Exhibit 4.1
______________________________________
STATER BROS. HOLDINGS INC.,
as Issuer
and
FIRST TRUST OF NEW YORK,
NATIONAL ASSOCIATION
as Trustee
_____________________
INDENTURE
Dated as of July 24, 1997
_____________________
$100,000,000
9% SENIOR SUBORDINATED NOTES DUE 2004
______________________________________
CROSS-REFERENCE TABLE*
Trust Indenture
Act Section Indenture Section
--------------- -----------------
310(a)(1)............................. 7.10
(a)(2)............................. 7.10
(a)(3)............................. N.A.
(a)(4)............................. N.A.
(b)................................ 7.08; 7.10; 10.02
(c)................................ N.A.
311(a)................................ 7.11
(b)................................ 7.11
(c)................................ N.A.
312(a)................................ 2.05
(b)................................ 10.03
(c)................................ 10.03
313(a)................................ 7.06
(b)(1)............................. N.A.
(b)(2)............................. 7.06
(c)................................ 7.06; 10.02
(d)................................ 7.06
314(a)................................ 4.01; 10.02
(b)................................ N.A.
(c)(1)............................. 10.04
(c)(2)............................. 10.04
(c)(3)............................. N.A.
(d)................................ N.A.
(e)................................ 10.05
(f)................................ N.A.
315(a)................................ 7.01(b)
(b)................................ 7.05; 10.02
(c)................................ 7.01(a)
(d)................................ 7.01(c)
(e)................................ 6.11
316(a)(last sentence)................. 2.09
(a)(1)(A).......................... 6.05
(a)(1)(B).......................... 6.04
(a)(2)............................. N.A.
(b)................................ 6.07
317(a)(1)............................. 6.08
(a)(2)............................. 6.09
(b)................................ 2.04
318(a)................................ 10.01
N.A. means not applicable.
---------------
*This Cross-Reference Table is not part of the Indenture.
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TABLE OF CONTENTS
Page
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE............................................ 1
Section 1.01 Definitions....................................................... 1
Section 1.02 Other Definitions................................................. 17
Section 1.03 Incorporation by Reference of Trust Indenture Act................. 17
Section 1.04 Rules of Construction............................................. 18
ARTICLE 2
THE 1997 NOTES................................... 18
Section 2.01 Form and Dating................................................... 18
Section 2.02 Execution and Authentication...................................... 20
Section 2.03 Registrar; Paying Agent; Depositary; Global Note Custodian........ 20
Section 2.04 Paying Agent to Hold Money in Trust............................... 21
Section 2.05 Noteholder Lists.................................................. 21
Section 2.06 Transfer and Exchange............................................. 21
Section 2.07 Replacement Notes................................................. 26
Section 2.08 Outstanding 1997 Notes............................................ 26
Section 2.09 When Treasury Notes Disregarded................................... 26
Section 2.10 Temporary Notes................................................... 26
Section 2.11 Cancellation...................................................... 27
Section 2.12 Defaulted Interest................................................ 27
Section 2.13 CUSIP Number...................................................... 27
ARTICLE 3
REPURCHASE AND OPTIONAL REDEMPTION...................... 28
Section 3.01 Purchase Offers................................................... 28
Section 3.02 Notices to Trustee................................................ 30
Section 3.03 Selection of 1997 Notes to Be Redeemed............................ 30
Section 3.04 Notice of Redemption.............................................. 31
Section 3.05 Effect of Notice of Redemption.................................... 31
Section 3.06 Deposit of Redemption Price....................................... 32
Section 3.07 1997 Notes Redeemed in Part....................................... 32
ARTICLE 4
COVENANTS OF THE COMPANY............................ 32
Section 4.01 Payment of 1997 Notes............................................. 32
Section 4.02 SEC Reports....................................................... 32
Section 4.03 Compliance Certificate............................................ 33
Section 4.04 Maintenance of Office or Agency................................... 34
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Section 4.05 Limitations on Restricted Payments and Investments.................... 34
Section 4.06 Continued Existence................................................... 36
Section 4.07 Taxes................................................................. 36
Section 4.08 Maintenance of Properties............................................. 36
Section 4.09 Insurance............................................................. 36
Section 4.10 Investment Company Act................................................ 37
Section 4.11 Change of Control..................................................... 37
Section 4.12 Limitation on Indebtedness............................................ 37
Section 4.13 Limitations on Liens.................................................. 38
Section 4.14 Limitation on Payment Restrictions Affecting Subsidiaries............. 39
Section 4.15 Limitation on Issuance and Sale of Capital Stock of Subsidiaries...... 39
Section 4.16 Limitations on Transactions with Related Persons...................... 39
Section 4.17 Compliance With Laws.................................................. 40
Section 4.18 Stay, Extension and Usury Laws........................................ 40
Section 4.19 Limitation on Sales of................................................ 41
Section 4.20 Further Assurance to the Trustee...................................... 42
Section 4.21 Restriction on Layering Debt.......................................... 42
ARTICLE 5
SUCCESSORS....................................... 42
Section 5.01 Merger, Consolidation, Etc............................................ 42
Section 5.02 Successor Corporation Substituted..................................... 43
Section 5.03 Purchase Offer on Change of Control................................... 43
ARTICLE 6
DEFAULTS AND REMEDIES................................. 43
Section 6.01 Events of Default..................................................... 43
Section 6.02 Acceleration.......................................................... 45
Section 6.03 Other Remedies........................................................ 46
Section 6.04 Waiver of Past Defaults............................................... 46
Section 6.05 Control by Majority................................................... 46
Section 6.06 Limitation on Suits................................................... 47
Section 6.07 Rights of Holders to Receive Payment.................................. 47
Section 6.08 Collection Suit by Trustee............................................ 47
Section 6.09 Trustee May File Proofs of Claim...................................... 47
Section 6.10 Priorities............................................................ 47
Section 6.11 Undertaking for Costs................................................. 48
ARTICLE 7
TRUSTEE....................................... 48
Section 7.01 Duties of Trustee..................................................... 48
Section 7.02 Rights of Trustee..................................................... 49
Section 7.03 Individual Rights of Trustee.......................................... 50
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Section 7.04 Trustee's Disclaimer.............................................. 50
Section 7.05 Notice of Defaults................................................ 50
Section 7.06 Reports by Trustee to Holders..................................... 51
Section 7.07 Compensation and Indemnity........................................ 51
Section 7.08 Replacement of Trustee............................................ 52
Section 7.09 Successor Trustee by Merger, etc.................................. 53
Section 7.10 Eligibility; Disqualification..................................... 53
Section 7.11 Preferential Collection of Claims Against Company................. 53
ARTICLE 8
SATISFACTION AND DISCHARGE OF INDENTURE............. 53
Section 8.01 Termination of Company's Obligations.............................. 53
Section 8.02 Application of Trust Money........................................ 56
Section 8.03 Repayment to Company.............................................. 56
Section 8.04 Reinstatement..................................................... 56
Section 8.05 Indemnity for Government Obligations.............................. 56
ARTICLE 9
AMENDMENTS............................. 57
Section 9.01 Without Consent of Holders........................................ 57
Section 9.02 With Consent of Holders........................................... 57
Section 9.03 Compliance with Trust Indenture Act............................... 58
Section 9.04 Revocation and Effect of Consents................................. 59
Section 9.05 Notation on or Exchange of 1997 Notes............................. 59
Section 9.06 Trustee Protected................................................. 59
ARTICLE 10
SUBORDINATION........................... 60
Section 10.01 The 1997 Notes Subordinated to Senior Indebtedness................ 60
Section 10.02 Liquidation; Dissolution; Bankruptcy.............................. 60
Section 10.03 Default on Senior Indebtedness.................................... 61
Section 10.04 When Distribution Must Be Paid Over............................... 61
Section 10.05 Notice by Company................................................. 62
Section 10.06 Subrogation....................................................... 62
Section 10.07 Relative Rights................................................... 62
Section 10.08 Subordination May Not Be Impaired by Company...................... 63
Section 10.09 Distribution or Notice to Representatives......................... 63
Section 10.10 Rights of Trustee and Paying Agent................................ 63
Section 10.11 Trustee Entitled to Assume Payments Not Prohibited in Absence of
Notice............................................................ 63
Section 10.12 Application by Trustee of Monies Deposited With It................ 63
Section 10.13 Trustee's Compensation Not Prejudiced............................. 64
Section 10.14 Officers' Certificate............................................. 64
Section 10.15 Certain Payments.................................................. 64
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Section 10.16 Names of Representatives........................................... 64
Section 10.17 Article 10 Not To Prevent Events of Default or Limit Right To
Accelerate......................................................... 65
Section 10.18 Reliance by Holders of Senior Indebtedness on Subordination
Provisions......................................................... 65
Section 10.19 Proof of Claim..................................................... 65
Section 10.20 No Fiduciary Duty Created to Holders of Senior Indebtedness........ 65
ARTICLE 11
GENERAL PROVISIONS.................................. 65
Section 11.01 Trust Indenture Act Controls....................................... 65
Section 11.02 Notices............................................................ 66
Section 11.03 Communication by Holders with Other Holders........................ 66
Section 11.04 Certificate and Opinion as to Conditions Precedent................. 66
Section 11.05 Statements Required in Certificate or Opinion...................... 66
Section 11.06 Rules by Trustee and Agents........................................ 67
Section 11.07 Legal Holidays; Business Days...................................... 67
Section 11.08 No Recourse Against Others......................................... 67
Section 11.09 Counterparts....................................................... 68
Section 11.10 Other Provisions................................................... 68
Section 11.11 Governing Law...................................................... 68
Section 11.12 No Adverse Interpretation of Other Agreements...................... 68
Section 11.13 Successors......................................................... 68
Section 11.14 Severability....................................................... 68
Section 11.15 Table of Contents, Headings, Etc................................... 69
EXHIBITS
Exhibit A Form of Private Placement Note
Exhibit B Form of Exchange Note
Exhibit C Certificate to be Delivered Upon Exchange or Registration of Transfer
of Notes
Exhibit D Form of Legal Opinion on Transfer
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THIS INDENTURE, dated July 24, 1997 (the "Issue Date"), is entered
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into between Stater Bros. Holdings Inc., a Delaware corporation (the "Company"),
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and First Trust of New York, National Association, as trustee (the "Trustee").
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Each party agrees as follows for the benefit of the other party and
for the equal and ratable benefit of the Holders of the Company's 9% Senior
Subordinated Notes due July 1, 2004 (the "Private Placement Notes") and the
-----------------------
Company's 9% Senior Subordinated Notes due July 1, 2004 to be issued in exchange
for the Private Placement Notes pursuant to the terms of the Registration Rights
Agreement (as hereinafter defined) (the "Exchange Notes" and, together with the
--------------
Private Placement Notes, the "1997 Notes").
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ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01 Definitions.
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"1994 Notes" means the Company's $165.0 million 11% Senior Notes
----------
due 2001.
"Accredited Investor" means an accredited investor as defined in
-------------------
the Securities Act, and the rules and regulations promulgated thereunder.
"Acquired Indebtedness" of any specified Person means Indebtedness
---------------------
of any other Person existing at the time such other Person merged with or into
or became a Subsidiary of such specified Person or assumed in connection with
the acquisition of assets from such other Person including, without limitation,
Indebtedness of such other Person incurred in connection with or in anticipation
of such other Person being merged with or into or becoming a Subsidiary of such
specified Person or such acquisition.
"Affiliate" means, when used with reference to any Person, any
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Person directly or indirectly controlling, controlled by, or under direct or
indirect common control with such Person or any Person who beneficially owns,
directly or indirectly, 5% or more of the equity interests of such Person or
warrants, options or other rights to acquire or hold more than 5% of the equity
interests of such Person. For the purposes of this definition, "control" when
used with respect to any specified Person means the power to direct or cause the
direction of management or policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative of the
foregoing.
"Agent" means any Registrar, Paying Agent or Co-Registrar.
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"Applicable Law" means, with respect to a Person, all provisions
--------------
of the following applicable to such Person: (i) constitutions, treaties,
statutes, laws, rules, regulations and ordinances of any Governmental Authority;
(ii) Governmental Approvals; and (iii) orders, decisions, judgments, awards and
decrees of any Governmental Authority.
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"assets" means any tangible or intangible assets or rights or real,
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personal or mixed properties of any Person.
"Asset Sale" means any sale, lease, transfer, exchange or other
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disposition (or series of related sales, leases, transfers, exchanges or
dispositions), including, without limitation, dispositions pursuant to merger,
consolidation or sale and leaseback transactions, of (i) shares of Capital Stock
of a Subsidiary, whether by such Subsidiary or another Person or (ii) any other
assets of the Company or any assets of the Subsidiaries outside the ordinary
course of business of the Company or such Subsidiary.
"Associate" of, or a Person "associated" with, any Person, means (i)
--------- ----------
any trust or other estate in which such Person has a substantial beneficial
interest or as to which such Person serves as trustee or in a similar fiduciary
capacity and (ii) any relative or spouse of such person, or any relative of such
spouse, who has the same home as such person.
"Average Life" means, as of the date of determination, with respect to
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any Indebtedness, the quotient obtained by dividing (a) the sum of the products
of (i) the number of years from such date to the date of each successive
scheduled principal payment of such Indebtedness multiplied by (ii) the amount
of such principal payment by (b) the sum of all such principal payments.
"Board of Directors" means the Board of Directors of the Company or
------------------
any authorized committee of the Board of Directors.
"Business Day" means any day other than a Saturday, Sunday or a Legal
------------
Holiday.
"Capital Stock" means, with respect to any Person, any and all shares,
-------------
interests (partnership or otherwise), participations, rights in, or other
equivalents (however designated and whether voting or non-voting) of, such
Person's capital stock, including each class of common or preferred stock of
such Person, whether outstanding on the Issue Date or issued after the Issue
Date, and any and all rights, warrants or options exchangeable for or
convertible into such capital stock (but excluding any debt security that is
exchangeable for or convertible into such capital stock).
"Capitalized Lease Obligation" means obligations under a lease that
----------------------------
are required to be classified and accounted for as a capital lease obligation
under GAAP and, the amount of such obligations at any date shall be the
capitalized amount of such obligations at such date, determined in accordance
with such principles.
"Cash" means U.S. dollars.
----
"Cash Equivalent" means (i) securities issued or directly and fully
---------------
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
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States of America is pledged in support of such securities), (ii) time deposits
and certificates of deposit and commercial paper issued by the parent
corporation of any domestic commercial bank of recognized standing having
capital and surplus in excess of $500 million, (iii) repurchase obligations with
a term of not more than 30 days for underlying securities of the types described
in clauses (i) and (ii) above, (iv) commercial paper issued by others rated at
--------------------
least
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A-2 or the equivalent thereof by Standard & Poor's Corporation or at least P-2
or the equivalent thereof by ▇▇▇▇▇'▇ Investors Service, Inc. and in each case
maturing within one year after the date of acquisition and (v) investments in
funds substantially all of whose assets comprise securities of the type
described in clauses (i) and (ii) above.
"Change of Control" means the occurrence of one or more of the
-----------------
following events (whether or not approved by the Board of Directors): (a) an
event or series of events by which any Person or other entity or group of
Persons or other entities acting in concert as determined in accordance with
Section 13(d) of the Exchange Act (a "Group of Persons") (other than ▇▇ ▇▇▇▇▇▇)
----------------
together with its or their Affiliates and Associates shall, as a result of a
tender or exchange offer, open market purchases, privately negotiated purchases,
merger, consolidation or otherwise (i) be or become the beneficial owner (within
the meaning of Rule 13d-3 and Rule 13d-5 under the Exchange Act, whether or not
applicable, except that a Person shall be deemed to have "beneficial ownership"
of all securities that such Person has the right to acquire, whether such right
is exercisable immediately or only after the passage of time) of 50% or more of
the combined voting power of the then outstanding Voting Stock of the Company or
(ii) have the ability to elect, directly or indirectly, a majority of the
members of the Board of Directors of the Company or other equivalent governing
body thereof, (b) the stockholders of the Company shall approve any plan or
proposal for the liquidation or dissolution of the Company (whether or not
otherwise in compliance with the provisions of this Indenture and the 1997
Notes), (c) a majority of the Board of Directors of the Company consists of
persons other than Continuing Directors or (d) the direct or indirect sale,
assignment, lease, exchange, disposition or other transfer, in one transaction
or a series of related transactions, of all or substantially all of the property
or assets of the Company to any Person or Group of Persons together with any
Affiliates thereof (whether or not otherwise in compliance with the provisions
of this Indenture and the 1997 Notes).
"Common Stock" means the Company's common stock.
------------
"Company" means the party named as such above until a successor
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replaces it in accordance with Article 5 of this Indenture and thereafter means
each successor and each successor thereto replaced in accordance with Article 5
of this Indenture.
"Consolidated EBITDA" for any person means for any period for which it
-------------------
is to be determined the sum of, without duplication, the amounts for such
period, taken as a single accounting period, of (i) Consolidated Net Income and
(ii) to the extent Consolidated Net Income has been reduced thereby, (A)
Consolidated Tax Expense of such Person paid or accrued in accordance with GAAP
for such period, (B) Consolidated Interest Expense of such Person for such
period, and (C) depreciation, depletion and amortization expenses (including,
without limitation, amortization of capitalized debt issuance costs) and other
non-cash expenses (other than any non-cash expense which requires the accrual of
or a reserve for cash charges for any future period) of such Person and its
subsidiaries for such period, less the amount of consolidated non-cash items
increasing Consolidated Net Income for such period, all as determined on a
consolidated basis in conformity with GAAP consistent with those applied in the
preparation of the audited financial statements of the Company and its
Consolidated Subsidiaries.
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"Consolidated Fixed Charge Coverage Ratio" means, with respect to any
----------------------------------------
Person, the ratio of (a) the aggregate amount of Consolidated EBITDA of such
Person for the four full fiscal quarters ending on or immediately prior to the
date of the transaction (the "Transaction Date") giving rise to the need to
----------------
calculate the Consolidated Fixed Charge Coverage Ratio (such four full fiscal
quarter period being referred to herein as the "Four Quarter Period") to (b) the
-------------------
aggregate Consolidated Fixed Charges of such Person for such Four Quarter
Period. For purposes of this definition, if the Transaction Date occurs prior to
the first anniversary of the Issue Date, Consolidated EBITDA and Consolidated
Fixed Charges shall be calculated, in the case of the Company, after giving
effect on a pro forma basis as if the issuance of the 1997 Notes and the
---------
application of the net proceeds therefrom occurred on the first day of such Four
Quarter Period. In addition to and without limitation of the foregoing, for
purposes of this definition, Consolidated EBITDA and Consolidated Fixed Charges
shall be calculated after giving effect on a pro forma basis for the period of
---------
such calculation to (i) the incurrence or retirement, as the case may be, of any
Indebtedness (including Acquired Indebtedness) of such Person or any of its
subsidiaries during the period commencing on the first day of the Four Quarter
Period to and including the Transaction Date (the "Reference Period"),
----------------
including, without limitation, the incurrence of the Indebtedness giving rise to
the need to make such calculation, as if such incurrence or retirement, as the
case may be, occurred on the first day of the Reference Period and (ii) the
Consolidated EBITDA during the Reference Period attributable to any acquired or
divested Person, business, property or asset, provided that with respect to any
--------
such acquisition, only to the extent the EBITDA of such Person is otherwise
includable in the referent Person's Consolidated EBITDA, as if such transaction
occurred on the first day of the Reference Period. If the Person for whom this
ratio is being calculated or any of its subsidiaries directly or indirectly
guarantees Indebtedness of a third person, the preceding sentence shall give
effect to the incurrence of such guaranteed Indebtedness as if such Person or
any subsidiary of such Person had directly incurred or otherwise assumed such
guaranteed Indebtedness as of the first day of the Reference Period.
Furthermore, in calculating Consolidated Fixed Charges of this Consolidated
Fixed Charge Coverage Ratio, (1) interest on Indebtedness determined on a
fluctuating basis as of the Transaction Date and which will continue to be so
determined thereafter shall be deemed to have accrued at a fixed rate per annum
--- -----
equal to the rate of interest on such Indebtedness in effect on the Transaction
Date; (2) if interest on any Indebtedness actually incurred on the Transaction
Date may be optionally determined at an interest rate based upon a factor of a
prime or similar rate, a eurocurrency interbank offered rate or other rates,
then the interest rate in effect on the Transaction Date will be deemed to have
been in effect during the Four Quarter Period; and (3) notwithstanding the
foregoing, interest on Indebtedness determined on a fluctuating basis, to the
extent such interest is covered by agreements relating to Interest Rate
Protection Agreements, shall be deemed to accrue at the rate per annum resulting
--- -----
after giving effect to the operation of such agreements.
"Consolidated Fixed Charges" means, with respect to any Person for any
--------------------------
period, the sum of, without duplication, the amounts for such period, taken as a
single accounting period, of (i) Consolidated Interest Expense and (ii) the
aggregate amount of all dividends 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 during such
period.
"Consolidated Interest Expense" means, with respect to any Person for
-----------------------------
any period, the aggregate of the interest expense of such Person and its
Consolidated Subsidiaries for such period, on a consolidated basis, as
determined in accordance with GAAP, including all amortization of original
-4-
issue discount, the interest component of Capitalized Lease Obligations, net
cash costs under all Interest Rate Protection Agreements (including amortization
of fees) all capitalized interest, the interest portion of any deferred payment
obligations for such period and cash contributions to any employee stock
ownership plan to the extent such contributions are used by such employee stock
ownership plan to pay interest or fees to any Person (other than the referent
Person or one of its Wholly Owned Subsidiaries) in connection with loans
incurred by such employee stock ownership plan to purchase capital stock of the
referent Person, but net of any amortization of any debt issuance costs.
"Consolidated Net Income" means, with respect to any Person for any
-----------------------
period, the consolidated net income (or deficit) of such Person and its
Consolidated Subsidiaries for such period, on a consolidated basis, as
determined in accordance with GAAP consistently applied, provided that the net
--------
income of any other Person (other than a subsidiary) in which such Person or any
subsidiary of such Person has a joint interest with a third party (which
interest does not cause the net income of such other Person to be consolidated
into the net income of such Person in accordance with GAAP) shall be included
only to the extent of the lesser of (a) such net income that has been actually
received by such Person or such subsidiary in the form of cash dividends or
similar cash distributions or (b) the net income of such Person (which in no
event shall be less than zero), provided further that there shall be excluded
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(i)(x) the net income (but not loss) of any subsidiary of such Person that is
subject to any restriction or encumbrance on the ability of such subsidiary to
make the payment of dividends or other distributions to such Person to the
extent of such encumbrance or restriction and (y) the net income of any Person
acquired in a pooling of interests transaction accrued prior to the date it
became a subsidiary of such Person or is merged into or consolidated with such
Person or any subsidiary of such Person; (ii) any restoration to income of any
contingency reserve, except to the extent that provision for such reserve was
made out of Consolidated Net Income accrued at any time following the Issue
Date; (iii) any gain (but not loss), together with any related provisions for
taxes, realized upon the sale or other disposition (including, without
limitation, dispositions pursuant to sale and leaseback transactions) of any
property or assets which are not sold or otherwise disposed of in the ordinary
course of business and upon the sale or other disposition of any Capital Stock
of any subsidiary of such Person; (iv) any gain arising from the acquisition of
any securities, or the extinguishment, retirement or repurchase, as determined
in accordance with GAAP, of any Indebtedness of such Person; (v) any
extraordinary gain (but not extraordinary loss) together with any related
provision for taxes on any such extraordinary gain and any one time gains or
losses (including, without limitation, those resulting from litigation
settlements and those related to the adoption of accounting standards under
GAAP), realized by the referent Person or any of its subsidiaries during the
period for which such determination is made; and (vi) in the case of a successor
to the Company by consolidation or merger or as a transferee of the Company's
assets (other than any calculation made under Article 5 hereof), any earnings of
the successor corporation prior to such consolidation, merger or transfer of
assets.
"Consolidated Net Worth" of a Person at any date means the
----------------------
Consolidated Stockholders' Equity of such Person less (a) the amount of any gain
net of all applicable federal, state and local taxes resulting, directly or
indirectly, from the extinguishment, retirement or repurchase, as determined in
accordance with GAAP, of any Indebtedness of such Person or any of its
subsidiaries, (b) any revaluation or other write-ups subsequent to the Issue
Date in the book value of any asset owned by such Person or a Consolidated
Subsidiary, (c) the book value of all intangible assets (as determined in
accordance with GAAP) of such Person and its Consolidated Subsidiaries, (d) any
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amounts attributable to the cost of treasury stock and the principal amount of
any promissory notes receivable from the sale of Capital Stock of such Person or
of any of its subsidiaries and (e) any gains from the sale of assets other than
in the ordinary course of business.
"Consolidated Stockholders' Equity" as of any date means with respect
---------------------------------
to any Person the amount by which the assets of such Person and its Consolidated
Subsidiaries exceed (a) the total liabilities of such Person and its
Consolidated Subsidiaries, plus (b) any redeemable Preferred Stock (including
Disqualified Capital Stock) of such Person or any Preferred Stock of any
Consolidated Subsidiary of such Person issued to any Person other than such
Person or a Wholly Owned Subsidiary of such Person, in each case determined in
accordance with GAAP.
"Consolidated Subsidiary" of any Person means a Subsidiary which for
-----------------------
financial reporting purposes is or, in accordance with GAAP, should be,
accounted for by such Person as a consolidated subsidiary; provided however,
----------------
that the Unrestricted Subsidiaries of any Person shall not be included as
Consolidated Subsidiaries of such Person for purposes of this Indenture,
regardless of whether such Unrestricted Subsidiaries are or, in accordance with
GAAP, should be, accounted for as consolidated subsidiaries; provided further,
----------------
that any Person that is not a subsidiary of a Person shall not be included as a
Consolidated Subsidiary of such Person for purposes of the Indenture, regardless
of whether such Person is, or in accordance with GAAP, should be, accounted for
as a consolidated subsidiary.
"Consolidated Tax Expense" means, with respect to any Person for any
------------------------
period, the aggregate of the federal, state and local tax expense attributable
to taxes based on income and foreign income tax expenses of such Person and its
Consolidated Subsidiaries for such period (net of any income tax benefit),
determined in accordance with GAAP, other than taxes (whether liabilities or
benefits) attributable to extraordinary, unusual or nonrecurring gains or
losses, or taxes attributable to Asset Sales.
"Continuing Director" means at any date a member of the Board of
-------------------
Directors who (i) was a member of the Board of Directors on the Issue Date or
(ii) was nominated for election or elected to the Board of Directors with the
affirmative vote of at least a majority of the directors who were Continuing
Directors at the time of such nomination or election.
"▇▇▇▇▇" means, collectively, ▇▇▇▇▇ Corporation, a Delaware
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corporation, and its assigns, including Reading Australia PTY Limited, an
Australian corporation.
"Default" means any event that is, or after notice or passage of time
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or both would be, an Event of Default.
"Depositary" means, with respect to the 1997 Notes issuable or issued
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in whole or in part in global form, the Person specified in Section 2.03 hereof
------------
as the Depositary with respect to the 1997 Notes, and any successor thereto.
"Designated Senior Indebtedness" shall mean each issue of Senior
------------------------------
Indebtedness that (A) has an outstanding principal amount of at least $25.0
million (including the amount of all reimbursement obligations pursuant to
letters of credit thereunder and the maximum principal amount
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available to be drawn thereunder), and (B) has been designated as Designated
Senior Indebtedness pursuant to an Officers' Certificate of the Company received
by the Trustee.
"Disqualified Capital Stock" means any Capital Stock that, other than
--------------------------
solely at the option of the issuer thereof, by its terms (or by the terms of any
security into which it is convertible or exchangeable) is, or upon the happening
of an event or the passage of time would be, required to be redeemed or
repurchased, in whole or in part, or has, or upon the happening of an event or
the passage of time would have, a redemption or similar payment due on or prior
to the first anniversary of the Maturity Date, or is convertible into or
exchangeable for debt securities at the option of the holder thereof at any time
prior to the first anniversary of the Maturity Date.
"Equity Offering" means any public or private sale of equity
---------------
securities (excluding Disqualified Capital Stock) of the Company other than any
private sales to an Affiliate of the Company.
"Event of Default" has the meaning set forth in Section 6.01 hereof.
---------------- ------------
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
------------
"Exchange Offer" means an offer to exchange Private Placement Notes
--------------
for Exchange Notes pursuant to the Registration Rights Agreement.
"Fair Market Value" or "fair value" means, with respect to any asset
----------------- ----------
or property, the price which could be negotiated in an arm's-length, free market
transaction, for cash, between a willing seller and a willing and able buyer,
neither of whom is under undue pressure or compulsion to complete the
transaction.
"GAAP" means generally accepted accounting principles set forth in the
----
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may have been approved by a significant segment of the
accounting profession of the United States, which are in effect as of the date
hereof.
"Global Note Custodian" means the Person specified in Section 2.03
--------------------- ------------
hereof as custodian with respect to the Global Notes, or any successor thereto.
"Governmental Authority" means any nation (including an Indian
----------------------
nation), any state or other political subdivision thereof and any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government, including any government authority,
agency, department, board, commission or instrumentality of the United States,
any State of the United States or any political subdivision thereof, and any
tribunal or arbitrator(s) of competent jurisdiction.
"guarantee" means, as applied to any obligation, (i) a guarantee
---------
(other than by endorsement of negotiable instruments for collection in the
ordinary course of business), direct or indirect, in any manner, of any part or
all of such obligation and (ii) an agreement, direct or indirect, contingent or
otherwise, the practical or legal effect of which is to assure in any way the
payment or
-7-
performance (or payment of damages in the event of a non-performance) of all or
any part of such obligation, including, without limiting the foregoing, the
payment of amounts drawn down by letters of credit.
"Holder" or "Noteholder" means a person in whose name a 1997 Notes is
------ ----------
registered in the Registrar's books.
"incur" means, with respect to any Indebtedness or other obligation of
-----
any Person, to create, issue, incur (by conversion, exchange, in connection with
an acquisition or otherwise), assume, guarantee or otherwise become liable in
respect of such Indebtedness or other obligation or the recording, as required
pursuant to GAAP or otherwise, of any such Indebtedness or other obligation on
the balance sheet of such Person (and "incurrence," "incurred," "incurable" and
"incurring" shall have meanings correlative to the foregoing), provided that a
--------
change in GAAP that results in an obligation of such Person that exists at such
time becoming Indebtedness shall not be deemed an incurrence of such
Indebtedness.
"Indebtedness" means, with respect to any Person, at any date, any of
------------
the following, without duplication, (i) any liability, 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 a note, bond, debenture or similar instrument or letters of credit
(including a purchase money obligation) or (C) for the payment of money relating
to a Capitalized Lease Obligation or other obligation (whether issued or
assumed) relating to the deferred purchase price of property; (ii) all
conditional sale obligations and all obligations under any title retention
agreement (even if the rights and remedies of the seller under such agreement in
the event of default are limited to repossession or sale of such property), but
excluding trade accounts payable arising in the ordinary course of business that
are not overdue by 90 days or more or are being contested in good faith by
appropriate proceedings promptly instituted and diligently conducted; (iii) all
obligations for the reimbursement of any obligor on any letter of credit,
banker's acceptance or similar credit transaction entered into the ordinary
course of business; (iv) all Indebtedness of others secured by (or for which the
holder of such Indebtedness has an existing right, contingent or otherwise, to
be secured by) any Lien on any asset or property (including, without limitation,
leasehold interests and any other tangible or intangible property) of such
Person, whether or not such Indebtedness is assumed by such Person or is not
otherwise such Person's legal liability, provided that if the Indebtedness so
--------
secured has not been assumed in full by such Person or is otherwise not such
Person's legal liability in full, the amount of such Indebtedness for the
purposes of this definition shall be limited to the lesser of the amount of such
Indebtedness secured by such Lien or the Fair Market Value of the assets or
property securing such Lien; (v) all Indebtedness of others (including all
dividends of other Persons the payment of which is) guaranteed, directly or
indirectly, by such Person or that is otherwise its legal liability or which
such Person has agreed to purchase or repurchase or in respect of which such
Person has agreed contingently to supply or advance funds; (vi) all Preferred
Stock issued by such Person and its subsidiaries (other than Qualified Capital
Stock) with the amount of Indebtedness represented by such Preferred Stock being
equal to the greater of its voluntary or involuntary liquidation preference and
its "maximum fixed repurchase price", but excluding accrued dividends if any;
and (vii) all obligations under Interest Rate Protection Agreements. For
purposes hereof, the "maximum fixed repurchase price" of any Preferred Stock
which does not have a fixed repurchase price shall be calculated in accordance
with the terms of such Preferred Stock as if such Preferred Stock were
-8-
purchased on any date on which Indebtedness shall be required to be determined
under this Indenture, and if such price is based upon, or measured by, the Fair
Market Value of such Preferred Stock, such Fair Market Value shall be determined
reasonably and in good faith by the board of directors of the issuer of such
Preferred Stock. For the avoidance of doubt, the Santee Financing and the Santee
Documents shall be deemed not to constitute, nor to have given rise to, the
incurrence of any Indebtedness of the Company or any of its Subsidiaries.
"Indenture" means this Indenture as amended or supplemented from time
---------
to time.
"Initial Purchaser" means BancAmerica Securities, Inc., as the initial
-----------------
purchaser of the Private Placement Notes pursuant to the Purchase Agreement,
dated as of the date hereof, between the Company and BancAmerica Securities,
Inc.
"Interest Payment Date" when used with respect to any of the 1997
---------------------
Notes means the stated maturity of an installment of interest specified in such
1997 Notes.
"Interest Rate Protection Agreement" means any interest rate swap
----------------------------------
agreement, interest rate cap agreement or other financial agreement designed to
protect a Person or any of its subsidiaries against fluctuations in interest
rates.
"Interest Record Date" when used with respect to any of the 1997 Notes
--------------------
means the date for determining the payee of an installment of interest specified
in such 1997 Notes.
"Investment" by any Person means any direct or indirect (i) loan,
----------
advance or other extension of credit or capital contribution to (by means of
transfers of cash or other property to others or payments for property or
services for the account or use of others, or otherwise), (ii) purchase or
acquisition of Capital Stock, bonds, notes, debentures or other securities or
evidences of Indebtedness issued by, any other Person (whether by merger,
consolidation, amalgamation or otherwise and whether or not purchased directly
from the issuer of such securities or evidences of Indebtedness), (iii)
guarantee or assumption of the Indebtedness of any other Person and (iv) all
other items that would be classified as investments (including, without
limitation, purchases of assets outside the ordinary course of business) on a
balance sheet of such Person prepared in accordance with GAAP. Investments
shall exclude extensions of trade credit and advances to customers and suppliers
to the extent in the ordinary course of business and made in accordance with
customary industry practice. The amount of any Investment shall be the original
cost of such Investment plus the cost of all additions thereto, without any
adjustments for increases or decreases in value, or write-ups, write-downs or
write-offs with respect to such Investment.
"Issue Date" means the date on which the 1997 Notes were originally
----------
issued under this Indenture.
"▇▇ ▇▇▇▇▇▇" means ▇▇ ▇▇▇▇▇▇ Investments, a California general
---------
partnership.
"Legended Note" means any 1997 Note required to contain the legend set
-------------
forth in Section 2.06(h) hereof.
---------------
-9-
"Lien" means, with respect to any Person, any mortgage, pledge, lien,
----
encumbrance, charge or adverse claim affecting title or resulting in an
encumbrance against real or personal property of such Person, or a security
interest of any kind.
"Markets Preferred Stock" means the $11.00 Cumulative Preferred Stock
-----------------------
issued by Stater Bros. Markets.
"Maturity Date" means July 1, 2004.
-------------
"Net Cash Proceeds" means, with respect to any Asset Sale of any
-----------------
Person, Cash and Cash Equivalents received therefrom, in each case net of (a)
all legal expenses and all title and recording tax expenses, all commissions and
other fees and expenses directly related to such Asset Sale, (b) all federal,
state or local taxes required to be accrued as a liability as a consequence of
such Asset Sale, and (c) all Indebtedness permitted under Section 4.12 that is
------------
secured by such assets, in accordance with the terms of any Lien permitted under
Section 4.13 upon or with respect to such assets that must by the terms of such
------------
Indebtedness and such Lien, or in order to obtain a necessary consent to such
Asset Sale or by applicable law, be repaid out of the proceeds from such Asset
Sale and which is actually so repaid in Cash.
"Net Equity Proceeds" means (a) in the case of any sale by the Company
-------------------
of Qualified Capital Stock, the aggregate net proceeds received by the Company,
after payment of expenses, commissions and the like incurred in connection
therewith, whether such proceeds are in cash or in other property (valued as
determined reasonably and in good faith by the Board of Directors, as evidenced
by a resolution approved by the Board of Directors, at the Fair Market Value
thereof at the time of receipt) and (b) in the case of any exchange, exercise,
conversion or surrender of any outstanding Indebtedness of the Company or any
Subsidiary for or into shares of Qualified Capital Stock, the amount of such
Indebtedness (or, if such Indebtedness was issued at an amount less than the
stated principal amount thereof, the accrued amount thereof as determined in
accordance with GAAP) as reflected in the consolidated financial statements of
the Company prepared in accordance with GAAP as of the most recent date next
preceding the date of such exchange, exercise, conversion or surrender (plus any
additional amount required to be paid by the holder of such Indebtedness to the
Company or to any Wholly Owned Subsidiary of the Company upon such exchange,
exercise, conversion or surrender and less any and all payments made to the
holders of such Indebtedness, and all other expenses incurred by the Company in
connection therewith), in the case of each of clauses (a) and (b) to the extent
consummated after June 30, 1997.
"Obligations" means (i) the due and punctual payment of principal of
-----------
and premium, if any, and interest on the 1997 Notes when due, whether at
maturity, by acceleration, by redemption or otherwise and all other monetary
obligations of the Company under the Indenture and the 1997 Notes, and (ii) the
due and punctual performance of all other obligations of the Company under this
Indenture or the 1997 Notes.
"Officer" means Chairman of the Board, the Chief Executive Officer,
-------
the President, the Chief Financial Officer, the Chief Accounting Officer, any
Vice President, the Treasurer, the Secretary, any Assistant Treasurer or any
Assistant Secretary of the Company.
-10-
"Officers' Certificate" means a certificate signed by two Officers,
---------------------
one of whom must be the Chairman of the Board, the President, the Treasurer or a
Vice-President of the Company.
"Opinion of Counsel" means a written opinion in form and substance,
------------------
and from legal counsel, reasonably acceptable to the recipient of such opinion,
which opinion may be subject to any necessary or customary qualifications,
exceptions, or limitations. The counsel may be an employee of or counsel to the
Company or the Trustee.
"Participants" means those Persons designated as participants by the
------------
Depositary.
"Permitted Construction Indebtedness" means Indebtedness of the
-----------------------------------
Company or any Wholly Owned Subsidiary representing the deferred purchase price
of, or the net proceeds of which are used solely to finance the purchase price,
cost of construction, lease, or major remodeling or major refurbishment of, any
new or existing supermarket (including any fixtures therein) operated or to be
operated by the Company or Stater Bros. Markets. For purposes hereof, "major
remodeling" or "major refurbishment" of a supermarket shall mean a remodeling or
refurbishment of a supermarket in a single transaction or a series of related
transactions involving aggregate expenditures equal to or greater than $1.0
million per project site.
"Permitted Investments" means the following kinds of instruments if,
---------------------
in the case of instruments referred to in clauses (a) through (d) below, on the
date of purchase or other acquisition of any such instrument by the Company or
any Subsidiary, the remaining term to maturity is not more than one year: (a)
readily marketable obligations issued or unconditionally guaranteed as to
principal and interest by the United States or by any agency or authority
controlled or supervised by and acting as an instrumentality of the United
States; (b) repurchase obligations for instruments of the type described in
clause (a) for which delivery of the instrument is made against payment; (c)
obligations (including, but not limited to, demand or time deposits, banker's
acceptances and certifi ▇▇▇▇▇ of deposit) issued by a depository institution or
trust company incorporated or doing business under the laws of the United
States, any state thereof or the District of Columbia or a branch or subsidiary
of any such depository institution or trust company operating outside the United
States, provided that such depository institution or trust company has, at the
--------
time of the Company's or such Subsidiary's investment therein or contractual
commitment providing for such investment, capital, surplus or undivided profits
(as of the date of such institution's most recently published financial
statements) in excess of $100.0 million; (d) commercial paper issued by any
corporation, if such commercial paper has, at the time of the Company's or any
Subsidiary's investment therein or contractual commitment providing for such
investment, credit ratings of A-1 by Standard & Poor's Corporation and P-1 by
▇▇▇▇▇'▇ Investors Service, Inc.; and (e) money market, mutual or similar funds
registered under the Investment Company Act of 1940, as amended, having assets
in excess of $100.0 million and whose sole investments are comprised of
securities of the type described in clauses (a) through (d), above, irrespective
of whether such funds are Affiliates of or otherwise associated with the
Trustee.
"Permitted Liens" means (a) Liens existing on the Issue Date and
---------------
renewals, extensions and replacements thereof; provided, that such renewals,
extensions or replacements shall not apply to any property or assets not
previously subject to such Liens or increase the principal amount of obligations
secured thereby, (b) Liens on deposits made in the ordinary course of business,
(c) Liens in favor of collecting banks having a right of setoff, revocation,
refund or chargeback with respect to
-11-
money or instruments of the Company or any Subsidiary on deposit with or in
possession of such banks, (d) Liens for taxes not yet due or which are being
contested in good faith by appropriate proceedings, provided that adequate
--------
reserves with respect thereto are maintained on the books of the Company or its
Subsidiaries, as the case may be, in conformity with GAAP, (e) carriers',
warehousemen's, mechanics' materialmen's, repairmen's or other like Liens
arising in the ordinary course of business and not overdue for a period of more
than 90 days or which are being contested in good faith by appropriate
proceedings, (f) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation, (g) deposits to
secure the performance of bids, trade contracts (other than for borrowed money),
leases, statutory obligations, surety and appeal bonds, performance bonds and
other obligations of like nature incurred in the ordinary course of business,
(h) easements, rights-of-way, restrictions and other similar encumbrances
incurred in the ordinary course of business which, in the aggregate, are not
substantial in amount and which do not in any case materially detract from the
value of the property subject thereto or materially interfere with the ordinary
course of business of the Company or its Subsidiaries, as the case may be, and
any exceptions to title set forth in any title policies, (i) any attachment or
judgment Lien so long as the execution or other enforcement thereof is
effectively stayed, the claims secured thereby are being contested in good faith
by appropriate proceedings, adequate reserves have been established with respect
to such claims in accordance with GAAP and no Default or Event of Default would
result thereby or occur as a consequence thereof, (j) any Liens relating solely
to property leased by the Company or any Subsidiary and arising solely out of
the lease for such property and (k) Liens on assets securing any Permitted
Construction Indebtedness permitted under Section 4.13.
------------
"Person" means any individual, corporation, partnership, joint
------
venture, trust, estate, limited liability company, unincorporated organization
or government or any agency or political subdivision thereof.
"Plan of Liquidation" means a plan (including by operation of law)
-------------------
that provides for, contemplates or the effectuation of which is preceded or
accompanied by (whether or not substantially contemporaneously) (i) the sale,
lease, conveyance or other disposition of all or substantially all of the assets
of the Company 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 of all or substantially all of the
remaining assets of the Company to holders of Capital Stock of the Company.
"Preferred Stock" means, as applied to the Capital Stock of any
---------------
Person, the Capital Stock of such Person (other than the common stock of such
Person) of any class or classes (however designated) that ranks prior, as to the
payment of dividends or as to the distribution of assets upon any voluntary or
involuntary liquidation, dissolution or winding-up of such Person, to shares of
Capital Stock of at least one other class of such Person.
"principal" of Indebtedness, including the 1997 Notes, means the
---------
principal of the security plus the premium, if any, on the security.
"Private Placement Notes" has the meaning ascribed thereto in the
-----------------------
preamble hereof.
-12-
"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.
"Qualified Capital Stock" means, with respect to any Person, any
-----------------------
Capital Stock of such Person that is not Disqualified Capital Stock or
convertible into or exchangeable or exercisable for Disqualified Capital Stock.
"Qualified ▇▇ ▇▇▇▇▇▇ Investment" means an Investment in the Company by
------------------------------
▇▇ ▇▇▇▇▇▇ for the purpose of providing funds to either the Company or Stater
Bros. Markets, as the case may be, to purchase additional limited liability
company interests in Santee LLC, provided, however, that if such an Investment
-----------------
is made in the form of Indebtedness, then such Indebtedness shall be (a)
unsecured Indebtedness, and (b) Subordinated Indebtedness.
"Qualified Non-Recourse Indebtedness" means Indebtedness of any Person
-----------------------------------
(i) as to which neither the Company nor any of its Subsidiaries (other than any
Unrestricted Subsidiary) (a) provides credit support of any kind (including any
undertaking, agreement or instrument that would constitute Indebtedness), (b) is
directly or indirectly liable (as a guarantor or otherwise) or (c) constitutes
the lender; and (ii) no default with respect to which (including any right that
the holders thereof may have to take enforcement action against such Person)
would permit (upon notice, lapse of time or both) any holder of any other
Indebtedness of the Company or any of its Subsidiaries (other than any
Unrestricted Subsidiary) to declare a default on such other Indebtedness or
cause the payment thereof to be accelerated or payable prior to its stated
maturity; provided, however, that the Company or any Subsidiary may execute and
become obligated under the Santee Documents and perform their obligations
thereunder, and such execution, obligation and performance shall not disqualify
the Indebtedness of Santee or Santee LLC from constituting Qualified Non-
Recourse Indebtedness.
"Qualified Santee LLC Interest Sale" means a sale by Stater Bros.
----------------------------------
Markets of its interest in Santee LLC.
"Registration Rights Agreement" means the Exchange and Registration
-----------------------------
Rights Agreement, dated as of the date hereof, between the Company and the
Initial Purchaser.
"Related Person" means with respect to any Person (a) any Affiliate of
--------------
such Person, (b) any individual or other Person who directly or indirectly is
the registered or beneficial owner of 5% or more of any class of Capital Stock
of such Person or warrants, rights, options or other rights to acquire more than
5% of any class of Capital Stock of such Person, (c) any relative of such
individual by blood, marriage or adoption not more remote than first cousin and
(d) any officer or director of such Person.
"Representative" means the indenture trustee or other trustee, agent
--------------
or representative, if any, for an issue of Senior Indebtedness.
"Restricted Payment" means (i) the declaration or payment of any
------------------
dividend or the making of any other distribution or other payment (whether in
cash, securities or other property or assets of the Company or of any
Subsidiary) of the Company's or any Subsidiary's Capital Stock, or to the
holders of the Company's or any Subsidiary's Capital Stock, or
-13-
to any Affiliate of the Company, whether outstanding on the Issue Date or
thereafter (other than dividends or distributions payable solely in Qualified
Capital Stock of the Company, dividends or distributions declared or paid by any
Subsidiary to the Company); (ii) any purchase, redemption, retirement or other
acquisition for value of any Capital Stock of the Company or of any Subsidiary
or of any Affiliate of the Company, whether outstanding on the Issue Date or
thereafter, or any warrants, rights or options to purchase or acquire shares of
the Capital Stock of the Company or of any Subsidiary or of any Affiliate of the
Company, whether outstanding on the Issue Date or thereafter, held by any Person
other than the Company or one of its Wholly Owned Subsidiaries (other than
through the issuance in exchange therefor solely of Qualified Capital Stock);
(iii) the prepayment, acquisition, decrease or retirement prior to maturity,
scheduled repayment or scheduled sinking fund payment of any Indebtedness of the
Company that is subordinated (whether pursuant to its terms, structurally or by
operation of law) to the 1997 Notes, or (iv) to incur, create, assume or suffer
to exist any guarantee of Indebtedness of, or make any loan or advancement to,
or other Investment in, any Related Person of the Company (other than a Wholly
Owned Subsidiary (other than an Unrestricted Subsidiary)). The dollar amount of
any non-cash dividend or distribution by the Company or any Subsidiary on the
Company's, any Subsidiary's or any of the Company's Affiliate's Capital Stock
shall be equal to the Fair Market Value of such dividend or distribution at the
time of such dividend or distribution. Notwithstanding the foregoing, provided
--------
that no Default or Event of Default shall have occurred and be continuing or
would result as a consequence thereof, the following shall not be or be deemed
to be Restricted Payments: (a) the repayment upon the consummation of an Asset
Sale of any Indebtedness of the Company permitted by Section 4.12 which is
------------
subordinated (whether pursuant to its terms or by operation of law) to the 1997
Notes and which is secured by a Lien permitted by Section 4.13 to the extent
------------
that such Indebtedness is required to be repaid in connection with such Asset
Sale pursuant to the terms of the instrument governing such Indebtedness and
such Lien, provided that concurrent or prior repayment of the 1997 Notes is
--------
provided for with the proceeds of such Asset Sale if the 1997 Notes are secured
by a Lien pari passu with or senior to the Lien of such Indebtedness, or (b) the
---- -----
prepayment, acquisition, retirement or decrease of Indebtedness of the Company
that is subordinated (whether pursuant to its terms or by operation of law) to
the 1997 Notes that is prepaid, acquired, decreased or retired by conversion
into or in exchange for Qualified Capital Stock.
"Revolving Credit Facility" means the Company's or any Subsidiary's
-------------------------
revolving credit facilities or any replacement facilities with respect thereto.
"Santee" means Santee Dairies, Inc., a California corporation.
------
"Santee Documents" means that certain Product Purchase Agreement
----------------
between Stater Bros. Markets and Santee, that certain Owner Consent between
Stater Bros. Markets and the trustee pursuant to the trust agreement executed as
part of the Santee Financing, that certain Limited Liability Company Agreement
between Stater Bros. Markets, ▇▇▇▇▇▇ Markets, Inc. and Santee LLC and all
documents effecting and ancillary to the Santee Financing.
"Santee Financing" means the issuance by Santee of up to $80.0 million
----------------
in principal amount of notes with respect to the construction of a new dairy in
the City of Industry, California, and all transactions incident and ancillary
thereto.
-14-
"Santee LLC" means Santee Dairies, LLC, a Delaware limited liability
----------
company.
"Santee Noteholders" means the purchasers of notes with respect to the
------------------
Santee Financing.
"SEC" means the Securities and Exchange Commission.
---
"Securities Act" means the Securities Act of 1933, as amended, or any
--------------
successor statute.
"Senior Indebtedness" means (x) all obligations of the Company now or
-------------------
hereafter existing to pay the principal of, and interest (including interest
accruing on or after the filing of any petition in bankruptcy or for
reorganization to the extent a claim for post-filing interest is allowed in such
proceedings) on, any Indebtedness (other than Capitalized Lease Obligations) of
the Company, whether outstanding on the date of this Indenture or thereafter
created, incurred, assumed, guaranteed or in effect guaranteed by the Company,
(y) Indebtedness of the Company represented by Capitalized Lease Obligations if
the instrument creating or evidencing the same expressly provides that such
Indebtedness shall be senior in right of payment to the 1997 Notes and (z)
Indebtedness of the Company with respect to Interest Rate Protection Agreements.
Notwithstanding the foregoing, Senior Indebtedness shall not include (a) any
Indebtedness, if the instrument creating or evidencing the same or the
assumption or guarantee thereof expressly provides that such Indebtedness shall
not be senior in right of payment to the 1997 Notes, (b) in the case of each
1997 Note, the other 1997 Notes, (c) Indebtedness of the Company to, or
guaranteed on behalf of, an Affiliate of the Company (other than to a Subsidiary
(other than an Unrestricted Subsidiary)), (d) Indebtedness to trade creditors
incurred or assumed in the ordinary course of business in connection with
obtaining goods, materials or services, (e) any liability for federal, state,
local or other taxes owed or owing by the Company, (f) Indebtedness incurred in
violation of Section 4.12, (g) any Indebtedness which is, by its express terms,
------------
subordinated in right of payment to any other Indebtedness of the Company and
(h) Indebtedness represented by Disqualified Capital Stock.
"Series B Preferred Stock" means the Series B Preferred Stock of the
------------------------
Company.
"Shelf Registration Statement" means a registration statement filed
----------------------------
with the Commission pursuant to the Securities Act and Rule 415 promulgated
thereunder in connection with the resale of 1997 Notes pursuant to the terms set
forth in the Registration Rights Agreement.
"Stater Bros. Markets" means Stater Bros. Markets, the Company's
--------------------
principal operating Subsidiary.
"Subordinated Indebtedness" means any Indebtedness of the Company or
-------------------------
any of its Subsidiaries (whether outstanding on the date of the Indenture or
thereafter incurred) that (i) matures no earlier than the date that is one year
after the maturity date of the Notes and (ii) is subordinated with respect to
payment of principal and interest to the payment of principal and interest on
the Notes (whether upon dissolution, liquidation, or reorganization of the
Company or any such Subsidiary, or otherwise).
-15-
"subsidiary" of any Person means (a) a corporation a majority of whose
----------
Voting Stock is at the time, directly or indirectly, owned by such Person, by
one or more subsidiaries of such Person or by such Person and one or more
subsidiaries of such Person or (b) any other Person (other than a corporation)
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 thereof, have (i) at least a majority ownership interest or (ii)
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.
----------
"Texas Eastern" means Texas Eastern Corporation.
-------------
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code (S)(S)77aaa-
---
77bbbb) as in effect on the date of execution of this Indenture.
"Trust Officer" means the Chairman of the Board, the President or any
-------------
other officer or assistant officer of the Trustee assigned by the Trustee to
administer its corporate trust matters.
"Trustee" means the party named as such above until a successor
-------
replaces it in accordance with the applicable provisions of this Indenture and
thereafter means the successor.
"Unrestricted Subsidiary" means, to the extent such Persons become
-----------------------
Subsidiaries, (i) Santee LLC, (ii) Santee and (iii) any subsidiary of an
Unrestricted Subsidiary; provided however, that any Unrestricted Subsidiary that
----------------
incurs Indebtedness other than Qualified Non-Recourse Indebtedness shall no
longer be deemed an Unrestricted Subsidiary, for so long as such Indebtedness
not constituting Qualified Non-Recourse Indebtedness shall be outstanding;
provided further, that at such time as any Unrestricted Subsidiary ceases to be
----------------
an Unrestricted Subsidiary, all Indebtedness of such Subsidiary shall be deemed
to have been incurred by the Company and such Subsidiary for the purposes
hereof.
"Voting Stock" means, with respect to any Person, securities of any
------------
class or classes of Capital Stock in such Person entitling the holders thereof
(whether at all times or only so long as no senior class of stock has voting
power by reason of any contingency) to vote in the election of members of the
board of directors or other governing body of such Person.
"Wholly Owned Subsidiary" means, with respect to any Person, any
-----------------------
subsidiary of such Person all the outstanding shares of Capital Stock (other
than directors' qualifying shares, if applicable) of which are owned directly by
such Person, and with respect to the Company, shall include Stater Bros. Markets
so long as the Company or any Wholly Owned Subsidiary of the Company owns all of
the outstanding shares of Capital Stock of Stater Bros. Markets, other than the
Markets Preferred Stock held by Texas Eastern on the Issue Date.
-16-
Section 1.02 Other Definitions.
---------------------
Defined in
Term Section
---- ----------
"Asset Sale Offer"............................. 4.19(b)
"Asset Sale Offer Amount"...................... 4.19(b)
"Asset Sale Offer Payment Date"................ 4.19(b)
"Asset Sale Offer Trigger Date"................ 4.19(b)
"Bankruptcy Law"............................... 6.01
"Certificated Notes"........................... 2.01
"Change of Control Date"....................... 4.11
"Change of Control Offer"...................... 4.11
"Change of Control Payment Date"............... 4.11
"Consummation Date"............................ 4.19(b)
"Co-Registrar"................................. 2.03
"covenant defeasance".......................... 8.01(c)
"Custodian".................................... 6.01
"Default Rate"................................. 6.02
"Event of Default"............................. 6.01
"Existing Debt"................................ 4.12(b)
"Global Note".................................. 2.01
"legal defeasance"............................. 8.01(b)
"Legal Holiday"................................ 11.07
"New York Office".............................. 2.03
"Non-Global Purchasers"........................ 2.01
"Notice of Default"............................ 6.01
"Offer Amount"................................. 3.01(f)(ii)
"Paying Agent"................................. 2.03
"Payment Restriction".......................... 4.14
"Payment Blockage Period"...................... 10.03
"Purchase Date"................................ 3.01(e)
"Purchase Offer"............................... 3.01(a)
"Purchase Price"............................... 3.01(f)
"Refinance".................................... 4.12(b)
"Refinancing Indebtedness"..................... 4.12(b)
"Registrar".................................... 2.03
"Regulation S"................................. 2.06(a)
"Related Person Transaction"................... 4.16
"Successor".................................... 5.02
"Trustee Office"............................... 2.03
"United States
Government Obligations"...................... 8.01
Section 1.03 Incorporation by Reference of Trust Indenture Act.
-------------------------------------------------
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
-17-
The following TIA terms used in this Indenture have the following
meanings:
"Commission" means the SEC;
"indenture securities" means the 1997 Notes;
"indenture security holder" means a Noteholder or Holder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on the 1997 Notes means the Company or any other obligor on
the 1997 Notes.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
have the meanings so assigned to them.
Section 1.04 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 as in effect at the date hereof;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular; and
(5) the words "herein," "hereof" and "hereunder" and other words
of similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision.
ARTICLE 2
THE 1997 NOTES
Section 2.01 Form and Dating.
---------------
The Private Placement Notes shall be substantially in the form set
forth in Exhibit A, and the Exchange Notes shall be substantially in the form
---------
set forth as Exhibit B, which exhibits are part of this Indenture, with such
---------
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture. The 1997 Notes may have notations,
legends or
-18-
endorsements required by law, stock exchange rule or usage. The Company shall
approve the forms of the 1997 Notes and any notation, legend or endorsement on
them. Each 1997 Note shall be dated the date of its authentication. The
aggregate principal amount of the Private Placement Notes shall be no greater
than $100.0 million; if Exchange Notes are issued, the aggregate principal
amount of Private Placement Notes then outstanding shall be reduced by the
aggregate principal amount of Exchange Notes so issued.
Private Placement Notes sold to Qualified Institutional Buyers will be
initially issued in global form, substantially in the form of Exhibit A
---------
(including footnotes 1 and 2 thereto) and the Exchange Notes, if any, issued to
Qualified Institutional Buyers in exchange for Private Placement Notes will be
initially issued in global form, substantially in the form of Exhibit B
---------
(including footnotes 1 and 2 thereto) (each of Exhibit A and Exhibit B,
--------- ---------
including such footnotes, hereinafter referred to as a "Global Note", and with
-----------
any Private Placement Notes issued in exchange therefor, the "Global Notes").
------------
Each Global Note will represent such of the outstanding 1997 Notes as shall be
specified therein and will provide that it represents the aggregate amount of
outstanding 1997 Notes from time to time endorsed thereon and that the aggregate
amount of outstanding 1997 Notes represented thereby may from time to time be
reduced or increased, as appropriate, to reflect transfers, exchanges and
redemptions. Any endorsement of a Global Note to reflect the amount of any
increase or decrease in the amount of outstanding 1997 Notes represented thereby
shall be made by the Trustee or the Global Note Custodian, at the direction of
the Trustee, in accordance with instructions given by the Holder thereof.
Private Placement Notes (i) purchased by or transferred to foreign
purchasers or Accredited Investors who are not Qualified Institutional Buyers or
(ii) held by Qualified Institutional Buyers who elect to take physical delivery
of their certificates (collectively, the "Non-Global Purchasers") will be issued
---------------------
in the registered form of certificated Notes, substantially in the form of
Exhibit A (excluding footnotes 1 and 2 thereto) and Exchange Notes that are
---------
issued to Holders other than Qualified Institutional Buyers in exchange for
Private Placement Notes will initially be issued in the form of certificated
Notes, substantially in the form of Exhibit B (excluding footnotes 1 and 2
---------
thereto) (collectively, the "Certificated Notes"). Upon the transfer to a
Qualified Institutional Buyer of Certificated Notes initially issued to a Non-
Global Purchaser, such Certificated Notes will, unless the transferee requests
otherwise or the Global Note has previously been exchanged in whole for
Certificated Notes, be exchanged for an interest in the Global Note.
Payment of the principal of and premium, if any, and interest on any
Certificated Note shall be made to the Holder thereof.
Payment of the principal of and premium, if any, and interest on the
Global Note will be made to the Depositary or its nominee, as the case may be,
as the registered owner of the Global Note, for immediate credit to the holders
of beneficial interests therein through the accounts of the Participants.
The terms and provisions contained in the 1997 Notes 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.
-19-
Section 2.02 Execution and Authentication.
----------------------------
Two Officers shall sign the 1997 Notes for the Company by manual
or facsimile signature.
If an Officer whose signature is on a 1997 Note no longer holds
that office at the time the 1997 Note is authenticated, the 1997 Note shall
nevertheless be valid.
A 1997 Note shall not be valid until authenticated by the manual
signature of the Trustee. The signature shall be conclusive evidence that the
1997 Note has been authenticated under this Indenture.
Upon a written order of the Company signed by an Officer of the
Company, the Trustee shall authenticate 1997 Notes for original issue up to the
aggregate principal amount of $100.0 million. The aggregate principal amount of
1997 Notes outstanding at any time may not exceed that amount except as provided
in Section 2.07.
------------
The 1997 Notes shall be issuable only in registered form without
coupons and only in denominations of $1,000 or any integral multiple thereof.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate 1997 Notes. Unless limited by the terms of its
appointment, an authenticating agent may authenticate 1997 Notes 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 right as an Agent to deal with the Company or an Affiliate.
Section 2.03 Registrar; Paying Agent; Depositary; Global Note Custodian.
----------------------------------------------------------
The Company shall maintain or cause to be maintained in the City
of New York, State of New York (the "Trustee Office"), and, to the extent
--------------
required by Applicable Law, (including without limitation any regulation or rule
of a national securities exchange), in the Borough of Manhattan, The City of New
York (the "New York Office"), State of New York, and in such other locations as
---------------
it shall determine: (i) an office or agency where securities may be presented
for registration of transfer or for exchange ("Registrar"); and (ii) an office
---------
or agency where 1997 Notes may be presented for payment ("Paying Agent"). The
------------
Registrar shall keep a register of the 1997 Notes and of their transfer and
exchange. The Company may appoint one or more co-registrars (a "Co-Registrar"),
and one or more additional paying agents. The term Paying Agent includes any
additional paying agent. The Company may change any Paying Agent, Registrar or
Co-Registrar without prior notice to the Holders. The Company shall promptly
notify the Trustee in writing of the name and address of any Agent not a party
to this Indenture and shall enter into an appropriate agency agreement with any
Registrar, Paying Agent or Co-Registrar not a party to this Indenture. The
agreement shall implement the provisions of this Indenture that relate to such
Agent. The Company or any of its subsidiaries may act as Paying Agent, Registrar
or Co-Registrar. If the Company fails to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee shall act as such, and the Trustee shall
initially act as such and shall be entitled to appropriate compensation in
accordance with Section 7.07. The Trustee shall cause to be maintained the
------------
Trustee Office and the New York Office (to the extent required by Applicable
Law) as long as it acts as Registrar or Paying Agent.
-20-
The Company initially appoints The Depository Trust Company to act
as Depositary with respect to the Global Notes and initially appoints First
Trust of New York, National Association, as custodian, to act as Global Note
Custodian with respect to the Global Notes.
Section 2.04 Paying Agent to Hold Money in Trust.
-----------------------------------
Not later than two Business Days prior to each due date for the
payment of the principal of and premium, if any, and interest on any of the 1997
Notes, the Company shall deposit with a Paying Agent available funds sufficient
to pay such principal and interest so becoming due to Holders. The Company
shall require each Paying Agent (other than the Trustee, who hereby so agrees),
to agree in writing that the Paying Agent will hold in trust for the benefit of
Noteholders or the Trustee all money held by the Paying Agent for the payment of
principal or interest on the 1997 Notes, and will promptly notify the Trustee in
writing of any delay or default by the Company in making any such payment.
While any such delay in payment or default continues, the Trustee may require a
Paying Agent to pay all money held by it to the Trustee. The Company at any
time may require a Paying Agent to pay all money held by it to the Trustee.
Upon payment over to the Trustee, the Paying Agent (if other than the Company or
a Subsidiary) shall have no further liability for such money. If the Company or
a Subsidiary acts as Paying Agent, it shall segregate and hold in a separate
trust fund for the benefit of the Noteholders all money held by it as Paying
Agent.
Section 2.05 Noteholder 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
Noteholders. If the Trustee is not the Registrar, the Company shall furnish to
the Trustee on or at least five (5) Business Days 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 Noteholders.
Section 2.06 Transfer and Exchange.
---------------------
(a) Transfer and Exchange of Certificated Notes. When Certificated
-------------------------------------------
Notes are presented to the Registrar or Co-Registrar with a request to register
the transfer of the Certificated Notes or to exchange such Certificated Notes
for an equal principal amount of Certificated Notes of other authorized
denominations, the Registrar or Co-Registrar shall register the transfer or make
the exchange as requested if its requirements for such transactions are met;
provided, however, that the Certificated Notes presented or surrendered for
-------- -------
registration of transfer or exchange:
(i) shall be duly endorsed or accompanied by a written instruction
of transfer in form satisfactory to the Registrar or Co-Registrar, duly
executed by the Holder thereof or by such Holder's attorney, duly
authorized in writing; and
(ii) in the case of Legended Notes that are Certificated Notes,
shall be accompanied by the following additional information and documents,
as applicable:
(A) if such Legended Note is being delivered to the Registrar
or Co-Registrar by a Noteholder for registration in the name of such
Noteholder, without transfer, a certification from such Noteholder to
that effect (in substantially the form of Exhibit C hereto); or
---------
-21-
(B) if such Legended Note is being transferred to a Qualified
Institutional Buyer in accordance with Rule 144A under the Securities
Act or pursuant to an exemption from registration in accordance with
Rule 144 or Rule 145 under the Securities Act or a transaction meeting
the requirements of Regulation S under the Securities Act ("Regulation
----------
S") or pursuant to an effective registration statement under the
-
Securities Act, a certification to that effect (in substantially the
form of Exhibit C hereto); or
---------
(C) if such Legended Note is being transferred in reliance on
another exemption from the registration requirements of the Securities
Act or in a transaction exempt from the registration requirements of
the Securities Act, a certification to that effect (in substantially
the form of Exhibit C hereto) and an Opinion of Counsel to the effect
---------
that such transfer does not require registration under the Securities
Act (in substantially the form of Exhibit D hereto).
---------
(b) Restrictions on Transfer of a Certificated Note for a Beneficial
----------------------------------------------------------------
Interest in a Global Note. A Certificated Note may not be exchanged for a
-------------------------
beneficial interest in a Global Note except upon satisfaction of the
requirements set forth below. Upon receipt by the Trustee of a Certificated
Note, duly endorsed or accompanied by appropriate instruments of transfer, in
form satisfactory to the Trustee, together with:
(i) if such Certificated Note is a Legended Note, certification (in
substantially the form of Exhibit C hereto) that such Certificated Note is
---------
being transferred to a Qualified Institutional Buyer in accordance with
Rule 144A under the Securities Act or in a transaction meeting the
requirements of Regulation S; and
(ii) whether or not such Certificated Note is a Legended Note, written
instructions directing the Trustee to make, or to direct the Global Note
Custodian to make, an endorsement on the Global Notes to reflect an
increase in the aggregate principal amount of the 1997 Notes represented by
the Global Notes;
then the Trustee shall cancel such Certificated Note and cause, or direct the
Global Note Custodian to cause, in accordance with the standing instructions and
procedures existing between the Depositary and the Global Note Custodian, the
aggregate principal amount of 1997 Notes represented by the Global Notes to be
increased accordingly. If no Global Notes are then outstanding, the Company
shall issue and the Trustee shall authenticate a new Global Note in the
appropriate principal amount.
(c) Transfer and Exchange of Global Notes. The transfer and exchange of
-------------------------------------
Global Notes or beneficial interests therein shall be effected through the
Depositary, in accordance with this Indenture (including the restrictions on
transfer set forth herein) and the procedures of the Depositary therefor.
(d) Transfer and Exchange of a Beneficial Interest in a Global Note for a
---------------------------------------------------------------------
Certificated Note. Any Person having a beneficial interest in a Global Note may
-----------------
upon request exchange such beneficial interest for a Certificated Note. Upon
receipt by the Trustee of written instructions including registration
instructions from the Depositary or its nominee on behalf of any Person having a
beneficial interest in a Global Note, and, in the case of a beneficial interest
in a Legended Note only, the following additional information and documents:
-22-
(i) if such beneficial interest is being transferred to the Person
designated by the Depositary as being the beneficial owner, a certification
from such Person to that effect (in substantially the form of Exhibit C
---------
hereto);
(ii) if such beneficial interest is being transferred to a Qualified
Institutional Buyer in accordance with Rule 144A under the Securities Act
or pursuant to an exemption from registration in accordance with Rule 144
or Rule 145 or in a transaction meeting the requirements of Regulation S or
pursuant to an effective registration statement under the Securities Act, a
certification to that effect from the transferee or transferor (in
substantially the form of Exhibit C hereto); or
---------
(iii) if such beneficial interest is being transferred in reliance on
another exemption from the registration requirements of the Securities Act,
a certification to that effect from the transferee or transferor (in
substantially the form of Exhibit C hereto) and an Opinion of Counsel to
---------
the effect that such transfer does not require registration under the
Securities Act (in substantially the form of Exhibit D hereto);
---------
then the Trustee, or the Global Note Custodian at the direction of the Trustee,
will cause, in accordance with the standing instructions and procedures existing
between the Depositary and the Global Note Custodian, the aggregate principal
amount of the Global Note to be reduced and, following such reduction, the
Company will execute and the Trustee will authenticate and deliver a
Certificated Note to the transferee. Certificated Notes issued in exchange for
a beneficial interest in a Global Note pursuant to this Section 2.06(d) shall be
---------------
registered in such names and in such authorized denominations as the Depositary,
pursuant to instructions from its direct or indirect Participants or otherwise,
shall instruct the Trustee. The Trustee shall deliver such Certificated Notes to
the Persons in whose names such 1997 Notes are so registered.
(e) Restrictions on Transfer and Exchange of Global Notes. Notwithstanding
-----------------------------------------------------
any other provisions of this Indenture (other than the provisions set forth in
Section 2.06(f)), a Global Note may not be transferred as a whole except by the
---------------
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary or by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary.
(f) Authentication of Certificated Notes in Absence of Depositary or at
-------------------------------------------------------------------
Company's Election. If at any time (i) the Depositary for a Global Note
------------------
notifies the Company that the Depositary is unwilling or unable to continue as
Depositary for the Global Note and a successor Depositary for the Global Note is
not appointed by the Company within 90 days after delivery of such notice, or
(ii) the Company, at its sole discretion, notifies the Trustee in writing that
it elects to cause the issuance of Certificated Notes under this Indenture, then
the Company will execute, and the Trustee, upon receipt of an Officers'
Certificate requesting the authentication and delivery of Certificated Notes,
and, if requested, an Opinion of Counsel, will authenticate and deliver
Certificated Notes, in an aggregate principal amount equal to the principal
amount of the Global Note, in exchange for such Global Note.
(g) Cancellation and/or Adjustment of Global Note. At such time as all
---------------------------------------------
beneficial interests in a Global Note have either been exchanged for
Certificated Notes, redeemed, converted, repurchased, or canceled or, with
respect to a Global Note that is a Private Placement Note, exchanged for
beneficial interests in Exchange Notes, such Global Note shall be returned to or
retained by and
-23-
canceled by the Trustee. At any time prior to such cancellation, if any
beneficial interest in a Global Note is exchanged for Certificated Notes,
redeemed, converted, repurchased, canceled or, with respect to a Global Note
that is a Private Placement Note, exchanged for beneficial interests in Exchange
Notes, the aggregate principal amount of 1997 Notes represented by such Global
Note shall be reduced and an endorsement shall be made on such Global Note, by
the Trustee or the Global Note Custodian at the direction of the Trustee, to
reflect such reduction.
(h) Legends. Except as otherwise provided below, each certificate
-------
evidencing the Global Notes and the Certificated Notes (and all 1997 Notes
issued in exchange therefor or substitution thereof) shall bear a legend in
substantially the following form:
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN
A TRANSACTION EXEMPT FROM REGISTRATION UNDER ▇▇▇▇▇▇▇ ▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE SECURITY
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD, OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM. EACH PURCHASER OF
THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE
RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES
ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED
HEREBY AGREES FOR THE BENEFIT OF THE ISSUER THAT (A) SUCH SECURITY MAY BE
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (i)(a) TO A PERSON WHO THE
SELLER REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED
IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144 UNDER THE SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A
FOREIGN PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER
THE SECURITIES ACT, (d) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS
DEFINED IN RULE 501(a)(1), (2), (3) or (7) OF THE SECURITIES ACT (AN
"INSTITUTIONAL ACCREDITED INVESTOR")) THAT, PRIOR TO SUCH TRANSFER,
FURNISHES THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS
AND AGREEMENTS (THE FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE) AND, IF
SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF NOTES LESS
THAN $100,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE ISSUER THAT SUCH
TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, OR (e) IN ACCORDANCE
WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE ISSUER SO REQUESTS, (ii)
TO THE ISSUER OR (iii) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND,
IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE
HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY
PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE
RESTRICTIONS SET FORTH IN (A) ABOVE.
-24-
Upon any sale or transfer of a Legended Note (including any Legended Note
represented by a Global Note) that (i) satisfies the conditions set forth in
clauses (A)(c), (d) or (e) of the above legend, (ii) is effected pursuant to an
--------------------------
effective registration statement under the Securities Act, (iii) consists of an
exchange of Private Placement Notes for Exchange Notes pursuant to the
Registration Rights Agreement or (iv) in connection with which the Trustee
receives an Opinion of Counsel to the effect that such 1997 Note will no longer
be subject to resale restrictions under federal and state securities laws, then
(A) in the case of any Legended Note that is a Certificated Note, the Registrar
or Co-Registrar shall permit the Holder thereof to exchange such Legended Note
for a Certificated Note that does not bear the legend set forth above and shall
rescind any restriction on the transfer of such 1997 Note, and (B) in the case
of a Legended Note represented by a Global Note, such 1997 Note shall no longer
be subject to the restrictions contained in the above legend (but still subject
to the provisions of Section 2.06(c) hereof); provided, however, that with
--------------- -------- -------
respect to any request for an exchange of a Legended Note for a Certificated
Note that does not bear the above legend, which request is made in reliance upon
clause (i) or (ii) above, the Holder thereof shall certify to that effect in
------------------
writing to the Registrar or Co-Registrar (such certification to be substantially
in the form of Exhibit C hereto).
---------
(i) Obligations with respect to Transfers and Exchanges of Certificated
-------------------------------------------------------------------
Notes.
-----
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate Certificated Notes
and Global Notes at the Registrar's or Co-Registrar's request.
(ii) No service charge shall be made to a Noteholder 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
charges payable in connection therewith (other than any such transfer taxes
or similar governmental charges payable upon exchange or transfer pursuant
to Sections 2.10, 3.01(d)(vii) and 9.05 hereof).
------------------------------------
(iii) The Registrar or Co-Registrar shall not be required to
register the transfer or exchange of any Certificated Note selected for
repurchase pursuant to a Purchase Offer in whole or in part, except the
unpurchased portion of any Certificated Note being repurchased in part.
(iv) All Certificated Notes and Global Notes issued upon any
registration of transfer or exchange of Certificated Notes or Global Notes
shall be the valid obligations of the Company, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Certificated
Notes or Global Notes surrendered upon such registration of transfer or
exchange.
(v) The Company shall not be required (A) to issue, register the
transfer of or exchange 1997 Notes during a period beginning at the opening
of business 15 days before the Purchase Date in connection with a Purchase
Offer under Section 3.01 and ending at the close of business on such
------------
Purchase Date, (B) to register the transfer or exchange of any 1997 Note
purchased in whole or in part, except the unpurchased portion of any 1997
Note being purchased in part, or (C) to register the transfer or exchange
of a 1997 Note between a record date and the next succeeding interest
payment date.
-25-
(vi) Prior to due presentment for registration of transfer of
any 1997 Note, the Trustee, any Agent and the Company shall deem and treat
the Person in whose name any 1997 Note is registered as the absolute owner
of such 1997 Note for the purpose of receiving payment of principal of and
premium, if any, and interest on such 1997 Note and for all other purposes
whatsoever, whether or not such 1997 Note is overdue, and neither the
Trustee, any Agent nor the Company shall be affected by notice to the
contrary.
Section 2.07 Replacement Notes.
-----------------
If any mutilated 1997 Note is surrendered to the Trustee or any
Holder claims, to the satisfaction of the Trustee and the Company, that any 1997
Note has been lost, destroyed or wrongfully taken, the Company shall issue and
the Trustee shall authenticate a replacement 1997 Note if the Trustee's
requirements are met. If required by the Trustee or the Company as a condition
of receiving a replacement 1997 Note, the Holder shall provide an indemnity bond
sufficient, in the judgment of both the Company and the Trustee, to fully
protect the Company, the Trustee, any Paying Agent and any authenticating agent
from any loss that any of them may suffer if such 1997 Note is replaced. The
Company shall be entitled to charge the holders of such 1997 Note for its
expenses in replacing any such 1997 Note.
Each replacement 1997 Note shall be an additional Obligation of
the Company.
Section 2.08 Outstanding 1997 Notes.
----------------------
The 1997 Notes outstanding at any time are all the 1997 Notes
properly authenticated by the Trustee except for those canceled by the Trustee,
those delivered to it for cancellation, and those described in this Section 2.08
------------
as not outstanding.
If a 1997 Note is replaced pursuant to Section 2.07 (other than a
------------
mutilated 1997 Note surrendered for replacement), it shall cease to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced 1997 Note is held by a bona fide purchaser. A mutilated 1997 Note
shall cease to be outstanding upon surrender of such 1997 Note and replacement
thereof pursuant to Section 2.07.
------------
If 1997 Notes are considered paid in full under Section 4.01, they
------------
cease to be outstanding and interest on them ceases to accrue.
Subject to Section 2.09, a 1997 Note does not cease to be
------------
outstanding because the Company or an Affiliate of the Company holds the 1997
Note.
Section 2.09 When Treasury Notes Disregarded.
-------------------------------
In determining whether the Holders of the required aggregate
principal amount of 1997 Notes have concurred in any direction, waiver or
consent, 1997 Notes owned by the Company or an Affiliate of the Company shall be
considered as though they are not outstanding, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only 1997 Notes which the Trustee knows are so
owned shall be so disregarded.
Section 2.10 Temporary Notes.
---------------
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Until Notes in certificated form are ready for delivery, the
Company may prepare and the Trustee shall authenticate temporary Notes.
Temporary Notes shall be substantially in the form of Notes in certificated form
but may have variations that the Company considers appropriate for temporary
Notes. Without unreasonable delay, the Company shall prepare and the Trustee
shall authenticate Notes in certificated form in exchange for temporary Notes.
Until such exchange, such temporary Notes shall be entitled to the same rights,
benefits and privileges as the Notes in certificated form.
Section 2.11 Cancellation.
------------
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange, or payment.
The Trustee and no one else shall cancel all Notes surrendered for registration
of transfer, exchange, payment, replacement, or cancellation, shall dispose of
canceled Notes subject to record retention requirements of the Exchange Act, and
shall promptly provide the Company with a certificate executed by an authorized
signatory certifying such destruction. The Company may not issue new Notes to
replace Notes that it has paid or that have been delivered to the Trustee for
cancellation.
Section 2.12 Defaulted Interest.
------------------
If the Company fails to make a payment of interest on the 1997
Notes, it shall pay such defaulted interest plus, to the extent lawful, any
interest payable on the defaulted interest to the persons who are Noteholders on
a subsequent special record date in each case at the rate provided in the 1997
Notes and in Section 4.01. The Company shall set any such record date and
------------
payment date and shall so notify the Trustee in writing at least 18 Business
Days before such record date, unless the Trustee shall elect to set the record
date pursuant to Section 6.10 hereof. At least 15 Business Days before any such
------------
record date, the Company (or the Trustee, in the name of, upon written direction
by, and at the expense of, the Company) shall mail to Noteholders a notice that
states the record date, payment date, and amount of such interest to be paid on
account of each 1997 Note.
Section 2.13 CUSIP Number.
------------
The Company in issuing the 1997 Notes may use a CUSIP number, and
if so, such CUSIP number shall be included in notices of redemption or exchange
as a convenience to Holders; provided, however, 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 1997 Notes and that reliance may be
placed only on the other identification numbers printed on the 1997 Notes. The
Company shall promptly notify the Trustee of any change in the CUSIP number.
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ARTICLE 3
REPURCHASE AND OPTIONAL REDEMPTION
Section 3.01 Purchase Offers.
---------------
(a) In the event that, pursuant to Section 4.11 or 4.19 hereof, the
--------------------
Company shall commence an offer to purchase 1997 Notes (a "Purchase Offer"), the
--------------
Company shall follow the procedures in this Section 3.01.
------------
(b) Notice of a Change of Control Offer shall be sent to the Trustee
not more than 25 days after the Change in Control Date and to the Noteholders as
shown on the register of Holders and the Trustee not more than 30 days after the
Change in Control Date. The Change of Control Offer shall commence on the date
such notice is given and shall remain open for not less than 30 days and nor
more than 45 days, except to the extent that a longer period is required by
Applicable Law. Upon expiration of such Change in Control Offer, the Company
shall promptly purchase for Cash the 1997 Notes delivered for purchase at a
purchase price equal to 101% of the principal amount thereof, plus accrued and
unpaid interest thereon, if any.
(c) Notice of an Asset Sale Offer shall be sent to the Trustee within
five days after the Asset Sale Offer Trigger Date as shown on the register of
Holders and the Trustee in writing and pursuant to Section 3.01(f) and to the
---------------
Noteholders within 10 days following the Asset Sale Offer Trigger Date, and
shall comply with the procedures reasonably determined by the Company. An Asset
Sale Offer shall remain open for a period of 20 Business Days or such longer
period as may be required by Applicable Law. Upon expiration of such Asset Sale
Offer, the Company shall promptly purchase for Cash the 1997 Notes delivered for
purchase at a purchase price equal to 100% of the outstanding principal amount
thereof, plus accrued and unpaid interest thereon, if any. To the extent Holders
properly tender 1997 Notes in an amount exceeding the Asset Sale Offer Amount,
the Trustee shall select the 1997 Notes to be redeemed on a pro rata basis or by
lot, subject to compliance with the requirements of any national securities
exchange on which the 1997 Notes are then listed. Notwithstanding the foregoing,
if an Asset Sale Offer Amount is less than $5.0 million, the application of the
Net Cash Proceeds constituting such Asset Sale Offer Amount to an Asset Sale
Offer may be deferred until such time as such Asset Sale Offer Amount plus the
aggregate amount of all Asset Sale Offer Amounts arising subsequent to the Asset
Sale Offer Trigger Date relating to such initial Asset Sale Offer Amount from
all Asset Sales by the Company and its Subsidiaries aggregate at least $5.0
million at which time the Company or said Subsidiary shall apply all Net Cash
Proceeds constituting all Asset Sale Offer Amounts that have been so deferred to
make an Asset Sale Offer (the first date the aggregate of all such deferred
Asset Sale Offer Amounts is equal to $5.0 million or more shall be deemed to be
an Asset Sale Offer Trigger Date). Pending application to an Asset Sale Offer
the Company shall invest such Asset Sale Offer Amounts in Permitted Investments.
(d) Upon receiving notice of a Purchase Offer under this Section
-------
3.01, Holders may elect to tender their 1997 Notes in whole or in part in
----
integral multiples of $1,000 in exchange for Cash. Tenders by Holders will be
revocable until 4 P.M., New York City time, on the Business Day immediately
preceding the applicable payment date. For purposes of any Purchase Offer, the
Company will not act as paying agent.
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(e) If the last day of the applicable Purchase Offer period (the
"Purchase Date") is on or after an interest payment record date and on or before
--------------
the related interest payment date, any accrued interest will be paid to the
Person in whose name a 1997 Note is registered at the close of business on such
record date.
(f) The Company (with written notice to the Trustee) or the Trustee
(at the expense and written direction of the Company) shall send, by first class
mail, a notice to each of the Noteholders, which shall govern the terms of the
Purchase Offer and shall state:
(i) that the Purchase Offer is being made pursuant to this Section
-------
3.01 and, as applicable, Section 4.11 or 4.19 hereof and the length of the
---- --------------------
Change in Control Offer or Asset Sale Offer, as applicable;
(ii) the amount of 1997 Notes to be purchased pursuant to the
applicable Purchase Offer (the "Offer Amount"), the price at which the 1997
------------
Notes will be purchased pursuant to the applicable Purchase Offer (the
"Purchase Price") and the Purchase Date and (A) in the case of a Purchase
---------------
Offer made pursuant to Section 4.19 hereof, the amount of the remaining Net
------------
Cash Proceeds resulting from the Asset Sale, and (B) in the case of a
Purchase Offer made pursuant to Section 4.11 hereof, that all 1997 Notes
------------
tendered will be accepted for payment;
(iii) that any 1997 Note not tendered or accepted for payment will
continue to accrue interest;
(iv) that any 1997 Note accepted for payment pursuant to the Purchase
Offer shall cease to accrue interest after the Purchase Date;
(v) that Noteholders electing to have a 1997 Note purchased pursuant
to any Purchase Offer will be required to surrender the 1997 Note, with the
form entitled "Option of Noteholder to Elect Purchase" on the reverse of
the 1997 Note completed, to the Company, a depositary, if appointed by the
Company, or a Paying Agent at the address specified in the notice;
(vi) that Noteholders will be entitled to withdraw their election if
the Company, depositary or Paying Agent, as the case may be, receives, not
later than the expiration of the Change in Control Offer or Asset Sale
Offer, as applicable, or such longer period as may be required by
applicable law, a letter or a telegram, telex, facsimile transmission
(promptly followed by a letter) setting forth the name of the Noteholder,
the principal amount of the 1997 Note the Noteholder delivered for purchase
and a statement that such Noteholder is withdrawing such Noteholder's
election to have the 1997 Note purchased; and
(vii) that Noteholders whose 1997 Notes are purchased only in part
will be issued new 1997 Notes equal in principal amount to the unpurchased
portion of the 1997 Notes surrendered.
(g) At least one Business Day prior to the Purchase Date, the Company
shall irrevocably deposit with the Trustee or a Paying Agent in immediately
available funds an amount equal to the aggregate Purchase Price of the 1997
Notes to be purchased pursuant to the Purchase Offer, to be held for payment in
accordance with this Section 3.01; provided that such funds shall be
------------ --------
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invested in Permitted Investments for the benefit of the Company until the
Purchase Date. On the Purchase Date, the Company shall, to the extent lawful,
(i) accept for payment 1997 Notes or portions thereof validly tendered pursuant
to the Purchase Offer, up to the Offer Amount, (ii) deliver or cause the
Depositary or Paying Agent to deliver to the Trustee Notes so accepted and (iii)
deliver to the Trustee an Officers' Certificate stating such 1997 Note or
portions thereof have been accepted for payment by the Company in accordance
with the terms of this Section 3.01. The Paying Agent or the Trustee, as the
------------
case may be, shall promptly (but in any case not later than ten days after the
Purchase Date) mail or deliver to each tendering Noteholder an amount equal to
the Purchase Price of the 1997 Notes tendered by such Noteholder and accepted by
the Company for purchase, and the Trustee shall promptly authenticate and mail
or deliver to such Noteholders a new 1997 Note equal in principal amount to any
unpurchased portion of the 1997 Note surrendered. Any 1997 Notes not so accepted
shall be promptly mailed or delivered by or on behalf of the Company to the
Holder thereof. The Company shall publicly announce in a newspaper of general
circulation the results of the Purchase Offer on the Purchase Date.
(h) The Purchase Offer shall be made by the Company in compliance with
all tender offer rules, including but not limited to, Section 14(e) under the
Exchange Act and Rule 14e-1 thereunder, to the extent applicable to such offer,
and shall include all instructions and materials necessary to enable Noteholders
to tender their 1997 Note.
Section 3.02 Notices to Trustee.
------------------
If the Company elects to redeem the 1997 Notes pursuant to the
optional redemption provisions of paragraph 5 of the 1997 Notes, it shall notify
the Trustee in writing of the redemption date and the principal amount of the
1997 Notes to be redeemed at least 10 days prior to the date the notice required
pursuant to Section 3.04 was sent to Holders.
------------
The Company shall give each notice provided for in this Section not
less than 40 nor more than 70 days before the scheduled redemption date (unless
a shorter notice period shall be satisfactory to the Trustee); provided,
however, that the Trustee shall have no liability to any Holder if it deems such
shorter notice period satisfactory to it in its sole discretion and without
consideration of the benefit of any Holder.
Section 3.03 Selection of 1997 Notes to Be Redeemed.
--------------------------------------
Except as provided below, if less than all of the 1997 Notes are to be
redeemed, the Trustee shall select the 1997 Notes or portions thereof to be
redeemed on a pro rata basis or by lot among the Holders of the 1997 Notes in
accordance with a method the Trustee considers fair and appropriate (in such
manner as complies with applicable legal and stock exchange requirements, if
any).
The amount of 1997 Notes shall be calculated as the aggregate
principal amount of 1997 Notes originally issued under this Indenture less the
aggregate principal amount of any 1997 Notes previously redeemed or tendered
pursuant to Section 3.01. The Trustee shall make the selection not more than 60
------------
days and not less than 30 days before the redemption date from outstanding 1997
Notes not previously called for redemption or tendered pursuant to Section 3.01.
------------
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The Trustee shall promptly notify the Company of the 1997 Notes or
portions of 1997 Notes to be called for redemption. The Trustee may select for
redemption portions of the principal amount of 1997 Notes that have
denominations of $1,000 or larger. 1997 Notes and portions of them the Trustee
selects shall be in amounts of $1,000 or integral multiples of $1,000.
Provisions of this Indenture that apply to 1997 Notes called for redemption also
apply to portions of 1997 Notes called for redemption.
Section 3.04 Notice of Redemption.
--------------------
At least 30 days but not more than 60 days before a redemption date,
the Company shall mail by first class mail, postage prepaid a notice of
redemption to each Holder whose 1997 Notes are to be redeemed at its address of
record; provided that the Company shall notify the Trustee in writing of any
--------
such redemption date not less than 40 days prior to such redemption date.
The notice shall identify the 1997 Notes to be redeemed and shall
state:
(1) the redemption date;
(2) the redemption price;
(3) if any 1997 Notes are being redeemed in part, the portion of
the principal amount of such 1997 Note to be redeemed and that, after the
redemption date, upon surrender of such 1997 Note, a new 1997 Note or 1997
Notes in principal amount equal to the unredeemed portion will be issued;
(4) the name and address of the Paying Agent;
(5) that 1997 Notes called for redemption must be surrendered to
the Paying Agent to collect the redemption price plus accrued interest;
(6) that, unless the Company defaults in making the redemption
payment, interest on 1997 Notes called for redemption ceases to accrue on
and after the redemption date, and that if 1997 Notes are redeemed on or
after an interest record date but on or prior to the related interest
payment date, then any accrued and unpaid interest shall be paid to the
Person in whose name such 1997 Notes were registered at the close of
business on such record date; and
(7) the paragraph of the 1997 Notes pursuant to which the 1997
Notes called for redemption are being redeemed.
At the Company's written request, the Trustee shall give the notice of
redemption in the Company's name and at its expense.
Section 3.05 Effect of Notice of Redemption.
------------------------------
Once notice of redemption is mailed, 1997 Notes called for redemption
become due and payable on the redemption date at the price set forth in the 1997
Notes. Unless the Company defaults in making the redemption payment, on and
after the redemption date, interest shall cease to
-31-
accrue on the 1997 Notes or the portions of 1997 Notes called for redemption. If
a 1997 Note is redeemed on or after an interest record date but on or prior to
the related interest payment date, then any accrued and unpaid interest shall be
paid to the person in whose name such 1997 Note was registered at the close of
business on such record date. If any 1997 Notes called for redemption shall not
be so paid upon surrender thereof for redemption, the principal (and premium, if
any) shall, until paid, bear interest from the redemption date at the rate borne
by the 1997 Notes.
Section 3.06 Deposit of Redemption Price.
---------------------------
No later than one Business Day prior to the redemption date, the
Company shall deposit with the Trustee or with the Paying Agent immediately
available funds sufficient to pay the redemption price of and accrued interest
on all 1997 Notes to be redeemed on that date; provided that such funds shall be
--------
invested for the benefit of the Company in Permitted Investments until the
redemption date. The Trustee or the Paying Agent shall promptly return to the
Company any money not required for that purpose.
Section 3.07 1997 Notes Redeemed in Part.
---------------------------
Upon surrender of a 1997 Note that is redeemed in part, the Company
shall issue and the Trustee shall authenticate for the Holder at the expense of
the Company a new 1997 Note equal in principal amount to the unredeemed portion
of the 1997 Note surrendered.
ARTICLE 4
COVENANTS OF THE COMPANY
Section 4.01 Payment of 1997 Notes.
---------------------
The Company shall pay the principal of and premium, if any, and
interest on the 1997 Notes on the dates and in the manner provided in this
Indenture and the 1997 Notes. Principal, premium and interest shall be
considered paid on the date due if the Trustee or Paying Agent (other than the
Company or a subsidiary) holds on that date money designated for and sufficient
to pay all principal, premium, if any, and interest then due. To the extent
lawful, the Company shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on (i) overdue principal, at the rate borne
by the 1997 Notes, compounded semiannually, and (ii) overdue installments of
interest (without regard to any applicable grace period) at the Default Rate.
Notwithstanding the foregoing, at no time shall the maximum aggregate interest
rate borne by the 1997 Notes exceed the lesser of (a) the initial interest rate
payable on the 1997 Notes plus 2.50% per annum and (b) the maximum amount
--- -----
permitted under applicable usury laws. The interest rate borne by the 1997
Notes shall be reduced by the amount of any additional interest pursuant to
paragraph 1 of the 1997 Notes on and after the date, if any, on which the
Company satisfies its obligations with respect to the Exchange Offer and/or the
Shelf Registration Statement.
Section 4.02 SEC Reports.
-----------
(a) The Company shall deliver to the Trustee, and to the Holders,
within 15 days after it files them with the SEC, copies of the annual and
quarterly reports and of the information,
-32-
documents, and other reports (or copies of such portions of any of the foregoing
as the SEC may by rules and regulations prescribe) that the Company is required
to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act,
provided that the Company shall not be required to deliver to the Trustee more
--------
than one set of any exhibits to any of the foregoing and the Trustee shall not
be required to deliver copies of any such exhibits to the Holders. The Company
shall timely comply with its reporting and filing obligations under the
applicable federal securities laws.
(b) To the extent that the Company is not subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act, the Company shall file
with the SEC and provide to the Trustee, and to the Holders, such annual and
quarterly reports and such information, documents and other reports (or copies
of such portions of any of the foregoing as the SEC may by rules and regulations
prescribe) as are specified in Sections 13 and 15(d) of the Exchange Act,
provided that the Company shall not be required to deliver to the Trustee more
--------
than one set of any exhibits to any of the foregoing and the Trustee shall not
be required to deliver copies of any such exhibits to the Holders. The Company
shall also make such reports available to prospective purchasers of the 1997
Notes, securities analysts and broker-dealers upon their request. In addition,
the Company shall furnish to Holders of the 1997 Notes and prospective
purchasers of the 1997 Notes designated by the Initial Purchaser, upon their
request, the information required to be delivered pursuant to Rule 144A(d)(4)
under the Securities Act until such time as the Company either exchanges Private
Placement Notes for a like principal amount of Exchange Notes or has registered
the 1997 Notes for resale under the Securities Act pursuant to the Shelf
Registration (as defined in the Registration Rights Agreement) and such Shelf
Registration has remained effective for a period of three years. Upon the
effectiveness of any registration statement called for by the Registration
Rights Agreement and thereafter so long as the 1997 Notes are outstanding, the
Company shall not file with the SEC a Form 15 or take any other action to
terminate the registration of the 1997 Notes under the Exchange Act or suspend
the Company's duty to file reports under Section 13 or 15(d) of the Exchange
Act.
(c) The Company also shall comply with the other provisions of TIA
(S)314(a).
Section 4.03 Compliance Certificate.
----------------------
(a) The Company shall deliver to the Trustee, within 120 days after
the end of each fiscal year of the Company, an Officers' Certificate stating
that a review of the activities of the Company and the Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether the Company has fully performed its
obligations under this Indenture, and further stating, as to each such Officer
signing such certificate, that to the best of his or her knowledge the Company
has kept, observed, performed and fulfilled each and every covenant contained in
this Indenture and is not in default in the performance or observance of any of
the terms and conditions hereof (or, if a Default or Event of Default shall have
occurred, describing all such Defaults or Events of Default of which he or she
may have knowledge and whatever action the Company is taking or plans to take to
cure all such Defaults or Events of Default).
(b) So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, at the time the Officers'
Certificate required by Section 4.03(a) is delivered, the Company shall cause to
---------------
be delivered to the Trustee a letter or statement of the Company's independent
accountants who shall have certified the financial statements of the Company for
its preceding fiscal year in connection with the annual report of the Company to
its stockholders for such year to the effect that, in making the examination
necessary for certification
-33-
of such financial statements, nothing came to their attention that caused them
to believe that the Company was not in compliance with any of the terms or
conditions contained in Sections 4.01, 4.05, 4.07, 4.12, 4.14, 4.15, 4.16 and
-----------------------------------------------------
4.19 and Article 5 of this Indenture, which Default remains uncured at the date
---- ---------
of such letter or statement or, if they shall have obtained knowledge of any
such uncured Default, specifying in such letter or statement such Default or
Defaults and the nature thereof, it being understood that such accountants shall
not be liable directly or indirectly for failure to obtain knowledge of any such
Default or Defaults and that their examination was not directed primarily toward
obtaining knowledge of such noncompliance.
(c) The Company shall, so long as any of the 1997 Notes are
outstanding, deliver to the Trustee forthwith upon any officer of the Company
becoming aware of (i) any Default, Event of Default or default in the
performance of any term or condition in this Indenture or (ii) any event of
default under any other Indebtedness as such term is used in Section 6.01(f), an
---------------
Officers' Certificate specifying such Default, Event of Default or default.
Section 4.04 Maintenance of Office or Agency.
-------------------------------
(a) The Company shall maintain or cause to be maintained the office
or agency required by Section 2.03. The Company shall give prompt written
------------
notice to the Trustee of the location, and any change in the location, of such
office and agency not maintained by or with the Trustee. 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 10.10.
-------------
(b) The Company may also from time to time designate one or more
other offices or agencies where the 1997 Notes may be presented or surrendered
for any or all such purposes and may from time to time rescind such designation;
provided, however, that no such designation or rescission shall in any manner
-------- -------
relieve the Company of its obligation to maintain or cause to be maintained an
office or agency in the City of New York for such purpose to the extent required
by any applicable law, regulation or rule. The Company will give prompt written
notice to the Trustee of such rescission or designation.
Section 4.05 Limitations on Restricted Payments and Investments.
--------------------------------------------------
(a) The Company will not, and will not permit or cause any of the
Subsidiaries (other than any Unrestricted Subsidiary), directly or indirectly,
to, make any Restricted Payment or Investment after the Issue Date unless, at
the time of such proposed Restricted Payment or Investment, and on a pro forma
--- -----
basis immediately after giving effect thereto:
(A) no Default or Event of Default shall have occurred and be
continuing or shall occur as a consequence thereof;
(B) the aggregate amount expended for all Restricted Payments and
Investments, without duplication, subsequent to June 30, 1997 would not
exceed the sum of:
(1) 50% of the aggregate Consolidated Net Income of the Company
(or if such Consolidated Net Income is a loss, minus 100% of such
loss) earned on a cumulative basis during the period beginning on June
30, 1997 and ending on the last
-34-
date of the Company's fiscal quarter immediately preceding such
proposed Restricted Payment or Investment; plus
(2) 100% of the aggregate Net Equity Proceeds received by the
Company from any Person (other than a Subsidiary) from the issuance
and sale subsequent to June 30, 1997 of Qualified Capital Stock
(excluding (x) any Qualified Capital Stock paid as a dividend on any
Capital Stock of the Company or of any Subsidiary or as interest on
any Indebtedness of the Company or of any Subsidiary, (y) the issuance
of Qualified Capital Stock upon the conversion of, or in exchange for,
any Capital Stock of the Company or of any Subsidiary and (z) any
Qualified Capital Stock of the Company with respect to which the
purchase price thereof has been financed directly or indirectly using
funds (i) borrowed from the Company or any Subsidiary, unless and
until and to the extent such borrowing is repaid, or (ii) contributed,
extended, guaranteed or advanced by the Company or any Subsidiary
(including, without limitation, in respect of any employee stock
ownership or benefit plan)); plus
(3) $5.0 million; and
(C) the Company shall be able to incur (assuming a market rate of
interest with respect thereto) at least $1.00 of additional Indebtedness
under Section 4.12(a).
---------------
(b) Section 4.05(a) shall not prevent (a) the payment of any dividend
---------------
within 60 days after the date of its declaration if at such date of declaration
the payment of such dividend would comply with the provisions set forth above,
provided that such dividend will be deemed to have been paid as of its date of
--------
declaration for the purposes of this Section 4.05, (b) if no Default or Event of
------------
Default shall have occurred and be continuing or would occur as a consequence
thereof, the purchase, redemption, retirement or acquisition of any shares of
Capital Stock of the Company or of any Subsidiary or any Indebtedness of the
Company that is pari passu with or subordinated to the 1997 Notes solely with or
---- -----
out of the net cash proceeds of the substantially concurrent sale (other than to
a Subsidiary or by a Subsidiary to one of its subsidiaries) of shares of
Qualified Capital Stock of the Company or of a Subsidiary and neither such
purchase, redemption, retirement or acquisition nor the proceeds of any such
sale will be included in any computation made under clause (B)(2) above, (c)
payments pursuant to usual and customary indemnification arrangements for
directors and officers of the Company, any Subsidiary, Santee LLC or Santee, (d)
payment to ▇▇▇▇▇ of up to $69,365,000 plus accrued and unpaid dividends from the
proceeds of the sale of the 1997 Notes to repurchase the outstanding Series B
Preferred Stock, (e) the making of Permitted Investments, (f) the making of
Investments in any Subsidiary (other than an Unrestricted Subsidiary) (including
any Person who becomes a Subsidiary as a result of any Investment, other than an
Unrestricted Subsidiary) by the Company or any other Subsidiary, provided that
--------
any Indebtedness evidencing such Investment is not subordinated to any
Indebtedness or other obligation of such Subsidiary, (g) the making of
Investments in the Company by any Subsidiary, provided that any Indebtedness
--------
evidencing such Investment is subordinated and junior to the 1997 Notes), (h)
the making of Investments of the type described in Section 4.19(b)(i), (ii) and
----------------------------
(iii), (i) the making of Investments in any Person, provided that the
-----
consideration paid by the Company or a Subsidiary for such Investment consists
solely of Qualified Capital Stock, (j) payment to Texas Eastern of dividends on
the Markets Preferred Stock as in effect on the Issue Date, (k) the making of
Investments in Santee LLC of up to $25.0 million; (l) the making of Investments
in Santee LLC for the purpose of purchasing additional limited liability company
interests in Santee LLC with the proceeds of a Qualified ▇▇ ▇▇▇▇▇▇ Investment,
(m) the payment to
-▇▇-
▇▇ ▇▇▇▇▇▇ of an amount equal to the lesser of the amount of (i) the sum of (X)
any Qualified ▇▇ ▇▇▇▇▇▇ Investment, plus (Y) an amount equal to a commercially
----
reasonable rate of interest on such Qualified ▇▇ ▇▇▇▇▇▇ Investment to the extent
that the net proceeds received by Stater Bros. Markets from the sale or
disposition of that portion of the State Bros. Markets' interest in Santee LLC
which was acquired with the proceeds from such Qualified ▇▇ ▇▇▇▇▇▇ Investment
exceeds the original amount of the Qualified ▇▇ ▇▇▇▇▇▇ Investment; and (ii) net
proceeds received by Stater Bros. Markets from the sale or disposition of that
portion of Stater Bros. Markets' interest in Santee LLC which was acquired with
the proceeds from such Qualified ▇▇ ▇▇▇▇▇▇ Investment and (n) the payment of a
financial advisory fee of up to $2.0 million to ▇▇ ▇▇▇▇▇▇ substantially
contemporaneously with the effective date of the 1997 amendments to the
indenture governing the 1994 Notes; provided that in each such case of clauses
--------
(f) through (j) above, no Default or Event of Default has occurred and is
continuing or would result therefrom. The amounts expended or received, as
applicable, pursuant to clause (a) will be included, and clauses (b) through (n)
will be excluded, in computing the amounts available for Restricted Payments and
Investments for purposes of the immediately preceding paragraph.
(c) For purposes of this Section 4.05, a distribution to holders of
------------
the Company's Capital Stock of (i) shares of Capital Stock of any Subsidiary or
(ii) other assets of the Company, without, in either case, the receipt of
equivalent consideration therefor shall be deemed to be the equivalent of a cash
dividend equal to the excess of the Fair Market Value of the shares or other
assets being so distributed at the time of such distribution over the
consideration, if any, received therefor.
Section 4.06 Continued Existence.
-------------------
Subject to Article 5, the Company shall do or cause to be done all
---------
things necessary to preserve and keep in full force and effect its existence as
a corporation and will refrain from taking any action that would cause its
existence as a corporation to cease, including without limitation any action
that would result in its liquidation, winding up or dissolution.
Section 4.07 Taxes.
-----
The Company shall, and shall cause each Subsidiary to, pay prior to
delinquency all taxes, assessments and governmental levies, except as contested
in good faith and by appropriate proceedings or where the failure to do so would
not have a material adverse effect on the Company and the Subsidiaries, taken as
a whole.
Section 4.08 Maintenance of Properties.
-------------------------
The Company shall, and shall cause each of the Subsidiaries to, take
reasonable action to maintain in appropriate condition each of its principal
properties that in the judgment of management is significant to the business
operations of the Company and the Subsidiaries, taken as a whole, and the loss
of which would have a material adverse effect on the financial condition of the
Company and the Subsidiaries, taken as a whole.
Section 4.09 Insurance.
---------
From and at all times after the Issue Date, the Company and its
Subsidiaries will have in effect customary insurance for general liabilities and
other risks on terms and in amounts as are
-36-
customarily carried by similar businesses and reasonably sufficient to avoid a
material adverse change in the financial condition or results of operation of
the Company and its Subsidiaries taken as a whole. The Company shall provide to
the Trustee a summary of all insurance coverage prepared by the Company's
insurance broker, which expressly states the expiration date for such coverage
and which shall appear as an exhibit to the Officer's Certificate delivered to
the Trustee pursuant to Section 4.03(a).
---------------
Section 4.10 Investment Company Act.
----------------------
Neither the Company nor any Subsidiary shall become an investment
company subject to registration under the Investment Company Act of 1940, as
amended.
Section 4.11 Change of Control.
-----------------
Upon the occurrence of a Change of Control (the date of each such
occurrence being the "Change of Control Date"), the Company will promptly notify
----------------------
the Trustee and the Holders in writing of such occurrence and will make an offer
to purchase (the "Change of Control Offer"), on a Business Day (the "Change of
----------------------- ---------
Control Payment Date") not later than 45 days following the date notification of
--------------------
the Change of Control is first given to the Holders, all 1997 Notes then
outstanding at a purchase price equal to 101% of the aggregate principal amount
thereof, plus accrued and unpaid interest thereon, if any, to such Change of
Control Payment Date (subject to the right of Holders of record on the relevant
Interest Record Date to receive interest due on the relevant Interest Payment
Date). Notice of a Change of Control will be mailed by the Company to the
Trustee not more than 20 days after any Change of Control Date and to the
Holders not more than 30 days after any Change of Control Date. The Change of
Control Offer is required to remain open for not less than 30 days, nor more
than 45 days, and until the close of business on any such Change of Control
Payment Date. Failure to make, maintain or complete a Change of Control Offer as
required under the terms of this Indenture and the 1997 Notes will constitute an
Event of Default.
Section 4.12 Limitation on Indebtedness.
--------------------------
(a) The Company will not, and will not permit any of its Subsidiaries
(other than any Unrestricted Subsidiary), directly or indirectly, to incur any
Indebtedness, provided that if no Default or Event of Default shall have
--------
occurred and be continuing at the time or as a consequence of the incurrence of
such Indebtedness, the Company may incur Indebtedness if, on the date of the
incurrence of such Indebtedness after giving pro forma effect to the incurrence
--- -----
of such Indebtedness, the Consolidated Fixed Charge Coverage Ratio of the
Company is at least 2.0 to 1.
(b) The limitations set forth in Section 4.12(a) shall not apply to:
---------------
(i) Indebtedness under a revolving credit facility or any replacement facility
thereof, provided that Indebtedness under such credit facility or any
--------
replacement facility, including unused commitments, shall not at any time exceed
$50.0 million in aggregate outstanding principal amount; (ii) Indebtedness of
the Company and its Subsidiaries existing on the Issue Date; (iii) Indebtedness
of the Company represented by the 1994 Notes and the 1997 Notes; (iv)
Indebtedness of the Company and its Subsidiaries incurred in exchange for or the
net proceeds of which are used to extend, refinance, renew, replace, substitute
or refund ("Refinance") Indebtedness referred to in clauses (i), (ii) and (iii)
---------
above and (ix) below (the "Refinancing Indebtedness") plus any penalties, fees
------------------------
or premiums incurred in connection therewith, provided that (A) the principal
--------
amount of such Refinancing Indebtedness shall not exceed the principal
-37-
amount of the Indebtedness (including unused commitments) so Refinanced (the
"Existing Debt") as of the date of the proposed incurrence of the Refinancing
-------------
Indebtedness, (B) such Refinancing Indebtedness shall have an Average Life equal
to or greater than the Average Life of the Existing Debt, (C) if the Existing
Debt (including the 1997 Notes) being Refinanced is pari passu with or
---- -----
subordinated to the 1997 Notes then such Refinancing Indebtedness shall be pari
----
passu with or at least as subordinated to, as the case may be, the 1997 Notes,
-----
(D) the Refinancing Indebtedness has a stated maturity date no earlier than the
Existing Debt as of the date of such proposed Refinancing and (E) if the
Existing Debt is Indebtedness solely of the Company, such Refinancing
Indebtedness will only be permitted if it is Indebtedness solely of the Company;
(v) Permitted Construction Indebtedness incurred after March 8, 1994 not to
exceed $10.0 million in the aggregate at any time outstanding and designated as
Permitted Construction Indebtedness subject to this clause (v) in an Officer's
Certificate delivered to the Trustee; (vi) Indebtedness of the Company to a
Wholly Owned Subsidiary of the Company or by a Wholly Owned Subsidiary of the
Company to the Company or between Wholly Owned Subsidiaries of the Company;
(vii) Indebtedness under Interest Rate Protection Agreements entered into in the
ordinary course of business; (viii) Indebtedness arising from agreements
providing for indemnification, adjustment of purchase price or similar
obligations, or from guarantees of letters of credit, surety bonds or
performance bonds securing any obligations of the Company pursuant to such
agreements, incurred or assumed in connection with the disposition of any
business, assets or Subsidiary of the Company, other than guarantees or similar
credit support by the Company 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 described in this clause shall not exceed the
net proceeds actually received in connection with any such disposition; and (ix)
Indebtedness to secure workers' compensation and other insurance coverages, not
to exceed the minimum amount required by the Company's insurance carriers or
other applicable regulatory agencies; and (x) Indebtedness to ▇▇ ▇▇▇▇▇▇ incurred
by the Company in connection with a Qualified ▇▇ ▇▇▇▇▇▇ Investment; provided,
however, that the repayment of principal with respect to, and the payment of
interest with respect to, any such Qualified ▇▇ ▇▇▇▇▇▇ Investment constituting
Indebtedness shall be subject to Section 4.05 hereof.
------------
Section 4.13 Limitations on Liens.
--------------------
The Company will not, and will not permit any of its Subsidiaries
(other than any Unrestricted Subsidiary) to, create, incur, assume or suffer to
exist any Liens securing Indebtedness, except for (a) any Liens which may be
granted to secure the 1997 Notes; (b) Liens securing Senior Indebtedness or
Indebtedness that is incurred pursuant to clause (i) of Section 4.12(b); (c)
---------------
Liens securing Indebtedness that is incurred in accordance with this Indenture
and that is pari passu with the 1997 Notes; provided that the 1997 Notes are
---- ----- --------
secured on an equal and ratable basis to such Liens; (d) Liens securing
Indebtedness incurred in accordance with this Indenture and that is subordinated
to the 1997 Notes; provided that the 1997 Notes are secured by Liens ranking
--------
prior to such Liens; (e) Liens in respect of Refinancing Indebtedness; provided
--------
that the terms of such Liens in respect of such Refinancing Indebtedness are not
less favorable to the Holders than terms of the Liens securing the Existing Debt
being Refinanced and do not extend to or cover any property or assets of the
Company or of any of the Subsidiaries not securing such Existing Debt; (f) Liens
in respect of Acquired Indebtedness permitted to be incurred in accordance with
this Indenture; provided that such Liens in respect of such Acquired
--------
Indebtedness do not extend to or cover any property or assets of the Company or
any Subsidiary other than the property or assets that secured the Acquired
Indebtedness prior to the time such Indebtedness became Acquired Indebtedness of
the Company or such
-38-
Subsidiary; (g) Liens securing Indebtedness of the Company or a Subsidiary,
which Indebtedness shall not exceed $15.0 million; and (h) Permitted Liens.
Section 4.14 Limitation on Payment Restrictions Affecting Subsidiaries.
---------------------------------------------------------
The Company will not, and will not permit any of its Subsidiaries
(other than any Unrestricted Subsidiary), directly or indirectly, to create or
suffer to exist or allow to become effective any encumbrance or restriction of
any kind (i) on the ability of any Subsidiary (other than any Unrestricted
Subsidiary) to (a) pay dividends, in cash or otherwise, or make other payments
or distributions on its Capital Stock or any other equity interest or
participation in, or measured by, its profits, owned by the Company or any
Subsidiary or any of their respective subsidiaries, or make payments on any
Indebtedness owed to the Company or any Subsidiary or any of their respective
subsidiaries, (b) make loans or advances to the Company or any of its
Subsidiaries, (c) transfer any of their respective property to the Company or
any of its Subsidiaries or (ii) on the ability of the Company or any of its
Subsidiaries (other than an Unrestricted Subsidiary) to receive or retain any
such (x) dividends, payments or distributions, (y) loans or advances or (z)
transfer of property (any such restriction being referred to herein as a
"Payment Restriction"), except for such encumbrances or restrictions existing
--------------------
under or by reason of (A) agreements in effect as of the Issue Date, (B)
applicable laws, (C) this Indenture or the indenture governing the 1994 Notes,
(D) customary provisions restricting subletting or assignment of any lease
governing a leasehold interest of the Company or any of the Subsidiaries, (E)
Acquired Indebtedness incurred in accordance with this Indenture, provided that
--------
such encumbrance or restriction in respect of such Acquired Indebtedness is not
applicable to any Person, or the property of any Person, other than the Person,
or the property of the Person, so acquired whether or not such Acquired
Indebtedness was incurred in connection with or anticipation of such
acquisition, (F) the Revolving Credit Facility or (G) any agreement effecting a
renewal, refunding, refinancing or extension of Indebtedness referred to in
clause (A), (E) or (F) above, provided that the provisions contained in such
--------
renewal, refunding, refinancing or extension relating to such encumbrance or
restriction are no more restrictive in any material respect than the provisions
contained in the agreement that is the subject thereof.
Section 4.15 Limitation on Issuance and Sale of Capital Stock of Subsidiaries.
----------------------------------------------------------------
The Company will not permit any Subsidiary (other than any
Unrestricted Subsidiary) to issue any shares of its Capital Stock to any Person
other than the Company or one or more of its Wholly Owned Subsidiaries (other
than any Unrestricted Subsidiary) nor will the Company permit any Person (other
than the Company or one or more of its Wholly Owned Subsidiaries) (other than
any Unrestricted Subsidiary) to own or hold any such Capital Stock, other than
the Markets Preferred Stock held by Texas Eastern Corporation as of the Issue
Date. The Company will not and will not permit any Subsidiary (other than any
Unrestricted Subsidiary) to transfer, sell or otherwise dispose of any Capital
Stock of any Subsidiary to any Person (other than to the Company or a Wholly
Owned Subsidiary that is not an Unrestricted Subsidiary) unless (i) such
transfer, sale or other disposition is of all the Capital Stock of such
Subsidiary owned by the Company or any Subsidiary and (ii) the Net Cash Proceeds
from such transfer, sale or other disposition are applied in accordance with
Section 4.19.
------------
Section 4.16 Limitations on Transactions with Related Persons.
------------------------------------------------
-39-
The Company will not, nor will it permit any of its Subsidiaries
(other than an Unrestricted Subsidiary) to (a) sell, lease, transfer or
otherwise dispose of any of its property to, (b) purchase any property from, (c)
make any Investment in or (d) enter into or amend any contract, agreement or
understanding with or for the benefit of, a Related Person of the Company or any
Subsidiary (other than the Company or any such Subsidiary (other than any
Unrestricted Subsidiary) in which no Related Person (other than the Company or a
Wholly Owned Subsidiary (other than any Unrestricted Subsidiary) of the Company)
owns, directly or indirectly, an equity interest) (each a "Related Person
--------------
Transaction"), other than Related Person Transactions that are on terms (which
-----------
terms are in writing) that are fair and reasonable to the Company or the
Subsidiary and that are no less favorable to the Company or such Subsidiary than
those that could be obtained in a comparable arm's length transaction by the
Company or such Subsidiary from an unrelated party as determined reasonably and
in good faith by the Board of Directors of the Company, provided that if the
--------
Company or any Subsidiary enters into a Related Person Transaction or series of
Related Person Transactions involving or having an aggregate value of more than
$1.0 million such Related Person Transaction shall, prior to the consummation
thereof, have been approved by a majority of the independent directors of the
Company. The restrictions of this Section 4.16 shall not apply to (a) any
------------
transactions between Wholly Owned Subsidiaries (other than any Unrestricted
Subsidiary) of the Company, or between the Company and any Wholly Owned
Subsidiary (other than any Unrestricted Subsidiary) of the Company, if such
transaction is not otherwise prohibited by this Indenture, (b) any payments or
purchases permitted by Section 4.05, (c) any reasonable and customary regular
------------
fees to directors of the Company, (d) any transactions contemplated by the
Santee Documents; provided that such transactions are not otherwise prohibited
--------
by this Indenture and (e) payment of a financial advisory fee of up to $2.0
million to ▇▇ ▇▇▇▇▇▇ substantially contemporaneously with the effective date of
the 1997 amendments to the indenture governing the 1994 Notes.
Section 4.17 Compliance With Laws.
--------------------
The Company shall comply, and shall cause each of the Subsidiaries to
comply, in all material respects with all Applicable Laws except to the extent
any such Applicable Law is contested in good faith by appropriate proceedings
and adequate reserves have been established as required by GAAP.
Section 4.18 Stay, Extension and Usury Laws.
------------------------------
The Company covenants (to the extent that it may lawfully do so) that
it shall not, and shall cause the Subsidiaries not to, at any time insist upon,
plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay, extension or waiver law or any usury law or other law that would
prohibit or forgive the Company from paying all or any portion of the principal
of or premium, if any, or interest on the 1997 Notes as contemplated herein,
wherever in force, now or at any time hereafter in force, or that may materially
affect the covenants or the performance of this Indenture or the 1997 Notes in a
manner inconsistent with the provisions hereof or thereof 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 shall not, and shall cause the
Subsidiaries not to, hinder, delay or impede the execution of any power granted
to the Trustee under this Indenture or the 1997 Notes, but will suffer and
permit the execution of every such power as though no such law existed.
-40-
Section 4.19 Limitation on Sales of Assets.
-----------------------------
(a) The Company will not, and will not permit any of its Subsidiaries
(other than any Unrestricted Subsidiary) to, consummate any Asset Sale (other
than a Qualified Santee LLC Interest Sale) unless (i) such Asset Sale is for at
least Fair Market Value and (ii) at least 85% of the consideration therefrom
received by the Company or such Subsidiary is in the form of Cash or Cash
Equivalents, provided that for purposes of this Section 4.19 Cash shall mean
-------- ------------
U.S. dollars or such money as is freely convertible into U.S. dollars, provided
--------
further that any non-Cash consideration that becomes Net Cash Proceeds will
-------
thereafter be subject to the provisions of Section 4.19(b) and provided further
--------------- ----------------
that any sale by Stater Bros. Markets of its interest in Santee LLC pursuant to
the terms of the limited liability company agreement governing Santee LLC shall
not be deemed to be an Asset Sale for purposes of this Section 4.19. Compliance
------------
by the Company with clause (i) of the preceding sentence shall be evidenced by
(x) an Officers' Certificate if the Net Cash Proceeds resulting from such Asset
Sale are less than or equal to $1.0 million (y) subject to clause (z) below, a
resolution of the Board of Directors, which shall be approved by at least a
majority of the independent directors of the Company, if the Net Cash Proceeds
resulting from such Asset Sale exceed $1.0 million or (z) an Officer's
Certificate if such Asset Sale involves the sale of property in a shopping
center developed or held for resale by the Company or in connection with a sale-
leaseback transaction for a newly constructed or remodeled supermarket and the
Net Cash Proceeds resulting from such Asset Sale are less than or equal to $10.0
million.
(b) Upon the date of consummation of any Asset Sale which, taken
individually or together with all Asset Sales since the Issue Date, results in
the receipt of Net Cash Proceeds in excess of $5.0 million, such Net Cash
Proceeds and all Net Cash Proceeds from all Asset Sales consummated concurrently
therewith or consummated thereafter (such first consummation date and each such
date thereafter a "Consummation Date") shall be applied by the Company within 18
-----------------
months of the relevant Consummation Date (or, in the event of a Qualified Santee
LLC Interest Sale, within 24 months of the relevant Consummation Date) at its
election to either: (i) investments in assets or business in the same line of
business as the Company or such Subsidiary; (ii) the repayment of any
Indebtedness which is secured by or incurred to construct such assets; (iii) the
repayment of Senior Indebtedness; or (iv) a combination of payment and
investment permitted by the foregoing clauses (i), (ii) and (iii). On the
earlier of the day after the 18 month period following a Consummation Date (or
in the event of a Qualified Santee LLC Interest Sale, within 24 months of the
relevant Consummation Date) or such date as the Board of Directors of the
Company or of such Subsidiary determines (as evidenced by a resolution of the
Board of Directors) not to apply the Net Cash Proceeds relating to such
Consummation Date as set forth in clauses (i), (ii) and (iii) of the preceding
sentence (each, an "Asset Sale Offer Trigger Date"), such aggregate amount of
-----------------------------
Net Cash Proceeds which has not been applied on or before such Asset Sale Offer
Trigger Date as permitted in clauses (i), (ii) and (iii) of the preceding
sentence (each an "Asset Sale Offer Amount") shall be applied by the Company or
-----------------------
such Subsidiary to make an offer to purchase (the "Asset Sale Offer") on a date
----------------
(the "Asset Sale Offer Payment Date") not less than 30 nor more than 60 days
-----------------------------
following the applicable Asset Sale Offer Trigger Date, from all Holders on a
pro rata basis, that amount of 1997 Notes equal to the Asset Sale Offer Amount
at a price equal to 100% of the aggregate principal amount of the 1997 Notes to
be repurchased, plus accrued and unpaid interest thereon, if any, to the date of
repurchase. Notwithstanding the foregoing, if an Asset Sale Offer Amount is
less than $5.0 million the application of the Net Cash Proceeds constituting
such Asset Sale Offer Amount to an Asset Sale Offer may be deferred until such
time as such Asset Sale Offer Amount plus the aggregate amount of all Asset Sale
Offer Amounts arising subsequent to the Asset Sale Offer Trigger Date relating
to such initial Asset
-41-
Sale Offer Amount from all Asset Sales by the Company and its Subsidiaries
aggregate at least $5.0 million at which time the Company or said Subsidiary
shall apply all Net Cash Proceeds constituting all Asset Sale Offer Amounts that
have been so deferred to make an Asset Sale Offer (the first date the aggregate
of all such deferred Asset Sale Offer Amounts is equal to $5.0 million or more
shall be deemed to be an Asset Sale Offer Trigger Date). Pending application to
an Asset Sale Offer the Company shall invest such Asset Sale Offer Amounts in
Permitted Investments.
Section 4.20 Further Assurance to the Trustee.
--------------------------------
The Company shall, upon request of the Trustee, execute and deliver
such further instruments and do such further acts or provide such further
assurances as may reasonably be necessary or proper to carry out more
effectively the provisions of this Indenture and the 1997 Notes.
Section 4.21 Restriction on Layering Debt.
----------------------------
The Company shall not incur any Indebtedness that is subordinate or
junior in right of payment to Senior Indebtedness and senior in any respect in
right of payment to the 1997 Notes.
ARTICLE 5
SUCCESSORS
Section 5.01 Merger, Consolidation, Etc.
--------------------------
The Company will not, in a single transaction or series of related
transactions, consolidate or merge with or into, or sell, assign, transfer,
lease, convey or otherwise dispose of all or substantially all of its assets to,
any Person or adopt a Plan of Liquidation unless: (i) either (1) the Company
shall be the surviving or continuing corporation or (2) the Person (if other
than the Company) formed by such consolidation or into which the Company is
merged or the Person which acquires by conveyance, transfer or lease the
properties and assets of the Company substantially as an entirety or in the case
of a Plan of Liquidation, the Person to which assets of the Company have been
transferred (x) shall be a corporation organized and validly existing under the
laws of the United States or any State thereof or the District of Columbia and
(y) shall expressly assume, by supplemental indenture (in form and substance
satisfactory to the Trustee), executed and delivered to the Trustee, the due and
punctual payment of the principal of and premium, if any, and interest on all of
the 1997 Notes and the performance of every covenant of the 1997 Notes and this
Indenture on the part of the Company to be performed or observed; (ii)
immediately after giving effect to such transaction and the assumption
contemplated by clause (y) above (including giving effect to any Indebtedness
(including Acquired Indebtedness) incurred or anticipated to be incurred in
connection with or in respect of such transaction), the Company (in the case of
clause (1) of the foregoing clause (i)) or such Person (in the case of clause
(2) thereof) (a) shall have a Consolidated Net Worth (immediately after the
transaction but prior to any purchase accounting adjustments relating to such
transaction) equal to or greater than the Consolidated Net Worth of the Company
immediately prior to such transaction and (b) shall be permitted to incur
(assuming a market rate of interest with respect thereto) at least $1.00 of
additional Indebtedness under Section 4.12(a), provided that this clause (ii)
--------------- --------
shall not apply if the purpose of such transaction is solely to change the
jurisdiction of incorporation of the Company; (iii) immediately before and after
giving effect to such transaction and the assumption contemplated by clause (y)
above
-42-
(including giving effect to any Indebtedness (including Acquired Indebtedness)
incurred or anticipated to be incurred in connection with or in respect of the
transaction) no Default or Event of Default shall have occurred or be continuing
or shall occur as a consequence thereof; (iv) the Company or such Person shall
have delivered to the Trustee (A) an Officers' Certificate and an Opinion of
Counsel (which counsel shall not be in-house counsel of the Company), each
stating that such consolidation, merger, conveyance, transfer or lease or Plan
of Liquidation and, if a supplemental indenture is required in connection with
such transaction, such supplemental indenture, comply with this Section 5.01 and
------------
that all conditions precedent relating to such transaction have been satisfied
and (B) a certificate from the Company's independent certified public
accountants stating that the Company has made the calculation required by clause
(ii) above in accordance with this Section 5.01; and (v) neither the Company nor
------------
such Person, as the case may be, would thereupon become obligated with respect
to any Indebtedness (including Acquired Indebtedness), nor any of its property
become subject to any lien, unless the Company or such Person, as the case may
be, could incur such Indebtedness (including Acquired Indebtedness) or create
such lien under this Indenture (giving effect to such Person being bound by all
the terms of this Indenture).
Section 5.02 Successor Corporation Substituted.
---------------------------------
Upon any consolidation or merger, or any sale, lease, conveyance or
other disposition of all or substantially all of the assets of the Company in
accordance with Section 5.01, the Successor 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 Successor had been named as the Company herein;
provided, however, that the predecessor Company in the case of a sale, lease,
-------- -------
conveyance or other disposition shall not be released from the obligation to pay
the principal of and premium, if any, and interest on the 1997 Notes in
accordance with the terms of the 1997 Notes and this Indenture.
Section 5.03 Purchase Offer on Change of Control.
-----------------------------------
This Article 5 shall not affect the obligations of the Company under
---------
Sections 4.11 and 4.19 hereof.
----------------------
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01 Events of Default.
-----------------
The following are "Events of Default":
-----------------
(a) default in the payment of principal of the 1997 Notes when due at
maturity, upon repurchase, upon acceleration or otherwise, including,
without limitation, failure of the Company to repurchase the 1997 Notes
duly tendered for purchase following a Change of Control Offer or an Asset
Sale Offer;
(b) default in the payment of any installment of interest on the 1997
Notes when due and continuance of such Default for more than 30 days;
-43-
(c) the Company or any Subsidiary (other than any Unrestricted
Subsidiary) fails to observe, perform or comply with any of the provisions
described under Sections 4.11 and 5.01.
----------------------
(d) default (other than a default set forth in clauses (a), (b) and
(c) above) in the performance, or breach, of any other covenant or warranty
of the Company in this Indenture or the 1997 Notes and failure to remedy
such default or breach within a period of 60 days after written notice from
the Trustee or the Holders of at least 25% in aggregate principal amount of
the then outstanding 1997 Notes;
(e) failure to pay at maturity or default on any other Indebtedness,
whether outstanding on the Issue Date or thereafter, of the Company or any
Subsidiary (other than any Unrestricted Subsidiary) if either (x) such
default results from the failure to pay principal of, or premium, if any,
or interest on, such Indebtedness when due in excess of $5.0 million or (y)
as a result of such default, the maturity of such Indebtedness has been
accelerated prior to its scheduled maturity, and the principal amount of
such Indebtedness, together with the principal amount of any other such
Indebtedness which has not been paid at maturity or is in default, or the
maturity of which has been so accelerated, aggregates $5.0 million or more;
(f) the entry by a court of one or more judgments or orders against
the Company or any Subsidiary or any of their respective properties in an
aggregate amount in excess of $2.0 million and that are not covered by
insurance underwritten by third parties, which judgments or orders have not
been vacated, discharged, satisfied or stayed pending appeal within 60 days
from the entry thereof; or
(g) (i) the Company or any Subsidiary pursuant to or within the
meaning of any Bankruptcy Law:
(A) commences a voluntary case for relief from its creditors,
(B) consents to the entry of an order for relief against it in an
involuntary case for relief from its creditors,
(C) consents to the appointment of a Custodian of it or for all
or substantially all of its property,
(D) makes a general assignment for the benefit of its creditors,
or
(E) admits in writing its inability generally to pay its debts as
the same become due; or
(ii) a court of competent jurisdiction enters a judgment, order
or decree under any Bankruptcy Law that:
(A) is for relief from its creditors in respect of the Company
or any Subsidiary in an involuntary case,
-44-
(B) appoints a Custodian of the Company or any Subsidiary or for
all or substantially all of its property, or
(C) orders the liquidation of the Company or any Subsidiary,
and the order or decree remains unstayed and in effect for 60 days;
The term "Bankruptcy Law" means title 11 of the United States Code or
--------------
any similar federal or state Law for the relief of debtors. The term
"Custodian" means any receiver, trustee, assignee, liquidator or similar
---------
official under any Bankruptcy Law.
The notice referred to in subsection (e) above must specify the
--------------
Default, demand that it be remedied and state that the notice is a "Notice of
---------
Default."
-------
Section 6.02 Acceleration.
------------
(a) If an Event of Default (other than an Event of Default specified
in Section 6.01(g) above with respect to the Company) occurs and is continuing,
---------------
then and in every such case the Trustee or the Holders of not less than 25% in
aggregate principal amount of the then outstanding 1997 Notes may declare the
unpaid principal of and accrued and unpaid interest thereon, if any, on all the
1997 Notes then outstanding to be due and payable, by a notice in writing to the
Company (and to the Trustee, if given by Holders) and upon such declaration such
principal amount, and accrued and unpaid interest thereon, if any, will become
immediately due and payable, notwithstanding anything contained in this
Indenture or the 1997 Notes to the contrary. If an Event of Default specified
in Section 6.01(g) above with respect to the Company occurs, all unpaid
---------------
principal of and accrued and unpaid interest thereon, if any, the 1997 Notes
then outstanding will ipso facto become due and payable without any declaration
---- -----
or other act on the part of the Trustee or any Holder. The Holders of no less
than a majority in aggregate principal amount of 1997 Notes are authorized to
rescind such acceleration if all existing Events of Default have been cured or
waived except for an Event of Default with respect to the non-payment of the
principal of and premium, if any, and interest on the 1997 Notes that have
become due solely by such acceleration.
(b) Prior to the declaration of acceleration of the maturity of the
1997 Notes, the holders of a majority in aggregate principal amount of the 1997
Notes at the time outstanding may waive on behalf of all such holders any
default, except a default in the payment of principal of or interest on any 1997
Note not yet cured, or a default with respect to any covenant or provision that
cannot be modified or amended without the consent of the holder of each
outstanding 1997 Note affected.
(c) Upon an acceleration as provided in this Section 6.02, all
------------
amounts owed by the Company to the Trustee or Holders, including the aggregate
principal of, and all premium and accrued and unpaid interest thereon, if any,
the 1997 Notes and any and all expenses, fees, or other amounts owing under this
Indenture shall bear interest at the then applicable rate of interest payable on
the 1997 Notes plus 2% per annum (the "Default Rate") until such amounts have
--- ----- ------------
been paid or such acceleration has been rescinded pursuant to Section 6.02(a).
---------------
-45-
Section 6.03 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 premium, if any, or interest on the 1997 Notes or to
enforce the performance of any provision of the 1997 Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the 1997 Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Noteholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies
are cumulative to the extent permitted by law.
Section 6.04 Waiver of Past Defaults.
-----------------------
At any time after declaration of acceleration with respect to the 1997
Notes has been made and before a judgment or decree for payment of the money due
has been obtained by the Trustee or the Holders, where applicable, the Holders
of a majority in aggregate principal amount of the then outstanding 1997 Notes,
by written notice to the Company and the Trustee, may rescind and annul such
declaration and its consequences if (a) the Company has paid or deposited with
the Trustee a sum sufficient to pay (i) all overdue installments of interest on
all the 1997 Notes, (ii) the principal of any 1997 Notes that have become due
otherwise than by such declaration of acceleration and interest thereon at the
rate or rates prescribed therefor in the 1997 Notes, (iii) to the extent that
payment of such interest is lawful, interest on the defaulted interest at the
rate or rates prescribed therefor in the 1997 Notes, and (iv) all money paid or
advanced by the Trustee under this Indenture and the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents, counsel and
other advisors and (b) all Defaults and Events of Default, other than the non-
payment of the principal of 1997 Notes that have become due solely by such
declaration of acceleration, have been cured or waived as provided in this
Indenture. No such rescission will affect any subsequent Default or impair any
right consequent thereon.
When a Default is waived, it is cured and stops continuing. No waiver
shall extend to any subsequent or other Default or impair any right consequent
thereto but any Event of Default arising from such Default shall be deemed to
have been cured for every purpose of this Indenture. This Section 6.04 shall be
------------
in lieu of TIA (S)316(a)(1)(B) and said TIA section is hereby expressly excluded
from this Indenture, as permitted by the TIA.
Section 6.05 Control by Majority.
-------------------
The Holders of a majority in aggregate principal amount of the then
outstanding 1997 Notes will have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on such Trustee, provided that (a) such
--------
direction is not in conflict with any rule of law or with this Indenture and (b)
the Trustee may take any other action it deems proper that is not inconsistent
with such direction. The Trustee may refuse to follow any direction that
conflicts with law or this Indenture, is unduly prejudicial to the rights of
other Noteholders, or would involve the Trustee in personal liability. This
Section 6.05 shall be in lieu of TIA (S)316(a)1(A) and said TIA section is
------------
hereby expressly excluded from this Indenture, as permitted by the TIA.
-46-
Section 6.06 Limitation on Suits.
-------------------
No Holder will have any right to institute any proceeding, judicial or
otherwise, with respect to this Indenture, or for the appointment of a receiver
or trustee or for any other remedy under this Indenture, unless (a) such Holder
has previously given written notice to the Trustee of a continuing Event of
Default, (b) the Holders of not less than 25% in aggregate principal amount of
the then outstanding 1997 Notes have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name as
trustee under this Indenture, (c) such Holder or Holders have offered to the
Trustee an indemnity, adequate in the sole reasonable discretion of the Trustee,
against the costs, expenses and liabilities to be incurred in compliance with
such request, (d) the Trustee for 30 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such proceeding and
(e) no direction inconsistent with such written request has been given to the
Trustee during such 30-day period by the Holders of a majority in aggregate
principal amount of the outstanding 1997 Notes.
A Noteholder may not use this Indenture to prejudice the rights of
another Noteholder or to give or obtain a preference or priority over another
Noteholder.
Section 6.07 Rights of Holders to Receive Payment.
------------------------------------
Each Holder will have the right, which is absolute and unconditional,
to receive payment of the principal of and interest on, such 1997 Note on the
stated maturity thereof and to institute suit for the enforcement of any such
payment, and such right may not be impaired without the consent of such Holder.
Section 6.08 Collection Suit by Trustee.
--------------------------
If an Event of Default specified in Section 6.01(a) or (b) occurs and
----------------------
is continuing, the Trustee may recover judgment in its own name and as trustee
of an express trust against the Company for the whole amount of principal and
interest remaining unpaid on the 1997 Notes and interest on overdue principal
and, to the extent lawful, interest and such further amounts 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, counsel and other advisors.
Section 6.09 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 and the Noteholders allowed in any judicial proceedings relative to the
Company, its Subsidiaries, its creditors or its property. Nothing contained
herein shall be deemed to authorize the Trustee to authorize or consent to or
accept or adopt on behalf of any Noteholder any plan of reorganization,
arrangement, adjustment or composition affecting the 1997 Notes or the rights of
any Holder thereof, or to authorize the Trustee to vote in respect of the claim
of any Noteholder in any such proceeding.
Section 6.10 Priorities.
----------
If the Trustee collects any money pursuant to this Article 6, it shall
---------
pay out the money in the following order:
-47-
First: to the Trustee for amounts due under Section 7.07;
------------
Second: to Noteholders for amounts due and unpaid on the 1997 Notes for
principal and interest, ratably, without preference or priority
of any kind, according to the amounts due and payable on the 1997
Notes for principal and interest, respectively; and
Third: to the Company.
The Trustee may fix a record date and payment date for any payment or
distribution of property or securities to Noteholders in accordance with Section
-------
2.12 and may set a record date or payment date as necessary to effectuate its
----
obligations under this Indenture and the 1997 Notes.
Section 6.11 Undertaking for Costs.
---------------------
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder
------------
pursuant to Section 6.07, or a suit by Holders of more than 10% in aggregate
------------
principal amount of the then outstanding 1997 Notes.
ARTICLE 7
TRUSTEE
The Trustee hereby accepts the trust imposed upon it by this Indenture
and covenants and agrees to perform the same, as herein expressed.
Section 7.01 Duties of Trustee.
-----------------
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in their exercise, as a prudent person
would exercise or use under the circumstances in the conduct of his or her own
affairs.
(b) Except during the continuance of an Event of Default:
(i) the Trustee need perform only those duties that are specifically
set forth in this Indenture and no others, and no implied covenants shall
be read into this Indenture against the Trustee; and
(ii) 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
-48-
Indenture. However, in the case of an Officer's Certificate or Opinion of
Counsel required to be furnished to the Trustee, the Trustee shall examine
the certificates and opinions to determine whether or not they conform on
their face to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of
-------------
this Section;
(ii) 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; and
(iii) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
------------
Subparagraph (c)(iii) shall be in lieu of TIA (S)315(d)(3) and said TIA section
---------------------
is hereby expressly excluded from this Indenture, as permitted by the TIA.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section 7.01.
--------------------------- ------------
(e) The Trustee may refuse to perform any duty or exercise any right
or power unless it is provided with adequate funds or indemnity, adequate in the
sole reasonable discretion of the Trustee, against any loss, liability or
expense.
(f) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Company. Money held
in trust by the Trustee need not be segregated from other funds except to the
extent required by law.
Section 7.02 Rights of Trustee.
-----------------
(a) The Trustee may rely and shall be protected from acting or
refraining from acting based on any document believed by it to be genuine and to
have been signed or presented by the proper person. The Trustee need not
investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting with respect to
any matter contemplated by this Indenture, it may require an Officers'
Certificate or an Opinion of Counsel, or both. The Trustee shall not be liable
for any action it takes or omits to take in good faith in reliance on such
Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through 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 it takes or omits
to take in good faith which it believes to be authorized or within its rights or
powers.
-49-
(e) The Trustee may consult with counsel, and the advice of such
counsel or any Opinion of Counsel shall be full and complete authorization and
protection from liability irrespective of any action taken, suffered or omitted
by it hereunder in good faith and in reliance thereon.
(f) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness 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, and, if the Trustee shall determine to
make such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company and its Subsidiaries, personally or
by agent or attorney.
(g) Except with respect to Section 4.01, the Trustee shall have no
------------
duty to inquire as to the performance of the Company's covenants in Article 3, 4
------------
and 5 hereof. In addition, the Trustee shall not be deemed to have knowledge of
-----
any Default or Event of Default except (i) any Event of Default occurring
pursuant to Sections 6.01(a) (other than a failure of the Company to repurchase
----------------
the 1997 Notes duly tendered for purchase following a Change of Control Offer or
an Asset Sale Offer), Section 6.01(b) and Section 4.01, (ii) any Default or
--------------- ------------
Event of Default of which the Trustee shall have received written notification
or obtained actual knowledge.
(h) 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 unless repayment of such funds shall reasonably be assured to
it or the Trustee is provided adequate indemnity in its sole reasonable
discretion.
Section 7.03 Individual Rights of Trustee.
----------------------------
The Trustee in its individual or any other capacity may become the
owner or pledgee of 1997 Notes and may otherwise deal with the Company or an
Affiliate with the same rights it would have if it were not Trustee. Any Agent
may do the same with like rights. However, the Trustee is subject to Sections
--------
7.10 and 7.11.
-------------
Section 7.04 Trustee's Disclaimer.
--------------------
The Trustee shall not be responsible and makes no representation as to
the validity or adequacy of this Indenture or the 1997 Notes, it shall not be
accountable for any statement made by the Company or for the Company's use of
the proceeds from the 1997 Notes, and it shall not be responsible for any
statement in this Indenture or any statement in the 1997 Notes other than its
authentication.
Section 7.05 Notice of Defaults.
------------------
If a Default of Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to each Noteholder a notice of the
Default within 90 days after it occurs. Except in the case of a Default in any
payment due on any 1997 Note (including any failure to make any mandatory
redemption payment required hereunder), the Trustee may withhold the notice if
and so long as a committee of its Trust Officers in good faith determines that
withholding the notice is in the interests of Noteholders. The second sentence
of Section 7.05 shall be in lieu of the proviso
------------
-50-
to TIA (S)315(b) and said TIA section is hereby expressly excluded from this
Indenture, as permitted by the TIA.
Section 7.06 Reports by Trustee to Holders.
-----------------------------
Within 60 days after the reporting date stated in Section 10.10, the
-------------
Trustee shall mail to Noteholders, if required by TIA (S) 313(a), a brief report
dated as of such reporting date that complies with such (S)313(a). The Trustee
also shall comply with TIA (S)313(b)(2) and transmit by mail all reports as
required by TIA (S)313(c).
After this Indenture has been qualified under the TIA, a copy of each
report at the time of its mailing to Noteholders shall be filed with the SEC and
each stock exchange on which the 1997 Notes are listed. The Company shall
promptly notify the Trustee in writing when the 1997 Notes are listed on any
stock exchange.
Section 7.07 Compensation and Indemnity.
--------------------------
The Company shall pay to the Trustee, paying agents and registrars
from time to time reasonable compensation (as the Company and such parties may
agree) for their respective services hereunder. 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
out-of-pocket expenses incurred by it. Such expenses may include the reasonable
compensation and out-of-pocket fees and expenses of the Trustee's agents,
counsel and other advisors.
The Company shall indemnify the Trustee, paying agents and registrars,
and their respective agents, counsel and other advisors, and shall hold them
harmless against any claim or demand (including but not limited to attorney's
fees and expenses) made against or as incurred by them in connection with the
acceptance of this trust or the administration of this Indenture and their
respective duties hereunder, except as set forth in the next paragraph. The
Trustee shall notify the Company promptly of any claim for which it may seek
indemnity. However, failure of the Trustee to do so shall not relieve the
Company of its obligations hereunder. The Company shall defend the claim at its
own expense with counsel, who may be outside counsel to the Company but shall in
all events be reasonably satisfactory to the Trustee, and the Trustee shall
cooperate in the defense; provided, however, that the Trustee may, at its
-------- -------
option, retain its own separate counsel to defend such claim and the Company
shall pay the reasonable fees and expenses of such separate counsel. In
addition, if the Company does not so defend the Trustee or if at any time the
counsel so selected is ethically prohibited from representing the Trustee
(whether because of a conflict of interest or the provisions of the TIA), then
the Trustee may retain one separate counsel and the Company shall pay the
reasonable fees and expenses of such separate counsel. The indemnification
herein extends to any settlement, provided that the Company will not be liable
--------
for any settlement made without its consent, and provided further that such
----------------
consent will not be unreasonably withheld.
The Company need not reimburse any expense or indemnify against any
loss or liability incurred by the Trustee through negligence or bad faith of the
Trustee.
To secure the Company's payment obligations in this Section, the
Trustee and any such predecessor trustee shall have a lien prior to the 1997
Notes on all money or property held or
-51-
collected by the Trustee or the Holders, except that held in trust to pay
principal of and premium, if any, and interest on the 1997 Notes.
When the Trustee, or its agents, counsel or advisors, incurs fees or
expenses or renders services after an Event of Default specified in Section
-------
6.01(g) occurs, the fees, expenses and the compensation for the services are
-------
intended to constitute expenses of administration under any Bankruptcy Law.
Section 7.08 Replacement of Trustee.
----------------------
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section.
The Trustee may resign by so notifying the Company. The Holders of a
majority in aggregate principal amount of the then outstanding 1997 Notes may
remove the Trustee by so notifying the removed Trustee and the Company and may
appoint a successor Trustee with the Company's consent. The Company may remove
the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
------------
(2) the Trustee is adjudged a bankrupt or an insolvent or an order for
relief is entered with respect to the Trustee under any Bankruptcy Law;
(3) a Custodian or 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 promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in aggregate principal amount of the then outstanding 1997 Notes
may appoint a successor Trustee to replace the successor Trustee appointed by
the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of at least 10% in aggregate principal amount of the then outstanding
1997 Notes may petition any court of competent jurisdiction for the appointment
of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Noteholder may
------------
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective without
any further act, deed or conveyance, and the successor Trustee shall have all
the rights, powers and duties of the Trustee under this Indenture. The
successor Trustee shall mail a notice of its succession to Noteholders. The
retiring Trustee shall promptly transfer all property held
-52-
by it as Trustee to the successor Trustee. Notwithstanding the replacement of
the Trustee pursuant to this Section 7.08, the Company's obligations and the
------------
Trustee's rights under Section 7.07 hereof shall continue for the benefit of the
------------
retiring Trustee with respect to expenses and liabilities incurred by it prior
to such replacement.
Section 7.09 Successor Trustee by Merger, etc.
--------------------------------
Subject to Section 7.10, 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 be the successor Trustee. Such
succession shall also occur without any further act with respect to all agency
roles in which the Trustee then serves.
Section 7.10 Eligibility; Disqualification.
-----------------------------
This Indenture shall always have a Trustee who satisfies the
requirements of TIA (S)310(a)(1). The Trustee shall always have a combined
capital and surplus as stated in Section 10.10. The Trustee is subject to TIA
-------------
(S)310(b), including TIA (S)310(b)(9); provided, however, that there shall be
-------- -------
excluded from the operation of (S) 310(b)(1) any indenture or indentures under
which other securities are outstanding if the requirements of (S) 310(b)(1) are
met. If at any time the Trustee shall cease to be eligible in accordance with
the provisions of this Section, it shall resign immediately in the manner and
with the effect specified herein.
Section 7.11 Preferential Collection of Claims Against Company.
-------------------------------------------------
The Trustee shall comply with TIA (S)311(a), excluding any creditor
relationship set forth in TIA (S)311(b). A Trustee who has resigned or been
removed shall be subject to TIA (S)311(a) to the extent indicated therein.
ARTICLE 8
SATISFACTION AND DISCHARGE OF INDENTURE
Section 8.01 Termination of Company's Obligations.
------------------------------------
(a) This Indenture shall cease to be of further effect (except that
the Company's obligations under Section 7.07, 8.04, 8.05 and 9.06, and the
---------------------------------
Company's, Trustee's and Paying Agent's obligations under Section 8.03 shall
------------
survive) when all outstanding 1997 Notes theretofore authenticated and issued
have been delivered (other than destroyed, lost or stolen 1997 Notes that have
been replaced or paid) to the Trustee for cancellation or the Company has paid
all sums payable hereunder. In addition, the Company may elect to have either
Section 8.01(b) or 8.01(c) below be applied to the outstanding 1997 Notes upon
--------------------------
compliance with the conditions set forth in Section 8.01(d).
---------------
(b) Upon the Company's exercise under Section 8.01(a) of the option
---------------
applicable to this Section 8.01(b), the Company shall be deemed to have been
---------------
released and discharged from its obligations with respect to the outstanding
1997 Notes on the date the conditions set forth below are
-53-
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 1997 Notes, which shall
thereafter be deemed to be "outstanding" only for the purposes of the Sections
-----------
of and matters under this Indenture referred to in (i) and (ii) below, and to
have satisfied all its other obligations under such 1997 Notes and this
Indenture insofar as such 1997 Notes are concerned (and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging the
same), except for the following which shall survive until otherwise terminated
or discharged hereunder: (i) the rights of Holders of outstanding 1997 Notes to
receive solely from the trust fund described in Section 8.01(d) below and as
---------------
more fully set forth therein, payments in respect of the principal of and
premium, if any, and interest on such 1997 Notes when such payments are due,
(ii) the Company's obligations with respect to such 1997 Notes under Sections
--------
2.06, 2.07 and 4.04, and, with respect to the Trustee, under Section 7.07 and
------------------- ----------------
9.06, (iii) the rights, powers, trusts, duties and immunities of the Trustee
----
hereunder and (iv) this Section 8.01. Subject to compliance with this Section
------------ -------
8.01, the Company may exercise its option under this Section 8.01(b)
---- ---------------
notwithstanding the prior exercise of its option under Section 8.01(c) below
---------------
with respect to the 1997 Notes.
(c) Upon the Company's exercise under Section 8.01(a) of the option
---------------
applicable to this Section 8.01(c), the Company shall be released and discharged
---------------
from its obligations under any covenant contained in Article 5 and in Sections
--------- --------
4.02, 4.04, 4.05, 4.07, 4.08, 4.09, 4.11 through 4.19 with respect to the
-----------------------------------------------------
outstanding 1997 Notes on and after the date the conditions set forth below are
satisfied (hereinafter, "covenant defeasance"), and the 1997 Notes 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. For this purpose, such covenant
------------
defeasance means that, with respect to the outstanding 1997 Notes, the Company
may omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such covenant, whether directly or
indirectly, by reason of any reference elsewhere herein to any such covenant or
by reason of any reference in any such covenant to any other provision herein or
in any other document and such omission to comply shall not constitute a Default
or an Event of Default under Section 6.01, but, except as specified above, the
------------
remainder of this Indenture and such 1997 Notes shall be unaffected thereby.
(d) The following shall be the conditions to the application of either
Section 8.01(b) or Section 8.01(c) above to the outstanding 1997 Notes:
--------------- ---------------
(i) the Company has irrevocably deposited in trust with the
Trustee or, at the option of the Trustee, with a trustee, satisfactory to
the Trustee and the Company, and conveyed all right, title, and interest
for the benefit of the Holders of such 1997 Notes, under the terms of an
irrevocable trust agreement in form and substance satisfactory to the
Trustee, as trust funds solely for the benefit of the Holders for that
purpose, Cash and/or United States Government Obligations maturing as to
principal and interest in such amounts and at such times as are sufficient
without consideration of any reinvestment of such interest to pay principal
of and premium, if any, and interest on such outstanding 1997 Notes to
maturity, and to pay all other sums payable by it hereunder and including
all amounts owing under Section 7.07; provided that (1) the trustee of the
------------ --------
irrevocable trust shall have been irrevocably instructed to pay such money
or the proceeds of such United States Government Obligations to the Trustee
and (2) the Trustee shall have been irrevocably instructed to apply such
money or
-54-
the proceeds of such United States Government Obligations to the payment of
said principal and interest with respect to the 1997 Notes;
(ii) the Company has delivered to the Trustee an Officers'
Certificate stating that (1) all conditions precedent provided for relating
to either the legal defeasance under Section 8.01(b) above or the covenant
---------------
defeasance under Section 8.01(c) above, as the case may be, have been
---------------
complied with and (2) if any other Indebtedness of the Company shall then
be outstanding or committed, such legal defeasance or covenant defeasance
will not violate the provisions of the agreements or instruments evidencing
such Indebtedness;
(iii) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit;
(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 agreement or instrument to which
the Company or any Subsidiary is a party or by which it is bound;
(v) in the case of an election under Section 8.01(b) above, the
---------------
Company shall have delivered to the Trustee an Opinion of Counsel from
counsel reasonably acceptable to the Trustee to the effect that (1) the
Company has received from, or there has been published by, the Internal
Revenue Service a ruling or (2) since the date of this Indenture, there has
been a change in the applicable federal income tax law, in either case to
the effect that the Holders of the outstanding 1997 Notes 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 amount and in the same manner and at the same time as would have been
the case if such legal defeasance had not occurred; and
(vi) in the case of an election under Section 8.01(c) above, the
---------------
Company shall have delivered to the Trustee an Opinion of Counsel from
counsel reasonably acceptable to the Trustee to the effect that (1) the
Holders of the outstanding 1997 Notes will recognize income, gain or loss
for federal income tax on the same amount and in the same manner and at the
same time as would have been the case if such covenant defeasance had not
occurred or (2) the Company has received from, or there has been published
by, the Internal Revenue Service a ruling to the foregoing effect.
(v) in the case of an election under either Section 8.01(b) or (c)
----------------------
above, the Company shall have delivered to the Trustee an Opinion of
Counsel from counsel reasonably acceptable to the Trustee to the effect
that (1) the Company's exercise of its option under Section 8.01(b) or (c),
----------------------
as applicable, will not result in any of the Company, the Trustee or the
trust created by the Company's deposit of funds pursuant to this provision
becoming or being deemed to be an "investment company" under the Investment
Company Act of 1940, as amended, and (2) after the passage of 90 days
following deposit, the trust funds will not be subject to ▇▇▇▇▇▇▇ ▇▇▇ ▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Bankruptcy Code.
After such irrevocable deposit made pursuant to this Section 8.01 and
------------
satisfaction of the other conditions set forth herein, the Trustee upon written
request by the Company shall
-55-
acknowledge in writing the discharge of the Company's obligations under this
Indenture except for those surviving obligations specified above.
As used herein, "United States Government Obligations" means direct
------------------------------------
obligations of the United States of America for the payment of which the full
faith and credit of the United States of America is pledged. In order to have
money available on a payment date to pay principal or interest on the 1997
Notes, the United States Government Obligations shall be payable as to principal
or interest on or before such payment date in such amounts as will provide the
necessary money. United States Government Obligations shall not be callable at
the issuer's option.
Section 8.02 Application of Trust Money.
--------------------------
The Trustee shall hold in trust money or United States Government
Obligations deposited with it pursuant to Section 8.01. It shall apply the
------------
deposited money and the money from United States Government Obligations through
the Paying Agent and in accordance with this Indenture to the payment of
principal of and premium, if any, and interest on the 1997 Notes.
Section 8.03 Repayment to Company.
--------------------
Subject to Section 7.07 and to this Article 8, the Trustee and the
------------ ---------
Paying Agent shall promptly pay to the Company upon receipt of an Officer's
Certificate any excess money or securities held by them at any time.
The Trustee and the Paying Agent shall pay to the Company upon receipt
of an Officer's Certificate any money held by them for the payment of principal
or interest that remains unclaimed for two years after the date upon which such
payment shall have become due; provided, however, that the Company shall have
-------- -------
first caused notice of such payment to the Company to be mailed to each
Noteholder entitled thereto no less than 30 days prior to such payment. After
payment to the Company, Noteholders entitled to the money must look to the
Company for payment as general creditors unless an applicable abandoned property
law designates another Person.
Section 8.04 Reinstatement.
-------------
If the Trustee or Paying Agent is unable to apply any money in
accordance with Section 8.01 by reason of any order or judgment of any court or
------------
governmental authority enjoining, restraining or otherwise prohibiting such
application, the Company's obligations under this Indenture and the 1997 Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 8.01 until such time as the Trustee or Paying Agent is permitted to
------------
apply all such money in accordance with Section 8.02; provided, however, that if
------------ -------- -------
the Company makes any payment of interest on or principal of any 1997 Note
following the reinstatement of its obligations, the Company shall be subrogated
to the rights of the Holders of such 1997 Notes to receive such payment from the
money held by the Trustee or Paying Agent.
Section 8.05 Indemnity for Government Obligations.
------------------------------------
The Company shall pay and shall indemnify the Trustee against any tax,
fee or other charge imposed on or assessed against United States Government
Obligations deposited with or
-56-
pursuant to Section 8.01 or the principal and interest received on such United
------------
States Governmental Obligations.
ARTICLE 9
AMENDMENTS
Section 9.01 Without Consent of Holders.
--------------------------
The Company, when authorized by a resolution of its Board of
Directors, and the Trustee may, without the consent of the Holders of any
outstanding 1997 Notes, amend, waive or supplement this Indenture or the Notes
for certain specified purposes, including, among other things:
(1) to cure any ambiguity, defect or inconsistency;
(2) to comply with Section 5.01;
------------
(3) to provide for uncertificated Notes in addition to certificated
Notes;
(4) to make any change that does not adversely affect the legal rights
hereunder of any Noteholder;
(5) to add to the covenants, conditions and restrictions of the
Company, for the benefit of the Noteholders, or to surrender any right or
power herein conferred upon the Company, or
(6) to modify, eliminate or add to the provisions of this Indenture to
such extent as shall be necessary to effect the qualification of this
Indenture under the TIA, or under any similar federal statute hereafter
enacted,
provided however, that in the case of a change pursuant to clauses (1) or (4) of
this sentence, the Company has delivered to the Trustee an Opinion of Counsel
stating that such change does not adversely affect the rights of any Holder.
Section 9.02 With Consent of Holders.
-----------------------
Subject to Section 6.07, the Company and the Trustee may amend this
------------
Indenture or the 1997 Notes with the written consent of the Holders of at least
a majority in aggregate principal amount of the then outstanding 1997 Notes.
Subject to Sections 6.02, 6.04 and 6.07, the Holders of a majority in
----------------------------
aggregate principal amount of the 1997 Notes then outstanding may also waive
compliance in a particular instance by the Company with any provision of this
Indenture or the 1997 Notes.
This Indenture may be amended or modified or rights thereunder may be
waived with the consent of Holders of at least a majority of the aggregate
principal amount of 1997 Notes then
-57-
outstanding provided that, without the consent of each Holder affected thereby,
--------
no such amendment, modification or waiver may:
a. reduce the percentage in outstanding aggregate principal amount of
1997 Notes the Holders of which must consent to an amendment, supplement or
waiver of any provision of this Indenture or the 1997 Notes;
b. reduce the rate of or change the time for payment of interest on
any 1997 Note;
c. reduce the aggregate principal amount outstanding of or change the
fixed maturity of any 1997 Note;
d. waive a default in the payment of the principal of, premium, if
any, or interest on, or an offer to purchase required under this Indenture
with respect to, any 1997 Note (except a rescission of acceleration of the
1997 Notes and a waiver of the payment default that resulted from such
acceleration);
e. make the principal of or interest on any 1997 Note payable in
money other than that stated in the 1997 Note;
f. amend, change or modify the obligation of the Company to make and
consummate a Change of Control Offer in the event of a Change of Control or
to make and consummate the Asset Sale Offer with respect to any Asset Sale
or modify any of the provisions or definitions with respect thereto; or
g. modify any of the provisions relating to amendments or
modifications of this Indenture requiring the consent of Holders or
relating to the waiver of past Events of Default or waive any default in
payment in respect of the 1997 Notes or impair the right to institute suit
for the enforcement of payment of the 1997 Notes.
To secure a consent of the Holders under this Section 9.02, it shall
------------
not be necessary for the Holders to approve the particular form of any proposed
amendment or waiver, but it shall be sufficient if such consent approves the
substance thereof. The calculation of holders so consenting shall be made
pursuant to Section 2.09 hereof.
------------
After an amendment or waiver under this Section 9.02 becomes
------------
effective, the Company shall mail to Noteholders and the Trustee a notice
describing the amendment or waiver, provided that failure to give the required
--------
notice shall not affect the validity and effect of such amendment or waiver.
Section 9.03 Compliance with Trust Indenture Act.
-----------------------------------
Every amendment to this Indenture or the 1997 Notes shall be set forth
in a supplemental indenture that complies with the TIA as then in effect.
-58-
Section 9.04 Revocation and Effect of Consents.
---------------------------------
Until the earlier of the time that an amendment or waiver becomes
effective or for a period of 90 days from the date the consent was given, a
consent to an amendment or waiver by a Holder of a 1997 Note is a continuing
consent by the Holder and every subsequent Holder of a 1997 Note or portion of a
1997 Note that evidences the same debt as the consenting Holder's Note, even if
notation of the consent is not made on any 1997 Note. Any such Holder or
subsequent Holder may, however, revoke its consent as to its 1997 Note or
portion of a 1997 Note if the Trustee receives notice of revocation before the
date on which the Trustee receives an Officers' Certificate certifying that the
Holders of the requisite principal amount of 1997 Notes have consented to the
amendment or waiver (or before such later date as may be required by law or
stock exchange rule).
The Trustee may, upon written direction of the Company, or as
otherwise required hereunder or by Applicable Law, fix a record date for the
purpose of determining the Holders entitled to consent to any amendment or
waiver. If a record date is fixed, then notwithstanding the provisions 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 consent to such amendment or waiver or to revoke any consent
previously given, whether or not such Persons continue to be Holders after such
record date. No consent shall be valid or effective for more than 90 days after
such record date unless consents from Holders of the aggregate principal amount
of 1997 Notes required hereunder for such amendment or waiver to be effective
shall have also been given and not revoked within such 90-day period.
After an amendment or waiver becomes effective it shall bind every
Noteholder, unless it is of the type described in any of clauses (a) through (g)
-----------------------
of Section 9.02. In such case, the amendment or waiver shall bind each Holder
------------
of a 1997 Note who has consented to it.
Section 9.05 Notation on or Exchange of 1997 Notes.
-------------------------------------
If an amendment, supplement or waiver changes the terms of the 1997
Notes, the Trustee may require each Holder thereof to deliver its 1997 Notes to
the Trustee. The Trustee may place an appropriate notation about an amendment
or waiver on any 1997 Note thereafter authenticated. The Company in exchange
for all 1997 Notes may issue and the Trustee shall authenticate new 1997 Notes
that reflect the amendment or waiver. Failure to make the appropriate notation
or issue a new 1997 Note shall not affect the validity or effect of such
amendment or waiver.
Section 9.06 Trustee Protected.
-----------------
The Trustee shall sign all supplemental indentures and amendments
authorized pursuant to this Article 9, except that the Trustee need not sign any
---------
supplemental indenture that adversely affects its rights. The Trustee, subject
to Sections 7.01 and 7.02, shall be entitled to receive if requested, an
----------------------
indemnity satisfactory to it in its sole reasonable discretion and shall be
entitled to be fully protected in relying upon, an Opinion of Counsel stating
that any amendment, supplement or waiver is authorized or permitted by this
Indenture and that such supplemental indenture and this Indenture, as so amended
or supplemented, constitute the valid and binding obligations of the Company,
enforceable against it in accordance with their respective terms (subject to
customary and necessary exceptions) and all conditions precedent have been
complied with.
-59-
ARTICLE 10
SUBORDINATION
Section 10.01 The 1997 Notes Subordinated to Senior Indebtedness.
--------------------------------------------------
The Company agrees, and each Holder by accepting a 1997 Note agrees,
that the Indebtedness evidenced by the 1997 Notes, including for all purposes of
this Article 10, all repurchase and redemption obligations with respect to the
----------
1997 Notes, is subordinated in right of payment, to the extent and in the manner
provided in this Article 10, to the prior payment in full of all existing and
----------
future Senior Indebtedness and that the subordination is for the benefit of and
enforceable by the holders of Senior Indebtedness, and authorizes and directs
the Trustee to take such action as may be required by such holders of Senior
Indebtedness to acknowledge or effectuate the subordination as provided in this
Article 10 and appoints the Trustee as attorney-in-fact for any and all such
purposes.
Only Indebtedness of the Company that is Senior Indebtedness shall
rank senior to the Notes in accordance with the provisions set forth in this
Indenture. This Article 10 shall remain in full force and effect as long as any
Senior Indebtedness is outstanding or any commitment to advance Senior
Indebtedness exists, assuming in the case of the Revolving Credit Facility that
all conditions precedent to any such advance could be satisfied.
Section 10.02 Liquidation; Dissolution; Bankruptcy.
------------------------------------
Upon any payment or distribution, whether of Cash, securities or other
property, to creditors of the Company in a liquidation (total or partial),
reorganization or dissolution of the Company, whether voluntary or involuntary,
or in a bankruptcy, reorganization, insolvency, receivership, assignment for the
benefit of creditors, marshalling of assets or similar proceeding relating to
the Company or its property:
(1) holders of Senior Indebtedness shall be entitled to receive
payment in full, in Cash or Cash equivalents, of such Senior Indebtedness
before Holders shall be entitled to receive any payment of principal of, or
interest on, or any other distribution with respect to, the 1997 Notes; and
(2) until the Senior Indebtedness is paid in full as provided in
clause (1) above, any distribution to which Holders would be entitled but
for this Article 10 shall be made to the holders of Senior Indebtedness as
their interests may appear;
in each case except that Holders may receive shares of stock and debt securities
that are subordinated to Senior Indebtedness to at least the same extent and
pursuant to the same or more stringent terms as are the 1997 Notes.
Upon any distribution of assets of the Company, referred to in this
Section 10.02, the Trustee and the Holders shall be entitled to rely upon any
-------------
order or decree of a court of competent jurisdiction in which such bankruptcy,
reorganization, insolvency, receivership, assignment for the benefit of
creditors, marshalling of assets or similar proceedings are pending, or a
certificate of the liquidating trustee or agent or other such Person making any
distribution to the Trustee or to the Holders, for the purpose of ascertaining
the persons entitled to participate in such distribution, the holders of Senior
Indebtedness, the amount thereof or payable thereon, the amount or amounts paid
or
-60-
distributed thereon and all other facts pertinent thereto or to this Section
-------
10.02. The Trustee shall be entitled to rely on the delivery to it of a written
-----
notice by a Person representing itself to be a holder of Senior Indebtedness or
a Representative, as the case may be, to establish that such notice has been
given by a holder of Senior Indebtedness or a Representative, as the case may
be. In the event that the Trustee determines, in good faith, that further
evidence is required with respect to the right of any Person, as a holder of
Senior Indebtedness, to participate in any payment or distribution pursuant to
this Section 10.02, the Trustee may request such Person to furnish evidence to
-------------
the reasonable satisfaction of the Trustee as to the amount of such Senior
Indebtedness held by such Person, as to the extent to which such Person is
entitled to participation in such payment or distribution and as to other facts
pertinent to the rights of such Person under this Section 10.02, and, if such
-------------
evidence is not furnished, the Trustee may defer any payment to such Person (or
to the Noteholder) pending judicial determination as to the right of such Person
to receive such payment.
Section 10.03 Default on Senior Indebtedness.
------------------------------
No direct or indirect payment by or on behalf of the Company under the
1997 Notes shall be made if (i) any Designated Senior Indebtedness is not paid
when due or (ii) any other default on Designated Senior Indebtedness occurs and
in the case of this clause (ii) the maturity of such Designated Senior
Indebtedness is accelerated in accordance with its terms, unless, in either
case, (x) the default has been cured or waived and any such acceleration has
been rescinded or (y) such Designated Senior Indebtedness has been paid in full;
provided, however, that the Company may make any such direct or indirect payment
under the 1997 Notes without regard to the foregoing if the Company and the
Trustee receive written notice approving such payment from the Representative of
such Designated Senior Indebtedness. In addition, during the continuance of any
other event of default with respect to Designated Senior Indebtedness pursuant
to which the maturity of such Designated Senior Indebtedness may be accelerated
immediately without further notice (except such notice as may be required to
effect such acceleration) or the expiration of any applicable grace periods,
upon the occurrence of (a) receipt by the Trustee of written notice from the
Representative with respect to, or the holders of at least a majority in
aggregate principal amount of, such Designated Senior Indebtedness then
outstanding or (b) if such event of default results from the acceleration of the
1997 Notes, the date of such acceleration, no direct or indirect payment may be
made by the Company upon or in respect of the 1997 Notes for a period (a
"Payment Blockage Period") commencing on the earlier of the date of receipt of
such notice by the Trustee or the date of such acceleration and ending 180 days
thereafter (unless such Payment Blockage Period shall be terminated by written
notice to the Trustee from such Representative or such holders). Not more than
one Payment Blockage Period in the aggregate may be commenced with respect to
the Notes during any period of 360 consecutive days, irrespective of the number
of defaults with respect to Senior Indebtedness during such period. In no event
will a Payment Blockage Period extend beyond 179 days from the date such payment
upon or in respect of the Notes was due, and there must be 180 days in any 360-
day period in which no Payment Blockage Period is in effect as to the Company.
For all purposes of this Section 10.03, no default or event of default that
-------------
existed or was continuing on the date of the commencement of the Payment
Blockage Period with respect to the Designated Senior Indebtedness initiating
such Payment Blockage Period shall be, or be made, the basis for the
commencement of a subsequent Payment Blockage Period by the Representative or
requisite holders of such Designated Senior Indebtedness whether or not within a
period of 360 consecutive days unless such default or event of default shall
been cured or waived for a period of not less than 90 consecutive days.
Section 10.04 When Distribution Must Be Paid Over.
-----------------------------------
-61-
In the event that the Company shall make any payment to the Trustee
pursuant to the 1997 Notes at a time when such payment is prohibited by Section
-------
10.02 or 10.03, such payment shall be held by the Trustee, in trust for the
----- -----
benefit of, and shall be paid forthwith over and delivered to, the holders of
Senior Indebtedness (pro rata as to each of such holders on the basis of the
--- ----
respective amounts of Senior Indebtedness held by them) or their
Representatives, as their respective interests may appear, for application to
the payment of all Senior Indebtedness remaining unpaid to the extent necessary
to pay all Senior Indebtedness in full in accordance with its terms, after
giving effect to any concurrent payment or distribution to or for the holders of
Senior Indebtedness.
If a distribution is made to Holders that because of this Article 10
should not have been made to them, the Holders who receive the distribution
shall hold it in trust for holders of Senior Indebtedness and pay it over to
them as their interests may appear.
Section 10.05 Notice by Company.
-----------------
The Company shall promptly notify the Trustee and any Paying Agent by
an appropriate Officers' Certificate of the Company delivered to a Trust Officer
and the Paying Agent of any facts known to the Company that would cause a
payment under the 1997 Notes of principal of or interest on the 1997 Notes to
violate this Article 10, but failure to give such notice shall not affect the
subordination of the 1997 Notes to the Senior Indebtedness provided in this
Article 10.
Section 10.06 Subrogation.
-----------
After all Senior Indebtedness is paid in full and all commitments to
advance Senior Indebtedness have been terminated, and until the 1997 Notes are
paid in full pursuant to the 1997 Notes and this Indenture or otherwise, Holders
shall be subrogated to the rights of holders of Senior Indebtedness to receive
distributions applicable to Senior Indebtedness to the extent that distributions
otherwise payable to Holders have been applied to payment of Senior
Indebtedness. A distribution made under this Article 10 to holders of Senior
Indebtedness that otherwise would have been made to Holders is not, as between
the Company and the Holders, a payment by the Company on Senior Indebtedness.
Section 10.07 Relative Rights.
---------------
This Article 10 defines the relative rights of Holders and holders of
Senior Indebtedness. Nothing in this Indenture (but subject to the provisions
of paragraph 5 of the 1997 Notes) shall:
(1) impair, as between the Company and the Holders, the
obligation of the Company, which is absolute and unconditional, to pay
principal of and interest on the 1997 Notes in accordance with their terms;
(2) affect the relative rights of Holders and creditors of the
Company other than such creditors as are holders of Senior Indebtedness;
(3) prevent the Trustee or any Holder from exercising its
available remedies upon a Default or Event of Default, subject to the
rights of holders of Senior Indebtedness to receive distributions otherwise
payable to Holders; or
-62-
(4) create or imply the existence of any commitment on the part
of the holders of Senior Indebtedness to extend credit to the Company,
other than as set forth in the terms governing such Senior Indebtedness.
Section 10.08 Subordination May Not Be Impaired by Company.
--------------------------------------------
No right of any present or future holder of Senior Indebtedness to
enforce the subordination of the Indebtedness evidenced by the 1997 Notes and
this Article 10 shall be impaired by any act or failure to act by the Company or
anyone in custody of its assets or property or by its failure to comply with
this Indenture.
Section 10.09 Distribution or Notice to Representatives.
-----------------------------------------
Whenever a distribution is to be made or a notice given to holders of
Senior Indebtedness, the distribution may be made and the notice given to their
Representatives, if any.
Section 10.10 Rights of Trustee and Paying Agent.
----------------------------------
Notwithstanding Section 10.02 or 10.03, the Trustee or any Paying
------------- -----
Agent may continue to make payments of principal of or interest on the 1997
Notes unless, in the case of the Trustee, a Trust Officer or, in the case of a
Paying Agent other than the Trustee, an officer of such Paying Agent, shall have
received, at least three Business Days prior to the date such payments are due
and payable, written notice of the occurrence of an event under Section 10.02 or
-------------
10.03 and that any payment under the 1997 Notes would violate this Article 10.
-----
Only the Company or a Repre sentative with respect to or holders of at least a
majority in principal amount of an issue of Designated Senior Indebtedness may
give such notice. Nothing contained in this Section 10.10 shall limit the right
-------------
of any holder of Senior Indebtedness to recover payments as contemplated by
Section 10.04.
-------------
The Trustee in its individual or any other capacity may hold Senior
Indebtedness with the same rights it would have if it were not Trustee. Any
Agent may do the same with like rights. The Trustee shall be entitled to all
the rights set forth in this Article 10 with respect to Senior Indebtedness
which may at any time be held by it, to the same extent as any other holder of
Senior Indebtedness; and nothing in Article 7 shall deprive the Trustee of any
---------
of its rights as such holder, except as otherwise provided by the TIA.
Section 10.11 Trustee Entitled to Assume Payments Not Prohibited in Absence of
----------------------------------------------------------------
Notice.
------
Notwithstanding any of the provisions of this Article 10 or any other
provision of this Indenture, unless a Trust Officer has received a written
notice pursuant to Section 10.10, 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, and in the absence of such written notice the
Trustee may make such payment without liability or obligation to any holder of
Senior Indebtedness.
Section 10.12 Application by Trustee of Monies Deposited With It.
--------------------------------------------------
Nothing contained in this Article 10 or elsewhere in this Indenture,
or in the 1997 Notes, shall (i) affect the obligation of the Company to make, or
prevent the Company from making, at any time except as specified in Section
-------
10.02 or 10.03 to the extent provided therein, payments at
----- -----
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any time pursuant to the 1997 Notes, (ii) prevent the application by the Trustee
or any Paying Agent of any monies or the proceeds of any United States
Government Obligations received from the Company and held by the Trustee or such
Paying Agent in trust for the benefit of the Holders of 1997 Notes as to which
notice of redemption shall have been given, to the payment of or on account of
the principal of or interest on the 1997 Notes, if, at the time such notice was
given, a payment by the Company under the 1997 Notes would not have been
prohibited by the foregoing provisions of this Article 10 or (iii) prevent the
application by the Trustee or any Paying Agent of any monies or the proceeds of
any United States Government Obligations deposited with it by the Company under
Article 8 hereof to the payment of or on account of the principal of or interest
on the 1997 Notes, if, at the time of such deposit, a payment by the Company
under the Notes would not have been prohibited by the foregoing provisions of
this Article 10.
Section 10.13 Trustee's Compensation Not Prejudiced.
-------------------------------------
Nothing in this Article 10 shall apply to claims of, or payments to,
the Trustee pursuant to Section 7.07.
Section 10.14 Officers' Certificate.
---------------------
If there occurs any event referred to in Section 10.02, the Company
-------------
shall promptly give to the Trustee an Officers' Certificate (on which the
Trustee may conclusively rely) identifying all holders of Senior Indebtedness
and the principal amount of Senior Indebtedness then outstanding held by each
such holder and stating the reasons why such Officers' Certificate is being
delivered to the Trustee.
Section 10.15 Certain Payments.
----------------
Nothing in this Article 10 shall prevent or delay (i) the Company from
or in redeeming any 1997 Notes pursuant to paragraph 5 of the 1997 Notes or
otherwise purchasing any 1997 Notes or (ii) the receipt by the Holders of
payments of principal of and interest on the Notes as provided in Section 8.02.
------------
Section 10.16 Names of Representatives.
------------------------
The Company shall from time to time, upon request of the Trustee,
provide to the Trustee an Officers' Certificate setting forth the name and
address of each Representative of all outstanding Senior Indebtedness.
Section 10.17 Article 10 Not To Prevent Events of Default or Limit Right To
-------------------------------------------------------------
Accelerate.
----------
The failure to make a payment pursuant to the Notes by reason of any
provision in this Article 10 shall not be construed as preventing the occurrence
of a Default. Nothing in this Article 10 shall have any effect on the right of
the Holders or the Trustee to accelerate the maturity of the Notes.
-64-
Section 10.18 Reliance by Holders of Senior Indebtedness on Subordination
-----------------------------------------------------------
Provisions.
----------
Each Holder by accepting a 1997 Note acknowledges and agrees that the
foregoing subordination provisions are, and are intended to be, an inducement
and a consideration to each holder of any Senior Indebtedness, whether such
Senior Indebtedness was created or acquired before or after the issuance of the
1997 Notes, to acquire and continue to hold, or to continue to hold, such Senior
Indebtedness and such holder of Senior Indebtedness shall be deemed conclusively
to have relied on such subordination provisions in acquiring and continuing to
hold, or in continuing to hold, such Senior Indebtedness. No provision in any
supplemental indenture that modifies this Article 10 in any manner adverse to
the holder of Senior Indebtedness shall be effective against the holders of
Senior Indebtedness who have not consented thereto in accordance with the
provisions of the documents governing such Senior Indebtedness.
Section 10.19 Proof of Claim.
--------------
In the event that the Company is subject to any proceeding under any
Bankruptcy Law and the Holders and the Trustee fail to file any proof of claim
permitted to be filed in such proceeding with respect to the 1997 Notes, then
any Representative of Senior Indebtedness may file such proof of claim no
earlier than the later of (i) the expiration of 15 days after such
Representative notifies the Trustee of its intention to do so and (ii) 30 days
preceding the last day permitted to file such claim.
Section 10.20 No Fiduciary Duty Created to Holders of Senior Indebtedness.
-----------------------------------------------------------
With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article 10, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness, and, subject to the
provisions of Article 7, the Trustee shall not be liable to any holder of Senior
Indebtedness if it shall mistakenly pay over or deliver to Holders, the Company
or any other person, monies or assets to which any holder of Senior Indebtedness
shall be entitled by virtue of this Article 10 or otherwise.
ARTICLE 11
GENERAL PROVISIONS
Section 11.01 Trust Indenture Act Controls.
----------------------------
This Indenture, whether or not qualified under the TIA, shall be
subject to the terms and provisions if the TIA as if so qualified.
If any provision of this Indenture limits, qualifies, or conflicts
with another provision that is required to be included in this Indenture by the
TIA as in effect at the date hereof or, to the extent required by law, as
amended after the date hereof, the required provision shall control.
-65-
Section 11.02 Notices.
-------
Any notice or communication by the Company or the Trustee to the other
is duly given if in writing and delivered in person or mailed by first-class
mail, nationally recognized overnight courier, telex or telecopier to the
other's address stated in Section 11.10. The Company or the Trustee by written
-------------
notice to the other may designate an additional or different address for
subsequent notices or communications.
Any notice or communication to a Noteholder shall be mailed by first-
class mail to its address shown on the register kept by the Registrar. Failure
to mail a notice or communication to a Noteholder or any defect in it shall not
affect its sufficiency with respect to other Noteholders.
If a notice or communication is given in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Noteholders, it
shall mail a copy to the Trustee and each Agent at the same time.
All other notices or communications shall be in writing.
Section 11.03 Communication by Holders with Other Holders.
-------------------------------------------
Noteholders may communicate pursuant to TIA (S)312(b) with other
Noteholders with respect to their rights under this Indenture or the 1997 Notes.
The Company, the Trustee, the Registrar and anyone else shall have the
protection of TIA (S)312(c).
Section 11.04 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
Company, 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; and
(3) where applicable, a certificate or opinion by an independent
certified public accountant satisfactory to the Trustee that complies with
TIA (S) 314(c).
Section 11.05 Statements Required in Certificate or Opinion.
---------------------------------------------
Each certificate or opinion of a Person with respect to compliance
with a condition or covenant provided for in this Indenture shall include:
(1) a statement that the Person making such certificate or opinion has
read such covenant or condition;
-66-
(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, such Person 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 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.
Section 11.06 Rules by Trustee and Agents.
---------------------------
The Trustee may make reasonable rules for action by or at a meeting of
Noteholders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
Section 11.07 Legal Holidays; Business Days.
-----------------------------
A "Legal Holiday" is a day on which banking institutions in the City
-------------
of New York or the State of California are not required to be open. If a
payment date is a Legal Holiday at a place of payment, payment may be made at
that place on the next succeeding Business Day, and no interest shall accrue for
the intervening period.
Section 11.08 No Recourse Against Others.
--------------------------
A director, officer, employee or stockholder, as such, of the Company
shall not have any liability for any obligations of the Company under the 1997
Notes or this Indenture or for any claim based on, in respect of or by reason of
such obligations or their creation. Each Noteholder by accepting a 1997 Note
waives and releases all such liability. The waiver and release are part of the
consideration for the 1997 Notes. Each director, officer, employee and
stockholder is a third party beneficiary of this Section 11.08.
-------------
Section 11.09 Counterparts.
------------
This Indenture may be executed in any number of counterparts and by
the parties hereto in separate counterparts, each of which when so executed
shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
Section 11.10 Other Provisions.
----------------
The Company initially appoints the Trustee as Paying Agent, Registrar
and authenticating agent.
The first certificate pursuant to Section 4.03(a) shall be for the
---------------
fiscal year ending on September 25, 1994. The reporting date for Section 7.06
------------
is March 31 of each year. The first reporting date is March 31, 1995.
-67-
The Trustee shall always have, or shall be a subsidiary of a bank or
bank holding company that has, a combined capital and surplus of at least $100.0
million as set forth in its most recent published annual report of condition
pursuant to applicable law.
The Company's address is:
Stater Bros. Holdings Inc.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
The Trustee's address is:
First Trust of New York, National Association
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Section 11.11 Governing Law.
-------------
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN THIS INDENTURE
AND THE 1997 NOTES, WITHOUT REGARD TO THE CONFLICTS OF LAWS PROVISIONS THEREOF
TO THE EXTENT THAT THE APPLICATION OF THE LAW OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY. IF ANY ACTION OR PROCEEDING SHALL BE BROUGHT BY A HOLDER OF
ANY OF THE 1997 NOTES OR BY THE TRUSTEE IN ORDER TO ENFORCE ANY RIGHT OR REMEDY
UNDER THIS INDENTURE OR UNDER THE 1997 NOTES, THE COMPANY HEREBY CONSENTS AND
WILL SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING
IN THE CITY OF NEW YORK OR ANY FEDERAL COURT SITTING IN THE CITY OF NEW YORK.
THE COMPANY HEREBY AGREES TO ACCEPT SERVICE OF PROCESS BY NOTICE GIVEN TO IT
PURSUANT TO THE PROVISIONS OF SECTION 11.02.
-------------
Section 11.12 No Adverse Interpretation of Other Agreements.
---------------------------------------------
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or a Subsidiary. Any such other indenture, loan
or debt agreement may not be used to interpret this Indenture.
Section 11.13 Successors.
----------
All agreements of the Company in this Indenture and the 1997 Notes
shall bind its successor. All agreements of the Trustee in this Indenture shall
bind its successor.
Section 11.14 Severability.
------------
-68-
In case any provision in this Indenture or in the 1997 Notes 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 11.15 Table of Contents, Headings, Etc.
--------------------------------
The Table of Contents, Cross-Reference Table and headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part hereof and shall in no way
modify or restrict any of the terms or provisions hereof.
[signature page follows]
-69-
The parties have caused this Indenture to be duly executed and
attested, all as of the date first above written, signifying their agreements
contained in this Indenture.
The Company:
-----------
STATER BROS. HOLDINGS INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇
Chairman, President and Chief Executive
Officer
Attest: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Secretary
Trustee:
-------
FIRST TRUST OF NEW YORK,
NATIONAL ASSOCIATION
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇
Vice President
Attest: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Assistant Vice President
-70-
EXHIBIT A
SEE REVERSE FOR TRANSFER RESTRICTIONS
STATER BROS. HOLDINGS INC.
9% SENIOR SUBORDINATED NOTE DUE JULY 1, 2004
$________________ Los Angeles, California
Note No. ________ July 24, 1997
Interest Payment Dates: July 1 and January 1
Record Dates: June 15 and December 15
FOR VALUE RECEIVED, the undersigned, Stater Bros. Holdings Inc., a
Delaware corporation (the "Company") hereby promises to pay to the holder
-------
hereof, or its registered assigns, the principal sum of ________________________
(or so much thereof as shall not have been prepaid) on July 1, 2004.
This is one of the Notes Dated: July 24, 1997 mentioned in the within-
mentioned Indenture.
FIRST TRUST OF NEW YORK, STATER BROS. HOLDINGS INC.
NATIONAL ASSOCIATION
as Trustee
By:________________________ By:________________________
Authorized Signatory Name:
Title:
By:________________________
Name:
Title:
A-1
BACK OF NOTE
9% Senior Subordinated Note
Due July 1, 2004
Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC") to Issuer or its agent
for registration of transfer, exchange or payment, and any certificate issued is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein./1/
"THE SECURITY EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A TRANSACTION
EXEMPT FROM REGISTRATION UNDER ▇▇▇▇▇▇▇ ▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE SECURITY EVIDENCED
HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF
SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF
THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE
RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES
ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED
HEREBY AGREES FOR THE BENEFIT OF THE ISSUER THAT (A) SUCH SECURITY MAY BE
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (i)(a) TO A PERSON WHO THE
SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED
IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144 UNDER THE SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A
FOREIGN PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER
THE SECURITIES ACT, (d) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS
DEFINED IN RULE 501(a)(1), (2), (3) OR (7) OF THE SECURITIES ACT) THAT,
PRIOR TO SUCH TRANSFER, FURNISHES THE TRUSTEE A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS (THE FORM OF WHICH CAN BE OBTAINED
FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE
PRINCIPAL AMOUNT OF NOTES LESS THAN $100,000, AN OPINION OF COUNSEL
ACCEPTABLE TO THE ISSUER THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT, OR (e) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION
OF COUNSEL IF THE ISSUER SO REQUESTS),
-----------------------------
/1/ This is to be included only if the Note is in global form.
A-2
(ii) TO THE ISSUER OR (iii) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE
HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY
PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE
RESTRICTIONS SET FORTH IN (A) ABOVE."
1. Interest. Stater Bros. Holdings Inc., a Delaware corporation (the
--------
"Company"), promises to pay interest on the principal amount of this Note at the
--------
rate per annum shown above. The Company shall pay interest semiannually on July
--- -----
1 and January 1 of each year. Interest on the Notes will accrue from the most
recent date to which interest has been paid or, if no interest has been paid,
from the first date on which any Notes are issued. Interest will be computed on
the basis of a 360-day year of twelve 30-day months. If (i) a registration
statement under the Securities Act to exchange the Private Placement Notes for
the Exchange Notes (the "Exchange Offer") or Shelf Registration Statement has
--------------
not been filed by the date 30 days after the Issue date, or (ii) such Exchange
Offer or Shelf Registration Statement has not become effective by the date 120
days after the date such registration statement has been filed, or (iii) (A) the
Company has not exchanged Exchange Notes for all Private Placement Notes validly
tendered in accordance with the terms of the Exchange Offer on or prior to 30
days after the date on which the Exchange Offer was declared effective or (B)
the Exchange Offer Registration Statement ceases to be effective at any time
prior to the time that the Exchange Offer is consummated or (C) if applicable,
the Shelf Registration Statement has been declared effective and such Shelf
Registration Statement ceases to be effective at any time prior to the second
anniversary of its effective date (each such event referred to in Clauses (i)
through (iii), a "Registration Default"), then commencing on the first day
--------------------
following the occurrence of a Registration Default, additional interest
("Additional Interest") shall be accrued on the Notes over and above the accrued
---------------------
interest at a rate of 0.50% per annum; provided, however, that (1) upon the
--- ----- -------- -------
filing of the Exchange Offer Registration Statement or a Shelf Registration
Statement (in the case of (i) above), (2) upon the effectiveness of the Exchange
Offer Registration Statement or a Shelf Registration Statement (in the case of
(ii) above), or (3) upon the exchange of Exchange Notes for all Notes tendered
(in the case of (iii)(A) above), or upon the effectiveness of the Exchange Offer
Registration Statement which had ceased to remain effective (in the case of
(iii)(B) above), or upon the effectiveness of the Shelf Registration Statement
which had ceased to remain effective (in the case of (iii)(C) above), such
Registration Default shall be deemed cured and Additional Interest on the Notes
as a result of such clause (or the relevant subclause thereof), as the case may
be, shall cease to accrue.
Any amounts of Additional Interest due pursuant to clauses (i), (ii) or
(iii) above will be payable in Cash, on the same original interest payment dates
as the Notes. The amount of Additional Interest will be determined by
multiplying the applicable Additional Interest rate by the principal amount of
the Notes, multiplied by a fraction, the numerator of which is the number of
days such Additional Interest rate was applicable during such period (determined
on the basis of a 360-day year comprised of twelve 30-day months), and the
denominator of which is 360.
Notwithstanding the foregoing, at no time shall the maximum aggregate
interest rate borne by the Notes exceed the lesser of (a) the initial interest
rate payable on the Notes plus 2.50% per annum and (b) the maximum amount
--- -----
permitted under applicable usury laws. The interest rate borne by the
A-3
Notes shall be reduced by the amount of any Additional Interest on and after the
date, if any, on which the Company satisfies its obligations with respect to the
Exchange Offer and/or the Shelf Registration Statement.
To the extent lawful, the Company shall pay interest on overdue
installments of interest at the Default Rate, as defined in Section 6.02(c) of
---------------
the Indenture.
2. Method of Payment. The Company shall pay interest on the Notes
-----------------
(except defaulted interest) to the persons who are registered holders of Notes
at the close of business on the record date for the next interest payment date
even though Notes are canceled after the record date and on or before the
interest payment date. Holders must surrender Notes to a Paying Agent to
collect principal payments and premium payments, if any. The Company shall pay
principal, premium, if any, and interest in money of the United States that at
the time of payment is legal tender for payment of public and private debts.
However, the Company may pay principal, premium, if any, and interest by check
payable in such money. It may mail an interest payment check to a Holder's
registered address.
3. Paying Agent and Registrar. First Trust of New York, National
--------------------------
Association, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇.▇., ▇.▇. ▇▇▇▇▇ (the "Trustee") will
-------
act as the initial Paying Agent and Registrar. The Company may change the
Paying Agent, Registrar or Co-Registrar without prior notice without prior
notice to the Holders. The Company or any of its subsidiaries may act in any
such capacity.
4. Indenture. The Company issued the Notes under an Indenture dated as
---------
of July 24, 1997 (the "Indenture") between the Company and the Trustee. The
---------
terms of the Notes include those stated in the Indenture and those made part of
the Indenture by reference to the Trust Indenture Act of 1939, as amended (15
U.S. Code (S)(S)77aaa-77bbbb) as in effect on the date of the Indenture. The
Notes are subject to, and qualified by, all such terms, certain of which are
summarized hereon, and Noteholders are referred to the Indenture and such Act
for a statement of such terms. The Notes are obligations of the Company limited
to $100.0 million in aggregate principal amount. Capitalized terms not defined
below have the meaning given to them in the Indenture.
5. Optional Redemption. The Notes will not be redeemable prior to July
-------------------
1, 2000. Thereafter, the Notes will be redeemable, at the option of the Company,
in whole or in part, at the following redemption prices (expressed as
percentages of the principal amount), if redeemed during the 12-month period
beginning July 1 of the years indicated below:
REDEMPTION
YEAR PRICE
---- ----------
2000........................ 104.50%
2001........................ 103.00%
2002........................ 101.50%
2003........................ 100.00%
A-4
In addition, up to $35.0 million aggregate principal amount of the Notes
will be redeemable at any time on or prior to July 1, 2000 at the option of the
Company from the net proceeds to the Company of one or more Equity Offerings at
a redemption price equal to 109% of the principal amount thereof, together with
accrued and unpaid interest, if any, to the redemption date, provided that not
less than $65.0 million in aggregate principal amount of the Notes remains
outstanding immediately after the occurrence of such redemption.
If less than all of the Notes are to be redeemed, the Trustee shall select
the Notes or portions thereof to be redeemed pro rata, by lot or by any other
method the Trustee shall deem fair and reasonable; provided, however, that the
Notes will not be redeemed in amounts less than the minimum authorized
denomination of $1,000. Notice of redemption will be mailed by first class mail
not less than 30 days nor more than 60 days prior to the scheduled redemption
date to each holder of a Note to be redeemed at its registered address. On and
after the registration date, interest will cease to accrue on the Notes or
portions thereof called for redemption.
6. Change of Control. Upon a Change of Control, the Company shall make a
-----------------
Purchase Offer to purchase all outstanding Notes at a price equal to 101% of the
aggregate principal amount thereof plus accrued and unpaid interest thereon, if
any, to the date of purchase. To accept the Purchase Offer, the Holder hereof
must comply with the terms thereof, including surrendering this Note, with the
"Option of Holder to Elect Purchase" portion hereof completed, to the Company, a
depositary, if appointed by the Company, or a Paying Agent, at the address
specified in the notice of the Purchase Offer mailed to Holders as provided in
the Indenture, prior to termination of the Purchase Offer.
7. Repurchase Upon Sales of Assets. Upon the date of consummation of any
-------------------------------
Asset Sale which, taken individually or together with all Asset Sales since the
Issue Date, results in the receipt of Net Cash Proceeds in excess of $5.0
million, such Net Cash Proceeds and all Net Cash Proceeds from all Asset Sales
consummated concurrently therewith or consummated thereafter (such first
consummation date and each such date thereafter a "Consummation Date") shall be
-----------------
applied by the Company within 18 months of the relevant Consummation Date (or,
in the event of a Qualified Santee LLC Interest Sale, within 24 months of the
relevant Consummation Date) at its election to either: (i) investments in assets
or business in the same line of business as the Company or such Subsidiary; (ii)
the repayment of any Indebtedness which is secured by or incurred to construct
such assets; (iii) the repayment of Senior Indebtedness; or (iv) a combination
of payment and investment permitted by the foregoing clauses (i), (ii) and
(iii). On the earlier of the day after the 18 month period following a
Consummation Date (or, in the event of a Qualified Santee LLC Interest Sale, the
day after the 24 month period following a relevant Consummation Date) or such
date as the Board of Directors of the Company or of such Subsidiary determines
(as evidenced by a resolution approved by the Board of Directors) not to apply
the Net Cash Proceeds relating to such Consummation Date as set forth in clauses
(i), (ii) and (iii) of the preceding sentence (each, an "Asset Sale Offer
----------------
Trigger Date"), such aggregate amount of Net Cash Proceeds which has not been
------------
applied on or before such Asset Sale Offer Trigger Date as permitted in clauses
(i), (ii) and (iii) of the preceding sentence (each an "Asset Sale Offer
----------------
Amount") shall be applied by the Company or such Subsidiary to make an offer to
------
purchase (the "Asset Sale Offer") on a date (the "Asset Sale Offer Payment
---------------- ------------------------
Date") not less than 30 nor more than 60 days following the applicable Asset
----
Sale Offer Trigger Date, from all Holders on a pro rata basis, that amount of
Notes equal to the Asset Sale Offer Amount at a price equal to 100% of the
A-5
aggregate principal amount of the Notes to be repurchased, plus accrued and
unpaid interest thereon, if any, to the date of repurchase. Notwithstanding the
foregoing, if an Asset Sale Offer Amount is less than $5.0 million the
application of the Net Cash Proceeds constituting such Asset Sale Offer Amount
to an Asset Sale Offer may be deferred until such time as such Asset Sale Offer
Amount plus the aggregate amount of all Asset Sale Offer Amounts arising
subsequent to the Asset Sale Offer Trigger Date relating to such initial Asset
Sale Offer Amount from all Asset Sales by the Company and its Subsidiaries
aggregate at least $5.0 million at which time the Company or said Subsidiary
shall apply all Net Cash Proceeds constituting all Asset Sale Offer Amounts that
have been so deferred to make an Asset Sale Offer (the first date the aggregate
of all such deferred Asset Sale Offer Amounts is equal to $5.0 million or more
shall be deemed to be an Asset Sale Offer Trigger Date). Pending application
pursuant to an Asset Sale Offer the Company shall invest such Asset Sale Offer
Amounts in Permitted Investments.
8. Subordination. The Notes are subordinated to Senior Indebtedness, as
-------------
defined in the Indenture. To the extent provided in the Indenture, Senior
Indebtedness must be paid before payments in respect of the Notes may be made
under the Notes and the Indenture. The Company agrees, and each Securityholder
by accepting a Note agrees, to the subordination provisions contained in the
Indenture and authorizes the Trustee to give them effect and appoints the
Trustee as attorney-in-fact for such purpose.
9. Denominations, Transfer, Exchange. The Notes sold to Qualified
---------------------------------
Institutional Buyers are initially issued in global form. The Global Note
represents such of the outstanding Notes as shall be specified therein or
endorsed thereon in accordance with the Indenture. The Notes that are not sold
to Qualified Institutional Buyers are initially issued in the form of
Certificated Notes. The Certificated Notes are in registered form without
coupons in denominations of $1,000 and integral multiples of $1,000. The
transfer of Notes may be registered and Notes may be exchanged as provided in
the Indenture. As a condition of transfer, the Registrar may require a Holder,
among other things, to furnish appropriate endorsements and transfer documents
and to pay any taxes and fees required by law or permitted by the Indenture.
10. Persons Deemed Owners. The registered Holder of a Note may be treated
---------------------
as its owner for all purposes.
11. Amendments and Waivers. Subject to certain exceptions, the Indenture
----------------------
or the Notes may be amended with the consent of the Holders of at least a
majority in aggregate principal amount of the then outstanding Notes, and any
existing default may be waived with the consent of the Holders of a majority in
aggregate principal amount of the then outstanding Notes. Without the consent
of any Noteholder, the Indenture or the Notes may be amended (i) to cure any
ambiguity, defect or inconsistency; (ii) to comply with restrictions on mergers,
consolidations and certain asset dispositions; (iii) to provide for
uncertificated Notes in addition to certificated Notes; (iv) to make any change
that does not adversely affect the legal rights hereunder of any Noteholder; (v)
to add to the covenants, conditions and restrictions of the Company, for the
benefit of the Noteholders, or to surrender any right or power herein conferred
upon the Company, or (vi) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the qualification of
this Indenture under the TIA, or under any similar federal statute hereafter
enacted.
A-6
12. Defaults and Remedies. An Event of Default includes, in summary form:
---------------------
default for 30 days in payment of interest on the Notes; default in payment of
principal of and premium, if any, on the Notes; failure by the Company for 60
days after notice to it to comply with any of its other agreements in the
Indenture or the Notes; certain events of bankruptcy or insolvency; certain
final judgments which remain undischarged; certain events of default under other
Indebtedness of the Company or any of its Subsidiaries; failure to commence any
of the Purchase Offers described in paragraphs 6 or 7 of this Note by the time
-----------------
specified in the Indenture or to pay for Notes tendered pursuant thereto; and
failure by the Company to maintain its corporate existence or to comply with the
restrictions on changes of control, mergers, consolidations and certain asset
dispositions.
If an Event of Default occurs and is continuing, the Trustee or the holders
of at least 25% in aggregate principal amount of the then outstanding Notes may
declare all the Notes to be due and payable immediately, except that in the case
of an Event of Default arising from certain events of bankruptcy or insolvency,
all outstanding Notes become due and payable without further action or notice.
Noteholders may not enforce the Indenture or the Notes except as provided in the
Indenture. The Trustee may require indemnity satisfactory to it before it
enforces the Indenture or the Notes. Subject to certain limitations, Holders of
a majority in aggregate principal amount of the then outstanding Notes may
direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Noteholders notice of any continuing default (except a default in
payment of principal or interest) if it determines that withholding notice is in
their interests. The Company must furnish an annual compliance certificate to
the Trustee.
13. Trustee Dealings with the Company. The Trustee under the Indenture,
---------------------------------
or any of its Affiliates, in their individual or any other capacities, may make
or continue loans to or guaranteed by, accept deposits from, and perform
services for the Company or its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if the Trustee were not Trustee.
14. No Recourse Against Others. A director, officer, employee or
--------------------------
stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under the Notes or the Indenture or for any claim
based on, in respect of or by reason of such obligations or their creation.
Each Noteholder by accepting a Note waives and releases all such liability. The
waiver and release are part of the consideration for the Notes.
15. Authentication. This Note shall not be valid until authenticated by
--------------
the manual signature of the Trustee or an authenticating agent.
16. Abbreviations. Customary abbreviations may be used in the name of a
-------------
Noteholder or an assignee, such as: TEN CO (= 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).
The Company shall furnish to any Noteholder upon written request and
without charge a copy of the Indenture. Requests may be made to: CHIEF
FINANCIAL OFFICER, STATER BROS. HOLDINGS INC., ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
A-7
ASSIGNMENT FORM
To assign this Note, fill in the form below:
I or we assign and transfer this Note to:
_____________________________________________
(Assignee)
_____________________________________________
(Assignee's soc. sec. or tax I.D. no.)
_____________________________________________
(Assignee's name, address and zip code)
and irrevocably appoint:
_____________________________________________
as agent to transfer this Note on the books of the Company. The agent may
substitute another to act for him or her.
Dated: _____________________
---------------------------------------------
(name as appears on the face of the Note)
By: ________________________________________
Signature guaranteed by: ___________________
A-8
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company pursuant to
Section 3.01, 4.11 or 4.19 of the Indenture and paragraph 5 or 6 of this Note,
-------------------------- ----------------
check the box:
[_]
If you want to elect to have only part of this Note purchased by the
Company pursuant to Section 3.01, 4.11 or 4.19 of the Indenture and paragraph 5
-------------------------- -----------
or 6 of this Note, state the amount:
----
$___________________________________
(in an integral multiple of $1,000)
Date:_ Your Signature:_____________________________
(Sign exactly as your name
appears on the other side of
this Note)
Signature Guarantee:
A-9
SCHEDULE OF EXCHANGES OF CERTIFICATED SECURITIES/2/
The following exchanges of a part of this Global Note for Certificated Notes
have been made:
Principal Amount Signature of
Amount of Amount of Increase of this Global Note authorized officer
Decrease in in Principal following such of Trustee or
Principal Amount Amount of this decreases (or Global Note
Date of Exchange of this Global Note Global Note increases) Custodian
--------------------------
/2/ This is to be included only if the Note is in global form.
A-10
EXHIBIT B
FORM OF EXCHANGE NOTE
SEE REVERSE FOR TRANSFER RESTRICTIONS
STATER BROS. HOLDINGS INC.
9% SENIOR SUBORDINATED NOTE DUE JULY 1, 2004
$________________ Los Angeles, California
Note No. ________ July 24, 1997
Interest Payment Dates: July 1 and January 1
Record Dates: July 15 and December 15
FOR VALUE RECEIVED, the undersigned, Stater Bros. Holdings Inc., a
Delaware corporation (the "Company") hereby promises to pay to the holder
-------
hereof, or its registered assigns, the principal sum of ________________________
(or so much thereof as shall not have been prepaid) on July 1, 1994.
This is one of the Notes Dated: July 24, 1997 mentioned in the within-
mentioned Indenture.
FIRST TRUST OF NEW YORK, STATER BROS. HOLDINGS INC.
NATIONAL ASSOCIATION
as Trustee
By:________________________ By:________________________
Authorized Signatory Name:
Title:
By:________________________
Name:
Title:
B-1
BACK OF NOTE
9% Senior Subordinated Note
Due July 1, 2004
Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC") to Issuer or its agent
for registration of transfer, exchange or payment, and any certificate issued is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein./1/
1. Interest. Stater Bros. Holdings Inc., a Delaware corporation (the
--------
"Company"), promises to pay interest on the principal amount of this Note at the
--------
rate per annum shown above. The Company shall pay interest semiannually on July
--- -----
1 and January 1 of each year. Interest on the Notes will accrue from the most
recent date to which interest has been paid or, if no interest has been paid,
from the first date on which any Notes are issued. Interest will be computed on
the basis of a 360-day year of twelve 30-day months.
Notwithstanding the foregoing, at no time shall the maximum aggregate
interest rate borne by the Notes exceed the lesser of (a) the initial interest
rate payable on the Notes plus 2.50% per annum and (b) the maximum amount
--- -----
permitted under applicable usury laws.
To the extent lawful, the Company shall pay interest on overdue
installments of interest at the Default Rate, as defined in Section 6.02(c) of
---------------
the Indenture.
2. Method of Payment. The Company shall pay interest on the Notes
-----------------
(except defaulted interest) to the persons who are registered holders of Notes
at the close of business on the record date for the next interest payment date
even though Notes are canceled after the record date and on or before the
interest payment date. Holders must surrender Notes to a Paying Agent to
collect principal payments and premium payments, if any. The Company shall pay
principal, premium, if any, and interest in money of the United States that at
the time of payment is legal tender for payment of public and private debts.
However, the Company may pay principal, premium, if any, and interest by check
payable in such money. It may mail an interest payment check to a Holder's
registered address.
3. Paying Agent and Registrar. First Trust of New York, National
--------------------------
Association, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇.▇., ▇.▇. ▇▇▇▇▇ (the "Trustee") will
-------
act as Paying Agent and Registrar. The Company may change the Paying Agent,
Registrar or Co-Registrar without prior notice without prior notice to the
Holders. The Company or any of its subsidiaries may act in any such capacity.
4. Indenture. The Company issued the Notes under an Indenture dated as
---------
of July 24, 1997 (the "Indenture") between the Company and the Trustee. The
---------
terms of the Notes 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
(S)(S)77aaa-77bbbb) as in effect on the date of the Indenture. The Notes are
subject to, and qualified by, all such terms, certain of which are summarized
hereon, and Noteholders are referred to the
----------------------
/1/ This is to be included only if the Note is in global form.
B-2
Indenture and such Act for a statement of such terms. The Notes are obligations
of the Company limited to $100.0 million in aggregate principal amount.
Capitalized terms not defined below have the meaning given to them in the
Indenture.
5. Optional Redemption. The Notes will not be redeemable prior to July 1,
-------------------
2000. Thereafter, the Notes will be redeemable, at the option of the Company, in
whole or in part, at the following redemption prices (expressed as percentages
of the principal amount), if redeemed during the 12-month period beginning July
1 of the years indicated below:
REDEMPTION
YEAR PRICE
---- ----------
2000.............................. 104.50%
2001.............................. 103.00%
2002.............................. 101.50%
2003.............................. 100.00%
In addition, up to $35.0 million aggregate principal amount of the Notes
will be redeemable at any time on or prior to July 1, 2000 at the option of the
Company from the net proceeds to the Company of one or more Equity Offerings at
a redemption price equal to 109% of the principal amount thereof, together with
accrued and unpaid interest, if any, to the redemption date, provided that not
less than $65.0 million in aggregate principal amount of the Notes remains
outstanding immediately after the occurrence of such redemption
If less than all of the Notes are to be redeemed, the Trustee shall select
the Notes or portions thereof to be redeemed pro rata, by lot or by any other
method the Trustee shall deem fair and reasonable; provided, however, that the
Notes will not be redeemed in amounts less than the minimum authorized
denomination of $1,000. Notice of redemption will be mailed by first class mail
not less than 30 days nor more than 60 days prior to the scheduled redemption
date to each holder of a Note to be redeemed at its registered address. On and
after the registration date, interest will cease to accrue on the Notes or
portions thereof called for redemption.
6. Change of Control. Upon a Change of Control, the Company shall make a
-----------------
Purchase Offer to purchase all outstanding Notes at a price equal to 101% of the
aggregate principal amount thereof plus accrued and unpaid interest thereon, if
any, to the date of purchase. To accept the Purchase Offer, the Holder hereof
must comply with the terms thereof, including surrendering this Note, with the
"Option of Holder to Elect Purchase" portion hereof completed, to the Company, a
depositary, if appointed by the Company, or a Paying Agent, at the address
specified in the notice of the Purchase Offer mailed to Holders as provided in
the Indenture, prior to termination of the Purchase Offer.
7. Repurchase Upon Sales of Assets. Upon the date of consummation of any
-------------------------------
Asset Sale which, taken individually or together with all Asset Sales since the
Issue Date, results in the receipt of Net Cash Proceeds in excess of $5.0
million, such Net Cash Proceeds and all Net Cash Proceeds from all Asset Sales
consummated concurrently therewith or consummated thereafter (such first
consummation date and each such date thereafter a "Consummation Date") shall be
-----------------
applied by the Company within one year of the relevant Consummation Date (or, in
the event of a Qualified Santee LLC Interest Sale, within 24 months of the
relevant Consummation Date) at its election to either: (i) investments in assets
or business in the same line of business as the Company or such Subsidiary; (ii)
the repayment of any Indebtedness which is secured by or incurred to construct
such assets; (iii) the repayment of Senior Indebtedness; or (iv) a
B-3
combination of payment and investment permitted by the foregoing clauses (i),
(ii) and (iii). On the earlier of the day after the 18 month period following a
Consummation Date (or, in the event of a Qualified Santee LLC Interest Sale, the
day after the 24 month period following a relevant Consummation Date) or such
date as the Board of Directors of the Company or of such Subsidiary determines
(as evidenced by a resolution approved by the Board of Directors) not to apply
the Net Cash Proceeds relating to such Consummation Date as set forth in clauses
(i), (ii) and (iii) of the preceding sentence (each, an "Asset Sale Offer
----------------
Trigger Date"), such aggregate amount of Net Cash Proceeds which has not been
------------
applied on or before such Asset Sale Offer Trigger Date as permitted in clauses
(i), (ii) and (iii) of the preceding sentence (each an "Asset Sale Offer
----------------
Amount") shall be applied by the Company or such Subsidiary to make an offer to
------
purchase (the "Asset Sale Offer") on a date (the "Asset Sale Offer Payment
---------------- ------------------------
Date") not less than 30 nor more than 60 days following the applicable Asset
----
Sale Offer Trigger Date, from all Holders on a pro rata basis, that amount of
Notes equal to the Asset Sale Offer Amount at a price equal to 100% of the
aggregate principal amount of the Notes to be repurchased, plus accrued and
unpaid interest thereon, if any, to the date of repurchase. Notwithstanding the
foregoing, if an Asset Sale Offer Amount is less than $5.0 million the
application of the Net Cash Proceeds constituting such Asset Sale Offer Amount
to an Asset Sale Offer may be deferred until such time as such Asset Sale Offer
Amount plus the aggregate amount of all Asset Sale Offer Amounts arising
subsequent to the Asset Sale Offer Trigger Date relating to such initial Asset
Sale Offer Amount from all Asset Sales by the Company and its Subsidiaries
aggregate at least $5.0 million at which time the Company or said Subsidiary
shall apply all Net Cash Proceeds constituting all Asset Sale Offer Amounts that
have been so deferred to make an Asset Sale Offer (the first date the aggregate
of all such deferred Asset Sale Offer Amounts is equal to $5.0 million or more
shall be deemed to be an Asset Sale Offer Trigger Date). Pending application
pursuant to an Asset Sale Offer the Company shall invest such Asset Sale Offer
Amounts in Permitted Investments.
8. Subordination. The Notes are subordinated to Senior Indebtedness, as
-------------
defined in the Indenture. To the extent provided in the Indenture, Senior
Indebtedness must be paid before payments in respect of the Notes may be made
under the Notes and the Indenture. The Company agrees, and each Securityholder
by accepting a Note agrees, to the subordination provisions contained in the
Indenture and authorizes the Trustee to give them effect and appoints the
Trustee as attorney-in-fact for such purpose.
9. Denominations, Transfer, Exchange. The Notes sold to Qualified
---------------------------------
Institutional Buyers are initially issued in global form. The Global Note
represents such of the outstanding Notes as shall be specified therein or
endorsed thereon in accordance with the Indenture. The Notes that are not sold
to Qualified Institutional Buyers are initially issued in the form of
Certificated Notes. The Certificated Notes are in registered form without
coupons in denominations of $1,000 and integral multiples of $1,000. The
transfer of Notes may be registered and Notes may be exchanged as provided in
the Indenture. As a condition of transfer, the Registrar may require a Holder,
among other things, to furnish appropriate endorsements and transfer documents
and to pay any taxes and fees required by law or permitted by the Indenture.
10. Persons Deemed Owners. The registered Holder of a Note may be treated
---------------------
as its owner for all purposes.
11. Amendments and Waivers. Subject to certain exceptions, the Indenture
----------------------
or the Notes may be amended with the consent of the Holders of at least a
majority in aggregate principal amount of the then outstanding Notes, and any
existing default may be waived with the consent of the Holders of a majority in
aggregate principal amount of the then outstanding Notes. Without the consent
of any Noteholder, the Indenture or the Notes may be amended (i) to cure any
ambiguity, defect or inconsistency; (ii) to comply with restrictions on mergers,
consolidations and certain asset dispositions; (iii) to provide for
uncertificated Notes in addition to certificated Notes; (iv) to make any change
that does not adversely
B-4
affect the legal rights hereunder of any Noteholder; (v) to add to the
covenants, conditions and restrictions of the Company, for the benefit of the
Noteholders, or to surrender any right or power herein conferred upon the
Company, or (vi) to modify, eliminate or add to the provisions of this Indenture
to such extent as shall be necessary to effect the qualification of this
Indenture under the TIA, or under any similar federal statute hereafter enacted.
12. Defaults and Remedies. An Event of Default includes, in summary form:
---------------------
default for 30 days in payment of interest on the Notes; default in payment of
principal of and premium, if any, on the Notes; failure by the Company for 60
days after notice to it to comply with any of its other agreements in the
Indenture or the Notes; certain events of bankruptcy or insolvency; certain
final judgments which remain undischarged; certain events of default under other
Indebtedness of the Company or any of its Subsidiaries; failure to commence any
of the Purchase Offers described in paragraphs 6 or 7 of this Note by the time
-----------------
specified in the Indenture or to pay for Notes tendered pursuant thereto; and
failure by the Company to maintain its corporate existence or to comply with the
restrictions on changes of control, mergers, consolidations and certain asset
dispositions.
If an Event of Default occurs and is continuing, the Trustee or the holders
of at least 25% in aggregate principal amount of the then outstanding Notes may
declare all the Notes to be due and payable immediately, except that in the case
of an Event of Default arising from certain events of bankruptcy or insolvency,
all outstanding Notes become due and payable without further action or notice.
Noteholders may not enforce the Indenture or the Notes except as provided in the
Indenture. The Trustee may require indemnity satisfactory to it before it
enforces the Indenture or the Notes. Subject to certain limitations, Holders of
a majority in aggregate principal amount of the then outstanding Notes may
direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Noteholders notice of any continuing default (except a default in
payment of principal or interest) if it determines that withholding notice is in
their interests. The Company must furnish an annual compliance certificate to
the Trustee.
13. Trustee Dealings with the Company. The Trustee under the Indenture,
---------------------------------
or any of its Affiliates, in their individual or any other capacities, may make
or continue loans to or guaranteed by, accept deposits from, and perform
services for the Company or its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if the Trustee were not Trustee.
14. No Recourse Against Others. A director, officer, employee or
--------------------------
stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under the Notes or the Indenture or for any claim
based on, in respect of or by reason of such obligations or their creation.
Each Noteholder by accepting a Note waives and releases all such liability. The
waiver and release are part of the consideration for the Notes.
15. Authentication. This Note shall not be valid until authenticated by
--------------
the manual signature of the Trustee or an authenticating agent.
16. Abbreviations. Customary abbreviations may be used in the name of a
-------------
Noteholder or an assignee, such as: TEN CO (= 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).
The Company shall furnish to any Noteholder upon written request and
without charge a copy of the Indenture. Requests may be made to: CHIEF
FINANCIAL OFFICER, STATER BROS. HOLDINGS INC., ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
B-5
ASSIGNMENT FORM
To assign this Note, fill in the form below:
I or we assign and transfer this Note to:
_____________________________________________
(Assignee)
_____________________________________________
(Assignee's soc. sec. or tax I.D. no.)
_____________________________________________
(Assignee's name, address and zip code)
and irrevocably appoint:
_____________________________________________
as agent to transfer this Note on the books of the Company. The agent may
substitute another to act for him or her.
Dated: _____________________
---------------------------------------------
(name as appears on the face of the Note)
By: ________________________________________
Signature guaranteed by: ___________________
B-6
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company pursuant to
Section 3.01, 4.11 or 4.19 of the Indenture and paragraph 5 or 6 of this Note,
-------------------------- ----------------
check the box:
[_]
If you want to elect to have only part of this Note purchased by the
Company pursuant to Section 3.01, 4.11 or 4.19 of the Indenture and paragraph 5
-------------------------- -----------
or 6 of this Note, state the amount:
----
$___________________________________
(in an integral multiple of $1,000)
Date:_ Your Signature:_____________________________
(Sign exactly as your name
appears on the other side of
this Note)
Signature Guarantee:
B-7
SCHEDULE OF EXCHANGES OF CERTIFICATED SECURITIES/2/
The following exchanges of a part of this Global Note for Certificated
Notes have been made:
Principal Amount Signature of
Amount of Amount of of this Global authorized officer
Decrease in Increase in Note following of Trustee or
Principal Amount Principal Amount such decreases (or Global Note
Date of Exchange of this Global of this Global increases) Custodian
Note Note
-----------------------
/2/ This is to be included only if the Note is in global form.
B-8
EXHIBIT C
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION
OF TRANSFER OF NOTES
Re: Senior Subordinated Note due 2004 of Stater Bros. Holdings Inc.
This Certificate relates to $___________ principal amount of Notes held in
* _____________ book-entry or * ______________ certificated form by
________________ (the "Transferor").
----------
The Transferor*:
[_] has requested the Trustee by written order to deliver in exchange for
its beneficial interest in the Global Note held by the Depositary, a
Note or Notes in certificated, registered form of authorized
denominations and an aggregate principal amount equal to its
beneficial interest in such Global Note (or the portion thereof
indicated above); or
[_] has requested the Trustee by written order to exchange or register the
transfer of a Note or Notes.
In connection with such request and in respect of each such Note, the
Transferor does hereby certify as follows:
[_] Such Note is being acquired for its own account, without transfer.
[_] Such Note is being transferred to a qualified institutional buyer (as
defined in Rule 144A under the Securities Act of 1933, as amended (the
"Securities Act")), in reliance on Rule 144A or in accordance with
--------------
Rule 145 or Regulation S under the Securities Act.
[_] Such Note is being transferred in accordance with Rule 144 under the
Securities Act, or pursuant to an effective registration statement
under the Securities Act.
[_] Such Note is being transferred in reliance on and in compliance with
an exemption from the registration requirements of the Securities Act,
other than Rule 144A, 144 or 145 or Regulation S under the Securities
Act. An opinion of counsel to the effect that such transfer does not
require registration under the Securities Act accompanies this
Certificate.
________________________________
Insert Name of Transferor
By: ____________________________
Dated:
_________________________
* Check applicable box
C-1
EXHIBIT D
FORM OF LEGAL
OPINION ON TRANSFER
__________________, _____
_______________________
_______________________
_______________________
Re: 9% Senior Subordinated Notes Due July 1, 2004
of Stater Bros. Holdings Inc.
-------------------------------------------
Ladies and Gentlemen:
This opinion is being furnished to you in connection with the sale by
_________________ (the "Transferor") to __________________ (the "Purchaser") of
---------- ---------
$________ aggregate principal amount of 9% Senior Subordinated Notes due 2004 of
Stater Bros. Holdings Inc. (the "Notes").
-----
We have examined such documents and records as we have deemed appropriate.
In our examination of the foregoing, we have assumed the authenticity of all
documents, the genuineness of all signatures and the due authorization,
execution and delivery of the aforementioned by each of the parties thereto. We
have further assumed the accuracy of the representations contained in the
documents referred to above made by the parties executing such documents. We
have also assumed that the sale of the Notes to the Transferor was exempt from
the registration and prospectus delivery requirements of the Securities Act of
1933, as amended (the "Securities Act").
--------------
Based on the foregoing, we are of the opinion that the sale to the
Purchaser of the Notes does not require registration of such Notes under the
Securities Act.
Very truly yours,
D-1