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EXHIBIT 4.8
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RALPHS GROCERY COMPANY
AND
SUBSIDIARY GUARANTORS
AND
UNITED STATES TRUST COMPANY OF NEW YORK
TRUSTEE
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INDENTURE
Dated as of March 26, 1997
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$155,000,000
11% Senior Subordinated Notes
due 2005
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CROSS-REFERENCE TABLE
TIA Indenture
Section Section
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310(a)(1)...................................................... 8.10
(a)(2)...................................................... 8.10
(a)(3)...................................................... N.A.
(a)(4)...................................................... N.A.
(a)(5)...................................................... 8.10; 8.11
(b)......................................................... 8.08; 8.10; 13,02
(c)......................................................... N.A.
311(a)......................................................... 8.11
(b)......................................................... 8.11
(c)......................................................... N.A.
312(a)......................................................... 2.05
(b)......................................................... 13.03
(c)......................................................... 13.03
313(a)......................................................... 8.06
(b)(1)...................................................... N.A
(b)(2)...................................................... 8.06
(c)......................................................... 8.06; 13.02
(d)......................................................... 8.06
314(a)......................................................... 5.07; 5.09; 13.02
(b)......................................................... N.A.
(c)(1)...................................................... 8.02; 13.04
(c)(2)...................................................... 8.02; 13.04
(c)(3)...................................................... N.A.
(d)......................................................... N.A.
(e) ........................................................ 13.05
(f)......................................................... N.A
315(a)......................................................... 8.01(b)
(b)......................................................... 8.05; 13.02
(c)......................................................... 8.01(a)
(d)......................................................... 8.01(c)
(e)......................................................... 7.11
316(a)(last sentence).......................................... 2.09
(a)(1)(A)................................................... 7.05
(a)(1)(B)................................................... 7.04
(a)(2)...................................................... N.A.
(b)......................................................... 7.07
317(a)(1)...................................................... 7.08
(a)(2)...................................................... 7.09
(b)......................................................... 2.04
318(a)......................................................... 13.01
(c)......................................................... 13.01
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N.A. means Not Applicable
NOTE: This Cross-Reference Table shall not, for any purpose, be deemed to be a
part of the Indenture.
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TABLE OF CONTENTS
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ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions........................................................... 1
SECTION 1.02. Incorporation by Reference of TIA..................................... 32
SECTION 1.03. Rules of Construction................................................. 33
ARTICLE TWO
THE SECURITIES
SECTION 2.01. Form and Dating....................................................... 33
SECTION 2.02. Execution and Authentication.......................................... 34
SECTION 2.03. Registrar and Paying Agent............................................ 35
SECTION 2.04. Paying Agent To Hold Assets in Trust.................................. 35
SECTION 2.05. Securityholder Lists.................................................. 36
SECTION 2.06. Transfer and Exchange................................................. 36
SECTION 2.07. Replacement Securities................................................ 37
SECTION 2.08. Outstanding Securities................................................ 37
SECTION 2.09. Treasury Securities................................................... 38
SECTION 2.10. Temporary Securities.................................................. 38
SECTION 2.11. Cancellation.......................................................... 38
SECTION 2.12. Defaulted Interest.................................................... 39
SECTION 2.13. CUSIP Number.......................................................... 39
ARTICLE THREE
REDEMPTION
SECTION 3.01. Notices to Trustee.................................................... 39
SECTION 3.02. Selection of Securities To Be Redeemed................................ 40
SECTION 3.03. Notice of Redemption.................................................. 40
SECTION 3.04. Effect of Notice of Redemption........................................ 41
SECTION 3.05. Deposit of Redemption Price........................................... 41
SECTION 3.06. Securities Redeemed in Part........................................... 42
ARTICLE FOUR
SUBORDINATION
SECTION 4.01. Securities Subordinated to Senior Indebtedness........................ 42
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SECTION 4.02. Suspension of Payment When Senior Indebtedness in Default............. 43
SECTION 4.03. Securities Subordinated to Prior Payment of All Senior
Indebtedness on Dissolution, Liquidation or
Reorganization of Company................................... 44
SECTION 4.04. Securityholders To Be Subrogated to Rights of Holders of
Senior Indebtedness......................................... 46
SECTION 4.05. Obligations of the Company Unconditional.............................. 47
SECTION 4.06. Trustee Entitled To Assume Payments Not Prohibited in Absence
of Notice................................................... 48
SECTION 4.07. Application by Trustee of Assets Deposited with It.................... 48
SECTION 4.08. No Waiver of Subordination Provisions................................. 49
SECTION 4.09. Securityholders Authorize Trustee To Effectuate Subordination
of Securities............................................... 50
SECTION 4.10. Right of Trustee To Hold Senior Indebtedness.......................... 51
SECTION 4.11. No Suspension of Remedies............................................. 51
SECTION 4.12. No Fiduciary Duty of Trustee to Holders of Senior
Indebtedness................................................ 51
ARTICLE FIVE
COVENANTS
SECTION 5.01. Payment of Securities................................................. 52
SECTION 5.02. Maintenance of Office or Agency....................................... 52
SECTION 5.03. Limitation on Restricted Payments..................................... 52
SECTION 5.04. Corporate Existence................................................... 54
SECTION 5.05. Payment of Taxes and Other Claims..................................... 54
SECTION 5.06. Maintenance of Properties and Insurance............................... 55
SECTION 5.07. Compliance Certificate; Notice of Default............................. 56
SECTION 5.08. Compliance with Laws.................................................. 57
SECTION 5.09. SEC Reports........................................................... 57
SECTION 5.10. Waiver of Stay, Extension or Usury Laws............................... 57
SECTION 5.11. Limitation on Transactions with Affiliates............................ 58
SECTION 5.12. Limitation on Incurrences of Additional Indebtedness.................. 60
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SECTION 5.13. Limitation on Dividends and Other Payment Restrictions
Affecting Subsidiaries...................................... 60
SECTION 5.14. Limitation on Liens................................................... 61
SECTION 5.15. Limitation on Change of Control....................................... 62
SECTION 5.16. Limitation on Asset Sales............................................. 65
SECTION 5.17. Guarantees of Certain Indebtedness.................................... 68
SECTION 5.18. Limitation on Preferred Stock of Subsidiaries......................... 68
SECTION 5.19. Limitation on Other Senior Subordinated Indebtedness.................. 69
ARTICLE SIX
SUCCESSOR CORPORATION
SECTION 6.01. Limitations on Mergers and Certain Other Transactions................. 69
SECTION 6.02. Successor Corporation Substituted..................................... 70
ARTICLE SEVEN
DEFAULT AND REMEDIES
SECTION 7.01. Events of Default..................................................... 71
SECTION 7.02. Acceleration.......................................................... 73
SECTION 7.03. Other Remedies........................................................ 74
SECTION 7.04. Waiver of Past Defaults............................................... 75
SECTION 7.05. Control by Majority................................................... 75
SECTION 7.06. Limitation on Suits................................................... 75
SECTION 7.07. Rights of Holders To Receive Payment.................................. 76
SECTION 7.08. Collection Suit by Trustee............................................ 76
SECTION 7.09. Trustee May File Proofs of Claim...................................... 76
SECTION 7.10. Priorities............................................................ 77
SECTION 7.11. Rights and Remedies Cumulative........................................ 78
SECTION 7.12. Delay or Omission Not Waiver.......................................... 78
SECTION 7.13. Undertaking for Costs................................................. 78
ARTICLE EIGHT
TRUSTEE
SECTION 8.01. Duties of Trustee..................................................... 79
SECTION 8.02. Rights of Trustee..................................................... 80
SECTION 8.03. Individual Rights of Trustee.......................................... 81
SECTION 8.04. Trustee's Disclaimer.................................................. 81
SECTION 8.05. Notice of Default..................................................... 81
SECTION 8.06. Reports by Trustee to Holders......................................... 81
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SECTION 8.07. Compensation and Indemnity............................................ 82
SECTION 8.08. Replacement of Trustee................................................ 83
SECTION 8.09. Successor Trustee by Merger, Etc...................................... 84
SECTION 8.10. Eligibility; Disqualification......................................... 84
SECTION 8.11. Preferential Collection of Claims Against Company..................... 84
ARTICLE NINE
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 9.01. Termination of the Company's Obligations.............................. 85
SECTION 9.02. Legal Defeasance and Covenant Defeasance.............................. 86
SECTION 9.03. Application of Trust Money............................................ 91
SECTION 9.04. Repayment to the Company or Subsidiary Guarantors..................... 91
SECTION 9.05. Reinstatement......................................................... 92
ARTICLE TEN
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 10.01. Without Consent of Holders........................................... 92
SECTION 10.02. With Consent of Holders.............................................. 93
SECTION 10.03. Compliance with TIA.................................................. 95
SECTION 10.04. Revocation and Effect of Consents.................................... 95
SECTION 10.05. Notation on or Exchange of Securities................................ 96
SECTION 10.06. Trustee To Sign Amendments, Etc...................................... 96
ARTICLE ELEVEN
GUARANTEE
SECTION 11.01. Unconditional Guarantee.............................................. 96
SECTION 11.02. Subordination of Guarantee........................................... 98
SECTION 11.03. Severability......................................................... 98
SECTION 11.04. Release of a Subsidiary Guarantor.................................... 98
SECTION 11.05. Limitation of Subsidiary Guarantor's Liability....................... 99
SECTION 11.06. Subsidiary Guarantors May Consolidate, etc., on Certain
Terms....................................................... 99
SECTION 11.07. Contribution......................................................... 100
SECTION 11.08. Waiver of Subrogation................................................ 101
SECTION 11.09. Execution of Guarantee............................................... 102
SECTION 11.10. Waiver of Stay, Extension or Usury Laws.............................. 102
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ARTICLE TWELVE
SUBORDINATION OF GUARANTEE OBLIGATIONS
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SECTION 12.01. Guarantee Obligations Subordinated to Guarantor Senior
Indebtedness................................................ 103
SECTION 12.02. Suspension of Guarantee Obligations When Guarantor Senior
Indebtedness in Default..................................... 103
SECTION 12.03. Guarantee Obligations Subordinated to Prior Payment of All
Guarantor Senior Indebtedness on Dissolution,
Liquidation or Reorganization of Such Subsidiary
Guarantor................................................... 105
SECTION 12.04. Holders of Guarantee Obligations To Be Subrogated to Rights
of Holders of Guarantor Senior Indebtedness................. 107
SECTION 12.05. Obligations of the Subsidiary Guarantors Unconditional............... 108
SECTION 12.06. Trustee Entitled To Assume Payments Not Prohibited in
Absence of Notice........................................... 109
SECTION 12.07. Application by Trustee of Assets Deposited with It................... 109
SECTION 12.08. No Waiver of Subordination Provisions................................ 109
SECTION 12.09. Holders Authorize Trustee To Effectuate Subordination of
Guarantee Obligations....................................... 111
SECTION 12.10. Right of Trustee To Hold Guarantor Senior Indebtedness............... 111
SECTION 12.11. No Suspension of Remedies............................................ 112
SECTION 12.12. No Fiduciary Duty of Trustee to Holders of Guarantor Senior
Indebtedness................................................ 112
ARTICLE THIRTEEN
MISCELLANEOUS
SECTION 13.01. TIA Controls......................................................... 112
SECTION 13.02. Notices.............................................................. 113
SECTION 13.03. Communications by Holders with Other Holders......................... 114
SECTION 13.04. Certificate and Opinion as to Conditions Precedent................... 114
SECTION 13.05. Statements Required in Certificate or Opinion........................ 114
SECTION 13.06. Rules by Trustee, Paying Agent, Registrar............................ 115
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SECTION 13.07. Legal Holidays....................................................... 115
SECTION 13.08. Governing Law........................................................ 115
SECTION 13.09. No Adverse Interpretation of Other Agreements........................ 116
SECTION 13.10. No Recourse Against Others........................................... 116
SECTION 13.11. Successors........................................................... 116
SECTION 13.12. Duplicate Originals.................................................. 116
SECTION 13.13. Severability......................................................... 116
SECTION 13.14. No Violation......................................................... 116
Signatures.......................................................................... S-1
Exhibit A - Form of Note
Note: This Table of Contents shall not, for any purpose, be deemed to be part of
the Indenture.
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INDENTURE dated as of March 26, 1997, among RALPHS GROCERY
COMPANY, a Delaware corporation (the "Company"), the SUBSIDIARY GUARANTORS, and
UNITED STATES TRUST COMPANY OF NEW YORK, a New York corporation, as Trustee.
Each party hereto agrees as follows for the benefit of each other
party and for the equal and ratable benefit of the Holders of the Company's 11%
Senior Subordinated Notes due 2005:
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
"Acquired Indebtedness" means (i) with respect to any person that
becomes a Subsidiary of the Company (or is merged into the Company or any of its
Subsidiaries) after the Issue Date, Indebtedness of such person or any of its
Subsidiaries existing at the time such person becomes a Subsidiary of the
Company (or is merged into the Company or any of its Subsidiaries) and which was
not incurred in connection with, or in contemplation of, such person becoming a
Subsidiary of the Company (or being merged into the Company or any of its
Subsidiaries) and (ii) with respect to the Company or any of its Subsidiaries,
any Indebtedness assumed by the Company or any of its Subsidiaries in connection
with the acquisition of any assets from another person (other than the Company
or any of its Subsidiaries), and which was not incurred by such other person in
connection with, or in contemplation of, such acquisition.
"Adjusted Net Assets" shall have the meaning provided in Section
11.07.
"Affiliate" means, with respect to any person, any other person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified person. For the purposes of this definition,
"control" when used with respect to any person means the power to direct the
management and policies of such person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"affiliated," "controlling" and "controlled" have meanings correlative to the
foregoing. Notwithstanding the foregoing, for purposes of this Indenture,
neither BT Securities Corporation nor any of its Af-
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filiates shall be deemed to be an Affiliate of the Company or any of its
Subsidiaries.
"Affiliate Transaction" shall have the meaning provided in
Section 5.11.
"Agent" means any Registrar, Paying Agent or co-Registrar.
"Apollo Advisors, L.P." means Apollo Advisors, L.P., a Delaware
limited partnership.
"Asset Sale" means, with respect to any person, any sale,
transfer or other disposition or series of sales, transfers or other
dispositions (including, without limitation, by merger or consolidation or by
exchange of assets and whether by operation of law or otherwise) made by such
person or any of its subsidiaries to any person other than such person or one of
its wholly owned subsidiaries (or, in the case of a sale, transfer or other
disposition by a Subsidiary, to any person other than the Company or a directly
or indirectly wholly owned Subsidiary) of any assets of such person or any of
its subsidiaries including, without limitation, assets consisting of any Capital
Stock or other securities held by such person or any of its subsidiaries, and
any Capital Stock issued by any subsidiary of such person, in each case, outside
of the ordinary course of business, excluding, however, any sale, transfer or
other disposition, or series of related sales, transfers or other dispositions
(i) involving only Excluded Assets, (ii) resulting in Net Proceeds to the
Company and the Subsidiaries of $500,000 or less, (iii) pursuant to any
foreclosure of assets or other remedy provided by applicable law to a creditor
of the Company or any Subsidiary with a Lien on such assets, which Lien is
permitted under this Indenture; provided that such foreclosure or other remedy
is conducted in a commercially reasonable manner or in accordance with any
Bankruptcy Law, (iv) involving only Cash Equivalents or inventory in the
ordinary course of business or obsolete equipment in the ordinary course of
business consistent with past practices of the Company, (v) involving only the
lease or sub-lease of any real or personal property in the ordinary course of
business or (vi) the proceeds of such Asset Sale which are not applied as
contemplated in Section 5.16 and which, together with all other such Asset Sale
Proceeds, do not exceed $20 million.
"Average Life" means, as of the date of determination, with
respect to any debt security, the quotient obtained by dividing (i) the sum of
the products of the number of years
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from the date of determination to the dates of each successive scheduled
principal payments of such debt security multiplied by the amount of each such
principal payment by (ii) the sum of all such principal payments.
"Bankruptcy Law" means Title 11, U.S. Code or any similar
Federal, state or foreign law for the relief of debtors.
"Board of Directors" means, with respect to any person, the Board
of Directors of such person or of a subsidiary of such person or any duly
authorized committee of the Board of Directors.
"Board Resolution" means, with respect to any person, a duly
adopted resolution of the Board of Directors of such person.
"Business Day" means a day that is not a Legal Holiday.
"Capital Stock" means, with respect to any person, any and all
shares, interests, participation or other equivalents (however designated) of
corporate stock, including each class of common stock and preferred stock of
such person.
"Capitalized Lease Obligation" means obligations under a lease
that is required to be capitalized for financial reporting purposes in
accordance with GAAP, and the amount of Indebtedness represented by such
obligations shall be the capitalized amount of such obligations determined in
accordance with GAAP.
"Cash Equivalents" means (i) obligations issued or
unconditionally guaranteed by the United States of America or any agency
thereof, or obligations issued by any agency or instrumentality thereof and
backed by the full faith and credit of the United States of America, (ii)
commercial paper rated the highest grade by ▇▇▇▇▇'▇ Investors Service, Inc. and
Standard & Poor's' Ratings Group and maturing not more than one year from the
date of creation thereof, (iii) time deposits with, and certificates of deposit
and banker's acceptances issued by, any bank having capital surplus and
undivided profits aggregating at least $500 million and maturing not more than
one year from the date of creation thereof, (iv) repurchase agreements that are
secured by a perfected security interest in an obligation described in clause
(i) and are with any bank described in clause (iii), (v) shares of any money
market mutual
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fund that (a) has at least 95% of its assets invested continuously in the types
of investments referred to in clauses (i) and (ii) above, (b) has net assets of
not less than $500 million, and (c) has the highest rating obtainable from
either Standard & Poor's Ratings Group or ▇▇▇▇▇'▇ Investors Service, Inc. and
(vi) readily marketable direct obligations issued by any state of the United
States of America or any political subdivision thereof having one of the two
highest rating categories obtainable from either ▇▇▇▇▇'▇ Investors Service, Inc.
or Standard & Poor's Ratings Group.
"Change of Control" means the acquisition after the Issue Date,
in one or more transactions, of beneficial ownership (within the meaning of Rule
13d-3 under the Exchange Act) by (i) any person or entity (other than any
Permitted Holder) or (ii) any group of persons or entities (excluding any
Permitted Holders) who constitute a group (within the meaning of Section
13(d)(3) of the Exchange Act), in either case, of any securities of Holdings or
the Company such that, as a result of such acquisition, such person, entity or
group beneficially owns (within the meaning of Rule 13d-3 under the Exchange
Act), directly or indirectly, 40% or more of the then outstanding voting
securities entitled to vote on a regular basis for a majority of the Board of
Directors of the Company (but only to the extent that such beneficial ownership
is not shared with any Permitted Holder who has the power to direct the vote
thereof); provided, however, that no such Change of Control shall be deemed to
have occurred if (A) the Permitted Holders beneficially own, in the aggregate,
at such time, a greater percentage of such voting securities than such other
person, entity or group or (B) at the time of such acquisition, the Permitted
Holders (or any of them) possess the ability (by contract or otherwise) to
elect, or cause the election, of a majority of the members of the Company's
Board of Directors.
"Change of Control Date" shall have the meaning provided in
Section 5.15.
"Change of Control Offer" shall have the meaning provided in
Section 5.15.
"Change of Control Payment Date" shall have the meaning provided
in Section 5.15.
"Commission" means the Securities and Exchange Commission.
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"▇▇▇▇▇▇ ▇▇▇▇▇" means, with respect to any person, any and all
shares, interests or other participations in, and other equivalents (however
designated and whether voting or nonvoting) of, such person's common stock,
whether outstanding at the Issue Date or issued after the Issue Date, and
includes, without limitation, all series and classes of such common stock.
"Company" means the party named as such in this Indenture until a
successor replaces it pursuant to this Indenture and thereafter means such
successor.
"Consolidated Net Income," means, with respect to any person, for
any period, the aggregate of the net income (or loss) of such person and its
subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided that (a) the net income of any other person in which such
person or any of its subsidiaries has an interest (which interest does not cause
the net income of such other person to be consolidated with the net income of
such person and its subsidiaries in accordance with GAAP) shall be included only
to the extent of the amount of dividends or distributions actually paid to such
person or such subsidiary by such other person in such period; (b) the net
income of any subsidiary of such person that is subject to any Payment
Restriction shall be excluded to the extent such Payment Restriction actually
prevented the payment of an amount that otherwise could have been paid to, or
received by, such person or a subsidiary of such person not subject to any
Payment Restriction; and (c)(i) the net income (or loss) of any other person
acquired in a pooling of interests transaction for any period prior to the date
of such acquisition, (ii) all gains and losses realized on any Asset Sale, (iii)
all gains realized upon or in connection with or as a consequence of the
issuance of the Capital Stock of such person or any of its subsidiaries and any
gains on pension reversions received by such person or any of its subsidiaries,
(iv) all gains and losses realized on the purchase or other acquisition by such
person or any of its subsidiaries of any securities of such person or any of its
subsidiaries, (v) all gains and losses resulting from the cumulative effect of
any accounting change pursuant to the application of Accounting Principles Board
Opinion No. 20, as amended,(vi) all other extraordinary gains and losses, (vii)
(A) all non-cash charges, (B) up to $10 million of severance costs and (C) any
other restructuring reserves or charges (provided, however, that any cash
payments actually made with respect to the liabilities for which such
restructuring reserves or charges were created shall be deducted from
Consolidated Net Income in the period when made), in each case, incurred by the
Company or any of its Sub-
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sidiaries in connection with the Merger, including, without limitation, the
divestiture of the Excluded Assets, (viii) losses incurred by the Company and
its Subsidiaries resulting from earthquakes and (ix) with respect to the
Company, all deferred financing costs written off in connection with the early
extinguishment of any Indebtedness, shall each be excluded; provided further
that solely for the purpose of computing amounts described in subclause (c) of
the first paragraph of Section 5.03, "Consolidated Net Income" of the Company
for any period shall be reduced by the aggregate amount of dividends paid by the
Company or a Subsidiary to Holdings pursuant to clauses (v) and (viii) of the
definition of "Permitted Payments" during such period.
"Consolidated Net Worth" means, with respect to any person, the
total stockholders' equity (exclusive of any Disqualified Capital Stock) of such
person and its subsidiaries determined on a consolidated basis in accordance
with GAAP.
"Consulting Agreement" means that certain Consulting Agreement
dated as of June 14, 1995 and as in effect on the Issue Date, among the Company,
Holdings and The Yucaipa Companies (as such Consulting Agreement may be amended
or replaced, so long as any amounts paid under any amended or replacement
agreement do not exceed the amounts payable under such Consulting Agreement as
in effect on the Issue Date).
"Credit Agent" means, at any time, the then-acting Administrative
Agent as defined in and under the Credit Agreement, which initially shall be
Bankers Trust Company. The Company shall promptly notify the Trustee of any
change in the Credit Agent.
"Credit Agreement" means the Credit Agreement, dated as of June
14, 1995, as amended and in effect on the Issue Date, by and among Food 4 Less,
as borrower, certain of its subsidiaries, Holdings, as guarantor, the Lenders
referred to therein and Bankers Trust Company, as administrative agent, as the
same may be amended, extended, renewed, restated, supplemented or otherwise
modified (in each case, in whole or in part, and without limitation as to
amount, terms, conditions, covenants and other provisions) from time to time,
and any agreement governing Indebtedness incurred to refund, replace or
refinance any borrowings and commitments then outstanding or permitted to be
outstanding under such Credit Agreement or any such prior agreement as the same
may be amended, extended, renewed, restated, supplemented or otherwise modified
(in each case, in whole or in part, and without limitation as to amount,
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terms, conditions, covenants and other provisions). The term "Credit Agreement"
shall include all related or ancillary documents, including, without limitation,
any guarantee agreements and security documents. The Company shall promptly
notify the Trustee of any such refunding or refinancing of the Credit Agreement.
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"Default" means any event which is, or after notice or passage of
time or both would be, an Event of Default.
"Designated Senior Indebtedness" means (i) in the event any
Indebtedness is outstanding under the Credit Agreement, all Senior Indebtedness
under the Credit Agreement and (ii) if no Indebtedness is outstanding under the
Credit Agreement, any other issue of Senior Indebtedness which (a) at the time
of determination is equal to or greater than $50 million in aggregate principal
amount and (b) is specifically designated in the instrument evidencing such
Senior Indebtedness as "Designated Senior Indebtedness" by the Company. For
purposes of this definition, the term "Credit Agreement" shall not include any
agreement governing Indebtedness incurred to refund, replace or refinance
borrowings or commitments under the Credit Agreement other than any such
agreements incurred to refund, replace or refinance the entirety of the
borrowings and commitments then outstanding or permitted to be outstanding
thereunder.
"Disqualified Capital Stock" means, with respect to any person,
any Capital Stock of such person or its subsidiaries that, by its terms, by the
terms of any agreement related thereto or by the terms of any security into
which it is convertible, puttable or exchangeable is, or upon the happening of
an event or the passage of time would be, required to be redeemed or repurchased
by such person or its subsidiaries, including at the option of the holder
thereof, in whole or in part, or has, or upon the happening of an event or
passage of time would have, a redemption or similar payment due, on or prior to
the Maturity Date of the Securities or any other Capital Stock of such person or
its subsidiaries designated as Disqualified Capital Stock by such person at the
time of issuance; provided, however, that if such Capital Stock is either (i)
redeemable or repurchasable solely at the option of such person or (ii) issued
to employees of the Company or its Subsidiaries or to any plan for the benefit
of such employees, such Capital
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Stock shall not constitute Disqualified Capital Stock unless so designated.
"EBDIT" means, with respect to any person, for any period, the
Consolidated Net Income of such person for such period, plus, in each case to
the extent deducted in computing Consolidated Net Income of such person for such
period (without duplication) (i) provisions for income taxes or similar charges
recognized by such person and its consolidated subsidiaries accrued during such
period, (ii) depreciation and amortization expense of such person and its
consolidated subsidiaries accrued during such period (but only to the extent not
included in Fixed Charges), (iii) Fixed Charges of such person and its
consolidated subsidiaries for such period, (iv) LIFO charges (credits) of such
person and its consolidated subsidiaries for such period, (v) the amount of any
restructuring reserve or charge recorded during such period in accordance with
GAAP, including any such reserve or charge related to the Merger, and (vi) any
other non-cash charges reducing Consolidated Net Income for such period
(excluding any such charge which requires an accrual of or a cash reserve for
cash charges for any future period), less, without duplication, (i) non-cash
items increasing Consolidated Net Income of such person for such period
(excluding any such items which represent the reversal of any accrual of, or
cash reserve for, anticipated cash charges in any prior period) in each case
determined in accordance with GAAP and (ii) the amount of all cash payments made
by such person or its subsidiaries during such period to the extent that such
cash payment has been provided for in a restructuring reserve or charge referred
to in clause (v) above (and was not otherwise deducted in the computation of
Consolidated Net Income of such person for such period).
"Event of Default" shall have the meaning provided in Section
7.01.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated by the Commission thereunder.
"Excluded Assets" means assets of the Company or any Subsidiary
required to be disposed of by applicable regulatory authorities in connection
with the Merger.
"Existing Indebtedness" means the following indebtedness of the
Company to the extent outstanding on the Issue Date: (a) the 10.45% Senior Notes
due 2004 issued pursuant to an indenture dated as of June 6, 1996; (b) the
10.45% Senior
18
-9-
Notes due 2004 issued pursuant to an indenture dated as of June 1, 1995; (c) the
10.45% Senior Notes due 2000 issued pursuant to an indenture dated as of April
15, 1992; (d) the 11% Senior Subordinated Notes due 2005 issued pursuant to an
indenture dated as of June 1, 1995; (e) the 9% Senior Subordinated Notes due
2003 issued pursuant to an indenture dated as of March 30, 1993; (f) the 10 1/4%
Senior Subordinated Notes due 2002 issued pursuant to an indenture dated as of
July 29, 1992; and (g)(1) the 13.75% Senior Subordinated Notes due 2005 issued
pursuant to an indenture dated as of June 1, 1995, and (2) the 13.75% Senior
Subordinated Notes due 2001 issued pursuant to an indenture dated as of June 15,
1991; provided that such indebtedness described under subclauses (1) and (2) of
clause (g) hereof shall no longer constitute Existing Indebtedness from and
after April 29, 1997.
"Fixed Charges" means, with respect to any person, for any
period, the aggregate amount of (i) interest, whether expensed or capitalized,
paid, accrued or scheduled to be paid or accrued during such period (except to
the extent accrued in a prior period) in respect of all Indebtedness of such
person and its consolidated subsidiaries (including (a) original issue discount
on any Indebtedness (including, (without duplication) in the case of the
Company, any original issue discount on the Securities but excluding
amortization of debt issuance costs) and (b) the interest portion of all
deferred payment obligations, calculated in accordance with the effective
interest method, in each case to the extent attributable to such period but
excluding the amortization of debt issuance costs), (ii) dividend requirements
on Preferred Stock of such person and its consolidated subsidiaries (whether in
cash or otherwise (except dividends payable in shares of Qualified Capital
Stock)) declared or paid or required to be declared or paid during such period
(except to the extent accrued in a prior period) and excluding items eliminated
in consolidation and (iii) dividends declared or paid or scheduled or required
to be declared or paid to Holdings which are permitted to be paid pursuant to
clause (v) of the definition of "Permitted Payments." For purposes of this
definition, (a) interest on a Capitalized Lease Obligation shall be deemed to
accrue at an interest rate reasonably determined by the Board of Directors of
such person (as evidenced by a Board Resolution) to be the rate of interest
implicit in such Capitalized Lease Obligation in accordance with GAAP, (b)
interest on Indebtedness that is determined on a fluctuating basis shall be
deemed to have accrued at a fixed rate per annum equal to the rate of interest
of such Indebtedness in effect on the date Fixed Charges are being calculated,
(c) interest on Indebtedness that may optionally be determined
19
-10-
at an interest rate based upon a factor of a prime or similar rate, a
eurocurrency interbank offered rate, or other rate, shall be deemed to have been
based upon the rate actually chosen, or, if none, then based upon such optional
rate chosen as the Company may designate, and (d) Fixed Charges shall be
increased or reduced by the net cost (including amortization of discount) or
benefit associated with Interest Swap Obligations attributable to such period.
For purposes of clause (ii) above, dividend requirements shall be increased to
an amount representing the pre-tax earnings that would be required to cover such
dividend requirements; accordingly, the increased amount shall be equal to a
fraction, the numerator of which is the amount of such dividend requirements and
the denominator of which is one (1) minus the applicable actual combined
federal, state, local and foreign income tax rate of such person and its
subsidiaries (expressed as a decimal), on a consolidated basis, for the fiscal
year immediately preceding the date of the transaction giving rise to the need
to calculate Fixed Charges.
"FFL" means Food 4 Less, Inc., a Delaware corporation, and its
successors, including, without limitation, Holdings.
"Food 4 Less" means Food 4 Less Supermarkets, Inc., a Delaware
corporation, and its successors, including, without limitation, the Company.
"Foreign Exchange Agreement" means any foreign exchange contract,
currency swap agreement or other similar agreement or arrangement designed to
protect against fluctuations in currency values.
"Forward Period" shall have the meaning provided in the
definition of "0perating Coverage Ratio" contained in this Section 1.01.
"GAAP" means generally accepted accounting principles as in
effect in the United States of America as of June 1, 1995.
"Guarantee" means the guarantee of each Subsidiary Guarantor set
forth in Article Eleven and any additional guarantee of the Securities executed
by any Subsidiary of the Company.
"Guarantee Obligations" shall have the meaning provided in
Section 12.01.
20
-11-
"Guarantor Payment Blockage Period" shall have the meaning
provided in Section 12.02.
"Guarantor Senior Indebtedness" means, with respect to any
Subsidiary Guarantor, the principal of, premium, if any, and interest on and all
other Obligations with respect to any Indebtedness of such Subsidiary Guarantor,
whether outstanding on the Issue Date or thereafter created, incurred or
assumed, 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 Guarantee of such Subsidiary Guarantor. Without limiting the
generality of the foregoing, "Guarantor Senior Indebtedness" shall include the
principal of, premium, if any, and interest on all Obligations of every nature
of such Subsidiary Guarantor from time to time owed to the lenders under the
Credit Agreement, including, without limitation, the Letter of Credit
Obligations and principal of and interest on, and all fees, indemnities and
expenses payable under the Credit Agreement. Notwithstanding the foregoing,
"Guarantor Senior Indebtedness" shall not include (a) Indebtedness evidenced by
the Guarantee of such Subsidiary Guarantor, (b) Indebtedness that is expressly
subordinate or junior in right of payment to any Indebtedness of such Subsidiary
Guarantor, (c) Indebtedness which, when incurred and without respect to any
election under Section 111(b) of ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code, is without
recourse to such Subsidiary Guarantor (other than Capitalized Lease
Obligations), (d) Indebtedness which is represented by Disqualified Capital
Stock, (e) obligations for goods, materials or services purchased in the
ordinary course of business or obligations consisting of trade payables, (f)
Indebtedness of or amounts owed by such Subsidiary Guarantors for compensation
to employees or for services rendered to such Subsidiary Guarantors, (g) any
liability for federal, state, local or other taxes owed or owing by such
Subsidiary Guarantor, (h) Indebtedness of such Subsidiary Guarantor representing
a guarantee of Subordinated Indebtedness or Pari Passu Indebtedness (in each
case, with respect to the Securities or any Guarantee) of the Company or any
other Subsidiary Guarantor, (i) Indebtedness of such Subsidiary Guarantor to a
Subsidiary of the Company and (j) that portion of any Indebtedness which is
incurred by such Subsidiary Guarantor in violation of this Indenture.
"Holder" or "Securityholder" means the person in whose name a
Security is registered on the Registrar's books.
21
-12-
"Holdings" means Food 4 Less Holdings, Inc., a Delaware
corporation, and its successors.
"Holdings Registration Rights Agreement" means that certain
Registration Rights Agreement by and between RGC Partners, L.P., Holdings and
Food 4 Less, as such Registration Rights Agreement may be amended or replaced,
so long as any amounts paid by Holdings and the Company under any amended or
replacement agreement do not exceed the amounts payable by Holdings and the
Company under such Registration Rights Agreement as in effect on June 14, 1995.
"Indebtedness" means with respect to any person, without
duplication, (i) all liabilities, contingent or otherwise, of such person (a)
for borrowed money (whether or not the recourse of the lender is to the whole of
the assets of such person or only to a portion thereof), (b) evidenced by bonds,
notes, debentures, drafts accepted or similar instruments or letters of credit
or representing the balance deferred and unpaid of the purchase price of any
property (other than any such balance that represents an account payable or any
other monetary obligation to a trade creditor (whether or not an Affiliate)
created, incurred, assumed or guaranteed by such person in the ordinary course
of business of such person in connection with obtaining goods, materials or
services and due within twelve months (or such longer period for payment as is
customarily extended by such trade creditor) of the incurrence thereof, which
account is not overdue by more than 90 days, according to the original terms of
sale, unless such account payable is being contested in good faith), or (c) for
the payment of money relating to a Capitalized Lease Obligation; (ii) the
maximum fixed repurchase price of all Disqualified Capital Stock of such person;
(iii) reimbursement obligations of such person with respect to letters of
credit; (iv) obligations of such person with respect to Interest Swap
Obligations and Foreign Exchange Agreements; (v) all liabilities of others of
the kind described in the preceding clause (i), (ii), (iii) or (iv) that such
person has guaranteed or that is otherwise its legal liability; and (vi) all
obligations of others secured by a Lien to which any of the properties or assets
(including, without limitation, leasehold interests and any other tangible or
intangible property rights) of such person are subject, whether or not the
obligations secured thereby shall have been assumed by such person or shall
otherwise be such person's legal liability (provided that if the obligations so
secured have not been assumed by such person or are not otherwise such person's
legal liability, such obligations shall be deemed to be in an amount equal to
the fair market value of such properties or as-
22
-13-
sets, as determined in good faith by the Board of Directors of such person,
which determination shall be evidenced by a Board Resolution). For purposes of
the preceding sentence, the "maximum fixed repurchase price" of any Disqualified
Capital Stock that does not have a fixed repurchase price shall be calculated in
accordance with the terms of such Disqualified Capital Stock as if such
Disqualified Capital Stock were purchased on any date on which Indebtedness
shall be required to be determined pursuant to this Indenture, and if such price
is based upon, or measured by, the fair market value of such Disqualified
Capital Stock (or any equity security for which it may be exchanged or
converted), such fair market value shall be determined in good faith by the
Board of Directors of such person, which determination shall be evidenced by a
Board Resolution. For purposes of this Indenture, Indebtedness incurred by any
person that is a general partnership (other than non-recourse Indebtedness)
shall be deemed to have been incurred by the general partners of such
partnership pro rata in accordance with their respective interests in the
liabilities of such partnership unless any such general partner shall, in the
reasonable determination of the Board of Directors of the Company, be unable to
satisfy its pro rata share of the liabilities of the partnership, in which case
the pro rata share of any Indebtedness attributable to such partner shall be
deemed to be incurred at such time by the remaining general partners on a pro
rata basis in accordance with their interests.
"Indenture" means this Indenture, as amended or supplemented from
time to time in accordance with the terms hereof.
"Independent Financial Advisor" means a reputable accounting,
appraisal or nationally recognized investment banking or consulting firm that
is, in the reasonable judgment of the Board of Directors of the Company,
qualified to perform the tasks for which such firm has been engaged and
disinterested and independent with respect to the Company and its Affiliates.
"Interest Payment Date" means the stated maturity of an
installment of interest on the Securities.
"Interest Swap Obligation" means any obligation of any person
pursuant to any arrangement with any other person whereby, directly or
indirectly, such person is entitled to receive from time to time periodic
payments calculated by applying either a fixed or floating rate of in-
23
-14-
terest on a stated notional amount in exchange for periodic payments made by
such person calculated by applying a fixed or floating rate of interest on the
same notional amount; provided that the term "Interest Swap Obligation" shall
also include interest rate exchange, collar, cap, swap option or similar
agreements providing interest rate protection.
"Investment" by any person in any other person means any
investment by such person in such other person, whether by share purchase,
capital contribution, loan, advance (other than reasonable loans and advances to
employees for moving and travel expenses, as salary advances, or to permit the
purchase of Qualified Capital Stock of Holdings or any of its Subsidiaries and
other similar customary expenses incurred, in each case in the ordinary course
of business consistent with past practice) or similar credit extension
constituting Indebtedness of such other person, and any guarantee of
Indebtedness of any other person.
"Issue Date" means the date of original issuance of the
Securities under this Indenture.
"Legal Holiday" shall have the meaning provided in Section 13.07.
"Letter of Credit Obligations" means Indebtedness of the Company
or any of its Subsidiaries with respect to letters of credit issued pursuant to
the Credit Agreement, and for purposes of the definition of the term "Permitted
Indebtedness," the aggregate principal amount of Indebtedness outstanding at any
time with respect thereto shall be deemed to consist of (a) the aggregate
maximum amount then available to be drawn under all such letters of credit (the
determination of such maximum amount to assume compliance with all conditions
for drawing), and (b) the aggregate amount that has then been paid by, and not
reimbursed to, the issuers under such letters of credit.
"Lien" means any mortgage, pledge, lien, encumbrance, charge or
adverse claim affecting title or resulting in an encumbrance against real or
personal property, or a security interest of any kind (including any conditional
sale or other title retention agreement, any lease in the nature thereof, any
option or other agreement to sell which is intended to constitute or create a
security interest, mortgage, pledge or lien, and any filing of or agreement to
give any financing statement under the Uniform Commercial Code (or equivalent
statutes) of any jurisdiction); provided that in no event shall an operating
lease be deemed to constitute a Lien under this Indenture.
"Maturity Date" means June 15, 2005.
24
-15-
"Merger" means (i) the merger of Food 4 Less into RSI (with RSI
surviving such merger) pursuant to the Merger Agreement and (ii) immediately
following the merger described in clause (i) of this definition, the merger of
Ralphs Grocery Company into RSI (with RSI surviving such merger and changing its
name to "Ralphs Grocery Company" in connection with such merger).
"Merger Agreement" means the Agreement and Plan of Merger, dated
September 14, 1994, by and among Holdings, FFL, Food 4 Less, RSI and the
stockholders of RSI, as such agreement was in effect on June 14, 1995.
"Net Cash Proceeds" means the Net Proceeds of any Asset Sale
received in the form of cash or Cash Equivalents.
"Net Proceeds" means (a) in the case of any Asset Sale or any
issuance and sale by any person of Qualified Capital Stock, the aggregate net
proceeds received by such person after payment of expenses, taxes, commissions
and the like incurred in connection therewith (and, in the case of any Asset
Sale, net of the amount of cash applied to repay Indebtedness secured by the
asset involved in such Asset Sale), whether such proceeds are in cash or in
property (valued at the fair market value thereof at the time of receipt, as
determined with respect to any Asset Sale resulting in Net Proceeds in excess of
$5 million in good faith by the Board of Directors of such person, which
determination shall be evidenced by a Board Resolution) and (b) in the case of
any conversion or exchange of any outstanding Indebtedness or Disqualified
Capital Stock of such person for or into shares of Qualified Capital Stock of
the Company, the sum of (i) the fair market value of the proceeds received by
the Company in connection with the issuance of such Indebtedness or Disqualified
Capital Stock on the date of such issuance and (ii) any additional amount paid
by the holder to the Company upon such conversion or exchange.
"New Discount Debenture Indenture" means the indenture dated as
of June 14, 1995 under which the 13 5/8% Senior Discount Debentures due 2005 of
Holdings were issued, as the same may be modified and amended from time to time
and refinancings thereof to the extent such refinancings are permitted under
this Indenture.
"New Discount Debentures" means the 13 5/8% Senior Discount
Debentures due 2005 of Holdings issued pursuant to the New Discount Debenture
Indenture, as the same may be modified and amended from time to time and future
refinancings thereof
25
-16-
to the extent such refinancings are permitted under this Indenture.
"1995 11% Senior Subordinated Note Indenture" means the indenture
dated as of June 1, 1995 among the Company, the Subsidiary Guarantors and United
States Trust Company of New York, as Trustee, under which the 11% Senior
Subordinated Notes of the Company were issued, as the same may be modified and
amended from time to time and refinancings thereof to the extent such
refinancings are permitted under this Indenture.
"Non-payment Default" means any event (other than a Payment
Default) the occurrence of which entitles one or more persons to act to
accelerate the maturity of any Designated Senior Indebtedness.
"Obligations" means all obligations of every nature, whether for
principal, reimbursements, interest, fees, expenses, indemnities or otherwise,
and whether primary, secondary, direct, indirect, contingent, fixed or otherwise
(including obligations of performance) under the documentation governing any
Indebtedness; provided that the term "Obligations" shall not include the
obligations of the Company to the Trustee under Section 8.07.
"Officer" means, with respect to any person, the Chairman of the
Board, the President, any Vice President, the Chief Financial Officer, the
Controller, or the Secretary of such person.
"Officers' Certificate" means, with respect to any person, a
certificate signed by two Officers or by an officer and either an Assistant
Treasurer or an Assistant Secretary of such person and otherwise complying with
the requirements of Sections 13.04 and 13.05.
"Operating Coverage Ratio" means, with respect to any person, the
ratio of (1) EBDIT of such person for the period (the "Pro Forma Period")
consisting of the most recent four full fiscal quarters for which financial
information in respect thereof is available immediately prior to the date of the
transaction giving rise to the need to calculate the Operating Coverage Ratio
(the "Transaction Date") to (2) the aggregate Fixed Charges of such person for
the fiscal quarter in which the Transaction Date occurs and the three fiscal
quarters immediately subsequent to such fiscal quarter (the "Forward Period")
reasonably anticipated by the Board of Directors of such person to become due
from time to time during such period. In
26
-17-
addition to, but without duplication of, the foregoing, for purposes of this
definition, "EBDIT" shall be calculated after giving effect (without
duplication), on a pro forma basis for the Pro Forma Period (but no longer), to
(a) any Investment, during the period commencing on the first day of the Pro
Forma Period to and including the Transaction Date (the "Reference Period"), in
any other person that, as a result of such Investment, becomes a subsidiary of
such person, (b) the acquisition, during the Reference Period (by merger,
consolidation or purchase of stock or assets) of any business or assets, which
acquisition is not prohibited by this Indenture, and (c) any sales or other
dispositions of assets (other than sales of inventory in the ordinary course of
business) occurring during the Reference Period, in each case as if such
incurrence, Investment, repayment, acquisition or asset sale had occurred on the
first day of the Reference Period. In addition, for purposes of this definition,
"Fixed Charges" shall be calculated after giving effect (without duplication),
on a pro forma basis for the Forward Period, to any Indebtedness incurred or
repaid on or after the first day of the Forward Period and prior to the
Transaction Date. If such person or any of its subsidiaries directly or
indirectly guarantees any Indebtedness of a third person, the Operating Coverage
Ratio shall give effect to the incurrence of such Indebtedness as if such person
or subsidiary had directly incurred such guaranteed Indebtedness.
"operating lease" means any lease the obligations under which do
not constitute Capitalized Lease Obligations.
"Opinion of Counsel" means a written opinion from legal counsel
who is reasonably acceptable to the Trustee complying with the requirements of
Sections 13.04 and 13.05. Unless otherwise required by the Trustee, the legal
counsel may be an employee of or counsel to the Company or the Trustee.
"Pari Passu Indebtedness" means, with respect to the Company or
any Subsidiary Guarantor, Indebtedness of such person which ranks pari passu in
right of payment to the Securities or the Guarantee of such Subsidiary
Guarantor, as the case may be (in each case, whether or not secured by any
Lien).
"Paying Agent" shall have the meaning provided in Section 2.03,
except that, for the purposes of Articles Three and Nine and Sections 5.15 and
5.16, the Paying Agent shall not be the Company or an Affiliate of the Company.
"Payment Blockage Notice" shall have the meaning provided in
Section 4.02.
27
-18-
"Payment Blockage Period" shall have the meaning provided in
Section 4.02.
"Payment Default" means any default in the payment of principal,
premium, if any, or interest on any Designated Senior Indebtedness or
Significant Senior Indebtedness beyond any applicable grace period with respect
thereto.
"Payment Restriction" means, with respect to a subsidiary of any
person, any encumbrance, restriction or limitation, whether by operation of the
terms of its charter or by reason of any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation, on the ability of (i)
such subsidiary to (a) pay dividends or make other distributions on its Capital
Stock or make payments on any obligation, liability or Indebtedness owed to such
person or any other subsidiary of such person, (b) make loans or advances to
such person or any other subsidiary of such person, or (c) transfer any of its
properties or assets to such person or any other subsidiary of such person, or
(ii) such person or any other subsidiary of such person to receive or retain any
such (a) dividends, distributions or payments, (b) loans or advances, or (c)
transfer of properties or assets.
"Permitted Holder" means (i) Food 4 Less Equity Partners, L.P.,
The Yucaipa Companies or any entity controlled thereby or any of the partners
thereof, (ii) Apollo Advisors, L.P., Lion Advisors, L.P. or any entity
controlled thereby or any of the partners thereof, (iii) an employee benefit
plan of the Company, or any of its subsidiaries or any participant therein, (iv)
a trustee or other fiduciary holding securities under an employee benefit plan
of the Company or any of its subsidiaries or (v) any Permitted Transferee of any
of the foregoing persons.
"Permitted Indebtedness" means (a) Indebtedness of the Company
and its Subsidiaries (and the Company and each Subsidiary (to the extent it is
not an obligor) may guarantee such Indebtedness) pursuant to (i) the Term Loans
in an aggregate principal amount at any time outstanding not to exceed $600
million less the aggregate amount of all principal repayments thereunder
pursuant to and in accordance with the requirements of Section 5.16 of the 1995
11% Senior Subordinated Note Indenture subsequent to June 14, 1995, (ii) the
revolving credit facility under the Credit Agreement (including the Letter of
Credit Obligations) in an aggregate principal amount at any time outstanding not
to exceed $325 million, less all permanent reductions thereunder pursuant to and
in accordance with the
28
-19-
requirements of Section 5.16 of the 1995 11% Senior Subordinated Note Indenture
since June 14, 1995, and (iii) any Indebtedness incurred under the Credit
Agreement pursuant to and in compliance with (A) clause (m) of this definition
and (B) Section 5.12 (other than Permitted Indebtedness that is not incurred
pursuant to clause (m) or this clause (a) of this definition); (b) Indebtedness
of the Company or a Subsidiary Guarantor owed to and held by the Company or a
Subsidiary Guarantor; (c) Indebtedness incurred by the Company or any Subsidiary
in connection with the purchase or improvement of property (real or personal) or
equipment or other capital expenditures in the ordinary course of business
(including for the purchase of assets or stock of any retail grocery store or
business) or consisting of Capitalized Lease Obligations; provided that (i) at
the time of the incurrence thereof, such Indebtedness, together with any other
Indebtedness incurred during the most recently completed four fiscal quarter
period in reliance upon this clause (c) does not exceed, in the aggregate, 3% of
net sales of the Company and its Subsidiaries during the most recently completed
four fiscal quarter period on a consolidated basis and (ii) such Indebtedness,
requirements of Section 5.16 of the 1995 11% Senior Subordinated Note Indenture
subsequent to June 14, 1995, (ii) the revolving credit facility under the Credit
Agreement (including the Letter of Credit Obligations) in an aggregate principal
amount at any time outstanding not to exceed $325 million, less all permanent
reductions thereunder pursuant to and in accordance with the requirements of
together with all then outstanding Indebtedness incurred in reliance upon this
clause (c) does not exceed, in the aggregate, 3% of the aggregate net sales of
the Company and its Subsidiaries during the most recently completed twelve
fiscal quarter period on a consolidated basis (calculated on a pro forma basis
if the date of incurrence is prior to the end of the twelfth fiscal quarter
following the Merger); (d) Indebtedness incurred by the Company or any
Subsidiary in connection with capital expenditures in an aggregate principal
amount not exceeding $150 million (less the aggregate principal amount of any
Indebtedness incurred by the Company or any Subsidiary on or prior to the Issue
Date in reliance on clause (d) of the definition of "Permitted Indebtedness"
under the 1995 11% Senior Subordinated Note Indenture); provided that such
capital expenditures relate solely to the integration of the operations of RSI,
Food 4 Less and their respective subsidiaries as described in the Prospectus of
Food 4 Less dated May 31, 1995; (e) Indebtedness of the Company or any
Subsidiary incurred under Foreign Exchange Agreements and Interest Swap
Obligations entered into with respect to Indebtedness otherwise permitted to be
outstanding pursuant to Section 5.12 or this definition of Permitted
Indebtedness in a notional amount not exceeding the aggregate principal amount
of such Indebtedness; (f) guarantees incurred in the ordinary course of business
by the Company or a Subsidiary of Indebtedness of any other person in the
aggregate not to exceed $25 million at any time outstanding; (less the amount of
any guarantees incurred by the Company or any Subsidiary on or prior to the
Issue Date
29
-20-
in reliance on clause (f) of the definition of "Permitted Indebtedness" under
the 1995 11% Senior Subordinated Note Indenture until such guarantees are no
longer outstanding); (g) guarantees by the Company or a Subsidiary Guarantor of
Indebtedness incurred by a wholly owned Subsidiary Guarantor so long as the
incurrence of such Indebtedness incurred by such wholly owned Subsidiary
Guarantor is permitted under the terms of this Indenture; (h) Refinancing
Indebtedness; (i) Indebtedness for letters of credit relating to workers'
compensation claims and self-insurance or similar requirements in the ordinary
course of business; (j) Existing Indebtedness and other Indebtedness outstanding
on the Issue Date; (k) Indebtedness arising from guarantees of Indebtedness of
the Company or any Subsidiary or other agreements of the Company or a Subsidiary
providing for indemnification, adjustment of purchase price or similar
obligations, in each case, incurred or assumed in connection with the
disposition of any business, assets or Subsidiary, other than guarantees of
Indebtedness incurred by any person acquiring all or any portion of such
business, assets or Subsidiary for the purpose of financing such acquisition;
provided that the maximum aggregate liability in respect of all such
Indebtedness shall at no time exceed the gross proceeds actually received by the
Company and its Subsidiaries in connection with such disposition; (l)
obligations in respect of performance bonds and completion guarantees provided
by the Company or any Subsidiary in the ordinary course of business; and (m)
additional Indebtedness of the Company and the Subsidiary Guarantors in an
amount not to exceed $175 million at any time outstanding (less the amount of
any Indebtedness incurred by the Company or any Subsidiary Guarantor on or prior
to the Issue Date in reliance on clause (m) of the definition of "Permitted
Indebtedness" under the 1995 11% Senior Subordinated Note Indenture until such
Indebtedness is repaid or no longer outstanding).
"Permitted Investment" by any person means (i) any Related
Business Investment, (ii) Investments in securities not constituting cash or
Cash Equivalents and received in connection with an Asset Sale made pursuant to
Section 5.16 or any other disposition of assets not constituting an Asset Sale
by reason of the $500,000 threshold contained in the definition thereof, (iii)
cash and Cash Equivalents, (iv) Investments existing on the Issue Date, (v)
Investments specifically permitted by and made in accordance with Section 5.11,
(vi) Investments by Subsidiary Guarantors in other Subsidiary Guarantors or the
Company and Investments by the Company in a Subsidiary Guarantor in the form of
Indebtedness owed to the Company by such Subsidiary Guarantor and Investments by
Subsidiaries which
30
-21-
are not Subsidiary Guarantors in other Subsidiaries which are not Subsidiary
Guarantors and (vii) additional Investments in an aggregate amount not exceeding
$15 million.
"Permitted Liens" means (i) Liens for taxes, assessments and
governmental charges or claims not yet due or which are being contested in good
faith by appropriate proceedings promptly instituted and diligently conducted
and if a reserve or other appropriate provision, if any, as shall be required in
conformity with GAAP shall have been made thereof; (ii) statutory Liens of
landlords and carriers, warehousemen, mechanics, suppliers, materialmen,
repairmen, or other like Liens arising in the ordinary course of business,
deposits made to obtain the release of such Liens, and with respect to amounts
not yet delinquent for a period of more than 60 days or being contested in good
faith by appropriate process of law, and for which a reserve or other
appropriate provision, if any, as shall be required by GAAP shall have been
made; (iii) Liens incurred or pledges or deposits made in the ordinary course of
business to secure obligations under workers' compensation, unemployment
insurance and other types of social security or similar legislation; (iv) Liens
incurred or deposits made to secure the performance of tenders, bids, leases,
statutory obligations, surety and appeal bonds, government contracts,
performance and return of money bonds and other obligations of a like nature
incurred in the ordinary course of business (exclusive of obligations for the
payment of borrowed money); (v) easements, rights-of-way, zoning or other
restrictions, minor defects or irregularities in title and other similar charges
or encumbrances not interfering in any material respect with the business of the
Company or any of its Subsidiaries incurred in the ordinary course of business;
(vi) Liens upon specific items of inventory or other goods and proceeds of any
person securing such person's obligations in respect of bankers' acceptances
issued or created for the account of such person to facilitate the purchase,
shipment or storage of such inventory or other goods in the ordinary course of
business; (vii) 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; (viii) 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; (ix)
judgment and attachment Liens not giving rise to a Default or Event of Default;
(x) leases or subleases granted to others not interfering in any material
respect with the business of the Company or any Subsidiary; (xi) Liens
encumbering customary initial deposits and margin deposits, and other Liens
incurred in the ordi-
31
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nary course of business that are within the general parameters customary in the
industry, in each case securing Indebtedness under Interest Swap Obligations and
Foreign Exchange Agreements and forward contracts, option futures contracts,
futures options or similar agreements or arrangements designed to protect the
Company or any Subsidiary from fluctuations in the price of commodities; (xii)
Liens encumbering deposits made in the ordinary course of business to secure
nondelinquent obligations arising from statutory, regulatory, contractual or
warranty requirements of the Company or its Subsidiaries for which a reserve or
other appropriate provision, if any, as shall be required by GAAP shall have
been made; (xiii) Liens arising out of consignment or similar arrangements for
the sale of goods entered into by the Company or any Subsidiary in the ordinary
course of business in accordance with past practices; (xiv) any interest or
title of a lessor in the property subject to any lease, whether characterized as
capitalized or operating other than any such interest or title resulting from or
arising out of a default by the Company or any Subsidiary of its obligations
under such lease; (xv) 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 Company or any
Subsidiary is lessee; (xvi) Liens on assets of the Company securing Indebtedness
which would constitute Senior Indebtedness but for the provisions of clause (c)
in the third sentence of the definition of "Senior Indebtedness" and Liens on
assets of a Subsidiary Guarantor securing Indebtedness which would constitute
Guarantor Senior Indebtedness but for the provisions of clause (c) in the third
sentence of the definition of "Guarantor Senior Indebtedness"; and (xvii)
additional Liens securing Indebtedness in an aggregate principal amount at any
one time outstanding not exceeding the sum of (i) $25 million and (ii) 10% of
the aggregate Consolidated Net Income of the Company earned subsequent to June
14, 1995 and on or prior to such time.
"Permitted Payments" means (i) any payment by the Company or any
Subsidiary, or any dividend by the Company or any Subsidiary to Holdings the
proceeds of which are utilized by Holdings to make payments, to The Yucaipa
Companies or the principals or any Affiliates thereof for consulting,
management, investment banking or similar services, or for reimbursement of
losses, costs and expenses pursuant to the Consulting Agreement, (ii) any
payment by the Company or any Subsidiary pursuant to the Second Amended and
Restated Tax Sharing Agreement, dated as of June 14, 1995, by and among Food 4
Less, all direct and indirect Subsidiaries, and Holdings, as such Tax
32
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Sharing Agreement may be amended from time to time, so long as the payment
thereunder by the Company and its Subsidiaries shall not exceed the amount of
taxes the Company would be required to pay if it were the filing person for all
applicable taxes, (iii) any payment by the Company or any Subsidiary pursuant to
the Transfer and Assumption Agreement, dated as of June 23, 1989, between Food 4
Less and Holdings, as in effect on the Issue Date, (iv) any payment by the
Company or any Subsidiary, or any dividend by the Company or any Subsidiary to
Holdings the proceeds of which are used by Holdings to make payments, (a) in
connection with repurchases of outstanding shares of the Company's or Holding's
Common Stock following the death, disability or termination of employment of
management stockholders, and (b) of amounts required to be paid by Holdings, the
Company or any of its Subsidiaries to participants or former participants in
employee benefit plans upon termination of employment by such participants, as
provided in the documents related thereto, in an aggregate amount (for both
clauses (a) and (b)) not to exceed $10 million in any Yearly Period (provided
that any unused amounts may be carried over to any subsequent Yearly Period
subject to a maximum amount of $20 million in any Yearly Period), (v) from and
after June 15, 2000, payments of cash dividends to Holdings in an amount
sufficient to enable Holdings to make payments of interest required to be made
in respect of the Seller Debentures and the New Discount Debentures in an amount
not to exceed the amount payable thereunder in accordance with the terms thereof
in effect on June 14, 1995, (vi) dividends or other payments to Holdings
sufficient to enable Holdings to perform accounting, legal, corporate reporting
and administrative functions in the ordinary course of business or to pay
required fees and expenses in connection with the Merger and the registration
under applicable laws and regulations of its debt or equity securities, (vii)
dividends by the Company to Holdings of the Net Cash Proceeds of an Asset Sale
to the extent that (a) the Company or any of the Subsidiaries is required
pursuant to this Indenture to utilize such Net Cash Proceeds to repay the
Securities (and has complied with all such requirements), (b) such Net Cash
Proceeds are not required to be and have not been utilized to repay outstanding
Indebtedness of the Company or any of the Subsidiaries and (c) Holdings is
required pursuant to the documents governing any outstanding Indebtedness of
Holdings to utilize such Net Cash Proceeds to repay such Indebtedness (it being
understood that only the amounts not utilized as described in clauses (a) and
(b) of this clause (vii) shall be permitted to be distributed to Holdings
pursuant to this clause (vii)), and (viii) for so long as the sole business
activity of such partnership is to acquire, hold, sell, ex-
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change, transfer or otherwise dispose of all or any portion of the New Discount
Debentures and to manage its investment in the New Discount Debentures, any
payment by the Company or any Subsidiary, or any dividend or loan to Holdings,
the proceeds of which are utilized by Holdings to fund ongoing costs and
expenses of RGC Partners, L.P. pursuant to the Subscription Agreement and the
Holdings Registration Rights Agreement.
"Permitted Subordinated Reorganization Securities" means
securities of the Company issued in a plan of reorganization in a case under the
Bankruptcy Law relating to the Company which constitutes either (y) Capital
Stock (other than Disqualified Capital Stock with the reference to "Maturity
Date" in the definition of such term modified to relate to the final stated
maturity of any debt securities issued in such plan of reorganization to the
holders of Designated Senior Indebtedness ("Senior Reorganization Securities"))
or (z) debt securities of the Company which are (i) unsecured, (ii) have no
scheduled mandatory amortization thereon prior to the final stated maturity of
the Senior Reorganization Securities and (iii) are subordinated in right of
payment to the Senior Reorganization Securities to at least the same extent as
the Securities are subordinated to Designated Senior Indebtedness.
"Permitted Transferees" means, with respect to any person, (i)
any Affiliate of such person, (ii) the heirs, executors, administrators,
testamentary trustees, legatees or beneficiaries of any such person, (iii) a
trust, the beneficiaries of which, or a corporation or partnership, the
stockholders or general or limited partners of which, include only such person
or his or her spouse or lineal descendants, in each case to whom such person has
transferred the beneficial ownership of any securities of the Company, (iv) any
investment account whose investment managers and investment advisors consist
solely of such person and/or Permitted Transferees of such person and (v) any
investment fund or investment entity that is a subsidiary of such person or a
Permitted Transferee of such person.
"person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization or government or other agency or political
subdivision thereof.
"Plan of Liquidation" means, with respect to any person, a plan
that provides for, contemplates or the effectuation of which is preceded or
accompanied by (whether or not substantially contemporaneously, in phases or
otherwise) (i) the sale,
34
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lease, conveyance or other disposition of all or substantially all of the assets
of such person otherwise than as an entirety or substantially as an entirety and
(ii) the distribution of all or substantially all of the proceeds of such sale,
lease, conveyance or other disposition and all or substantially all of the
remaining assets of such person to holders of Capital Stock of such person.
"Preferred Stock" means, with respect to any person, Capital
Stock of any class or classes (however designated) which is preferred as to the
payment of dividends or distributions, or as to the distribution of assets upon
any voluntary or involuntary liquidation or dissolution of such person, over
shares of Capital Stock of any other class of such person.
"principal" of any Indebtedness (including the Securities) means
the principal of such Indebtedness plus the premium, if any, on such
Indebtedness.
"pro forma" means, with respect to any calculation made or
required to be made pursuant to the terms of this Indenture, a calculation in
accordance with Article 11 of Regulation S-X under the Securities Act, as
interpreted by the Company's chief financial officer or Board of Directors in
consultation with its independent certified public accountants.
"Public Equity Offering" means an underwritten public offering of
Common Stock of the Company or Holdings pursuant to a registration statement
filed with the Commission in accordance with the Securities Act which public
equity offering results in gross proceeds to the Company or Holdings, as the
case may be, of not less than $20 million; provided, however, that in the case
of a Public Equity Offering by Holdings, Holdings contributes to the capital of
the Company net proceeds in an amount sufficient to redeem Securities called for
redemption in accordance with the terms thereof.
"Qualified Capital Stock" means, with respect to any person, any
Capital Stock of such person that is not Disqualified Capital Stock.
"Ralphs Grocery Company" means Ralphs Grocery Company, Inc., a
Delaware corporation, and its successors.
"Record Date" means the Record Dates specified in the Securities;
provided that if any such date is a Legal Holiday, the Record Date shall be the
first day immediately preceding such specified day that is not a Legal Holiday.
35
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"Redemption Date," when used with respect to any Security to be
redeemed, means the date fixed for such redemption pursuant to this Indenture
and Paragraph 5 of the Securities annexed hereto as Exhibit A.
"Redemption Price," when used with respect to any Security to be
redeemed, means the price fixed for such redemption pursuant to this Indenture
and Paragraph 5 of the Securities annexed hereto as Exhibit A.
"Reference Date" shall have the meaning provided in Section 5.03.
"Reference Period" shall have the meaning provided in the
definition of "Operating Coverage Ratio" contained in this Section 1.01.
"Refinancing Indebtedness" means, with respect to any person,
Indebtedness of such person issued in exchange for, or the proceeds from the
issuance and sale or disbursement of which are used to substantially
concurrently repay, redeem, refund, refinance, discharge or otherwise retire for
value, in whole or in part (collectively, "repay"), or constituting an
amendment, modification or supplement to, or a deferral or renewal of
(collectively, an "amendment"), any Indebtedness of such person existing on the
Issue Date or Indebtedness (other than Permitted Indebtedness, except Permitted
Indebtedness incurred pursuant to clauses (c), (d), (h) and (j) of the
definition thereof) incurred in accordance with this Indenture (a) in a
principal amount (or, if such Refinancing Indebtedness provides for an amount
less than the principal amount thereof to be due and payable upon the
acceleration thereof, with an original issue price) not in excess of (without
duplication) (i) the principal amount or the original issue price, as the case
may be, of the Indebtedness so refinanced (or, if such Refinancing Indebtedness
refinances Indebtedness under a revolving credit facility or other agreement
providing a commitment for subsequent borrowings, with a maximum commitment not
to exceed the maximum commitment under such revolving credit facility or other
agreement) plus (ii) unpaid accrued interest on such Indebtedness plus (iii)
premiums, penalties, fees and expenses actually incurred by such person in
connection with the repayment or amendment thereof and (b) with respect to
Refinancing Indebtedness that repays or constitutes an amendment to Subordinated
Indebtedness, such Refinancing Indebtedness (x) shall not have any fixed
mandatory redemption or sinking fund requirement in an amount greater than or at
a time prior to the amounts and times specified in such repaid or amended
Subordi-
36
-27-
nated Indebtedness, except to the extent that any such requirement applies on a
date after the Maturity Date and (y) shall contain subordination and default
provisions no less favorable in any material respect to Holders than those
contained in such repaid or amended Subordinated Indebtedness.
"Registrar" shall have the meaning provided in Section 2.03.
"Related Business Investment" means (i) any Investment by a
person in any other person a majority of whose revenues are derived from the
operation of one or more retail grocery stores or supermarkets or any other line
of business engaged in by the Company or any of its Subsidiaries as of the Issue
Date; (ii) any Investment by such person in any cooperative or other supplier,
including, without limitation, any joint venture which is intended to supply any
product or service useful to the business of the Company and its Subsidiaries as
it is conducted as of the Issue Date and as such business may thereafter evolve
or change; and (iii) any capital expenditure or Investment, in each case
reasonably related to the business of the Company and its Subsidiaries as it is
conducted as of the Issue Date and as such business may thereafter evolve or
change.
"Representative" means the indenture trustee or other trustee,
agent or representative for any Senior Indebtedness; provided that in no event
shall United States Trust Company of New York, in its capacities as Trustee,
Registrar, co-Registrar or Paying Agent, serve as Representative.
"Restricted Debt Prepayment" means any purchase, redemption,
defeasance (including, but not limited to, in-substance or legal defeasance) or
other acquisition or retirement for value, directly or indirectly, by the
Company or a Subsidiary, prior to the scheduled maturity or prior to any
scheduled repayment of principal or sinking fund payment, as the case may be, in
respect of Subordinated Indebtedness.
"Restricted Payment" means any (i) Stock Payment, (ii) Investment
(other than a Permitted Investment, or (iii) Restricted Debt Prepayment.
"RSI" means Ralphs Supermarkets Inc., a Delaware corporation, and
its successors.
"Securities" means the Company's 11% Senior Subordinated Notes
due 2005, as amended or supplemented from time to
37
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time in accordance with the terms hereof, that are issued pursuant to this
Indenture.
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations of the Commission promulgated thereunder.
"Seller Debentures" means the 13 5/8% Senior Subordinated
Pay-in-Kind Debentures due 2007 of Holdings issued pursuant to the Seller
Debenture Indenture, including any additional 13 5/8% Senior Subordinated
Pay-in-Kind Debentures due 2007 issued as interest thereon, in each case, as
such Seller Debentures may be modified or amended from time to time and future
refinancings thereof to the extent such refinancings are permitted under this
Indenture.
"Seller Debenture Indenture" means the indenture between Holdings
and Norwest Bank Minnesota, National Association, as trustee, dated as of June
14, 1995 under which the 13 5/8% Senior Subordinated Pay-in-Kind Debentures due
2007 of Holdings were issued, as the same may be modified and amended from time
to time and refinancings thereof to the extent such refinancings are permitted
under this Indenture.
"Senior Indebtedness" means the principal of, premium, if any,
and interest on, and all other Obligations with respect to, any Indebtedness of
the Company, whether outstanding on the Issue Date or thereafter created,
incurred or assumed, 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. Without limiting the generality of the
foregoing, "Senior Indebtedness" shall include (x) the principal of, premium, if
any, and interest on all Obligations of every nature of the Company from time to
time owed to the lenders under the Credit Agreement, including, without
limitation, the Letter of Credit Obligations and principal of and interest on
and all fees, indemnities, and expenses payable under the Credit Agreement and
(y) interest accruing thereon subsequent to the occurrence of any Event of
Default specified in clause (vi) or (vii) of Section 7.01 relating to the
Company, whether or not the claim for such interest is allowed under any
applicable Bankruptcy Law. Notwithstanding the foregoing, "Senior Indebtedness"
shall not include (a) Indebtedness evidenced by the Securities, (b) Indebtedness
that is expressly subordinate or junior in right of payment to any Indebtedness
of the Company including, but not necessarily limited to (i) the 13.75% Senior
Subordinated Notes
38
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due 2005 of the Company issued pursuant to an indenture dated as of June 1,
1995, (ii) the 13.75% Senior Subordinated Notes due 2001 of the Company issued
pursuant to an indenture dated as of June 15, 1991, (iii) the 10.25% Senior
Subordinated Notes due 2002 of the Company issued pursuant to an indenture dated
as of July 29, 1992, (iv) the 9% Senior Subordinated Notes due 2003 of the
Company issued pursuant to an indenture dated as of March 30, 1993 and (v) the
11% Senior Subordinated Notes due 2005 issued pursuant to the 1995 11% Senior
Subordinated Note Indenture, each of (i) through (v) above which shall rank pari
passu with the Securities, (c) Indebtedness which, when incurred and without
respect to any election under Section 1111(b) of ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code,
is without recourse to the Company (other than Capitalized Lease Obligations),
(d) Indebtedness which is represented by Disqualified Capital Stock, (e)
obligations for goods, materials or services purchased in the ordinary course of
business or obligations consisting of trade payables, (f) Indebtedness of or
amounts owed by the Company for compensation to employees or for services
rendered to the Company, (g) any liability for federal, state, local or other
taxes owed or owing by the Company, (h) Indebtedness of the Company to a
Subsidiary of the Company, and (i) that portion of any Indebtedness which is
incurred by the Company in violation of this Indenture.
"Senior Notes" means (i) the 10.45% Senior Notes due 2004 of the
Company issued pursuant to an indenture dated as of June 6, 1996, (ii) the
10.45% Senior Notes due 2004 of the Company issued pursuant to an indenture
dated as of June 1, 1995 and (iii) the 10.45% Senior Notes due 2000 of the
Company issued pursuant to an indenture dated as of April 15, 1992.
"Significant Senior Indebtedness" means Senior Indebtedness
which, at the time of determination, is equal to or greater than $50 million in
aggregate principal amount.
"Significant Stockholder" means, with respect to any person, any
other person who is the beneficial owner (within the meaning of Rule 13d-3 under
the Exchange Act) of more than 10% of any class of equity securities of such
person that are entitled to vote on a regular basis for the election of
directors of such person.
"Significant Subsidiary" means each subsidiary of the Company
that is either (a) a "significant subsidiary" as defined in Rule 1-02(v) of
Regulation S-X under the Securities Act and the Exchange Act (as such regulation
is in effect on the Issue Date) or (b) material to the financial condition or
39
-30-
results of operations of the Company and its Subsidiaries taken as a whole.
"Stock Payment" means, with respect to any person, (a) the
declaration or payment by such person, either in cash or in property, of any
dividend on (except, in the case of the Company, dividends payable solely in
Qualified Capital Stock of the Company), or the making by such person or any of
its subsidiaries of any other distribution in respect of, such person's
Qualified Capital Stock or any warrants, rights or options to purchase or
acquire shares of any class of such Capital Stock (other than exchangeable or
convertible Indebtedness of such person), or (b) the redemption, repurchase,
retirement or other acquisition for value by such person or any of its
subsidiaries, directly or indirectly, of such person's Qualified Capital Stock
(and, in the case of a Subsidiary, Qualified Capital Stock of the Company) or
any warrants, rights or options to purchase or acquire shares of any class of
such Capital Stock (other than exchangeable or convertible Indebtedness of such
person), other than, in the case of the Company, through the issuance in
exchange therefor solely of Qualified Capital Stock of the Company; provided,
however, that in the case of a Subsidiary, the term "Stock Payment" shall not
include any such payment with respect to its Capital Stock or warrants, rights
or options to purchase or acquire shares of any class of its Capital Stock that
are owned solely by the Company or a wholly owned Subsidiary.
"Subordinated Indebtedness" means, with respect to the Company or
any Subsidiary Guarantor, Indebtedness of such person which is subordinated in
right of payment to the Securities or the Guarantee of such Subsidiary
Guarantor, as the case may be.
"Subscription Agreement" means that certain Subscription
Agreement between RGC Partners, L.P., Holdings, Food 4 Less and the partnership
investors listed on Exhibit A thereto, as such Subscription Agreement may be
amended or replaced, so long as any amounts paid by Holdings and the Company
under any amended or replacement agreement do not exceed the amounts payable by
Holdings and the Company under such Subscription Agreement as in effect on June
14, 1995.
"subsidiary" of any person means (i) a corporation a majority of
whose Capital Stock with voting power, under ordinary circumstances, to elect
directors is, at the date of determination, directly or indirectly, owned by
such person, by one or more subsidiaries of such person or by such person and
40
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one or more subsidiaries of such person or (ii) a partnership in which such
person or a subsidiary of such person is, at the date of determination, a
general partner of such partnership, but only if such person or its subsidiary
is entitled to receive more than fifty percent of the assets of such partnership
upon its dissolution, or (iii) any other person (other than a corporation or a
partnership) in which such person, a subsidiary of such person or such person
and one or more subsidiaries of such person, directly or indirectly, at the date
of determination, has (x) at least a majority ownership interest or (y) the
power to elect or direct the election of a majority of the directors or other
governing body of such person.
"Subsidiary" means any subsidiary of the Company.
"Subsidiary Guarantor" means (i) each of Alpha Beta Company, Bay
Area Warehouse Stores, Inc., ▇▇▇▇ Markets, Inc., Cala Co., Cala Foods, Inc.,
▇▇▇▇▇▇'▇, Inc., Food 4 Less of California, Inc., Food 4 Less Merchandising,
Inc., Food 4 Less GM, Inc., Food 4 Less of Southern California, Inc. and
▇▇▇▇▇▇▇▇ Stores, Inc., (ii) each of the Company's Subsidiaries which becomes a
guarantor of the Securities in compliance with the provisions set forth in
Section 5.17, and (iii) each of the Company's Subsidiaries executing a
supplemental indenture in which such Subsidiary agrees to be bound by the terms
of this Indenture.
"Term Loans" means the term loan facility under the Credit
Agreement and any agreement governing Indebtedness incurred to refund, replace
or refinance any borrowings outstanding under such facility or under any prior
refunding, replacement or refinancing thereof (in each case, in whole or in
part, and without limitation as to amount, terms, conditions, covenants and
other provisions).
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code ▇▇.▇▇.
77aaa-77bbbb), as amended, as in effect on the date this Indenture is qualified
under the TIA, except as otherwise provided in Section 10.03.
"Transaction Date" shall have the meaning provided in the
definition of "Operating Coverage Ratio" contained in this Section 1.01.
"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.
41
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"Trust Officer" means any officer of the Trustee assigned by the
Trustee to administer its corporate trust matters.
"U.S. Government Obligations" shall have the meaning provided in
Section 9.02.
"U.S. Legal Tender" means such coin or currency of the United
States of America as at the time of payment shall be legal tender for the
payment of public and private debts.
"Yearly Period" means each fiscal year of the Company.
"Yucaipa Companies" means The Yucaipa Companies, a California
general partnership, or any successor thereto which is an affiliate of ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇ or his Permitted Transferees and which has been established for the sole
purpose of changing the form of The Yucaipa Companies from that of a partnership
to that of a limited liability company or any other form of entity which is not
materially adverse to the rights of the Holders under this Indenture.
SECTION 1.02. Incorporation by Reference of TIA.
Whenever this Indenture refers to a provision of the TIA, such
provision is incorporated by reference in, and made a part of, this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Holder or a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company, any
Subsidiary Guarantor, or any other obligor on the Securities or the Guarantees.
All other TIA terms used in this Indenture that are defined by
the TIA, defined by TIA reference to another statute
42
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or defined by SEC rule and not otherwise defined herein have the meanings
assigned to them therein.
SECTION 1.03. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and words in the
plural include the singular;
(5) provisions apply to successive events and transactions; and
(6) "herein," "hereof" and other words of similar import refer to
this Indenture as a whole and not to any particular Article, Section or
other subdivision.
ARTICLE TWO
THE SECURITIES
SECTION 2.01. Form and Dating.
The Securities, the notation thereon relating to the Guarantee
and the Trustee's certificate of authentication shall be substantially in the
form of Exhibit A. The Securities may have notations, legends or endorsements
required by law, stock exchange rule or usage. The Company and the Trustee shall
approve the form of the Securities and any notation, legend or endorsement on
them. Each Security shall be dated the date of its authentication.
The terms and provisions contained in the Securities and the
Guarantee shall constitute, and are hereby expressly made, a part of this
Indenture and, to the extent applicable, the Company and the Trustee, by their
execution and delivery of this Indenture, expressly agree to such terms and
provisions and to be bound thereby.
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SECTION 2.02. Execution and Authentication.
Two Officers, or an Officer and an Assistant Secretary, shall
sign, or one Officer shall sign and one officer or an Assistant Secretary (each
of whom shall, in each case, have been duly authorized by all requisite
corporate actions) shall attest to, the Securities for the Company by manual or
facsimile signature. Each Subsidiary Guarantor shall execute the Guarantee in
the manner set forth in Section 11.09.
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.
A Security shall not be valid until an authorized signatory of
the Trustee manually signs the certificate of authentication on the Security.
The signature shall be conclusive evidence that the Security has been
authenticated under this Indenture.
The Trustee shall authenticate Securities for original issue in
the aggregate principal amount of up to $155,000,000 upon a written order of the
Company in the form of an Officers' Certificate. The Officers' Certificate shall
specify the amount of Securities to be authenticated and the date on which the
Securities are to be authenticated. The aggregate principal amount of Securities
outstanding at any time may not exceed $155,000,000, except as provided in
Section 2.07. 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 reasonably
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 and Affiliates of the Company.
The Securities shall be issuable only in registered form without
coupons in denominations of $1,000 and integral multiples thereof.
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SECTION 2.03. Registrar and Paying Agent.
The Company shall maintain an office or agency in the Borough of
Manhattan, The City of New York, where (a) Securities may be presented or
surrendered for registration of transfer or for exchange ("Registrar"), (b)
Securities may be presented or surrendered for payment ("Paying Agent") and (c)
notices and demands to or upon the Company in respect of the Securities and this
Indenture may be served. 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 may act as its own Registrar or Paying Agent except that for the
purposes of Articles Three and Nine and Sections 5.15 and 5.16, 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, upon notice to the Trustee, may have one or more
co-Registrars and one or more additional paying agents reasonably acceptable to
the Trustee. The term "Paying Agent" includes any additional paying agent. The
Company initially appoints the Trustee as Registrar and Paying Agent until such
time as the Trustee has resigned or a successor has been appointed.
The Company shall enter into an appropriate agency agreement with
any Agent not a party to this Indenture, which agreement shall implement the
provisions of this Indenture that relate to such Agent. The Company shall notify
the Trustee, in advance, 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.
SECTION 2.04. Paying Agent To Hold Assets in Trust.
The Company shall require each Paying Agent other than the
Trustee to agree in writing that, subject to Article Four and Article Twelve,
each 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, 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 of
any Default by the Company (or any other obligor on the Securities) in making
any such payment. If the Company or a Subsidiary acts as Paying Agent, it
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shall segregate such assets and hold them as a separate trust fund, subject to
Article Four and Article Twelve. 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, 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 to the Paying Agent, the Paying Agent shall
have no further liability for such assets.
SECTION 2.05. Securityholder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Holders. If the Trustee is not the Registrar, the Company shall furnish to the
Trustee on or before each Interest Payment Date and at such other times as the
Trustee may request in writing a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of Holders, which list
may be conclusively relied upon by the Trustee.
SECTION 2.06. Transfer and Exchange.
When Securities are presented to the Registrar or a co-Registrar
with a request to register the transfer of such Securities or to exchange such
Securities for an equal principal amount of Securities of other authorized
denominations, the Registrar or co-Registrar shall register the transfer or make
the exchange as requested if its requirements for such transaction are met;
provided, however, that the Securities surrendered for transfer or exchange
shall be duly endorsed or accompanied by a written instrument of transfer in
form satisfactory to the Company and the Registrar or co-Registrar, duly
executed by the Holder thereof or his attorney duly authorized in writing. To
permit registrations of transfers and exchanges, the Company shall execute and
the Trustee shall authenticate Securities at the Registrar's or co-Registrar's
request. No service charge shall be made for any registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
transfer tax or similar governmental charge payable in connection therewith
(other than any such transfer taxes or similar governmental charge payable upon
exchanges or transfers pursuant to Sections 2.02, 2.07, 2.10, 3.06, 5.15, 5.16
or 10.05). The Registrar or co-Registrar shall not be required to register the
transfer of or exchange of any Security
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(i) during a period beginning at the opening of business 15 days before the
mailing of a notice of redemption of Securities and ending at the close of
business on the day of such mailing and (ii) selected for redemption in whole or
in part pursuant to Article Three, except the unredeemed portion of any Security
being redeemed in part.
SECTION 2.07. Replacement Securities.
If a mutilated Security is surrendered to the Trustee or if the
Holder of a Security claims that the Security has been lost, destroyed or
wrongfully taken, the Company shall issue and 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 charge such Holder for its
reasonable, out-of-pocket expenses in replacing a Security, including reasonable
fees and expenses of counsel.
Every replacement Security is an additional obligation of the
Company.
SECTION 2.08. Outstanding Securities.
Securities outstanding at any time are all the Securities that
have been authenticated by the Trustee except those cancelled by it, those
delivered to it for cancellation and those described in this Section as not
outstanding. A Security does not cease to be outstanding because the Company,
the Subsidiary Guarantors or any of their respective Affiliates holds the
Security.
If a Security is replaced pursuant to Section 2.07 (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
2.07.
If on a Redemption Date or the Maturity Date the Paying Agent
(other than the Company or a Subsidiary) holds U.S. Legal Tender or U.S.
Government obligations sufficient to pay all of the principal and interest due
on the Securities payable on that date, then on and after that date such
Securities cease
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to be outstanding and interest on them ceases to accrue unless, pursuant to the
provisions of Article Four and Article Twelve, the Paying Agent is unable to
make payments on the Securities to the Holders thereof.
SECTION 2.09. Treasury Securities.
In determining whether the Holders of the required principal
amount of Securities have concurred in any direction, waiver or consent,
Securities owned by the Company, the Subsidiary Guarantors or any of their
respective Affiliates shall be disregarded, except that, for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Securities that the Trustee knows or has
reason to know are so owned shall be disregarded.
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 considers appropriate for temporary Securities.
Without unreasonable delay, the Company shall prepare and the Trustee shall
authenticate definitive Securities in exchange for temporary Securities.
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 them for transfer, exchange or payment. The
Trustee, or at the direction of the Trustee, the Registrar or the Paying Agent
(other than the Company or a Subsidiary), and no one else, shall cancel and, at
the written direction of the Company, shall dispose of all Securities
surrendered for transfer, exchange, payment or cancellation. Subject to Section
2.07, the Company may not issue new Securities to replace Securities that it has
paid or delivered to the Trustee for cancellation. If the Company or any
Subsidiary Guarantor shall acquire any of the Securities, such acquisition shall
not operate as a redemption or satisfaction of the Indebtedness represented by
such Securities unless and until the same are surrendered to the Trustee for
cancellation pursuant to this Section 2.11.
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SECTION 2.12. Defaulted Interest.
If the Company defaults in a payment of interest on the
Securities, it shall, unless the-Trustee fixes another record date pursuant to
Section 7.10, pay the defaulted interest, plus (to the extent lawful) any
interest payable on the defaulted interest, to the persons who are Holders on a
subsequent special record date, which date shall be the fifteenth day next
preceding the date fixed by the Company for the payment of defaulted interest or
the next succeeding Business Day if such date is not a Business Day. At least 15
days before the subsequent special record date, the Company shall mail to each
Holder, with a copy to the Trustee, a notice that states the subsequent special
record date, the payment date and the amount of defaulted interest, and interest
payable on such defaulted interest, if any, to be paid.
SECTION 2.13. CUSIP Number.
The Company in issuing the Securities may use a "CUSIP" number,
and if so, the Trustee shall use the CUSIP number in notices of redemption or
exchange as a convenience to Holders; provided that any such notice may state
that no representation is made as to the correctness or accuracy of the CUSIP
number printed in the notice or on the Securities, and that reliance may be
placed only on the other identification numbers printed on the Securities.
ARTICLE THREE
REDEMPTION
SECTION 3.01. Notices to Trustee.
If the Company elects to redeem Securities pursuant to Paragraph
5 of the Securities, it shall notify the Trustee, with a copy to the Credit
Agent, 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 at least 30 days (unless a shorter notice shall be satisfactory to the
Trustee) but not more than 60 days before the Redemption Date. In order to
effect a redemption pursuant to Paragraph 5 of the Securities with the proceeds
of a Public Equity Offering, the Company shall send the redemption notice not
later than 60 days after the consummation of such Public Equity Offering. Any
such notice may be cancelled at any time prior to
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notice of such redemption being mailed to any Holder and shall thereby be void
and of no effect.
SECTION 3.02. Selection of Securities To Be Redeemed.
If fewer than all of the Securities are to be redeemed, the
Trustee shall select the Securities to be redeemed pro rata by lot or by any
other method that the Trustee considers fair and appropriate and, if such
Securities are listed on any securities exchange, by a method that complies with
the requirements of such exchange; provided, however, that any redemption
pursuant to Paragraph 5 of the Securities with the proceeds of a Public Equity
Offering shall be made on a pro rata basis unless such method is otherwise
legally prohibited.
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 integral multiples thereof) of the principal amount 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 3.03. 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 to each
Holder whose Securities are to be redeemed at such Holder's registered address,
with a copy to the Trustee and the Credit Agent. In order to effect a redemption
pursuant to Paragraph 5 of the Securities with the proceeds of a Public Equity
Offering, the Company shall send the redemption notice not later than 60 days
after the consummation of such Public Equity Offering. 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;
(3) the name and address of the Paying Agent;
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(4) that Securities called for redemption must be surrendered
to the Paying Agent to collect the Redemption Price;
(5) that, unless (a) the Company defaults in making the
redemption payment or (b) such redemption payment is prohibited pursuant
to Article Four or Article Twelve hereof or otherwise, interest on
Securities called for redemption ceases to accrue on and after the
Redemption Date and the only remaining right of the Holders of such
Securities is to receive payment of the Redemption Price upon surrender
to the Paying Agent of the Securities redeemed;
(6) if any Security is being redeemed in part, the portion of the
principal amount of such Security to be redeemed and that, after the
Redemption Date, and upon surrender of such Security, a new Security or
Securities in aggregate principal amount equal to the unredeemed portion
thereof will be issued; and
(7) if fewer than all the Securities are to be redeemed, the
identification of the particular Securities (or portion thereof) to be
redeemed, as well as the aggregate principal amount of Securities to be
redeemed and the aggregate principal amount of Securities to be
outstanding after such partial redemption.
SECTION 3.04. Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section
3.03, Securities called for redemption become due and payable on the Redemption
Date and at the Redemption Price. Upon surrender to the Trustee or Paying Agent,
such Securities called for redemption shall be paid at the Redemption Price
unless prohibited pursuant to Article Four or Article Twelve or otherwise
pursuant to this Indenture. Securities that are redeemed by the Company or that
are purchased by the Company pursuant to a Net Proceeds Offer as described in
Section 5.16 or pursuant to a Change of Control Offer as described in Section
5.15 or that are otherwise acquired by the Company will be surrendered to the
Trustee for cancellation.
SECTION 3.05. Deposit of Redemption Price.
On or before the Redemption Date, the Company shall deposit with
the Paying Agent U.S. Legal Tender sufficient to pay the Redemption Price of all
Securities to be redeemed on that date (other than Securities or portions
thereof called for
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redemption on that date which have been delivered by the Company to the Trustee
for cancellation). The Paying Agent shall promptly return to the Company any
U.S. Legal Tender so deposited which is not required for that purpose upon the
written request of the Company, except with respect to monies owed as
obligations to the Trustee pursuant to Article Eight and Article Twelve hereof.
If the Company complies with the preceding paragraph and payment
of the Securities called for redemption is not prohibited under Article Four or
Article Twelve or otherwise, then, unless the Company defaults in the payment of
such Redemption Price, interest on the Securities to be redeemed will cease to
accrue on and after the applicable Redemption Date whether or not such
Securities are presented for payment.
SECTION 3.06. Securities Redeemed in Part.
Upon surrender of a Security that is to be redeemed in part, the
Trustee shall authenticate for the Holder a new Security or Securities equal in
principal amount to the unredeemed portion of the Security surrendered.
ARTICLE FOUR
SUBORDINATION
SECTION 4.01. Securities Subordinated to Senior Indebtedness.
Anything herein to the contrary notwithstanding, the Company, for
itself and its successors, and each Holder, by his acceptance of Securities,
agrees that the payment of the Obligations on the Securities is subordinated, to
the extent and in the manner provided in this Article Four, to the prior payment
in full in cash or Cash Equivalents of all Senior Indebtedness.
This Article Four shall constitute a continuing offer to all
persons who become holders of, or continue to hold, Senior Indebtedness, and
such provisions are made for the benefit of the holders of Senior Indebtedness
and such holders are made obligees hereunder and any one or more of them may
enforce such provisions.
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The obligations of the Company to the Trustee under Section 8.07
shall not be subject to the provisions of this Article Four.
SECTION 4.02. Suspension of Payment When Senior Indebtedness in Default.
(a) Unless Section 4.03 shall be applicable, upon (1) the
occurrence of a Payment Default and (2) receipt by the Trustee and the Company
from the Representatives of written notice of such occurrence, then no direct or
indirect payment (other than payments previously made pursuant to Article Nine
hereof) or distribution of any assets of the Company of any kind or character
shall be made by or on behalf of the Company on account of the Obligations on
the Securities or on account of the purchase or redemption or other acquisition
of Securities whether pursuant to the terms of the Securities or upon
acceleration or otherwise unless and until such Payment Default shall have been
cured or waived or shall have ceased to exist or such Designated Senior
Indebtedness or Significant Senior Indebtedness, as the case may be, as to which
such Payment Default relates shall have been discharged or paid in full in cash
or Cash Equivalents, after which the Company shall resume making any and all
required payments in respect of the Securities, including any missed payments.
(b) Unless Section 4.03 shall be applicable, upon the
occurrence of a Non-payment Default and (2) the earlier of (i) receipt by the
Trustee from the Representative of written notice of such occurrence stating
that such notice is a "Payment Blockage Notice" pursuant to Section 4.02(b) of
this Indenture or (ii) if such Non-payment Default results from the acceleration
of the Securities, the date of such acceleration, no such payment (other than
payments previously made pursuant to Article Nine hereof) or distribution of any
assets of the Company of any kind or character shall be made by the Company on
account of any principal of, premium, if any, or interest on the Securities or
on account of the purchase or redemption or other acquisition of Securities for
a period ("Payment Blockage Period") commencing on the earlier to occur of the
date of receipt by the Trustee of the written notice of a Non-payment Default
from the Representative or the date of the acceleration referred to in clause
(ii) above, as the case may be, unless and until the earlier to occur of the
following events: (w) 179 days shall have elapsed since receipt of such notice
or the date of the acceleration of the Securities, as the case may be (provided
such Designated Senior Indebtedness shall theretofore not have been
accelerated), (x) such Non-payment Default shall
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have been cured or waived or shall have ceased to exist, (y) such Designated
Senior Indebtedness shall have been discharged or paid in full in cash or Cash
Equivalents or (z) such Payment Blockage Period shall have been terminated by
written notice to the Company or the Trustee from the Representative initiating
such Payment Blockage Period or the holders of at least a majority in principal
amount of such issue of Designated Senior Indebtedness initiating such Payment
Blockage Period, after which, in the case of clause (w), (x), (y) or (z), the
Company shall resume making any and all required payments in respect of the
Securities, including any missed payments. Notwithstanding any other provision
of this Indenture, only one Payment Blockage Period may be commenced within any
consecutive 365-day period and no Non-payment Default with respect to Designated
Senior Indebtedness which existed or was continuing on the date of the
commencement of any Payment Blockage Period shall be, or shall be made, the
basis for the commencement of a second Payment Blockage Period, whether or not
within a period of 365 consecutive days, unless such event of default shall have
been cured or waived for a period of not less than 90 consecutive days. In no
event shall a Payment Blockage Period extend beyond 179 days from the date of
the receipt of the written notice by the Trustee of a Non-payment Default or the
date of the acceleration initiating such Payment Blockage Period, as the case
may be.
(c) In the event that, notwithstanding the foregoing, the
Trustee or the Holder of any Security shall have received any payment prohibited
by the foregoing provisions of this Section 4.02, then and in such event such
payment shall be paid over and delivered forthwith to the Representatives or as
a court of competent jurisdiction shall direct.
SECTION 4.03. Securities Subordinated to Prior Payment of All Senior
Indebtedness on Dissolution, Liquidation or Reorganization
of Company.
Upon any payment or distribution of assets of the Company of any
kind or character, whether in cash, property or securities, upon any
dissolution, winding-up, total or partial liquidation or reorganization of the
Company (including, without limitation, in bankruptcy, insolvency or
receivership proceedings or upon any assignment for the benefit of creditors or
any other marshalling of assets and liabilities of the Company and whether
voluntary or involuntary):
(a) the holders of all Senior Indebtedness shall first be
entitled to receive payments in full in cash or
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Cash Equivalents of all amounts payable under Senior Indebtedness
(including, with respect to Designated Senior Indebtedness, any interest
accruing after the commencement of any such proceeding at the rate
specified in the applicable Designated Senior Indebtedness whether or
not interest is an allowed claim enforceable against the Company in any
such proceeding) before the Holders will be entitled to receive any
payment with respect to the Securities (excluding Permitted Subordinated
Reorganization Securities), and until all Obligations with respect to
the Senior Indebtedness are paid in full in cash or Cash Equivalents,
any distribution to which the Holders would be entitled (excluding
Permitted Subordinated Reorganization Securities) shall be made to the
holders of Senior Indebtedness; provided, however, that no payment on
any Guarantee shall constitute payment on behalf of the Company for
purposes of this Section 4.03(a);
(b) any payment or distribution of assets of the Company of any
kind or character, whether in cash, property or securities, to which the
Holders or the Trustee on behalf of the Holders would be entitled
(excluding Permitted Subordinated Reorganization Securities) except for
the provisions of this Article Four, shall be paid by the liquidating
trustee or agent or other person making such a payment or distribution,
directly to the holders of Senior Indebtedness or their Representative,
ratably according to the respective amounts of Senior Indebtedness
remaining unpaid held or represented by each, until all Senior
Indebtedness remaining unpaid shall have been paid in full in cash or
Cash Equivalents after giving effect to any concurrent payment or
distribution to the holders of such Senior Indebtedness; and
(c) in the event that, notwithstanding the foregoing, any payment
or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, shall be received by the
Trustee or the Holders or any Paying Agent on account of principal of,
premium, if any, or interest on the Securities (excluding Permitted
Subordinated Reorganization Securities) before all Senior Indebtedness
is paid in full in cash or Cash Equivalents, such payment or
distribution (subject to the provisions of Sections 4.06 and 4.07) shall
be received, segregated from other funds, and held in trust by the
Trustee or such Holder or Paying Agent for the benefit of, and shall
immediately be paid over to, the holders of Senior Indebtedness or their
Representative, ratably according to the re-
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spective amounts of Senior Indebtedness held or represented by each,
until all Senior Indebtedness remaining unpaid shall have been paid in
full in cash or Cash Equivalents, after giving effect to any concurrent
payment or distribution to or for the holders of Senior Indebtedness.
Notwithstanding anything to the contrary contained herein, in the
absence of its gross negligence or willful misconduct, the Trustee shall
have no duty to collect or retrieve monies previously paid by it in good
faith; provided that this sentence shall not affect the obligation of
any other party receiving such payment to hold such payment for the
benefit of, and to pay over such payment over to, the holders of Senior
Indebtedness or their Representative.
The consolidation of the Company with, or the merger of the
Company with or into, another person or the liquidation or dissolution of the
Company following the conveyance, transfer or lease of its properties and assets
substantially as an entirety to another person upon the terms and conditions set
forth in Article Six hereof shall not be deemed a dissolution, winding-up,
liquidation, reorganization, assignment for the benefit of creditors or
marshalling of assets and liabilities of the Company for the purposes of this
Article Four if the person formed by such consolidation or the surviving entity
of such merger or the person which acquires by conveyance, transfer or lease
such properties and assets substantially as an entirety, as the case may be,
shall, as a part of such consolidation, merger, conveyance, transfer or lease,
comply with the conditions set forth in such Article Six.
The Company shall give prompt notice to the Trustee prior to any
dissolution, winding-up, total or partial liquidation or reorganization
(including, without limitation, in bankruptcy, insolvency, or receivership
proceedings or upon any assignment for the benefit of creditors or any other
marshalling of the Company's assets and liabilities).
SECTION 4.04. Securityholders To Be Subrogated to Rights of Holders of
Senior Indebtedness.
Subject to the payment in full in cash or Cash Equivalents of all
Senior Indebtedness, the Holders of Securities shall be subrogated to the rights
of the holders of Senior Indebtedness to receive payments or distri-
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butions of assets of the Company applicable to the Senior Indebtedness until all
amounts owing on the Securities shall be paid in full in cash, and for the
purpose of such subrogation no payments or distributions to the holders of
Senior Indebtedness by or on behalf of the Company, or by or on behalf of the
Holders by virtue of this Article Four, which otherwise would have been made to
the Holders, shall, as between the Company and the Holders, be deemed to be
payment by the Company to or on account of the Senior Indebtedness, it being
understood that the provisions of this Article Four are and are intended solely
for the purpose of defining the relative rights of the Holders, on the one hand,
and the holders of Senior Indebtedness, on the other hand.
If any payment or distribution to which the Holders would
otherwise have been entitled but for the provisions of this Article Four shall
have been applied, pursuant to the provisions of this Article Four, to the
payment of all amounts payable under the Senior Indebtedness, then the Holders
shall be entitled to receive from the holders of such Senior Indebtedness any
payments or distributions received by such holders of Senior Indebtedness in
excess of the amount sufficient to pay all amounts payable under or in respect
of the Senior Indebtedness in full in cash or Cash Equivalents.
SECTION 4.05. Obligations of the Company Unconditional.
Nothing contained in this Article Four or elsewhere in this
Indenture or in the Securities is intended to or shall impair, as between the
Company and the Holders, the obligation of the Company, which is absolute and
unconditional, to pay to the Holders the principal of 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 other than the holders of the Senior
Indebtedness, nor shall anything herein or therein prevent the Trustee or any
Holder from exercising all remedies otherwise permitted by applicable law upon
default under this Indenture, subject to the rights, if any, under this Article
Four, of the holders of Senior Indebtedness in respect of cash, property or
securities of the Company received upon the exercise of any such remedy. Upon
any payment or distribution of assets or securities of the Company referred to
in this Article Four, the Trustee, subject to the provisions of Sections 8.01
and 8.02, and the Holders shall be entitled to rely upon any order or decree
made by any court of competent jurisdiction in which any dissolution,
winding-up, liquidation or reorganization proceedings are pending, or a
certificate of the receiver, trustee in bankruptcy, liquidating trustee or agent
or other person making any payment or distribution to the Trustee or to the
Holders for the purpose of ascertaining the
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persons entitled to participate in such payment or distribution, the holders of
Senior Indebtedness and other Indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article Four. Nothing in this Section 4.05
shall apply to the claims of, or payments to, the Trustee under or pursuant to
Section 8.07.
SECTION 4.06. Trustee Entitled to Assume Payments Not Prohibited in
Absence of Notice.
The Trustee shall not at any time be charged with knowledge of
the existence of any facts that would prohibit the making of any payment to or
by the Trustee unless and until the Trustee or any Paying Agent shall have
received written notice thereof from the Company or from one or more holders of
Senior Indebtedness or from any Representative therefor and, prior to the
receipt of any such notice, the Trustee, subject to the provisions of Sections
8.01 and 8.02, shall be entitled in all respects conclusively to assume that no
such fact exists.
SECTION 4.07. Application by Trustee of Assets Deposited with It.
U.S. Legal Tender or U.S. Government obligations deposited in
trust with the Trustee pursuant to and in accordance with Section 9.02 shall be
for the sole benefit of Securityholders and, to the extent allocated for the
payment of Securities, shall not be subject to the subordination provisions of
this Article Four. Otherwise, any deposit of assets or securities by or on
behalf of the Company with the Trustee or any Paying Agent (whether or not in
trust) for the payment of principal of or interest on any Securities shall be
subject to the provisions of this Article Four; provided that if prior to the
second Business Day preceding the date on which by the terms of this Indenture
any such assets may become distributable for any purpose (including, without
limitation, the payment of either principal of or interest on any Security) the
Trustee or such Paying Agent shall not have received with respect to such assets
the notice provided for in Section 4.06, then the Trustee or such Paying Agent
shall have full power and authority to receive such assets and to apply the same
to the purpose for which they were received, and shall not be affected by any
notice to the contrary received by it on or after such date; provided, further,
that no payment on any Guarantee shall constitute payment on behalf of the
Company for purposes of this Section 4.07. The foregoing shall not apply to the
Paying Agent if the Company or any Subsidiary or Affiliate of the Company is
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acting as Paying Agent. Nothing contained in this Section 4.07 shall limit the
right of the holders of Senior Indebtedness to recover payments as contemplated
by this Article Four.
SECTION 4.08. No Waiver of Subordination Provisions.
(a) No right of any present or future holder of any Senior
Indebtedness to enforce subordination as herein provided 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 by any act or failure to act, in good faith, by any such holder,
or by any non-compliance by the Company with the terms, provisions and covenants
of this Indenture, regardless of any knowledge thereof any such holder may have
or be otherwise charged with.
(b) Without limiting the generality of subsection (a) of this
Section 4.08, the holders of Senior Indebtedness may, at any time and from time
to time, without the consent of or notice to the Trustee or the Holders of the
Securities, without incurring responsibility to the Holders of the Securities
and without impairing or releasing the subordination provided in this Article
Four or the obligations hereunder of the Holders of the Securities to the
holders of Senior Indebtedness, do any one or more of the following: (1) change
the manner, place or terms of payment or extend the time of payment of, or renew
or alter, Senior Indebtedness or any instrument evidencing the same or any
agreement under which Senior Indebtedness is outstanding; (2) sell, exchange,
release or otherwise deal with any property pledged, mortgaged or otherwise
securing Senior Indebtedness; (3) release any person liable in any manner for
the collection or payment of Senior Indebtedness; and (4) exercise or refrain
from exercising any rights against the Company and any other person; provided,
however, that in no event shall any such actions limit the right of the Holders
of the Securities to take any action to accelerate the maturity of the
Securities pursuant to Article Seven hereof or to pursue any rights or remedies
hereunder or under applicable laws if the taking of such action does not
otherwise violate the terms of this Indenture.
(c) Each Holder by accepting a Security agrees that the
Representative of any Senior Indebtedness (including without limitation, the
Credit Agent), in its discretion, without notice or demand and without affecting
any rights of any holder of Senior Indebtedness under this Article Four, may
foreclose any mortgage or deed of trust covering interests in real property
secured thereby, by judicial or nonjudicial sale; and such Holder hereby waives
any defense to the enforcement by the Rep-
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resentative (including without limitation, the Credit Agent) of any Senior
Indebtedness or by any holder of any Senior Indebtedness against such Holder of
this Article Four after a judicial or nonjudicial sale or other disposition of
its interests in real property secured by such mortgage or deed of trust; and
such Holder expressly waives any defense or benefits that may be derived from
California Civil Code ▇▇.▇▇. 2808, 2809, 2810, 2819, 2845, 2849 or 2850, or
California Code of Civil Procedure ▇▇.▇▇. 580a, 580d or 726, or comparable
provisions of the laws of any other jurisdiction or any similar statute in
effect in any other jurisdiction.
SECTION 4.09. 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 effect the subordination provisions
contained in this Article Four, 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 (whether in bankruptcy, insolvency
or receivership proceedings or upon an assignment for the benefit of creditors
or any other marshalling of assets and liabilities of the Company) tending
towards liquidation or reorganization of the business and assets of the Company,
the immediate filing of a claim for the unpaid balance of its or his Securities
in the form required in said proceedings and cause said claim to be approved. If
the Trustee does not file a proper claim or proof of debt in the form required
in such proceeding prior to 30 days before the expiration of the time to file
such claim or claims, then the holders of the Senior Indebtedness or their
Representative is hereby authorized to file an appropriate claim for and on
behalf of the Holders of said Securities. Nothing herein contained shall be
deemed to authorize the Trustee or the holders of Senior Indebtedness or their
Representative to authorize or consent to or accept or adopt on behalf of any
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 Indebtedness or their
Representative to vote in respect of the claim of any Securityholder in any such
proceeding.
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SECTION 4.10. Right of Trustee To Hold Senior Indebtedness.
The Trustee shall be entitled to all of the rights set forth in
this Article Four in respect of any Senior Indebtedness at any time held by it
to the same extent as any other holder of Senior Indebtedness, and nothing in
this Indenture shall be construed to deprive the Trustee of any of its rights as
such holder.
SECTION 4.11. No Suspension of Remedies.
The failure to make a payment on account of principal of or
interest on the Securities by reason of any provision of this Article Four shall
not be construed as preventing the occurrence of a Default or an Event of
Default under Section 7.01.
Nothing contained in this Article Four shall limit the right of
the Trustee or the Holders of Securities to take any action to accelerate the
maturity of the Securities pursuant to Article Seven or to pursue any rights or
remedies hereunder or under applicable law, subject to the rights, if any, under
this Article Four of the holders, from time to time, of Senior Indebtedness.
SECTION 4.12. No Fiduciary Duty of Trustee to Holders of Senior
Indebtedness.
The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness, and shall not be liable to any such holders
(other than for its willful misconduct or gross negligence) if it shall in good
faith mistakenly pay over or deliver to the Holders of Securities or the Company
or any other person, money or assets to which any holders of Senior Indebtedness
shall be entitled by virtue of this Article Four or otherwise. Nothing in this
Section 4.12 shall affect the obligation of any person other than the Trustee to
hold such payment for the benefit of, and to pay such payment over to, the
holders of Senior Indebtedness or their Representative.
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ARTICLE FIVE
COVENANTS
SECTION 5.01. Payment of Securities.
The Company shall pay the principal of and interest on the
Securities on the dates and in the manner provided in the Securities. An
installment of principal of 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 or a Subsidiary) holds on that date U.S. Legal Tender designated for and
sufficient to pay the installment; provided, however, that U.S. Legal Tender
held by the Trustee for the benefit of holders of Senior Indebtedness or
Guarantor Senior Indebtedness or the payment of which to the Holders is
prohibited pursuant to the provisions of Article Four or Article Twelve hereof
or otherwise shall not be considered to be designated for the payment of any
installment of principal or interest on the Securities within the meaning of
this Section 5.01.
The Company shall pay interest on overdue principal at the rate
borne by the Securities and it shall pay interest on overdue installments of
interest at the same rate, to the extent lawful.
SECTION 5.02. Maintenance of Office or Agency.
The Company shall maintain in the Borough of Manhattan, The City
of New York, the office or agency required under Section 2.03 hereof. The
Company shall give prior notice to the Trustee of the location, and any change
in the location, of such office or agency. If at any time 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 set forth in Section
13.02.
SECTION 5.03. Limitation on Restricted Payments.
The Company shall not, and shall cause each of its Subsidiaries
not to, directly or indirectly, make any Restricted Payment if, at the time of
such proposed Restricted Payment, or after giving effect thereto, (a) a Default
or an Event of Default shall have occurred and be continuing, (b) the Company
could not incur $1.00 of additional Indebtedness (other than Permitted
Indebtedness) pursuant to Section 5.12 or (c)
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the aggregate amount expended for all Restricted Payments, including such
proposed Restricted Payment (the amount of any Restricted Payment, if other than
cash, to be the fair market value thereof at the date of payment, as determined
in good faith by the Board of Directors of the Company), subsequent to June 14,
1995, shall exceed the sum of (i) 50% of the aggregate Consolidated Net Income
(or if such aggregate Consolidated Net Income is a loss, minus 100% of such
loss) of the Company earned subsequent to June 14, 1995 and on or prior to the
date of the proposed Restricted Payment (the "Reference Date"), plus (ii) 100%
of the aggregate Net Proceeds received by the Company from any person (other
than a Subsidiary of the Company) from the issuance and sale (including upon
exchange or conversion for other securities of the Company) subsequent to June
14, 1995 and on or prior to the Reference Date of Qualified Capital Stock
(excluding (A) Qualified Capital Stock paid as a dividend on any Capital Stock
or as interest on any Indebtedness and (B) any Net Proceeds from issuances and
sales financed directly or indirectly using funds borrowed from the Company or
any Subsidiary, until and to the extent such borrowing is repaid), plus (iii)
100% of the aggregate net cash proceeds received by the Company as capital
contributions to the Company after June 14, 1995, plus (iv) $25 million.
Notwithstanding the foregoing, if no Default or Event of Default
shall have occurred and be continuing as a consequence thereof, the provisions
set forth in the immediately preceding paragraph will not prevent (1) the
payment of any dividend within 60 days after the date of its declaration if the
dividend would have been permitted on the date of declaration, (2) the
acquisition of any shares of Capital Stock of the Company or the repurchase,
redemption or other repayment of any Subordinated Indebtedness in exchange for
or solely out of the proceeds of the substantially concurrent sale (other than
to a Subsidiary) of shares of Qualified Capital Stock of the Company, (3) the
repurchase, redemption or other repayment of any Subordinated Indebtedness in
exchange for or solely out of the proceeds of the substantially concurrent sale
(other than to a Subsidiary) of Subordinated Indebtedness of the Company with an
Average Life equal to or greater than the then remaining Average Life of the
Subordinated Indebtedness repurchased, redeemed or repaid and (4) Permitted
Payments; provided, however, that the declaration of each dividend paid in
accordance with clause (1) above, each acquisition, repurchase, redemption or
other repayment made in accordance with, or of the type set forth in, clause (2)
above, and each payment described in clause (iii), (iv), (vi) and (vii) of the
definition of the term "Permitted Payments" shall each be counted for purposes
of computing
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amounts expended pursuant to subclause (c) in the immediately preceding
paragraph, and no amounts expended pursuant to clause (3) above or pursuant to
clauses (i), (ii), (v) and (viii) of the definition of the term "Permitted
Payments" shall be so counted; provided further that to the extent any payments
made pursuant to clause (vi) of the definition of the term "Permitted Payments"
are deducted for purposes of computing the Consolidated Net Income of the
Company, such payments shall not be counted for purposes of computing amounts
expended as Restricted Payments pursuant to subclause (c) in the immediately
preceding paragraph.
Prior to making any Restricted Payment under the first paragraph
of this Section 5.03, the Company shall deliver to the Trustee an Officers'
Certificate setting forth the computation by which the amount available for
Restricted Payments pursuant to such paragraph was determined. The Trustee shall
have no duty or responsibility to determine the accuracy or correctness of this
computation and shall be fully protected in relying on such Officers'
Certificate.
SECTION 5.04. Corporate Existence.
Except as otherwise permitted by Article Six, the Company shall
do or cause to be done all things necessary to preserve and keep in full force
and effect its corporate existence and the corporate or other existence of each
of its Significant Subsidiaries in accordance with the respective organizational
documents of each such Significant Subsidiary and the rights (charter and
statutory) and franchises of the Company and each such Significant Subsidiary;
provided, however, that the Company shall not be required to preserve, with
respect to itself, any right or franchise, and with respect to any of its
Significant Subsidiaries, any such existence, right or franchise, if the Board
of Directors of the Company or such Significant Subsidiary, as the case may be,
shall determine that the preservation thereof is no longer desirable in the
conduct of the business of the Company or any such Significant Subsidiary.
SECTION 5.05. Payment of Taxes and Other Claims.
The Company shall pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (i) all taxes, assessments
and governmental charges (including withholding taxes and any penalties,
interest and additions to taxes) levied or imposed upon it or any of its
Subsidiaries or properties of it or any of its Subsidiaries and (ii) all lawful
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claims for labor, materials and supplies that, if unpaid, might by law become a
Lien upon the property of it or any of its Subsidiaries; provided, however, that
the Company shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim if either (a) the amount,
applicability or validity thereof is being contested in good faith by
appropriate proceedings and an adequate reserve has been established therefor to
the extent required by GAAP or (b) the failure to make such payment or effect
such discharge (together with all other such failures) would not have a material
adverse effect on the financial condition or results or operations of the
Company and its Subsidiaries taken as a whole.
SECTION 5.06. Maintenance of Properties and Insurance.
(a) The Company shall cause all properties used or useful to
the conduct of its business or the business of any of its Subsidiaries to be
maintained and kept in good condition, repair and working order and supplied
with all necessary equipment and shall cause to be made all necessary repairs,
renewals, replacements, betterments and improvements thereof, all as in its
judgment may be necessary, so that the business carried on in connection
therewith may be properly and advantageously conducted at all times unless the
failure to so maintain such properties (together with all other such failures)
would not have a material adverse effect on the financial condition or results
of operations of the Company and its Subsidiaries taken as a whole; provided,
however, that nothing in this Section 5.06 shall prevent the Company or any
Subsidiary from discontinuing the operation or maintenance of any of such
properties, or disposing of any of them, if such discontinuance or disposal is
either (i) in the ordinary course of business, (ii) in the good faith judgment
of the Board of Directors of the Company or the Subsidiary concerned, or of the
senior officers of the Company or such Subsidiary, as the case may be, desirable
in the conduct of the business of the Company or such Subsidiary, as the case
may be, or (iii) is otherwise permitted by this Indenture.
(b) The Company shall provide or cause to be provided, for
itself and each of its Subsidiaries, insurance (including appropriate
self-insurance) against loss or damage of the kinds that, in the reasonable,
good faith opinion of the Company are adequate and appropriate for the conduct
of the business of the Company and such Subsidiaries in a prudent manner, with
reputable insurers or with the government of the United States of America or an
agency or instrumentality
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thereof, in such amounts, with such deductibles, and by such methods as shall be
either (i) consistent with past practices of the Company or the applicable
Subsidiary or (ii) customary, in the reasonable, good faith opinion of the
Company, for corporations similarly situated in the industry, unless the failure
to provide such insurance (together with all other such failures) would not have
a material adverse effect on the financial condition or results of operations of
the Company and its Subsidiaries, taken as a whole.
SECTION 5.07. Compliance Certificate; Notice of Default.
(a) The Company shall deliver to the Trustee within 120 days
after the end of the Company's fiscal year an Officers' Certificate stating that
a review of its activities and the activities of its Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether it has kept, observed, performed and
fulfilled its obligations under this Indenture and further stating, as to each
such Officer signing such certificate, that to the best of his knowledge the
Company during such preceding fiscal year has kept, observed, performed and
fulfilled each and every such covenant and no event of default in respect of any
payment obligation under the Credit Agreement, Default or Event of Default
occurred during such year or, if such signers do know of such an event of
default, Default or Event of Default, the certificate shall describe the event
of default, Default or Event of Default and its status with particularity. The
Officers' Certificate shall also notify the Trustee should the Company elect to
change the manner in which it fixes its fiscal year end.
(b) So long as not contrary to the then current
recommendations of the American Institute of Certified Public Accountants, the
Company shall deliver to the Trustee within 120 days after the end of each
fiscal year a written statement by the Company's independent certified public
accountants stating (A) that their audit examination has included a review of
the terms of this Indenture and the Securities as they relate to accounting
matters, and (B) whether, in connection with their audit examination, any
Default has come to their attention and if such a Default has come to their
attention, specifying the nature and period of existence thereof.
(c) The Company shall deliver to the Trustee, forthwith upon
becoming aware, and in any event within 5 days after the occurrence, of (i) any
Default or Event of Default in the performance of any covenant, agreement or
condition contained
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in this Indenture; (ii) any event of default in respect of any payment
obligation under the Credit Agreement or any event of default under any other
bond, debenture, note, or other evidence of Indebtedness of the Company or any
of its Subsidiaries, or under any mortgage, indenture or other instrument if
such event of default related to Indebtedness at any time in an aggregate
principal amount exceeding $20 million, an Officers' Certificate specifying with
particularity such event.
SECTION 5.08. Compliance with Laws.
The Company shall comply, and shall cause each of its
Subsidiaries to comply, with all applicable statutes, rules, regulations, orders
and restrictions of the United States of America, all states and municipalities
thereof, and of any governmental department, commission, board, regulatory
authority, bureau, agency and instrumentality of the foregoing, in respect of
the conduct of their respective businesses and the ownership of their respective
properties, except such as are being contested in good faith and by appropriate
proceedings and except for such noncompliances as would not in the aggregate
have a material adverse effect on the financial condition or results of
operations of the Company and its Subsidiaries taken as a whole.
SECTION 5.09. SEC Reports.
The Company will deliver to the Trustee within 15 days after the
filing of the same with the Commission, copies of the quarterly and annual
report and of the information documents and other reports, if any, which the
Company is required to file with the Commission pursuant to Section 13 or 15(d)
of the Exchange Act. Notwithstanding that the Company may not be subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act, the Company
will file with the Commission, to the extent permitted, and provide the Trustee
and Holders of Securities with such annual reports and such information,
documents and other reports specified in Section 13 and 15(d) of the Exchange
Act. The Company will also comply with the other provisions of TIA Section
314(a).
SECTION 5.10. Waiver of Stay, Extension or Usury Laws.
The Company covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law or any
usury law or other law that would prohibit or forgive the Company from paying
all
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or any portion of the principal of or interest on the Securities as contemplated
herein, wherever enacted, now or at any time hereafter in force, or which may
affect the covenants or the performance of this Indenture; and (to the extent
that it may lawfully do so) the Company hereby expressly waives all benefit or
advantage of any such law, and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Trustee, but will suffer
and permit the execution of every such power as though no such law had been
enacted.
SECTION 5.11. Limitation on Transactions with Affiliates.
(a) Neither the Company nor any of its Subsidiaries shall (i)
sell, lease, transfer or otherwise dispose of any of its properties or assets,
or issue securities (other than equity securities which do not constitute
Disqualified Capital Stock) to, (ii) purchase any property, assets or securities
(other than equity securities which do not constitute Disqualified Capital
Stock) from, (iii) make any Investment in, or (iv) enter into or suffer to exist
any contract or agreement with or for the benefit of, an Affiliate or
Significant Stockholder (or any Affiliate of such Significant Stockholder) of
the Company or any Subsidiary (an "Affiliate Transaction"), other than (x)
Affiliate Transactions permitted under Section 5.11(b) and (y) Affiliate
Transactions in the ordinary course of business that are fair to the Company or
such Subsidiary, as the case may be, and on terms at least as favorable as might
reasonably have been obtainable at such time from an unaffiliated party;
provided that (A) with respect to Affiliate Transactions involving aggregate
payments in excess of $1 million and less than $5 million, the Company or such
Subsidiary, as the case may be, shall have delivered an Officers' Certificate to
the Trustee certifying that such transaction or series of transactions complies
with clause (y) above (other than the requirement set forth in such clause (y)
that such Affiliate Transaction be in the ordinary course of business), (B) with
respect to Affiliate Transactions involving aggregate payments in excess of $5
million and less than $15 million, the Company or such Subsidiary, as the case
may be, shall have delivered an Officers' Certificate to the Trustee certifying
that such Affiliate Transaction complies with clause (y) above (other than the
requirement set forth in such clause (y) that such Affiliate Transaction be in
the ordinary course of business) and that such Affiliate Transaction has
received the approval of a majority of the disinterested members of the Board of
Directors of the Company or the Subsidiary, as the case may be, or in the
absence of any such approval by the disinterested members of the Board of
Directors
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of the Company or the Subsidiary, as the case may be, that an Independent
Financial Advisor has reasonably and in good faith determined that the financial
terms of such Affiliate Transaction are fair to the Company or such Subsidiary,
as the case may be, or that the terms of such Affiliate Transaction are at least
as favorable as might reasonably have been obtained at such time from an
unaffiliated party and that such Independent Financial Advisor has provided
written confirmation of such determination to the Board of Directors and (C)
with respect to Affiliate Transactions involving aggregate payments in excess of
$15 million, the Company or such Subsidiary, as the case may be, shall have
delivered to the Trustee a written opinion from an Independent Financial Advisor
to the effect that the financial terms of such Affiliate Transaction are fair to
the Company or such Subsidiary, as the case may be, or that the terms of such
Affiliate Transaction are at least as favorable as those that might reasonably
have been obtained at the time from an unaffiliated party.
(b) The provisions of Section 5.11(a) shall not apply to (i)
any Permitted Payment, (ii) any Restricted Payment that is made in compliance
with the provisions of Section 5.03, (iii) reasonable and customary fees and
compensation paid to, and indemnity provided on behalf of, officers, directors,
employees or consultants of the Company or any Subsidiary, as determined by the
Board of Directors of the Company or any Subsidiary or the senior management
thereof in good faith, (iv) transactions exclusively between or among the
Company and any of its wholly owned Subsidiaries or exclusively between or among
such wholly owned Subsidiaries, provided such transactions are not otherwise
prohibited by this Indenture, (v) any agreement as in effect as of June 14, 1995
or any amendment thereto or any transaction contemplated thereby (including
pursuant to any amendment thereto) so long as any such amendment is not
disadvantageous to the Securityholders in any material respect, (vi) the
existence of, or the performance by the Company or any of its Subsidiaries of
its obligations under the terms of, any stockholder agreement (including any
registration rights agreement or purchase agreement related thereto) to which it
(or Holdings) is a party as of June 14, 1995 and any similar agreements which it
(or Holdings) may enter into thereafter; provided, however, that the existence
of, or the performance by the Company or any Subsidiaries of obligations under
any future amendment to, any such existing agreement or under any similar
agreement entered into after June 14, 1995 shall only be permitted by this
clause (vi) to the extent that the terms of any such amendment or new agreement
are not otherwise disadvantageous to the Securityholders in any material
re-
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spect, (vii) transactions permitted by, and complying with, the provisions of
Section 6.01 and (viii) transactions with suppliers or other purchases or sales
of goods or services, in each case in the ordinary course of business
(including, without limitation, pursuant to joint venture agreements) and
otherwise in compliance with the terms of this Indenture which are fair to the
Company, in the reasonable determination of the Board of Directors of the
Company 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.
SECTION 5.12. Limitation on Incurrences of Additional Indebtedness.
The Company shall not, and shall not permit any of its
Subsidiaries, directly or indirectly, to incur, assume, guarantee, become
liable, contingently or otherwise, with respect to, or otherwise become
responsible for the payment of (collectively "incur") any Indebtedness other
than Permitted Indebtedness; provided, however, that if no Default with respect
to payment of principal of, or interest on, the Securities or Event of Default
under this Indenture shall have occurred and be continuing at the time of or as
a consequence of the incurrence of any such Indebtedness, the Company may incur
Indebtedness if immediately before and immediately after giving effect to the
incurrence of such Indebtedness the Operating Coverage Ratio of the Company
would be greater than 2.0 to 1.0; provided further a Subsidiary may incur
Acquired Indebtedness to the extent such Indebtedness could have been incurred
by the Company pursuant to the immediately preceding proviso.
SECTION 5.13. Limitation on Dividends and Other Payment Restrictions
Affecting Subsidiaries.
The Company shall not, and shall not permit any Subsidiary to,
directly or indirectly, create or suffer to exist, or allow to become effective
any consensual Payment Restriction with respect to any of its Subsidiaries,
except for (a) any such restrictions contained in (i) the Credit Agreement in
effect on the Issue Date, as any such Payment Restriction may apply to any
present or future Subsidiary, (ii) this Indenture and any agreement in effect at
or entered into on the Issue Date, (iii) Indebtedness of a person existing at
the time such person becomes a Subsidiary (provided that (x) such Indebtedness
is not incurred in connection with, or in contemplation of, such person becoming
a Subsidiary, (y) such restriction is not applicable to any person, or the
properties or assets of any person, other than the person so acquired and (z)
such In-
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debtedness is otherwise permitted to be incurred pursuant to Section 5.12), (iv)
secured Indebtedness otherwise permitted to be incurred pursuant to Sections
5.12 and 5.14 that limit the right of the debtor to dispose of the assets
securing such Indebtedness; (b) customary non-assignment provisions restricting
subletting or assignment of any lease or other agreement entered into by a
Subsidiary; (c) customary net worth provisions contained in leases and other
agreements entered into by a Subsidiary in the ordinary course of business; (d)
customary restrictions with respect to a Subsidiary pursuant to an agreement
that has been entered into for the sale or disposition of all or substantially
all of the Capital Stock or assets of such Subsidiary; (e) customary provisions
in joint venture agreements and other similar agreements; (f) restrictions
contained in Indebtedness incurred to refinance, refund, extend or renew
Indebtedness referred to in clause (a) above; provided that the restrictions
contained therein are not materially more restrictive taken as a whole than
those provided for in such Indebtedness being refinanced, refunded, extended or
renewed and (g) Payment Restrictions contained in any other Indebtedness
permitted to be incurred subsequent to the Issue Date pursuant to the provisions
of Section 5.12; provided that any such Payment Restrictions are ordinary and
customary with respect to the type of Indebtedness being incurred (under the
relevant circumstances) and, in any event, no more restrictive than the most
restrictive Payment Restrictions in effect on June 14, 1995.
SECTION 5.14. Limitation on Liens.
The Company shall not and shall not permit any Subsidiary to
create, incur, assume or suffer to exist any Liens upon any of their respective
assets unless the Securities are equally and ratably secured by the Liens
covering such assets, except for (i) Liens on assets of the Company securing
Senior Indebtedness and Liens on assets of a Subsidiary Guarantor which, at the
time of incurrence, secure Guarantor Senior Indebtedness; (ii) existing and
future Liens securing Indebtedness and other obligations of the Company and its
Subsidiaries under the Credit Agreement and related documents or any refinancing
or replacement thereof in whole or in part permitted under this Indenture, (iii)
Permitted Liens, (iv) Liens securing Acquired Indebtedness; provided that such
Liens (x) are not incurred in connection with, or in contemplation of, the
acquisition of the property or assets acquired and (y) do not extend to or cover
any property or assets of the Company or any Subsidiary other than the property
or assets so acquired, (v) Liens to secure Capitalized Lease Obligations and
certain other Indebtedness that is otherwise permitted under this Indenture;
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provided that (A) any such Lien is created solely for the purpose of securing
such other Indebtedness representing, or incurred to finance, refinance or
refund, the cost (including sales and excise taxes, installation and delivery
charges and other direct costs of, and other direct expenses paid or charged in
connection therewith) of the purchase (whether through stock or asset purchase,
merger or otherwise) or construction or improvement of the property subject
thereto (whether real or personal, including fixtures and other equipment), (B)
the principal amount of the Indebtedness secured by such Lien does not exceed
100% of such costs and (C) such Lien does not extend to or cover any other
property other than such item of property and any improvements on such item,
(vi) Liens existing on the Issue Date, (vii) Liens in favor of the Trustee under
this Indenture and any substantially equivalent Lien granted to any trustee or
similar institution under any indenture for Indebtedness permitted to be
incurred under this Indenture, and (viii) any replacement, extension or renewal,
in whole or in part, of any Lien described in this or the foregoing clauses
including in connection with any refinancing of the Indebtedness, in whole or in
part, secured by any such Lien; provided that to the extent any such clause
limits the amount secured or the assets subject to such Liens, no replacement,
extension or renewal shall increase the amount or the assets subject to such
Liens, except to the extent that the Liens associated with such additional
assets are otherwise permitted hereunder.
SECTION 5.15. Limitation on Change of Control.
(a) Upon the occurrence of a Change of Control, each Holder
shall have the right to require the repurchase of such Holder's Securities
pursuant to the offer described in paragraph (b) below (the "Change of Control
Offer"), at a purchase price equal to 101% of the principal amount thereof plus
accrued and unpaid interest to the date of repurchase. Prior to the mailing of
the notice of a Change of Control Offer provided for in paragraph (b) below,
within 30 days following any Change of Control the Company shall either (a)
repay in full and terminate all commitments under Indebtedness under the Credit
Agreement to the extent the terms thereof require repayment upon a Change of
Control (or offer to repay in full and terminate all commitments under all such
Indebtedness under the Credit Agreement and repay the Indebtedness owed to each
lender which has accepted such offer), or (b) obtain the requisite consent under
the Credit Agreement, the terms of which require repayment upon a Change of
Control, to permit the repurchase of the Securities as provided for in this
Section 5.15. The Com-
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pany shall first comply with the covenant in the immediately preceding sentence
before it shall be required to repurchase Securities pursuant to this Section
5.15. The Company's failure to comply with the covenants described in this
paragraph shall constitute an Event of Default under this Indenture.
In addition, prior to purchasing Securities tendered into a
Change of Control Offer, the Company shall purchase all Senior Notes (or
permitted refinancings thereof) which it is required to purchase by reason of
such Change of Control pursuant to the provisions of the agreements governing
such Indebtedness.
(b) Within 30 days following the date upon which the Change of
Control occurred (the "Change of Control Date"), the Company must send, by first
class mail, a notice to each Holder of Securities, with a copy to the Trustee,
which notice shall govern the terms of the Change of Control Offer. The notice
to the Holders shall contain all instructions and materials necessary to enable
such Holders to tender Securities pursuant to the Change of Control Offer. The
Company shall give notice of an event giving rise to a Change of Control on the
same date and in the same manner to all Holders of Securities. Such notice shall
state:
(1) that the Change of Control Offer is being made pursuant to
this Section 5.15 and that all Securities tendered will be accepted for
payment;
(2) the purchase price (including the amount of accrued interest)
and the purchase date (which shall be no earlier than 30 days nor later
than 40 days from the date such notice is mailed, other than as may be
required by law) (the "Change of Control Payment Date"); provided,
however, that the Change of Control Payment Date for the Securities
shall be subsequent to such date for the Senior Notes;
(3) that any Security not tendered will continue to accrue
interest if interest is then accruing;
(4) that, unless (i) the Company defaults in making payment
therefor or (ii) such payment is prohibited pursuant to Article Four,
any Security accepted for payment pursuant to the Change of Control
Offer shall cease to accrue interest after the Change of Control Payment
Date;
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(5) that Holders electing to have a Security purchased pursuant
to a Change of Control Offer will be required to surrender the Security,
with the form entitled "Option of Holder to Elect Purchase" on the
reverse of the Security completed, to the Paying Agent at the address
specified in the notice prior to the close of business on the Business
Day prior to the Change of Control Payment Date;
(6) that Holders will be entitled to withdraw their election if
the Paying Agent receives, not later than two Business Days prior to the
Change of Control Payment Date, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the
principal amount of the Securities the Holder delivered for purchase and
a statement that such Holder is withdrawing his election to have such
Security purchased;
(7) that Holders whose Securities are purchased only in part will
be issued new Securities equal in principal amount to the unpurchased
portions of the Securities surrendered; provided that each Security
purchased and each Security issued shall be in an original principal
amount of $1,000 or integral multiples thereof;
(8) that each Change of Control Offer is required to remain open
for at least 20 Business Days or such longer period as may be required
by law and until 12:00 Midnight New York City time on the applicable
Change of Control Payment Date; and
(9) the circumstances and relevant facts regarding such Change of
Control.
On or before the Change of Control Payment Date, the Company
shall (i) accept for payment Securities or portions thereof tendered pursuant to
the Change of Control Offer, (ii) deposit with the Paying Agent U.S. Legal
Tender sufficient to pay the purchase price of all Securities so tendered and
(iii) deliver to the Trustee Securities so accepted together with an Officers'
Certificate stating the Securities or portions thereof being purchased by the
Company. The Paying Agent shall promptly mail to the Holders of Securities so
accepted payment in an amount equal to the purchase price (and the Trustee shall
promptly authenticate and mail to such Holders new Securities equal in principal
amount to any unpurchased portion of the Securities surrendered provided that
each such new Security shall be in the principal amount of $1,000 or integral
multiples
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thereof) unless such payment is prohibited pursuant to Article Four or
otherwise. The Company will publicly announce the results of the Change of
Control Offer on or as soon as practicable after the Change of Control Payment
Date. For purposes of this Section 5.15, the Trustee shall act as the Paying
Agent.
The Company shall comply with the requirements of Rule 14e-1
under the Exchange Act and any other securities laws and regulations thereunder
to the extent such laws and regulations are applicable in connection with the
repurchase of Securities pursuant to a Change of Control Offer. To the extent
the provisions of any securities laws or regulations conflict with the
provisions under this Section 5.15, the Company shall comply with the applicable
securities laws and regulations and shall not be deemed to have breached its
obligations under this Section 5.15 by virtue thereof.
SECTION 5.16. Limitation on Asset Sales.
Neither the Company nor any of its Subsidiaries shall consummate
an Asset Sale unless (a) the Company or the applicable Subsidiary receives
consideration at the time of such Asset Sale at least equal to the fair market
value of the assets sold and (b) upon consummation of an Asset Sale, the Company
will within 365 days of the receipt of the proceeds therefrom, either: (i) apply
or cause its Subsidiary to apply the Net Cash Proceeds of any Asset Sale to (A)
a Related Business Investment, (B) an investment in properties and assets that
replace the properties and assets that are the subject of such Asset Sale or (C)
an investment in properties and assets that will be used in the business of the
Company and its Subsidiaries existing on the Issue Date or in a business
reasonably related thereto; (ii) in the case of a sale of a store or stores,
deem such Net Cash Proceeds to have been applied to the extent of any capital
expenditures made to acquire or construct a replacement store in the general
vicinity of the store sold within 365 days preceding the date of the Asset Sale;
(iii) apply or cause to be applied such Net Cash Proceeds to the permanent
repayment of Pari Passu Indebtedness or Senior Indebtedness; provided, however,
that the repayment of any revolving loan (under the Credit Agreement or
otherwise) shall result in a permanent reduction in the commitment thereunder;
(iv) use such Net Cash Proceeds to secure Letter of Credit obligations to the
extent related letters of credit have not been drawn upon or returned undrawn;
or (v) after such time as the accumulated Net Cash Proceeds of Asset Sales
effected since June 14, 1995 equal or exceed $20 million, apply or cause to be
applied such Net Cash Proceeds to the purchase of Securities tendered
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to the Company for purchase at a price equal to 100% of the principal amount
thereof plus accrued interest thereon to the date of purchase pursuant to an
offer to purchase made by the Company as set forth below (a "Net Proceeds
Offer"); provided, however, that the Company shall have the right to exclude
from the foregoing provisions Asset Sales subsequent to June 14, 1995, the
proceeds of which are derived from the sale and substantially concurrent
lease-back of a supermarket and/or related assets or equipment which are
acquired or constructed by the Company or a Subsidiary subsequent to the date
that is six months prior to the Issue Date; provided that such sale and
substantially concurrent lease-back occurs within 270 days following such
acquisition or the completion of such construction, as the case may be. Pending
the utilization of any Net Cash Proceeds in the manner (and within the time
period) described above, the Company may use any such Net Cash Proceeds to repay
revolving loans (under the Credit Agreement or otherwise) without a permanent
reduction of the commitment thereunder.
Notice of a Net Proceeds Offer pursuant to this Section 5.16 will
be mailed to record Holders of Securities as shown on the register of Holders
not less than 325 days nor more than 365 days after the relevant Asset Sale,
with a copy to the Trustee. The notice shall contain all instructions and
materials necessary to enable such Holders to tender Securities pursuant to the
Net Proceeds Offer and shall state the following terms:
(1) that the Net Proceeds Offer is being made pursuant to Section
5.16 and that all Securities tendered will be accepted for payment,
provided, however, that if the aggregate principal amount of Securities
tendered in a Net Proceeds Offer plus accrued interest at the expiration
of such offer exceeds the aggregate amount of the Net Proceeds Offer,
the Company shall select the Securities to be purchased on a pro rata
basis (with such adjustments as may be deemed appropriate by the Company
so that only Securities in denominations of $1,000 or multiples thereof
shall be purchased);
(2) the purchase price (including the amount of accrued interest)
and the purchase date (which shall be no earlier than 30 days nor later
than 40 days from the date such notice is mailed, other than as may be
required by law) (the "Proceeds Purchase Date");
(3) that any Security not tendered will continue to accrue
interest if interest is then accruing;
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(4) that, unless (i) the Company defaults in making payment
therefor or (ii) such payment is prohibited pursuant to Article Four
hereof or otherwise, any Security accepted for payment pursuant to the
Net Proceeds Offer shall cease to accrue interest after the Proceeds
Purchase Date;
(5) that Holders electing to have a Security purchased pursuant
to a Net Proceeds Offer will be required to surrender the Security, with
the form entitled "Option of Holder to Elect Purchase" on the reverse of
the Security completed, to the Paying Agent at the address specified in
the notice prior to the close of business on the Business Day prior to
the Proceeds Purchase Date;
(6) that Holders will be entitled to withdraw their election if
the Paying Agent receives, not later than two Business Days prior to the
Proceeds Purchase Date, a telegram, telex, facsimile transmission or
letter setting forth the name of the Holder, the principal amount of the
Securities the Holder delivered for purchase and a statement that such
Holder is withdrawing his election to have such Security purchased;
(7) that Holders whose Securities were purchased only in part
will be issued new Securities equal in principal amount to the
unpurchased portion of the Securities surrendered; provided that each
Security purchased and each new Security issued shall be in an original
principal amount of $1,000 or integral multiples thereof; and
(8) that the Net Proceeds Offer shall remain open for a period of
20 Business Days or such longer period as may be required by law.
On or before the Proceeds Purchase Date, the Company shall (i)
accept for payment Securities or portions thereof tendered pursuant to the Net
Proceeds Offer which are to be purchased in accordance with item (b)(1) above,
(ii) deposit with the Paying Agent U.S. Legal Tender sufficient to pay the
purchase price of all Securities to be purchased and (iii) deliver to the
Trustee Securities so accepted together with an Officers' Certificate stating
the Securities or portions thereof being purchased by the Company. The Paying
Agent shall promptly mail to the Holders of Securities so accepted payment in an
amount equal to the purchase price (and the Trustee shall promptly authenticate
and mail or deliver to such Holders a new Security equal in principal amount to
any unpurchased portion
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of the Security surrendered provided that each such new Security shall be in the
principal amount of $1,000 or integral multiples thereof) unless such payment is
prohibited pursuant to Article Four hereof or otherwise. The Company will
publicly announce the results of the Net Proceeds Offer on or as soon as
practicable after the Proceeds Purchase Date. For purposes of this Section 5.16,
the Trustee shall act as the Paying Agent.
Any amounts remaining after the purchase of Securities pursuant
to a Net Proceeds Offer shall be returned by the Trustee to the Company.
The Company shall comply with the requirements of Rule 14e-1
under the Exchange Act and any other securities laws and regulations thereunder
to the extent such laws and regulations are applicable in connection with the
purchase of Securities pursuant to a Net Proceeds Offer. To the extent the
provisions of any securities laws or regulations conflict with the provisions
under this Section 5.16, the Company shall comply with the applicable securities
laws and regulations and shall not be deemed to have breached its obligations
under this Section 5.16 by virtue thereof.
SECTION 5.17. Guarantees of Certain Indebtedness.
The Company will not permit any of its Subsidiaries to (a) incur,
guarantee or secure through the granting of Liens the payment of any
Indebtedness under the term portion of the Credit Agreement or refinancings
thereof or (b) pledge any intercompany notes representing obligations of any of
its Subsidiaries, to secure the payment of any Indebtedness under the term
portion of the Credit Agreement or refinancings thereof, in each case unless
such Subsidiary, the Company and the Trustee execute and deliver a supplemental
indenture evidencing such Subsidiary's Guarantee.
SECTION 5.18. Limitation on Preferred Stock of Subsidiaries.
The Company will not permit any of its Subsidiaries to issue
Preferred Stock (other than to the Company or to a wholly owned Subsidiary) or
permit any person (other than the Company or a wholly owned Subsidiary) to own
any Preferred Stock of any Subsidiary.
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SECTION 5.19. Limitation on Other Senior Subordinated Indebtedness.
Neither the Company nor any Subsidiary Guarantor will, directly
or indirectly, incur any Indebtedness (including Acquired Indebtedness) that is
subordinate in right of payment to any Indebtedness of the Company or such
Subsidiary Guarantor, as the case may be, unless such Indebtedness is either (a)
pari passu in right of payment with the Securities or the Guarantee of such
Subsidiary Guarantor, as the case may be, or (b) subordinate in right of payment
to the Securities or the Guarantee of such Subsidiary Guarantor, as the case may
be, in the same manner and at least to the same extent as the Securities are
subordinate to Senior Indebtedness or as such Guarantee is subordinated to
Senior Guarantor Indebtedness of such Subsidiary Guarantor, as the case may be.
ARTICLE SIX
SUCCESSOR CORPORATION
SECTION 6.01. Limitations on Mergers and Certain Other Transactions.
(a) The Company shall not in a single transaction or through a
series of related transactions, (i) consolidate with or merge with or into any
other person, or transfer (by lease, assignment, sale or otherwise) all or
substantially all of its properties and assets as an entirety or substantially
as an entirety to another person or group of affiliated persons or (ii) adopt a
Plan of Liquidation, unless, in either case:
(1) either the Company shall be the continuing person, or the
person (if other than the Company) formed by such consolidation or into
which the Company is merged or to which all or substantially all of the
properties and assets of the Company as an entirety or substantially as
an entirety are transferred (or, in the case of a Plan of Liquidation,
any person to which assets are transferred) (the Company or such other
person being hereinafter referred to as the "Surviving Person") shall be
a corporation organized and validly existing under the laws of the
United States, any State thereof or the District of Columbia, and shall
expressly assume, by an indenture supplement, all the obligations of the
Company under the Securities and this Indenture;
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(2) immediately after and giving effect to such transaction and
the assumption contemplated by clause (1) above and the incurrence or
anticipated incurrence of an Indebtedness to be incurred in connection
therewith, (A) the Surviving Person shall have a Consolidated Net Worth
equal to or greater than the Consolidated Net Worth of the Company
immediately preceding the transaction and (B) the Surviving Person could
incur at least $1 of additional Indebtedness (other than Permitted
Indebtedness) pursuant to Section 5.12;
(3) immediately before and immediately after and giving effect to
such transaction and the assumption of the obligations as set forth in
clause (1) above and the incurrence or anticipated incurrence of any
Indebtedness to be incurred in connection therewith, no Default or Event
of Default shall have occurred and be continuing; and
(4) each Subsidiary Guarantor, unless it is the other party to
the transaction, shall have by supplemental indenture confirmed that its
Guarantee of the obligations of the Company under the Securities and
this Indenture shall apply, without alteration or amendment as such
Guarantee applies on the date it was granted under this Indenture to the
obligations of the Company under this Indenture and the Securities to
the obligations of the Company or such Person as the case may be, under
this Indenture and the Securities, after consummation of such
transaction.
(b) For purposes of the foregoing, the transfer (by lease,
assignment, sale or otherwise, in a single transaction or series of
transactions) of all or substantially all of the properties and assets of one or
more direct or indirect Subsidiaries, the Capital 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.
SECTION 6.02. Successor Corporation Substituted.
Upon any consolidation or merger, or any transfer of all or
substantially all of the assets of the Company or any adoption of a Plan of
Liquidation by the Company in accordance with Section 6.01, the Surviving Person
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, to
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which assets are transferred) shall succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Indenture with the
same effect as if such Surviving Person had been named as the Company herein;
provided, however, that solely for purposes of computing amounts described in
subclause (c) of the first paragraph of Section 5.03, any such Surviving Person
shall only be deemed to have succeeded to and be substituted for the Company
with respect to periods subsequent to the effective time of such merger,
consolidation or transfer of assets. When a successor corporation assumes all of
the obligations of the Company hereunder and under the Securities and agrees to
be bound hereby and thereby, the predecessor shall be released from such
obligations.
ARTICLE SEVEN
DEFAULT AND REMEDIES
SECTION 7.01. Events of Default.
An "Event of Default" occurs if:
(i) the Company defaults in the payment of interest on any
Securities when the same becomes due and payable and the Default
continues for a period of 30 days, whether or not such payment shall be
prohibited by the provisions of Article Four hereof;
(ii) the Company defaults in the payment of the principal of, or
premium, if any, on the Securities when due whether at maturity, upon
acceleration, redemption, required repurchase or otherwise, whether or
not such payment shall be prohibited by the provisions of Article Four
hereof;
(iii) the Company fails to comply with any of its agreements
contained in the Securities or this Indenture (other than a default
specified in clause (i) or (ii) above), if such failure continues for
the period and after the notice specified below;
(iv) there shall be a default under any Indebtedness of the
Company or any of its Subsidiaries, whether such Indebtedness now exists
or shall hereafter be created, if both (A) such default either (1)
results from the failure to pay any such Indebtedness at its stated
final maturity
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or (2) relates to an obligation other than the obligation to pay such
Indebtedness at its stated final maturity and results in the holder or
holders of such Indebtedness causing such Indebtedness to become due
prior to its stated final maturity and (B) the principal amount of such
Indebtedness, together with the principal amount of any other such
Indebtedness in default for failure to pay principal at stated final
maturity or the maturity of which has been so accelerated, aggregates
$20 million or more at any one time outstanding;
(v) one or more judgments, orders or decrees of any court or
regulatory or administrative agency of competent jurisdiction for the
payment of money in excess of $20 million, either individually or in the
aggregate, shall be entered against the Company or any Subsidiary of the
Company or any of their respective properties and shall not be
discharged 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;
(vi) either the Company or any Significant Subsidiary pursuant to
or within the meaning of any Bankruptcy Law: (a) commences a voluntary
case or proceeding; (b) consents to the entry of a Bankruptcy Order for
relief against it in an involuntary case or proceeding or the
commencement of any case or proceeding against it; (c) consents to the
appointment of a custodian of it or for substantially all of its
property; or (d) makes a general assignment for the benefit of its
creditors;
(vii) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that: (a) is for relief against the Company or
any Significant Subsidiary, in an involuntary case or proceeding; (b)
appoints a custodian of the Company or any Significant Subsidiary, or
for all or any substantial part of their respective properties; or (c)
orders the liquidation of the Company or any Significant Subsidiary and
in each case the order or decree remains unstayed and in effect for 60
days;
(viii) the lenders under the Credit Agreement shall commence
judicial proceedings to foreclose upon any material portion of the
assets of the Company and its Subsidiaries or shall have exercised any
right under applicable law or applicable security documents to take
ownership of any such assets in lieu of foreclosure; or
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(ix) any of the Guarantees shall be declared or adjudged invalid
in a final judgment or order issued by any court or governmental
authority.
A Default under clause (iii) above (other than in the case of any
Default under Section 5.03, 5.15, 5.16 or 6.01, which Defaults shall be Events
of Default with the notice specified in this paragraph but without the passage
of time specified in this paragraph) is not an Event of Default until the
Trustee notifies the Company or the Holders of at least 25% in principal amount
of the outstanding Securities notify the Company and the Trustee of the Default,
and the Company does not cure the Default within 30 days after receipt of the
notice. The notice must specify the Default, demand that it be remedied and
state that the notice is a "Notice of Default." Such notice shall be given by
the Trustee if so requested by the Holders of at least 25% in principal amount
of the Securities then outstanding. When a Default is cured, it ceases.
SECTION 7.02. Acceleration.
(a) If an Event of Default (other than an Event of Default
specified in Section 7.01(vi) or (vii) with respect to the Company or a
Subsidiary Guarantor) occurs and is continuing, the Trustee or the Holders of at
least 25% in principal amount of the then outstanding Securities may, and the
Trustee upon the request of the Holders of not less than 25% in aggregate
principal amount of the then outstanding Securities shall, declare due and
payable all unpaid principal and interest accrued and unpaid on the then
outstanding Securities by written notice to the Company (and, if any
Indebtedness is outstanding under the Credit Agreement or the Credit Agreement
is otherwise in effect, to the Credit Agent) and the Trustee specifying the
respective Event of Default and that it is a "notice of acceleration" (the
"Acceleration Notice"), and the same (i) shall become immediately due and
payable or (ii) if there are any amounts outstanding under the Credit Agreement,
shall become due and payable upon the first to occur of an acceleration under
the Credit Agreement, or five business days after receipt by the Company and the
Credit Agent of such Acceleration Notice. If an Event of Default specified in
Section 7.01(vi) or (vii) occurs with respect to the Company or a Subsidiary
Guarantor that is a Significant Subsidiary, all unpaid principal of and accrued
interest on all then outstanding Securities shall be immediately due and payable
without any declaration or other act on the part of the Trustee or any of the
Holders. Upon payment of such principal amount, interest, and premium, if any,
all of the Company's obligations under the Securities and
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this Indenture, other than obligations under Section 8.07, shall terminate.
After a declaration of acceleration, the Holders of a majority in principal
amount of the Securities then outstanding, by notice to the Trustee, may rescind
an acceleration and its consequences if (i) all existing Events of Default,
other than the non-payment of the principal of the Securities which has become
due solely by such declaration of acceleration, have been cured or waived, (ii)
to the extent the payment of such interest is lawful, interest on overdue
installments of interest and overdue principal, which has become due otherwise
than by such declaration of acceleration, has been paid, (iii) the rescission
would not conflict with any judgment or decree of a court of competent
jurisdiction and (iv) the Company has paid or deposited with the Trustee a sum
sufficient to pay all sums paid or advanced by the Trustee under this Indenture
and the compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel.
(b) In the event of a declaration of acceleration under this
Indenture because an Event of Default set forth in Section 7.01(iv) has occurred
and is continuing, such declaration of acceleration shall be automatically
rescinded and annulled if either (i) the holders of the Indebtedness which is
the subject of such Event of Default have waived such failure to pay at maturity
or have rescinded the acceleration in respect of such Indebtedness within 90
days of such maturity or declaration of acceleration, as the case may be, and no
other Event of Default has occurred during such 90-day period which has not been
cured or waived, or (ii) such Indebtedness shall have been discharged or the
maturity thereof shall have been extended such that it is not then due and
payable, or the underlying default has been cured (and any acceleration based
thereon of such other Indebtedness has been rescinded), within 90 days of such
maturity or declaration of acceleration, as the case may be.
SECTION 7.03. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy by proceeding at law or in equity to collect the
payment of principal of or interest on the Securities or to enforce the
performance of any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess
any of the Securities or does not produce any of them in the proceeding. A delay
or omission by the Trustee or any Securityholder in exercising any right or
remedy accruing
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upon an Event of Default shall not impair the right or remedy or constitute a
waiver of or acquiescence in the Event of Default. No remedy is exclusive of any
other remedy. All available remedies are cumulative to the extent permitted by
law.
SECTION 7.04. Waiver of Past Defaults.
Subject to Sections 7.07 and 10.02, the Holders of a majority in
principal amount of the outstanding Securities by notice to the Trustee may
waive an existing Default or Event of Default and its consequences, except a
Default in the payment of principal of or interest on any Security as specified
in clauses (i) and (ii) of Section 7.01. When a Default or Event of Default is
waived, it is cured and ceases.
SECTION 7.05. Control by Majority.
Subject to Section 2.09, the Holders of a majority in principal
amount of the outstanding Securities may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on it, including, without limitation, any remedies
provided for in Section 7.03. Subject to Section 8.01, however, the Trustee may
refuse to follow any direction that conflicts with any law or this Indenture,
that the Trustee determines may be unduly prejudicial to the rights of another
Securityholder, or that may involve the Trustee in personal liability; provided
that the Trustee may take any other action deemed proper by the Trustee which is
not inconsistent with such direction.
SECTION 7.06. Limitation on Suits.
A Securityholder may not pursue any remedy with respect to this
Indenture or the Securities unless:
(1) the Holder gives to the Trustee written notice of a
continuing Event of Default;
(2) the Holder or Holders of at least 25% in principal amount of
the outstanding Securities make a written request to the Trustee to
pursue the remedy;
(3) such Holder or Holders offer to the Trustee indemnity
satisfactory to the Trustee against any loss, liability or expense to be
incurred in compliance with such request;
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(4) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer of indemnity; and
(5) during such 60-day period the Holder or Holders of a majority
in principal amount of the outstanding Securities do not give the
Trustee a direction which, in the opinion of the Trustee, is
inconsistent with the request.
A Securityholder may not use this Indenture to prejudice the
rights of another Securityholder or to obtain a preference or priority over such
other Securityholder.
SECTION 7.07. Rights of Holders To Receive Payment.
Notwithstanding any other provision of this Indenture, the right
of any Holder to receive payment of principal of and interest on a Security, on
or after the respective due dates expressed in such Security, or to bring suit
for the enforcement of any such payment on or after such respective dates, shall
not be impaired or affected without the consent of the Holder.
SECTION 7.08. Collection Suit by Trustee.
If an Event of Default in payment of principal or interest
specified in clause (i) or (ii) of Section 7.01 occurs and is continuing, the
Trustee may recover judgment in its own name and as trustee of an express trust
against the Company or any other obligor on the Securities for the whole amount
of principal and accrued interest remaining unpaid, together with interest on
overdue principal and, to the extent that payment of such interest is lawful,
interest on overdue installments of interest, in each case at the rate per annum
borne by the Securities and such further amount as shall be sufficient to cover
the costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel.
SECTION 7.09. Trustee May File Proofs of Claim.
The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Securityholders allowed in any judicial proceedings relating to the Company or
any other obligor upon the Securities, any of their respective
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creditors or any of their respective property and shall be entitled and
empowered to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same, and any Custodian in
any such judicial proceedings is hereby authorized by each Securityholder 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 Securityholders, to pay
to the Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agent and counsel, and any other
amounts due the Trustee under Section 8.07. Nothing herein contained shall be
deemed to authorize the Trustee to authorize or consent to or accept or adopt on
behalf of any Securityholder any plan of reorganization, arrangement, adjustment
or composition affecting the Securities or the rights of any Holder thereof, or
to authorize the Trustee to vote in respect of the claim of any Securityholder
in any such proceeding.
SECTION 7.10. Priorities.
If the Trustee collects any money pursuant to this Article Seven,
it shall pay out the money in the following order:
First: to the Trustee for amounts due under Section 8.07;
Second: subject to Article Four and Article Twelve, to Holders
for interest accrued on the Securities, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Securities for interest;
Third: subject to Article Four and Article Twelve, to Holders
for principal amounts due and unpaid on the Securities, ratably, without
preference or priority of any kind, according to the amounts due and
payable on the Securities for principal; and Fourth: subject to Article
Four and Article Twelve, to the Company or the Subsidiary Guarantors, as
their respective interests may appear.
The Trustee, upon prior notice to the Company, may fix a record
date and payment date for any payment to Securityholders pursuant to this
Section 7.10.
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SECTION 7.11. Rights and Remedies Cumulative.
No right or remedy herein conferred upon or reserved to the
Trustee or to the Holders is intended to be exclusive of any other right or
remedy, And every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
SECTION 7.12. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any
Security to exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of any such Event
of Default or an acquiescence therein. Every right and remedy given by this
Article Seven 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 7.13. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section 7.13 does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 7.07, or a suit by a Holder or Holders of more than 10% in
principal amount of the outstanding Securities.
ARTICLE EIGHT
TRUSTEE
The Trustee hereby accepts the trust imposed upon it by this
Indenture and covenants and agrees to perform the same, as herein expressed.
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SECTION 8.01. Duties of Trustee.
(a) If a Default or an Event of Default of which the Trustee
is aware has occurred and is continuing, the Trustee shall exercise such of the
rights and powers vested in it by this Indenture and use the same degree of care
and skill in its exercise thereof as a prudent person would exercise or use
under the circumstances in the conduct of his own affairs.
(b) Except during the continuance of a Default or an Event of
Default:
(1) The Trustee need undertake to perform only those duties as
are specifically set forth in this Indenture and no covenants or
obligations shall be implied in this Indenture against the Trustee.
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions
furnished to the Trustee and conforming to the requirements of this
Indenture. However, the Trustee shall examine the certificates and
opinions to determine whether or not they conform to the requirements of
this Indenture.
(c) The Trustee shall have no liability except 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 8.01.
(2) The Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts.
(3) The Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 7.05.
(d) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers if it shall have reasonable grounds for believing that
repayment
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of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
(e) Every provision of this Indenture that in any way relates
to the Trustee is subject to paragraphs (a), (b), (c) and (d) of this Section
8.01.
(f) The Trustee shall not be liable for interest on any assets
received by it. Assets held in trust by the Trustee need not be segregated from
other assets except to the extent required by law.
SECTION 8.02. Rights of Trustee.
Subject to Section 8.01:
(a) The Trustee may rely on and shall be protected in acting or
refraining from acting upon 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 in addition to written direction
from the Company an Officers' Certificate or an Opinion of Counsel,
which shall conform to Sections 13.04 and 13.05. The Trustee shall not
be liable for any action it takes or omits to take in good faith in
reliance on such certificate or opinion.
(c) The Trustee may act through its attorneys and agents and
shall not be responsible for the misconduct or negligence of any
attorney or agent appointed with due care.
(d) The Trustee shall not be liable for any action that it takes
or omits to take in good faith which it believes to be authorized or
within its rights or powers.
(e) The Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, notice, request, direction, consent, order, bond,
debenture, or other paper or document, but the Trustee, in its
discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit.
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(f) The Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request,
order or direction of any of the Holders pursuant to the provisions of
this Indenture, unless such Holders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and
liabilities which may be incurred therein or thereby.
SECTION 8.03. 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, its
Subsidiaries, or their respective Affiliates with the same rights it would have
if it were not Trustee. Any Agent may do the same with like rights. However, the
Trustee must comply with Sections 8.10 and 8.11.
SECTION 8.04. Trustee's Disclaimer.
The Trustee makes no representation as to the validity or
adequacy of this Indenture or the Securities, it shall not be accountable for
the Company's use of the proceeds from the Securities, and it shall not be
responsible for any statement in the Securities other than the Trustee's
certificate of authentication.
SECTION 8.05. Notice of Default.
If a Default or an Event of Default occurs and is continuing and
if it is known to the Trustee, the Trustee shall mail to each Holder of
Securities notice of the Default or Event of Default within 90 days after such
Default or Event of Default occurs or if such Default or Event of Default is
known to the Trustee during such 90-day period, promptly after such Default or
Event of Default becomes known to the Trustee; provided, however, that, except
in the case of a Default or Event of Default in the payment of the principal of
or interest on any Security, including the failure to make payment on a Change
of Control Payment Date pursuant to a Change of Control offer or payment when
due pursuant to a Net Proceeds Offer the Trustee may withhold such notice if it
in good faith determines that withholding such notice is in the interest of the
Holders.
SECTION 8.06. Reports by Trustee to Holders.
Within 60 days after each May 15 beginning with the May 15
following the date of this Indenture, the Trustee shall, to the extent that any
of the events described in TIA ss. 313(a)
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occurred within the previous twelve months, but not otherwise, 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).
A copy of each report at the time of its mailing to
Securityholders shall be mailed to the Company and filed with the Commission and
each stock exchange, if any, on which the Securities are listed.
The Company shall notify the Trustee if the Securities become
listed on any stock exchange.
SECTION 8.07. Compensation and Indemnity.
The Company shall pay to the Trustee from time to time reasonable
compensation for its services. The Trustee's compensation shall not be limited
by any law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee upon request for all reasonable disbursements, expenses
and advances incurred or made by it. Such expenses shall include the reasonable
compensation, disbursements and expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee for, and hold it harmless
against, any loss or liability incurred by it except for such actions to the
extent caused by any negligence or bad faith on its part, arising out of or in
connection with the administration of this trust and its rights or duties
hereunder. The Trustee shall notify the Company promptly of any claim asserted
against the Trustee for which it may seek indemnity. The Company shall defend
the claim and the Trustee shall cooperate in the defense. The Trustee may have
separate counsel and the Company shall pay the reasonable fees and expenses of
such counsel; provided that the Company will not be required to pay such fees
and expenses if it assumes the Trustee's defense and there is no conflict of
interest between the Company and the Trustee in connection with such defense as
reasonably determined by the Trustee. The Company need not pay for any
settlement made without its written consent. The Company need not reimburse any
expense or indemnify against any loss or liability to the extent incurred by the
Trustee through its negligence, bad faith or willful misconduct.
To secure the Company's payment obligations in this Section 8.07,
the Trustee shall have a lien prior to the Securities on all assets held or
collected by the Trustee, in its
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capacity as Trustee, except assets held in trust to pay principal of or interest
on particular Securities.
When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 7.01(vi) or (vii) occurs, the expenses and
the compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
SECTION 8.08. Replacement of Trustee.
The Trustee may resign by so notifying the Company. The Holders
of a majority in principal amount of the outstanding Securities may remove the
Trustee and appoint a successor trustee with the Company's consent, by so
notifying the Company and the Trustee. The Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 8.10;
(2) the Trustee is adjudged a bankrupt or an insolvent;
(3) a receiver or other public officer takes charge of the
Trustee or its property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Company shall notify each Holder of
such event and shall promptly appoint a successor Trustee. Within one year after
the successor Trustee takes office, the Holders of a majority in principal
amount of the 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,
the retiring Trustee shall transfer all property held by it as Trustee to the
successor Trustee, subject to the lien provided in Section 8.07, 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
Securityholder.
If a successor Trustee does not take office within 60 days after
the retiring Trustee resigns or is removed, the re-
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tiring Trustee, the Company or the Holders of at least 10% in 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 8.10, 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 8.08, the Company's obligations under Section 8.07 shall continue for
the benefit of the retiring Trustee.
SECTION 8.09. Successor Trustee by Merger, Etc.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the resulting, surviving or transferee corporation without any
further act shall, if such resulting, surviving or transferee corporation is
otherwise eligible hereunder, be the successor Trustee.
SECTION 8.10. Eligibility; Disqualification.
This Indenture shall always have a Trustee who satisfies the
requirement of TIA Sections 310(a)(1) and 310(a)(5). The Trustee shall have a
combined capital and surplus of at least $100,000,000 as set forth in its most
recent published annual report of condition. The Trustee shall comply with TIA
ss. 310(b); provided, however, that there shall be excluded from the operation
of TIA Section 310(b)(1) any indenture or indentures under which other
securities, or certificates of interest or participation in other securities, of
the Company are outstanding, if the requirements for such exclusion set forth in
TIA Section 310(b)(1) are met.
SECTION 8.11. Preferential Collection of Claims Against Company.
The Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated.
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ARTICLE NINE
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 9.01. Termination of the Company's Obligations.
The Company may terminate its obligations under the Securities
and this indenture, and the obligations of any Subsidiary Guarantor shall
terminate, except those obligations referred to in the penultimate paragraph of
this Section 9.01, if all Securities previously authenticated and delivered
(other than destroyed, lost or stolen Securities which have been replaced or
paid or Securities for whose payment money has theretofore been deposited with
the Trustee or the Paying Agent in trust or segregated and held in trust by the
Company and thereafter repaid to the Company, as provided in Section 9.04) have
been delivered to the Trustee for cancellation and the Company has paid all sums
payable by it hereunder, or if:
(1) either (i) pursuant to Article Three, the Company shall have
given notice to the Trustee and mailed a notice of redemption to each
Holder of the redemption of all of the Securities under arrangements
satisfactory to the Trustee for the giving of such notice or (ii) all
Securities have otherwise become due and payable hereunder;
(2) the Company shall have irrevocably deposited or caused to be
deposited with the Trustee or a trustee satisfactory to the Trustee,
under the terms of an irrevocable trust agreement in form and substance
satisfactory to the Trustee, as trust funds in trust solely for the
benefit of the Holders for that purpose, money in such amount as is
sufficient without consideration of reinvestment of such interest, to
pay principal of, premium, if any, and interest on the outstanding
Securities to maturity or redemption; provided that the Trustee shall
have been irrevocably instructed to apply such money to the payment of
said principal, premium, if any, and interest with respect to the
Securities and, provided, further, that from and after the time of
deposit, the money deposited shall not be subject to the rights of
holders of Senior Indebtedness pursuant to the provisions of Article
Four and Article Twelve;
(3) no Default or Event of Default with respect to this Indenture
or the Securities shall have occurred and be continuing on the date of
such deposit or shall occur
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as a result of such deposit and such deposit will not result in a breach
or violation of, or constitute a default under, any other instrument to
which the Company is a party or by which it is bound;
(4) the Company shall have paid all other sums payable by it
hereunder; and
(5) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent providing for the termination of the Company's and any
Subsidiary Guarantor's obligation under the Securities and this
Indenture have been complied with. Such Opinion of Counsel shall also
state that such satisfaction and discharge does not result in a default
under the Credit Agreement (if then in effect) or any other agreement or
instrument then known to such counsel that binds or affects the Company.
Notwithstanding the foregoing paragraph, the Company's
obligations in Sections 2.05, 2.06, 2.07, 2.08, 5.01, 5.02 and 8.07 and any
Subsidiary Guarantor's obligations in respect thereof shall survive until the
Securities are no longer outstanding pursuant to the last paragraph of Section
2.08. After the Securities are no longer outstanding, the Company's obligations
in Sections 8.07, 9.04 and 9.05 and any Subsidiary Guarantor's obligations in
respect thereof shall survive.
After such delivery or irrevocable deposit the Trustee upon
request shall acknowledge in writing the discharge of the Company's and any
Subsidiary Guarantor's obligations under the Securities and this Indenture
except for those surviving obligations specified above.
SECTION 9.02. Legal Defeasance and Covenant Defeasance.
(a) The Company may, at its option by Board Resolution of the
Board of Directors of the Company, at any time, with respect to the Securities,
elect to have either paragraph (b) or paragraph (c) below be applied to the
outstanding Securities upon compliance with the conditions set forth in
paragraph (d).
(b) Upon the Company's exercise under paragraph (a) of the
option applicable to this paragraph (b), the Company and any Subsidiary
Guarantor shall be deemed to have been released and discharged from its
obligations with respect to the outstanding Securities on the date the
conditions set forth below
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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 paragraph (e) below and the other Sections of and
matters under this Indenture referred to in (i) and (ii) below, and to
have satisfied all its other obligations under such Securities and this
Indenture insofar as such Securities are concerned (and the Trustee, at
the expense of the Company, shall execute proper instruments
acknowledging the same), and Holders of the Securities and the
Guarantees and any amounts deposited under paragraph (d) below shall
cease to be subject to any obligations to, or the rights of, any holder
of Senior Indebtedness or Guarantor Senior Indebtedness under Article
Four, Article Twelve or otherwise, except for the following which shall
survive until otherwise terminated or discharged hereunder: (i) the
rights of Holders of outstanding Securities to receive solely from the
funds held by the Trustee in the trust fund described in paragraph (d)
below and as more fully set forth in such paragraph, payments in respect
of the principal of, premium, if any, and interest on such Securities
when such payments are due, (ii) the Company's obligations with respect
to such Securities under Sections 2.06, 2.07 and 5.02, and, with respect
to the Trustee, under Section 8.07 and any Subsidiary Guarantor's
obligations in respect thereof, (iii) the rights, powers, trusts, duties
and immunities of the Trustee hereunder and (iv) this Section 9.02 and
Section 9.05. Subject to compliance with this Section 9.02, the Company
may exercise its option under this paragraph (b) notwithstanding the
prior exercise of its option under paragraph (c) below with respect to
the Securities.
(c) Upon the Company's exercise under paragraph (a) of the
option applicable to this paragraph (c), the Company shall be released and
discharged from its. obligations under any covenant contained in Article Four
and Article Six and in Sections 5.03, 5.05 through 5.09 and 5.11 through 5.19
with respect to the outstanding Securities on and after the date the conditions
set forth below are satisfied (hereinafter, "covenant defeasance"), and the
Securities shall thereafter be deemed to be not "outstanding" for the purpose of
any direction, waiver, consent or declaration or act of Holders (and the
consequences of any thereof) in connection with such covenants, but shall
continue to be deemed "outstanding for all other purposes hereunder and Holders
of the Securities and the Guarantees and any amounts deposited under paragraph
(d) below shall cease to be subject to any obligations to, or the rights of,
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any holder of Senior Indebtedness or Guarantor Senior Indebtedness under Article
Four, Article Twelve or otherwise. For this purpose, such covenant defeasance
means that, with respect to the outstanding Securities, the Company and any
Subsidiary Guarantor may omit to comply with and shall have no liability in
respect of any term, condition or limitation set forth in any such covenant,
whether directly or indirectly, by reason of any reference elsewhere herein to
any such covenant or by reason of any reference in any such covenant to any
other provision herein or in any other document and such omission to comply
shall not constitute a Default or an Event of Default under Section 7.01(iii),
but, except as specified above, the remainder of this Indenture and such
Securities shall be unaffected thereby.
(d) The following shall be the conditions to application of
either paragraph (b) or paragraph (c) above to the outstanding Securities:
(i) the Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the
requirements of Section 8.10 who shall agree to comply with the
provisions of this Section 9.02 applicable to it) as trust funds in
trust for the purpose of making the following payments, specifically
pledged as security for, and dedicated solely to, the benefit of the
Holders of such Securities, (x) money in an amount or (y) direct
non-callable obligations of, or non-callable obligations guaranteed by,
the United States of America for the payment of which guarantee or
obligation the full faith and credit of the United States is pledged
("U.S. Government Obligations") maturing as to principal, premium, if
any, and interest in such amounts of money and at such times as are
sufficient without consideration of any reinvestment of such interest,
to pay principal of and interest on the outstanding Securities not later
than one day before the due date of any payment, or (z) a combination
thereof, sufficient, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay and discharge and which shall
be applied by the Trustee (or other qualifying trustee) to pay and
discharge principal of, premium, if any, and interest on the outstanding
Securities on the Maturity Date or otherwise in accordance with the
terms of this Indenture and of such Securities; provided, however, that
the Trustee (or other qualifying trustee) shall have received an
irrevocable written order from the Company instructing the
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Trustee (or other qualifying trustee) to apply such money or the
proceeds of such U.S. Government obligations to said payments with
respect to the Securities;
(ii) no Default or Event of Default or event which with notice or
lapse of time or both would become a Default or an Event of Default with
respect to the Securities shall have occurred and be continuing on the
date of such deposit or, insofar as Section 7.01(vi) or (vii) is
concerned, at any time during the period ending on the 91st day after
the date of such deposit (it being understood that this condition shall
not be deemed satisfied until the expiration of such period);
(iii) such legal defeasance or covenant defeasance shall not cause
the Trustee to have a conflicting interest with respect to any
Securities of the Company or any Subsidiary Guarantor;
(iv) such legal defeasance or covenant defeasance shall not
result in a breach or violation of, or constitute a Default or Event of
Default under, this Indenture or any other material agreement or
instrument to which the Company or any Subsidiary Guarantor is a party
or by which it is bound (and in that connection, the Trustee shall have
received a certificate from the Credit Agent to that effect with respect
to such Credit Agreement if then in effect);
(v) in the case of an election under paragraph (b) above, the
Company shall have delivered to the Trustee an Opinion of Counsel
stating that (x) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling or (y) since the
Issue Date, there has been a change in the applicable Federal income tax
law, in either case to the effect that, and based thereon such opinion
shall confirm that, the Holders of the outstanding Securities will not
recognize income, gain or loss for Federal income tax purposes as a
result of such legal defeasance and will be subject to Federal income
tax on the same amounts, in the same manner and at the same times as
would have been the case if such legal defeasance had not occurred;
(vi) in the case of an election under paragraph (c) above, the
Company shall have delivered to the Trustee an Opinion of Counsel to the
effect that the Holders of the outstanding Securities will not recognize
income, gain or
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loss for Federal income tax purposes as a result of such covenant
defeasance and will be subject to Federal income tax on the same
amounts, in the same manner and at the same times as would have been the
case if such covenant defeasance had not occurred;
(vii) in the case of an election under either paragraph (b) or (c)
above, an Opinion of Counsel to the effect that after the 91st day
following the deposit, (A) the trust funds will not be subject to any
rights of holders of Senior Indebtedness or Guarantor Senior
Indebtedness, including, without limitation, those arising under this
Indenture and (B) the trust funds will not be subject to the effect of
any applicable Bankruptcy Law;
(viii) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to either the legal defeasance under
paragraph (b) above or the covenant defeasance under paragraph (c)
above, as the case may be, have been complied with; and
(ix) the Company shall have delivered to the Trustee an Officer's
Certificate stating that the deposit was not made by the Company with
the intent of preferring the Holders of the Securities over other
creditors of the Company or any Subsidiary Guarantor or with the intent
of defeating, hindering, delaying or defrauding creditors of the
Company, any Subsidiary Guarantor or others.
(e) All money and U.S. Government obligations (including the
proceeds thereof) deposited with the Trustee (or other qualifying trustee,
collectively for purposes of this paragraph (e), the "Trustee") pursuant to
paragraph (d) above in respect of the outstanding Securities shall be held in
trust and applied by the Trustee, in accordance with the provisions of such
Securities and this Indenture, to the payment, either directly or through any
Paying Agent (other than the Company or any Affiliate of the Company), to the
Holders of such Securities of all sums due and to become due thereon in respect
of principal, premium and interest, but such money need not be segregated from
other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax,
fee or other charge imposed on or assessed against the U.S. Government
obligations deposited pursuant to paragraph (d) above or the principal, premium,
if any, and in-
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terest received in respect thereof other than any such tax, fee or other charge
which by law is for the account of the Holders of the outstanding Securities.
The Company's obligations to pay and indemnify the Trustee as set forth in this
paragraph shall survive the termination of this Indenture and the Securities.
Anything in this Section 9.02 to the contrary notwithstanding,
the Trustee shall deliver or pay to the Company from time to time upon the
request, in writing, by the Company any money or U.S. Government obligations
held by it as provided in paragraph (d) above which, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, are in excess of the
amount thereof which would then be required to be deposited to effect an
equivalent legal defeasance or covenant defeasance.
SECTION 9.03. Application of Trust Money.
The Trustee shall hold in trust money or U.S. Government
obligations deposited with it pursuant to Sections 9.01 and 9.02, and shall
apply the deposited money And the money from U.S. Government obligations in
accordance with this Indenture to the payment of principal of, premium, if any,
and interest on the Securities.
SECTION 9.04. Repayment to the Company or Subsidiary Guarantors.
Subject to Sections 8.07, 9.01 and 9.02, the Trustee shall
promptly pay to the Company, or if deposited with the Trustee by any Subsidiary
Guarantor, to such Guarantor, upon receipt by the Trustee of an Officers'
Certificate, any excess money, determined in accordance with Section 9.02, held
by it at any time. The Trustee and the Paying Agent shall pay to the Company or
any Subsidiary Guarantor, as the case may be, upon receipt by the Trustee or the
Paying Agent, as the case may be, of an Officers' Certificate, any money held by
it for the payment of principal, premium, if any, or interest that remains
unclaimed for two years after payment to the Holders is required; provided,
however, that the Trustee and the Paying Agent before being required to make any
payment may, but need not, at the expense of the Company cause to be published
once in a newspaper of general circulation in The City of New York or mail to
each Holder entitled to such money notice that such money remains unclaimed and
that after a date specified therein, which shall be at least 30 days from the
date of such
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publication or mailing, any unclaimed balance of such money then remaining will
be repaid to the Company. After payment to the Company or any Subsidiary
Guarantor, as the case may be, Securityholders entitled to money must look
solely to the Company for payment as general creditors unless an applicable
abandoned property law designates another person, and all liability of the
Trustee or Paying Agent with respect to such money shall thereupon cease.
SECTION 9.05. Reinstatement.
If the Trustee or Paying Agent is unable to apply any money or
U.S. Government obligations in accordance with this Indenture 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 and only then the Company's and each Subsidiary Guarantor's,
if any, obligations under this Indenture and the Securities shall be revived and
reinstated as though no deposit had been made pursuant to this Indenture until
such time as the Trustee is permitted to apply all such money or U.S. Government
obligations in accordance with this Indenture; provided, however, that if the
Company or the Subsidiary Guarantors, as the case may be, has made any payment
of principal of, premium, if any, or interest on any Securities because of the
reinstatement of its obligations, the Company or the Subsidiary Guarantors, as
the case may be, shall be, subrogated to the rights of the holders of such
Securities to receive such payment from the money or U.S. Government obligations
held by the Trustee or Paying Agent.
ARTICLE TEN
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 10.01. Without Consent of Holders.
The Company and the Subsidiary Guarantors, when authorized by a
Board Resolution, and the Trustee, together, may amend or supplement this
Indenture or the Securities without notice to or consent of any Securityholder:
(1) to cure any ambiguity, defect or inconsistency; provided that
such amendment or supplement does not adversely affect the rights of any
Holder;
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(2) to comply with Article Six and Section 11.06;
(3) to provide for uncertificated Securities in addition to or in
place of certificated Securities;
(4) to make any other change that does not adversely affect the
rights of any Securityholder in any material respect; or
(5) to comply with any requirements of the Commission in
connection with the qualification of this Indenture under the TIA;
provided that the Company has delivered to the Trustee an Opinion of Counsel
stating that such amendment or supplement complies with the provisions of this
Section 10.01.
SECTION 10.02. With Consent of Holders.
Subject to Section 7.07, the Company and each Subsidiary
Guarantor, when authorized by a Board Resolution, and the Trustee, together with
the written consent of the Holder or Holders of at least a majority in aggregate
principal amount of the outstanding Securities, may amend or supplement, or
waive compliance with any provision of, this Indenture, the Securities or any
Guarantee without notice to any other Securityholders; provided that without the
consent of Holders of not less than two thirds in aggregate principal amount of
Securities then outstanding, no such amendment, supplement or waiver may release
any Subsidiary Guarantor from any of its obligations under its Guarantee or this
Indenture other than in accordance with the terms of such Guarantee and this
Indenture; provided, further, that without the consent of Holders of not less
than 75% in aggregate principal amount of the Securities then outstanding, no
such amendment, supplement or waiver may change the Change of Control Payment
Date or the purchase price in connection with any repurchase of Securities
pursuant to Section 5.15 in a manner adverse to any Holder or waive a Default or
Event of Default resulting from a failure to comply with Section 5.15. Without
the consent of each Securityholder affected, however, no amendment, supplement
or waiver, including a waiver pursuant to Section 7.04, may:
(1) change the principal amount of Securities whose Holders must
consent to an amendment, supplement or waiver of any provision of this
Indenture, the Securities or the Guarantees;
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(2) reduce the rate or extend the time for payment of interest
on any Security;
(3) reduce the principal amount of any Security;
(4) change the Maturity Date of any Security or alter the
redemption provisions in this Indenture or the Securities in a manner
adverse to any Holder;
(5) make any changes in the provisions concerning waivers of
Defaults or Events of Default by Holders of the Securities or the rights
of Holders to recover the principal of, interest on, or redemption
payment with respect to, any Security;
(6) make any changes in Section 7.04, 7.07 or this Section
10.02;
(7) make the principal of, or the interest on any Security
payable with anything or in any manner other than as provided for in
this Indenture, the Securities and the Guarantees as in effect on the
date hereof;
(8) modify the subordination provisions of this Indenture
(including the related definitions) so as to adversely affect the
ranking of any Security or Guarantee; provided, however, that it is
understood that any amendment the purpose of which is to permit the
incurrence of additional Indebtedness under this Indenture shall not be
construed as adversely affecting the ranking of any Security or
Guarantee.
The Company and each Subsidiary Guarantor agree that no
amendment, supplement or waiver under this Article Ten may make any change that
adversely affects the rights under Article Four or Twelve of any holders of any
Senior Indebtedness or any Guarantor Senior Indebtedness unless the holders of
such Senior Indebtedness or Guarantor Senior Indebtedness consent to the change.
It shall not be necessary for the consent of the Holders under
this Section to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section
becomes effective, the Company shall mail to the Holders affected thereby a
notice briefly describing the amendment,
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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 supplemental indenture.
In connection with any amendment, supplement or waiver under this
Article Ten, 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.
SECTION 10.03. Compliance with TIA.
From the date on which the Indenture is qualified under the TIA,
every amendment, waiver or supplement of this Indenture or the Securities shall
comply with the TIA as then in effect.
SECTION 10.04. Revocation and Effect of Consents.
Until an amendment, waiver or supplement becomes effective, a
consent to it by a Holder is a continuing consent by the Holder and every
subsequent Holder of a Security or portion of a Security that evidences the same
debt as the consenting Holder's Security, even if notation of the consent is not
made on any Security. However, any such Holder or subsequent Holder may revoke
the consent as to his Security or portion of his Security by notice to the
Trustee or the Company received before the date on which the Trustee receives an
Officers' Certificate certifying that the Holders of the requisite principal
amount of Securities have consented (and not theretofore revoked such consent)
to the amendment, supplement or waiver.
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 at least 30 days prior to the
first solicitation of such consent. If a record date is fixed, then
notwithstanding the last sentence of the immediately preceding paragraph, those
persons who were Holders at such record date (or their duly designated proxies),
and only those persons, shall be entitled to revoke any consent previously
given, whether or not such persons continue to be Holders after such record
date. No such consent shall be valid or effective for more than 90 days after
such record date.
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After an amendment, supplement or waiver becomes effective, it
shall bind every Securityholder, unless it makes a change described in any of
clauses (1) through (8) of Section 10.02, in which case, the amendment,
supplement or waiver shall bind only each Holder of a Security who has consented
to it and every subsequent Holder of a Security or portion of a Security that
evidences the same debt as the consenting Holder's Security; provided that any
such waiver shall not impair or affect the right of any Holder to receive
payment of principal of and interest on a Security, on or after the respective
due dates expressed in such Security, or to bring suit for the enforcement of
any such payment on or after such respective dates without the consent of such
Holder.
SECTION 10.05. Notation on or Exchange of Securities.
If an amendment, supplement or waiver changes the terms of a
Security, the Trustee may require the Holder of the Security to deliver it to
the Trustee. The Trustee may place an appropriate notation on the Security about
the changed terms and return it to the Holder. Alternatively, if 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.
SECTION 10.06. Trustee To Sign Amendments, Etc.
The Trustee shall execute any amendment, supplement or waiver
authorized pursuant to this Article Ten; 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 Ten is
authorized or permitted by this Indenture.
ARTICLE ELEVEN
GUARANTEE
SECTION 11.01. Unconditional Guarantee.
Each Subsidiary Guarantor hereby unconditionally, jointly and
severally, guarantees (such guarantee to be re-
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ferred to herein as the "Guarantee"), subject to Article Twelve, to each Holder
of a Security authenticated and delivered by the Trustee and to the Trustee and
its successors and assigns, the Securities or the obligations of the Company
hereunder or thereunder, that: (i) the principal of and interest on the
Securities will be promptly paid in full when due, subject to any applicable
grace period, whether at maturity, by acceleration or otherwise and interest on
the overdue principal, if any, and interest on any interest, to the extent
lawful, of the Securities and all other obligations of the Company to the
Holders or the Trustee hereunder or thereunder will be promptly paid in full or
performed, all in accordance with the terms hereof and thereof; and (ii) in case
of any extension of time of payment or renewal of any Securities or of any such
other obligations, the same will be promptly paid in full when due or performed
in accordance with the terms of the extension or renewal, subject to any
applicable grace period, whether at stated maturity, by acceleration or
otherwise, subject, however, in the case of clauses (i) and (ii) above, to the
limitations set forth in Section 11.05. Each Subsidiary Guarantor hereby agrees
that its obligations hereunder 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 waiver or consent by any Holder
of the Securities with respect to any provisions hereof or thereof, the recovery
of any judgment against the Company, any action to enforce the same or any other
circumstance which might otherwise constitute a legal or equitable discharge or
defense of a guarantor. Each Subsidiary 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, protest, notice and all demands whatsoever and covenants
that this Guarantee will not be discharged except by complete performance of the
obligations contained in the Securities, this Indenture and in this Guarantee.
If any Securityholder or the Trustee is required by any court or otherwise to
return to the Company, any Subsidiary Guarantor, or any custodian, trustee,
liquidator or other similar official acting in relation to the Company or any
Subsidiary Guarantor, any amount paid by the Company or any Subsidiary Guarantor
to the Trustee or such Securityholder, this Guarantee, to the extent theretofore
discharged, shall be reinstated in full force and effect. Each Subsidiary
Guarantor further agrees that, as between each Subsidiary Guarantor, on the one
hand, and the Holders and the Trustee, on the other hand, (x) the maturity of
the obligations guaranteed hereby may be accelerated as provided in Article
Seven for the purposes of this Guarantee, notwithstanding any
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stay, injunction or other prohibition preventing such acceleration in respect of
the obligations guaranteed hereby, and (y) in the event of any acceleration of
such obligations as provided in Article Seven, such obligations (whether or not
due and payable) shall forthwith become due and payable by each Subsidiary
Guarantor for the purpose of this Guarantee.
SECTION 11.02. Subordination of Guarantee.
The obligations of each Subsidiary Guarantor to the Holders of
Securities pursuant to the Guarantee and this Indenture are expressly
subordinate and subject in right of payment to the prior payment in full of all
Guarantor Senior Indebtedness of such Subsidiary Guarantor, to the extent and in
the manner provided in Article Twelve.
SECTION 11.03. Severability.
In case any provision of this Guarantee shall be invalid, illegal
or unenforceable, the validity, legality, and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
SECTION 11.04. Release of a Subsidiary Guarantor.
Upon (i) the release by the lenders under the Term Loans, related
documents and future refinancings thereof of all guarantees of a Subsidiary
Guarantor and all Liens on the property and assets of such Subsidiary Guarantor
relating to such Indebtedness, or (ii) the sale or disposition (whether by
merger, stock purchase, asset sale or otherwise) of a Subsidiary Guarantor (or
all or substantially all its assets) to an entity which is not a Subsidiary of
the Company and which sale or disposition is otherwise in compliance with the
terms of this Indenture, such Subsidiary Guarantor shall be deemed released from
all obligations under this Article Eleven without any further action required on
the part of the Trustee or any Holder; provided, however, that any such
termination shall occur only to the extent that all obligations of such
Subsidiary Guarantor under all of its guarantees of, and under all of its
pledges of assets or other security interests which secure, such Indebtedness of
the Company shall also terminate upon such release, sale or transfer.
The Trustee shall deliver an appropriate instrument evidencing
such release upon receipt of a request by the Company accompanied by an
Officers' Certificate certifying as to the compliance with this Section 11.04.
Any Subsidiary Guaran-
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tor not so released remains liable for the full amount of principal of and
interest on, and all other obligations under, the Securities as provided in this
Article Eleven.
SECTION 11.05. Limitation of Subsidiary Guarantor's Liability.
Each Subsidiary Guarantor and by its acceptance hereof each
Holder hereby confirms that it is the intention of all such parties that the
guarantee by such Subsidiary Guarantor pursuant to its Guarantee not constitute
a fraudulent transfer or conveyance for purposes of the 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 such Subsidiary Guarantor hereby irrevocably agree that the obligations of
such Subsidiary Guarantor under the Guarantee shall be limited to the maximum
amount as will, after giving effect to all other contingent and fixed
liabilities of such Subsidiary Guarantor (including, but not limited to, the
Guarantor Senior Indebtedness of such Subsidiary Guarantor) and after giving
effect to any collections from or payments made by or on behalf of any other
Subsidiary Guarantor in respect of the obligations of such other Subsidiary
Guarantor under its Guarantee or pursuant to Section 11.07, result in the
obligations of such Subsidiary Guarantor under the Guarantee not constituting
such fraudulent transfer or conveyance.
SECTION 11.06. Subsidiary Guarantors May Consolidate, etc., on Certain
Terms.
(a) nothing contained in this Indenture or in any of the
Securities shall prevent any consolidation or merger of a Subsidiary Guarantor
with or into the Company or another Subsidiary Guarantor or shall prevent any
sale or conveyance of the property of a Subsidiary Guarantor as an entirety or
substantially as an entirety, to the Company or another Subsidiary Guarantor.
Upon any such consolidation, merger, sale or conveyance, the Guarantee given by
such Subsidiary Guarantor shall no longer have any force or effect.
(b) Except as set forth in Article Five and Article Six
hereof, nothing contained in this Indenture or in any of the Securities shall
prevent any consolidation or merger of a Subsidiary Guarantor with or into a
corporation or corporations other than the Company or another Subsidiary
Guarantor (whether or not affiliated with the Subsidiary Guarantor); provided,
however, that, subject to Sections 11.04 and 11.06(a), (i) im-
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mediately after such transaction, and giving effect thereto, no Default or Event
of Default shall have occurred as a result of such transaction and be
continuing, and (ii) upon any such consolidation, merger, sale or conveyance,
the Subsidiary Guarantee set forth in this Article Eleven, and the due and
punctual performance and observance of all of the covenants and conditions of
this Indenture to be performed by such Subsidiary Guarantor, shall be expressly
assumed (in the event that the Subsidiary Guarantor is not the surviving
corporation in the merger), by supplemental indenture satisfactory in form to
the Trustee, executed and delivered to the Trustee, by the corporation formed by
such consolidation, or into which the Subsidiary Guarantor shall have merged, or
by the corporation that shall have acquired such property. In the case of any
such consolidation, merger, sale or conveyance and upon the assumption by the
successor corporation, by supplemental indenture executed and delivered to the
Trustee and satisfactory in form to the Trustee of the due and punctual
performance of all of the covenants and conditions of this Indenture to be
performed by the Subsidiary Guarantor, such successor corporation shall succeed
to and be substituted for the Subsidiary Guarantor with the same effect as if it
had been named herein as a Subsidiary Guarantor; provided, however, that solely
for purposes of computing amounts described in subclause (c) of the first
paragraph of Section 5.03, any such successor corporation shall only be deemed
to have succeeded to and be substituted for any Subsidiary Guarantor with
respect to periods subsequent to the effective time of such merger,
consolidation or transfer of assets.
SECTION 11.07. Contribution.
In order to provide for just and equitable contribution among the
Subsidiary Guarantors, the Subsidiary Guarantors agree, inter se, that in the
event any payment or distribution is made by any Subsidiary Guarantor (a
"Funding Guarantor") under the Guarantee, such Funding Guarantor shall be
entitled to a contribution from all other Subsidiary Guarantors in a pro rata
amount based on the Adjusted Net Assets of each Subsidiary Guarantor (including
the Funding Guarantor) for all payments, damages and expenses incurred by that
Funding Guarantor in discharging the Company's obligations with respect to the
Securities or any other Subsidiary Guarantor's obligations with respect to the
Guarantee. "Adjusted Net Assets" with respect to the Guarantee of such
Subsidiary Guarantor at any date shall mean the lesser of the amount by which
(x) the fair value of the property of such Subsidiary Guarantor exceeds the
total amount of liabilities, including, without limitation, contin-
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gent liabilities (after giving effect to all other fixed and contingent
liabilities incurred or assumed on such date (other than liabilities of such
Subsidiary Guarantor under Indebtedness which constitutes Subordinated
Indebtedness with respect to such Guarantee)), but excluding liabilities under
the Guarantee, of such Subsidiary Guarantor at such date and (y) the present
fair salable value of the assets of such Subsidiary Guarantor at such date
exceeds the amount that will be required to pay the probable liability of such
Subsidiary Guarantor on its debts (after giving effect to all other fixed and
contingent liabilities incurred or assumed on such date (other than liabilities
of such Subsidiary Guarantor under Indebtedness which constitutes Subordinated
Indebtedness with respect to such Guarantee) and after giving effect to any
collection from any Subsidiary of such Subsidiary Guarantor in respect of the
obligations of such Subsidiary under the Guarantee), excluding debt in respect
of the Guarantee of such Subsidiary Guarantor, as they become absolute and
matured.
SECTION 11.08. Waiver of Subrogation.
Each Subsidiary Guarantor hereby irrevocably waives any claim or
other rights which it may now or hereafter acquire against the Company that
arise from the existence, payment, performance or enforcement of such Subsidiary
Guarantor's obligations under the 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 Subsidiary Guarantor in violation of the preceding sentence
and the Securities shall not have been paid in full, such amount shall have been
deemed to have been paid to such Subsidiary Guarantor for the benefit of, and
held in trust for the benefit of, the Holders of the Securities, and shall,
subject to the provisions of Section 11.02, Article Four and Article Twelve,
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 Subsidiary Guarantor acknowledges that it
will receive direct and indirect benefits from the financing arrangements
contemplated by this Indenture and that the waiver
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set forth in this Section 11.08 is knowingly made in contemplation of such
benefits.
SECTION 11.09. Execution of Guarantee.
To evidence their guarantee to the Securityholders set forth in
this Article Eleven, the Subsidiary Guarantors hereby agree to execute the
Guarantee in substantially the form included in Exhibit A, which shall be
endorsed on each Security ordered to be authenticated and delivered by the
Trustee. Each Subsidiary Guarantor hereby agrees that its Guarantee set forth in
this Article Eleven shall remain in full force and effect notwithstanding any
failure to endorse on each Security a notation of such Guarantee. Each such
Guarantee shall be signed on behalf of each Subsidiary Guarantor by two
Officers, or an Officer and an Assistant Secretary or one Officer shall sign and
one officer or an Assistant Secretary (each of whom shall, in each case, have
been duly authorized by all requisite corporate actions) shall attest to such
Guarantee prior to the authentication of the Security on which it is endorsed,
and the delivery of such Security by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of such Guarantee on behalf of
such Subsidiary Guarantor. Such signatures upon the Guarantee may be by manual
or facsimile signature of such officers and may be imprinted or otherwise
reproduced on the Guarantee, and in case any such officer who shall have signed
the Guarantee shall cease to be such officer before the Security on which such
Guarantee is endorsed shall have been authenticated and delivered by the Trustee
or disposed of by the Company, such Security nevertheless may be authenticated
and delivered or disposed of as though the person who signed the Guarantee had
not ceased to be such officer of the Subsidiary Guarantor.
SECTION 11.10. Waiver of Stay, Extension or Usury Laws.
Each Subsidiary Guarantor covenants (to the extent that it may
lawfully do so) that it will not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay or
extension law or any usury law or other law that would prohibit or forgive each
such Subsidiary Guarantor from performing its Guarantee as contemplated herein,
wherever enacted, now or at any time hereafter in force, or which may affect the
covenants or the performance of this Indenture; and (to the extent that it may
lawfully do so) each such Subsidiary Guarantor 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
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herein granted to the Trustee, but will suffer and permit the execution of every
such power as though no such law had been enacted.
ARTICLE TWELVE
SUBORDINATION OF GUARANTEE OBLIGATIONS
SECTION 12.01. Guarantee Obligations Subordinated to Guarantor Senior
Indebtedness.
Anything herein to the contrary notwithstanding, each of the
Subsidiary Guarantors, for itself and its successors, and each Holder, by his
acceptance of Guarantees, agrees, that any payment of Obligations by a
Subsidiary Guarantor in respect of its Guarantee (collectively, as to any
Subsidiary Guarantor, its "Guarantee Obligations") is subordinated, to the
extent and in the manner provided in this Article Twelve, to the prior payment
in full in cash or Cash Equivalents of all Guarantor Senior Indebtedness of such
Subsidiary Guarantor.
This Article Twelve shall constitute a continuing offer to all
persons who become holders of, or continue to hold, Guarantor Senior
Indebtedness, and such provisions are made for the benefit of the holders of
Guarantor Senior Indebtedness and such holders are made obligees hereunder and
any one or more of them may enforce such provisions.
The obligations of the Subsidiary Guarantors to the Trustee under
Section 8.07 shall not be subject to the provisions of this Article Twelve.
SECTION 12.02. Suspension of Guarantee Obligations When Guarantor Senior
Indebtedness in Default.
(a) Unless Section 12.03 shall be applicable, upon (1) the
occurrence of a Payment Default with respect to any Designated Senior
Indebtedness or Significant Senior Indebtedness guaranteed by a Subsidiary
Guarantor (which guarantee constitutes Guarantor Senior Indebtedness of such
Subsidiary Guarantor) and (2) receipt by the Trustee, the Company and such
Subsidiary Guarantor from the Representatives of written notice of such
occurrence, then no payment (other than payments previously made pursuant to
Article Nine hereof) or distribution of any assets of such Subsidiary Guarantor
of any kind or character shall be made by such Subsidiary Guarantor on account
of
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Obligations on the Securities or on account of the purchase, redemption or other
acquisition of Securities or any of the obligations of such Subsidiary Guarantor
under this Guarantee unless and until such Payment Default shall have been cured
or waived or shall have ceased to exist or such Guarantor Senior Indebtedness
shall have been discharged or paid in full cash or Cash Equivalents, after which
such Guarantor shall resume making any and all required payments in respect of
its obligations under this Guarantee.
(b) Unless Section 12.03 shall be applicable upon (1) the
occurrence of a Non-payment Default with respect to any Designated Senior
Indebtedness guaranteed by a Subsidiary Guarantor (which guarantee constitutes
Guarantor Senior Indebtedness of such Subsidiary Guarantor) and (2) the earlier
of (i) receipt by the Trustee, the Company and such Subsidiary Guarantor from
the Representatives of written notice of such occurrence stating that such
notice is a "Payment Blockage Notice" pursuant to Sections 4.02(b) and 12.02(b)
of this Indenture or (ii) if such Non-payment Default results from the
acceleration of the Securities, the date of the acceleration of the Securities,
no payment (other than payments previously made pursuant to Article Nine hereof)
or distribution of any assets of such Subsidiary Guarantor of any kind or
character shall be made by such Guarantor on account of principal, premium, if
any, or interest on the Securities or on account of the purchase, redemption or
other acquisition of Securities or on account of any of the other obligations of
such Subsidiary Guarantor under this Guarantee for a period ("Guarantor Payment
Blockage Period") commencing on the date of receipt by the Trustee of such
notice or the date of the acceleration referred to in clause (ii) above, as the
case may be, unless and until the earlier to occur of the following events: (w)
179 days shall have elapsed since receipt of such written notice by the Trustee
or the date of the acceleration of the Securities, as the case may be (provided
such Guarantor Senior Indebtedness shall theretofore not have been accelerated),
(x) such Non-payment Default shall have been cured or waived or shall have
ceased to exist, (y) such Guarantor Senior Indebtedness shall have been
discharged or paid in full in cash or Cash Equivalents or (z) such Guarantor
Payment Blockage Period shall have been terminated by written notice to the
Guarantor or the Trustee from the Representative initiating such Guarantor
Payment Blockage Period, or the holders of at least a majority in principal
amount of such issue of such Guarantor Senior Indebtedness, after which, in the
case of clause (w), (X), (y) or (z), the Subsidiary Guarantor shall resume
making any and all required payments in respect of its obligations under this
Guarantee. Notwithstanding any
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other provisions of this Indenture, only one Guarantor Payment Blockage Period
may be commenced within any consecutive 365 day period and no Non-payment
Default with respect to Guarantor Senior Indebtedness guaranteed by any
Subsidiary Guarantor (which guarantee constitutes Guarantor Senior Indebtedness
of such Subsidiary Guarantor) which existed or was continuing on the date of the
commencement of any Guarantor Payment Blockage Period shall be, or be made, the
basis for the commencement of a second Guarantor Payment Blockage Period,
whether or not within a period of 365 consecutive days, unless such event of
default shall have been cured or waived for a period of not less than 90
consecutive days. In no event shall a Guarantor Payment Blockage Period extend
beyond 179 days from the date of the receipt of the notice or the date of the
acceleration of the Securities referred to in clause (2) hereof.
(c) In the event that, notwithstanding the foregoing, the
Trustee or the Holder of any Security shall have received any payment prohibited
by the foregoing provisions of this Section 12.02, then and in such event such
payment shall be paid over and delivered forthwith to the Representatives or as
a court of competent jurisdiction shall direct.
SECTION 12.03. Guarantee Obligations Subordinated to Prior Payment of All
Guarantor Senior Indebtedness on Dissolution, Liquidation
or Reorganization of Such Subsidiary Guarantor.
Upon any payment or distribution of assets of any Subsidiary
Guarantor of any kind or character, whether in cash, property or securities upon
any dissolution, winding up, total or partial liquidation or reorganization of
such Subsidiary Guarantor and whether voluntary or involuntary (including,
without limitation, in bankruptcy, insolvency or receivership proceedings or
upon any assignment for the benefit of creditors or any other marshalling of
assets and liabilities of such Subsidiary Guarantor and whether voluntary or
involuntary):
(a) the holders of all Guarantor Senior Indebtedness of such
Subsidiary Guarantor shall first be entitled to receive payments in full
in cash or Cash Equivalents of all amounts payable under Guarantor
Senior Indebtedness (including, with respect to Designated Senior
Indebtedness guaranteed by such Subsidiary Guarantor, any interest
accruing after the commencement of any such proceeding at the rate
specified in the applicable Designated Senior Indebtedness whether or
not interest is an allowed claim en-
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forceable against the Company in any such proceeding) before the Holders
will be entitled to receive any payment with respect to the Guarantee
(excluding Permitted Subordinated Reorganization Securities), and until
all Obligations with respect to the Guarantor Senior Indebtedness are
paid in full in cash or Cash Equivalents, any distribution to which the
Holders would be entitled (excluding Permitted Subordinated
Reorganization Securities) shall be made to the holders of Guarantor
Senior Indebtedness; provided, however, that no payment by any other
Subsidiary Guarantor or the Company shall constitute payment on behalf
of such Subsidiary Guaranty for purposes of this Section 12.03(a);
(b) any payment or distribution of assets of such Subsidiary
Guarantor of any kind or character, whether in cash, property or
securities, to which the Holders or the Trustee on behalf of the Holders
would be entitled (excluding Permitted Subordinated Indebtedness) except
for the provisions of this Article Twelve, shall be paid by the
liquidating trustee or agent or other person making such a payment or
distribution, directly to the holders of Guarantor Senior Indebtedness
of such Subsidiary Guarantor or their Representative, ratably according
to the respective amounts of such Guarantor Senior Indebtedness
remaining unpaid held or represented by each, until all such Guarantor
Senior Indebtedness remaining unpaid shall have been paid in full in
cash or Cash Equivalents after giving effect to any concurrent payment
or distribution to the holders of such Guarantor Senior Indebtedness;
(c) in the event that, notwithstanding the foregoing, any payment
or distribution of assets of such Subsidiary Guarantor of any kind or
character, whether in cash, property or securities, shall be received by
the Trustee or the Holders or any Paying Agent in respect of payment of
the Guarantee before all Guarantor Senior Indebtedness of such
Subsidiary Guarantor is paid in full in cash or Cash Equivalents, such
payment or distribution (subject to the provisions of Sections 12.06 and
12.07) shall be received, segregated from other funds, and held in trust
by the Trustee or such Holder or Paying Agent for the benefit of, and
shall immediately be paid over to, the holders of such Guarantor Senior
Indebtedness or their Representative, ratably according to the
respective amounts of such Guarantor Senior Indebtedness held or
represented by each, until all such Guarantor Senior Indebtedness
remaining unpaid shall have been paid in full in
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cash or Cash Equivalents, after giving effect to any concurrent payment
or distribution to the holders of Guarantor Senior Indebtedness.
Notwithstanding anything to the contrary contained herein, in the absence
of its gross negligence or willful misconduct, the Trustee shall have no
duty to collect or retrieve monies previously paid by it in good faith;
provided that this sentence shall not affect the obligation of any other
party receiving such payment to hold such payment for the benefit of, and
to pay over such payment over to, the holders of such Guarantor Senior
Indebtedness or their Representative.
Each Subsidiary Guarantor shall give prompt notice to the Trustee
prior to any dissolution, winding up, total or partial liquidation or total or
reorganization (including, without limitation, in bankruptcy, insolvency, or
receivership proceedings or upon any assignment for the benefit of creditors or
any other marshalling of such Subsidiary Guarantor's assets and liabilities).
SECTION 12.04. Holders of Guarantee Obligations To Be Subrogated to
Rights of Holders of Guarantor Senior Indebtedness.
Subject to the payment in full in cash or Cash Equivalents of all
Guarantor Senior Indebtedness, the Holders of Guarantee Obligations of a
Subsidiary Guarantor shall be subrogated to the rights of the holders of
Guarantor Senior Indebtedness of such Subsidiary Guarantor to receive payments
or distributions of assets of such Subsidiary Guarantor applicable to such
Guarantor Senior Indebtedness until all amounts owing on or in respect of the
Guarantee Obligations shall be paid in full in cash, and for the purpose of such
subrogation no payments or distributions to the holders of such Guarantor Senior
Indebtedness by or on behalf of such Subsidiary Guarantor, or by or on behalf of
the Holders by virtue of this Article Twelve, which otherwise would have been
made to the holders, shall, as between such Subsidiary Guarantor and the
Holders, be deemed to be payment by such Subsidiary Guarantor to or on account
of such Guarantor Senior Indebtedness, it being understood that the provisions
of this Article Twelve 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
Guarantor Senior Indebtedness, on the other hand.
If any payment or distribution to which the Holders would
otherwise have been entitled but for the provisions of this Article Twelve shall
have been applied, pursuant to the
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provisions of this Article Twelve, to the payment of all amounts payable under
such Guarantor Senior Indebtedness, then the Holders shall be entitled to
receive from the holders of such Guarantor Senior Indebtedness any payments or
distributions received by such holders of such Guarantor Senior Indebtedness in
excess of the amount sufficient to pay all amounts payable under or in respect
of such Guarantor Senior Indebtedness in full in cash or Cash Equivalents.
SECTION 12.05. Obligations of the Subsidiary Guarantors Unconditional.
Nothing contained in this Article Twelve or elsewhere in this
Indenture or in the Guarantees is intended to or shall impair, as between the
Subsidiary Guarantors and the Holders, the obligation of the Subsidiary
Guarantors, which is absolute and unconditional, to pay to the Holders all
amounts due and payable under the Guarantees 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 Subsidiary
Guarantors other than the holders of the Guarantor Senior Indebtedness, nor
shall anything herein or therein prevent the Trustee or any Holder from
exercising all remedies otherwise permitted by applicable law upon default under
this Indenture, subject to the rights, if any, under this Article Twelve, of the
holders of Guarantor Senior Indebtedness in respect of cash, property or
securities of the Subsidiary Guarantors received upon the exercise of any such
remedy. Upon any payment or distribution of assets of any Subsidiary Guarantor
referred to in this Article Twelve, the Trustee, subject to the provisions of
Sections 8.01 and 8.02, and the Holders shall be entitled to rely upon any order
or decree made by any court of competent jurisdiction in which any dissolution,
winding up, liquidation or reorganization proceedings are pending, or a
certificate of the receiver, trustee in bankruptcy, liquidating trustee or agent
or other person making any payment or distribution to the Trustee or to the
Holders for the purpose of ascertaining the persons entitled to participate in
such payment or distribution, the holders of Guarantor Senior Indebtedness and
other Indebtedness of any Subsidiary 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 Twelve. Nothing in this Section 12.05 shall
apply to the claims of, or payments to, the Trustee under or pursuant to Section
8.07.
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SECTION 12.06. Trustee Entitled To Assume Payments Not Prohibited in Absence of
Notice.
The Trustee shall not at any time be charged with knowledge of
the existence of any facts that would prohibit the making of any payment to or
by the Trustee unless and until the Trustee or any Paying Agent shall have
received notice thereof from the Company or any Subsidiary Guarantor or from one
or more holders of Guarantor Senior Indebtedness or from any Representative
therefor and, prior to the receipt of any such notice, the Trustee, subject to
the provisions of Sections 8.01 and 8.02, shall be entitled in all respects
conclusively to assume that no such fact exists.
SECTION 12.07. Application by Trustee of Assets Deposited with It.
U.S. Legal Tender or U.S. Government obligations deposited in
trust with the Trustee pursuant to and in accordance with Sections 9.01 and 9.02
shall be for the sole benefit of Securityholders and, to the extent allocated
for the payment of Securities, shall not be subject to the subordination
provisions of this Article Twelve. Otherwise, any deposit of assets or
securities by or on behalf of a Subsidiary Guarantor with the Trustee or any
Paying Agent (whether or not in trust) for payment of the Guarantee shall be
subject to the provisions of this Article Twelve; provided that if prior to the
second Business Day preceding the date on which by the terms of this Indenture
any such assets may become distributable for any purpose (including, without
limitation, the payment of either principal of or interest on any Security) the
Trustee or such Paying Agent shall not have received with respect to such assets
the notice provided for in Section 12.06, then the Trustee or such Paying Agent
shall have full power and authority to receive such assets and to apply the same
to the purpose for which they were received, and shall not be affected by any
notice to the contrary received by it on or after such date. The foregoing shall
not apply to the Paying Agent if the Company or any Subsidiary or Affiliate of
the Company is acting as Paying Agent. Nothing contained in this Section 12.07
shall limit the right of the holders of Guarantor Senior Indebtedness to recover
payments as contemplated by this Article Twelve.
SECTION 12.08. No Waiver of Subordination Provisions.
(a) No right of any present or future holder of any Guarantor
Senior Indebtedness to enforce subordination as herein provided shall at any
time in any way be prejudiced or
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impaired by any act or failure to act on the part of any Subsidiary Guarantor or
by any act or failure to act, in good faith, by any such holder, or by any
non-compliance by any Subsidiary Guarantor with the terms, provisions and
covenants of this Indenture, regardless of any knowledge thereof any such holder
may have or be otherwise charged with.
(b) Without limiting the generality of subsection (a) of this
Section 12.08, the holders of Guarantor Senior Indebtedness may, at any time and
from time to time, without the consent of or notice to the Trustee or the
Holders of the Securities, without incurring responsibility to the Holders of
the Securities and without impairing or releasing the subordination provided in
this Article Twelve or the obligations hereunder of the Holders of the
Securities to the holders of Guarantor Senior Indebtedness, do any one or more
of the following: (1) change the manner, place or terms of payment or extend the
time of payment of, or renew or alter, Guarantor Senior Indebtedness or any
instrument evidencing the same or any agreement under which Guarantor Senior
Indebtedness is outstanding; (2) sell, exchange, release or otherwise deal with
any property pledged, mortgaged or otherwise securing Guarantor Senior
Indebtedness; (3) release any person liable in any manner for the collection or
payment of Guarantor Senior Indebtedness; and (4) exercise or refrain from
exercising any rights against the Company and any other person; provided,
however, that in no event shall any such actions limit the right of the Holders
of the Securities to take any action to accelerate the maturity of the
Securities pursuant to Article Seven hereof or to pursue any rights or remedies
hereunder or under applicable laws if the taking of such action does not
otherwise violate the terms of this Indenture.
(c) Each Holder by accepting a Security agrees that the
Representative of any Guarantor Senior Indebtedness (including without
limitation, the Credit Agent), in its discretion, without notice or demand and
without affecting any rights of any holder of Guarantor Senior Indebtedness
under this Article Twelve, may foreclose any mortgage or deed of trust covering
interests in real property secured thereby, by judicial or nonjudicial sale; and
such Holder hereby waives any defense to the enforcement by the Representative
(including without limitation, the Credit Agent) of any Guarantor Senior
Indebtedness or by any holder of any Guarantor Senior Indebtedness against such
Holder of this Article Twelve after a Judicial or nonjudicial sale or other
disposition of its interests in real property secured by such mortgage or deed
of trust; and such Holder expressly waives any defense or benefits that may
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be derived from California Civil Code ▇▇.▇▇. 2808, 2809, 2810, 2819, 2845, 2849
or 2850, or California Code of Civil Procedure ▇▇.▇▇. 580a, 580d or 726, or
comparable provisions of the laws of any other jurisdiction or any similar
statute in effect in any other jurisdiction.
SECTION 12.09. Holders Authorize Trustee To Effectuate Subordination of
Guarantee Obligations.
Each Holder of the Guarantee Obligations by his acceptance
thereof authorizes and expressly directs the Trustee on his behalf to take such
action as may be necessary or appropriate to effect the subordination provisions
contained in this Article Twelve, and appoints the Trustee his attorney-in-fact
for such purpose, including, in the event of any dissolution, winding up,
liquidation or reorganization of any Subsidiary Guarantor (whether in
bankruptcy, insolvency or receivership proceedings or upon an assignment for the
benefit of creditors or any other marshalling of assets and liabilities of any
Subsidiary Guarantor) tending towards liquidation or reorganization of the
business and assets of any Subsidiary Guarantor, the immediate filing of a claim
for the unpaid balance under its or his Guarantee obligations in the form
required in said proceedings and cause said claim to be approved. If the Trustee
does not file a proper claim or proof of debt in the form required in such
proceeding prior to 30 days before the expiration of the time to file such claim
or claims, then the holders of the Guarantor Senior Indebtedness or their
Representative is hereby authorized to file an appropriate claim for and on
behalf of the Holders of said Guarantee Obligations. Nothing herein contained
shall be deemed to authorize the Trustee or the holders of Guarantor Senior
Indebtedness or their Representative to authorize or consent to or accept or
adopt on behalf of any holder of Guarantee Obligations any plan of
reorganization, arrangement, adjustment or composition affecting the Guarantee
Obligations or the rights of any Holder thereof, or to authorize the Trustee or
the holders of Guarantor Senior Indebtedness or their Representative to vote in
respect of the claim of any holder of Guarantee Obligations in any such
proceeding.
SECTION 12.10. Right of Trustee To Hold Guarantor Senior Indebtedness.
The Trustee shall be entitled to all of the rights set forth in
this Article Twelve in respect of any Guarantor Senior Indebtedness at any time
held by it to the same extent as any other holder of Guarantor Senior
Indebtedness, and noth-
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ing in this Indenture shall be construed to deprive the Trustee of any of its
rights as such holder.
SECTION 12.11. No Suspension of Remedies.
The failure to make a payment in respect of the Guarantees by
reason of any provision of this Article Twelve shall not be construed as
preventing the occurrence of a Default or an Event of Default under Section
7.01.
Nothing contained in this Article Twelve shall limit the right of
the Trustee or the Holders of Securities to take any action to accelerate the
maturity of the Securities pursuant to Article Seven or to pursue any rights or
remedies hereunder or under applicable law, subject to the rights, if any, under
this Article Twelve of the holders, from time to time, of Guarantor Senior
Indebtedness.
SECTION 12.12. No Fiduciary Duty of Trustee to Holders of Guarantor
Senior Indebtedness.
The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Guarantor Senior Indebtedness, and shall not be liable to any such
holders (other than for its willful misconduct or gross negligence) if it shall
in good faith mistakenly pay over or deliver to the holders of Guarantee
Obligations or the Company or any other person, money or assets to which any
holders of Guarantor Senior Indebtedness shall be entitled by virtue of this
Article Twelve or otherwise. Nothing in this Section 12.12 shall affect the
obligation of any person other than the Trustee to hold such payment for the
benefit of, and to pay such payment over to, the holders of Guarantor Senior
Indebtedness or their Representative.
ARTICLE THIRTEEN
MISCELLANEOUS
SECTION 13.01. TIA Controls.
If any provision of this Indenture limits, qualifies, or
conflicts with the duties imposed by operation of Section 3.18(c) of the TIA,
the imposed duties shall control.
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SECTION 13.02. Notices.
Any notices or other communications required or permitted
hereunder shall be in writing, and shall be sufficiently given if made by hand
delivery, by telex, by telecopier or registered or certified mail, postage
prepaid, return receipt requested, addressed as follows:
if to the Company or any Subsidiary Guarantor:
c/o The Yucaipa Companies
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
if to the Trustee:
United States Trust Company of New York
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Corporate Trust Division
if to the Credit Agent:
Bankers Trust Company
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇ ▇▇▇▇▇
w/a copy to:
Bankers Trust Company
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn.: ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
Each of the Company, the Trustee, the Subsidiary Guarantors and
the Credit Agent by written notice to each other such person may designate
additional or different addresses for notices to such person. Any notice or
communication to the company, the Trustee, the Subsidiary Guarantors and the
Credit Agent shall be deemed to have been given or made as of the date so
delivered if personally delivered; when answered back, if telexed; when receipt
is acknowledged, if telecopied; and five (5) calendar days after mailing if sent
by registered or certified mail, postage prepaid (except that a notice of change
of
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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 by first class mail or other equivalent means at his address as it
appears on the registration books of the Registrar and shall be sufficiently
given to him if so mailed within the time prescribed.
Failure to mail a notice or communication to a 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 13.03. 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 Subsidiary Guarantors, the Trustee, the Registrar
and any other person shall have the protection of TIA ss. 312(c).
SECTION 13.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to
take any action under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
SECTION 13.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture, other than the Officers'
Certificate required by Section 5.07, shall include:
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(1) a statement that the person making such certificate or
opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such person, he has made
such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether or not, in the opinion of each such
person, such condition or covenant has been complied with; provided,
however, that with respect to matters of fact an Opinion of Counsel may
rely on an Officers' Certificate or certificates of public officials.
SECTION 13.06. 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 13.07. Legal Holidays.
A legal Holiday used with respect to a particular place of
payment is a Saturday, a Sunday or a day on which banking institutions in New
York, New York, Los Angeles, California or at such place of payment are not
required to be open. If a payment date is a Legal Holiday at such place, payment
may be made at such place on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening period.
SECTION 13.08. Governing Law.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO
CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW. Each of the parties hereto agrees to submit to
the jurisdiction of the courts of the State of New York in any action or
proceeding arising out of or relating to this Indenture.
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SECTION 13.09. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture,
loan or debt agreement of any of the Company or any of its Subsidiaries. Any
such indenture, loan or debt agreement may not be used to interpret this
indenture.
SECTION 13.10. No Recourse Against Others.
A director, officer, employee, stockholder or incorporator, as
such, of the Company shall not have any liability for any obligations of the
Company under the Securities or the Indenture or for any claim based on, in
respect of or by reason of such obligations or their creations. Each
Securityholder 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 each Subsidiary Guarantor 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 of this Indenture. Each
signed copy shall be an original, but all of them together shall represent the
same agreement.
SECTION 13.13. Severability.
In case any one or more of the provisions in this Indenture or in
the Securities shall be held invalid, illegal or unenforceable, in any respect
for any reason, the validity, legality and enforceability of any such provision
in every other respect and of the remaining provisions shall not in any way be
affected or impaired thereby, it being intended that all of the provisions
hereof shall be enforceable to the full extent permitted by law.
SECTION 13.14. No Violation.
Notwithstanding the provisions of this Indenture, in no event
shall any transaction, agreement, payment or other event to be consummated,
entered into or made in connection
126
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with the Merger or any financing thereof be considered a violation of any
provision of this Indenture or constitute a Change of Control hereunder.
127
S-1
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture
to be duly executed, all as of the date first written above.
RALPHS GROCERY COMPANY
By:
-------------------------------
Name:
Title:
UNITED STATES TRUST COMPANY OF NEW YORK,
as Trustee
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Assistant Vice
President
128
S-2
SUBSIDIARY GUARANTORS:
CALA CO.
CALA FOODS, INC.
▇▇▇▇ MARKETS, INC.
FOOD 4 LESS OF SOUTHERN
CALIFORNIA, INC.
ALPHA BETA COMPANY
FOOD 4 LESS OF CALIFORNIA, INC.
▇▇▇▇▇▇'▇, INC.
BAY AREA WAREHOUSE STORES, INC.
FOOD 4 LESS MERCHANDISING, INC.
FOOD 4 LESS GM, INC.
▇▇▇▇▇▇▇▇ STORES, INC.
By: /s/ [ILLEGIBLE]
-------------------------------
Name:
(for each of the above-
listed Subsidiary Guarantors)
Attest: /s/ [ILLEGIBLE]
-------------------------------
(for each of the
above listed
Subsidiary Guarantors)
129
EXHIBIT A
[FORM OF NOTE]
RALPHS GROCERY COMPANY
11% Senior Subordinated Note
due 2005
No. $
RALPHS GROCERY COMPANY (the "Company", which term includes any
successor corporation), for value received promises to pay to or registered
assigns, the principal sum of Dollars, on June 15, 2005.
Interest Payment Dates: June 15 and December 15 commencing on
June 15, 1997.
Record Dates: June 1 and December 1.
Reference is hereby made to the further provisions of this
Security set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
IN WITNESS WHEREOF, the Company has caused this Security to be
signed manually or by facsimile by its duly authorized officers.
Dated:
RALPHS GROCERY COMPANY
By:
-------------------------------
Name:
Title:
By:
-------------------------------
Name:
Title:
A-1
130
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Securities described in the within-mentioned
Indenture.
UNITED STATES TRUST COMPANY
OF NEW YORK,
as Trustee
By
-------------------------------
Authorized Signatory
A-2
131
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR
SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
PERSONS EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1)
REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE
144A UNDER THE ACT) OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS
SECURITY IN AN OFFSHORE TRANSACTION, (2) AGREES THAT IT WILL NOT WITHIN THREE
YEARS AFTER THE ORIGINAL ISSUANCE OF THE SECURITY RESELL OR OTHERWISE TRANSFER
THIS SECURITY EXCEPT (A) TO THE ISSUER OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE
UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A
UNDER THE ACT, (C) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH RULE 904 UNDER THE ACT, (D) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE ACT (IF AVAILABLE), OR (E) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND (3) AGREES THAT IT WILL
GIVE TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY
TO THE EFFECT OF THIS LEGEND. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION,"
"UNITED STATES" AND "U.S. PERSON" HAVE THE MEANING GIVEN TO THEM BY REGULATION S
UNDER THE ACT.
A-3
132
RALPHS GROCERY COMPANY
11% Senior Subordinated Note
due 2005
1. Interest.
RALPHS GROCERY COMPANY (the "Company"), promises to pay interest
on the principal amount of this Security at the rate per annum shown above. The
Company will pay interest semi-annually on each June 15 and December 15 of each
year (the "Interest Payment Date"), commencing on June 15, 1997, to the Holders
of record on the immediately preceding June 1 and December 1. Interest on the
Securities will accrue from the most recent date to which interest has been paid
or, if no interest has been paid, from the date of issuance of the Securities.
Interest will be computed on the basis of a 360-day year comprised of twelve
30-day months.
The Company shall pay interest on overdue principal and interest
on overdue installments of interest, to the extent lawful, at a rate equal to
the rate of interest otherwise payable on the Securities.
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 Record Date immediately preceding the interest Payment Date
even if the Securities are cancelled on registration of transfer or registration
of exchange after such Record Date. Holders must surrender Securities to a
Paying Agent to collect principal payments. The Company shall pay principal and
interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts ("U.S. Legal Tender"). However,
the Company may pay principal and interest by wire transfer of Federal funds, or
interest by its check payable in such U.S. Legal Tender. The Company may deliver
any such interest payment to the Paying Agent or to a Holder at the Holder's
registered address. Notwithstanding the foregoing, the Company shall pay or
cause to be paid all amounts payable with respect to non-DTC eligible Securities
by wire transfer of Federal funds to the account of the Holders of such
Securities.
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3. Paying Agent and Registrar.
Initially, United States Trust Company of New York (the
"Trustee") 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 or any of its Subsidiaries may, subject to certain exceptions, act as
Paying Agent, Registrar or co-Registrar.
4. Indenture and Guarantees.
The Company issued the Securities under an Indenture, dated as of
March 26, 1997 (the "Indenture"), among the Company, the Subsidiary Guarantors
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 of 1939 (15 U.S. Code ▇▇.▇▇. 77aaa-77bbbb) (the "TIA"), as
in effect on the date of the Indenture until such time as the Indenture is
qualified under the TIA, and thereafter as in effect on the date on which the
Indenture is qualified under the TIA. Notwithstanding anything to the contrary
herein, the Securities are subject to all such terms, and Holders of Securities
are referred to the Indenture and said Act for a statement of them. The
Securities are general unsecured obligations of the Company limited in aggregate
principal amount to $155,000,000. Payment on each Security is guaranteed on a
senior subordinated basis, jointly and severally, by the Subsidiary Guarantors
pursuant to Article Eleven of the Indenture.
5. Optional Redemption.
On or after June 15, 2000 the Securities may be redeemed in whole
at any time or in part from time to time, at the option of the Company, at a
redemption price equal to the applicable percentage of the principal amount
thereof set forth below, together with accrued and unpaid interest to the
Redemption Date, if redeemed during the 12 months commencing on June 15 in the
years set forth below:
Year Percentage
---- ----------
2000 ................................ 105.500%
2001.................................... 103.667%
2002.................................... 101.833%
2003 and thereafter..................... 100.000%
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134
In addition, on or prior to June 15, 1998, the Company may, at
its option, use the net cash proceeds of one or more Public Equity Offering to
redeem up to an aggregate of 35% of the principal amount of the Securities
originally issued, at a redemption price equal to 109.429% of the principal
amount thereof if redeemed during the 12 months commencing on June 15, 1996 and
107.857% of the principal amount thereof if redeemed during the 12 months
commencing on June 15, 1997, in each case plus accrued and unpaid interest, if
any, to the redemption date.
The documents evidencing Senior Indebtedness will restrict the
Company's ability to optionally redeem the Securities.
6. Notice of Redemption.
Notice of redemption will be mailed at least 30 days but not more
than 60 days before the Redemption Date to each Holder of Securities to be
redeemed at such Holder's registered address. In order to effect a redemption
with the proceeds of a Public Equity Offering, the Company shall send the
redemption notice not later than 60 days after the consummation of such Public
Equity Offering. Securities in denominations larger than $1,000 may be redeemed
in part.
Except as set forth in the Indenture, from and after any
Redemption Date, if monies for the redemption of the Securities called for
redemption shall have been deposited with the Paying Agent for redemption on
such Redemption Date and payment of the Securities called for redemption is not
prohibited under Article Four or Article Twelve of the Indenture, then, unless
the Company defaults in the payment of such Redemption Price, the Securities
called for redemption will cease to bear interest and the only right of the
Holders of such Securities will be to receive payment of the Redemption Price.
7. Change of Control Offer.
Upon the occurrence of a Change of Control, each Holder shall
have the right to require the repurchase of such Holder's Securities pursuant to
a Change of Control Offer at a purchase price equal to 101% of the principal
amount thereof plus accrued interest, if any, to the date of purchase. The
Company shall not be required to repurchase Securities until it has complied
with its covenants to repay in full all Indebtedness of the Company and its
Subsidiaries under the Credit Agreement or offer to repay in full all such
Indebtedness and
A-6
135
repay the Indebtedness of each lender who has accepted its offer to repay such
Indebtedness or to obtain the requisite consent under the Credit Agreement to
permit the repurchase of the Securities pursuant to a Change of Control Offer.
In addition, prior to purchasing the Securities tendered in a Change of Control
Offer, the Company shall purchase all Senior Notes (or permitted refinancings
thereof) which it is required to purchase by reason of such Change of Control.
8. Limitation on Asset Sales.
Under certain circumstances the Company is required to apply the
net proceeds from Asset Sales to the repayment of Pari Passu Indebtedness or
Senior Indebtedness, to make Related Business Investments, an investment in
properties and assets that replace the properties and assets that are the
subject of such Asset Sale, an investment in properties and assets that will be
used in the business of the Company and its Subsidiaries existing on the Issue
Date or in a business reasonably related thereto or to purchase in a Net
Proceeds Offer (at a price equal to 100% of the aggregate principal amount
thereof, plus accrued interest to the date of purchase) such aggregate principal
amount of Securities which, when added to the accrued interest thereon, shall be
equal to the net proceeds required to be applied thereto.
9. Denominations; Transfer; Exchange.
The Securities are in registered form, without coupons, in
denominations of $1,000 and integral multiples of $1,000. A Holder shall
register the transfer of or exchange Securities in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay certain transfer
taxes or similar governmental charges payable in connection therewith as
permitted by the Indenture. The Registrar need not register the transfer of or
exchange any Securities or portions thereof selected for redemption.
10. Persons Deemed Owners.
The registered Holder of a Security shall be treated as the owner
of it for all purposes.
▇-▇
▇▇▇
▇▇. Unclaimed Money.
If money for the payment of principal or interest remains
unclaimed for two years, the Trustee and the Paying Agents will pay the money
back to the Company at its request.
After that, all liability of the Trustee and such Paying Agents
with respect to such money shall cease.
12. Discharge Prior to Redemption or Maturity.
If the Company at any time deposits with the Trustee U.S. Legal
Tender or U.S. Government Obligations sufficient to pay the principal of and
interest on the Securities to redemption or maturity and complies with the other
provisions of the Indenture relating thereto, the Company will be discharged
from certain provisions of the Indenture and the Securities (including the
financial covenants, but excluding its obligation to pay the principal of and
interest on the Securities).
13. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture, the Securities and
the Guarantees 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 amend or supplement the
Indenture or the Securities to, among other things, cure any ambiguity, defect
or inconsistency, provide for uncertificated Securities in addition to or in
place of certificated Securities, comply with Article Six or Section 11.06 of
the Indenture, or comply with any requirements of the SEC in connection with the
qualification of the Indenture under the TIA, or make any other change that does
not adversely affect the rights of any Holder of a Security.
14. Restrictive Covenants.
The Indenture imposes certain limitations on the ability of the
Company and its Subsidiaries to, among other things, incur additional
Indebtedness or Liens, make payments in respect of its Capital Stock and merge
or consolidate with any other person and sell, lease, transfer or otherwise
dispose of substantially all of its properties or assets. The limita-
A-8
137
tions are subject to a number of important qualifications and exceptions. The
Company must annually report to the Trustee on compliance with such limitations.
15. Subordination.
The Securities will be subordinated in right of payment to the
prior payment in full of all Senior Indebtedness (as defined in the Indenture)
of the Company. The Guarantees are subordinated in right of payment, in the
manner and to the extent set forth in the Indenture, to the prior payment in
full of Guarantor Senior Indebtedness (as defined in the Indenture). To the
extent and in the manner provided in the Indenture, Senior Indebtedness, and in
the case of payment by a Subsidiary Guarantor, Guarantor Senior Indebtedness,
must be paid before any payment may be made to any Holder of this Security. Any
Securityholder by accepting this Security agrees to the subordination and
authorizes the Trustee to give it effect.
16. Successors.
When a successor assumes all the obligations of its predecessor
under the Securities and the Indenture, the predecessor will be released from
those obligations.
17. Defaults and Remedies.
If an Event of Default occurs and is continuing, the Trustee or
the Holders of at least 25% in aggregate principal amount of Securities then
outstanding may declare all the Securities to be due and payable immediately in
the manner and with the effect provided in the Indenture. Holders of Securities
may not enforce the Indenture or the Securities except as provided in the
Indenture. The Trustee 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 or interest) if it
determines that withholding notice is in their interest.
18. Trustee Dealings with Company.
The Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of Securi-
A-9
138
ties and may otherwise deal with the Company, its Subsidiaries or their
respective Affiliates as if it were not the Trustee.
19. No Recourse Against Others.
No stockholder, director, officer, employee or incorporator, as
such, of the Company shall have any liability for any obligation of the Company
under the Securities or the Indenture or for any claim based on, in respect of
or by reason of, such obligations or their creation. Each Holder of a Security
by accepting a Security waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Securities.
20. Authentication.
This Security shall not be valid until the Trustee or
authenticating agent manually signs the certificate of authentication on this
Security.
21. Abbreviations and Defined Terms.
Customary abbreviations may be used in the name of a Holder of a
Security or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
22. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Company will cause CUSIP numbers
to be printed on the Securities immediately prior to the qualification of the
Indenture under the TIA as a convenience to the Holders of the Securities. No
representation is made as to the accuracy of such numbers as printed on the
Securities and reliance may be placed only on the other identification numbers
printed hereon.
The Company will furnish to any Holder of a Security upon written
request and without charge a copy of the Indenture. Requests may be made to:
Ralphs Grocery Company, c/o The Yucaipa Companies, ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇.
A-10
139
[FORM OF NOTATION ON NOTE RELATING TO GUARANTEE]
GUARANTEE
The Subsidiary Guarantors (as defined in the Indenture (the
"Indenture") referred to in the Security upon which this notation is endorsed
and each hereinafter referred to as a "Subsidiary Guarantor," which term
includes any successor person under the Indenture) have unconditionally
guaranteed on a senior subordinated basis (such guarantee by each Subsidiary
Guarantor being referred to herein as the "Guarantee") (i) the due and punctual
payment of the principal of and interest on the Securities, whether at maturity,
by acceleration or otherwise, the due and punctual payment of interest on the
overdue principal and interest, if any, on the Securities, to the extent lawful,
and the due and punctual performance of all other obligations of the Company to
the Holders or the Trustee all in accordance with the terms set forth in Article
Eleven and Article Twelve of the Indenture and (ii) in case of any extension of
time of payment or renewal of any Securities or any of such other obligations,
that the same will be promptly paid in full when due or performed in accordance
with the terms of the extension or renewal, whether at stated maturity, by
acceleration or otherwise.
The obligations of each Subsidiary Guarantor to the Holders of
Securities and to the Trustee pursuant to the Guarantee and the Indenture are
expressly set forth and are expressly subordinated and subject in right of
payment to the prior payment in full of all Guarantor Senior Indebtedness of
such Subsidiary Guarantor, to the extent and in the manner provided, in Article
Eleven and Article Twelve of the Indenture, and reference is hereby made to such
Indenture for the precise terms of the Guarantee therein made.
No stockholder, officer, director or incorporator, as such, past,
present or future, of any Subsidiary Guarantor shall have any liability under
the Guarantee by reason of his or its status as such stockholder, officer,
director or incorporator.
A-11
140
The Guarantee shall not be valid or obligatory for any purpose
until the certificate of authentication on the Securities upon which the
Guarantee is noted shall have been executed by the Trustee under the Indenture
by the manual signature of one of its authorized officers.
SUBSIDIARY GUARANTORS:
CALA CO.
CALA FOODS, INC.
▇▇▇▇ MARKETS, INC.
FOOD 4 LESS OF SOUTHERN
CALIFORNIA, INC.
ALPHA BETA COMPANY
FOOD 4 LESS OF CALIFORNIA, INC.
▇▇▇▇▇▇'▇, INC.
FOOD 4 LESS MERCHANDISING, INC.
BAY AREA WAREHOUSE STORES, INC.
FOOD 4 LESS GM, INC.
▇▇▇▇▇▇▇▇ STORES, INC.
By:
-------------------------------
Name:
(for each of the above-
listed Subsidiary Guarantors)
By:
-------------------------------
Name:
(for each of the above-
listed Subsidiary Guarantors)
A-12
141
[FORM OF ASSIGNMENT]
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
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:______________________________ Signature:_______________________________
--------------------------------------------------------------------------------
(Sign exactly as your name appears on
the face of this Security)
Signature Guarantee: ___________________________________________________________
A-13
142
[OPTION OF HOLDER TO ELECT PURCHASE]
If you want to elect to have this Security purchased by the
Company pursuant to Section 5.15 or Section 5.16 of the Indenture, as the case
may be, check the appropriate box below: Section 5.15 [ ] Section 5.16 [ ]
If you want to elect to have only part of this Security purchased
by the Company pursuant to Section 5.15 or Section 5.16 of the Indenture, as the
case may be, state the amount you want to be purchased:
$
Date:_______________________________ Signature:_______________________________
(Sign exactly as your name
appears on the face of this
Security)
Signature Guarantee:____________________________________________________________
A-14
143
RALPHS GROCERY COMPANY
11% Senior Subordinated Note
due 2005
No. 751258 AG 9 $155,000,000
RALPHS GROCERY COMPANY (the "Company", which term includes any
successor corporation), for value received promises to pay to CEDE & CO. or
registered assigns, the principal sum of ONE HUNDRED FIFTY FIVE MILLION Dollars,
on June 15, 2005.
Interest Payment Dates: June 15 and December 15 commencing on
June 15, 1997.
Record Dates: June 1 and December 1.
Reference is hereby made to the further provisions of this
Security set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
IN WITNESS WHEREOF, the Company has caused this Security to be
signed manually or by facsimile by its duly authorized officers.
Dated: MARCH 26, 1997
RALPHS GROCERY COMPANY
By: /s/ ▇▇▇▇ ▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇▇▇▇
Title: Executive Vice President
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Chief Financial Officer
144
This is one of the Securities described in the within-mentioned
Indenture.
UNITED STATES TRUST COMPANY
OF NEW YORK,
as Trustee
By /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------
Authorized Signatory
145
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR
SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
PERSONS EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1)
REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE
144A UNDER THE ACT) OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS
SECURITY IN AN OFFSHORE TRANSACTION, (2) AGREES THAT IT WILL NOT WITHIN THREE
YEARS AFTER THE ORIGINAL ISSUANCE OF THE SECURITY RESELL OR OTHERWISE TRANSFER
THIS SECURITY EXCEPT (A) TO THE ISSUER OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE
UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A
UNDER THE ACT, (C) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH RULE 904 UNDER THE ACT, (D) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE ACT (IF AVAILABLE), OR (E) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND (3) AGREES THAT IT WILL
GIVE TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY
TO THE EFFECT OF THIS LEGEND. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION,"
"UNITED STATES" AND "U.S. PERSON" HAVE THE MEANING GIVEN TO THEM BY REGULATION S
UNDER THE ACT.
146
RALPHS GROCERY COMPANY
11% Senior Subordinated Note
due 2005
1. Interest.
RALPHS GROCERY COMPANY (the "Company"), promises to pay interest
on the principal amount of this Security at the rate per annum shown above. The
Company will pay interest semi-annually on each June 15 and December 15 of each
year (the "Interest Payment Date"), commencing on June 15, 1997, to the Holders
of record on the immediately preceding June 1 and December 1. Interest on the
Securities will accrue from the most recent date to which interest has been paid
or, if no interest has been paid, from the date of issuance of the Securities.
Interest will be computed on the basis of a 360-day year comprised of twelve
30-day months.
The Company shall pay interest on overdue principal and interest
on overdue installments of interest, to the extent lawful, at a rate equal to
the rate of interest otherwise payable on the Securities.
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 Record Date immediately preceding the interest Payment Date
even if the Securities are cancelled on registration of transfer or registration
of exchange after such Record Date. Holders must surrender Securities to a
Paying Agent to collect principal payments. The Company shall pay principal and
interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts ("U.S. Legal Tender"). However,
the Company may pay principal and interest by wire transfer of Federal funds, or
interest by its check payable in such U.S. Legal Tender. The Company may deliver
any such interest payment to the Paying Agent or to a Holder at the Holder's
registered address. Notwithstanding the foregoing, the Company shall pay or
cause to be paid all amounts payable with respect to non-DTC eligible Securities
by wire transfer of Federal funds to the account of the Holders of such
Securities.
147
3. Paying Agent and Registrar.
Initially, United States Trust Company of New York (the
"Trustee") 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 or any of its Subsidiaries may, subject to certain exceptions, act as
Paying Agent, Registrar or co-Registrar.
4. Indenture and Guarantees.
The Company issued the Securities under an Indenture, dated as of
March 26, 1997 (the "Indenture"), among the Company, the Subsidiary Guarantors
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 of 1939 (15 U.S. Code Sections 77aaa-77bbbb) (the "TIA"), as
in effect on the date of the Indenture until such time as the Indenture is
qualified under the TIA, and thereafter as in effect on the date on which the
Indenture is qualified under the TIA. Notwithstanding anything to the contrary
herein, the Securities are subject to all such terms, and Holders of Securities
are referred to the Indenture and said Act for a statement of them. The
Securities are general unsecured obligations of the Company limited in aggregate
principal amount to $155,000,000. Payment on each Security is guaranteed on a
senior subordinated basis, jointly and severally, by the Subsidiary Guarantors
pursuant to Article Eleven of the Indenture.
5. Optional Redemption.
On or after June 15, 2000 the Securities may be redeemed in whole
at any time or in part from time to time, at the option of the Company, at a
redemption price equal to the applicable percentage of the principal amount
thereof set forth below, together with accrued and unpaid interest to the
Redemption Date, if redeemed during the 12 months commencing on June 15 in the
years set forth below:
Year Percentage
---- ----------
2000.................................... 105.500%
2001.................................... 103.667%
2002.................................... 101.833%
2003 and thereafter..................... 100.000%
148
In addition, on or prior to June 15, 1998, the Company may, at
its option, use the net cash proceeds of one or more Public Equity Offering to
redeem up to an aggregate of 35% of the principal amount of the Securities
originally issued, at a redemption price equal to 109.429% of the principal
amount thereof if redeemed during the 12 months commencing on June 15, 1996 and
107.857% of the principal amount thereof if redeemed during the 12 months
commencing on June 15, 1997, in each case plus accrued and unpaid interest, if
any, to the redemption date.
The documents evidencing Senior Indebtedness will restrict the
Company's ability to optionally redeem the Securities.
6. Notice of Redemption.
Notice of redemption will be mailed at least 30 days but not more
than 60 days before the Redemption Date to each Holder of Securities to be
redeemed at such Holder's registered address. In order to effect a redemption
with the proceeds of a Public Equity Offering, the Company shall send the
redemption notice not later than 60 days after the consummation of such Public
Equity Offering. Securities in denominations larger than $1,000 may be redeemed
in part.
Except as set forth in the Indenture, from and after any
Redemption Date, if monies for the redemption of the Securities called for
redemption shall have been deposited with the Paying Agent for redemption on
such Redemption Date and payment of the Securities called for redemption is not
prohibited under Article Four or Article Twelve of the Indenture, then, unless
the Company defaults in the payment of such Redemption Price, the Securities
called for redemption will cease to bear interest and the only right of the
Holders of such Securities will be to receive payment of the Redemption Price.
7. Change of Control Offer.
Upon the occurrence of a Change of Control, each Holder shall
have the right to require the repurchase of such Holder's Securities pursuant to
a Change of Control Offer at a purchase price equal to 101% of the principal
amount thereof plus accrued interest, if any, to the date of purchase. The
Company shall not be required to repurchase Securities until it has complied
with its covenants to repay in full all Indebtedness of the Company and its
Subsidiaries under the Credit Agreement or offer to repay in full all such
Indebtedness and
149
repay the Indebtedness of each lender who has accepted its offer to repay such
Indebtedness or to obtain the requisite consent under the Credit Agreement to
permit the repurchase of the Securities pursuant to a Change of Control Offer.
In addition, prior to purchasing the Securities tendered in a Change of Control
Offer, the Company shall purchase all Senior Notes (or permitted refinancings
thereof) which it is required to purchase by reason of such Change of Control.
8. Limitation on Asset Sales.
Under certain circumstances the Company is required to apply the
net proceeds from Asset Sales to the repayment of Pari Passu Indebtedness or
Senior Indebtedness, to make Related Business Investments, an investment in
properties and assets that replace the properties and assets that are the
subject of such Asset Sale, an investment in properties and assets that will be
used in the business of the Company and its Subsidiaries existing on the Issue
Date or in a business reasonably related thereto or to purchase in a Net
Proceeds Offer (at a price equal to 100% of the aggregate principal amount
thereof, plus accrued interest to the date of purchase) such aggregate principal
amount of Securities which, when added to the accrued interest thereon, shall be
equal to the net proceeds required to be applied thereto.
9. Denominations; Transfer; Exchange.
The Securities are in registered form, without coupons, in
denominations of $1,000 and integral multiples of $1,000. A Holder shall
register the transfer of or exchange Securities in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay certain transfer
taxes or similar governmental charges payable in connection therewith as
permitted by the Indenture. The Registrar need not register the transfer of or
exchange any Securities or portions thereof selected for redemption.
10. Persons Deemed Owners.
The registered Holder of a Security shall be treated as the owner
of it for all purposes.
150
11. Unclaimed Money.
If money for the payment of principal or interest remains
unclaimed for two years, the Trustee and the Paying Agents will pay the money
back to the Company at its request.
After that, all liability of the Trustee and such Paying Agents
with respect to such money shall cease.
12. Discharge Prior to Redemption or Maturity.
If the Company at any time deposits with the Trustee U.S. Legal
Tender or U.S. Government Obligations sufficient to pay the principal of and
interest on the Securities to redemption or maturity and complies with the other
provisions of the Indenture relating thereto, the Company will be discharged
from certain provisions of the Indenture and the Securities (including the
financial covenants, but excluding its obligation to pay the principal of and
interest on the Securities).
13. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture, the Securities and
the Guarantees 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 amend or supplement the
Indenture or the Securities to, among other things, cure any ambiguity, defect
or inconsistency, provide for uncertificated Securities in addition to or in
place of certificated Securities, comply with Article Six or Section 11.06 of
the Indenture, or comply with any requirements of the SEC in connection with the
qualification of the Indenture under the TIA, or make any other change that does
not adversely affect the rights of any Holder of a Security.
14. Restrictive Covenants.
The Indenture imposes certain limitations on the ability of the
Company and its Subsidiaries to, among other things, incur additional
Indebtedness or Liens, make payments in respect of its Capital Stock and merge
or consolidate with any other person and sell, lease, transfer or otherwise
dispose of substantially all of its properties or assets. The limita-
151
tions are subject to a number of important qualifications and exceptions. The
Company must annually report to the Trustee on compliance with such limitations.
15. Subordination.
The Securities will be subordinated in right of payment to the
prior payment in full of all Senior Indebtedness (as defined in the Indenture)
of the Company. The Guarantees are subordinated in right of payment, in the
manner and to the extent set forth in the Indenture, to the prior payment in
full of Guarantor Senior Indebtedness (as defined in the Indenture). To the
extent and in the manner provided in the Indenture, Senior Indebtedness, and in
the case of payment by a Subsidiary Guarantor, Guarantor Senior Indebtedness,
must be paid before any payment may be made to any Holder of this Security. Any
Securityholder by accepting this Security agrees to the subordination and
authorizes the Trustee to give it effect.
16. Successors.
When a successor assumes all the obligations of its predecessor
under the Securities and the Indenture, the predecessor will be released from
those obligations.
17. Defaults and Remedies.
If an Event of Default occurs and is continuing, the Trustee or
the Holders of at least 25% in aggregate principal amount of Securities then
outstanding may declare all the Securities to be due and payable immediately in
the manner and with the effect provided in the Indenture. Holders of Securities
may not enforce the Indenture or the Securities except as provided in the
Indenture. The Trustee 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 or interest) if it
determines that withholding notice is in their interest.
18. Trustee Dealings with Company.
The Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of Securi-
152
ties and may otherwise deal with the Company, its Subsidiaries or their
respective Affiliates as if it were not the Trustee.
19. No Recourse Against Others.
No stockholder, director, officer, employee or incorporator, as
such, of the Company shall have any liability for any obligation of the Company
under the Securities or the Indenture or for any claim based on, in respect of
or by reason of, such obligations or their creation. Each Holder of a Security
by accepting a Security waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Securities.
20. Authentication.
This Security shall not be valid until the Trustee or
authenticating agent manually signs the certificate of authentication on this
Security.
21. Abbreviations and Defined Terms.
Customary abbreviations may be used in the name of a Holder of a
Security or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
22. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Company will cause CUSIP numbers
to be printed on the Securities immediately prior to the qualification of the
Indenture under the TIA as a convenience to the Holders of the Securities. No
representation is made as to the accuracy of such numbers as printed on the
Securities and reliance may be placed only on the other identification numbers
printed hereon.
The Company will furnish to any Holder of a Security upon written
request and without charge a copy of the Indenture. Requests may be made to:
Ralphs Grocery Company, c/o The Yucaipa Companies, ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇.
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GUARANTEE
The Subsidiary Guarantors (as defined in the Indenture (the
"Indenture") referred to in the Security upon which this notation is endorsed
and each hereinafter referred to as a "Subsidiary Guarantor," which term
includes any successor person under the Indenture) have unconditionally
guaranteed on a senior subordinated basis (such guarantee by each Subsidiary
Guarantor being referred to herein as the "Guarantee") (i) the due and punctual
payment of the principal of and interest on the Securities, whether at maturity,
by acceleration or otherwise, the due and punctual payment of interest on the
overdue principal and interest, if any, on the Securities, to the extent lawful,
and the due and punctual performance of all other obligations of the Company to
the Holders or the Trustee all in accordance with the terms set forth in Article
Eleven and Article Twelve of the Indenture and (ii) in case of any extension of
time of payment or renewal of any Securities or any of such other obligations,
that the same will be promptly paid in full when due or performed in accordance
with the terms of the extension or renewal, whether at stated maturity, by
acceleration or otherwise.
The obligations of each Subsidiary Guarantor to the Holders of
Securities and to the Trustee pursuant to the Guarantee and the Indenture are
expressly set forth and are expressly subordinated and subject in right of
payment to the prior payment in full of all Guarantor Senior Indebtedness of
such Subsidiary Guarantor, to the extent and in the manner provided, in Article
Eleven and Article Twelve of the Indenture, and reference is hereby made to such
Indenture for the precise terms of the Guarantee therein made.
No stockholder, officer, director or incorporator, as such, past,
present or future, of any Subsidiary Guarantor shall have any liability under
the Guarantee by reason of his or its status as such stockholder, officer,
director or incorporator.