XXXX DEPARTMENT STORES, INC.
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12 1/2% Senior Notes Due 2003
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SECOND SUPPLEMENTAL INDENTURE
Dated as of April 15, 1999
to
INDENTURE
Dated as of April 19, 1996
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STATE STREET BANK AND TRUST COMPANY,
as Trustee
SECOND SUPPLEMENTAL INDENTURE
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XXXX DEPARTMENT STORES, INC.
STATE STREET BANK AND TRUST COMPANY, Trustee
Dated as of April 15, 1999
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Second Supplemental Indenture (this "Supplemental Indenture"), dated as
of April 15, 1999, by and among Xxxx Department Stores, Inc., a Delaware
corporation ("Xxxx"), Hills Stores Company, a Delaware corporation ("Hills"
and/or the "Company"), Hills Department Store Company, a Delaware corporation
("HDSC"), Canton Advertising, Inc., a Massachusetts corporation ("Canton"), HDS
Transport, Inc., an Ohio corporation ("Transport"), Corporate Vision, Inc., a
Massachusetts corporation ("Vision"), and Hills Distributing Company, a Delaware
corporation ("Distributing" and, together with Canton, Transport and Vision, the
"Subsidiaries"; and, together with HDSC, the "Guarantors"), and State Street
Bank and Trust Company, successor to Fleet National Bank, as Trustee (the
"Trustee"), to the Indenture, dated as of April 19, 1996, as amended by the
First Supplemental Indenture, dated as of December 24, 1998, among Hills, the
Guarantors, as guarantors, and the Trustee relating to the 12 1/2% Senior Notes
due 2003 of the Company (the "Notes"). Capitalized terms used herein and not
defined herein have the meanings set forth in the Indenture.
W I T N E S S E T H:
WHEREAS, pursuant to an Agreement and Plan of Merger, dated as
of November 12, 1998 (the "Merger Agreement"), among Xxxx, HSC Acquisition
Corp., formerly a Delaware corporation and wholly-owned subsidiary of Xxxx
("HSC"), and Hills, HSC engaged in a tender offer (the "Equity Offer") for all
of the outstanding common stock, par value $0.01 per share (the "Hills Common
Stock"), and preferred stock, par value $0.10 per share (the "Hills Preferred
Stock"), of Hills; and
WHEREAS, concurrently with the Equity Offer and pursuant to
the Merger Agreement, HSC conducted a tender offer (the "Debt Offer" and
collectively with the Equity Offer, the "Offers") for all of the outstanding
Notes; and
WHEREAS, the Offers closed on December 30, 1998, and, as a
result, HSC acquired approximately 81% and 74% of the then outstanding shares of
Hills Common Stock and Hills Preferred Stock, respectively, and 74% of the then
outstanding principal amount of the Notes; and
WHEREAS, following the consummation of the Equity Offer and
pursuant to the Merger Agreement, on March 19, 1999, HSC was merged with and
into Hills (the "Second-Step Merger"); and
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WHEREAS, as a result of the Equity Offer and the Second-Step
Merger, Xxxx, as the owner of all of the capital stock of HSC, acquired the
entire equity interest in Hills, and Hills, as the surviving corporation of the
Second-Step Merger, became a wholly-owned subsidiary of Xxxx; and
WHEREAS, (1) Sections 5.01 and 10.05 of the Indenture provide
that a Guarantor may merge with or into another corporation, including another
Guarantor or the Company, with the other corporation as the surviving entity of
any such merger, and (2) Section 5.01 of the Indenture provides that Hills may
merge with or into another corporation, with the other corporation as the
surviving entity of any such merger, in each case, provided that the provisions
set forth in such Sections 5.01 and 10.05, as the case may be, are complied
with; and
WHEREAS, on or about April 19, 1999, (1) each of the
Subsidiaries shall be merged with and into HDSC (the "Subsidiary Mergers"), with
HDSC being the surviving entity of each such Subsidiary Merger, (2) promptly
thereafter, HDSC shall be merged with and into Hills (the "HDSC Merger"), with
Hills being the surviving entity of the HDSC Merger, and (3) promptly
thereafter, Hills shall be merged with and into Xxxx (the "Hills Merger" and,
together with the Subsidiary Mergers and the HDSC Merger, the "Mergers"), with
Xxxx being the surviving entity of the Hills Merger; and
WHEREAS, Section 5.01 of the Indenture provides that, upon a
merger as described above, the surviving entity of each such merger shall assume
all of the obligations of the merged entities pursuant to a supplemental
indenture reasonably acceptable to the Trustee; and
WHEREAS, the Mergers described above are intended to occur in
immediate succession such that (1) the time period for which HDSC and Hills are
the surviving entities shall be de minimus and (2) the parties have determined
that no separate supplemental indenture is reasonable or necessary with respect
to the Subsidiary Mergers or the HDSC Merger, but that such entities shall
execute this Supplemental Indenture so as to acknowledge, in accordance with
Section 5.01 of the Indenture, their assumption of the Obligations for such
period as may be applicable; and
WHEREAS, in accordance with Section 5.01 of the Indenture,
upon the effectiveness of this Supplemental Indenture, Xxxx shall assume all of
the Obligations (as defined in the Indenture) of Hills under the Notes and the
Indenture; and
WHEREAS, the Boards of Directors of each of Xxxx, Hills and
the Guarantors have duly adopted resolutions authorizing (1) each of Xxxx, Hills
and the Guarantors, respectively, to execute and deliver this Supplemental
Indenture and (2) the Mergers as required by applicable law; and
WHEREAS, pursuant to Section 9.01 of the Indenture, the
Trustee is authorized to execute and deliver this Supplemental Indenture.
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NOW, THEREFORE, IT IS AGREED AS FOLLOWS:
1. Release of Subsidiary Guarantee Obligations. Pursuant to
Sections 5.01(c) and 10.06 of the Indenture, (a) immediately upon the
effectiveness of each Subsidiary Merger, HDSC shall assume and shall be deemed
to have assumed all of the Obligations of the Subsidiaries under the Notes and
the Indenture, and each Subsidiary party thereto other than HDSC shall hereby be
released from its obligations under its Subsidiary Guarantee, and (b)
immediately upon the effectiveness of the HDSC Merger, Hills shall assume and
shall be deemed to have assumed all of the Obligations of the Guarantors under
the Notes and the Indenture, and HDSC shall hereby be released from its
obligations under its Subsidiary Guarantee.
2. Assumption of Obligations. In accordance with Sections 5.01
and 5.02 of the Indenture, immediately upon the effectiveness of the Hills
Merger, Xxxx shall, and by this Supplemental Indenture does, hereby assume all
of the Obligations of Hills under the Notes and the Indenture.
3. Confirmation. Except as expressly amended hereby, all of
the provisions of the Indenture are in all respects ratified and confirmed, and
nothing herein shall affect the validity or enforceability of the Indenture, as
amended hereby.
4. Counterparts. This Supplemental Indenture may be executed
in any number of counterparts, each of which, when so executed, shall be deemed
to be an original, but all of which shall together constitute but one and the
same instrument.
5. Effectiveness. This Supplemental Indenture shall become
effective immediately upon (i) the execution and delivery hereof by Xxxx, Hills,
the Guarantors and the Trustee, (ii) the execution and delivery to the Trustee
by Xxxx, Hills and the Guarantors of an Officers' Certificate and an opinion of
counsel in accordance with Sections 5.01 and 10.05 of the Indenture, in form and
substance acceptable to the Trustee, and (iii) the execution and delivery to the
Trustee by Xxxx of an officer's certificate certifying the effectiveness of the
Mergers.
6. Governing Law. This Supplemental Indenture shall be
governed by and construed in accordance with the law of the State of New York.
[Signatures on following page.]
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IN WITNESS WHEREOF, the parties have caused this Supplemental Indenture
to be duly executed, all as of the date and year above first written.
XXXX DEPARTMENT STORES, INC.
By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
Title: Senior Vice President, General Counsel
and Corporate Secretary
HILLS STORES COMPANY
By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
Title: Vice President and Secretary
HILLS DEPARTMENT STORE COMPANY
By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
Title: Vice President and Secretary
CANTON ADVERTISING, INC.
By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
Title: Vice President and Secretary
HDS TRANSPORT, INC.
By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
Title: Vice President and Secretary
CORPORATE VISION, INC.
By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
Title: Vice President and Secretary
HILLS DISTRIBUTING COMPANY
By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
Title: Vice President and Secretary
0
XXXXX XXXXXX BANK AND TRUST COMPANY, as Trustee
By: /s/ Xxxx X. Xxxxx
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Name: Xxxx X. Xxxxx
Title: Vice President
