% of the total voting
power in the aggregate of all classes of Capital Stock of the Company then
outstanding normally entitled to vote in elections of directors, (iii) from and
after the date of the Reorganization, any "person" or "group", other than any
Excluded Person, is or becomes the Beneficial Owner, directly or indirectly, of
more than 50% of the total voting power in the aggregate of all classes of
Capital Stock of the Holding Company or the Parent then outstanding normally
entitled to vote in the election of directors, managers or trustees, as
applicable, or (iv) at any time during any period of 12 consecutive months,
individuals who at the beginning of any such 12-month period constituted the
board of directors of the Company or, from and after the date of the
Reorganization, the board of directors of the Parent (together, in each case,
with any new directors whose election by such board or whose nomination for
election by the shareholders was approved by a vote of a majority of the
directors then still in office who were either directors at the beginning of
such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the board of
directors of the Company or the Parent, as applicable, then in office.
"Change of Control Offer" shall have the meaning specified in Section
10.1.
"Change of Control Offer Period" shall have the meaning specified in
Section 10.1.
"Change of Control Purchase Date" shall have the meaning specified in
Section 10.1.
"Change of Control Purchase Price" shall have the meaning specified in
Section 10.1.
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"Change of Control Put Date" shall have the meaning specified in Section
10.1.
"Commission" means the Securities Exchange Commission or any successor
thereto.
"Common Stock Offering" means the underwritten public offering by the
Company of 4,500,000 shares of its common stock (plus up to an additional
675,000 shares of its common stock issuable upon exercise of the underwriters'
over-allotment options) being made concurrently with the private placement of
the Securities.
"Company" 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.
"Consolidated Depreciation and Amortization Expense" means, with respect
to any person for any period, the depreciation and amortization expense of such
person and its Subsidiaries for such period (including amortization of debt
discount and deferred financing costs in connection with any Indebtedness of
such person and its Subsidiaries), determined on a consolidated basis in
accordance with GAAP.
"Consolidated EBITDA" means, with respect to any person for any period,
the Consolidated Net Income of such person for such period adjusted to add
thereto or subtract therefrom, as applicable (to the extent deducted or
included, as applicable in determining such Consolidated Net Income), without
duplication, the sum of (i) Consolidated Income Tax Expense of such person for
such period, (ii) Consolidated Depreciation and Amortization Expense of such
person for such period, (iii) Consolidated Interest Expense of such person for
such period, (iv) Consolidated LIFO Charges (Credits) of such person for such
period, and (v) all other consolidated non-cash items of such person and its
Subsidiaries for such period, and further adjusted to subtract therefrom all
cash payments made by such person or any of its Subsidiaries during such period
to the extent such payments relate to non-cash charges that were added back in
determining Consolidated EBITDA for such period or any prior period, all
determined on a consolidated basis in accordance with GAAP; provided that any
amounts referred to in any one or more of clauses (i) through (v) of this
sentence which are to be added to Consolidated Net Income and which are
attributable to a Subsidiary of such person which is not a Wholly-Owned
Subsidiary shall be added to Consolidated Net Income only to the extent (and in
the same proportion) that the net income of such Subsidiary was included in
calculating the Consolidated Net Income of such person and then only to the
extent that the amount of such expense or charge, as applicable, attributable to
such Subsidiary would be permitted at the time of determination to be dividended
to such person in cash by such Subsidiary.
"Consolidated Interest Coverage Ratio" means, with respect to any person
on any date of determination (the "Transaction Date"), the ratio, on a pro forma
basis, of (a) Consolidated EBITDA of such person (exclusive of amounts
attributable to operations and businesses permanently discontinued or disposed
of) for the Reference Period to (b) Consolidated Interest Expense of such person
(exclusive of amounts attributable to operations and businesses permanently
discontinued or disposed of, but only to the extent that the obligations giving
rise to such Consolidated Interest Expense would no longer be obligations
contributing to such person's Consolidated Interest Expense subsequent to the
Transaction Date) for the Reference Period; provided, that for purposes of
calculating Consolidated EBITDA and Consolidated Interest Expense for this
definition, (i) Acquisitions which occurred during the Reference Period or
subsequent to the Reference Period and on or prior to the Transaction Date shall
be assumed to have occurred on the first day of the Reference Period, (ii)
transactions giving rise to the need to calculate the Consolidated Interest
Coverage Ratio shall be assumed to have occurred on the first day of the
Reference Period, and (iii) the Incurrence of any
4
Indebtedness or issuance of any Disqualified Capital Stock during the Reference
Period or subsequent to the Reference Period and on or prior to the Transaction
Date (and the application of the proceeds therefrom to the extent used to
Refinance or retire other Indebtedness or Disqualified Capital Stock permitted
by this Indenture) shall be assumed to have occurred on the first day of such
Reference Period and the interest rate on any such Indebtedness or the dividend
rate on any such Disqualified Capital Stock which bears interest or accrues
dividends at a floating rate shall be computed on a pro forma basis as if the
average rate in effect from the beginning of the Reference Period to the
Transaction Date had been the applicable rate for the entire period, unless such
person or any of its Subsidiaries is party to an Interest Swap or Hedging
Obligation (which shall remain in effect for the 12-month period immediately
following the Transaction Date) which has the effect of fixing the interest rate
or dividend rate on the date of computation, in which case such rate (whether
higher or lower) shall be used. If such person or any of its Subsidiaries
directly or indirectly guarantees Indebtedness or dividends or other
distributions on Disqualified Capital Stock of a third person, the foregoing
definition shall give effect to the Incurrence of such guaranteed Indebtedness
or the issuance of any such guaranteed Disqualified Capital Stock as if it had
been Incurred or issued, as the case may be, by such person or such Subsidiary.
"Consolidated Income Tax Expense" means, with respect to any person for
any period, the provision for federal, state, local and foreign income taxes of
such person and its Subsidiaries for such period, determined on a consolidated
basis in accordance with GAAP.
"Consolidated Interest Expense" means, with respect to any person for any
period, without duplication, (i) the sum of (A) the aggregate amount of cash and
non-cash interest expense (including capitalized interest but excluding
amortization of deferred financing costs) of such person and its Subsidiaries
for such period (including, without limitation, (v) any amortization of debt
discount, (w) net costs associated with Interest Swap and Hedging Obligations
(including any amortization of discounts), (x) the interest portion of any
deferred payment obligation, (y) all accrued interest and capitalized interest,
and (z) all commissions, discounts and other fees and charges owed with respect
to letters of credit, bankers' acceptances, Interest Swap and Hedging
Obligations or similar facilities) paid or accrued, or scheduled to be paid or
accrued, during such period; (B) the aggregate amount of cash and non-cash
dividends and other distributions paid or accrued, or scheduled to be paid or
accrued, during such period in respect of Disqualified Capital Stock of such
person and its Subsidiaries; (C) the portion of any rental obligation of such
person or its Subsidiaries for such period in respect of any Capitalized Lease
Obligation allocable to interest expense (based upon the rate of interest
implicit in such Capitalized Lease Obligations as reasonably determined by the
Subject Entity) in accordance with GAAP; and (D) to the extent that any
Indebtedness of any other person is guaranteed, or any dividends or
distributions on Disqualified Capital Stock of any other person are guaranteed,
by such person or any of its Subsidiaries, the aggregate amount of interest,
dividends and distributions paid or accrued or scheduled to be paid or accrued
by such other person during such period attributable to any such Indebtedness or
Disqualified Capital Stock, as applicable, all determined on a consolidated
basis in accordance with GAAP.
"Consolidated LIFO Charges (Credits)" means, with respect to any person
for any period, the consolidated LIFO charges (credits) of such person and its
Subsidiaries for such period, determined on a consolidated basis in accordance
with GAAP.
"Consolidated Net Income" means, with respect to any person for any
period, an amount equal to (A) the net income (or loss) of such person and its
Subsidiaries for such period (adjusted as provided in the next succeeding
sentence) minus (B) to the extent not deducted in the computation of the amount
of
5
consolidated net income (loss) referred to in clause (A), the aggregate amount
of Permitted Payments paid or accrued, or scheduled to be paid or accrued, by
such person and its Subsidiaries during such period, all determined on a
consolidated basis in accordance with GAAP; provided that, solely for purposes
of clause (3)(a) and the proviso to clause (3)(d) of the first paragraph of
Section 4.3, Consolidated Net Income shall mean the net income (or loss) of such
person and its Subsidiaries for such period (adjusted as provided in the next
succeeding sentence), determined on a consolidated basis in accordance with
GAAP. The amount referred to in clause (A) of and in the proviso to the
preceding sentence shall be adjusted to exclude (to the extent included in
computing such net income (or loss) and without duplication): (a) all gains and
losses which are extraordinary (as determined in accordance with GAAP) or which
are unusual or non-recurring, (b) the net income or loss of any other person
(other than a Subsidiary of such person) in which such person or any of its
Subsidiaries has an interest, except that any such net income shall be included
only to the extent of the amount of any dividends or distributions actually paid
in cash to such person or a Subsidiary of such person during such period but in
any case not in excess of such person's or Subsidiary's, as the case may be, pro
rata share of such net income for such period, and any such net loss shall be
included only to the extent of such person's or Subsidiary's, as the case may
be, pro rata share of such net loss for such period, (c) the net income or loss
of any person acquired in a pooling of interests transaction for any period
prior to the date of such acquisition, (d) the net income, if positive, of any
Subsidiary of such person to the extent that the declaration or payment of
dividends or similar distributions by such Subsidiary is not at the time
permitted, directly or indirectly, by the terms of its charter, bylaws,
partnership agreement or other organizational documents or any other agreement,
instrument, judgment, decree, order, law, rule or governmental regulation
applicable to such Subsidiary, (e) gains and losses in respect of any Asset
Sales or other sale or disposition of assets outside the ordinary course of
business or from the issuance or sale of any Capital Stock by such person or any
of its Subsidiaries, (f) any gain or income or losses, net of taxes,
attributable to refunds or credits in respect of any employee benefit plan, (g)
any non-cash compensation expense in connection with the issuance of any
employee stock options, (h) the effects of changes in accounting principles, and
(i) all deferred financing costs written off in connection with the early
extinguishment of any Indebtedness Incurred by the Subject Entity or any of its
Subsidiaries in connection with the ▇▇▇▇▇▇ Acquisition or the KUI Acquisition.
"Covenant Defeasance" shall have the meaning specified in Section 8.3.
"Credit Agreement" means the one or more credit agreements (including,
without limitation, the New Credit Agreement) entered into by and among the
Company and/or the Holding Company and/or any of their respective Subsidiaries
and certain financial institutions which provide for in the aggregate one or
more term loans, letter of credit facilities and/or revolving credit facilities,
including any related notes, guarantees, letters of credit, collateral
documents, instruments and agreements executed in connection therewith, as such
credit agreement and/or related documents may be amended, restated,
supplemented, renewed, refinanced, replaced or otherwise modified from time to
time whether or not with the same agent, trustee, representative, lenders or
holders, and, subject to the next succeeding sentence, irrespective of any
changes in the terms and conditions thereof. Without limiting the generality of
the foregoing, the term "Credit Agreement" shall include any amendment,
amendment and restatement, renewal, extension, restructuring, supplement or
modification to any such credit agreement not prohibited by this Indenture and
all refundings, refinancings and replacements of any such credit agreement not
prohibited by this Indenture, including any agreement (i) extending the maturity
of any Indebtedness Incurred thereunder or contemplated thereby, (ii) adding or
deleting borrowers or guarantors thereunder, so long as borrowers and issuers
include one or more of the Subject Entity and its Subsidiaries, (iii) increasing
the amount of Indebtedness Incurred thereunder or available to be borrowed
thereunder, provided that on the date such Indebtedness is Incurred it would not
be prohibited by the covenant
6
described in Section 4.10 or (iv) otherwise altering the terms and conditions
thereof in a manner not prohibited by the terms of this Indenture.
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"Debt Incurrence Ratio" shall have the meaning specified in Section 4.10.
"Default" means any event or condition that is, or after notice or passage
of time or both would be, an Event of Default.
"Defaulted Interest" shall have the meaning specified in Section 2.12.
"Definitive Securities" means Securities that are in the form of the
Security attached hereto as Exhibit A that do not include the information called
for by footnotes 1 and 3 thereof.
"Depositary" means, with respect to the Securities issuable or issued in
whole or in part in global form, the person specified in Section 2.3 as the
Depositary with respect to the Securities, until a successor shall have been
appointed and become such pursuant to the applicable provision of this
Indenture, and, thereafter, "Depositary" shall mean or include such successor.
"Designated Senior Debt" means, with respect to the Company (i) all Senior
Debt of the Company under any Credit Agreement; and (ii) any other Senior Debt
of the Company which (a) at the time of determination exceeds $25,000,000 in
aggregate principal amount outstanding and (b) is specifically designated in the
instrument or agreement creating or evidencing such Senior Debt or pursuant to
which such Senior Debt was issued as "Designated Senior Debt." "Designated
Senior Debt" means, with respect to any Guarantor, (i) all Senior Debt of such
Guarantor under any Credit Agreement; and (ii) any other Senior Debt of such
Guarantor which (a) at the time of determination exceeds $25,000,000 in
aggregate principal amount outstanding and (b) is specifically designated in the
instrument or agreement creating or evidencing such Senior Debt or pursuant to
which such Senior Debt was issued as "Designated Senior Debt."
"Disqualified Capital Stock" means, (a) except as set forth in clauses (b)
and (c) of this paragraph, with respect to any person, Capital Stock of such
person (excluding warrants, rights and options) that, by its terms or by the
terms of any security into which it is then convertible, exercisable or
exchangeable, is or, upon the happening of an event or the passage of time or
both would be, required to be redeemed or repurchased (including at the option
of the holder thereof) by such person or any of its Subsidiaries, in whole or in
part, on or prior to the Final Maturity Date, or is convertible into or
exchangeable for debt securities at any time on or prior to the Final Maturity
Date, (b) with respect to any Subsidiary of such person (excluding, with respect
to the Subject Entity, any of its Subsidiaries which is a Guarantor and, from
and after the Reorganization, the Company), any Capital Stock (excluding
warrants, rights and options) other than common stock with no preferences or
redemption or repayment provisions, and (c) with respect to any Guarantor and,
from and after the Reorganization, the Company, any of its Capital Stock
(excluding warrants, rights and options) that (1) by its terms or by the terms
of any security into which it is convertible, exercisable or exchangeable, is
or, upon the happening of an event or the passage of time or both would be,
required to be redeemed or repurchased (including at the option of the holder
thereof) by the Subject Entity or any of its Subsidiaries, in whole or in part,
on or prior to the Final Maturity Date, or is convertible into or exchangeable
for debt securities at any time on or prior to the Final Maturity Date, or (2)
provides for any increase in the dividend
7
or distribution rate or other monetary penalty, or provides for the holders
thereof to be granted any additional rights, upon the failure to pay dividends
or distributions thereon (including, without limitation, the right to appoint or
elect one or more directors, trustees or similar persons).
"Domestic Subsidiary" means, with respect to any person, any Subsidiary of
such person other than a Foreign Subsidiary of such person.
"DTC" shall have the meaning specified in Section 2.3.
"Equity Offering" means an underwritten public offering of common stock
of, prior to the Reorganization, the Company or, following the Reorganization,
the Parent, in each case pursuant to a registration statement filed with the
Commission.
"Event of Default" shall have the meaning specified in Section 6.1.
"Event of Loss" means, with respect to any property or asset, any (i)
loss, destruction or damage of such property or asset, and (ii) any actual
condemnation, seizure or taking, by exercise of the power of eminent domain or
otherwise, of such property or asset, or confiscation or requisition of the use
of such property or asset.
"Excess Proceeds" shall have the meaning specified in Section 4.13.
"Excess Proceeds Date" shall have the meaning specified in Section 4.13.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, or
any successor thereto, in each case including, the rules and regulations
promulgated by the Commission thereunder.
"Exchange Securities" means the 8.70% Senior Subordinated Notes due 2007
to be issued pursuant to this Indenture in connection with the offer to exchange
Securities for the Initial Securities that may be made by the Company and the
Guarantors pursuant to the Registration Rights Agreement.
"Excluded Person" means (i) ▇▇▇▇/Chilmark Fund L.P., a Delaware limited
partnership ("▇▇▇▇/Chilmark"), and any person who, by virtue of their position
with the general partner, or with the persons that directly or indirectly
control the general partner, of ▇▇▇▇/Chilmark may be deemed the Beneficial Owner
of securities owned by ▇▇▇▇/Chilmark and (ii) from and after the date of the
Reorganization, the Holding Company, the Parent, any Subsidiary of the Holding
Company through which the Holding Company holds an interest in the Capital Stock
of the Company and any Subsidiary of the Parent through which Parent holds an
interest in the Capital Stock of the Company or the Holding Company.
"Existing Indebtedness" means Indebtedness of the Company or a Subsidiary
of the Company (including, without limitation, ▇▇▇▇▇▇ and KUA) in existence on
the Issue Date, other than Indebtedness under the Old Credit Agreements, the Old
Security Agreements, any Credit Agreement, and any other Indebtedness of ▇▇▇▇▇▇
or any of its Subsidiaries which is to be repaid in connection with the ▇▇▇▇▇▇
Acquisition.
"Fair Market Value" or "fair market value" means, with respect to any
assets or properties, the amount at which such assets or properties would change
hands between a willing buyer and a willing seller,
8
within a commercially reasonable time, each having reasonable knowledge of the
relevant facts, neither being under a compulsion to sell or buy.
"Final Maturity Date" means March 15, 2007
"Foreign Subsidiary" means, with respect to any person, any Subsidiary of
such person which is incorporated or otherwise organized under the laws of any
jurisdiction other than the United States of America, any state thereof or the
District of Columbia and substantially all of whose consolidated assets are
located outside of the United States of America.
"GAAP" means United States generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as approved by a significant segment of the
accounting profession, as in effect on the Issue Date.
"Global Security" means a Security that contains the paragraph referred to
in footnote 1 and the additional schedule referred to in footnote 3 to the form
of Security attached hereto as Exhibit A.
"guarantee" means, as applied to any obligation, (i) a guarantee (other
than by endorsement of negotiable instruments for collection in the ordinary
course of business), direct or indirect, in any manner, of any part or all of
such obligation and (ii) an agreement, direct or indirect, contingent or
otherwise, the practical effect of which is to assure in any way the payment or
performance (or payment of damages in the event of non-performance) of all or
any part of such obligation, including, without limiting the foregoing, the
payment or reimbursement of amounts drawn down under letters of credit; provided
that none of the following shall constitute a "guarantee" for purposes of this
Indenture: (A) ▇▇▇▇▇▇' guarantee of Santee's obligations under the Trademark
License Agreement between Kraft, Inc. and Santee, as in effect on the Issue
Date, and any amendments, renewals or modifications thereof so long as the
obligations guaranteed in any such amended, modified or renewed agreement do not
include indebtedness for borrowed money or Capitalized Lease Obligations or
evidenced by bonds, notes, debentures or similar instruments, (B) guarantees by
the Subject Entity or any of its Subsidiaries of Indebtedness of Santee,
provided that the aggregate principal amount of such Indebtedness outstanding at
any time shall not exceed $30 million and, to the extent that the aggregate
principal amount of such Indebtedness outstanding at any time after the 60th day
following the Issue Date exceeds $10 million, then the amount of such
outstanding Indebtedness in excess of $10 million shall be deemed an Investment
in Santee but shall not constitute Indebtedness, and (C) agreements to purchase
milk or other products from Santee. The terms "guarantee" (when used as a verb)
and "guaranteed" have meanings correlative to the foregoing.
"Guarantee" shall have the meaning provided in Section 11.1.
"Guarantors" means (i) the Initial Guarantors and (ii) any person which
becomes a Guarantor after the Issue Date in accordance with the provisions
described in this Indenture, until such time as, in the case of any Guarantor, a
successor replaces it in accordance with the provisions of this Indenture, in
which case the term Guarantor shall thereafter include such successor, but
excluding in each case any persons whose Guarantees have been released pursuant
to the terms of this Indenture and any Unrestricted Subsidiaries and
Non-Guarantor Foreign Subsidiaries of the Subject Entity.
9
"Guarantor Foreign Subsidiary" means any Foreign Subsidiary of the Subject
Entity which is a Guarantor.
"Holder" or "Securityholder" means the Person in whose name a Security is
registered on the Registrar's books.
"Holding Company" means Quality Food Holdings, Inc., a Delaware
corporation until a successor replaces it as a Guarantor in accordance with the
provisions of this Indenture, and thereafter means such successor.
"▇▇▇▇▇▇" means ▇▇▇▇▇▇ Markets, Inc., a California corporation, and its
successors.
"▇▇▇▇▇▇ Acquisition" means the Company's acquisition of ▇▇▇▇▇▇ pursuant to
the ▇▇▇▇▇▇ Merger Agreement.
"▇▇▇▇▇▇ Merger Agreement" means the Agreement and Plan of Merger dated as
of November 20, 1996, as amended, among the Company, QHI Acquisition Corporation
and ▇▇▇▇▇▇.
"Incur" or "Incurrence" shall have the respective meanings specified in
Section 4.10.
"Incurrence Date" shall have the meaning specified in Section 4.10.
"Indebtedness" means, with respect to any person, without duplication, (a)
all liabilities and obligations, contingent or otherwise, of such person 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) or for the deferred purchase
price of property or services, excluding any trade payables incurred in the
ordinary course of business, but including, without limitation, all obligations,
contingent or otherwise, of such person in connection with any letters of
credit, banker's acceptances or other similar credit transactions, (b) all
liabilities and obligations of such person, contingent or otherwise, evidenced
by bonds, notes, debentures or other similar instruments, (c) all indebtedness
created or arising under any conditional sale or other title retention agreement
with respect to property acquired by such person (even if the rights and
remedies of the seller or lender under such agreement in the event of default
are limited to repossession or sale of such property), but excluding trade
accounts payable arising in the ordinary course of business, (d) all Capitalized
Lease Obligations of such person, (e) all Indebtedness of other persons of the
types referred to in the preceding clauses of this sentence, the payment of
which is secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by) any Lien upon any
property or assets owned by such person, even though such person has not assumed
or become liable for the payment of such Indebtedness (the amount of such
obligation being deemed to be the lesser of the Fair Market Value (as determined
in good faith by the Board of Directors of the Subject Entity and evidenced by a
resolution delivered to the Trustee) of such property or assets or the amount of
the obligation so secured), other than Indebtedness of Santee secured by the
Liens on the Capital Stock of Santee owned by the Subject Entity or any of its
Subsidiaries, (f) all Disqualified Capital Stock of such person valued at the
greater of its voluntary or involuntary maximum fixed repurchase price plus
accrued dividends, (g) all net payment obligations under or in respect of
Interest Swap and Hedging Obligations of such person, (h) all Indebtedness of
others of the types referred to in the preceding clauses of this sentence which
is guaranteed by such person, and (i) any amendment, supplement, modification,
deferral, renewal, extension or refunding of any liability of the types referred
to in clauses (a) through (h) above. For purposes hereof, the "maximum fixed
repurchase price" of any Disqualified
10
Capital Stock which 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, such Fair Market Value shall be determined in good faith by the
Board of Directors of the Company and evidenced by a resolution delivered to the
Trustee.
"Indenture" means this Indenture, as amended or supplemented from time to
time in accordance with the terms hereof.
"Initial Guarantors" means (i) ▇▇▇▇▇▇, (ii) KUA, and (iii) the Holding
Company.
"Initial Parent" means Quality Food, Inc., a Delaware corporation.
"Initial Purchasers" means ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities
Corporation, ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated and BancAmerica
Securities, Inc.
"Initial Securities" means the 8.70% Senior Subordinated Notes due 2007
issued under this Indenture on the Issue Date.
"Initial Unrestricted Subsidiaries" means Second Story, Inc., a Washington
corporation, ▇▇▇▇▇▇ Realty, Inc., a California corporation, Univar San
Bernardino, Inc., a California corporation, and MM Foods, Inc., a California
corporation..
"Interest Payment Date" means the stated due date of an installment of
interest on the Securities.
"Interest Swap and Hedging Obligation" means, with respect to any person,
any monetary obligation of such person pursuant to any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement, interest
rate exchange agreement, currency exchange agreement or any other agreement or
arrangement designed to protect against fluctuations in interest rates or
currency values, including, without limitation, any arrangement 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 to a stated notional amount in exchange for periodic payments made by
such person calculated by applying a fixed or floating rate of interest to the
same notional amount.
"Investment" by any person in any other person means (without duplication)
(a) the acquisition (whether by purchase, merger, consolidation or otherwise) by
such person (whether for cash, property, services, securities or otherwise) of
Capital Stock, bonds, notes, debentures or other securities, including any
options or warrants, of such other person or any agreement to make any such
acquisition; (b) the making by such person of any deposit with, or advance, loan
or other extension of credit to, such other person or any commitment to make any
such advance, loan or extension (but excluding accounts receivable or deposits
arising in the ordinary course of business); (c) the entering into by such
person of any guarantee of, or other credit support or contingent obligation
with respect to, Indebtedness or other liabilities of such other person; (d) the
making of any capital contribution by such person to such other person
(including by means of any transfer of cash or other property or any payment for
property or services for the account or use of such other person); (e) the
designation by the Board of Directors of the Subject Entity of any person to be
an Unrestricted Subsidiary of the Subject Entity; (f) the establishment or
acquisition by the Subject Entity of a
11
Non-Guarantor Foreign Subsidiary; and (g) a Subsidiary of the Subject Entity
ceasing for any reason to be a Subsidiary of the Subject Entity (other than as a
result of its merger or consolidation with or into the Subject Entity or any of
its Domestic Subsidiaries or Guarantor Foreign Subsidiaries in a transaction not
prohibited by this Indenture or as a result of its designation as an
Unrestricted Subsidiary) but only if the Subject Entity or any of its other
Subsidiaries retains an equity interest in such former Subsidiary. The Subject
Entity shall be deemed to make an Investment in an amount equal to the portion
(proportionate to the Subject Entity's equity interest in the relevant
Subsidiary) of the Fair Market Value (as determined in good faith by the Board
of Directors of the Subject Entity and evidenced by a resolution delivered to
the Trustee) of any Subsidiary (or, if neither the Subject Entity nor any of its
Subsidiaries has theretofore made an Investment in such Subsidiary, in an amount
equal to the Fair Market Value (determined as aforesaid) of the Investment being
made) at the time that such Subsidiary is designated as an Unrestricted
Subsidiary. The Subject Entity shall be deemed to make an Investment in an
amount equal to the Fair Market Value (determined as aforesaid) of the
Investment being made at the time the Subject Entity acquires or establishes a
Non-Guarantor Foreign Subsidiary. In addition, if any Subsidiary of the Subject
Entity shall cease for any reason to be a Subsidiary of the Subject Entity
(other than as a result of its merger or consolidation with or into the Subject
Entity or any of its Domestic Subsidiaries or Guarantor Foreign Subsidiaries in
a transaction not prohibited by this Indenture or as a result of its designation
as an Unrestricted Subsidiary), then the Subject Entity shall be deemed to make
an Investment in an amount equal to the portion (proportionate to the Subject
Entity's remaining equity interest in such former Subsidiary immediately after
it ceases to be a Subsidiary) of the Fair Market Value (as determined in good
faith by the Board of Directors of the Subject Entity and evidenced by a
resolution delivered to the Trustee) of such former Subsidiary at such time. Any
property transferred between an Unrestricted Subsidiary and the Subject Entity
or a Subsidiary of the Subject Entity, or between any Non-Guarantor Foreign
Subsidiary and the Subject Entity or a Guarantor Foreign Subsidiary or Domestic
Subsidiary of the Subject Entity, shall in each case be valued at its Fair
Market Value (determined as aforesaid) at the time of such transfer. The amount
of any such Investment shall be reduced by any liabilities or obligations of the
Subject Entity or any of its Subsidiaries to be assumed or discharged in
connection with such Investment by an entity other than the Subject Entity or
any of its Subsidiaries or Unrestricted Subsidiaries; provided that, in the case
of any Investment in a Non-Guarantor Foreign Subsidiary, such Investment shall
be reduced only to the extent of any liabilities or obligations of the Subject
Entity or any of its Guarantor Foreign Subsidiaries or Domestic Subsidiaries
which are so assumed or discharged.
"Issue Date" means March 19, 1997.
"Junior Security" means securities of the Company or any Guarantor that
are equity securities or are subordinated in right of payment to all Senior Debt
of the Company or of such Guarantor, as the case may be, at least to the same
extent that the Security or the Guarantees, as applicable, are subordinated to
the payment of all Senior Debt of the Company or such Guarantor, as applicable,
then outstanding.
"KUA" means KU Acquisition Corporation, a Washington corporation and its
successors.
"KUI" means ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Inc., a Washington corporation.
"KUI Acquisition" means the Company's acquisition of KUI pursuant to the
KUI Merger Agreement.
"KUI Merger Agreement" means the Agreement and Plan of Merger dated
December 18, 1996, as amended, among the Company, KUA and KUI.
12
"Legal Defeasance" shall have the meaning specified in Section 8.2.
"Lien" means any mortgage, lien, pledge, charge, security interest or
other encumbrance of any kind, whether or not filed, recorded or otherwise
perfected under applicable law (including any conditional sale or other title
retention agreement and any lease deemed to constitute a security interest and
any option or other agreement to give a security interest).
"Liquidated Damages" shall have the meaning set forth in the Registration
Rights Agreement.
"Merger Subsidiary" shall have the meaning set forth in Section 4.17.
"Net Cash Proceeds" means the aggregate amount of Cash or Cash Equivalents
received after the Issue Date by the Subject Entity in the case of a sale of its
Qualified Capital Stock and by the Subject Entity or any of its Subsidiaries in
respect of an Asset Sale or an Event of Loss plus, in the case of an issuance of
Qualified Capital Stock of the Subject Entity upon any exercise, exchange or
conversion of securities (including options, warrants, rights and convertible or
exchangeable debt) of the Subject Entity that were issued for cash after the
Issue Date, the amount of cash originally received by the Subject Entity upon
the issuance of such securities (including any such options, warrants, rights
and convertible or exchangeable debt) less, in each case, the sum of all
out-of-pocket payments, fees, commissions and expenses (including, without
limitation, the fees and expenses of legal counsel and investment banking fees
and expenses) reasonably incurred in connection with such Asset Sale, Event of
Loss or sale of Qualified Capital Stock, as applicable, and, in the case of an
Asset Sale or Event of Loss only, less (i) the amount (estimated reasonably and
in good faith by the Subject Entity) of income, franchise, sales and other
applicable taxes required to be paid by the Subject Entity or any of its
Subsidiaries in connection with such Asset Sale or Event of Loss, as applicable,
(ii) the amounts of any repayments of Indebtedness of the Subject Entity or any
of its Subsidiaries secured, directly or indirectly, by Liens on the assets
which are the subject of such Asset Sale or Event of Loss, as applicable, or
Indebtedness of the Subject Entity or any of its Subsidiaries associated with
such assets which is due by reason of such Asset Sale or Event of Loss, as
applicable, (i.e., such disposition is permitted by the terms of the instruments
evidencing or applicable to such Indebtedness, or by the terms of a consent
granted thereunder, on the condition that the proceeds of such disposition (or
portion thereof) be applied to such Indebtedness), provided that (A) the
repayment of such Indebtedness is permitted by this Indenture, and (B) to the
extent that any such Indebtedness so repaid is Senior Debt, the amount of such
repayment shall permanently reduce the amount of such Senior Debt outstanding
(and, in the case of Senior Debt outstanding under a revolving credit facility
or similar arrangement that makes credit available, the commitment thereunder is
also permanently reduced by such amount); (iii) all amounts deemed appropriate
by the Subject Entity (as evidenced by an Officers' Certificate of the Subject
Entity delivered to the Trustee) to be provided as a reserve, in accordance with
GAAP, against any liabilities associated with such assets which are the subject
of such Asset Sale or Event of Loss, as applicable; and (iv) with respect to
Asset Sales or Event of Loss by Subsidiaries of the Subject Entity, the portion
of such cash payments attributable to persons holding a minority interest in
such Subsidiary.
"New Credit Agreement" means the Amended and Restated Credit Agreement
dated as of March 14, 1997 among the Company, the Holding Company, the Initial
Parent, the various financial institutions party thereto from time to time, and
Bank of America National Trust and Savings Association, as administrative agent
and paying agent, and The Chase Manhattan Bank, as administrative agent.
13
"Non-Cash Net Proceeds" means the aggregate Fair Market Value (as
determined in good faith by the Board of Directors of the Subject Entity and
evidenced by a resolution delivered to the Trustee) of property (other than Cash
or Cash Equivalents) received after the Issue Date by the Subject Entity from
the issuance and sale of its Qualified Capital Stock plus, in the case of an
issuance of Qualified Capital Stock of the Subject Entity upon any exercise,
exchange or conversion of securities (including options, warrants, rights and
convertible or exchangeable debt) of the Subject Entity that were issued for
property (other than Cash or Cash Equivalents) after the Issue Date, the
aggregate Fair Market Value (determined as aforesaid) of the property (other
than Cash and Cash Equivalents) originally received by the Subject Entity upon
the issuance of such securities (including any such options, warrants, rights
and convertible or exchangeable debt) less, in each case, the sum of all
out-of-pocket payments, fees, commissions and expenses (including, without
limitation, the fees and expenses of legal counsel and investment banking fees
and expenses) reasonably incurred in connection with the sale of such Qualified
Capital Stock.
"Non-Guarantor Foreign Subsidiary" means any Foreign Subsidiary of the
Subject Entity which is not a Guarantor.
"Notice of Default" shall have the meaning specified in Section 6.2.
"Officer" means, with respect to the Company or a Guarantor, the Chairman,
the Chief Executive Officer, the President, any Vice President, the Chief
Financial Officer, the Treasurer, the Controller, or the Secretary of the
Company or such Guarantor, as applicable; provided that, in the case of any
Guarantor which is not a corporation, the term "Officer" shall mean any other
natural person who is authorized to execute the certificate, instrument or other
document on behalf of such Guarantor.
"Officers' Certificate" means, with respect to any person, a certificate
signed by two Officers or by an Officer and an Assistant Secretary of such
person and otherwise complying with the requirements of Sections 13.4 and 13.5,
and delivered to the Trustee or an Agent, as applicable.
"Old Credit Agreements" means the Credit Agreement dated as of March 15,
1995 among the Company, Bank of America National Trust and Savings Association,
as Agent, Seattle First National Bank, as Swingline Lender, Bank of America
Illinois, as Issuing Lender, and the other financial institutions party thereto
and the Loan Agreement dated as of October 31, 1995 among ▇▇▇▇▇▇ and Union Bank,
in each case including any related notes and guarantees executed in connection
therewith.
"Old Security Agreements" means any security agreement, trademark security
agreement, pledge agreement, mortgage, deed of trust or other similar instrument
or agreement entered into by the Company or ▇▇▇▇▇▇ or any of their respective
Subsidiaries in connection with or pursuant to any of the Old Credit Agreements.
"Opinion of Counsel" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee (which may include, unless otherwise
provided herein, counsel to the Trustee or the Company including an employee of
the Company) or an Agent, as applicable, complying with the requirements of
Sections 13.4 and 13.5, and delivered to the Trustee or an Agent, as applicable.
"Parent" means, at any date from and after the date of the Reorganization,
the person which, directly or through one or more of its Subsidiaries, owns at
least a majority of the outstanding Voting Stock of the Holding Company on such
date and is the ultimate parent of the Holding Company on such date.
14
"Pari Passu Indebtedness" means Indebtedness of the Company or any
Guarantor which ranks pari passu in right of payment with the Securities or with
the Guarantee of such Guarantor, as the case may be.
"Paying Agent" shall have the meaning specified in Section 2.3.
"Payment Blockage Period" shall have the meaning specified in Section
12.2.
"Payment Default" shall have the meaning specified in Section 12.2.
"Payment Notice" shall have the meaning specified in Section 12.2.
"Permitted Indebtedness" means, without duplication:
(a) Indebtedness evidenced by the Securities or the Guarantees or arising
under this Indenture;
(b) Indebtedness of the Subject Entity or any of its Subsidiaries under
the Credit Agreements up to an aggregate principal amount outstanding at any
time not to exceed (i) $600 million minus (ii) the aggregate principal amount of
any such Indebtedness (x) repaid with Net Cash Proceeds from any Asset Sale or
Event of Loss or by application of amounts referred to in clause (ii)(B) of the
definition of "Net Cash Proceeds" or (y) assumed by a transferee in any Asset
Sale;
(c) Indebtedness owed by the Subject Entity to any Subsidiary of the
Subject Entity and Indebtedness owed by any Subsidiary of the Subject Entity to
the Subject Entity or any other Subsidiary of the Subject Entity; provided that
any such Indebtedness owed by the Company shall be unsecured and subordinated in
right of payment to the Company's obligations pursuant to the Securities; and
provided, further, that any such Indebtedness owed by any Non-Guarantor Foreign
Subsidiary of the Subject Entity shall be permitted under Section 4.3 and shall
not be otherwise prohibited by this Indenture;
(d) Indebtedness Incurred by the Subject Entity or any of its Subsidiaries
in connection with the purchase, construction 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, whether by merger of otherwise) 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 then most
recently completed four fiscal quarter period in reliance upon this clause (d),
does not exceed, in the aggregate, 3% of net sales of the Subject Entity and its
Subsidiaries during such four fiscal quarter period on a consolidated basis in
accordance with GAAP (calculated on a pro forma basis if the date of Incurrence
is prior to the end of the fourth fiscal quarter following the ▇▇▇▇▇▇
Acquisition), (ii) at the time of Incurrence thereof, such Indebtedness,
together with all then outstanding Indebtedness Incurred in reliance upon this
clause (d), does not exceed, in the aggregate, 3% of the net sales of the
Subject Entity and its Subsidiaries during the most recently completed twelve
fiscal quarter period on a consolidated basis in accordance with GAAP
(calculated on a pro forma basis if the date of Incurrence is prior to the end
of the twelfth fiscal quarter following the ▇▇▇▇▇▇ Acquisition), and (iii) such
Indebtedness is Incurred concurrently with, or within 180 days of, such
acquisition or purchase or the completion of such construction or improvement or
the inception of such lease, as the case may be, and, if secured, is secured
only by the property so purchased, constructed, improved or leased (and proceeds
and products therefrom);
15
(e) Indebtedness arising from tender, bid, performance or government
contract bonds, surety bonds or completion guarantees or other obligations of
like nature, or warranty or contractual service obligations, in any case
Incurred by the Subject Entity any of its Subsidiaries in the ordinary course of
business;
(f) Interest Swap and Hedging Obligations that are Incurred by the Subject
Entity or any of its Subsidiaries for the purpose of fixing or hedging interest
rates or currency rates with respect to any fixed or floating rate Indebtedness
that is permitted by this Indenture to be outstanding or any receivable or
liability the payment of which is determined by reference to a foreign currency;
provided, that the notional amount of any such Interest Swap and Hedging
Obligation does not exceed the principal amount of such Indebtedness or the
amount of such receivable or liability to which such Interest Swap and Hedging
Obligation relates, as applicable, at the time such Indebtedness, receivable or
liability is first incurred or, if later, the time such Interest Swap and
Hedging Obligation is first entered into (so long as any subsequent reduction in
the amount of such Indebtedness, receivable or liability without a corresponding
reduction in such notional amount is for a valid business purpose and not for
speculation and such notional amount at no time exceeds the principal amount of
such Indebtedness or the amount of such receivable or liability, as applicable,
by more than 20% or, in the event that such notional amount shall at any time
exceed the principal amount of such Indebtedness or the amount of such
receivable or liability by more than 20%, such Interest Swap and Hedging
Obligation is promptly terminated); and provided, further, that notwithstanding
the preceding proviso, the Subject Entity or any of its Subsidiaries may enter
into an Interest Swap and Hedging Obligation which would otherwise be permitted
under this clause (f) up to 90 days in advance of the date on which the related
Indebtedness, receivable or other liability is expected to be incurred so long
as (x) such Interest Swap and Hedging Obligation is entered into for a valid
business purpose and not for speculation and the notional amount thereof does
not exceed the amount of the Indebtedness, receivable or liability, as
applicable, which the Subject Entity reasonably anticipates will be incurred,
(y) such Indebtedness, receivable or liability, as applicable, is incurred
within such 90-day period or, if not incurred within such period, such Interest
Swap and Hedging Obligation is promptly terminated, and (z) the notional amount
of such Interest Swap and Hedging Obligation does not exceed the principal
amount of such Indebtedness or the amount of such receivable or liability, as
applicable, when such Indebtedness, receivable or liability is first incurred or
at any time thereafter by more than 20% or, in the event that such notional
amount shall at any time exceed the principal amount of such Indebtedness or the
amount of such receivable or liability by more than 20%, such Interest Swap and
Hedging Obligation is promptly terminated;
(g) Indebtedness of the Subject Entity or any of its Subsidiaries
represented by letters of credit for the account of the Subject Entity or such
Subsidiary in order to provide security for workers' compensation claims,
payment obligations in respect of self-insurance arrangements or similar
arrangements entered into in the ordinary course of business, or other
Indebtedness (so long as such Indebtedness is not for borrowed money or
Capitalized Lease Obligations or evidenced by bonds, notes, debentures or
similar instruments) with respect to reimbursement type obligations regarding
workers' compensation claims in the ordinary course of business or represented
by letters of credit for the account of the Subject Entity or any of its
Subsidiaries in connection with the purchase of goods or services in the
ordinary course of business;
(h) Existing Indebtedness of the Subject Entity or any of its Subsidiaries
(after giving effect to the ▇▇▇▇▇▇ Acquisition);
(i) other Indebtedness of the Subject Entity or any of its Subsidiaries in
an aggregate principal amount not to exceed $25 million at any time outstanding;
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(j) guarantees incurred in the ordinary course of business by the Subject
Entity or any Subsidiary of the Subject Entity of Indebtedness of any other
person in an aggregate principal amount not to exceed $15 million outstanding at
any time;
(k) Indebtedness arising from agreements of the Subject Entity or any of
its Subsidiaries providing for indemnification, adjustment of purchase price or
similar obligations, in each case Incurred in connection with the disposition of
any business, assets or Subsidiary of the Subject Entity, other than guarantees
of Indebtedness Incurred or assumed 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 aggregate liability of all such
Indebtedness shall at no time exceed the gross proceeds actually received by the
Subject Entity and its Subsidiaries in connection with such disposition;
(l) guarantees by the Subject Entity or any of its Subsidiaries of
Indebtedness or other liabilities of Santee to the extent that such guarantees
are permitted under clause (viii) or (ix) of the definition of Restricted
Investment; and
(m) Indebtedness or Disqualified Capital Stock of the Subject Entity or
any of its Subsidiaries ("Refinancing Indebtedness") (1) issued in exchange for,
or the proceeds from the issuance and sale of which are used substantially
concurrently to repay, redeem, defease, refund, refinance, discharge or
otherwise retire for value, in whole or in part or (2) constituting an
amendment, modification or supplement to, or a deferral or renewal of ((1) and
(2) above are, collectively, a "Refinancing" and the term "Refinance" shall have
a correlative meaning) any Indebtedness or Disqualified Capital Stock of the
Subject Entity or any of its Subsidiaries which was Incurred in compliance with
the Debt Incurrence Ratio described in the second paragraph in Section 4.10 or
pursuant to above clause (a) or (h) (provided that the amount of such
Indebtedness so Refinanced is permanently reduced and, if any such Indebtedness
so Refinanced was Incurred under a revolving credit facility or similar
arrangement, the commitment thereunder is also permanently reduced by an amount
equal to the amount of such Indebtedness so Refinanced) or this clause (m);
provided, however, that (u) the aggregate principal amount of Indebtedness or
the aggregate liquidation preference of the Disqualified Capital Stock, as the
case may be, Incurred pursuant to this clause (m) (or, if such Indebtedness
provides for an amount less than the principal amount thereof to be due and
payable upon a declaration of acceleration of the maturity thereof, the original
issue price of such Indebtedness) shall not exceed the aggregate principal
amount of the Indebtedness or the aggregate liquidation preference of the
Disqualified Capital Stock, as the case may be, so Refinanced (or, if the
Indebtedness so Refinanced provides for an amount less than the principal amount
thereof to be due and payable upon a declaration of acceleration of the maturity
thereof, the amount that would be payable upon such an acceleration on the date
of such Refinancing), plus the amount of any premium required to be paid in
connection with such Refinancing pursuant to the terms of such Indebtedness or
Disqualified Capital Stock, as applicable, or the amount of any premium
reasonably determined by the Board of Directors of the Subject Entity as
necessary to accomplish such Refinancing by means of a tender offer or privately
negotiated purchase plus the amount of reasonable and customary out-of-pocket
fees and expenses payable in connection therewith; (v) Refinancing Indebtedness
Incurred by the Subject Entity or any of its Guarantor Foreign Subsidiaries or
Domestic Subsidiaries shall not be used to Refinance outstanding Indebtedness or
Disqualified Capital Stock of a Non-Guarantor Foreign Subsidiary of the Subject
Entity, unless such Incurrence complies with Section 4.3; (w) Refinancing
Indebtedness shall not have an Average Life shorter than the Average Life of the
Indebtedness or Disqualified Capital Stock, as applicable, to be Refinanced at
the time of such Refinancing (unless the Average Life of the Indebtedness or
Disqualified Capital Stock to be Refinanced is, at the time of such Refinancing,
longer than the Average Life of the Securities at such time, in which case such
Refinancing
17
Indebtedness must have an Average Life longer than the Average Life of the
Securities at such time), and Refinancing Indebtedness shall have a final
maturity date which is on or after the earlier of (1) two Business Days after
the Final Maturity Date and (2) the final maturity date of the Indebtedness or
Disqualified Capital Stock, as applicable, to be Refinanced; (x) to the extent
that the Indebtedness or Disqualified Capital Stock to be so Refinanced requires
the scheduled payment of installments of principal or liquidation amount or
scheduled sinking fund payments on or prior to the Final Maturity Date, the
Refinancing Indebtedness may also require scheduled payments of installments of
principal or liquidation amount or sinking fund payments, as applicable, on or
prior to the Final Maturity Date so long as the dates of any such scheduled
payments falling on any date which is both (1) on or prior to the final maturity
date of the Indebtedness or Disqualified Capital Stock, as applicable, to be
Refinanced and (2) on or prior to the Final Maturity Date are no earlier than,
and the amounts of such payments are no greater than, was the case with respect
to the Indebtedness to be so Refinanced; (y) in the case of Refinancing
Indebtedness Incurred to Refinance Subordinated Indebtedness or Disqualified
Capital Stock, such Refinancing Indebtedness is expressly subordinated, by the
terms of the instrument or agreement evidencing such Refinancing Indebtedness or
pursuant to which it is issued, in right of payment to the Securities or the
Guarantees, as applicable, at least to the same extent as the Indebtedness or
Disqualified Stock to be so Refinanced; and (z) if the Indebtedness to be
Refinanced is Pari Passu Indebtedness, such Refinancing Indebtedness constitutes
Pari Passu Indebtedness or Subordinated Indebtedness.
"Permitted Lien" means any of the following: (a) Liens existing on the
Issue Date; (b) Liens imposed by governmental authorities for taxes, assessments
or other charges not yet subject to penalty or which are being contested in good
faith and by appropriate proceedings, if adequate reserves with respect thereto
are maintained on the books of the Subject Entity and its Subsidiaries in
accordance with GAAP; (c) statutory liens of carriers, warehousemen, mechanics,
materialmen, suppliers, landlords, repairmen or other like Liens arising by
operation of law in the ordinary course of business provided that the underlying
obligations are not overdue or such Liens are being contested in good faith and
by appropriate proceedings and adequate reserves with respect thereto are
maintained on the books of the Subject Entity and its Subsidiaries in accordance
with GAAP; (d) Liens securing the performance of bids, trade contracts (other
than for borrowed money), leases, statutory obligations, surety and appeal
bonds, performance bonds and other obligations of a like nature incurred in the
ordinary course of business; (e) easements, rights-of-way, zoning and similar
restrictions and other similar encumbrances or title defects which do not
materially interfere with the ordinary conduct of the business of the Subject
Entity and its Subsidiaries; (f) Liens arising by operation of law in connection
with judgments, but only to the extent, for an amount and for a period not
resulting in an Event of Default; (g) pledges or deposits made and Liens
incurred in the ordinary course of business in connection with workers'
compensation, unemployment insurance and other types of social security
legislation; (h) any Liens securing the Securities or the Guarantees or created
by this Indenture; (i) Liens on any assets or property of any person existing at
the time such person becomes a Subsidiary of the Subject Entity or is merged
into or consolidated with the Subject Entity or another Subsidiary of the
Subject Entity, or Liens on assets or property existing at the time of
acquisition thereof by the Subject Entity or a Subsidiary of the Subject Entity,
provided in each case that such Liens were in existence prior to the date of
such acquisition, merger or consolidation, were not incurred in anticipation
thereof, and do not extend to any other assets or property; (j) Liens securing
Indebtedness permitted to be Incurred by the Subject Entity or any of its
Subsidiaries under clause (d) of the definition of Permitted Indebtedness or
securing other Purchase Money Indebtedness of the Subject Entity or any of its
Subsidiaries which is not prohibited by this Indenture, provided such Liens (i)
relate to (and only to) the property and assets (and proceeds and products
thereof) which were acquired (including property acquired under a capitalized
lease), improved or constructed with such Indebtedness, and (ii) the Liens
securing such Indebtedness shall be created not later than 180 days after such
acquisition or the completion of
18
such improvement or construction or the inception of any such capitalized lease;
(k) Liens securing Refinancing Indebtedness Incurred to Refinance any
Indebtedness that was previously so secured in a manner no more adverse to the
Holders of the Securities and the Guarantees than the terms of the Liens
securing such refinanced Indebtedness and which Liens do not extend to any
additional property or assets; (l) Liens in favor of customs and revenue
authorities arising as a matter of law to secure payment of nondelinquent
customs duties in connection with the importation of goods; (m) leases or
subleases granted in the ordinary course of business to others which do not
materially interfere with the business of the Subject Entity and its
Subsidiaries; (n) Liens encumbering customary initial deposits and margin
deposits, and other Liens incurred in the ordinary course of business that are
within the general parameters customary in the industry, in each case securing
Senior Debt of the Company and its Subsidiaries under Interest Swap and Hedging
Obligations and under forward contracts, option futures contracts, futures
options or similar agreements or arrangements designed to protect the Subject
Entity or any of its Subsidiaries from fluctuations in the price of commodities;
(o) Liens encumbering deposits made in the ordinary course of business to secure
nondelinquent obligations arising from statutory, regulatory, contractual or
warranty requirements of the Subject Entity or any of its Subsidiaries for which
a reserve or other appropriate provision, if any, as shall be required by GAAP
shall have been made; (p) Liens arising out of consignment or similar
arrangements for the sale of goods entered into by the Subject Entity or any of
its Subsidiaries in the ordinary course of business; (q) any interest or title
of a lessor in the property subject to any lease, whether characterized as a
capitalized or operating lease, other than any such interest or title resulting
from or arising out of a default by the Subject Entity or any of its
Subsidiaries of its obligations under such lease; (r) Liens arising from filing
UCC financing statements for precautionary purposes in connection with true
leases of personal property that are otherwise permitted under this Indenture
and under which the Subject Entity or any of its Subsidiaries is lessee; (s)
Liens securing reimbursement obligations with respect to letters of credit which
encumber documents and other property relating to such letters of credit and the
products and proceeds thereof and which letters of credit are issued in
connection with the purchase of goods or services in the ordinary course of
business and not in respect of Indebtedness for borrowed money or Capitalized
Lease Obligations or represented by bonds, notes, debentures or similar
instruments; and (t) Liens on the Capital Stock or other assets of Santee.
"Permitted Payments" means payments made to Parent after the date of the
Reorganization in an aggregate amount not to exceed the sum of (without
duplication):
(i) the Pro Rata Portion of customary salary, bonus and other
benefits payable to officers and employees of Parent, except any such
officers and employees whose responsibilities relate primarily, in the
good faith judgment of the Subject Entity's Board of Directors, to
Subsidiaries and Affiliates of the Parent other than the Subject Entity
and its Subsidiaries and Unrestricted Subsidiaries;
(ii) the Pro Rata Portion of customary fees and expenses payable to
members of the Parent's Board of Directors;
(iii) an amount equal to the sum (without duplication) of (A) 100%
of the Parent's general corporate overhead expense (collectively "Parent
Expenses") directly attributable, in the good faith judgment of the
Subject Entity's Board of Directors, to the Subject Entity and its
Subsidiaries and Unrestricted Subsidiaries plus (B) the Pro Rata Portion
of those Parent Expenses which are not directly attributable, in the good
faith judgment of the Subject Entity's Board of Directors, to either the
Subject Entity or any of its Subsidiaries or Unrestricted Subsidiaries or
to any other Subsidiaries or Affiliates of the Parent;
19
(iv) the amount of foreign, federal, state or local tax liabilities
payable by Parent, not to exceed the amount of any tax liabilities that
would otherwise be payable by the Subject Entity and its Subsidiaries and
Unrestricted Subsidiaries to the appropriate taxing authorities if they
filed a separate consolidated tax return and then only to the extent that
(A) the Parent has an obligation to pay such tax liabilities relating to
the Subject Entity and its Subsidiaries and Unrestricted Subsidiaries and
(B) such tax liabilities are not otherwise paid by Subject Entity or its
Subsidiaries or Unrestricted Subsidiaries (provided that if any such
payment shall not be used by the Parent to pay such tax liabilities within
45 days of the Parent's receipt of such payment, then the Subject Entity
shall cause such payment to be refunded to the Subject Entity);
(v) an amount not to exceed the sum (without duplication) of (A)
amounts payable by Parent to repurchase Parent's common stock, stock
options, stock appreciation rights or similar rights under employee
benefit plans held by departing, retiring or deceased directors, officers
or employees of the Subject Entity or any Subsidiary or Unrestricted
Subsidiary of the Subject Entity and (B) the Pro Rata Portion of amounts
payable by Parent after the date of the Reorganization to repurchase
Parent's common stock, stock options, stock appreciation rights or similar
rights under employee benefit plans held by departing, retiring or
deceased officers or employees of Parent whose responsibilities did not
relate primarily, in the good faith judgment of the Subject Entity's Board
of Directors, to Subsidiaries and Affiliates of Parent other than the
Subject Entity and its Subsidiaries and Unrestricted Subsidiaries or held
by departing or deceased directors of Parent (provided that the aggregate
amount paid by Subject Entity pursuant to this clause (v) shall not exceed
$1 million in any fiscal year); and
(vi) cash payments in an aggregate amount not to exceed $500,000 in
any fiscal year, with any portion of such amount which is not expended in
any fiscal year being carried forward;
provided that there shall be excluded from the expenses and other amounts
payable by Parent referred to above (other than amounts referred to in clauses
(iv) and (v)(A) above) all expenses and other amounts which relate to periods
prior to the date of the Reorganization.
"Person" or "person" means any person, corporation, individual,
partnership, limited liability company, trust, unincorporated association, or a
government or any agency or political subdivision thereof.
"Preferred Stock" means, with respect to any person, any Capital Stock of
such person of any class or series (however designated) that ranks prior, as to
payment of dividends or distributions or as to distributions upon voluntary of
involuntary liquidation, dissolution or winding up, to shares of Capital Stock
of any other class or series of such person. For purposes of this definition,
the term "Capital Stock" shall not include rights, warrants or options.
"Pro Rata Portion" means, at any date, 100% or, if the consolidated
revenues of the Parent and its consolidated subsidiaries shall, for the then
most recent period (the "Subject Period") of four full fiscal quarters ended
prior to the date of determination, exceed the consolidated revenues of the
Subject Entity and its consolidated subsidiaries for the Subject Period, then
the Pro Rata Portion shall be equal to a fraction (i) the numerator of which is
the consolidated revenues of the Subject Entity and its consolidated
subsidiaries for the Subject Period and (ii) the denominator of which is the
consolidated revenues of the Parent and its consolidated subsidiaries for the
Subject Period, provided that if the date of such determination is less than
four full fiscal quarters after the date of the Reorganization, then the term
Subject Period shall instead mean
20
the period from and including the date of the Reorganization through and
including the last day of the then most recently ended period for which the
internal financial statements necessary to make such calculation are available.
All computations of consolidated revenues pursuant to this definition shall be
made in accordance with GAAP.
"Property" or "property" means any right or interest in or to property or
assets of any kind whatsoever, whether real, personal or mixed and whether
tangible or intangible.
"Purchase Date" shall have the meaning specified in Section 4.13.
"Purchase Money Indebtedness" means, with respect to any person, any
Indebtedness of such person to any seller or other person Incurred to finance
the acquisition, improvement or construction (including in the case of a
Capitalized Lease Obligation, the lease) of any business or real or personal
property (or, in each case, any interest therein) acquired, improved or
constructed after the Issue Date which, in the reasonable judgment of the Board
of Directors of such person, is related to a Related Business and which is
Incurred concurrently with, or within 180 days of, such acquisition or the
completion of such improvement or construction and, if secured, is secured only
by the business or property so acquired, improved or constructed (and the
proceeds and products therefrom).
"Qualified Capital Stock" means, with respect to any person, any Capital
Stock of such person that is not Disqualified Capital Stock.
"Qualified Exchange" means (i) any legal defeasance, redemption,
retirement, repurchase or other acquisition of Capital Stock of the Subject
Entity or Indebtedness of the Subject Entity with the Net Cash Proceeds received
by the Subject Entity from the substantially concurrent sale of its Qualified
Capital Stock or a substantially concurrent capital contribution to the Subject
Entity, or (ii) any exchange of Qualified Capital Stock of the Subject Entity
for any outstanding Capital Stock of the Subject Entity or outstanding
Indebtedness of the Subject Entity.
"Record Date" means a Record Date specified in the form of Security
attached hereto as Exhibit A, whether or not such Record Date is a Business Day.
"Redemption Date," when used with respect to any Security to be redeemed,
means the date fixed for such redemption pursuant to Article III of this
Indenture and Paragraph 5 in the form of Security attached hereto as Exhibit A.
"Redemption Price," when used with respect to any Security to be redeemed,
means the redemption price for such redemption pursuant to Paragraph 5 in the
form of Security attached hereto as Exhibit A, which shall include, without
duplication, in each case, accrued and unpaid interest to the Redemption Date
(subject to the provisions of Section 3.5).
"Reference Period" with regard to any person means the most recent period
of four full fiscal quarters (or such lesser period during which such person has
been in existence) ended immediately preceding any date upon which any
determination is to be made pursuant to the terms of the Securities or this
Indenture.
"Refinance" and "Refinancing Indebtedness" have the meanings set forth in
the definition of Permitted Indebtedness.
21
"Registrar" shall have the meaning specified in Section 2.3.
"Registration Rights Agreement" means the Registration Rights Agreement
dated as of the Issue Date by and between the Company and the Guarantors on the
one hand, and the Initial Purchasers, on the other hand, providing for certain
registration rights for the Securities.
"Regulation S" means Regulation S under the Securities Act or any
successor thereto, in each case as the same may be amended or modified from time
to time.
"Related Business" means the business conducted by the Subject Entity and
its Subsidiaries as of the Issue Date and any and all businesses that in the
good faith judgment of the Board of Directors of the Subject Entity are related
businesses, including related extensions thereof.
"Reorganization" shall have the meaning specified in Section 4.17.
"Restricted Investment" means any Investment other than (i) Investments in
the Company or any Guarantor (including any person that pursuant to such
Investment becomes a Guarantor) or any person that is merged or consolidated
with or into, or transfers or conveys all or substantially all of its assets to,
the Company or any Guarantor at the time such Investment is made; (ii)
Investments in Cash Equivalents; (iii) Investments in deposits with respect to
leases or utilities provided to third parties in the ordinary course of
business; (iv) investments in the Securities; (v) Investments in Interest Swap
and Hedging Obligations entered into by the Subject Entity or any of its
Subsidiaries for bona fide business purposes and not for speculation and which
Interest Swap and Hedging Obligations are not otherwise prohibited by this
Indenture; (vi) loans or advances to officers, employees or consultants of the
Subject Entity and its Subsidiaries for bona fide business purposes of the
Subject Entity and its Subsidiaries (including travel and moving expenses) not
in excess of $5 million in the aggregate at any one time outstanding; (vii)
Investments in evidences of Indebtedness, securities or other property received
from another person by the Subject Entity or any of its Subsidiaries in
connection with any bankruptcy proceeding of such person or by reason of a
composition or readjustment of debt or a reorganization of such person or as a
result of foreclosure or enforcement of any Lien on the assets or property of
such person held by the Subject Entity or any of its Subsidiaries, or taken in
settlement of or other resolution of claims or disputes with such person, and,
in each case, extensions, modifications and renewals thereof (but not increases
thereof, other than as a result of the accrual or accretion of interest or
original issue discount pursuant to the terms of such Investments);
(viii) Investments in Santee made prior to the second anniversary of the Issue
Date in an aggregate amount not to exceed $50 million (it being understood that
amounts temporarily advanced to Santee as a prepayment for the purchase of milk
or other products from Santee shall not be deemed an Investment for purposes of
this clause or otherwise, except to the extent of any such advances which (A)
are outstanding in an aggregate amount in excess of $10 million on any date from
the Issue Date through the 90th day after the Issue Date or (B) are outstanding
on any date after such 90th day), provided that the proceeds of such Investments
are used to pay the costs of constructing and equipping Santee's new dairy which
was under construction on the Issue Date and costs reasonably related thereto;
(ix) Investments in Santee in an aggregate amount at any time outstanding not to
exceed $30 million, provided that, to the extent that the aggregate amount of
outstanding Investments made pursuant to clause (viii) above and this clause
(ix) shall at any time exceed $40 million, then the amount of such Investments
in excess of $40 million will be deducted in the calculation of the aggregate
amount of Restricted Payments available to be made referred to in clause (3) of
the first paragraph of Section 4.3; (x) Investments in Unrestricted Subsidiaries
in an aggregate amount not to exceed $15 million at any one time outstanding;
(xi) additional Investments in Related Businesses in an aggregate amount not to
exceed $25
22
million at any time outstanding; (xii) Investments of the Company and its
Subsidiaries existing as of the Issue Date and any extension, modification or
renewal of such Investments (but not increases thereof, other than as a result
of the accrual or accretion of interest or original issue discount pursuant to
the terms of such Investments); (xiii) Investments in persons (other than
Affiliates of the Subject Entity) received as consideration from Asset Sales to
the extent not prohibited by Section 4.13 and extensions, modifications and
renewals thereof (but not increases thereof, other than as a result of the
accrual or accretion of interest or original issue discount pursuant to the
terms of such Investments); and (xiv) Investments made by Non-Guarantor Foreign
Subsidiaries in other Non-Guarantor Foreign Subsidiaries. If any Investment made
pursuant to clause (viii) or (ix) of the preceding sentence is, pursuant to the
proviso to such clause (ix), deducted in the calculation of the aggregate amount
of Restricted Payments available to be made referred to in clause (3) of the
first paragraph of Section 4.3, there shall be added back to the aggregate
amount of Restricted Payments available to be made referred to in such clause
(3) any net reduction in such Investment resulting from repurchases or
redemptions of such Investment by ▇▇▇▇▇▇, proceeds realized upon the sale of
such Investment to any person (other than to the Subject Entity or any of its
Subsidiaries), and repayments of loans or advances or other transfers of
property (valued at Fair Market Value as determined in good faith by the Board
of Directors of the Subject Entity and evidenced by a resolution delivered to
the Trustee) by Santee to the Subject Entity or any of its Subsidiaries
(provided that such net reduction shall occur only to the extent that the monies
or property giving rise to such reduction are received by the Subject Entity or
a Domestic Subsidiary or Guarantor Foreign Subsidiary of the Subject Entity) or
the termination of guarantees of, or other credit support with respect to, any
Indebtedness or other liabilities of Santee provided by the Subject Entity or
any of its Domestic Subsidiaries or Guarantor Foreign Subsidiaries, not to
exceed the amount of Investments previously made by the Subject Entity and its
Subsidiaries in Santee pursuant to such clause (viii) or (ix), as applicable,
which were, pursuant to the proviso to such clause (ix), applied to reduce the
aggregate amount of Restricted Payments available to be made pursuant to such
clause (3) (provided, however, that no amount added back pursuant to this
sentence shall be included in Consolidated Net Income for purposes of clause
(3)(a), or shall be added back pursuant to clause (3)(d), of the first paragraph
set of Section 4.3).
"Restricted Payment" means, with respect to any person, (a) the
declaration or payment of any dividend or other distribution in respect of
Capital Stock of such person, (b) any payment on account of the purchase,
redemption or other acquisition or retirement for value of Capital Stock of such
person, (c) any purchase, redemption, or other acquisition or retirement for
value of, any payment in respect of any amendment of the terms of or any
defeasance of, any Subordinated Indebtedness, directly or indirectly, by such
person prior to the scheduled maturity, any scheduled repayment of principal, or
scheduled sinking fund payment, as the case may be, of such Subordinated
Indebtedness and (d) any Restricted Investment by such person; provided,
however, that the term "Restricted Payment" does not include (i) any dividend,
distribution or other payment on or with respect to Capital Stock of the Subject
Entity to the extent payable in shares of Qualified Capital Stock of the Subject
Entity; (ii) any dividend, distribution or other payment (A) to the Subject
Entity, (B) to any Domestic Subsidiary or Guarantor Foreign Subsidiary of the
Subject Entity by the Subject Entity or any of its other Subsidiaries, or (C) to
any Non-Guarantor Foreign Subsidiary of the Subject Entity by any of its other
Non-Guarantor Foreign Subsidiaries; or (iii) the declaration or payment of
dividends or distributions by any Subsidiary of the Subject Entity on any class
or series of its Capital Stock (other than rights, warrants or options),
provided such dividends or distributions are made on a pro rata basis (and in
like form) to all holders of Capital Stock of such class or series and except to
the extent of any such dividends or distributions paid by any Domestic
Subsidiary or Guarantor Foreign Subsidiary of the Subject Entity to any
Non-Guarantor Foreign Subsidiary of the Subject Entity.
23
"Rule 144" means Rule 144 under the Securities Act or any successor
thereto, in each case as the same may be amended or modified from time to time.
"Rule 144A" means Rule 144A under the Securities Act or any successor
thereto, in each case as the same may be amended or modified from time to time.
"Sale and Leaseback Transaction" means, with respect to any person, any
transaction by which such person, directly or indirectly, becomes liable as a
lessee or as a guarantor or other surety with respect to any lease of any
property (whether owned at the date of this Indenture or thereafter acquired)
that such person has sold or transferred or is to sell or transfer to any other
person in a substantially concurrent transaction with such assumption of
liability.
"Santee" means Santee Dairies, Inc., a California corporation, and its
successors.
"SEC" means the Securities and Exchange Commission, or any successor
thereto.
"Securities" means, collectively, the Initial Securities and, when and if
issued as provided in the Registration Rights Agreement, the Exchange
Securities.
"Securities Act" means the Securities Act of 1933, as amended, or any
successor thereto, in each case including the rules and regulations of the
Commission promulgated thereunder.
"Securities Custodian" means the Registrar, as custodian with respect to
the Securities in global form, or any successor entity thereto.
"Securityholder" or "Holder" means the Person in whose name a Security is
registered on the Registrar's books.
"Senior Bank Representative" means, at any time and with respect to any
Credit Agreement, the then-acting agent or agents under such Credit Agreement,
which, in the case of the New Credit Agreement, shall initially be Bank of
America National Trust and Savings Association and The Chase Manhattan Bank.
"Senior Debt" means, with respect to the Company or any Guarantor, (i) any
Indebtedness and other obligations of the Company or such Guarantor, as the case
may be, under any Credit Agreement (including, without limitation, obligations
to pay principal, premium, if any, interest, penalties, fees (including
commitment fees, facility fees and letter of credit fees and commissions),
expenses, indemnities, funding losses and increased costs (including capital
adequacy charges)) and (ii) any other Indebtedness of the Company or such
Guarantor, as the case may be (including, without limitation, obligations to pay
principal, premium, if any, and interest), in each case referred to in clauses
(i) and (ii) of this sentence whether outstanding on the Issue Date or
thereafter created, Incurred or assumed and including, in the case of Designated
Senior Debt, interest accruing after the commencement of any bankruptcy case or
proceeding at the rate specified in the applicable Designated Senior Debt
whether or not such interest is allowed as a claim in such case or proceeding,
unless, in the case of any particular Indebtedness, the instrument creating or
evidencing the same or pursuant to which the same is outstanding expressly
provides that such Indebtedness shall not be senior in right of payment to the
Securities or the Guarantee of such Guarantor, as applicable, or that such
Indebtedness shall rank pari passu with or subordinate in right of payment to
the Securities or such Guarantee, as applicable, or that such Indebtedness shall
rank subordinate in right of payment to any other
24
Indebtedness of the Company or such Guarantor, as applicable. Notwithstanding
the foregoing, "Senior Debt" shall not include (a) Indebtedness evidenced by the
Securities or the Guarantees, (b) Indebtedness to trade creditors, (c) any
liability for federal, state, local or other taxes, (d) Indebtedness owed to the
Company, the Holding Company or the Parent or any of their respective
Subsidiaries or Unrestricted Subsidiaries, (e) Indebtedness owed to any officer,
employee or director of the Company, the Holding Company or the Parent or any of
their respective Subsidiaries or Unrestricted Subsidiaries, (f) Disqualified
Capital Stock, (g) that portion of any Indebtedness which is Incurred in
violation of this Indenture or (h) Indebtedness of the type referred to in
clause (e) of the definition of the term "Indebtedness" included herein.
"Senior Debt Representative" means the indenture trustee or other trustee,
agent or representative for any Senior Debt.
"Significant Subsidiary" means a "significant subsidiary" as defined in
Rule 1-02 of Regulation S-X promulgated pursuant to the Securities Act, as such
Regulation S-X was in effect on January 1, 1996.
"Special Record Date" for payment of any Defaulted Interest means a date
fixed by the Trustee pursuant to Section 2.12.
"Standstill Agreements" means the Standstill Agreement dated as of January
14, 1995 between the Company and ▇▇▇▇/Chilmark Fund L.P., a Delaware limited
partnership, and the Standstill Agreement dated as of January 14, 1995 between
the Company and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇.
"Stated Maturity" means, when used with respect to any Security or any
installment of interest thereon, the date specified in such Security or in this
Indenture as the fixed date on which the principal of such Security or such
installment of interest is due and payable, and when used with respect to any
other Indebtedness, means the date specified in the instrument governing or
evidencing such Indebtedness as the fixed date on which the principal of such
Indebtedness or any installment of interest thereon is due and payable.
"Subject Entity" means (i) prior to the Reorganization, the Company and
(ii) from and after the Reorganization, the Holding Company.
"Subordinated Indebtedness" means, with respect to the Company or any
Guarantor, Indebtedness of the Company or such Guarantor, as the case may be,
that is subordinated in right of payment to the Securities or to the Guarantee
of such Guarantor, as applicable.
"Subsidiary," with respect to any person, means (i) a corporation a
majority of whose Capital Stock with voting power, under ordinary circumstances
to elect directors, is at the time, directly or indirectly, owned by such
person, by such person and one or more Subsidiaries of such person, or by one or
more Subsidiaries of such person, and (ii) any other person (other than a
corporation) in which such person, one or more Subsidiaries of such person, or
such person and one or more Subsidiaries of such person, directly or indirectly,
at the date of determination thereof has at least majority equity ownership
interest. Notwithstanding the foregoing, an Unrestricted Subsidiary shall be
deemed not to be a Subsidiary of the Subject Entity or any of its Subsidiaries,
and Santee shall not be deemed a Subsidiary of the Subject Entity or any of its
Subsidiaries for any purpose under this Indenture.
25
"Subsidiary Guarantors" means, prior to the Reorganization, the Guarantors
and, from and after the Reorganization, the Guarantors other than the Holding
Company.
"TIA" means the Trust Indenture Act of 1939, as amended (15 U.S. Code
▇▇.▇▇. 77aaa-77bbbb), as in effect on the date of the Issue Date; except as
otherwise provided in Section 9.3.
"Transfer Restricted Securities" means Securities that bear or are
required to bear the legend set forth in Section 2.6 hereof.
"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 within the corporate trust
administration division (or any successor group) of the Trustee or any other
officer of the Trustee customarily performing functions similar to those
performed by the Persons who at that time shall be such officers, and also
means, with respect to a particular corporate trust matter, any other officer of
the Trustee to whom such trust matter is referred because of such officer's
knowledge of and familiarity with the particular subject.
"U.S. Government Obligations" means 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.
"Unrestricted Subsidiary" means a Subsidiary of the Subject Entity (i)
whose properties and assets, to the extent that they secure Indebtedness, secure
only Non-Recourse Indebtedness, (ii) which has no Indebtedness other than
Non-Recourse Indebtedness, (iii) which does not, directly or indirectly, own any
Capital Stock of, and which does not hold any Lien on any property or assets of,
the Subject Entity or any other Subsidiary of the Subject Entity other than an
Unrestricted Subsidiary or a Subsidiary which is concurrently being designated
as an Unrestricted Subsidiary, (iv) as to which neither the Subject Entity nor
any of its Subsidiaries has any direct or indirect obligation to subscribe for
additional Capital Stock or to maintain or preserve such Subsidiary's financial
condition or to cause such Subsidiary to achieve any specified levels of
operating results, (v) which either is designated by the Board of Directors of
the Subject Entity as an Unrestricted Subsidiary pursuant to a Board Resolution
(provided that (A) immediately prior to and immediately after giving pro forma
effect to such designation, no Default or Event of Default shall have occurred
and shall be continuing and (B) immediately after giving pro forma effect to
such designation, the Subject Entity could Incur at least $1.00 of additional
Indebtedness pursuant to the Debt Incurrence Ratio in the second paragraph of
Section 4.10), or which is an Initial Unrestricted Subsidiary; provided that the
Company may not be designated as an Unrestricted Subsidiary and, prior to the
Reorganization, neither the Parent nor the Holding Company may be designated as
an Unrestricted Subsidiary. For purposes of this Indenture, including the
proviso to the immediately preceding sentence, the Subject Entity shall be
deemed to have made an Investment in an Unrestricted Subsidiary at the time it
is designated as such. If, at any time, any Unrestricted Subsidiary would fail
to meet the requirements set forth in clauses (i) through (iv) of the second
preceding sentence, it shall thereafter cease to be an Unrestricted Subsidiary
for purposes of this Indenture and any Indebtedness of such Subsidiary shall be
deemed to be Incurred by such Subsidiary as of such time. The Board of Directors
of the Subject Entity may at any time designate any Unrestricted Subsidiary to
be a Subsidiary of the Subject Entity; provided that such designation shall be
deemed to be an Incurrence by a Subsidiary of the Subject Entity of any
outstanding Indebtedness of such Unrestricted Subsidiary at such time and such
designation shall only be permitted if (i) the Incurrence of such Indebtedness
is not prohibited by
26
this Indenture, (ii) immediately prior to and immediately after giving pro forma
effect to such designation, no Default or Event of Default shall have occurred
and shall be continuing, and (iii) immediately after giving pro forma effect to
such designation, the Subject Entity could incur at least $1.00 of additional
Indebtedness pursuant to the Debt Incurrence Ratio in the second paragraph of
Section 4.10. Any such designation of a Subsidiary as an Unrestricted
Subsidiary, or of an Unrestricted Subsidiary as a Subsidiary, shall be evidenced
by the filing with the Trustee of the Board Resolution of the Subject Entity
effecting such designation, together with an Officers' Certificate of the
Subject Entity certifying that such designation complied with the foregoing
conditions. As used above, "Non-Recourse Indebtedness" means Indebtedness as to
which (i) neither the Subject Entity nor any of its Subsidiaries (other than the
relevant Unrestricted Subsidiary or another Unrestricted Subsidiary) (1)
provides credit support (including any undertaking, agreement or instrument
which would constitute Indebtedness), (2) guarantees or is otherwise directly or
indirectly liable or (3) constitutes the lender (in each case, other than
pursuant to and in compliance with Section 4.3) and (ii) no default with respect
to such Indebtedness (including any rights which the holders thereof may have to
take enforcement action against the relevant Unrestricted Subsidiary or its
assets) would permit (upon notice, lapse of time or both) any holder of any
other Indebtedness of the Subject Entity or its Subsidiaries (other than
Unrestricted Subsidiaries) to declare a default on such other Indebtedness or
cause the payment thereof to be accelerated or to become payable prior to its
Stated Maturity.
"Voting Stock" means, with respect to any person, any class or classes or
series or series of Capital Stock of such person pursuant to which the holders
thereof have the general voting power under ordinary circumstances to elect at
least a majority of the board of directors, managers or trustees of such person
(irrespective of whether or not, at the time, Capital Stock of any other class
or classes or series or series shall have, or might have, voting power by reason
of the happening of any contingency).
"Wholly-Owned Subsidiary" means, with respect to any person, any
Subsidiary of such person of which 100% of the outstanding Capital Stock is
owned by such person, by one or more Wholly-Owned Subsidiaries of such person or
by such person and one or more Wholly-Owned Subsidiaries of such person. For
purposes of this definition, any directors' qualifying shares shall be
disregarded in determining the ownership of a Subsidiary.
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 securityholder" means a Holder or a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture Trustee" or "institutional Trustee" means the Trustee.
27
"obligor" on the indenture securities means the Company, each Guarantor
and 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 thereby.
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;
(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; and
(7) references to Sections or Articles means reference to such
Section or Article in this Indenture, unless stated otherwise.
ARTICLE II
THE SECURITIES
SECTION 2.1. Form and Dating.
The Securities and the Trustee's certificate of authentication, in respect
thereof, shall be substantially in the form of Exhibit A hereto, which Exhibit
is part of this Indenture. The Securities may have notations, legends or
endorsements required by law, stock exchange rule or usage or the terms hereof.
The Company shall approve the form of the Securities and any notation, legend or
endorsement on them. Any such notations, legends or endorsements not contained
in the form of Security attached as Exhibit A hereto shall be delivered in
writing to the Trustee. Each Security shall be dated the date of its
authentication.
The terms and provisions contained in the form of Securities attached
hereto as Exhibit A shall constitute, and are hereby expressly made, a part of
this Indenture and, to the extent applicable, the Company, the Guarantors and
the Trustee, by their execution and delivery of this Indenture, expressly agree
to such terms and provisions and to be bound thereby.
28
SECTION 2.2. Execution and Authentication.
Two Officers shall sign, or one Officer shall sign and one Officer shall
attest to, the Securities for the Company by manual or facsimile signature. The
Company's seal shall be impressed, affixed, imprinted or reproduced on the
Securities and may be in facsimile form.
If an Officer whose signature is on a Security was an Officer at the time
of such execution but no longer holds that office at the time the Trustee
authenticates the Security, the Security shall be valid nevertheless and the
Company shall nevertheless be bound by the terms of the Securities and this
Indenture.
A Security shall not be valid until an authorized signatory of the Trustee
manually signs the certificate of authentication on the Security but such
signature shall be conclusive evidence that the Security has been authenticated
pursuant to the terms of this Indenture.
The Trustee shall authenticate or cause to be authenticated the
Initial Securities for original issue in the aggregate principal amount of
$150,000,000 and shall authenticate Exchange Securities for original issue in
the aggregate principal amount of up to $150,000,000, in each case upon a
written order of the Company in the form of an Officers' Certificate provided
that such Exchange Securities shall be issuable only upon the valid surrender
for cancellation of Initial Securities of a like aggregate principal amount. 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
$150,000,000, except as provided in Section 2.7. Upon the written order of the
Company in the form of an Officers' Certificate, the Trustee shall authenticate
Securities in substitution of Securities originally issued to reflect any name
change of the Company.
The Trustee may appoint an authenticating agent acceptable to the Company
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 the Company, any Affiliate of the Company, or any of their
respective Subsidiaries.
Securities shall be issuable only in fully registered form, without
coupons, in denominations of $1,000 and integral multiples thereof.
SECTION 2.3. Registrar and Paying Agent.
The Company shall maintain an office or agency in the Borough of
Manhattan, The City of New York, where Securities may be presented for
registration of transfer or exchange ("Registrar") and an office or agency of
the Company where Securities may be presented for payment ("Paying Agent") and
where notices and demands to or upon the Company in respect of the Securities
may be served. The Company may act as Registrar or Paying Agent, except that for
the purposes of Articles III, VIII, X and Section 4.13 and as otherwise
specified in this Indenture, neither the Company nor any Affiliate of the
Company shall act as Paying Agent. The Registrar shall keep a register of the
Securities and of their transfer and exchange. The Company may have one or more
co-Registrars and one or more additional Paying Agents. The term "Registrar"
includes any co-Registrar and the term "Paying Agent" includes any additional
Paying Agent. The Company hereby initially appoints the Trustee as Registrar and
Paying Agent, and by its signature
29
hereto, the Trustee ▇▇▇▇▇▇ agrees so to act. The Company may at any time change
any Paying Agent or Registrar without notice to any Holder.
The Company shall enter into an appropriate written agency agreement with
any Agent (including the Paying Agent) not a party to this Indenture, which
agreement shall implement the provisions of this Indenture that relate to such
Agent, and shall furnish a copy of each such agreement to the Trustee. The
Company shall promptly notify the Trustee in writing of the name and address of
any such Agent. If the Company fails to maintain a Registrar or Paying Agent,
the Trustee shall act as such.
The Company initially appoints The Depository Trust Company ("DTC") to act
as Depositary with respect to the Global Securities.
The Company initially appoints the Registrar to act as Securities
Custodian with respect to the Global Securities.
Upon the occurrence of an Event of Default described in Section
6.1(g) or (h), the Trustee shall, or upon the occurrence of any other Event of
Default by notice to the Company, the Registrar and the Paying Agent, the
Trustee may, assume the duties and obligations of the Registrar and the Paying
Agent hereunder.
The Trustee is authorized to enter into a letter of representation with
DTC in the form provided to the Trustee by the Company and to act in accordance
with such letter.
SECTION 2.4. Paying Agent to Hold Assets in Trust.
The Company shall require each Paying Agent other than the Trustee to
agree in writing that such Paying Agent shall hold in trust for the benefit of
Holders or the Trustee all assets held by the Paying Agent for the payment of
principal of, premium, if any, or interest on, the Securities (whether such
assets have been distributed to it by the Company or any other obligor on the
Securities), and shall notify the Trustee in writing of any default in making
any such payment. If either of the Company or an Affiliate of the Company acts
as Paying Agent, it shall segregate such assets and hold them as a separate
trust fund for the benefit of the Holders or the Trustee. The Company at any
time may require a Paying Agent to distribute all assets 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 or any Event of Default, upon
written request to a Paying Agent, require such Paying Agent to distribute all
assets held by it to the Trustee and to account for any assets distributed. Upon
distribution to the Trustee of all assets that shall have been delivered by the
Company or any Guarantor to the Paying Agent, the Paying Agent (if other than
the Company) shall have no further liability for such assets.
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 and shall otherwise comply with TIA ss. 312(a). If the Trustee is not
the Registrar, the Company shall furnish to the Trustee on or before the third
Business Day preceding each Interest Payment Date and at such other times as the
Trustee or any Paying Agent may request in writing a list in such form and as of
such date as the Trustee reasonably may require of the names and addresses of
Holders and the Company shall otherwise comply with TIA ss. 312(a).
30
SECTION 2.6. Transfer and Exchange.
(a) Transfer and Exchange of Definitive Securities. When Definitive
Securities are presented to the Registrar with a request:
(x) to register the transfer of such Definitive Securities; or
(y) to exchange such Definitive Securities for an equal principal
amount of Definitive Securities of other authorized denominations,
the Registrar shall register the transfer or make the exchange as
requested if its reasonable requirements for such transaction are met;
provided, however, that the Definitive Securities surrendered for
registration of transfer or exchange:
(i) shall be duly endorsed or accompanied by a written
instrument of transfer in form reasonably satisfactory to the
Company and the Registrar duly executed by the Holder thereof or his
attorney duly authorized in writing; and
(ii) in the case of Definitive Securities that are
Transfer Restricted Securities, such request shall be accompanied by
the following additional information and documents, as applicable:
(A) if such Transfer Restricted Securities are being
delivered to the Registrar by a Holder for registration in the
name of such Holder, without transfer, a certification from
such Holder to that effect (in substantially the form set
forth on the reverse of the Security); or
(B) if such Transfer Restricted Security is being
transferred to a person the beneficial owner reasonably
believes is a "qualified institutional buyer" (as defined in
Rule 144A under the Securities Act) in accordance with Rule
144A under the Securities Act, a certification to that effect
(in substantially the form set forth on the reverse of the
Security); or
(C) if such Transfer Restricted Security is being
transferred (i) pursuant to an exemption from registration in
accordance with Rule 144 or Regulation S under the Securities
Act or (ii) pursuant to an effective registration statement
under the Securities Act, or (iii) to an institutional
"accredited investor" within the meaning of Rule 501(A)(1),
(2), (3) or (7) under the Securities Act that is acquiring the
Security for its own account, or for the account of such an
institutional accredited investor, in each case in a minimum
principal amount of the Securities of $100,000, not with a
view to or for offer or sale in connection with any
distribution in violation of the Securities Act, or (iv) in
reliance on another exemption from the registration
requirements of the Securities Act, a certification to that
effect (in substantially the form set forth on the reverse of
the Security) and in the case of (i), (iii) and (iv) above, if
the Company or the Registrar so request, a customary opinion
of counsel, certificates and other information reasonably
acceptable to the Company
31
and to the Registrar to the effect that such transfer is in
compliance with the Securities Act.
(b) Restrictions on Transfer of a Definitive Security for a
Beneficial Interest in a Global Security. A Definitive Security may not be
exchanged for a beneficial interest in a Global Security except upon
satisfaction of the requirements set forth below. Upon receipt by the Registrar
of a Definitive Security, duly endorsed or accompanied by appropriate
instruments of transfer, in form satisfactory to the Registrar, together with:
(i) if such Definitive Security is a Transfer Restricted
Security, certification, substantially in the form set forth on the
reverse of the Security, that such Definitive Security is being
transferred to a "qualified institutional buyer" (as defined in Rule
144A under the Securities Act) in accordance with Rule 144A under
the Securities Act; and
(ii) whether or not such Definitive Security is a
Transfer Restricted Security, written instructions of the Holder
directing the Registrar to make, or to direct the Securities
Custodian to make, an endorsement on the Global Security to reflect
an increase in the aggregate principal amount of the Securities
represented by the Global Security,
then the Registrar shall cancel such Definitive Security and cause, or
direct the Securities Custodian to cause, in accordance with the standing
instructions and procedures existing between the Depositary and the
Securities Custodian, the aggregate principal amount of Securities
represented by the Global Security to be increased accordingly. If no
Global Securities are then outstanding, the Company shall issue and the
Trustee shall authenticate a new Global Security in the appropriate
principal amount.
(c) Transfer and Exchange of Global Securities. The transfer and
exchange of Global Securities or beneficial interests therein shall be effected
through the Depositary, in accordance with this Indenture (including applicable
restrictions on transfer set forth herein, if any) and the procedures of the
Depositary therefor which shall include restrictions on transfer comparable to
those set forth herein to the extent required by the Securities Act.
(d) Transfer of a Beneficial Interest in a Global Security for a
Definitive Security.
(i) Any Person having a beneficial interest in a Global
Security may upon request exchange such beneficial interest for a
Definitive Security. Upon receipt by the Registrar of written
instructions or such other form of instructions as is customary for
the Depositary from the Depositary or its nominee on behalf of any
Person having a beneficial interest in a Global Security and, in the
case of a beneficial interest in a Transfer Restricted Security,
upon receipt by the Registrar of the following information and
documents in such form as is customary for the Depositary from the
Depositary or its nominee on behalf of any Person having a
beneficial interest in such Transfer Restricted Security (all of
which may be submitted by facsimile or electronically):
(A) if such beneficial interest in a Transfer Restricted
Security is being transferred to the Person designated by the
Depositary as being the beneficial
32
owner, a certification to that effect (in substantially the
form set forth on the reverse of the Security); or
(B) if such beneficial interest in a Transfer Restricted
Security is being transferred to a person the beneficial owner
reasonably believes is a "qualified institutional buyer" (as
defined in Rule 144A under the Securities Act) in accordance
with Rule 144A under the Securities Act, a certification to
that effect (in substantially the form set forth on the
reverse of the Security); or
(C) if such beneficial interest in a Transfer Restricted
Security is being transferred (i) pursuant to an exemption
from registration in accordance with Rule 144 or Regulation S
under the Securities Act or (ii) pursuant to an effective
registration statement under the Securities Act, or (iii) to
an institutional "accredited investor" within the meaning of
Rule 501 (A)(1), (2), (3) or (7) under the Securities Act that
is acquiring the Security for its own account, or for the
account of such an institutional accredited investor, in each
case in a minimum principal amount of the Securities of
$100,000, not with a view to or for offer or sale in
connection with any distribution in violation of the
Securities Act, or (iv) in reliance on another exemption from
the registration requirements of the Securities Act, a
certification to that effect (in substantially the form set
forth on the reverse of the Security) and in the case of (i),
(iii) and (iv) above, if the Company or the Registrar so
requests, a customary opinion of counsel, certificates and
other information reasonably acceptable to the Company and to
the Registrar to the effect that such transfer is in
compliance with the Securities Act;
then the Registrar or the Securities Custodian, at the direction of the
Trustee, will cause, in accordance with the standing instructions and
procedures existing between the Depositary and the Securities Custodian,
the aggregate principal amount of the Global Security to be reduced and,
following such reduction, the Company will execute and the Trustee or the
Trustee's authenticating agent will authenticate and deliver to the
transferee a Definitive Security.
(ii) Definitive Securities issued in exchange for a beneficial
interest in a Global Security pursuant to this Section 2.6(d) shall
be registered in such names and in such authorized denominations as
the Depositary, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Registrar. The
Registrar shall deliver such Definitive Securities to the Persons in
whose names such Securities are so registered.
(e) Restrictions on Transfer and Exchange of Global Securities.
Notwithstanding any other provisions of this Indenture (other than the
provisions set forth in subsection (f) of this Section 2.6), a Global Security
may not be transferred as a whole except by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
(f) Authentication of Definitive Securities in Absence of
Depository. If at any time:
(i) the Depositary for the Securities notifies the Company
that the Depositary is unwilling or unable to continue as Depositary
for the Global Securities or if the Depositary
33
ceases to be a clearing agency registered as such under the Exchange
Act at any time when the Depositary is required to be so registered
in order to act as depositary for the Global Securities and a
successor Depositary for the Global Securities is not appointed by
the Company within 90 days after the Company receives such notice or
learns of such ineligibility; or
(ii) the Company, in its sole discretion, determines that the
Securities shall no longer be represented by Global Securities and
executes and delivers to the Trustee and the Registrar an Officers'
Certificate to such effect; or
(iii) an Event of Default with respect to the Securities shall
have occurred and be continuing,
then the Company will execute, and the Trustee, upon receipt of an Officers'
Certificate requesting the authentication and delivery of Definitive Securities
(which the Company agrees that it will deliver), will, or its authenticating
agent will, authenticate and deliver Definitive Securities, in an aggregate
principal amount equal to the principal amount of the Global Securities, in
exchange for such Global Securities. Such Definitive Securities shall be
registered in such name or names as the Depositary shall instruct the Trustee.
(g) Cancellation and/or Adjustment of Global Security. At such time
as all beneficial interests in a Global Security have either been exchanged for
Definitive Securities, redeemed, repurchased or cancelled, such Global Security
shall be returned to or retained and cancelled by the Trustee. At any time prior
to such cancellation, if any beneficial interest in a Global Security is
exchanged for Definitive Securities, redeemed, repurchased or cancelled, the
principal amount of Securities represented by such Global Security shall be
reduced and an endorsement shall be made on such Global Security, by the Trustee
or the Securities Custodian, at the direction of the Trustee, to reflect such
reduction.
(h) Legends.
(i) Except as permitted by the following paragraph (ii), each
Security certificate evidencing the Global Securities and the Definitive
Securities (and all Securities issued in exchange therefor or substitution
thereof except Exchange Securities which have been registered under the
Securities Act and which are issued in exchange for Initial Securities
pursuant to an exchange offer as contemplated by the Registration Rights
Agreement) shall bear a legend in substantially the following form:
THIS SECURITY AND THE GUARANTEES HEREOF HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST
OR PARTICIPATION HEREIN MAY BE OFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT
TO, REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER THIS SECURITY, PRIOR TO THE DATE
(THE "RESALE RESTRICTION TERMINATION DATE") WHICH IS THREE YEARS
34
(OR SUCH SHORTER PERIOD THAT MAY HEREAFTER BE PROVIDED UNDER RULE
144(K) (OR ANY SUCCESSOR THERETO) UNDER THE SECURITIES ACT AS
PERMITTING THE RESALE BY NON-AFFILIATES OF RESTRICTED SECURITIES
WITHOUT RESTRICTION) AFTER THE LATER OF THE ORIGINAL ISSUE DATE
HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY GUARANTOR (AS
DEFINED) OR ANY "AFFILIATE" (AS DEFINED IN RULE 144 (OR ANY
SUCCESSOR THERETO) UNDER THE SECURITIES ACT) OF THE COMPANY OR ANY
GUARANTOR WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF THIS
SECURITY) ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT, (C) SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO
RULE 144A UNDER THE SECURITIES ACT ("RULE 144A") TO A PERSON IT
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED
IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO
OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED
STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT,
(E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF
SUBPARAGRAPH (A)(1),(2),(3) OR (7) OF RULE 501 UNDER THE SECURITIES
ACT THAT IS ACQUIRING THIS SECURITY FOR ITS OWN ACCOUNT, OR FOR THE
ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, FOR INVESTMENT
PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION
WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (F)
PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS UNDER THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND
THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (i)
PURSUANT TO CLAUSE (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN
OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM, AND (ii) IN EACH OF THE FOREGOING
CASES, TO REQUIRE THAT A CERTIFICATE OF TRANSFER IN THE FORM
APPEARING ON THIS SECURITY IS COMPLETED AND DELIVERED BY THE
TRANSFEROR TO THE TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE
REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.
THE HOLDER OF THIS SECURITY IS ENTITLED TO THE BENEFITS OF A
REGISTRATION RIGHTS AGREEMENT (AS SUCH TERM IS DEFINED IN THE
INDENTURE REFERRED TO BELOW) AND, BY ITS ACCEPTANCE HEREOF, AGREES
TO BE BOUND BY AND TO COMPLY WITH THE PROVISIONS OF SUCH
REGISTRATION RIGHTS AGREEMENT.
(ii) Upon any sale or transfer of a Transfer Restricted
Security (including any Transfer Restricted Security represented by a
Global Security) pursuant to Rule 144 under the Securities Act or an
effective registration statement under the Securities Act:
35
(A) in the case of any Transfer Restricted Security that is a
Definitive Security, the Registrar shall permit the Holder
thereof to exchange such Transfer Restricted Security for a
Definitive Security that does not bear the legend set forth
above and shall rescind any restriction on the transfer of
such Transfer Restricted Security, provided that, in the case
of a sale or transfer pursuant to Rule 144 under the
Securities Act, the Holder thereof shall certify in writing
(to be accompanied by a customary opinion of counsel) to the
Registrar that such Security is being transferred pursuant to
an exemption from registration pursuant to Rule 144 (such
certification to be substantially in the form set forth on the
reverse of the Security); and
(B) any such Transfer Restricted Security represented by a Global
Security shall bear the legend set forth in (i) above but not
be subject to the provisions set forth in (i) above (such
sales or transfers being subject only to the provi- sions of
Section 2.6(c) hereof); provided, however, that with respect
to any request for an exchange of a Transfer Restricted
Security that is represented by a Global Security for a
Definitive Security that does not bear a legend, which request
is made in reliance upon Rule 144 under the Securities Act,
the Holder thereof shall certify in writing (to be accompanied
by a customary opinion of counsel) to the Registrar that such
Security is being transferred pursuant to an exemption from
registration pursuant to Rule 144 under the Securities Act
(such certification to be substantially in the form set forth
on the reverse of the Security).
(i) Obligations with respect to Transfers and Exchanges of
Definitive Securities.
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee or any authenticating agent of the
Trustee shall authenticate Definitive Securities and Global Securities at
the Registrar's request.
(ii) No service charge shall be made to a Holder for any
registration of transfer or exchange, but the Company may require payment
of a sum sufficient to cover any tax or other governmental charge payable
in connection therewith (other than any such taxes or other governmental
charge payable upon exchanges or transfers pursuant to Section 2.2 (fourth
paragraph), 2.6(f), 2.10, 3.7, 4.13(8), 9.5, or 10. 1 (final paragraph)).
(iii) The Registrar shall not be required to register the
transfer of or exchange (a) any Definitive Security selected for
redemption in whole or in part pursuant to Article III, except the
unredeemed portion of any Definitive Security being redeemed in part, or
(b) any Security for a period beginning 15 Business Days before the
mailing of a notice of redemption pursuant to Article III hereof and
ending at the close of business on the day of such mailing.
(iv) Prior to due presentment for registration or transfer of
any Security, the Trustee, any Agent and the Company may deem and treat
the Person in whose name the Security is registered as the absolute owner
of such Security, and none of the Trustee, Agent or the Company shall be
affected by notice to the contrary.
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SECTION 2.7. Replacement Securities.
If a mutilated Security is surrendered to the Trustee or if the Holder of
a Security claims and submits an affidavit or other evidence, satisfactory to
the Trustee, to the effect that the Security has been lost, destroyed or
wrongfully taken, the Company shall issue and the Trustee or any authenticating
agent of the Trustee shall authenticate a replacement Security if the Trustee's
requirements are met. If required by the Trustee or the Company, such Holder
must provide an indemnity bond or other indemnity, sufficient in the judgment of
both the Company and the Trustee, to protect the Company, the Trustee or any
Agent from any loss which any of them may suffer if a Security is replaced. The
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation to the issuance of any new
Security and charge such Holder for its reasonable, out-of-pocket expenses in
replacing a Security.
Every replacement Security is an additional obligation of the Company.
SECTION 2.8. Outstanding Securities.
Securities outstanding at any time are all the Securities that have been
authenticated by the Trustee (including any Security represented by a Global
Security) except those cancelled by it, those delivered to it for cancellation,
those reductions in the interest in a Global Security effected by the Trustee
hereunder and those described in this Section 2.8 as not outstanding. A Security
does not cease to be outstanding because the Company or an Affiliate of the
Company holds the Security, except as provided in Section 2.9.
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
the Company or an Affiliate of the Company) holds Cash or U.S. Government
Obligations sufficient to pay all of the principal and interest and premium, if
any, due on the Securities payable on that date and payment of the Securities
called for redemption is not otherwise prohibited or prevented (including,
without limitation, pursuant to Article XII hereof), 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 principal amount of
Securities have concurred in any direction, amendment, supplement, waiver or
consent, Securities owned by the Company or Affiliates of the Company shall be
disregarded, except that, for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, amendment, supplement,
waiver or consent, only Securities that a Trust Officer of the Trustee knows are
so owned shall be disregarded.
SECTION 2.10. Temporary Securities.
Until Definitive Securities are ready for delivery, the Company 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 the Company reasonably and in good faith considers
appropriate for
37
temporary Securities. Without unreasonable delay, the Company shall prepare and
the Trustee shall authenticate Definitive Securities in exchange for temporary
Securities. Until so exchanged, the temporary Securities shall in all respects
be entitled to the same benefits under this Indenture as permanent Securities
authenticated and delivered hereunder.
SECTION 2.11. Cancellation.
The Company 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 it or them (as applicable) for registration of
transfer, exchange or payment. The Trustee or, at the direction of the Trustee,
the Registrar or the Paying Agent (other than the Company or an Affiliate of the
Company), and no one else shall cancel and, at the written direction of the
Company, shall dispose of all Securities surrendered for transfer, exchange,
payment or cancellation. Subject to Section 2.7, the Company may not issue new
Securities to replace Securities that have been paid or delivered to the Trustee
for cancellation. No Securities shall be authenticated in lieu of or in exchange
for any Securities cancelled as provided in this Section 2.11, except as
expressly permitted in the form of Securities and as permitted by this
Indenture.
SECTION 2.12. Defaulted Interest.
Any interest on any Security which is payable, but is not punctually paid
or duly provided for, on any Interest Payment Date plus, to the extent lawful,
any interest payable on the defaulted interest (herein called "Defaulted
Interest") shall forthwith cease to be payable to the registered Holder on the
relevant Record Date, and such Defaulted Interest may be paid by the Company, at
its election in each case, as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest
to the persons in whose names the Securities (or their respective
predecessor Securities) are registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest, which
shall be fixed in the following manner. The Company shall notify the
Trustee in writing of the amount of Defaulted Interest proposed to be paid
on each Security and the date of the proposed payment, and at the same
time the Company shall deposit with the Trustee an amount of Cash equal to
the aggregate amount proposed to be paid in respect of such Defaulted
Interest or shall make arrangements satisfactory to the Trustee for such
deposit prior to the date of the proposed payment, such ▇▇▇▇ when
deposited to be held in trust for the benefit of the persons entitled to
such Defaulted Interest as provided in this clause (1). Thereupon the
Trustee shall fix a Special Record Date for the payment of such Defaulted
Interest which shall be not more than 15 days and not less than 10 days
prior to the date of the proposed payment and not less than 10 days after
the receipt by the Trustee of the notice of the proposed payment. The
Trustee shall promptly notify the Company of such Special Record Date and,
in the name and at the expense of the Company, shall cause notice of the
proposed payment of such Defaulted Interest and the Special Record Date
therefor to be mailed, first-class postage prepaid, to each Holder at his
address as it appears in the Security register not less than 10 days prior
to such Special Record Date. Notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor having been mailed
as aforesaid, such Defaulted Interest shall be paid to the persons in
whose names the Securities (or their respective predecessor Securities)
are registered at the close of business on such Special Record Date and
shall no longer be payable pursuant to the following clause (2).
38
(2) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon such
notice as may be required by such exchange, if, after notice given by the
Company to the Trustee of the proposed payment pursuant to this clause,
such manner shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
ARTICLE III
REDEMPTION
SECTION 3.1. Right of Redemption.
Redemption of Securities, as permitted by any provision of this Indenture,
shall be made in accordance with such provision and this Article III. The
Company will not have the right to redeem any Securities prior to March 15,
2002, except as provided in the immediately following paragraph. On or after
March 15, 2002, the Company will have the right to redeem all or any part of the
Securities at the Redemption Prices specified in the form of Security attached
as Exhibit A set forth therein in Paragraph 5 thereof, including accrued and
unpaid interest to the Redemption Date (subject to the right of Holders of
record at the close of business on a Record Date to receive interest due on an
Interest Payment Date that is on or prior to such Redemption Date, and subject
to the provisions set forth in Section 3.5).
Notwithstanding the foregoing, prior to March 15, 2000, the Company may
redeem up to 20% of the aggregate principal amount of the Securities originally
issued at a redemption price of 108% of the principal amount thereof, plus
accrued and unpaid interest thereon to the Redemption Date, with the net cash
proceeds of one or more public Equity Offerings of common stock, prior to the
Reorganization, of the Company or, after the Reorganization, of the Parent;
provided that at least 80% of the aggregate principal amount of the Securities
originally issued remains outstanding immediately after the occurrence of such
redemption; and provided, further, that if Securities are redeemed with the net
proceeds from the sale of common stock of Parent, the Subject Entity shall have
received cash from the Parent, as a capital contribution or as the net proceeds
from the issuance and sale to the Parent of common stock of the Subject Entity,
in an amount at least equal to the aggregate principal amount of the Securities
so redeemed; and provided, further, that such notice of redemption shall be sent
within 30 days after the date of closing of any such Equity Offering, and such
redemption shall occur within 60 days after the date such notice is sent.
SECTION 3.2. Notices to Trustee.
If the Company elects to redeem Securities pursuant to Paragraph 5 of the
Securities, it shall notify the Trustee in writing of the Redemption Date and
the principal amount of Securities to be redeemed and whether it wants the
Trustee to give notice of redemption to the Holders.
If the Company elects to reduce the principal amount of Securities to be
redeemed pursuant to Paragraph 5 of the Securities by crediting against any such
redemption Securities it has not previously
39
delivered to the Trustee for cancellation, it shall so notify the Trustee of the
amount of the reduction and deliver such Securities with such notice.
The Company shall give each notice to the Trustee provided for in this
Section 3.2 at least 45 days before the Redemption Date (unless a shorter notice
shall be satisfactory to the Trustee). Any such notice 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 3.3. Selection of Securities to Be Redeemed.
If less than all of the Securities are to be redeemed pursuant to
Paragraph 5 thereof, the Trustee shall select the Securities or portions thereof
for redemption on a pro rata basis, by lot or by such other method as the
Trustee shall determine to be fair and appropriate.
The Trustee shall make the selection from the Securities outstanding and
not previously called for redemption and shall promptly notify the Company in
writing of the Securities selected for redemption and, in the case of any
Security selected for partial redemption, the principal amount thereof to be
redeemed. Securities in denominations of $1,000 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 3.4. Notice of Redemption.
At least 30 days but not more than 60 days before a Redemption Date, the
Company shall mail a notice of redemption by first class mail, postage prepaid,
to the Trustee and each Holder whose Securities are to be redeemed to such
▇▇▇▇▇▇'s last address as then shown on the registry books of the Registrar. At
the Company's request, the Trustee shall give the notice of redemption in the
Company's name and at the Company's expense. Each notice for redemption shall
identify the Securities to be redeemed and shall state:
(1) the Redemption Date;
(2) the Redemption Price, including the amount of accrued and unpaid
interest to be paid upon such redemption;
(3) the name, address and telephone number of the Paying Agent;
(4) that Securities called for redemption must be surrendered to the
Paying Agent at the address specified in such notice to collect the Redemption
Price;
(5) that, unless the Company defaults in its obligation to deposit
Cash with the Paying Agent in accordance with Section 3.6 hereof or such
redemption payment is otherwise prohibited, 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, including accrued and unpaid interest to the Redemption Date,
upon surrender to the Paying Agent of the Securities called for redemption and
to be redeemed;
40
(6) if any Security is being redeemed in part, the portion of the
principal amount, equal to $1,000 or any integral multiple thereof, of such
Security to be redeemed and that, on or 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;
(7) if less than all the Securities are to be redeemed, the
identification of the particular Securities (or portions thereof) to be
redeemed, as well as the aggregate principal amount of such Securities to be
redeemed and the aggregate principal amount of Securities to be outstanding
after such partial redemption;
(8) the CUSIP number of the Securities to be redeemed; and
(9) that the notice is being sent pursuant to this Section 3.4 and
pursuant to the optional redemption provisions of Paragraph 5 of the Securities.
SECTION 3.5. Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 3.4,
Securities called for redemption become due and payable on the Redemption Date
and at the Redemption Price, including accrued and unpaid interest to the
Redemption Date. Upon surrender to the Trustee or, if the Trustee is no longer
the paying agent, to the Paying Agent, such Securities called for redemption
shall be paid at the Redemption Price, including interest, if any, accrued and
unpaid to the Redemption Date; provided that if the Redemption Date is on or
after a regular Record Date and on or prior to the Interest Payment Date to
which such Record Date relates, the accrued interest shall be payable to the
Holder of the redeemed Securities registered at the close of business on the
relevant Record Date and no additional interest will be payable to Holders of
the redeemed Securities on the Redemption Date, and provided, further, that if a
Redemption Date is a non-Business Day, payment shall be made on the next
succeeding Business Day and no interest shall accrue for the period from such
Redemption Date to such succeeding Business Day.
SECTION 3.6. Deposit of Redemption Price.
On or prior to the Redemption Date, the Company shall deposit with the
Paying Agent (other than the Company or an Affiliate of the Company) Cash
sufficient to pay the Redemption Price of, and accrued and unpaid interest on,
all Securities to be redeemed on such Redemption Date (other than Securities or
portions thereof called for redemption on that date that have been delivered by
the Company to the Trustee for cancellation). The Paying Agent shall promptly
return to the Company any Cash so deposited which is not required for that
purpose upon the written request of the Company.
If the Company complies with the preceding paragraph and the other
provisions of this Article III and payment of the Securities called for
redemption is not otherwise prohibited or prevented (including, without
limitation, pursuant to Article XII hereof), interest on the Securities to be
redeemed will cease to accrue on the applicable Redemption Date, whether or not
such Securities are presented for payment. Notwithstanding anything herein to
the contrary, if any Security surrendered for redemption in the manner provided
in the Securities shall not be so paid upon surrender for redemption because of
the failure of the Company to comply with the preceding paragraph or because
payment of the Securities called for redemption is otherwise prohibited or
prevented (including, without limitation, pursuant to Article XII hereof),
interest shall continue to accrue and be paid from the Redemption Date until
such payment is made on the unpaid principal, and, to
41
the extent lawful, premium, if any, and interest not paid on such unpaid
principal, in each case at the rate and in the manner provided in Section 4.1
hereof and the Security.
SECTION 3.7. Securities Redeemed in Part.
Upon surrender of a Security that is to be redeemed in part, the Company
shall execute, and the Trustee shall authenticate and deliver to the Holder,
without service charge to 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.
The Company will pay the principal of, premium, if any, and interest on
the Securities on the dates and in the manner provided herein and in the
Securities. An installment of principal of, premium, if any, or interest on the
Securities shall be considered paid on the date it is due if the Trustee or
Paying Agent (other than the Company, a Subsidiary of the Company or an
Affiliate of the Company) holds for the benefit of the Holders, on or before
10:00 a.m. New York City time on that date, Cash deposited and designated for
and sufficient to pay the installment, so long as payment of such principal,
premium, if any, or interest, as applicable, to the Holder or Holders entitled
thereto is not otherwise prohibited or prevented (including, without limitation,
pursuant to Article XII hereof).
The Company will pay interest on overdue principal and, to the extent
lawful, overdue premium, if any, and overdue installments of interest at the
rate specified in the Securities compounded semi-annually.
SECTION 4.2. Maintenance of Office or Agency.
The Company will maintain in the Borough of Manhattan, The City of New
York, an office or agency where Securities may be presented or surrendered for
payment, where Securities may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Company in respect of the
Securities and this Indenture may be served. The Company will give prompt
written notice to the Trustee of the location, and any change in the location,
of such office or agency. If at any time the Company 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 specified in or pursuant to Section
13.2. The Company hereby initially designates the Trustee's corporate trust
agency currently located at First Trust of New York, National Association, ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ as such office.
The Company 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 the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, The City of New York, for such purposes. The Company shall give
prompt written notice to the Trustee of any such designation or rescission and
of any change in the location of any such other office or agency.
42
SECTION 4.3. Limitation on Restricted Payments.
The Subject Entity will not, and will not cause or permit any of its
Subsidiaries to, directly or indirectly, make any Restricted Payment if, after
giving effect to such Restricted Payment on a pro forma basis, (1) a Default or
an Event of Default shall have occurred and be continuing, (2) the Subject
Entity is not permitted to Incur at least $1.00 of additional Indebtedness
pursuant to the Debt Incurrence Ratio set forth in the second paragraph of the
covenant described in Section 4.10, or (3) the aggregate amount of all
Restricted Payments made by the Subject Entity and its Subsidiaries, including
after giving effect to such proposed Restricted Payment, from and after the
Issue Date would exceed the sum (without duplication) of (a) 50% of the
aggregate Consolidated Net Income of the Subject Entity for the period (taken as
one accounting period) commencing on the first day after the Issue Date through
and including the last day of the fiscal quarter ended immediately prior to the
date of each such calculation (or, in the event Consolidated Net Income for such
period is a deficit, then minus 100% of such deficit), plus (b) the aggregate
Net Cash Proceeds and the aggregate Non- -Cash Net Proceeds received by the
Subject Entity from the issuance and sale of its Qualified Capital Stock after
the Issue Date (other than (i) from or to a Subsidiary of the Subject Entity,
(ii) to the extent applied in connection with a Qualified Exchange, (iii)
Qualified Capital Stock paid as a dividend on any Capital Stock or as interest
on any Indebtedness, (iv) any Net Cash Proceeds or Non-Cash Net Proceeds from
issuances and sales financed directly or indirectly using funds borrowed from
the Subject Entity or any of its Subsidiaries until and to the extent such
borrowing is repaid and (v) any Net Cash Proceeds from the issuance of any
shares of the Company's common stock issued upon the exercise of the
underwriters' over-allotment options in the Common Stock Offering), plus (c) the
aggregate net cash proceeds and the aggregate Fair Market Value (as determined
in good faith by the Board of Directors of the Subject Entity and evidenced by a
resolution delivered to the Trustee) of all other property received by the
Subject Entity as a capital contribution after the Issue Date (other than to the
extent applied in connection with a Qualified Exchange), plus (d) the amount
equal to the net reduction in Restricted Investments made by the Subject Entity
or any of its Subsidiaries in any person resulting from (i) repurchases or
redemptions of such Restricted Investments by such person, proceeds realized
upon the sale of such Restricted Investments to any person (other than the
Subject Entity or any of its Subsidiaries), and repayments of loans or advances
or other transfers of property (valued at its Fair Market Value as determined in
good faith by the Board of Directors of the Subject Entity and evidenced by a
resolution delivered to the Trustee) by such person to the Subject Entity or any
of its Subsidiaries (provided that such net reduction shall occur only to the
extent that the monies or property giving rise to such reduction are received by
the Subject Entity or a Domestic Subsidiary or Guarantor Foreign Subsidiary of
the Subject Entity), or the termination of any guarantee of or other credit
support or contingent obligation with respect to any Indebtedness or other
liabilities of such person provided by the Subject Entity or any of its Domestic
Subsidiaries or Guarantor Foreign Subsidiaries or (ii) the redesignation of
Unrestricted Subsidiaries as Subsidiaries, so long as such Subsidiaries are
Domestic Subsidiaries or Guarantor Foreign Subsidiaries (valued in each case as
provided in the definition of "Investment"), not to exceed, in the case of any
Unrestricted Subsidiary, the amount of Restricted Investments previously made by
the Subject Entity and its Subsidiaries in such Unrestricted Subsidiary, which
amount was included in the calculation of the amount of Restricted Payments or
(iii) a Non-Guarantor Foreign Subsidiary becoming a Guarantor Foreign Subsidiary
(valued in each case as provided in the definition of "Investment"), not to
exceed, in the case of any Non-Guarantor Foreign Subsidiary, the amount of
Restricted Investments previously made by the Subject Entity and its Guarantor
Foreign Subsidiaries and Domestic Subsidiaries in such Non-Guarantor Foreign
Subsidiary, but only to the extent that, in each case described in this clause
(d), such amount was previously included in the calculation of the amount of
Restricted Payments (provided, however, that no amount shall be included under
this clause (d) to the extent it is already included in Consolidated Net
Income); plus (e) $25 million.
43
The foregoing provisions will not prohibit or be violated by (A) a
Qualified Exchange; (B) the payment or making of any Restricted Payment within
60 days after the date of declaration thereof or the making of any binding
commitment in respect thereof if, at said date of declaration or commitment,
such Restricted Payment would have complied with the provisions contained in
clauses (1), (2) and (3) of the first paragraph hereof, (C) the payment or
making of Permitted Payments; (D) 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 the Subject Entity or one of
its Subsidiaries or Unrestricted Subsidiaries) of Subordinated Indebtedness of
the Subject Entity or any of its Subsidiaries with (x) an Average Life equal to
or greater than the then remaining Average Life of the Subordinated Indebtedness
repurchased, redeemed or repaid (unless the Average Life of the Subordinated
Indebtedness repurchased, redeemed or repaid is, at the time, longer than the
Average Life of the Securities at such time, in which case such new Subordinated
Indebtedness must have an Average Life longer than the Average Life of the
Securities at such time), and (y) a final maturity date on or after the earlier
of (1) two Business Days after the Final Maturity Date and (2) the final
maturity date of the Subordinated Indebtedness repurchased, redeemed or repaid
(provided that, in the case of Subordinated Indebtedness of a Non-Guarantor
Foreign Subsidiary, such Subordinated Indebtedness is repurchased, redeemed or
repaid with the proceeds of Subordinated Indebtedness of another Non-Guarantor
Foreign Subsidiary); or (E) Investments in Non-Guarantor Foreign Subsidiaries of
the Subject Entity if, after giving effect to such Investment, the aggregate
amount of then outstanding Investments made by the Subject Entity and its
Guarantor Foreign Subsidiaries and Domestic Subsidiaries in Non-Guarantor
Foreign Subsidiaries of the Subject Entity would not exceed 15% of the assets of
the Subject Entity and its Subsidiaries at such time, computed on a consolidated
basis in accordance with GAAP. The full amount of any Restricted Payments made
pursuant to clauses (B) and (C) of the immediately preceding sentence, however,
will be deducted in the calculation of the aggregate amount of Restricted
Payments available to be made referred to in clause (3) of the immediately
preceding paragraph.
SECTION 4.4. Corporate Existence.
Except as otherwise provided or permitted in Article V or XI or elsewhere
in this Indenture, the Company and the Guarantors will do or cause to be done
all things necessary to preserve and keep in full force and effect their
respective existence (corporate or other, as applicable) in accordance with the
respective organizational documents of each of them (as the same may be amended
from time to time) and the rights (charter and statutory) and franchises
(corporate or other, as applicable) of the Company and the Guarantors; provided,
however, nothing in this Section will prohibit the Company or any Guarantor from
engaging in any transaction permitted under Section 11.4 hereof and provided,
further, that neither the Company nor any Guarantor shall be required to
preserve any right or franchise if the Board of Directors of the Subject Entity
shall determine that the preservation thereof is no longer desirable in the
conduct of the business of such entity.
SECTION 4.5. Payment of Taxes and Other Claims.
The Subject Entity will pay, and will cause each of its Subsidiaries to
pay, prior to delinquency, all material taxes, assessments, and governmental
levies except (i) as contested in good faith by appropriate proceedings and with
respect to which appropriate reserves have been taken to the extent required by
GAAP or (ii) where the failure to effect such payment is not adverse in any
material respect to the Holders.
44
SECTION 4.6. Compliance Certificate, Notice of Default.
(a) The Company will deliver to the Trustee within 120 days after
the end of its fiscal year an Officers' Certificate complying with Section
314(a)(4) of the TIA and stating that a review of its activities and the
activities of the Subject Entity and its Subsidiaries during the preceding
fiscal year has been made under the supervision of the signing Officers and
stating, as to each such Officer signing such certificate, to the best of his
knowledge, based on such review, whether or not the signer knows of any Event of
Default or event which with notice or the passage of time would become an Event
of Default which has occurred and is continuing. The Officers' Certificate will
also notify the Trustee should there be any change in the Subject Entity's
fiscal year.
(b) The Company will, so long as any of the Securities are
outstanding, deliver to the Trustee, promptly upon becoming aware of any Default
or Event of Default, an Officers' Certificate specifying such Default or Event
of Default and what action the Company is taking or proposes to take with
respect thereto. The Trustee shall not be deemed to have knowledge of any
Default or any Event of Default unless one of its Trust Officers receives
written notice thereof from the Company or any of the Holders.
SECTION 4.7. Reports.
The Subject Entity will file with the Commission the annual reports,
quarterly reports and other documents required to be filed with the Commission
pursuant to Sections 13 or 15(d) of the Exchange Act, whether or not the Subject
Entity has a class of securities registered under the Exchange Act, unless the
Commission will not accept such documents; provided that, from and after the
date of the Reorganization, the Subject Entity shall be deemed to have satisfied
its obligations under this sentence if (i) the Parent shall have filed with the
Commission the annual reports, quarterly reports and other documents required to
be filed with the Commission pursuant to Section 13 or 15(d) of the Exchange
Act, whether or not the Parent has a class of securities registered under the
Exchange Act, unless the Commission will not accept such documents (and the
Subject Entity will not be deemed to have failed to satisfy the condition set
forth in this clause (i) solely by reason of the Commission's failure to accept
such documents) and (ii) if, for the most recent fiscal quarter covered by the
Parent's consolidated financial statements included in the most recent annual
report or quarterly report which the Parent has filed or is then filing with the
Commission pursuant to Section 13 or 15(d) of the Exchange Act (or if the
Commission will not accept such documents, which the Parent would have
theretofore or then been required to file, as applicable), the revenues of the
Subject Entity and its Subsidiaries for such fiscal quarter computed on a
consolidated basis in accordance with GAAP shall be less than 95% of the
revenues of the Parent and its subsidiaries for such fiscal quarter computed on
a consolidated basis in accordance with GAAP, the notes to such financial
statements shall set forth the consolidated indebtedness, consolidated sales,
consolidated capital expenditures, consolidated interest expense (net of
interest income and excluding any deferred financing costs), and consolidated
net earnings before interest, income taxes, depreciation, amortization, LIFO
inventory charges and, if applicable, before equity earnings (losses) from
subsidiaries, non-recurring and extraordinary items, and union, pension and
benefit credits of the Subject Entity and its consolidated Subsidiaries,
determined in accordance with GAAP, as of the same dates and for the same
periods for which consolidated financial statements are presented for the Parent
(provided that, in the case of such information included in the notes to the
Parent's audited financial statements, such notes also shall be covered by the
audit report, provided that the Parent's independent accountants may rely on the
audit report of other independent accountants with respect to any acquired
businesses). Whether or not the Subject Entity is subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act, the Subject Entity, at
its expense (x) will be required to file with the Trustee and
45
mail to each Holder of Securities within 15 days after filing with the
Commission (or if any such filing is not permitted under the Exchange Act, 15
days after such filing would have been required), and to deliver to prospective
purchasers of Securities upon written request, copies of the annual reports,
quarterly reports and other documents required to be filed by Sections 13 or
15(d) of the Exchange Act and (y) so long as any of the Securities are evidenced
by Global Securities, promptly deliver copies of such reports and documents to
any beneficial owner of Securities upon written request by such beneficial
owner; provided that, from and after the date of the Reorganization, the Subject
Entity may satisfy its obligations under this sentence if (A) it shall instead
have delivered the annual reports, quarterly reports and other documents of the
Parent required to be filed by Sections 13 or 15(d) of the Exchange Act (whether
or not Parent is subject to the reporting requirements of such Sections) and (B)
the conditions set forth in clause (ii) of the preceding sentence are satisfied.
In addition, the Subject Entity shall furnish to the Holders and, so long as the
Securities are evidenced by Global Securities, beneficial owners of Securities
and to prospective investors, upon their request, the information, if any,
required to be delivered pursuant to Rule 144A(d)(4) (or any successor thereto)
under the Securities Act.
SECTION 4.8. [Reserved]
SECTION 4.9. Limitation on Transactions with Affiliates.
The Subject Entity will not, and will not cause or permit any of its
Subsidiaries to, enter into any contract, agreement, arrangement or transaction
(or any renewal or extension thereof) with (i) any Affiliate of the Subject
Entity, (ii) any Affiliate of any Subsidiary of the Subject Entity or (iii) any
Affiliate or Subsidiary of Parent (each, an "Affiliate Transaction") or any
series of related Affiliate Transactions, unless the terms of such Affiliate
Transaction are fair and reasonable to the Subject Entity or such Subsidiary, as
the case may be, and are at least as favorable as the terms which could
reasonably be expected to be obtained by the Subject Entity or such Subsidiary,
as the case may be, in a comparable transaction made on an arm's length basis
with persons who are not such Affiliates; provided that the following shall not
be deemed Affiliate Transactions: (A) any contracts, agreements, arrangements or
transactions (or any renewals or extensions thereof) solely between or among the
Subject Entity and any of its Subsidiaries or between or among any Subsidiaries
of the Subject Entity; (B) Permitted Payments; (C) any Restricted Payments made
in compliance with Section 4.3; (D) customary loans, advances, fees and
compensation paid to, and indemnity provided on behalf of, officers, directors,
employees or consultants of the Subject Entity or any of its Subsidiaries; (E)
transactions pursuant to any contract or agreement in effect on the Issue Date
(including, without limitation, the Standstill Agreements) as the same may be
amended, modified or replaced from time to time so long as any such amendment,
modification or replacement is no less favorable to the Subject Entity and its
Subsidiaries than such contract or agreement as in effect on the Issue Date or
is approved by either a majority of the disinterested directors of the Subject
Entity or, in the case of amendments, modifications or replacements of any
Standstill Agreement after the date of the Reorganization, a majority of the
disinterested directors of Parent; (F) employment agreements entered into by the
Subject Entity or any of its Subsidiaries in the ordinary course of business;
(G) transactions with suppliers or other purchases or sales of goods and
services, in each case in the ordinary course of business (including, without
limitation, pursuant to any joint venture agreements) and otherwise in
compliance with the terms of this Indenture, which are fair to the Subject
Entity, in the reasonable determination of its Board of Directors or the senior
management thereof, or are on terms at least as favorable as might reasonably
have been obtained at such time from an unaffiliated party; (H) Investments in
Santee, and other contracts and agreements entered into in connection therewith,
so long as none of the foregoing is prohibited by this Indenture; (I) credit
support and other provisions of comfort in respect of, and other contracts and
agreements entered into in connection with, Indebtedness or
46
other obligations of Santee and all amendments, modifications and replacements
thereof, so long as none of the foregoing is prohibited by any other provision
of this Indenture; and (J) transactions pursuant to agreements and contracts
with Santee (including agreements for the purchase of milk and other products)
or with any stockholders of Santee (including stockholder agreements,
indemnifications and other agreements and transactions contemplated thereby) or
entered into in connection with ▇▇▇▇▇▇'▇ financing of its new dairy which was
under construction on the Issue Date (including Permitted Liens, guarantees,
credit support and other provisions of comfort) and all amendments,
modifications and replacements thereof, so long as none of the foregoing is
prohibited by any other provision of this Indenture.
Without limiting the foregoing, in connection with any Affiliate
Transaction or series of related Affiliate Transactions (1) involving
consideration to either party in excess of $2.5 million, the Subject Entity must
deliver an Officers' Certificate to the Trustee, stating that the terms of such
Affiliate Transaction are fair and reasonable to the Subject Entity or the
relevant Subsidiary, as the case may be, and are no less favorable to the
Subject Entity or such Subsidiary, as the case may be, than could reasonably be
expected to have been obtained in an arm's length transaction with a
non-Affiliate, (2) involving consideration to either party in excess of $7.5
million, a majority of the disinterested members of the Subject Entity's board
of directors approve such Affiliate Transaction or series of related Affiliate
Transactions, as the case may be, and, in their good faith judgment, believe
that such transaction or transactions, as applicable, are fair and reasonable to
the Subject Entity or such Subsidiary, as the case may be, and are no less
favorable to the Subject Entity or such Subsidiary, as the case may be, than
could reasonably be expected to have been obtained in an arms' length
transaction with a non-Affiliate (all of the foregoing to be evidenced by a
resolution of such disinterested directors delivered to the Trustee), and (3)
involving consideration to either party in excess of $20 million, the Subject
Entity must also, prior to the consummation thereof, obtain a written favorable
opinion as to the fairness of such transaction to the Subject Entity or the
relevant Subsidiary, as the case may be, from a financial point of view from an
independent investment banking firm of recognized standing, provided that the
requirements of this clause (3) shall only be applicable if the transaction or
series of transactions is of a type as to which investment banking firms of
recognized standing customarily render fairness opinions.
SECTION 4.10. Limitation on Additional Indebtedness and Disqualified
Capital Stock.
Except as set forth in this Section 4.10, the Subject Entity will not, and
will not cause or permit any of its Subsidiaries to, directly or indirectly,
issue, create, assume, guarantee, incur, become directly or indirectly liable
with respect to (including as a result of an Acquisition), or otherwise become
responsible for, contingently or otherwise (individually and collectively, to
"Incur" or, as appropriate, an "Incurrence"), any Indebtedness or any
Disqualified Capital Stock (including Acquired Indebtedness), except for
Permitted Indebtedness.
Notwithstanding the foregoing: if (i) no Default or Event of Default shall
have occurred and be continuing at the time of, or would occur after giving
effect on a pro forma basis to, the Incurrence of such Indebtedness or
Disqualified Capital Stock and (ii) on the date of such Incurrence (the
"Incurrence Date"), the Consolidated Interest Coverage Ratio of the Subject
Entity for the Reference Period immediately preceding the Incurrence Date, after
giving effect on a pro forma basis to the Incurrence of such Indebtedness or
Disqualified Capital Stock and, to the extent set forth in the definition of
Consolidated Interest Coverage Ratio, the use of proceeds thereof, would be at
least 2.0 to 1 (the "Debt Incurrence Ratio"), then the Subject Entity and its
Subsidiaries may Incur such Indebtedness or Disqualified Capital Stock.
47
Indebtedness of any Person which is outstanding at the time such Person
becomes a Subsidiary of the Subject Entity or is merged with or into or
consolidated with the Subject Entity or any of its Subsidiaries shall be deemed
to have been Incurred at the time such Person becomes such a Subsidiary of the
Subject Entity or is merged with or into or consolidated with the Subject Entity
or any of its Subsidiaries, as applicable.
Notwithstanding anything to the contrary contained in this Indenture, the
Subject Entity and its Subsidiaries each may guarantee Indebtedness of the
Subject Entity or any Subsidiary of the Subject Entity that is permitted to be
Incurred under this Indenture; provided that if such Indebtedness is
subordinated in right of payment to any other Indebtedness of the obligor, then
such guarantee shall be subordinated to Indebtedness of such guarantor to the
same extent; and provided, further, that if the Subject Entity or any of its
Domestic Subsidiaries or Guarantor Foreign Subsidiaries shall guarantee
Indebtedness of any Non-Guarantor Foreign Subsidiary of the Subject Entity, such
guarantee must comply with Section 4.3.
SECTION 4.11. Limitation on Dividends and Other Payment Restrictions
Affecting Subsidiaries.
The Subject Entity will not, and will not cause or permit any of its
Subsidiaries to, directly or indirectly, create, assume, incur or suffer to
exist any consensual restriction on the ability of the Subject Entity or any of
its Subsidiaries: (i) (x) to pay dividends or make other distributions to the
Subject Entity or any of its Subsidiaries on its Capital Stock or with respect
to any other interest or participation in, or measured by, its profits, or (y)
to pay any Indebtedness owed to Subject Entity or any of its Subsidiaries, (ii)
to make capital contributions, loans or advances to, or purchase Capital Stock
of, the Subject Entity or any of its Subsidiaries or (iii) to transfer any of
its properties or assets to the Subject Entity or any of its Subsidiaries,
except (a) restrictions imposed by the Securities or this Indenture; (b)
restrictions imposed by applicable law and regulation; (c) restrictions under
Existing Indebtedness, as in effect on the Issue Date; (d) restrictions under
any Acquired Indebtedness not Incurred in violation of this Indenture or under
any agreement relating to any property, asset or business acquired by the
Subject Entity or any of its Subsidiaries not acquired in violation of this
Indenture, which restrictions in each case existed at the time of acquisition,
were not put in place in connection with or in anticipation of such acquisition
and are not applicable to any person, other than the person acquired, or to any
property, asset or business, other than the property, assets and business so
acquired, as the case may be; (e) restrictions imposed by the New Credit
Agreement and by any other Indebtedness Incurred under paragraph (b) of the
definition of Permitted Indebtedness; (f) restrictions with respect to a
Subsidiary of the Subject Entity imposed pursuant to a binding agreement which
has been entered into for the sale or disposition of all or substantially all of
the Capital Stock or assets of such Subsidiary (including, without limitation,
by merger or consolidation), provided such sale or disposition would not be
prohibited by this Indenture and such restrictions apply solely to the Capital
Stock or assets of such Subsidiary which are being sold; (g) restrictions on
transfer contained in Indebtedness (including, without limitation, any
Capitalized Lease Obligations) Incurred pursuant to paragraph (d) of the
definition of Permitted Indebtedness and in any other Purchase Money
Indebtedness of the Subject Entity or any of its Subsidiaries not prohibited by
this Indenture, provided such restrictions relate only to the property acquired,
improved, constructed or leased (and proceeds and products thereof) with the
proceeds of such Indebtedness or pursuant to such capitalized lease, as
applicable; (h) customary restrictions imposed on the transfer of copyrighted or
patented materials or other intellectual property and customary provisions in
agreements that restrict the assignment of such agreements or any rights
thereunder; (i) customary provisions restricting subletting or assignment of any
lease entered into in the ordinary course of business; (j) Liens not prohibited
by the terms of this Indenture; (k) customary net worth or similar provisions
contained in leases, subleases or similar arrangements or agreements entered
into by the Subject Entity or any of its Subsidiaries in the ordinary course of
business; (l) customary rights of first refusal, buy-sell provisions and other
similar
48
provisions in joint venture agreements and other similar agreements; (m)
restrictions under instruments or agreements (including product purchase
agreements) entered into in connection with Indebtedness incurred by ▇▇▇▇▇▇; (n)
restrictions imposed by secured Indebtedness (including, without limitation,
Indebtedness secured by a mortgage or deed of trust) of the Subject Entity or
any of the Subsidiaries not prohibited by this Indenture that limit the right of
the debtor to dispose of the property (or proceeds or products thereof) securing
such Indebtedness; and (o) in connection with and pursuant to permitted
refinancings, replacements of restrictions imposed pursuant to clause (c), (d),
(e), (g), (m) or (n) of this paragraph that are not more restrictive than those
being replaced and do not apply to any other person or assets other than those
covered by the restrictions in the Indebtedness so refinanced.
SECTION 4.12. Limitation on Liens.
The Subject Entity will not, and will not cause or permit any of its
Subsidiaries to, create, incur, assume or suffer to exist, to secure any
Indebtedness other than Senior Debt, any Lien, other than Permitted Liens, upon
any of their respective property (whether owned on the date of this Indenture or
acquired thereafter), or upon any income or profits or proceeds therefrom,
unless the Subject Entity or such Subsidiary, as the case may be, provides,
concurrently therewith, that the Securities are equally and ratably secured;
provided that, if such Indebtedness is Subordinated Indebtedness, the Lien
securing such Subordinated Indebtedness shall be subordinate and junior to the
Lien securing the Securities or the Guarantee, as applicable, with the same
relative priority as such Subordinated Indebtedness shall have with respect to
the Securities or the Guarantee, as applicable; and provided, further, that, in
the case of Indebtedness of a Guarantor, if such Guarantor shall cease to be a
Guarantor in accordance with the provisions of this Indenture, such equal and
ratable Lien to secure the Securities shall, without any further action, cease
to exist.
SECTION 4.13. Limitation on Sale of Assets and Subsidiary Stock.
The Subject Entity will not, and will not cause or permit any of its
Subsidiaries to, in one transaction or a series of related transactions, convey,
sell, transfer, assign or otherwise dispose of, directly or indirectly, any of
their respective property, business or assets (whether owned on the date of this
Indenture or thereafter acquired), including, without limitation, by merger or
consolidation or by a Sale and Leaseback Transaction and including, without
limitation, any sale or other transfer or issuance of any Capital Stock (other
than directors qualifying shares) of any Subsidiary of the Subject Entity, as
the case may be (an "Asset Sale"), unless (1) within 360 days following such
Asset Sale (a) the Net Cash Proceeds received from such Asset Sale are (i) (x)
used to purchase one or more businesses or to purchase more than 50% of the
outstanding Capital Stock of a person operating one or more businesses, which
person becomes a Subsidiary of the Subject Entity concurrently with such
purchase, (y) used to make capital expenditures or to purchase inventory or (z)
used to acquire other assets, in each case so long as such business or
businesses, capital expenditures or assets will constitute, be a part of or be
used in a Related Business (provided that, in the case of the sale of a
supermarket, the Subject Entity may deem the Net Cash Proceeds therefrom to have
been applied in accordance with this clause (i) to the extent of any capital
expenditures made by the Subject Entity or any of its Subsidiaries to acquire or
construct a replacement supermarket in the same general vicinity of the
supermarket sold within 360 days preceding the date of the Asset Sale) or (ii)
used to retire Senior Debt and to permanently reduce the amount of such Senior
Debt outstanding (provided that in the case of a revolving credit facility or
similar arrangement that makes credit available, the commitment thereunder is
also permanently reduced by such amount) and (b) the Net Cash Proceeds of such
Asset Sale not applied as provided in clause (a) (the "Excess Proceeds") are
applied to the optional redemption of the Securities in accordance with the
terms of this Indenture or to the repurchase of the Securities pursuant to an
irrevocable,
49
unconditional cash offer (the "Asset Sale Offer") to repurchase Securities at a
purchase price of 100% of the principal amount (the "Asset Sale Offer Price"),
plus accrued interest to the date of payment; (2) no Default or Event of Default
shall have occurred and be continuing or would occur after giving effect, on a
pro forma basis, to such Asset Sale; and (3) the Subject Entity or such
Subsidiary, as applicable, shall have received Fair Market Value for the
property, business or assets, as applicable, disposed of in such Asset Sale;
provided, however, that the Subject Entity shall have the right to exclude from
the foregoing provisions any Asset Sale subsequent to the Issue Date, the
proceeds of which are derived from a Sale and Leaseback Transaction of a
supermarket and/or related assets or equipment which is acquired or constructed
by the Subject Entity or a Subsidiary of the Subject Entity subsequent to the
Issue Date, so long as any such Sale and Leaseback Transaction occurs within 365
days following such acquisition or the completion of such construction, as the
case may be; and, provided, further, that clauses (2) and (3) above shall not
apply to the sale or disposition of assets as a result of a foreclosure (or a
secured party taking ownership of such assets in lieu of foreclosure) or as a
result of an involuntary proceeding in which the Subject Entity cannot, directly
or through its Subsidiaries, direct the type of proceeds received and, in such
event, the 360 day period referred to in clause (1) above shall commence on the
date Net Cash Proceeds therefrom are received (with a separate 360 day period
commencing on each day any such Net Cash Proceeds are received). An Asset Sale
Offer may be deferred until the accumulated Excess Proceeds exceeds $15,000,000
(the date on which the Excess Proceeds exceed $15,000,000 being herein referred
to as the "Excess Proceeds Date") and each Asset Sale Offer shall remain open
for not less than 20 Business Days following its commencement (the "Asset Sale
Offer Period"). Upon expiration of the Asset Sale Offer Period, the Company
shall apply the Excess Proceeds plus an amount equal to accrued interest to the
purchase of all Securities properly tendered (on a pro rata basis if the Excess
Proceeds are insufficient to purchase all Securities so tendered) at the Asset
Sale Offer Price (together with accrued interest). To the extent Holders of
Securities do not tender Securities in connection with any such Asset Sale
Offer, the remaining Excess Proceeds may be applied in any manner not prohibited
by this Indenture and the amount of Excess Proceeds shall be reset to zero.
Pending the utilization of any Net Cash Proceeds in the manner (and within the
time period) described in this paragraph, the Subject Entity may use any such
Net Cash Proceeds to repay revolving loans under any Credit Agreement (provided
that such revolving loans constitute Senior Debt) and, in that event, anything
in the Indenture to the contrary notwithstanding, the Subject Entity shall not
be required to reduce the commitment under the related revolving credit facility
as a result of such repayments of revolving loans except to the extent the
Subject Entity deems such Net Cash Proceeds to have been used to retire Senior
Debt as contemplated by clause (1)(a)(ii) of the first sentence of this
paragraph.
In the event of a transaction as a result of which a Subsidiary Guarantor
will be released from its Guarantee as provided in Section 11.4(c), then,
anything in this Indenture to the contrary notwithstanding, such transaction
shall be deemed to be an Asset Sale and shall be subject to and shall only be
made in compliance with the foregoing covenant.
Notwithstanding the provisions of the first paragraph of this Section
4.13, the following transactions shall not be deemed Asset Sales:
(i) (A) any sale, lease, sublease, conveyance, assignment, transfer or
other disposition of inventory made in the ordinary course of business or (B)
any sale, lease, sublease, conveyance, assignment, transfer or other
disposition, in one transaction or a series of related transactions, of any
other property or assets (other than Capital Stock of a Subsidiary of the
Subject Entity) with an aggregate Fair Market Value (as determined in good faith
by the Board of Directors of the Subject Entity) of less than $1,000,000; (ii)
any merger or consolidation of a Guarantor that is governed by and complies with
the provisions described in
50
Section 11.4(a) or any sale, lease, sublease, conveyance, assignment, transfer
or other disposition of property or assets (including, without limitation, by
merger or consolidation) that is governed by and complies with the provisions
described in Section 5.1; (iii) any Restricted Payment permitted in Section 4.3
or any Lien permitted by Section 4.12; (iv) any sale, lease, sublease,
conveyance, assignment, transfer or other disposition of property or assets by
the Subject Entity or any of its Subsidiaries to the Subject Entity or to any of
its Subsidiaries; (v) any sale, lease, sublease, conveyance, assignment,
transfer or other disposition of damaged, worn-out or other obsolete property in
the ordinary course of business so long as such property is no longer necessary
for the proper conduct of the business of the Subject Entity or any of its
Subsidiaries; (vi) any liquidation of Cash Equivalents in the ordinary course of
business; (vii) the sale or other disposition of up to six of the supermarkets
acquired in the KUI Acquisition so long as such sale or other disposition of any
such store occurs prior to the conversion of such store to the Quality Food
Centers name or format; (viii) substantially contemporaneous exchanges by the
Subject Entity or any of its Subsidiaries of property or assets (including,
without limitation, real property and improvements) for other property or
assets, provided that the property or assets received in such exchange by the
Subject Entity or such Subsidiary are part of or will be used in a Related
Business and have a Fair Market Value at least equal to the Fair Market Value of
the property and assets exchanged (determined in each case in good faith by the
Board of Directors of the Subject Entity as evidenced by a board resolution
delivered to the Trustee); provided that, if property or assets are exchanged by
the Subject Entity or any of the Subsidiary Guarantors, the property or assets
received in such exchange are also received by the Subject Entity or a
Subsidiary Guarantor; and provided, further, that, if the property or assets to
be exchanged by the Subject Entity or any of its Subsidiaries in any transaction
or series of related transactions have a Fair Market Value of $20 million or
more, the Board of Directors of the Subject Entity shall have received, prior to
or concurrently with such exchange, one or more written opinions or valuations
from appraisal or valuation firms of national or regional standing selected by
the Subject Entity, with experience in appraisal or valuation of property or
assets of the type to be exchanged and be received by the Subject Entity or such
Subsidiary, as applicable, to the effect that the Fair Market Value of the
property or assets to be received is at least equal to the Fair Market Value of
the property and assets to be exchanged; (ix) any sale, transfer or other
disposition of any shares of Capital Stock of any distributor or supplier of
wholesale groceries or related wholesale products, which shares are (A) owned by
the Subject Entity or any of its Subsidiaries on the Issue Date or (B) acquired
by the Subject Entity or any of its Subsidiaries after the Issue Date in the
ordinary course of business without the payment of any consideration (other than
the purchase of products and services related thereto in the ordinary course of
business); and (x) any Asset Sale the Net Cash Proceeds of which do not exceed
$15 million and which, together with all other Asset Sales the Net Cash Proceeds
of which have not been applied as contemplated by the second preceding
paragraph, do not exceed $15 million in the aggregate (it being understood that,
at such time as the aggregate Net Cash Proceeds from such Asset Sales exceed $15
million, all such Net Cash Proceeds shall be applied as required by the second
preceding paragraph).
All Net Cash Proceeds from any Event of Loss shall be invested, used to
retire Senior Debt, or used to repurchase or redeem Securities, all within the
period, and as otherwise provided, in the first paragraph (other than clauses
(2) and (3) of the first sentence thereof) of this Section 4.13.
Notice of an Asset Sale Offer will be sent 20 Business Days prior to the
close of business on the third Business Day prior to the date set by the Company
to repurchase Securities pursuant to this Section 4.13 (the "Purchase Date"), by
first-class mail, by the Company to each Holder at its registered address, with
a copy to the Trustee. The notice to the Holders will contain all information,
instructions and materials required by applicable law. The notice, which (to the
extent consistent with this Indenture) shall govern the terms of the Asset Sale
Offer, shall state:
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(1) that the Asset Sale Offer is being made pursuant to
such notice and this Section 4.13;
(2) the Asset Sale Offer, the Asset Sale Offer Price
(including the amount of accrued and unpaid interest), and the
Purchase Date, which Purchase Date shall be on or prior to 45
Business Days following the Excess Proceeds Date;
(3) that any Security or portion thereof not tendered or
accepted for payment will continue to accrue interest;
(4) that, unless the Company defaults in depositing Cash
with the Paying Agent in accordance with the provisions of this
Section 4.13 or the payment thereof to Holders is prevented or
prohibited (including, without limitation, pursuant to Article XII
hereof), any Security, or portion thereof, accepted for payment
pursuant to the Asset Sale Offer shall cease to accrue interest on
and after the Purchase Date;
(5) that Holders electing to have a Security, or portion
thereof, purchased pursuant to an Asset Sale Offer will be required
to surrender the Security, with the form entitled "Option of Holder
to Elect Purchase" on the Security completed (or, in the case of
Global Securities, to effect such surrender in accordance with the
Depositary's procedures), to the Paying Agent (which may not for
purposes of this Section 4.13, notwithstanding anything in this
Indenture to the contrary, be the Company or any Affiliate of the
Company) at the address specified in the notice prior to the close
of business on the date (which shall be specified in such notice)
which is the third Business Day prior to the Purchase Date;
(6) that Holders will be entitled to withdraw their
elections, in whole or in part, if the Paying Agent receives, up to
the close of business on the date (which shall be specified in such
notice) which is the third Business Day prior to the Purchase Date,
a telegram, telex, facsimile transmission or letter setting forth
the name of the Holder, the principal amount of the Securities the
Holder is withdrawing and a statement that such Holder is
withdrawing his election to have such principal amount of Securities
purchased;
(7) that if Securities in a principal amount in excess
of the principal amount of Securities to be acquired pursuant to the
Asset Sale Offer (which principal amount shall be specified in such
notice) are tendered and not withdrawn, the Company shall purchase
Securities on a pro rata basis (with such adjustments as may be
deemed appropriate by the Company so that only Securities in
denominations of $1,000 or integral multiples of $1,000 shall be
acquired);
(8) 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; and
(9) a brief description of the circumstances and
relevant facts regarding the relevant Asset Sales.
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On or before the Purchase Date, the Company shall (i) accept for payment
Securities or portions thereof properly tendered and not withdrawn pursuant to
the Asset Sale Offer promptly after the close of business on the third Business
Day prior to the Purchase Date (on a pro rata basis if required pursuant to
paragraph (7) hereof) and (ii) deposit with the Paying Agent Cash sufficient to
pay the Asset Sale Offer Price for all Securities or portions thereof so
tendered and accepted (provided that the amount of Cash which the Company is
required to deposit in respect of the aggregate principal amount of Securities
and portions thereof to be repurchased shall not exceed the amount of Excess
Proceeds) plus accrued and unpaid interest thereon to the Purchase Date. On the
Purchase Date, the Company shall deliver to the Trustee Securities so accepted
together with an Officers' Certificate stating the Securities or portions
thereof being purchased by the Company. The Paying Agent shall on the Purchase
Date mail or deliver to Holders of Securities so accepted (or, in the case of
Securities held in book-entry form through the Depositary, will deliver in
accordance with the Depositary's procedures as then in effect) payment in an
amount equal to the Asset Sale Offer Price for such Securities (together with
accrued and unpaid interest), and the Trustee shall promptly authenticate and
mail or deliver (or deliver in accordance with the Depositary's procedures, as
the case may be) to such Holders new Securities equal in principal amount to any
unpurchased portion of the Securities surrendered. Any Security not so accepted
shall be promptly mailed or delivered (or delivered in accordance with the
Depositary's procedures, as the case may be) by the Company to the Holder
thereof. The Company agrees that any Asset Sale Offer shall be made in
compliance with all applicable laws, rules, and regulations, including, if
applicable, Regulation 14E under the Exchange Act and all other applicable
Federal and state securities laws, and any provisions of this Indenture which
conflict with such laws shall be deemed to be superseded by the provisions of
such laws. The Trustee shall be under no obligation to ascertain the occurrence
of an Asset Sale or, except as directed by the Company, to give notice to the
Securityholders with respect thereto. The Trustee may conclusively assume, in
the absence of written notice to the contrary from the Company, that no Asset
Sale has occurred.
SECTION 4.14. Limitation on Layering Indebtedness.
Neither the Company nor any of the Guarantors will directly or indirectly,
Incur, permit to remain outstanding or otherwise suffer to exist any
Indebtedness that is subordinated by the terms of the instrument creating or
evidencing such Indebtedness in right of payment to any other Indebtedness of
the Company or such Guarantor, as the case may be, unless, by the express terms
of the instrument creating or evidencing such Indebtedness or pursuant to which
such Indebtedness was issued, such Indebtedness is subordinate in right of
payment to, or pari passu in right of payment with, the Securities or the
Guarantee of such Guarantor, as applicable. For purposes of this provision, no
Indebtedness shall be deemed to be subordinated in right of payment to any other
Indebtedness solely by reason of the fact that such other Indebtedness is
secured by any Lien.
SECTION 4.15. Limitation on Lines of Business.
The Subject Entity will not, and will not cause or permit any of its
Subsidiaries to, directly or indirectly, engage in any line or lines of business
other than a Related Business.
SECTION 4.16. Waiver of Stay, Extension or Usury Laws.
Each of the Company and the Guarantors covenants (to the extent that it
may lawfully do so) that it shall not at any time voluntarily 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 which would prohibit or
forgive the
53
Company or any Guarantor from paying all or any portion of the principal of,
premium, if any, or interest on the Securities or any amounts due under the
Guarantees as contemplated herein, wherever enacted, now or at any time
hereafter in force; and (to the extent that it may lawfully do so) each of the
Company and the Guarantors 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 relating to any such law,
but will suffer and permit the execution of every such power as though no such
law had been enacted.
SECTION 4.17. Reorganization as a Holding Company.
The Company will not reorganize into a holding company structure (the
"Reorganization") unless (i) immediately after giving effect to the
Reorganization, the Holding Company shall own, directly, all of the outstanding
Capital Stock (other than directors' qualifying shares) of the Company (provided
that the Holding Company may thereafter cease to own such Capital Stock directly
so long as the Company shall at all times be a Wholly-Owned Subsidiary of the
Holding Company); (ii) immediately after giving affect to the Reorganization,
the Initial Parent shall own, directly, all of the outstanding Capital Stock
(other than directors' qualifying shares) of the Holding Company and shall not
own any other Capital Stock (provided that the Parent may thereafter cease to
directly own all of the outstanding Capital Stock of Holding Company so long as
Holding Company shall at all times be a Subsidiary of Parent, and the Parent
also may thereafter own other Capital Stock); (iii) effective upon consummation
of the Reorganization, the holders of outstanding shares of the Company's
Capital Stock shall generally become holders of Capital Stock of Initial Parent;
(iv) no Event of Default shall exist or shall occur immediately after giving
effect to the Reorganization; (v) the Initial Parent shall have conducted no
business or operations prior to the Reorganization other than in connection with
the Reorganization and matters reasonably related thereto (except that Initial
Parent may be a guarantor under and a party to the New Credit Agreement) and,
immediately prior to and at the time of the Reorganization, the total
Investments made by the Company and its other Subsidiaries in Initial Parent
shall be less than $100,000 and Initial Parent's total assets shall be less than
$100,000; (vi) the Reorganization is not structured with the intention of
evading the effect of the restrictive covenants and other provisions of this
Indenture; and (vii) the Company shall have delivered to the Trustee an
Officers' Certificate to the effect that the Reorganization has been effected in
compliance with this paragraph and an Opinion of Counsel to the effect that the
conditions to the Reorganization set forth in this Indenture have been
satisfied. If the Reorganization is effected in accordance with the provisions
of this Section 4.17, then the Reorganization shall not be deemed to constitute
a breach of or default under any provision of this Indenture and may be effected
notwithstanding anything in this Indenture to the contrary. The provisions of
this Section 4.17 shall permit one Reorganization only.
Anything in this Indenture to the contrary notwithstanding, in the event
that the Company shall organize one or more subsidiaries solely for the purpose
of acting as merger subsidiaries in connection with the Reorganization (each, a
"Merger Subsidiary"), the Company will not be required to cause any such Merger
Subsidiary to become a Guarantor prior to the Reorganization so long as such
Merger Subsidiary has assets of less than $10,000 at all times prior to the
Reorganization and conducts no business or operations other than in connection
with the Reorganization and matters reasonably related thereto.
Anything in this Indenture to the contrary notwithstanding (a) from and
after the date of the Reorganization, the Subject Entity will cause the Company
at all times to be a Wholly-Owned Subsidiary of the Subject Entity, and (b) the
Subject Entity will not cause or permit any of its Non-Guarantor Foreign
Subsidiaries to own any Capital Stock of the Subject Entity or any of its
Domestic Subsidiaries or Guarantor
54
Foreign Subsidiaries, and (c) the Subject Entity will not cause or permit any of
its Unrestricted Subsidiaries to own any Capital Stock of the Subject Entity or
any of its Subsidiaries.
ARTICLE V
SUCCESSOR CORPORATION
SECTION 5.1. Limitation on Merger, Sale or Consolidation.
The Company will not, directly or indirectly, consolidate with or merge
with or into any other person or sell, lease, convey, assign, transfer or
otherwise dispose of all or substantially all of its properties and assets
(computed on a consolidated basis), whether in a single transaction or a series
of related transactions, to any other person or persons, or adopt a plan of
liquidation, unless (i) either (a) if the transaction or series of transactions
is a merger, the Company shall be the surviving person of such merger, or (b)
the person formed by such consolidation or into which the Company is merged or
to which the properties and assets of the Company are transferred or, in the
case of a plan of liquidation, the entity which receives the greatest value from
such plan of liquidation (any such surviving person or transferee person or
person receiving the greatest such value referred to in this clause (b) being
hereinafter called the "Surviving Entity") shall be a corporation organized and
existing under the laws of the United States of America, any state thereof or
the District of Columbia and shall expressly assume by a supplemental indenture,
executed and delivered to the Trustee and in form reasonably satisfactory to the
Trustee, all the obligations of the Company under the Securities and this
Indenture (and such supplemental indenture shall also be executed by each
Guarantor and shall further provide that each Guarantor confirms that its
obligations under this Indenture and its Guarantee remain in full force and
effect); (ii) no Default or Event of Default shall exist or shall occur
immediately after giving effect to such transaction or series of transactions
(including, without limitation, any Indebtedness Incurred or to be Incurred in
connection with such transaction or series of transactions) on a pro forma
basis; (iii) immediately after giving effect to such transaction or series of
transactions (including, without limitation, any Indebtedness Incurred or to be
Incurred in connection with such transaction or series of transactions) on a pro
forma basis, the Subject Entity would immediately thereafter be permitted to
Incur at least $1.00 of additional Indebtedness pursuant to the Debt Incurrence
Ratio set forth in the second paragraph of Section 4.10 above; (iv) if such
transaction or series of transactions shall occur in connection with or at any
time from and after the date of the Reorganization, immediately after giving
effect to such transaction or series of transactions the Company or the
Surviving Entity, as applicable, shall be a Wholly-Owned Subsidiary of the
Holding Company; and (v) the Company shall deliver or cause to be delivered to
the Trustee an Officers' Certificate (in form and substance reasonably
satisfactory to the Trustee) stating that such transaction or series of
transactions, as applicable, and, if a supplemental indenture is required in
connection therewith, such supplemental indenture comply with this Indenture and
that all conditions precedent herein relating to such transaction or series of
transactions have been complied with and an Opinion of Counsel (in form and
substance reasonably satisfactory to the Trustee) stating that such transaction
or series of transactions, as applicable, and, if a supplemental indenture is
required in connection therewith, such supplemental indenture comply with the
requirements of clause (i) of this paragraph and that the conditions precedent
provided in clause (iv) of this paragraph have been complied with; provided that
the conditions set forth in clause (iii) of this sentence shall not apply to the
merger of any Guarantor into the Company.
For purposes of the foregoing, the sale, lease, conveyance, assignment,
transfer or other disposition of all or substantially all of the properties and
assets of one or more Subsidiaries of the Company, the Capital
55
Stock of which constitutes all or substantially all of the properties and assets
of the Company, shall be deemed to be the transfer of all or substantially all
of the properties and assets of the Company on a consolidated basis.
SECTION 5.2. Successor Corporation Substituted.
Upon any consolidation or merger or any transfer of all or substantially
all of the assets of the Company or consummation of a plan of liquidation in
accordance with Section 5.1, the successor corporation formed by such
consolidation or into which the Company is merged or to which such transfer is
made or, in the case of a plan of liquidation, the corporation which receives
the greatest value from such plan of liquidation, shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Indenture and the Securities with the same effect as if such successor
corporation had been named herein and therein as the Company, and thereafter,
except in the case of a lease, the predecessor corporation shall be released
from all obligations under the Securities and this Indenture.
ARTICLE VI
EVENTS OF DEFAULT AND REMEDIES
SECTION 6.1. Events of Default.
"Event of Default," wherever used herein, means any one of the following
events (whatever the reason for such Event of Default and whether it shall be
caused voluntarily or involuntarily or effected, without limitation, by
operation of law, by operation of Article XII hereof, or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(a) default in the payment of any principal of or premium, if any,
on any of the Securities when the same becomes due and payable (upon
Stated Maturity, acceleration, optional redemption, required purchase in
connection with a Change of Control Offer or Asset Sale Offer, scheduled
principal payment or otherwise); or
(b) default in the payment of any interest on, or any Liquidated
Damages, if any, with respect to, any of the Securities when the same
becomes due and payable, which default continues for a period of 30 days;
or
(c) default by the Company, the Holding Company or any Subsidiary
Guarantor in the performance or observance of any other term, covenant or
agreement contained in the Securities or this Indenture (other than a
default specified in clause (a) or (b) above) and (A) in the case of a
default in the performance of the covenant set forth in clause (a) of the
third paragraph of Section 4.17, written notice of such default shall have
been given to the Company by the Trustee or to the Company and the Trustee
by Holders of at least 25% in aggregate principal amount of the Securities
then outstanding or (B) in any other case, such default continues for a
period of 30 days after written notice of such default shall have been
given to the Company by the Trustee or to the Company and the Trustee by
Holders of at least 25% in aggregate principal amount of the Securities
then outstanding; or
56
(d) a default under any mortgage, indenture or other instrument or
agreement under which there may be issued or by which there may be secured
or evidenced any Indebtedness of the Subject Entity or any Subsidiary of
the Subject Entity, whether such Indebtedness exists on the date of this
Indenture or shall be incurred thereafter, if (A) such default results
from the failure to pay any such Indebtedness at its stated final maturity
(after giving effect to any applicable grace period) or as a result of
such default such Indebtedness has been declared due and payable or
otherwise accelerated prior to its stated final maturity and (B) the sum
of (x) the aggregate principal amount of such Indebtedness plus (y) the
aggregate principal amount of all other such Indebtedness in default for
failure to pay any such Indebtedness at its stated final maturity (after
giving effect to any applicable grace period) or which has been so
declared due and payable or otherwise accelerated prior to its stated
final maturity, aggregates more than $20,000,000; or
(e) one or more final judgments, orders or decrees of any court or
regulatory or administrative agency of competent jurisdiction for the
payment of money (to the extent not covered by insurance) in excess of
$20,000,000, either individually or in the aggregate, shall be entered
against Subject Entity or any Subsidiary of the Subject Entity or any
property of the Subject Entity or any Subsidiary of the Subject Entity and
shall not be discharged or fully bonded and there shall have been a period
of 60 days after the date on which any period for appeal has expired and
during which a stay of enforcement of such judgment, order or decree shall
not be in effect; or
(f) any Guarantor denies that it has any further liability under its
Guarantee or gives notice to such effect (other than by reason of the
termination of this Indenture or the release of any such Guarantee in
accordance with this Indenture or, in the case of any Guarantor which is
not (A) a Significant Subsidiary of the Subject Entity or (B) from and
after the Reorganization, the Subject Entity, if such denial or notice is
given by a trustee in bankruptcy, receiver or other similar person in
connection with bankruptcy, insolvency, reorganization or similar
proceedings relating to such Guarantor) or, prior to the Reorganization,
any Guarantee of a Significant Subsidiary of the Subject Entity is
declared or adjudged invalid in a final judgment or order issued by any
court or governmental authority of competent jurisdiction or, from and
after the Reorganization, the Guarantee of the Subject Entity or any
Guarantor which is a Significant Subsidiary of the Subject Entity is
declared or adjudged invalid in a final judgment or order issued by any
court or governmental authority of competent jurisdiction; or
(g) the commencement by the Company, the Holding Company, the Parent
or any Significant Subsidiary of the Subject Entity of a voluntary case or
proceeding under any Bankruptcy Law or the consent by the Company, the
Holding Company, the Parent or any Significant Subsidiary of the Subject
Entity to the entry of an order for relief or similar decree in respect of
the Company, the Holding Company, the Parent or any Significant Subsidiary
of the Subject Entity in an involuntary case or proceeding under any
Bankruptcy Law or the filing by the Company, the Holding Company, the
Parent or any Significant Subsidiary of the Subject Entity of a petition,
answer or consent seeking reorganization or relief under any Bankruptcy
Law, or the consent by the Company, the Holding Company, the Parent or any
Significant Subsidiary of the Subject Entity to the filing of any such
petition or to the appointment of or taking possession by a Custodian of
the Company, the Holding Company, the Parent or any Significant Subsidiary
of the Subject Entity or of any substantial part of the property of the
Company, the Holding Company, the Parent or any Significant Subsidiary of
the Subject Entity, or the making by the Company, the Holding Company, the
Parent or any Significant Subsidiary of the Subject Entity of an
assignment for the benefit of creditors, or the admission by the
57
Company, the Holding Company, the Parent or any Significant Subsidiary of
the Subject Entity in writing that it is bankrupt, insolvent or unable to
pay its debts generally as they become due, or the taking of corporate,
company or partnership action, as the case may be, by the Company, the
Holding Company, the Parent or any Significant Subsidiary of the Subject
Entity in furtherance of any such action; or
(h) the entry by a court having jurisdiction in the premises of a
judgment, decree or order for relief in respect of the Company, the
Holding Company, the Parent or any Significant Subsidiary of the Subject
Entity in an involuntary case or proceeding under any applicable
Bankruptcy Law, or determining that the Company, the Holding Company, the
Parent or any Significant Subsidiary of the Subject Entity is bankrupt or
insolvent or that the Company, the Holding Company, the Parent or any
Significant Subsidiary of the Subject Entity is entitled to seek
reorganization, arrangement, adjustment or composition of its
indebtedness, or appointing a Custodian of or for the Company, the Holding
Company, the Parent or any Significant Subsidiary of the Subject Entity or
any substantial part of property of the Company, the Holding Company, the
Parent or any Significant Subsidiary of the Subject Entity, or ordering
the winding up or liquidation of the affairs of the Company, the Holding
Company, the Parent or any Significant Subsidiary of the Subject Entity,
and any such judgment, order or decree shall remain unstayed and in effect
for a period of 60 consecutive days.
SECTION 6.2. Acceleration of Maturity Date, Rescission and Annulment.
If an Event of Default occurs and is continuing (other than an Event of
Default specified in Section 6.1 (g) or (h)) then in every such case, unless the
principal of all of the Securities shall have already become due and payable,
either the Trustee or the Holders of at least 25% in aggregate principal amount
of the Securities then outstanding, by notice in writing to the Company (and to
the Trustee if given by Holders) (an "Acceleration Notice"), may declare the
principal of, and accrued and unpaid interest on, and accrued and unpaid
Liquidated Damages, if any, with respect to, all of the outstanding Securities
to be due and payable immediately, and upon such declaration all such amounts
shall be and become immediately due and payable. If an Event of Default
specified in Section 6.1 (g) or (h) occurs, then the principal of, and accrued
and unpaid interest on, and accrued and unpaid Liquidated Damages, if any, with
respect to, all of the outstanding Securities shall ipso facto become and be
immediately due and payable without any declaration or other act on the part of
Trustee or any of the Holders.
At any time after such a declaration of acceleration has been made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter provided in this Article VI, the Holders of at least
a majority in aggregate principal amount of then outstanding Securities, by
written notice to the Company and the Trustee, may rescind, on behalf of all
Holders, such declaration of acceleration and its consequences if:
(1) the Company has paid or deposited with the Trustee Cash
sufficient to pay
(A) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee and its agents and counsel, and any other amounts due the
Trustee under Section 7.7,
58
(B) all interest on and Liquidated Damages, if any, with
respect to the Securities which has become due otherwise than by
such declaration of acceleration and, to the fullest extent
permitted by law, interest thereon at the rate of interest borne by
the Securities, and
(C) the principal of and premium, if any, on any Securities
which have become due otherwise than by such declaration of
acceleration, and, to the fullest extent permitted by law, interest
thereon at the rate of interest borne by the Securities, and
(2) such rescission would not conflict with any judgment or decree
of a court of competent jurisdiction, and
(3) all Events of Default, other than the non-payment of the
principal of, and interest on and Liquidated Damages, if any, with respect
to, the Securities which have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 6.12.
Notwithstanding the previous sentence of this Section 6.2, no waiver shall
be effective against any Holder for any Event of Default or event which with
notice or lapse of time or both would be an Event of Default with respect to (i)
any covenant or provision which cannot be modified or amended without the
consent of the Holder of each outstanding Security affected thereby unless all
such affected Holders agree, in writing, to waive such Event of Default or other
event and (ii) any provision requiring supermajority approval to amend unless
such Event of Default or other event has been waived by such a supermajority. No
such waiver shall cure or waive any subsequent default or impair any right
consequent thereon.
The Trustee shall provide to each Senior Debt Representative a copy of
each Acceleration Notice that it sends, and of each Acceleration Notice and
notice of rescission of a declaration of acceleration that it receives, under
this Section 6.2, on the date that the Trustee sends any such notice, and as
promptly as possible following the date that the Trustee receives any such
notice.
SECTION 6.3. Collection of Indebtedness and Suits for Enforcement by
Trustee.
The Company covenants that if an Event of Default in payment of principal,
premium, interest or Liquidated Damages specified in clause (a) or (b) of
Section 6.1 occurs and is continuing, the Company shall, upon demand of the
Trustee, pay to it, for the benefit of the Holders of the Securities, the whole
amount then due and payable on the Securities for principal, premium (if any),
interest and Liquidated Damages (if any), and, to the extent that payment of
such interest shall be legally enforceable, interest on any overdue principal,
premium (if any), interest and Liquidated Damages (if any) at the rate of
interest borne by the Securities, computed semi-annually, and, in addition
thereto, such further amount as shall be sufficient to cover the costs and
expenses of collection, including compensation to, and expenses, disbursements
and advances of the Trustee and its agents and counsel and all other amounts due
the Trustee under Section 7.7.
If the Company fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name and as trustee of an express trust in favor of the
Holders, may institute a judicial proceeding for the collection of the sums so
due and unpaid, may prosecute such proceeding to judgment or final decree and
may enforce the same against the Company, any Guarantor or any other obligor
upon the Securities or the Guarantees and collect the moneys adjudged or decreed
to be payable in the manner provided by law out of the property of the Company,
any Guarantor or any other obligor upon the Securities or the Guarantees,
wherever situated.
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If an Event of Default occurs and is continuing, the Trustee may in its
discretion proceed to protect and enforce its rights and the rights of the
Holders by such appropriate judicial proceedings as the Trustee shall deem most
effective to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 6.4. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company, any Guarantor or any other obligor
upon the Securities or the Guarantees or the property of the Company, any
Guarantor or of such other obligor or its creditors, the Trustee (irrespective
of whether the principal of the Securities shall then be due and payable as
therein expressed or by declaration or otherwise and irrespective of whether the
Trustee shall have made any demand on the Company or any Guarantor for the
payment of overdue principal or premium, if any, or interest or Liquidated
Damages, if any) shall be entitled and empowered, by intervention in such
proceeding or otherwise to take any and all actions under the TIA, including
(1) to file and prove a claim for the whole amount of
principal (and premium, if any) and interest and Liquidated Damages
(if any) owing and unpaid in respect of the Securities and to file
such 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 and its agent and counsel and all other amounts due the
Trustee under Section 7.7) and of the Holders allowed in such
judicial proceeding, and
(2) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute the
same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee 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 it for the reasonable compensation, expenses,
disbursements and advances of the Trustee and 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 Guarantees or the rights of any Holder of the Securities or to authorize
the Trustee to vote in respect of the claim of any Holder in any such
proceeding.
SECTION 6.5. Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the Securities may
be prosecuted and enforced by the Trustee without the possession of any of the
Securities or the production thereof in any proceeding relating thereto, and any
such proceeding instituted by the Trustee shall be brought in its own name as
trustee of an express trust in favor of the Holders, and any recovery of
judgment shall, after provision for the payment of compensation to, and
expenses, disbursements and advances of, the Trustee, its agents and
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counsel and all other amounts due the Trustee under Section 7.7, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
SECTION 6.6. Priorities.
Any money collected by the Trustee pursuant to this Article VI shall,
subject to Article XII, be applied in the following order, at the date or dates
fixed by the Trustee and, in case of the distribution of such money on account
of principal, premium (if any), interest or Liquidated Damages, if any, upon
presentation of the Securities and the notation thereon of the payment if only
partially paid and upon surrender thereof if fully paid:
FIRST: To the Trustee in payment of all amounts due pursuant to
Section 7.7;
SECOND: To the Holders in payment of the amounts then due and unpaid
for principal of, premium (if any) and interest on, and Liquidated Damages in
respect of, the Securities in respect of which or for the benefit of which such
money has been collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on such Securities for principal,
premium (if any) and interest, respectively; and
THIRD: To the Company or such other Person as may be lawfully
entitled thereto, the remainder, if any.
The Trustee may, but shall not be obligated to, fix a record date and
payment date for any payment to the Holders under this Section 6.6.
SECTION 6.7. Limitation on Suits.
Subject to Section 6.8, no Holder of any Security shall have any right to
institute any proceeding, judicial or otherwise, with respect to this Indenture,
or for the appointment of a receiver or trustee, or pursue any remedy with
respect to this Indenture or the Securities, unless
(A) such Holder has previously given written notice to the Trustee
of a continuing Event of Default;
(B) the Holders of not less than 25% in aggregate principal amount
of then outstanding Securities shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default in
its own name as Trustee hereunder;
(C) such Holder or Holders have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities to be
incurred or reasonably probable to be incurred in compliance with such
request;
(D) the Trustee for 30 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
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(E) no direction inconsistent with such written request has been
received by the Trustee during such 30-day period from the Holders of at
least a majority in aggregate principal amount of the outstanding
Securities;
it being understood and intended that no one or more Holders shall have any
right in any manner whatsoever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders,
or to obtain or to seek to obtain priority or preference over any other Holders
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all the Holders.
SECTION 6.8. Unconditional Right of Holders to Receive Principal, Premium
and Interest.
Notwithstanding any other provision of this Indenture, the Holder of any
Security shall have the right, which is absolute and unconditional, to receive
payment of the principal of, and premium (if any) and interest on or Liquidated
Damages (if any) with respect to, such Security on the respective dates such
payments are due as expressed in such Security (in the case of redemption, the
Redemption Price on the applicable Redemption Date, in the case of an Asset Sale
Offer, the Asset Sale Offer Price on the Purchase Date, and in the case of a
Change of Control Offer, the Change of Control Purchase Price on the Change of
Control Purchase Date) and to institute suit for the enforcement of any such
payment after such respective dates, and such rights shall not be impaired
without the consent of such Holder.
SECTION 6.9. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Securities in Section 2.7, no right or
remedy herein conferred upon or reserved to the Trustee or to the Holders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 6.10. Delay or Omission Not Waiver.
No delay or omission by the Trustee or by any Holder of any Security to
exercise any right or remedy arising upon any Event of Default shall impair the
exercise of any such right or remedy or constitute a waiver of any such Event of
Default. Every right and remedy given by this Article VI or by law to the
Trustee or to the Holders may be exercised from time to time, and as often as
may be deemed expedient, by the Trustee or by the Holders, as the case may be.
SECTION 6.11. Control by Holders.
The Holder or Holders of not less than a majority in aggregate principal
amount of then outstanding Securities shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee or exercising any trust or power conferred upon the Trustee, provided,
that
(1) such direction shall not be in conflict with any rule of
law or with this Indenture or involve the Trustee in personal
liability,
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(2) the Trustee shall not determine that the action so
directed would be unjustly prejudicial to the Holders not taking
part in such direction, and
(3) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 6.12. Waiver of Past Default.
Subject to Section 6.8, the Holder or Holders of not less than a majority
in aggregate principal amount of the Securities then outstanding may, on behalf
of the Holders of all of the Securities, waive any past default under this
Indenture or the Securities and its consequences, except a default
(A) in the payment of the principal of, premium, if any, or
interest on, or Liquidated Damages, if any, with respect to any
Securities;
(B) in respect of a covenant or provision which, under Article
IX, cannot be modified or amended without the consent of the Holder
of each outstanding Security affected; or
(C) in respect of any provision hereof which, under Article
IX, cannot be modified, amended or waived without the consent of the
Holders of at least 662/3% of the aggregate principal amount of the
Securities at the time outstanding; provided, that any such waiver
may be effected with the consent of the Holders of at least 662/3%
of the aggregate principal amount of the Securities then
outstanding.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
default or impair the exercise of any right arising therefrom.
SECTION 6.13. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Security by
his acceptance thereof shall be deemed to have agreed, that 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, suffered or omitted to be taken by it as
Trustee, any court may in its discretion require the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section 6.13 shall not apply to any suit instituted
by the Company, to any suit instituted by the Trustee, to any suit instituted by
any Holder, or group of Holders, holding in the aggregate more than 10% in
aggregate principal amount of the outstanding Securities, or to any suit
instituted by any Holder for enforcement of the payment of principal of, or
premium (if any) or interest on, or Liquidated Damages (if any) with respect to
any Security on or after the respective dates such payments are due as expressed
in such Security (in the case of redemption, the Redemption Price on the
applicable Redemption Date, in the case of an Asset Sale Offer the Asset Sale
Offer Price on the Purchase Date, and in the case of a Change of Control Offer,
the Change of Control Purchase Price on the Change of Control Purchase Date).
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SECTION 6.14. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce any
right or remedy under this Indenture and such proceeding has been discontinued
or abandoned for any reason, or has been determined adversely to the Trustee or
to such Holder, then and in every case, subject to any determination in such
proceeding, the Company, the Guarantors, the Trustee and the Holders shall be
restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
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, subject to the
terms hereof.
SECTION 7.1. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture and use the same degree of care and skill in the exercise thereof as a
prudent Person would exercise or use under the circumstances in the conduct of
such Person's own affairs.
(b) Except during the continuance of an Event of Default:
(1) The Trustee need perform only those duties as are
specifically set forth in this Indenture and no others, and no
covenants or obligations shall be implied in or read into this
Indenture which are adverse to the Trustee, and
(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, in the case of any such certificates or
opinions which by any provision hereof are specifically required to
be furnished to the Trustee, 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 it, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts, and
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(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 6.11.
(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 to take or omit to take any action
under this Indenture or at the request, order or direction of the Holders 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), (d) and (f) 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 in writing with the Company.
Assets held in trust by the Trustee need not be segregated from other assets
except to the extent required by law.
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 advice of counsel.
(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 it takes or omits
to take in good faith which it believes to be authorized or within its rights or
powers conferred upon it by this Indenture, nor for any action permitted to be
taken or omitted hereunder by any Agent.
(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.
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(g) Unless otherwise specifically provided for in this Indenture,
any demand, request, direction or notice from the Company or any Guarantor shall
be sufficient if signed by an Officer of the Company or such Guarantor, as
applicable.
(h) The Trustee shall have no duty to inquire as to the performance
of the Company's or any Guarantor's covenants in Article IV hereof or as to the
performance by any Agent of its duties hereunder. In addition, the Trustee shall
not be deemed to have knowledge of any Default or Event of Default except any
Default or Event of Default of which the Trustee shall have received written
notification or with respect to which a Trust Officer shall have actual
knowledge.
(i) Whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its part,
rely upon an Officers' Certificate.
SECTION 7.3. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the owner
or pledgee of Securities and may otherwise deal with the Company, any Guarantor,
any of their 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 and it shall not be accountable for the Company's
use of the proceeds from the Securities, and it shall not be responsible for any
statement in the Securities, other than the Trustee's certificate of
authentication (if executed by the Trustee), or the use or application of any
funds received by a Paying Agent other than the Trustee.
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 Securityholder and the
Senior Bank Representative notice of the Default or Event of Default within 30
days after obtaining knowledge thereof. Except in the case of a default in
payment of principal (or premium, if any) of, or interest on, or Liquidated
Damages (if any) in respect of, any Security (including the payment of the
Change of Control Purchase Price on the Change of Control Purchase Date, the
payment of the Redemption Price on the Redemption Date or the payment of the
Asset Sale Price on the Purchase Date), the Trustee may withhold the notice if
and so long as a committee of Trust Officers in good faith determines that
withholding the notice is in the interest of the Securityholders.
SECTION 7.6. Reports by Trustee to Holders.
Within 60 days after each May 15, beginning with May 15, 1997, the Trustee
shall, if required by law, mail to each Securityholder a brief report dated as
of such May 15 that complies with TIA ss. 313(a). The Trustee also shall comply
with TIA ▇▇.▇▇. 313(b) and 313(c).
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The Company shall promptly notify the Trustee in writing if the Securities
become listed on any stock exchange or automated quotation system.
A copy of each report at the time of its mailing to Securityholders shall
be mailed to the Company and filed with the SEC and each stock exchange, if any,
on which the Securities are listed.
SECTION 7.7. Compensation and Indemnity.
The Company and the Guarantors jointly and severally agree to 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. The Company and the Guarantors jointly and
severally shall reimburse the Trustee upon request for all reasonable
disbursements, expenses and advances incurred or made by it in accordance with
this Indenture. Such expenses shall include the reasonable compensation,
disbursements and expenses of the Trustee's agents, accountants, experts and
counsel.
The Company and the Guarantors jointly and severally agree to indemnify
the Trustee (in its capacity as Trustee) and each of its officers, directors,
attorneys-in-fact and agents for, and hold it harmless against, any claim,
demand, expense (including but not limited to reasonable compensation,
disbursements and expenses of the Trustee's agents and counsel), loss or
liability incurred by it without negligence or bad faith on the part of the
Trustee, arising out of or in connection with the administration of this trust
and its rights or duties hereunder including the reasonable costs and expenses
of defending itself against any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder. The Trustee
shall notify the Company promptly of any claim asserted against the Trustee for
which it may seek indemnity. The Company and the Guarantors shall defend the
claim and the Trustee shall provide reasonable cooperation at the Company's and
the Guarantors' expense in the defense. The Trustee may have separate counsel
and the Company and the Guarantors shall pay the reasonable fees and expenses of
such counsel. The Company and the Guarantors need not pay for any settlement
made without their written consent, which consent shall not be unreasonably
withheld. The Company and the Guarantors 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. The obligations of the
Company and the Guarantors under this Section 7.7 to compensate the Trustee, to
pay or reimburse the Trustee for reasonable expenses, disbursements and advances
and to indemnify the Trustee shall constitute additional indebtedness hereunder.
Such additional indebtedness shall not be subordinated to the payment of Senior
Debt pursuant to Article XII.
To secure the Company's and the Guarantors' 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 on, or premium, if any, of or interest on, or
Liquidated Damages (if any) in respect of, particular Securities.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.1(g) or (h) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
The Company's and the Guarantors' obligations under this Section 7.7 and
any lien arising hereunder shall survive the resignation or removal of the
Trustee, the discharge of the Company's and the Guarantors' obligations pursuant
to Article VIII of this Indenture and any rejection or termination of this
Indenture under any Bankruptcy Law.
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SECTION 7.8. Replacement of Trustee.
The Trustee may resign by so notifying the Company in writing, to become
effective upon the appointment of a successor trustee. The Holder or Holders of
a majority in aggregate principal amount of the outstanding Securities may
remove the Trustee by so notifying the Company and the Trustee in writing and
may appoint a successor trustee with the Company's consent. The Company may
remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10;
(b) the Trustee is adjudged bankrupt or insolvent;
(c) a receiver, Custodian, or other public officer takes charge of
the Trustee or its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holder or
Holders of a majority in aggregate principal amount of the outstanding
Securities may appoint a successor Trustee to replace the successor Trustee
appointed by the Company.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Immediately after that and provided
that all sums owing to the retiring Trustee provided for in Section 7.7 have
been paid, 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, the Company or the
Holder or 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.
If the Trustee fails to comply with Section 7.10, any Securityholder 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,
the Company's and the Guarantors' obligations under Section 7.7 shall continue
for the benefit of the retiring Trustee.
SECTION 7.9. Successor Trustee by ▇▇▇▇▇▇, 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.
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SECTION 7.10. Eligibility: Disqualification.
The Trustee shall at all times satisfy the requirements of TIA ss.
310(a)(1), (2) and (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 ss. 310(b).
SECTION 7.11. Preferential Collection of Claims Against Company.
The Trustee shall comply with TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 31l(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated.
ARTICLE VIII
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.1. Option to Effect Legal Defeasance or Covenant Defeasance.
The Company may, at its option and at any time, elect to have Section 8.2
or Section 8.3 applied to all outstanding Securities upon compliance with the
conditions set forth below in this Article VIII.
SECTION 8.2. Legal Defeasance and Discharge.
Upon the Company's exercise under Section 8.1 of the option applicable to
this Section 8.2, the Company and the Guarantors shall be deemed to have been
discharged from their respective obligations with respect to all outstanding
Securities on the date the conditions set forth below are satisfied
(hereinafter, "Legal Defeasance"). For this purpose, such Legal Defeasance means
that the Company shall be deemed to have paid and discharged the entire
Indebtedness represented by the outstanding Securities, which shall thereafter
be deemed to be "outstanding" only for the purposes of Section 8.5 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 the Company, shall execute
proper instruments acknowledging the same), except for the following which shall
survive until otherwise terminated or discharged hereunder: (a) rights of
Holders to receive payments in respect of the principal of, premium, if any, and
interest on the Securities when such payments are due from the trust funds
described below and the rights of Holders to receive payments of Liquidated
Damages, if any, pursuant to the Registration Rights Agreement; (b) the
Company's obligations with respect to such Securities concerning issuing
temporary Securities, registration of Securities, mutilated, destroyed, lost or
stolen Securities, and the maintenance of an office or agency for payment and
money for security payments held in trust; (c) the rights, powers, trust,
duties, and immunities of the Trustee, and the Company's and the Guarantor's
obligations in connection therewith; and (d) this Article VIII. Without
limitation to the foregoing, the provisions of Article XII shall not be
operative from and after the effectiveness of Legal Defeasance. Upon Legal
Defeasance as provided herein, the Guarantee of each Guarantor shall be fully
released and discharged and the Trustee shall promptly execute and deliver to
the Company any documents reasonably requested by the Company to evidence or
effect the foregoing. Subject to compliance with this Article VIII, the Company
may exercise its option under this Section 8.2 notwithstanding the prior
exercise of its option under Section 8.3 with respect to the Securities.
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SECTION 8.3. Covenant Defeasance.
Upon the Company's exercise under Section 8.1 of the option applicable to
this Section 8.3, the Company and the Guarantors shall be released from their
respective obligations under the covenants contained in Sections 4.3, 4.5, 4.6,
4.7, 4.9, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.17 (other than clause (a) of the
third paragraph of Section 4.17), Article V and Article X 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. For this purpose, such Covenant
Defeasance means that, with respect to the outstanding Securities, the Company
need not 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 Section 6.1 (c) shall not apply to any such
covenant), but, except as specified above, the remainder of this Indenture and
such Securities shall be unaffected thereby. Without limitation to the
foregoing, the provisions of Article XII shall not be operative from and after
the effectiveness of Covenant Defeasance.
SECTION 8.4. Conditions to Legal or Covenant Defeasance.
The following shall be the conditions to the application of either Section
8.2 or Section 8.3 to the outstanding Securities:
(a) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfactory to the Trustee
satisfying the requirements of Section 7.10 who shall agree to comply with the
provisions of this Article VIII applicable to it) as trust funds in trust for
the purpose of making the following payments, specifically pledged as security
for, and dedicated solely to, the benefit of the Holders of such Securities, (a)
Cash in an amount, or (b) U.S. Government Obligations which through the
scheduled payment of principal and interest in respect thereof in accordance
with their terms will provide, not later than one day before the due date of any
payment, Cash in an amount, or (c) a combination thereof, in such amounts as in
each case will be sufficient, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, to pay and discharge and which shall be applied by the
Paying Agent (or other qualifying trustee) to pay and discharge the principal
of, premium, if any, and interest on, the outstanding Securities as and when the
same shall become due and payable in accordance with the terms of this Indenture
and the Securities; provided that the Paying Agent shall have been irrevocably
instructed to apply such Cash and the proceeds of such U.S. Government
Obligations to said payments with respect to the Securities. The Paying Agent
shall promptly advise the Trustee in writing of any Cash or U.S. Government
Obligations deposited pursuant to this Section 8.4;
(b) In the case of an election under Section 8.2, the Company shall
have delivered to the Trustee an Opinion of Counsel from independent legal
counsel in the United States reasonably acceptable to the Trustee confirming
that, since the date of this Indenture (i) the Company has received from, or
there has been published by, the Internal Revenue Service a ruling or (ii) there
has been a change in the applicable Federal income tax law, in either case to
the effect that, and based thereon such opinion shall confirm that, the Holders
of the outstanding Securities will not recognize income, gain or loss for
Federal income tax purposes as a result of such Legal Defeasance and will be
subject to Federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such Legal Defeasance had not
occurred;
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(c) In the case of an election under Section 8.3, the Company shall
have delivered to the Trustee an Opinion of Counsel from independent legal
counsel in the United States reasonably acceptable to the Trustee confirming
that the Holders of the outstanding Securities will not recognize income, gain
or loss for Federal income tax purposes as a result of such Covenant Defeasance
and will be subject to Federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such Covenant
Defeasance had not occurred;
(d) No Default or Event of Default shall have occurred and be
continuing on the date of such deposit or, insofar as Events of Default under
Section 6.1(g) or Section 6.1(h) are concerned, at any time in the period ending
on the 91st day after the date of such deposit (it being understood that this
condition is a condition subsequent which shall not be deemed satisfied until
the expiration of such period);
(e) Such Legal Defeasance or Covenant Defeasance shall not result in
a breach or violation of, or constitute a default under, this Indenture or any
other material agreement or instrument to which the Subject Entity or any of its
Subsidiaries is a party or by which the Subject Entity or any of its
Subsidiaries is bound;
(f) In the case of an election under either Section 8.2 or 8.3, the
Company shall have delivered to the Trustee an Officers' Certificate stating
that the deposit made by the Company pursuant to its election under Section 8.2
or 8.3 was not made by the Company with the intent of preferring the Holders
over any other creditors of the Company or the Guarantors or with the intent of
defeating, hindering, delaying or defrauding any other creditors of the Company
or the Guarantors or others;
(g) The Company shall have delivered to the Trustee an Opinion of
Counsel from independent legal counsel in the United States reasonably
acceptable to the Trustee to the effect that, after the 91st day following such
deposit, the trust funds deposited pursuant to clause (a) above will not be
subject to the effect of any applicable bankruptcy, insolvency, reorganization
or similar laws affecting creditors' rights generally under any applicable U.S.
federal or state law and that the Trustee has a perfected security interest in
such trust funds for the ratable benefit of the Holders of the Securities;
(h) If the Cash or U.S. Government Obligations or combination
thereof, as applicable, deposited with the Trustee (or other qualifying trustee)
under clause (a) above are sufficient to pay and discharge the principal of,
premium, if any, and interest on the outstanding Securities provided such
Securities are redeemed on a particular Redemption Date, the Company shall have
given the Trustee irrevocable instructions to redeem such Securities on such
date and to provide notice of such redemption to Holders as provided in this
Indenture; and
(i) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that the conditions
precedent provided for in, in the case of the Officer's Certificate, clauses (a)
through (h), and, in the case of the Opinion of Counsel, clauses (b) or (c), as
applicable, (e) and (g) of this Section 8.4 have been complied with.
SECTION 8.5. Deposited Cash and U.S. Government Obligations to be Held in
Trust, Other Miscellaneous Provisions.
Subject to Section 8.6, all Cash and U.S. Government Obligations
(including the proceeds thereof) deposited with the Trustee (or other qualifying
trustee, collectively for purposes of this Section 8.5, the
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"Paying Agent") pursuant to Section 8.4 in respect of the outstanding Securities
shall be held in trust and applied by the Paying Agent, in accordance with the
provisions of such Securities and this Indenture, to the payment, either
directly or through any other Paying Agent 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.
SECTION 8.6. Repayment to the Company.
Anything in this Article VIII to the contrary notwithstanding, the Trustee
or the Paying Agent, as applicable, shall deliver or pay to the Company from
time to time upon the request of the Company any Cash or 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 Section 8.4(a) hereof), are in excess of the amount thereof that
would then be required to be deposited to effect an equivalent Legal Defeasance
or Covenant Defeasance.
Any Cash and U.S. Government Obligations (including the proceeds thereof)
deposited with the Trustee or any Paying Agent, or then held by the Company, in
trust for the payment of the principal of, premium, if any, or interest on and
Liquidated Damages, if any, any Security and remaining unclaimed for two years
after such principal, and premium, if any, or interest or Liquidated Damages, if
any, have become due and payable shall, subject to the requirements of
applicable law, be paid to the Company on its request; and the Holder of such
Security shall thereafter look only to the Company 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, may at the expense of the
Company cause to be published once, in the New York Times and The Wall Street
Journal (national edition), or mailed to each Holder entitled to such money
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 publication
or mailing, any unclaimed balance of such money then remaining will be repaid to
the Company.
SECTION 8.7. Reinstatement.
If the Trustee or Paying Agent is unable to apply any Cash or U.S.
Government Obligations deposited pursuant to Section 8.4 in accordance with this
Indenture or the Securities, by reason of any legal proceeding or by reason of
any order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, then the Company's and
the Guarantors' obligations under this Indenture and the Securities shall be
revived and reinstated as though no deposit had occurred pursuant to Section 8.4
until such time as the Trustee or Paying Agent is permitted to apply such money
in accordance with this Indenture or the Securities; provided, however, that, if
the Company makes any payment of principal of, premium, if any, or interest on
any Security following the reinstatement of its obligations, the Company shall
be subrogated to the rights of the Holders of such Securities to receive such
payment from the Cash and U.S. Government Obligations held by the Trustee or
Paying Agent.
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ARTICLE IX
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.1. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holder, the Company, when authorized by Board
Resolutions, the Guarantors, when authorized by Board Resolution (or, if any
Guarantor is not a corporation, when otherwise appropriately authorized) and the
Trustee, at any time and from time to time, may enter into one or more
indentures supplemental hereto, in form satisfactory to the Trustee, for any of
the following purposes:
(1) to cure any ambiguity, defect, or inconsistency;
(2) to evidence the succession of another Person to the Company in
accordance with this Indenture, and the assumption by any such successor of the
obligations of the Company, herein and in the Securities in accordance with
Article V;
(3) to evidence the succession of another Person to any Guarantor
and assumption by any such successor of the obligations of such Guarantor (as
set forth in Section 11.4) in accordance with Article XI;
(4) to evidence the release of any Guarantor in accordance with
Article XI;
(5) to evidence the addition of any new Guarantor in accordance with
this Indenture;
(6) to add to the covenants of the Company or the Guarantors for the
benefit of the Holders, or to surrender any right or power herein conferred upon
the Company or any of the Guarantors;
(7) to comply with the TIA;
(8) in any other case where a supplemental indenture is required or
permitted to be entered into pursuant to the provisions of Article XI without
the consent of any Holder;
(9) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities;
(10) to secure the Securities in accordance with the provisions of
Section 4.12;
(11) to provide for the issuance and authentication of the Exchange
Securities in exchange for the Initial Securities in compliance with this
Indenture and the Registration Rights Agreement; or
(12) to make any other change that does not adversely affect the
rights of any Holder in any material respect.
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SECTION 9.2. Amendments, Supplemental Indentures and Waivers with Consent
of Holders.
Subject to Section 6.8, with the consent of the Holders of not less than a
majority in aggregate principal amount of then outstanding Securities, by
written act of said Holders delivered to the Company and the Trustee, the
Company, when authorized by Board Resolutions, the Guarantors, when authorized
by Board Resolution (or, if any Guarantor is not a corporation, when otherwise
appropriately authorized) and the Trustee may amend or supplement this Indenture
or the Securities or enter into an indenture or indentures supplemental hereto
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Indenture or the Securities or of
modifying in any manner the rights of the Holders under this Indenture or the
Securities. Subject to Section 6.8, the Holder or Holders of not less than a
majority in aggregate principal amount of then outstanding Securities may waive
compliance by the Company or any Guarantor with any provision of this Indenture
or the Securities. Notwithstanding any of the above, however, no such amendment,
supplemental indenture or waiver shall without the consent of the Holders of not
less than 66-2/3% of the aggregate principal amount of Securities at the time
outstanding alter the terms or provisions of Section 10.1 in a manner which
adversely affects the Holders; no such amendment, supplemental indenture or
waiver shall, without the written consent of all holders of Senior Debt alter
the terms or provisions of Article XII; and no such amendment, supplemental
indenture or waiver shall, without the consent of the Holder of each outstanding
Security affected thereby:
(1) reduce the percentage of principal amount of the outstanding
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 or Redemption Price of any Security, or
reduce the Change of Control Purchase Price or the Asset Sale Offer Price;
(4) change the Stated Maturity of any Security or any installment of
interest thereon;
(5) alter the redemption provisions of Article III in a manner
adverse to any Holder;
(6) make any changes in the provisions concerning waivers by the
Holders of Defaults, Events of Default or other defaults or of compliance by the
Company or any Guarantor with any provision of this Indenture or the Securities,
or impair the right of any Holder to institute suit for the enforcement of any
payment of principal of, premium, if any, or interest on any Security on or
after the date such payment is due as expressed in such Security or in this
Indenture, including without limitation any changes in Section 6.8, 6.12 or the
second sentence or this third sentence of this Section 9.2, except to increase
any required percentage or to provide that certain other provisions of this
Indenture cannot be modified or waived without the consent of the Holder of each
outstanding Security affected thereby;
(7) make the principal of, or the interest or premium 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 (including
changing the place of payment where, or the coin or currency in which, any
Security or any premium or the interest thereon is payable); or
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(8) make the Securities or the Guarantees further subordinated in
right of payment to any extent or under any circumstances to any other
Indebtedness (it being understood that amendments to Section 4.10 hereof which
may have the effect of increasing the amount of Senior Debt that the Company and
the Guarantors may Incur shall not, for purposes of this clause (8), be deemed
to make the Securities or the Guarantees further subordinated in right of
payment to any extent or under any circumstances to any other Indebtedness).
It shall not be necessary for the consent of the Holders under this
Section 9.2 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, the Company shall mail to the Holders affected thereby a notice
briefly describing the amendment, supplement or waiver. Any failure of the
Company to mail such notice, or any defect therein, shall not, however, in any
way impair or affect the validity of any such amendment, supplemental indenture
or waiver.
After an amendment, supplement or waiver under this Section 9.2 or Section
9.4 becomes effective, it shall bind each Holder.
In connection with any amendment, supplement or waiver under this Article
IX, the Company 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.
Anything herein to the contrary notwithstanding, each amendment to this
Indenture and each indenture supplemental hereto shall be signed by each of the
Guarantors and shall set forth the agreement of the Guarantors that their
obligations under the Guarantees and this Indenture remain in full force and
effect, and, in the case of any waiver by the Holders of compliance by the
Company or any Guarantor with any provision of this Indenture or the Securities,
the Guarantors shall execute and deliver to the Trustee a written instrument
acknowledging such waiver and agreeing that their obligations under the
Guarantees and this Indenture remain in full force and effect.
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 written notice to the Company
or the Person designated by the Company as the Person to whom consents should be
sent if such revocation is received by the Company or such Person 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.
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The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver, which record date shall be the date so fixed by the
Company notwithstanding the provisions of the TIA. If a record date is fixed,
then notwithstanding the last sentence of the immediately preceding paragraph,
those Persons who were Holders at the close of business on such record date, and
only those Persons (or their duly designated proxies), 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 Security- holder, unless it makes a change described in any of clauses (1)
through (8) 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 other Holder to receive payment of
principal of and premium of, if any, and interest on a Security, on or after the
respective dates set for such amounts to become due and payable expressed in
such Security and this Indenture, or to bring suit for the enforcement of any
such payment on or after such respective dates.
SECTION 9.5. Notation on or Exchange of Securities.
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 or
require the Holder to put an appropriate notation on the Security. The Trustee
may place an appropriate notation on the Security about the changed terms and
return it to the Holder. Alternatively, if the Company or the Trustee so
determines, the Company in exchange for the Security shall issue and the Trustee
shall authenticate a new Security that reflects the changed terms. Any failure
to make the appropriate notation or to issue a new Security shall not affect the
validity of such amendment, supplement or waiver.
SECTION 9.6. Trustee to Sign Amendments, Etc.
The Trustee shall execute any amendment, supplement or waiver authorized
pursuant to this Article IX; 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 IX is authorized or permitted by this
Indenture.
ARTICLE X
RIGHT TO REQUIRE REPURCHASE
SECTION 10.1. Repurchase of Securities at Option of the Holder Upon a
Change of Control.
(a) In the event that a Change of Control occurs, each Holder shall
have the right, at such Holder's option, pursuant to an irrevocable and
unconditional offer by the Company (the "Change of Control Offer") subject to
the terms and conditions of this Indenture, to require the Company to repurchase
all or any part of such Holder's Securities (provided, that the principal amount
purchased must be $1,000 or
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an integral multiple thereof) on a date (the "Change of Control Purchase Date")
selected by the Company that is no later than 45 Business Days after the
occurrence of such Change of Control, at a cash price (the "Change of Control
Purchase Price") equal to 101% of the principal amount thereof, plus accrued and
unpaid interest to the Change of Control Purchase Date.
(b) In the event of a Change of Control, the Company shall be
required to make the Change of Control Offer as follows:
(1) the Change of Control Offer shall commence within 15
Business Days following the occurrence of the Change of Control;
(2) the Change of Control Offer shall remain open for not less
than 20 Business Days following its commencement (the "Change of Control
Offer Period");
(3) upon the expiration of the Change of Control Offer Period,
the Company shall purchase all of the properly tendered Securities at the
Change of Control Purchase Price, plus accrued and unpaid interest
thereon;
(4) the Company shall provide the Trustee and the Paying Agent
with written notice of the Change of Control Offer at least three Business
Days before the commencement of any Change of Control Offer; and
(5) on or before the commencement of any Change of Control
Offer, the Company or the Registrar (upon the request and at the expense
of the Company) shall send, by first-class mail, a notice to each of the
Securityholders, which (to the extent consistent with this Indenture)
shall govern the terms of the Change of Control Offer and shall state:
(i) that the Change of Control Offer is being made
pursuant to such notice and this Section 10.1 and that all
Securities, or portions thereof, tendered will be accepted for
payment;
(ii) the Change of Control Purchase Price (including the
amount of accrued and unpaid interest), the Change of Control
Purchase Date and the Change of Control Put Date (as hereinafter
defined);
(iii) that any Security, or portion thereof, not tendered
or accepted for payment will continue to accrue interest;
(iv) that, unless the Company defaults in depositing
Cash with the Paying Agent in accordance with the last paragraph of
this Article X or the payment to Holders is prevented or prohibited
(including, without limitation, pursuant to Article XII hereof), any
Security, or portion thereof, accepted for payment pursuant to the
Change of Control Offer shall cease to accrue interest on and after
the Change of Control Purchase Date;
(v) that Holders electing to have a Security, or
portion thereof, purchased pursuant to a Change of Control Offer
will be required to surrender the Security,
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with the form entitled "Option of Holder to Elect Purchase" on the
Security completed (or, in the case of Global Securities, to effect
such surrender in accordance with the Depositary's procedures), to
the Paying Agent (which may not for purposes of this Section 10.1,
notwithstanding anything in this Indenture to the contrary, be the
Company or any Affiliate of the Company) at the address specified in
the notice prior to the close of business on the earlier of the date
(which shall be specified in such notice) which is (a) the third
Business Day prior to the Change of Control Purchase Date and (b)
the third Business Day following the expiration of the Change of
Control Offer (such earlier date being the "Change of Control Put
Date");
(vi) that Holders will be entitled to withdraw their
election, in whole or in part, if the Paying Agent receives, up to
the close of business on the Change of Control Put Date, a telegram,
telex, facsimile transmission or letter setting forth the name of
the Holder, the principal amount of the Securities the Holder is
withdrawing and a statement that such ▇▇▇▇▇▇ is withdrawing his
election to have such principal amount of Securities purchased;
(vii) that Holders who surrender Securities for purchase
only in part will be issued new Securities equal in principal amount
to the unpurchased portion of the Securities surrendered; and
(viii) a brief description of the events resulting in such
Change of Control.
Any such Change of Control Offer shall be made in compliance with all
applicable Federal and state laws, rules and regulations, including, if
applicable, Regulation 14E under the Exchange Act and all other applicable
Federal and state securities laws, and any provisions of this Indenture which
conflict with such laws shall be deemed to be superseded by the provisions of
such laws.
On or before the Change of Control Purchase Date, the Company will (i)
accept for payment Securities or portions thereof properly tendered pursuant to
the Change of Control Offer on or before the Change of Control Put Date, (ii)
deposit with the Paying Agent Cash sufficient to pay the Change of Control
Purchase Price (together with accrued and unpaid interest) for all Securities or
portions thereof so tendered and (iii) deliver to the Trustee Securities so
accepted together with an Officers' Certificate listing the Securities or
portions thereof being purchased by the Company. The Paying Agent shall promptly
mail to Holders of Securities so accepted (or, in the case of Securities held in
book-entry form through the Depositary, will deliver in accordance with the
Depositary's procedures as then in effect) payment in an amount equal to the
Change of Control Purchase Price (together with accrued and unpaid interest),
for such Securities, and the Trustee or its authenticating agent shall promptly
authenticate and mail or deliver to such Holders (or deliver in accordance with
the Depositary's procedures, as the case may be) new Securities equal in
principal amount to any unpurchased portion of the Securities surrendered;
provided, however, that each such new Security will be in a principal amount of
$1,000 or an integral multiple thereof. Any Securities not so accepted shall be
promptly mailed or delivered (or delivered in accordance with the Depositary's
procedures, as the case may be) by the Company to the Holder thereof. The
Company shall publicly announce the results of the Change of Control Offer on or
as soon as practicable after the Change of Control Purchase Date. The Trustee
shall be under no obligation to ascertain the occurrence of a Change of Control
or, except as directed by the Company, to give notice to the Securityholders
with respect thereto. The Trustee
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may conclusively assume, in the absence of written notice to the contrary from
the Company, that no Change of Control has occurred.
ARTICLE XI
GUARANTEE
SECTION 11.1. Guarantee.
(a) In recognition of the benefits that the issuance of the
Securities will confer upon the Guarantors, including, without limitation, the
benefits that will inure to the Guarantors from the additional capital provided
by issuance of the Securities and the application of the proceeds therefrom in
connection with, among other things, the ▇▇▇▇▇▇ Acquisition, and for $1.00 in
hand paid and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each of the Guarantors hereby
irrevocably and unconditionally guarantees (individually, a "Guarantee" and,
collectively, the "Guarantees"), jointly and severally, on a senior subordinated
basis, to each Holder of a Security authenticated and delivered by the Trustee
and to the Trustee and its successors and assigns, irrespective of the validity
and enforceability of this Indenture, the Securities or the obligations of the
Company under this Indenture or the Securities, that: (i) the principal of and
premium (if any) and interest on and Liquidated Damages, if any, in respect of
the Securities will be paid in full when due, whether at Stated Maturity or
Interest Payment Date, by acceleration, call for redemption or otherwise, (ii)
the purchase price for all Securities properly and timely tendered in response
to a Change of Control Offer or Asset Sale Offer, together with accrued and
unpaid interest thereon, will be timely, and otherwise in accordance with the
provisions of this Indenture, paid in full; (iii) all other obligations of the
Company to the Holders or the Trustee under this Indenture or the Securities
will be promptly paid in full or performed, all in accordance with the terms of
this Indenture and the Securities; and (iv) in case of any extension of time of
payment or renewal of any Securities or any of such other obligations, they will
be paid in full when due or performed in accordance with the terms of the
extension or renewal, whether at Stated Maturity, by acceleration, call for
redemption, upon a Change of Control Offer, upon an Asset Sale Offer or
otherwise. Failing payment when due of any amount so guaranteed for whatever
reason, each Guarantor shall be jointly and severally obligated to pay the same
before failure so to pay becomes an Event of Default. If the Company or a
Guarantor defaults in the payment of the principal of, premium, if any, or
interest on, or Liquidated Damages in respect of, any of the Securities when and
as the same shall become due, whether upon maturity, acceleration, call for
redemption, upon a Change of Control Offer, Asset Sale Offer or otherwise,
without the necessity of action by the Trustee or any Holder, each Guarantor
shall be required, jointly and severally, to promptly make such payment in full.
(b) Each Guarantor hereby agrees that its obligations with regard to
its Guarantee shall be unconditional, irrespective of the validity, regularity
or enforceability of the Securities or this Indenture, the absence of any action
to enforce the same, any delays in obtaining or realizing upon or failures to
obtain or realize upon collateral, the recovery of any judgment against the
Company, any action to enforce the same or any other circumstances that might
otherwise constitute a legal or equitable discharge or defense of a guarantor
(except the release of such Guarantor pursuant to the last sentence of Section
11.3 or Section 11.4(c)). Each Guarantor hereby waives diligence, presentment,
demand of payment, filing of claims with a court in the event of insolvency or
bankruptcy of the Company, any right to require a proceeding first against the
Company or right to require the prior disposition of the assets of the Company
to meet its obligations, protest, notice and all demands whatsoever and
covenants that this Guarantee will not be discharged (except
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to the extent released pursuant to the last sentence of Section 11.3 or Section
11.4(c)) except by complete performance of the obligations contained in the
Securities and this Indenture.
(c) If any Holder or the Trustee is required by any court or
otherwise to return to either the Company or any Guarantor, or any Custodian,
trustee, or similar official acting in relation to either the Company or such
Guarantor, any amount paid by either the Company or such Guarantor to the
Trustee or such Holder, this Guarantee, to the extent theretofore discharged,
shall be reinstated in full force and effect (except to the extent theretofore
released pursuant to the last sentence of Section 11.3 or Section 11.4(c)). Each
Guarantor agrees that it will not be entitled to any right of subrogation in
relation to the Holders in respect of any obligations guaranteed hereby until
payment in full of all obligations guaranteed hereby. Each Guarantor further
agrees, to the extent permitted by law, that, as between such Guarantor, on the
one hand, and the Holders and the Trustee, on the other hand, (i) the maturity
of the obligations guaranteed hereby may be accelerated as provided in Section
6.2 for the purposes of this Guarantee, notwithstanding any stay, injunction or
other prohibition preventing such acceleration as to the Company of the
obligations guaranteed hereby, and (ii) in the event of any declaration of
acceleration of those obligations as provided in Section 6.2, those obligations
(whether or not due and payable) will forthwith become due and payable by each
of the Guarantors for the purpose of this Guarantee.
(d) Each Guarantor and by its acceptance of a Security issued
hereunder each Holder hereby confirms that it is the intention of all such
parties that the Guarantee by such Guarantor set forth in Section 11.1(a) not
constitute a fraudulent transfer or conveyance for purpose of any Bankruptcy
Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act
or any similar Federal or state law. To effectuate the foregoing intention, the
Holders and each Guarantor hereby irrevocably agree that the obligations of such
Guarantor under its Guarantee set forth in Section 11.1(a) shall be limited to
the maximum amount as will, under applicable law and (to the extent permitted by
applicable law) after giving effect to all other contingent and fixed
liabilities of such Guarantor and after giving effect to any collections from or
payments made by or on behalf of any other Guarantor in respect of the
obligations of such other Guarantor under its Guarantee or pursuant to Section
11.1(e), result in the obligations of such Guarantor under its Guarantee not
constituting such a fraudulent transfer or conveyance.
(e) Each Guarantor that makes any payment or distribution under
Section 11.1(a) shall be entitled to a contribution from each other Guarantor
equal to its Pro Rata Share of such payment or distribution. For purposes of the
foregoing, the "Pro Rata Share" of any Guarantor means the percentage of the net
assets of all Guarantors held by such Guarantor, determined in accordance with
GAAP.
SECTION 11.2. Execution and Delivery of Guarantee.
Each Guarantor shall, by virtue of such Guarantor's execution and delivery
of this Indenture or such Guarantor's execution and delivery of an indenture
supplement pursuant to Section 11.3 hereof, be deemed to have signed on each
Security issued hereunder the notation of guarantee set forth on the form of the
Securities attached hereto as Exhibit A to the same extent as if the signature
of such Guarantor appeared on such Security.
The delivery of any Security by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Guarantee set forth in
Section 11.1 on behalf of each Guarantor. The notation of a guarantee set forth
on any Security shall be null and void and of no further effect with respect to
the
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Guarantee of any Guarantor which, pursuant to the last sentence of Section 11.3
or Section 11.4(c), is released from its Guarantee.
SECTION 11.3. Additional Guarantors.
The Subject Entity will not, and will not cause or permit any of its
Subsidiaries to, directly or indirectly, establish or acquire a new Subsidiary
of the Subject Entity or such Subsidiary, as the case may be, unless either (A)
such new Subsidiary is designated as an Unrestricted Subsidiary in accordance
with the definition of the term "Unrestricted Subsidiary" or (B) the Subject
Entity (by delivery of an Officers' Certificate to the Trustee) designates such
new Subsidiary as a Non-Guarantor Foreign Subsidiary and the aggregate amount of
Investments made by the Subject Entity and its Domestic Subsidiaries and
Guarantor Foreign Subsidiaries in such Non-Guarantor Foreign Subsidiary are not
prohibited by this Indenture (provided that the Subject Entity may at any time
thereafter elect to cause such Non-Guarantor Foreign Subsidiary to become a
Guarantor as contemplated by clause (C) of this Section 11.3) or (C) (i) such
new Subsidiary simultaneously executes and delivers a supplemental indenture
pursuant to which such new Subsidiary becomes a Guarantor and guarantees the
obligations of the Company under the Securities and this Indenture on the same
terms as the other Guarantors and (ii) the Subject Entity shall deliver to the
Trustee an Officers' Certificate and an Opinion of Counsel, each in a form
reasonably satisfactory to the Trustee, stating that the Subject Entity has
complied with this Section 11.3 in connection with the establishment or
acquisition of such new Subsidiary. For purposes of this Section 11.3, the
designation of any Unrestricted Subsidiary as a Subsidiary shall be deemed to be
the establishment of a new Subsidiary. Upon the designation of a Subsidiary as
an Unrestricted Subsidiary in accordance with the provisions of this Indenture,
such Unrestricted Subsidiary shall be released from all of its obligations under
its Guarantee and this Indenture. From and after the time of the Reorganization,
the Subject Entity will always be a Guarantor.
SECTION 11.4. Guarantor May Consolidate, Etc., on Certain Terms; Release
of Guarantors.
(a) Except for transactions made in accordance with the provisions
described in Section 11.4(c), no Guarantor will, directly or indirectly,
consolidate with or merge with or into any other person unless (i) either (a) if
such transaction is a merger, such Guarantor shall be the surviving person of
such merger or (b) the person formed by such consolidation or into which such
Guarantor is merged (any such surviving person referred to in this clause (b)
being hereinafter called the "Surviving Person") shall be a corporation (or, if
such Guarantor is not a corporation, such person shall be either a corporation
or the same type of entity as such Guarantor) organized and existing under the
laws of the United States of America, any state thereof or the District of
Columbia (or, if such Guarantor is a Guarantor Foreign Subsidiary, the Surviving
Person may be organized and existing under the laws of a foreign country or
other foreign jurisdiction) which (except in the case of a merger of such
Guarantor into the Subject Entity) is or, concurrently with such merger or
consolidation, becomes a Subsidiary of the Subject Entity and expressly assumes,
by a supplemental indenture executed and delivered to the Trustee in form
reasonably satisfactory to the Trustee, all of the obligations of such Guarantor
under its Guarantee and this Indenture (and such supplemental indenture shall
also be executed by each other Guarantor and shall further provide that each
such other Guarantor confirms that its obligations under this Indenture and its
Guarantee remain in full force and effect); (ii) no Default or Event of Default
shall exist or shall occur immediately after giving effect to such transaction
on a pro forma basis (including, without limitation, after giving effect to any
Indebtedness Incurred or to be Incurred in connection with such transaction);
(iii) immediately after giving effect to such transaction on a pro forma basis
(including, without limitation, any Indebtedness Incurred or to be Incurred in
connection with such transaction), the Subject Entity would be permitted to
incur at least $1.00 of additional
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Indebtedness pursuant to the Debt Incurrence Ratio set forth in the second
paragraph of Section 4.10; (iv) if such transaction shall occur in connection
with or at any time from and after the Reorganization, immediately after giving
effect to such transaction the Company shall be a Wholly-Owned Subsidiary of the
Holding Company; and (v) the Subject Entity shall deliver, or cause to be
delivered, to the Trustee an Officers' Certificate (in form and substance
reasonably satisfactory to the Trustee) stating that such transaction and, if a
supplemental indenture is required in connection therewith, such supplemental
indenture comply with this Indenture and that all conditions precedent herein
relating to such transaction have been complied with and an Opinion of Counsel
(in form and substance reasonably satisfactory to the Trustee) stating that such
transaction and, if a supplemental indenture is required in connection
therewith, such supplemental indenture comply with the requirements of clause
(i) of this paragraph and that the conditions precedent provided in clause (v)
of this paragraph have been complied with; provided that the condition set forth
in clause (i)(b) of this sentence requiring that the Surviving Person enter into
a supplemental indenture and the conditions set forth in clause (iii) of this
sentence shall not apply to the merger of any Guarantor into the Company or with
or into another Guarantor. Upon any consolidation or merger of any Guarantor in
accordance with the foregoing, the successor person formed by such consolidation
or into which such Guarantor is merged shall (unless such successor person is
the Company or another Guarantor) succeed to, and be substituted for, and may
exercise every right and power of, such Guarantor under this Indenture and its
Guarantee, with the same effect as if such successor person had been named
herein as a Guarantor, and in any such case (including the merger of a Guarantor
into another Guarantor or the Company), the predecessor person shall be released
from all obligations under its Guarantee and this Indenture.
(b) Any Guarantor may convey, sell, transfer, assign or dispose of
(other than by merger or consolidation) any property or assets of such Guarantor
(whether or not constituting all or substantially all of the assets of such
Guarantor) to any person, provided that such conveyance, sale, transfer,
assignment or other disposition complies with the provisions of Section 4.13 and
is not otherwise prohibited by this Indenture.
(c) (x) In the event of a merger or consolidation of a Subsidiary
Guarantor with or into a person which is not the Subject Entity or a Subsidiary
Guarantor (and which person does not become a Subsidiary Guarantor concurrently
with such transaction), or (y) in the event of a transaction (including, without
limitation, the sale or disposition of Capital Stock of a Subsidiary Guarantor)
not prohibited by this Indenture which results in a Subsidiary Guarantor no
longer being a Subsidiary of the Subject Entity, and which, in any case
described in clause (x) or (y) of this sentence, is otherwise made in compliance
with this Indenture, the Company may elect to obtain the release of such
Subsidiary Guarantor (and all Subsidiaries of such Subsidiary Guarantor) from
all of their respective obligations under their Guarantees and this Indenture
(in which case any such merger or consolidation need not comply with Section
11.4(a); provided that (i) prior to such transaction, the Subject Entity shall
have delivered an Officers' Certificate to the Trustee stating that such
transaction will be effected in accordance with the provisions of this Section
11.4(c) in order to obtain the release of such Subsidiary Guarantor, (ii) such
transaction is made in accordance with the provisions of Section 4.13, (iii) if
such transaction is a merger or consolidation of a Subsidiary Guarantor into a
Non-Guarantor Foreign Subsidiary, such transaction shall be deemed an Investment
and must comply with the provisions of Section 4.3 hereof and (iv) except in the
case of a merger with or into a Non- Guarantor Foreign Subsidiary, such release
shall occur only if all obligations of such Subsidiary Guarantor and its
Subsidiaries and Unrestricted Subsidiaries, if any, under guarantees of, and
under all pledges of assets or other Liens which secure, Indebtedness of the
Subject Entity or any of its other Subsidiaries or Unrestricted Subsidiaries
shall also terminate. Upon any merger, consolidation or sale or other
disposition of Capital Stock of any Subsidiary Guarantor made in compliance with
the immediately preceding sentence, such Subsidiary
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Guarantor and all of its Subsidiaries shall be released from all of their
obligations under their Guarantees and this Indenture.
SECTION 11.5. Waiver of Subrogation
Until the date that is 91 days after the later of (x) the date on which
the principal of, premium, if any, and interest on all of the outstanding
Securities shall have been indefeasibly paid to the Holders thereof and (y) the
date on which any and all other amounts owing by the Company or any of the
Guarantors under this Indenture, the Securities or the Guarantees shall have
been indefeasibly paid to the persons entitled thereto, each Guarantor hereby
irrevocably waives, to the fullest extent that it may do so under applicable
law, any claim or other rights which it may now have or hereafter acquire
against the Company that arise from the existence, payment, performance or
enforcement of such Guarantor's obligations under its Guarantee and this
Indenture, including, without limitation, any right of subrogation,
reimbursement, exoneration, indemnification, and any right to participate in any
claim or remedy of any Holder of Securities against the Company, whether or not
such claim, remedy or right arises in equity, or under contract, statute or
common law, including, without limitation, the right to take or receive from the
Company, directly or indirectly, in cash or other property or by set-off or in
any other manner, payment or security on account of such claim or other rights.
If any amount shall be paid to any Guarantor in violation of the preceding
sentence and the Securities shall not have been paid in full, then (to the
fullest extent permitted by applicable law) such amount shall have been deemed
to have been paid to such Guarantor for the benefit of, and held in trust for
the benefit of, the Holders of the Securities, and shall forthwith be paid to
the Trustee for the benefit of such Holders to be credited and applied upon the
Securities, whether matured or unmatured, in accordance with the terms of this
Indenture. Each Guarantor acknowledges that it will receive direct and indirect
benefits from the financing arrangements contemplated by this Indenture and that
the waiver set forth in this Section 11.5 is knowingly made in contemplation of
such benefits.
SECTION 11.6. Certain Bankruptcy Events.
Each Guarantor hereby covenants and agrees, to the fullest extent that it
may do so under applicable law, that in the event of the insolvency, bankruptcy,
dissolution, liquidation or reorganization of the Company, such Guarantor shall
not file (or join in any filing of), or otherwise seek to participate in the
filing of, any motion or request seeking to stay or to prohibit (even
temporarily) execution on its Guarantee and, to the fullest extent that it may
do so under applicable law, hereby waives and agrees not to take the benefit of
any such stay of execution, whether under the Bankruptcy Law or otherwise.
ARTICLE XII
SUBORDINATION
SECTION 12.1. Securities Subordinated to Senior Debt.
The Company and the Guarantors and each Holder, by its acceptance of
Securities, agree that (a) the payment of the principal of and premium, if any,
interest on, and Liquidated Damages, if any, with respect to the Securities and
(b) any other payment in respect of the Securities, including on account of the
acquisition or redemption of the Securities by the Company and the Guarantors
(including, without limitation, pursuant to Section 4.13 or Section 10.1) is
subordinated, to the extent and in the manner provided in this Article XII,
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to the prior payment in full in Cash or Cash Equivalents of all Senior Debt of
the Company and the Guarantors and that these subordination provisions are for
the benefit of the holders of Senior Debt.
This Article XII shall constitute a continuing offer to all Persons who,
in reliance upon such provisions, become holders of, or continue to hold, Senior
Debt, and such provisions are made for the benefit of the holders of Senior
Debt, and such holders are made obligees hereunder and any one or more of them
may enforce such provisions.
SECTION 12.2. No Payment on Securities in Certain Circumstances.
(a) No payment (by set-off or otherwise, but excluding distributions
of Junior Securities) shall be made by or on behalf of the Company or any
Guarantor, as applicable, on account of the principal of, premium, if any, or
interest on, or Liquidated Damages, if any, in respect of, the Securities
(including any repurchases of Securities), or on account of the redemption
provisions of the Securities (i) upon the maturity of any Senior Debt of the
Company or such Guarantor, as applicable, by lapse of time, acceleration (unless
waived or rescinded) or otherwise, unless and until all such Senior Debt is
first paid in full in cash or Cash Equivalents (or, except in the case of Senior
Debt under any Credit Agreement, such payment is duly provided for), or (ii) in
the event of default in the payment of any principal of, premium, if any, or
interest on any Senior Debt of the Company or such Guarantor, as applicable,
when it becomes due and payable, whether at maturity or at a date fixed for
prepayment or by declaration or otherwise (a "Payment Default"), unless and
until such Payment Default has been cured or waived or otherwise has ceased to
exist.
(b) Upon (i) the happening of an event of default (other than a
Payment Default) that permits the holders of Designated Senior Debt to declare
such Designated Senior Debt to be due and payable and (ii) written notice of
such event of default being given to the Company and the Trustee by the relevant
Senior Bank Representative or the holders of an aggregate of at least
$25,000,000 principal amount outstanding of any other Designated Senior Debt or
their representative (a "Payment Notice"), then, unless and until such event of
default has been cured or waived or otherwise has ceased to exist, no payment
(by set-off or otherwise) may be made by or on behalf of the Company, if the
Company is an obligor under such Designated Senior Debt, or any Guarantor which
is an obligor under such Designated Senior Debt, on account of the principal of,
premium, if any, or interest on, or Liquidated Damages, if any, in respect of,
the Securities (including any repurchases of any of the Securities), or on
account of the redemption provisions of the Securities. Notwithstanding the
foregoing, unless the Designated Senior Debt in respect of which such event of
default exists has been declared due and payable in its entirety within 179 days
after the Payment Notice is delivered as set forth above (the "Payment Blockage
Period") (and such declaration has not been rescinded or waived), at the end of
the Payment Blockage Period, the Company and the Guarantors shall be required to
pay all sums not paid to the Holders of the Securities during the Payment
Blockage Period due to the foregoing prohibitions and to resume all other
payments as and when due on the Securities. Any number of Payment Notices may be
given; provided, however, that (i) not more than one Payment Notice shall be
given within a period of any 360 consecutive days, and (ii) no event of default
that existed upon the date of such Payment Notice or the commencement of such
Payment Blockage Period (whether or not such event of default is on the same
issue of Designated Senior Debt) shall be made the basis for the commencement of
any other Payment Blockage Period, unless such event of default has been cured
or waived for a period of not less than 90 consecutive days.
(c) In furtherance of the provisions of Section 12.1, in the event
that, notwithstanding the foregoing provisions of this Section 12.2, any payment
or distribution of assets of the Company or any
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Guarantor shall be received by the Trustee or the Holders at a time when such
payment or distribution is prohibited by the foregoing provisions of this
Section 12.2, such payment or distribution shall be held in trust for the
benefit of the holders of such Senior Debt, and shall be paid or delivered by
the Trustee or such Holders, as the case may be, to the holders of such Senior
Debt remaining unpaid or unprovided for or to their representative or
representatives, or to the trustee or trustees under any indenture pursuant to
which any instruments evidencing any of such Senior Debt may have been issued,
ratably according to the aggregate amounts remaining unpaid on account of such
Senior Debt held or represented by each, for application to the payment of all
such Senior Debt remaining unpaid, to the extent necessary to pay or to provide
for the payment of all such Senior Debt in full in cash or Cash Equivalents
after giving effect to any concurrent payment or distribution to the holders of
such Senior Debt.
SECTION 12.3. Securities Subordinated to Prior Payment of All Senior Debt
on Dissolution, Liquidation or Reorganization.
Upon any distribution of assets of the Company or any Guarantor upon any
dissolution, winding up, total or partial liquidation or reorganization of the
Company or a Guarantor, whether voluntary or involuntary, in bankruptcy,
insolvency, receivership or a similar proceeding or upon assignment for the
benefit of creditors or any marshalling of assets or liabilities:
(a) the holders of all Senior Debt of the Company or such Guarantor,
as applicable, will first be entitled (i) in the case of Senior Debt under any
Credit Agreement, to receive payment in full in cash or Cash Equivalents or (ii)
in the case of any other Senior Debt, to receive payment in full in cash or Cash
Equivalents (or have such payment duly provided for) or otherwise to the extent
holders of such Senior Debt accept satisfaction of amounts due by settlement in
other than cash or Cash Equivalents before the Holders are entitled to receive
any payment on account of the principal of, premium, if any, and interest on, or
Liquidated Damages, if any, in respect of the Securities (other than
distributions of Junior Securities);
(b) any payment or distribution of assets of the Company or such
Guarantor, as applicable, of any kind or character from any source, whether in
cash, property or securities (other than Junior Securities), to which the
Holders or the Trustee on behalf of the Holders would be entitled (by set-off or
otherwise), except for the provisions of this Article XII, will be paid by the
liquidating trustee or agent or other person making such a payment or
distribution directly to the holders of such Senior Debt or their representative
to the extent necessary to make payment in full (or to have such payment duly
provided for) on all such Senior Debt remaining unpaid, after giving effect to
any concurrent payment or distribution to the holders of such Senior Debt; and
(c) in the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company or any Guarantor (other than Junior
Securities) shall be received by the Trustee or the Holders at a time when such
payment or distribution is prohibited by the foregoing provisions, such payment
or distribution shall be held in trust for the benefit of the holders of such
Senior Debt, and shall be paid or delivered by the Trustee or such Holders, as
the case may be, to the holders of such Senior Debt remaining unpaid or
unprovided for or to their representative or representatives, or to the trustee
or trustees under any indenture pursuant to which any instruments evidencing any
of such Senior Debt may have been issued, ratably according to the aggregate
amounts remaining unpaid on account of such Senior Debt held or represented by
each, for application to the payment of all such Senior Debt remaining unpaid,
to the extent necessary to pay all such Senior Debt in full in cash or Cash
Equivalents after giving effect to any concurrent payment or distribution to the
holders of such Senior Debt.
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SECTION 12.4. Securityholders to Be Subrogated to Rights of Holders of
Senior Debt.
Subject to the payment in full in Cash or Cash Equivalents of all Senior
Debt of the Company or any Guarantor as provided herein, the Holders of
Securities shall be subrogated to the rights of the holders of such Senior Debt
to receive payments or distributions of assets of the Company applicable to the
Senior Debt until all amounts (including, without limitation, Liquidated
Damages) owing on or in respect of the Securities shall be paid in full, and for
the purpose of such subrogation no such payments or distributions to the holders
of such Senior Debt by or on behalf of the Company or any Guarantor, or by or on
behalf of the Holders by virtue of this Article XII, which otherwise would have
been made to the Holders shall, as between the Company or any Guarantor and the
Holders, be deemed to be payment by the Company or any Guarantor or on account
of such Senior Debt, it being understood that the provisions of this Article XII
are and are intended solely for the purpose of defining the relative rights of
the Holders, on the one hand, and the holders of such Senior Debt, 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 XII shall have been
applied, pursuant to the provisions of this Article XII, to the payment of
amounts payable under Senior Debt of the Company or any Guarantor, then the
Holders shall be entitled to receive from the holders of such Senior Debt any
payments or distributions received by such holders of Senior Debt in excess of
the amount sufficient to pay all amounts payable under or in respect of such
Senior Debt in full in Cash or Cash Equivalents.
SECTION 12.5. Obligations of the Company and the Guarantors Unconditional.
Nothing contained in this Article XII or elsewhere in this Indenture
or in the Securities is intended to or shall impair, as between the Company and
the Guarantors and the Holders, the obligation of the Company and the
Guarantors, which is absolute and unconditional, to pay to the Holders the
principal of, premium, if any, and interest on 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 the
Company and the Guarantors other than the holders of the Senior Debt, nor shall
anything herein or therein limit or prevent the Trustee or any Holder from
exercising all rights and remedies otherwise permitted by this Indenture or by
applicable law upon default under this Indenture, subject to the rights, if any,
under this Article XII, of the holders of Senior Debt in respect of cash,
property or securities of the Company and the Guarantors received upon the
exercise of any such remedy. Notwithstanding anything to the contrary in this
Article XII or elsewhere in this Indenture or in the Securities, upon any
distribution of assets of the Company or any of the Guarantors referred to in
this Article XII, 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 such dissolution, winding up,
liquidation or reorganization proceedings are pending, or a certificate of the
liquidating trustee or agent or other Person making any distribution to the
Trustee or to the Holders for the purpose of ascertaining the Persons entitled
to participate in such distribution, the holders of the Senior Debt and other
Indebtedness of the Company or any Guarantor, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article XII so long as such court has been apprised
of the provisions of, or the order, decree or certificate makes reference to,
the provisions of this Article XII. Nothing in this Section 12.5 shall apply to
the claims of, or payments to, the Trustee under or pursuant to Section 7.7.
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SECTION 12.6. 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 which would prohibit the making of any payment to or by
the Trustee unless and until a Trust Officer of the Trustee or any Paying Agent
shall have received at its address set forth in, or established in accordance
with, Section 13.2, no later than one Business Day prior to such payment,
written notice thereof from the Company or from one or more holders of Senior
Debt or from any representative therefor and, prior to the receipt of any such
written 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 12.7. Application by Trustee of Assets Deposited with It.
Amounts deposited in trust with the Trustee pursuant to and in accordance
with Article VIII shall be for the sole benefit of Securityholders and, to the
extent (i) the making of such deposit by the Company shall not be in
contravention of any term or provision of the Credit Agreements and (ii)
allocated for the payment of Securities, shall not be subject to the
subordination provisions of this Article XII. Otherwise, any deposit of assets
with the Trustee or a Paying Agent (whether or not in trust) for the payment of
principal of, premium, if any, interest on, or Liquidated Damages, if any, in
respect of, any Securities shall be subject to the provisions of Sections 12.1,
12.2, 12.3 and 12.4; provided that, if prior to one Business Day preceding the
date on which by the terms of this Indenture or the Registration Rights
Agreement, as applicable, any such assets may become distributable for any
purpose (including without limitation, the payment of either principal of,
premium, if any, interest on, or Liquidated Damages, if any, in respect of, any
Security) the Trustee or such Paying Agent shall not have received with respect
to such assets the written notice provided for in Section 12.6 at its address
set forth in , or established in accordance with, Section 13.2, 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 which may be received by it on or
after such date.
SECTION 12.8. Subordination Rights Not Impaired by Acts or Omissions of
the Company, the Guarantors or Holders of Senior Debt.
No right of any present or future holders of any Senior Debt to enforce
subordination provisions contained in this Article XII shall at any time in any
way be prejudiced or impaired by any act or failure to act on the part of the
Company or any Guarantor or by any act or failure to act, in good faith, by any
such holder, or by any noncompliance by the Company or any Guarantor with the
terms of this Indenture, regardless of any knowledge thereof which any such
holder may have or be otherwise charged with. The holders of Senior Debt may
extend renew, modify or amend the terms of the Senior Debt or any security
therefor and release, sell or exchange such security and otherwise deal freely
with the Company and the Guarantors, all without affecting the liabilities and
obligations of the parties to this Indenture or the Holders.
SECTION 12.9. Securityholders Authorize Trustee to Effectuate
Subordination of Securities.
Each Holder of the Securities by his acceptance thereof authorizes and
expressly directs the Trustee on his behalf to take such action as may be
necessary or appropriate to effectuate the subordination provisions contained in
this Article XII and to protect the rights of the Holders pursuant to this
Indenture, and appoints the Trustee his attorney-in-fact for such purpose,
including, in the event of any dissolution, winding up, liquidation or
reorganization of the Company or any Guarantor (whether in bankruptcy,
insolvency or
87
receivership proceedings or upon an assignment for the benefit of creditors or
any other marshalling of assets and liabilities of the Company or any
Guarantor), the immediate filing of a claim for the unpaid balance of his
Securities in the form required in said proceedings and causing 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 Debt or their
representative are or is hereby authorized to have the right to file and are or
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 Debt or their representative to
authorize or consent to or accept or adopt on behalf of any Securityholder any
plan of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof, or to authorize the Trustee or
the holders of Senior Debt or their representative to vote in respect of the
claim of any Securityholder in any such proceeding.
SECTION 12.10. Right of Trustee to Hold Senior Debt.
The Trustee shall be entitled to all of the rights set forth in this
Article XII in respect of any Senior Debt at any time held by it to the same
extent as any other holder of Senior Debt, and nothing in this Indenture shall
be construed to deprive the Trustee of any of its rights as such holder.
SECTION 12.11. Article XII Not to Prevent Events of Default.
The failure to make a payment on account of principal of, premium, if any,
interest on, or Liquidated Damages in respect of, the Securities by reason of
any provision of this Article XII shall not be construed as preventing the
occurrence of a Default or an Event of Default under Section 6.1 or in any way
limit the rights of the Trustee or any Holder to pursue any other rights or
remedies with respect to the Securities.
As set forth in Article VIII of this Indenture, the provisions of this
Article XII shall not be operative from and after the effectiveness of Legal
Defeasance or Covenant Defeasance with respect to the Securities.
SECTION 12.12. No Fiduciary Duty of Trustee to Holders of Senior Debt.
The Trustee shall not be deemed to owe any fiduciary duty to the holders
of Senior Debt, and shall not be liable to any such holders (other than for its
willful misconduct or negligence) if it shall in good faith mistakenly pay over
or distribute to the Holders of Securities or the Company, any Guarantor or any
other Person, cash, property or securities to which any holders of Senior Debt
shall be entitled by virtue of this Article XII or otherwise. Nothing in this
Section 12.12 shall affect the obligation of any other such Person to hold such
payment for the benefit of, and to pay such payment over to, the holders of
Senior Debt or their representative. In the event of any conflict between the
fiduciary duty of the Trustee to the Holders of Securities and to the holders of
Senior Debt, the Trustee is expressly authorized to resolve such conflict in
favor of the Holders.
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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 the TIA, the imposed duties, upon
qualification of this Indenture under the TIA, shall control.
SECTION 13.2. Notices.
Any notices or other communications to the Company or any Guarantor,
Paying Agent, Registrar, Securities Custodian, transfer agent or the Trustee
required or permitted hereunder shall be in writing, and shall be sufficiently
given if made by hand delivery or delivery by overnight courier, by telex, by
telecopier or registered or certified mail, postage prepaid, return receipt
requested, addressed as follows:
If to the Company or any Guarantor:
Quality Food Centers, Inc.
▇▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Trustee:
First Trust National Association
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ - ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Senior Bank Representative:
Bank of America National Trust & Savings Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
and
The Chase Manhattan Bank
89
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Any party named above by notice to each other party named above may
designate additional or different addresses as shall be furnished in writing by
such party. Any notice or communication to any party 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
Business 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).
Any notice or communication mailed to a Securityholder shall be mailed to
him or her by first-class mail or other equivalent means at his or her address
as it appears on the registration books of the Registrar and shall be
sufficiently given to him or her if so mailed within the time prescribed.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
SECTION 13.3. Communications by Holders with Other Holders.
Securityholders may communicate pursuant to TIA ss. 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and any other Person shall
have the protection of TIA ss. 312(c).
SECTION 13.4. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company or any Guarantor to the
Trustee to take any action under this Indenture, such Person shall furnish to
the Trustee:
(1) an Officers' Certificate (in form and substance reasonably
satisfactory to the Trustee) 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 met; and
(2) an Opinion of Counsel (in form and substance reasonably
satisfactory to the Trustee) stating that, in the opinion of such counsel,
all such conditions precedent have been met;
provided, however, that in the case of any such request or application as
to which the furnishing of particular documents is specifically required
by any provision of this Indenture, no additional certificate or opinion
need be furnished under this Section 13.4.
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 shall include:
90
(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 met; and
(4) a statement as to whether or not, in the opinion of each
such Person, such condition or covenant has been met; provided, however,
that with respect to 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
Securityholders. The Paying Agent or Registrar may make reasonable rules for its
functions.
SECTION 13.7. Non-Business Days.
If a payment date is not a Business Day at the relevant place of payment,
payment may be made at such place on the next succeeding day that is a Business
Day, and no interest shall accrue for the intervening period.
SECTION 13.8. Governing Law.
THIS INDENTURE AND THE SECURITIES AND GUARANTEES 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 COMPANY AND THE GUARANTORS HEREBY
IRREVOCABLY SUBMITS, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER
APPLICABLE LAW, TO THE JURISDICTION OF ANY NEW YORK STATE COURT SITTING IN THE
BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK OR ANY FEDERAL COURT SITTING IN THE
BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK IN RESPECT OF ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE OR THE SECURITIES OR
GUARANTEES, AND IRREVOCABLY ACCEPTS, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO
SO UNDER APPLICABLE LAW, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY
AND UNCONDITIONALLY, JURISDICTION OF THE AFORESAID COURTS. EACH OF THE COMPANY
AND THE GUARANTORS IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY
DO SO UNDER APPLICABLE LAW, ANY OBJECTION WHICH THEY MAY NOW OR HEREAFTER HAVE
TO THE LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY
SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY
SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. NOTHING HEREIN SHALL
AFFECT THE RIGHT OF THE TRUSTEE OR ANY
91
SECURITYHOLDER TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE COMPANY AND THE
GUARANTORS IN ANY OTHER JURISDICTION.
SECTION 13.9. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or any Guarantor or any of their respective
Subsidiaries. Any such indenture, loan or debt agreement may not be used to
interpret this Indenture.
SECTION 13.10. No Recourse against Others.
No direct or indirect stockholder, employee, officer or director, as such,
past, present or future, of the Company, the Guarantors or any successor entity,
shall have any personal liability in respect of the obligations of the Company
or the Guarantors under the Securities or this Indenture by reason of his, her
or its status as such stockholder, employee, officer or director. Each Security-
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 the Company and the Guarantors in this Indenture and the
Securities shall bind their respective successors. All agreements of the Trustee
in this Indenture shall bind its successor.
SECTION 13.12. Duplicate Originals.
All parties may sign any number of copies or counterparts of this
Indenture. Each signed copy or counterpart 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.
SECTION 13.14. Table of Contents, Headings, Etc.
The Table of Contents and headings of the Articles and the Sections of
this Indenture have been inserted for convenience of reference only, are not to
be considered a part hereof and shall in no way modify or restrict any of the
terms or provisions hereof.
92
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duty executed as of the date first written above.
QUALITY FOOD CENTERS, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------
Name:
Title:
▇▇▇▇▇▇ MARKETS, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------
Name:
Title:
KU ACQUISITION CORPORATION
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------
Name:
Title:
QUALITY FOOD HOLDINGS, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------
Name:
Title:
FIRST TRUST NATIONAL ASSOCIATION, as
Trustee, Registrar, Paying Agent and
Securities Custodian
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
Name:
Title:
93
Exhibit A
Unless and until it is exchanged in whole or in part for Securities in
definitive form, this Security may not be transferred except as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary or by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary. Unless this certificate is presented by an authorized representative
of The Depository Trust Company (▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇) ("DTC"),
to the Company or its agent for registration of transfer, exchange or payment,
and any certificate issued is registered in the name of Cede & Co. or such other
name as requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.(1)
THIS SECURITY AND THE GUARANTEES HEREOF HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN
MAY BE OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION UNLESS SUCH TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.(2)
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR
OTHERWISE TRANSFER THIS SECURITY, PRIOR TO THE DATE (THE "RESALE RESTRICTION
TERMINATION DATE") WHICH IS THREE YEARS (OR SUCH SHORTER PERIOD THAT MAY
HEREAFTER BE PROVIDED UNDER RULE 144(K) (OR ANY SUCCESSOR THERETO) UNDER THE
SECURITIES ACT AS PERMITTING THE RESALE BY NON-AFFILIATES OF RESTRICTED
SECURITIES WITHOUT RESTRICTION) AFTER THE LATER OF THE ORIGINAL ISSUE DATE
HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY GUARANTOR (AS DEFINED) OR
ANY "AFFILIATE" (AS DEFINED IN RULE 144 (OR ANY SUCCESSOR THERETO) UNDER THE
SECURITIES ACT) OF THE COMPANY OR ANY GUARANTOR WAS THE OWNER OF THIS SECURITY
(OR ANY PREDECESSOR OF THIS SECURITY) ONLY (A) TO THE COMPANY, (B) PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT, (C) SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A
UNDER THE SECURITIES ACT ("RULE 144A") TO A PERSON IT REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS
OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE
IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT
TO
----------
(1) This paragraph should only be added if the Security is issued in global
form.
(2) This paragraph should be included only for the Transfer Restricted
Securities.
A-1
OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN
THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL
"ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (A)(1),(2),(3) OR (7)
OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS SECURITY FOR ITS OWN
ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION
WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO
ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE
SECURITIES ACT, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY
SUCH OFFER, SALE OR TRANSFER (i) PURSUANT TO CLAUSE (D),(E) OR (F) TO REQUIRE
THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM, AND (ii) IN EACH OF THE FOREGOING CASES, TO
REQUIRE THAT A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THIS SECURITY IS
COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE. THIS LEGEND WILL BE
REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION
DATE.2
THE HOLDER OF THIS SECURITY IS ENTITLED TO THE BENEFITS OF A REGISTRATION RIGHTS
AGREEMENT (AS SUCH TERM IS DEFINED IN THE INDENTURE REFERRED TO BELOW) AND, BY
ITS ACCEPTANCE HEREOF, AGREES TO BE BOUND BY AND TO COMPLY WITH THE PROVISIONS
OF SUCH REGISTRATION RIGHTS AGREEMENT.(2)
QUALITY FOOD CENTERS, INC.
8.70% SENIOR SUBORDINATED NOTE
DUE 2007
CUSIP: ______________
No. $_______
Quality Food Centers, Inc., a Washington corporation (hereinafter called
the "Company," which term includes any successors under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
______________________, or registered assigns, the principal sum of
__________________ Dollars, on March 15, 2007.
Interest Payment Dates: March 15 and September 15 commencing September 15,
1997.
----------
(2) This paragraph should be included only for the Transfer Restricted
Securities.
Record Dates: March 1 and September 1
A-2
Reference is made to the further provisions of this Security on the
reverse side, which will, for all purposes, have the same effect as if set forth
at this place.
IN WITNESS WHEREOF, the Company has caused this Instrument to be duly
executed under its corporate seal.
Dated: QUALITY FOOD CENTERS, INC.
[Seal]
By:______________________________________
Name:
Title:
Attest:______________________________
Secretary
A-3
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities described in the within-mentioned Indenture.
FIRST TRUST NATIONAL ASSOCIATION
as Trustee
By: ______________________________________
Authorized Signatory
A-4
QUALITY FOOD CENTERS, INC.
8.70% Senior Subordinated Note
due 2007
1. Interest.
Quality Food Centers, Inc., a Washington corporation (hereinafter called
the "Company," which term includes any successors under the Indenture
hereinafter referred to), promises to pay interest on the principal amount of
this Security at the rate of 8.70% per annum from March 19, 1997 until the
principal hereof is paid or duly provided for. The Company promises to pay
interest on any principal of and, to the extent permitted by applicable law,
premium, if any, or interest on this Security which is not paid when due at a
rate of 8.70% per annum compounded semi-annually.
The Company will pay interest semi-annually on March 15 and September 15
of each year or, if any such day is not a Business Day, on the next succeeding
Business Day (each, an "Interest Payment Date"), commencing September 15, 1997.
Interest on the Securities will accrue from the most recent date to which
interest has been paid or duly provided for or, if no interest has been paid or
duly provided for on the Securities, from March 19, 1997 (the "Issue Date").
Interest will be computed on the basis of a 360-day year consisting of twelve
30-day months.
2. Method of Payment.
The Company shall pay interest on the Securities (except Defaulted
Interest) to the Persons who are the registered Holders at the close of business
on the March 1 or September 1 (each, a "Record Date") immediately preceding the
Interest Payment Date. Holders must surrender Securities to a Paying Agent to
collect principal payments. Except as provided below, the Company shall pay
principal, premium, if any, and interest in such coin or currency of the United
States of America as at the time of payment shall be legal tender for payment of
public and private debts ("Cash"). The Securities will be payable as to
principal, premium, if any, and interest, and the Securities may be presented
for registration of transfer or exchange, at the office or agency of the Company
maintained for such purpose in the Borough of Manhattan, the City and State of
New York or, at the option of the Company, payment of interest may be made by
check mailed to the Holders at their addresses set forth in the register of
Holders, and provided that payment by wire transfer of immediately available
funds will be required with respect to principal of and interest and premium on
all Global Securities and all other Securities the Holders of which shall have
provided wire transfer instructions to an account within the United States to
the Company or the Paying Agent. Until otherwise designated by the Company, the
Company's office or agency will be the corporate trust agency of the Trustee
presently located at the First Trust of New York, National Association, ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
A-5
3. Paying Agent and Registrar.
Initially, First Trust National Association (the "Trustee," which term
includes any successor Trustee under the Indenture) will act as Paying Agent and
Registrar. The Company may change any Paying Agent, Registrar or co-Registrar
without notice to the Holders. The Company, any of the Guarantors or any of
their respective Subsidiaries may, subject to certain exceptions, act as Paying
Agent, Registrar or co-Registrar.
4. Indenture; Defined Terms.
The Company issued the Securities under an Indenture dated as of March 19,
1997 (the "Indenture") among the Company, the Guarantors named therein and the
Trustee. 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, as in effect on the date of the Indenture. 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 senior
subordinated, unsecured general obligations of the Company limited, subject to
certain exceptions, in aggregate principal amount to $150,000,000. The
Securities and the Guarantees are subordinated in right of payment to certain
other debt obligations of the Company and the Guarantors, respectively. The
Securities are guaranteed on a senior subordinated basis by each of the
Guarantors.
5. Redemption.
The Company will not have the right to redeem any Securities prior to
March 15, 2002, except as provided in the immediately following paragraph. The
Securities will be redeemable at the option of the Company, in whole or in part,
at any time on or after March 15, 2002, upon not less than 30 days nor more than
60 days notice to each Holder of Securities to be redeemed, at the following
Redemption Prices (expressed as percentages of the principal amount) if redeemed
during the 12-month period commencing on March 15 of the years indicated below,
together with accrued and unpaid interest thereon to the Redemption Date
(subject to the right of Holders of record at the close of business on a Record
Date to receive interest due on an Interest Payment Date that is on or prior to
such Redemption Date):
Year Redemption Price
---- ----------------
2002..................... 104.35%
2003..................... 102.90%
2004..................... 101.45%
2005 and thereafter...... 100.00%
A-6
Notwithstanding the foregoing, prior to March 15, 2000, the Company may
redeem up to 20% of the aggregate principal amount of the Securities originally
issued at a redemption price of 108% of the principal amount thereof, plus
accrued and unpaid interest thereon to the Redemption Date, with the net cash
proceeds of one or more public Equity Offerings of common stock, prior to the
Reorganization, of the Company or, after the Reorganization, of the Parent;
provided that at least 80% of the aggregate principal amount of the Securities
originally issued remains outstanding immediately after the occurrence of such
redemption; and provided, further, that if Securities are redeemed with the net
proceeds from the sale of common stock of Parent, the Subject Entity shall have
received cash from the Parent, as a capital contribution or as the net proceeds
from the issuance and sale to the Parent of common stock of the Subject Entity,
in an amount at least equal to the aggregate principal amount of the Securities
so redeemed; and provided, further, that such notice of redemption shall be sent
within 30 days after the date of closing of any such Equity Offering, and such
redemption shall occur within 60 days after the date such notice is sent.
Any such redemption will comply with Article III of the Indenture.
6. Notice of Redemption.
Notice of redemption will be sent by first class mail, at least 30 days
and not more than 60 days prior to the Redemption Date, to the Holder of each
Security to be redeemed at such Holder's last address as then shown upon the
registry books of the Registrar. Securities may be redeemed in part in multiples
of $1,000 only.
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 on such Redemption Date and payment of the
Securities called for redemption is not otherwise prevented or prohibited, 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 plus accrued and unpaid interest to the Redemption Date.
7. Denominations; Transfer; Exchange.
The Securities are in fully registered form, without coupons, in
denominations of $1,000 and integral multiples of $1,000. A Holder may register
the transfer of Securities in accordance with the Indenture. No service charge
will be made for any registration of transfer or exchange of the Securities, but
the Company may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay any taxes or other governmental
charge payable in connection therewith. The Registrar need not register the
transfer of or exchange any Securities selected for redemption.
8. Persons Deemed Owners.
A-7
The registered Holder of a Security may be treated as the owner of it for
all purposes.
9. Unclaimed Money.
If money for the payment of principal, premium or interest remains
unclaimed for two years, the Trustee and the Paying Agents will pay the money
back to the Company at its written request. After that, all liability of the
Trustee and any such Paying Agents with respect to such money shall cease.
10. Discharge Prior to Redemption or Maturity.
Except as set forth in the Indenture, if the Company irrevocably deposits
with the Trustee, in trust, for the benefit of the Holders, Cash, U.S.
Government Obligations or a combination thereof, in such amounts as will be
sufficient in the opinion of a nationally recognized firm of independent public
accountants, to pay the principal of, premium, if any, and interest on the
Securities to redemption or maturity and complies with the other provisions of
the Indenture relating thereto, the Company will be discharged from certain
provisions of the Indenture and the Securities (including certain restrictive
covenants described in paragraph 12 below).
11. 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 a majority in aggregate principal
amount of the Securities then outstanding. Without notice to or consent of any
Holder, the parties thereto may under certain circumstances amend or supplement
the Indenture or the Securities to, among other things, cure any ambiguity,
defect or inconsistency, or make any other change that does not adversely affect
the rights of any Holder of a Security in any material respect.
12. Restrictive Covenants.
The Indenture imposes certain limitations on the ability of the Company
and its Subsidiaries to, among other things, incur additional Indebtedness and
Disqualified Capital Stock, pay dividends or make certain other Restricted
Payments, enter into certain transactions with Affiliates, incur Liens, sell
assets, merge or consolidate with any other Person or transfer (by lease,
assignment or otherwise) substantially all of the properties and assets of the
Company. The limitations are subject to a number of important qualifications and
exceptions. The Company must periodically report to the Trustee on compliance
with such limitations.
A-8
13. Repurchase at Option of Holder.
(a) If there is a Change of Control, the Company shall be required to
offer to purchase on the Change of Control Purchase Date all outstanding
Securities at a purchase price equal to 101% of the principal amount thereof,
plus accrued and unpaid interest to the Change of Control Purchase Date. Holders
of Securities will receive a Change of Control Offer from the Company prior to
any related Change of Control Purchase Date and may elect to have such
Securities purchased by completing the form entitled "Option of Holder to Elect
Purchase" appearing below.
(b) The Indenture imposes certain limitations on the ability of the
Company and its Subsidiaries to sell assets. In the event the proceeds from a
permitted Asset Sale exceed certain amounts, as specified in the Indenture, the
Company generally will be required either to reinvest the proceeds of such Asset
Sale in its business, use such proceeds to retire Senior Debt, or to make an
Asset Sale Offer to purchase a certain amount of each Holder's Securities at
100% of the principal amount thereof, plus accrued interest to the Purchase
Date, as more fully set forth in the Indenture.
14. Notation of Guarantee.
As set forth more fully in the Indenture, the Persons constituting
Guarantors from time to time, in accordance with the provisions of the
Indenture, unconditionally and jointly and severally guarantee, in accordance
with Section 11.1 of the Indenture, to the Holders and to the Trustee and its
successors and assigns, that (i) the principal of, and premium (if any) and
interest on, and Liquidated Damages, if any, in respect of, the Securities will
be paid, whether at Stated Maturity or Interest Payment Dates, by acceleration,
call for redemption or otherwise, (ii) the purchase price for all Securities
properly and timely tendered in response to a Change of Control Offer or Asset
Sale Offer, together with accrued and unpaid interest thereon, will be timely,
and otherwise in accordance with the provisions of the Indenture, paid in full,
(iii) all other obligations of the Company to the Holders or the Trustee under
the Indenture or the Securities will be promptly paid in full or performed, all
in accordance with the terms of the Indenture and the Securities, and (iv) in
the case of any extension of payment or renewal of this Security or any of such
other obligations, they will be paid in full when due or performed in accordance
with the terms of such extension or renewal, whether at Stated Maturity, by
acceleration, call for redemption, upon a Change of Control Offer, upon an Asset
Sale Offer or otherwise. Such Guarantee shall cease to apply, and shall be null
and void, with respect to any Guarantor who, pursuant to Article XI of the
Indenture, is released from its Guarantee or whose Guarantee otherwise cease to
be applicable pursuant to the terms of the Indenture.
15. Ranking.
Payment of principal, premium, if any, and interest on and Liquidated
Damages, if any, in respect of, the Securities is subordinated, in the manner
and to the extent set forth in the Indenture, to the prior payment in full of
all Senior Debt.
A-9
16. Successors.
When a successor assumes all the obligations of its predecessor under the
Securities and the Indenture, the predecessor will, subject to certain
exceptions, be released from those obligations.
17. Defaults and Remedies.
If an Event of Default occurs and is continuing (other than an Event of
Default relating to certain events of bankruptcy, insolvency or reorganization),
then in every such case, unless the principal of all of the Securities shall
have already become due and payable, either 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 and with the
effect provided in the Indenture. If an Event of Default relating to certain
events of bankruptcy, insolvency or reorganization occurs, then the Securities
shall ipso facto become and be immediately due and payable as provided in the
Indenture. Holders of Securities may not enforce the Indenture or the Securities
except as provided in the Indenture. The Trustee may require indemnity
satisfactory to it before it enforces the Indenture or the Securities. Subject
to certain limitations, Holders of a majority in aggregate principal amount of
the Securities then outstanding may 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, premium, interest or Liquidated Damages), if a committee of Trust
Officers determines that withholding notice is in the interest of Holders.
18. Trustee or Agent Dealings with Company.
The Trustee and each Agent under the Indenture, in its individual or any
other capacity, may make loans to, accept deposits from, and perform services
for the Company, any Guarantor or their respective Affiliates, and may otherwise
deal with the Company, any Guarantor or their respective Affiliates as if it
were not the Trustee and such Agent.
19. No Recourse Against Others.
No direct or indirect stockholder, employee, officer or director, as such,
past, present or future, of the Company, the Guarantors or any successor entity
shall have any personal liability in respect of the obligations of the Company
or the Guarantors under the Securities or the Indenture by reason of his or its
status as such stockholder, employee, officer or director. 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.
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20. Authentication.
This Security shall not be valid until the Trustee or authenticating agent
signs the certificate of authentication on this Security.
21. Abbreviations.
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, the Company will cause CUSIP numbers to be
printed on the Securities 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. Additional Rights of Holders of Securities.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture. Requests may be made to:
Quality Food Centers, Inc.
▇▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Corporate Secretary
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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 the Company. The agent may substitute
another to act for him.
Dated: ________________ Signed:________________________________________________
________________________________________________________________________________
(Sign exactly as name appears on
the other side of this Security)
Signature Guarantee**
----------
** NOTICE: The Signature must be guaranteed by an institution which is a
member of one of the following recognized Signature Guaranty Programs: (i)
The Securities Transfer Agent Medallion Program (Stamp); (ii) The New York
Stock Exchange Medallion Program
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(MSP); (iii) The Stock Exchange Medallion Program (SEMP); or (iv) such
other guarantee program acceptable to the Trustee.
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.13 or Article X of the Indenture, check the appropriate
box:
|_| Section 4.13 |_| Article X
If you want to elect to have only part of this Security purchased by the
Company pursuant to Section 4.13 or Article X of the Indenture, as the case may
be, state the amount you want to be purchased (must be $1,000 or a multiple of
$1,000): $_____________
Date:______________________ Signature:_________________________________________
(Sign exactly as your name appears on the
other side of this Security)
Signature Guarantee**
----------
** NOTICE: The Signature must be guaranteed by an institution which is a
member of one of the following recognized Signature Guaranty Programs: (i)
The Securities Transfer Agent
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Medallion Program (Stamp); (ii) The New York Stock Exchange Medallion
Program (MSP); (iii) The Stock Exchange Medallion Program (SEMP); or (iv)
such other guarantee program acceptable to the Trustee.
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SCHEDULE OF EXCHANGES OF DEFINITIVE SECURITIES(3)
The following exchanges of a part of this Global Security for Definitive
Securities have been made:
Principal amount of this
Amount of decrease in Amount of increase in Global Security following Signature of authorized
Date of principal amount of this principal amount of this such decrease officer of Trustee or
exchange Global Security Global Security or increase Securities Custodian
-------- ------------------------ ------------------------ ------------------------- -----------------------
----------
(3) This schedule should only be added if the Security is issued in global
form.
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CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF
TRANSFER OF SECURITIES
Re: 8.70% SENIOR SUBORDINATED NOTES DUE 2007 OF QUALITY FOOD
CENTERS, INC.
This certificate relates to $________________ principal amount of
Securities held in (check applicable box)
|_| book-entry or |_| definitive form by _____________________ (the
"Transferor").
The Transferor (check applicable box):
|_| has requested the Registrar by written order to deliver in exchange
for its beneficial interest in the Global Security held by the Depositary a
Security or Securities in definitive, registered form of authorized
denominations and an aggregate principal amount equal to its beneficial interest
in such Global Security (or the portion thereof indicated above); or
|_| has requested the Registrar by written order to exchange or register
the transfer of a Security or Securities.
In connection with such request and in respect of each such Security, the
Transferor does hereby certify that Transferor is familiar with transfer
restrictions relating to the above-captioned Securities as provided in Section
2.6 of such Indenture, and the transfer of this Security does not require
registration under the Securities Act (as defined below) because (check
applicable box):
|_| Such Security is being acquired for the Transferor's own account,
without transfer (in satisfaction of Section 2.6(a)(ii)(A) or Section
2.6(d)(i)(A) of the Indenture).
|_| Such Security is being transferred to a person the Transferor
reasonably believes is a "qualified institutional buyer" (as defined in Rule
144A under the Securities Act of 1933, as amended (the "Securities Act")) that
is purchasing for its own account or for the account of a "qualified
institutional buyer" to whom notice is given that the transfer is being made in
reliance on such Rule 144A, in each case in reliance on Rule 144A (in
satisfaction of Section 2.6(a)(ii)(B), 2.6(b)(i) or Section 2.6(d)(i)(B) of the
Indenture) or pursuant to an effective registration statement under the
Securities Act (in satisfaction of Section 2.6(a)(ii)(C) or Section 2.6(d)(i)(C)
of the Indenture).
|_| Such Security is being transferred (w) pursuant to an exemption from
registration in accordance with Rule 144 or Regulation S under the Securities
Act or (x) to an institutional "accredited investor" within the meaning of Rule
501(A)(1), (2), (3) or (7) under the Securities Act that is acquiring the
Security for its own account, or for the account of such an institutional
accredited investor, in each case in a minimum principal amount of $100,000, for
investment purposes and not with a view to, or for offer or sale in connection
with, any distribution in
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violation of the Securities Act (in satisfaction of Section 2.6(a)(ii)(C) or
Section 2.6(d)(i)(C) of the Indenture).
|_| Such Security is being transferred in reliance on and in compliance
with an exemption from the registration requirements of the Securities Act
(other than an exemption referred to above) (in satisfaction of Section
2.6(a)(ii)(C) or Section 2.6(d)(i)(C) of the Indenture).
[INSERT NAME OF TRANSFEROR]
By:_________________________________________
Date:___________________________
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