As filed with the Securities and Exchange Commission on September 18, 1996
Registration No. 333-11101
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
------------
AMENDMENT NO. 2
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------
SAKS HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
DELAWARE 5311 52-1685667
(State or other jurisdiction (Primary Standard (I.R.S. Employer
of incorporation or Industrial Classification Identification No.)
organization) Code Number)
</TABLE>
------------
12 EAST 49TH STREET
NEW YORK, NEW YORK 10017
(212) 940-4048
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
------------
JOAN F. KREY
GENERAL COUNSEL
SAKS HOLDINGS, INC.
12 EAST 49TH STREET
NEW YORK, NEW YORK 10017
(212) 940-4048
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
------------
Copies to:
<TABLE>
<S> <C>
CHARLES K. MARQUIS PATRICIA A. CERUZZI
STEVEN R. FINLEY SULLIVAN & CROMWELL
GIBSON, DUNN & CRUTCHER LLP 125 BROAD STREET
200 PARK AVENUE NEW YORK, NEW YORK
NEW YORK, NEW YORK 10166 10004
(212) 351-4000 (212) 558-4000
</TABLE>
------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The Registrant's expenses in connection with the offering described in this
registration statement are set forth below. All amounts except the Securities
and Exchange Commission registration fee, the NASD filing fee and the NYSE
listing fee are estimated.
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee........... $ 79,320
NASD filing fee............................................... 23,500
Printing expenses............................................. 250,000
Accounting fees and expenses.................................. 100,000
Legal fees and expenses....................................... 200,000
Fees and expenses (including legal fees) for qualifications
under state securities laws................................... 30,000
Trustee's fees and expenses................................... 16,500
Rating Agencies' fees and expenses............................ 130,000
Miscellaneous................................................. 170,680
----------
Total..................................................... $1,000,000
----------
----------
</TABLE>
ITEM 14. IDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law (the "DGCL") makes
provision for the indemnification of officers and directors of corporations in
terms sufficiently broad to indemnify the officers and directors of the
registrant under certain circumstances from liabilities (including reimbursement
of expenses incurred) arising under the Securities Act of 1933, as amended (the
"Act").
As permitted by the DGCL, the registrant's Certificate of Incorporation (the
"Charter") provides that, to the fullest extent permitted by the DGCL, no
director shall be liable to the registrant or to its stockholders for monetary
damages for breach of his fiduciary duty as a director. Delaware law does not
permit the elimination of liability (i) for any breach of the director's duty of
loyalty to the registrant or its stockholders, (ii) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of
law, (iii) in respect of certain unlawful dividend payments or stock redemptions
or repurchases, or (iv) for any transaction from which the director derives an
improper personal benefit. The effect of this provision in the Charter is to
eliminate the rights of the registrant and its stockholders (through
stockholders' derivative suits on behalf of the registrant) to recover monetary
damages against a director for breach of fiduciary duty as a director thereof
(including breaches resulting from negligent or grossly negligent behavior)
except in the situations described in clauses (i)-(iv), inclusive, above. These
provisions will not alter the liability of directors under federal securities
laws.
The registrant's Bylaws (the "Bylaws") provide that the registrant may
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than an action by or in
the right of the registrant) by reason of the fact that he is or was a director,
officer, employee or agent of the registrant or is or was serving at the request
of the registrant as a director, officer, employee or agent of any other
corporation or enterprise, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by such person in connection with such action, suit or proceeding if such person
acted
II-1
<PAGE>
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the registrant, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe such person's conduct was
unlawful.
The Bylaws also provide that the registrant may indemnify any person who was
or is a party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the registrant to procure
judgment in its favor by reason of the fact that such person acted in any of the
capacities set forth above, against expenses (including attorneys' fees)
actually and reasonably incurred by such person in connection with the defense
or settlement of such action or suit if such person acted under similar
standards, except that no indemnification may be made in respect of any claim,
issue or matter as to which such person shall have been adjudged to be liable to
the registrant unless and only to the extent that the Court of Chancery of the
State of Delaware or the court in which such action or suit was brought shall
determine that despite the adjudication of liability but in view of all the
circumstances of the case, such person if fairly and reasonably entitled to be
indemnified for such expenses which the Court of Chancery of the State of
Delaware or the court in which such action was brought shall deem proper.
The Bylaws also provide that to the extent a director or officer of the
registrant has been successful in the defense of any action, suit or proceeding
referred to in the previous paragraphs or in the defense of any claim, issue, or
matter therein, he shall be indemnified against expenses (including attorneys'
fees) actually and reasonably incurred by him in connection therewith; that
indemnification provided for in the Bylaws shall not be deemed exclusive of any
other rights to which the indemnified party may be entitled; and that the
registrant may purchase and maintain insurance on behalf of a director or
officer of the registrant against any liability asserted against him or incurred
by him in any such capacity or arising out of his status as such whether or not
the registrant would have the power to indemnify him against such liabilities
under such Bylaws.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
The registrant has not issued or sold securities within the past three years
pursuant to offerings that were not registered under the Securities Act of 1933,
as amended (the "Securities Act"), except as follows:
<TABLE>
<C> <S>
(a) In August 1993, Saks Holdings sold 260 of its Class C Shares to Robert Ramsden for
an aggregate of $26,000. These shares have since been repurchased by Saks Holdings.
(b) In December 1994, Saks Holdings sold 357 of its Class C Shares to Owen Dorsey for
an aggregate of $35,700.
(c) In December 1994, Saks Holdings sold 260 of its Class C Shares to Richard Zannino
for an aggregate of $26,000.
(d) In November 1995, Saks Holdings sold 97 of its Class C Shares to Stephen Bock for
an aggregate of $9,700.
(e) In December 1995, Saks Investments Limited, Saks Equity Limited and Saks Capital
Limited each converted 2,400 Class D Shares into 2,400 Class C Shares pursuant to
Section 6(d) of the Certificate of Designations of Saks Holdings.
(f) In January 1996, Saks Holdings sold 357 of its Class C Shares to Gail Pisano for an
aggregate of $35,700.
(g) In February 1996, Saks Holdings sold 357 of its Class C Shares to Dan Smith for an
aggregate of $35,700.
</TABLE>
II-2
<PAGE>
<TABLE>
<C> <S>
(h) In February 1996, Saks Holdings sold 357 of its Class C Shares to Wayne Meichner
for an aggregate of $35,700.
(i) In February 1996, Saks Holdings sold 357 of its Class C Shares to Barbara Lynne
Ronon for an aggregate of $35,700.
(j) In February 1996, Saks Holdings sold 357 of its Class C Shares to Sheri Wilson-Gray
for an aggregate of $35,700.
(k) In February 1996, Saks Holdings sold 260 of its Class C Shares to Mark Hood for an
aggregate of $26,000.
(l) On various dates from January 30, 1993 through February 28, 1996, pursuant to the
Old Incentive Plan, Saks Holdings awarded to key employees of Saks (i)
Non-qualified Options, exercisable in whole or in part at $100.00 ($20.00 giving
effect to the stock split in the form of a dividend effected on April 26, 1996 (the
"Stock Split")) per share to purchase an aggregate of 129,313 (646,565 giving
effect to the Stock Split) Class C Shares and (ii) ISOs, exercisable in whole or in
part at $100.00 ($20.00 giving effect to the Stock Split) per share to purchase an
aggregate of 47,557 (237,785 giving effect to the Stock Split) Class C Shares.
(m) On February 28, 1996, pursuant to the New Incentive Plan, Saks Holdings issued
ISOs, exercisable in whole or in part at $80.00 ($16.00 giving effect to the Stock
Split) per share, to purchase 324,171 (1,620,855 giving effect to the Stock Split)
Class C Shares in exchange for the cancellation of Options issued pursuant to the
Old Incentive Plan to purchase an indentical number of Class C Shares.
(n) On various dates from February 29, 1996 through April 19, 1996, pursuant to the New
Incentive Plan, Saks Holdings issued ISOs, exercisable in whole or in part at
$80.00 ($16.00 giving effect to the Stock Split) per share, to purchase 51,068
(255,340 giving effect to the Stock Split) Class C Shares.
(o) On May 22, 1996, Saks Holdings granted ISOs, pursuant to the New Incentive Plan, to
purchase 1,199,750 shares of Common Stock, exercisable in whole or in part at
$25.00 per share.
</TABLE>
The transactions set forth above were undertaken in reliance upon the
exemptions from the registration requirements of the Securities Act afforded by
(i) Section 4(2) thereof and/or Regulation D promulgated thereunder, as sales
not involving a public offering, and/or (ii) Rule 701 promulgated thereunder, as
sales by an issuer to employees, directors, officers, consultants or advisors
pursuant to written compensatory benefit plans or written contracts relating to
the compensation of such persons. The purchasers of the securities described
above acquired them for their own account not with a view to any distribution
thereof to the public. The certificates evidencing the securities bear legends
stating that the shares may not be offered, sold or transferred other than
pursuant to an effective registration statement under the Securities Act or an
exemption from such registration requirements.
With respect to the transaction described in paragraphs (l) through (o)
above, on June 10, 1996, Saks Holdings registered on Form S-8 under the
Securities Act the exercise of options granted under the Plans as well as any
further grants of options granted under the New Incentive Plan.
Upon the closing of Saks Holdings' initial public offering on May 28, 1996,
all of Saks Holdings' capital stock, including all Class C Shares, was converted
into Common Stock.
II-3
<PAGE>
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- ----------- ----------------------
<S> <C>
1.01 Form of Underwriting Agreement
3.01* Amended and Restated Certificate of Incorporation of Saks Holdings, as filed
with the Delaware Secretary of State on May 28, 1996
3.02* Bylaws of Saks Holdings, as adopted on August 6, 1990
4.01 Form of Indenture between Saks Holdings and Bankers Trust Company, as trustee,
with regard to % Covertible Subordinated Notes due 2006
4.02** Form of % Covertible Surbordinated Notes due 2006 (included in Exhibit 4.01)
4.03* See Exhibits 3.01 and 3.02 as to the rights of holders of Saks Holdings' Common
Stock
4.04* Form of Stock Certificate of the Common Stock of Saks Holdings
4.05.1* Amended and Restated Credit Agreement, dated as of July 1, 1993, among Saks,
Chemical Bank and Bankers Trust Company as managing agents, Chemical Bank,
Bankers Trust Company, the CIT Group/Business Credit, Inc. and Barclays Bank
PLC as co-agents, and Chemical Bank as administrative agent (the "Credit
Facility")
4.05.2* First Amendment to the Credit Facility, dated as of March 1, 1995
4.05.3* Second Amendment to the Credit Facility, dated as of October 24, 1995
4.05.4* Third Amendment to the Credit Facility, dated as of March 5, 1996
4.05.5* Fourth Amendment to the Credit Facility, dated as of April 10, 1996
4.05.6* Fifth Amendment to the Credit Facility, dated as of April 18, 1996
4.05.7** Sixth Amendement and Consent to the Credit Facility, dated as of August 28,
1996
4.06* Amended and Restated Loan and Security Agreement dated as of
May 12, 1995 between Fifth Avenue Capital Trust ("FACT") and certain direct and
indirect wholly-owned subsidiaries of Saks (the "Borrowers")
4.07* Trust and Servicing Agreement dated as of May 12, 1995 among FACT, Bankers
Trust Company, as servicer, and Marine Midland Bank, as trustee
4.08* Amended and Restated Trust Agreement, dated as of May 12, 1995, among Saks,
HNY, Inc. and Wilmington Company, as owner trustee
4.09* Indenture, dated as of July 1, 1993, between Saks and AIBC Services N.V., as
trustee
4.10* First Supplemental Indenture, dated as of April 22, 1996, between Saks and AIBC
Services N.V., as trustee
4.11 Form of % Subordinated Note from Saks to Saks Holdings
4.12 Second Supplemental Indenture, dated as of September , 1996, between Saks and
AIBC Services N.V., as trustee.
4.13 Registration Rights Agreement, dated as of August 16, 1996, among Saks Holdings
and certain stockholders of Saks Holdings.
5.01 Opinion of Gibson, Dunn & Crutcher LLP
8.01 Opinion of Gibson, Dunn & Crutcher LLP
10.01.1* Amended and Restated Pooling & Servicing Agreement, dated as of December 16,
1991, among SFA Finance Company, Saks and Bankers Trust Company, as trustee
(the "1991 P&S")
10.01.2* First Amendment to the 1991 P&S, dated as of November 5, 1992
10.01.3* Second Amendment to the 1991 P&S, dated as of October 26, 1993
10.02.1* Second Amended and Restated Receivables Purchase Agreement, dated as of
December 16, 1991, between Saks and SFA Finance Company (the "Receivables
Purchase Agreement")
10.02.2* First Amendment to the 1991 Receivables Purchase Agreement, dated as of
November 5, 1992
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- ----------- ----------------------
<S> <C>
10.02.3* Second Amendment to the 1991 Receivables Purchase Agreement, dated as of
October 26, 1993
10.03.1* Series 1991-2 Supplement, dated as of December 16, 1991, among SFA Finance
Company, Saks, MHTC, as administrative agent, and Bankers Trust Company, as
trustee (the "1991-2 Supplement")
10.03.2* First Amendment to the 1991-2 Supplement, dated as of July 22, 1992
10.03.3* Second Amendment to the 1991-2 Supplement, dated as of August 20, 1992
10.03.4* Third Amendment to the 1991-2 Supplement, dated as of November 5, 1992
10.03.5* Fourth Amendment to the 1991-2 Supplement, dated as of May 20, 1993
10.03.6* Fifth Amendment to the 1991-2 Supplement, dated as of October 28, 1993
10.03.7* Sixth Amendment to the 1991-2 Supplement, dated as of September 30, 1994
10.04.1* Class C Supplement to Series 1991-2 Supplement, dated as of
November 5, 1992, among SFA Finance Company, Saks and Bankers Trust Company, as
trustee (the "1991-2(C) Supplement")
10.04.2* First Amendment to the 1991-2(C) Supplement, dated as of September 30, 1994
10.05* Class B Supplement to Series 1991-2 Supplement, dated as of September 30, 1994,
among SFA Finance Company, Saks and Bankers Trust Company, as trustee
10.06* Series 1995-1 Supplement, dated as of November 13, 1995, among SFA Finance
Company, Saks, Swiss Bank Corporation, New York Branch, as administrative
agent, and Bankers Trust Company, as trustee
10.07* Transition Supplement to the 1991 P&S, dated as of April 25, 1996, among SFA
Finance Company, Saks and Bankers Trust Company, as trustee
10.08* Pooling and Servicing Agreement, dated as of April 25, 1996, among SFA Finance
Company, Saks and Bankers Trust Company, as trustee (the "1996 P&S")
10.09* Series 1996-1 Supplement to the 1996 P&S, dated as of April 25, 1996, among SFA
Finance Company, Saks and Bankers Trust Company, as trustee
10.10* Third Amended and Restated Receivables Purchase Agreement, dated as of April
25, 1996, between Saks and SFA Finance Company
10.11* Series 1996-2 Supplement to the 1996 P&S, dated as of April 25, 1996, among SFA
Finance Company, Saks and Bankers Trust Company, as trustee
10.12* Purchase Agreement, dated May 4, 1995 among Saks, FACT, the Borrowers, Goldman,
Sachs & Company and Chemical Securities, Inc., with respect to the sale of
Commercial Mortgage Pass-Through Certificates due May 12, 2002
10.13* Saks Fifth Avenue Supplemental Pension Plan, effective July 2, 1990
10.14* Saks Holdings, Inc. Senior Management Stock Incentive Plan, dated as of October
17, 1990 (the "Old Incentive Plan")
10.15* Standard Form of Stock Option Agreement Pursuant to the Old Incentive Plan
10.16.1* Saks Holdings, Inc. 1996 Management Stock Incentive Plan, dated as of February
1, 1996 (the "New Incentive Plan")
10.16.2* Amendment to the New Incentive Plan
10.17* Standard Form of Stock Option Agreement Pursuant to the New Incentive Plan
10.18* Amended and Restated Employment Agreement, dated as of March 1, 1996, between
Saks and Philip B. Miller
10.19* Amended and Restated Employment Agreement, dated as of March 1, 1996, between
Saks and Rose Marie Bravo
10.20* Amended and Restated Employment Agreement, dated as of March 1, 1996, between
Saks and Owen E. Dorsey
10.21* Employment Agreement, dated as of March 1, 1996, between Saks and Brian E.
Kendrick
10.22* Agreement for Management Advisory and Consulting Services, dated as of July 2,
1995, between Saks and III
10.23* Acquisitions Advisory Agreement, dated as of January 29, 1995, between Saks and
III
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- ----------- ----------------------
<S> <C>
10.24* Public Company Expenses Agreement, dated as of April 27, 1996, between Saks
Holdings and Saks.
10.25* Form of Common Stock Purchase Agreement between Saks Holdings and Investcorp,
S.A.
12.01** Statement regarding the computation of the ratio of earnings to fixed charges
21.01* Subsidiaries of Saks Holdings
23.01** Consent of Coopers & Lybrand L.L.P.
23.02 Consents of Gibson, Dunn & Crutcher (contained in Exhibits 5.01 and 8.01)
24.01** Power of Attorney (included on signature page of Registration Statement)
25.01 Form T-1 of Bankers Trust Company
</TABLE>
- ------------
* Incorporated herein by reference to Saks Holdings' registration statement on
Form S-1 (File No. 333-2426)
** Previously filed.
ITEM 17. UNDERTAKINGS
(a) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
(b) The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4)
or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
II-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant has duly caused this Amendment No. 2 to the Registration Statement to
be signed on its behalf by the undersigned, thereunto duly authorized, in The
City of New York, State of New York, on September 17, 1996.
SAKS HOLDINGS, INC.
By /s/ PHILIP B. MILLER
..................................
Philip B. Miller
Chief Executive Officer
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Amendment No. 2 to the Registration Statement has been signed by the following
persons in the capacity indicated on September 17, 1996.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ PHILIP B. MILLER Chairman of the Board and
........................................ Chief Executive Officer
Philip B. Miller (Principal Executive Officer)
/s/ BRIAN E. KENDRICK Vice Chairman of the Board and
........................................ Chief Operating Officer
Brian E. Kendrick
* President and Director
........................................
Rose Marie Bravo
* Executive Vice President,
........................................ Chief Financial Officer and Treasurer
Richard F. Zannino (Principal Financial Officer)
* Director
........................................
Savio W. Tung
* Director
........................................
Jon P. Hedley
* Director
........................................
E. Garrett Bewkes III
* Director
........................................
Charles J. Philippin
</TABLE>
II-7
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
* Director
........................................
Stephen I. Sadove
<S> <C>
* Director
........................................
Brian Ruder
/s/ MARK E. HOOD Senior Vice President--Finance
........................................ (Principal Accounting Officer)
Mark E. Hood
</TABLE>
*By: /s/ MARK E. HOOD
...................................
Mark E. Hood
Attorney in Fact
II-8
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT PAGE
- --------- ---------------------- -----
<S> <C> <C>
1.01 Form of Underwriting Agreement
3.01* Amended and Restated Certificate of Incorporation of Saks Holdings, as
filed with the Delaware Secretary of State on May 28, 1996
3.02* Bylaws of Saks Holdings, as adopted on August 6, 1990
4.01 Form of Indenture between Saks Holdings and Bankers Trust Company, as
trustee, with regard to % Covertible Subordinated Notes due 2006
4.02** Form of % Covertible Surbordinated Notes due 2006 (included in
Exhibit 4.01)
4.03* See Exhibits 3.01 and 3.02 as to the rights of holders of Saks Holdings'
Common Stock
4.04* Form of Stock Certificate of the Common Stock of Saks Holdings
4.05.1* Amended and Restated Credit Agreement, dated as of July 1, 1993, among
Saks, Chemical Bank and Bankers Trust Company as managing agents,
Chemical Bank, Bankers Trust Company, the CIT Group/Business Credit,
Inc. and Barclays Bank PLC as co-agents, and Chemical Bank as
administrative agent (the "Credit Facility")
4.05.2* First Amendment to the Credit Facility, dated as of March 1, 1995
4.05.3* Second Amendment to the Credit Facility, dated as of October 24, 1995
4.05.4* Third Amendment to the Credit Facility, dated as of March 5, 1996
4.05.5* Fourth Amendment to the Credit Facility, dated as of April 10, 1996
4.05.6* Fifth Amendment to the Credit Facility, dated as of April 18, 1996
4.05.7** Sixth Amendement and Consent to the Credit Facility, dated as of August
28, 1996
4.06* Amended and Restated Loan and Security Agreement dated as of
May 12, 1995 between Fifth Avenue Capital Trust ("FACT") and certain
direct and indirect wholly-owned subsidiaries of Saks (the "Borrowers")
4.07* Trust and Servicing Agreement dated as of May 12, 1995 among FACT,
Bankers Trust Company, as servicer, and Marine Midland Bank, as trustee
4.08* Amended and Restated Trust Agreement, dated as of May 12, 1995, among
Saks, HNY, Inc. and Wilmington Company, as owner trustee
4.09* Indenture, dated as of July 1, 1993, between Saks and AIBC Services
N.V., as trustee
4.10* First Supplemental Indenture, dated as of April 22, 1996, between Saks
and AIBC Services N.V., as trustee
4.11 Form of % Subordinated Note from Saks to Saks Holdings
4.12 Second Supplemental Indenture, dated as of September , 1996, between
Saks and AIBC Services N.V., as trustee.
4.13 Registration Rights Agreement, dated as of August 16, 1996, among Saks
Holdings and certain stockholders of Saks Holdings.
5.01 Opinion of Gibson, Dunn & Crutcher LLP
8.01 Opinion of Gibson, Dunn & Crutcher LLP
10.01.1* Amended and Restated Pooling & Servicing Agreement, dated as of December
16, 1991, among SFA Finance Company, Saks and Bankers Trust Company, as
trustee (the "1991 P&S")
10.01.2* First Amendment to the 1991 P&S, dated as of November 5, 1992
10.01.3* Second Amendment to the 1991 P&S, dated as of October 26, 1993
10.02.1* Second Amended and Restated Receivables Purchase Agreement, dated as of
December 16, 1991, between Saks and SFA Finance Company (the
"Receivables Purchase Agreement")
10.02.2* First Amendment to the 1991 Receivables Purchase Agreement, dated as of
November 5, 1992
10.02.3* Second Amendment to the 1991 Receivables Purchase Agreement, dated as of
October 26, 1993
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT PAGE
- --------- ---------------------- -----
<S> <C> <C>
10.03.1* Series 1991-2 Supplement, dated as of December 16, 1991, among SFA
Finance Company, Saks, MHTC, as administrative agent, and Bankers Trust
Company, as trustee (the "1991-2 Supplement")
10.03.2* First Amendment to the 1991-2 Supplement, dated as of July 22, 1992
10.03.3* Second Amendment to the 1991-2 Supplement, dated as of August 20, 1992
10.03.4* Third Amendment to the 1991-2 Supplement, dated as of November 5, 1992
10.03.5* Fourth Amendment to the 1991-2 Supplement, dated as of May 20, 1993
10.03.6* Fifth Amendment to the 1991-2 Supplement, dated as of October 28, 1993
10.03.7* Sixth Amendment to the 1991-2 Supplement, dated as of September 30, 1994
10.04.1* Class C Supplement to Series 1991-2 Supplement, dated as of
November 5, 1992, among SFA Finance Company, Saks and Bankers Trust
Company, as trustee (the "1991-2(C) Supplement")
10.04.2* First Amendment to the 1991-2(C) Supplement, dated as of September 30,
1994
10.05* Class B Supplement to Series 1991-2 Supplement, dated as of September
30, 1994, among SFA Finance Company, Saks and Bankers Trust Company, as
trustee
10.06* Series 1995-1 Supplement, dated as of November 13, 1995, among SFA
Finance Company, Saks, Swiss Bank Corporation, New York Branch, as
administrative agent, and Bankers Trust Company, as trustee
10.07* Transition Supplement to the 1991 P&S, dated as of April 25, 1996, among
SFA Finance Company, Saks and Bankers Trust Company, as trustee
10.08* Pooling and Servicing Agreement, dated as of April 25, 1996, among SFA
Finance Company, Saks and Bankers Trust Company, as trustee (the "1996
P&S")
10.09* Series 1996-1 Supplement to the 1996 P&S, dated as of April 25, 1996,
among SFA Finance Company, Saks and Bankers Trust Company, as trustee
10.10* Third Amended and Restated Receivables Purchase Agreement, dated as of
April 25, 1996, between Saks and SFA Finance Company
10.11* Series 1996-2 Supplement to the 1996 P&S, dated as of April 25, 1996,
among SFA Finance Company, Saks and Bankers Trust Company, as trustee
10.12* Purchase Agreement, dated May 4, 1995 among Saks, FACT, the Borrowers,
Goldman, Sachs & Company and Chemical Securities, Inc., with respect to
the sale of Commercial Mortgage Pass-Through Certificates due May 12,
2002
10.13* Saks Fifth Avenue Supplemental Pension Plan, effective July 2, 1990
10.14* Saks Holdings, Inc. Senior Management Stock Incentive Plan, dated as of
October 17, 1990 (the "Old Incentive Plan")
10.15* Standard Form of Stock Option Agreement Pursuant to the Old Incentive
Plan
10.16.1* Saks Holdings, Inc. 1996 Management Stock Incentive Plan, dated as of
February 1, 1996 (the "New Incentive Plan")
10.16.2* Amendment to the New Incentive Plan
10.17* Standard Form of Stock Option Agreement Pursuant to the New Incentive
Plan
10.18* Amended and Restated Employment Agreement, dated as of March 1, 1996,
between Saks and Philip B. Miller
10.19* Amended and Restated Employment Agreement, dated as of March 1, 1996,
between Saks and Rose Marie Bravo
10.20* Amended and Restated Employment Agreement, dated as of March 1, 1996,
between Saks and Owen E. Dorsey
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT PAGE
- --------- ---------------------- -----
<S> <C> <C>
10.21* Employment Agreement, dated as of March 1, 1996, between Saks and Brian
E. Kendrick
10.22* Agreement for Management Advisory and Consulting Services, dated as of
July 2, 1995, between Saks and III
10.23* Acquisitions Advisory Agreement, dated as of January 29, 1995, between
Saks and III
10.24* Public Company Expenses Agreement, dated as of April 27, 1996, between
Saks Holdings and Saks.
10.25* Form of Common Stock Purchase Agreement between Saks Holdings and
Investcorp, S.A.
12.01** Statement regarding the computation of the ratio of earnings to fixed
charges
21.01* Subsidiaries of Saks Holdings
23.01** Consent of Coopers & Lybrand L.L.P.
23.02 Consents of Gibson, Dunn & Crutcher (contained in Exhibits 5.01 and
8.01)
24.01** Power of Attorney (included on signature page of Registration Statement)
25.01 Form T-1 of Bankers Trust Company
</TABLE>
- ------------
* Incorporated herein by reference to Saks Holdings' registration statement on
Form S-1 (File No. 333-2426)
** Previously filed.
EXHIBIT 1.01
Draft of September 14, 1996
Saks Holdings, Inc.
$200,000,000
___% Convertible Subordinated
Notes Due 2006
Underwriting Agreement
September , 1996
Goldman, Sachs & Co.,
CS First Boston Corporation,
Morgan Stanley & Co. Incorporated,
Salomon Brothers Inc,
As representatives of the several Underwriters
named in Schedule I hereto,
c/o Goldman, Sachs & Co.,
85 Broad Street,
New York, New York 10004.
Ladies and Gentlemen:
Saks Holdings, Inc., a Delaware corporation (the "Company"), proposes,
subject to the terms and conditions stated herein, to issue and sell to the
Underwriters named in Schedule I hereto (the "Underwriters") an aggregate of
$200,000,000 principal amount of the Convertible Subordinated Notes, convertible
into Common Stock, par value $0.01 per share ("Stock") of the Company, specified
above (the "Firm Securities") and, at the election of the Underwriters, up to an
aggregate of $30,000,000 additional aggregate principal amount of Convertible
Subordinated Notes (the "Optional Securities") of the Company (the Firm
Securities and the Optional Securities that the Underwriters elect to purchase
pursuant to Section 2 hereof being collectively called the "Securities").
1. The Company represents and warrants to, and agrees with, each of the
Underwriters that:
(a) A registration statement on Form S-1 (File No. 333-11101) (the
"Initial Registration Statement") in respect of the Securities has been
filed with the Securities and Exchange Commission (the "Commission"); the
Initial Registration Statement and any post-effective amendment thereto,
each in the form heretofore delivered to you, and, excluding exhibits
thereto, to you for each of the other Underwriters, have been
<PAGE>
declared effective by the Commission in such form; other than a
registration statement, if any, increasing the size of the offering (a
"Rule 462(b) Registration Statement"), filed pursuant to Rule 462(b) under
the Securities Act of 1933, as amended (the "Act"), which became effective
upon filing, no other document with respect to the Initial Registration
Statement has heretofore been filed with the Commission; and no stop order
suspending the effectiveness of the Initial Registration Statement, any
post-effective amendment thereto or the Rule 462(b) Registration Statement,
if any, has been issued and, to the knowledge of the Company, no proceeding
for that purpose has been initiated or threatened by the Commission (any
preliminary prospectus included in the Initial Registration Statement or
filed with the Commission pursuant to Rule 424(a) of the rules and
regulations of the Commission under the Act is hereinafter called a
"Preliminary Prospectus"; the various parts of the Initial Registration
Statement and the Rule 462(b) Registration Statement, if any, including all
exhibits thereto and including the information contained in the form of
final prospectus filed with the Commission pursuant to Rule 424(b) under
the Act in accordance with Section 5(a) hereof and deemed by virtue of Rule
430A under the Act to be part of the Initial Registration Statement at the
time it was declared effective or such part of the Rule 462(b) Registration
Statement, if any, became or hereafter becomes effective, each as amended
at the time such part became effective, are hereinafter collectively called
the "Registration Statement"; and such final prospectus, in the form first
filed pursuant to Rule 424(b) under the Act, is hereinafter called the
"Prospectus";
(b) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission, and each Preliminary
Prospectus, at the time of filing thereof, conformed in all material
respects to the requirements of the Act and the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"), and the rules and regulations
of the Commission thereunder, and did not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter through
Goldman, Sachs & Co. expressly for use therein;
(c) As of the applicable effective date as to the Registration
Statement and any amendment thereto, and as of the applicable filing date
as to the Prospectus and any amendment or supplement thereto, the
Registration Statement conformed, and the Prospectus and any further
amendments or supplements to the Registration Statement or the Prospectus
will conform, in all material respects to the requirements of the Act and
the Trust Indenture Act and the rules and regulations of the Commission
thereunder and do not and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made in the case of the Prospectus and
any amendment or supplement thereto, not misleading; provided, however,
that this representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information
-2-
<PAGE>
furnished in writing to the Company by an Underwriter through Goldman,
Sachs & Co. expressly for use therein;
(d) Neither the Company nor any of its subsidiaries listed on
Schedule II hereto (its "Subsidiaries"), which listing includes each of the
Company's "significant subsidiaries" as such term is defined in Rule 405
under the Act, has sustained since the date of the latest audited financial
statements included in the Prospectus any loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental
action, order or decree, which loss or interference is material to the
financial position or results of operations of the Company and its
subsidiaries taken as a whole otherwise than as set forth or contemplated
in the Prospectus; and, since the respective dates as of which information
is given in the Registration Statement and the Prospectus, there has not
been any change in the capital stock (other than pursuant to the exercise
of existing options and other than as described in or referred to in the
Prospectus) or increase in the long-term debt (other than pursuant to the
Company's accounts receivable sale program) of the Company or any of its
Subsidiaries, any material revaluation of inventories, or any material
adverse change, or any development involving a prospective material adverse
change, in or affecting the general affairs, management, financial
position, stockholders' equity or results of operations of the Company and
its subsidiaries taken as a whole, otherwise than as set forth or
contemplated in the Prospectus;
(e) The Company and its Subsidiaries own all real property and
personal property as set forth in the Prospectus other than as described in
or referred to in the Prospectus in each case free and clear of all liens,
encumbrances and defects except such as are described or referred to in the
Prospectus or such as do not materially affect the value of such property
and do not interfere with the use made and proposed to be made of such
property by the Company and its subsidiaries; and any real property and
buildings held under lease by the Company and its Subsidiaries are held by
them under valid, subsisting and enforceable leases with such exceptions as
are described or referred to in the Prospectus or are not material and do
not interfere with the use made and proposed to be made of such property
and buildings by the Company and its subsidiaries;
(f) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of Delaware with corporate
power and authority to own its properties and conduct its business as
described in the Prospectus, and has been duly qualified as a foreign
corporation for the transaction of business and is in good standing under
the laws of each other jurisdiction in which it owns or leases properties
or conducts any business so as to require such qualification, except where
the failure to be so qualified would not result in a material adverse
change to the financial position or results of operations of the Company
and its subsidiaries taken as a whole; and each Subsidiary has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation with corporate power
and authority to own its properties and conduct its business as
-3-
<PAGE>
described in the Prospectus, and has been duly qualified as a foreign
corporation for the transaction of business and is in good standing under
the laws of each other jurisdiction in which it owns or leases properties
or conducts any business so as to require such qualification except where
the failure to be so qualified would not result in a material adverse
change to the financial position or results of operations of the Company
and its subsidiaries taken as a whole, or is subject to no material
liability or disability by reason of the failure to be so qualified in any
such jurisdiction;
(g) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company
have been duly and validly authorized and issued, are fully paid and
non-assessable; the shares of Stock initially issuable upon conversion of
the Securities have been duly authorized and reserved for issuance and,
when issued and delivered in accordance with the provisions of the
Securities and the Indenture referred to below, will be validly issued,
fully paid and non-assessable and will conform to the description of the
Stock contained in the Prospectus; and all of the issued shares of capital
stock of each Subsidiary have been duly and validly authorized and issued,
are fully paid and (except, with respect to any Subsidiary incorporated in
the State of New York, as provided in Section 630 of the Business
Corporations Law of the State of New York) non-assessable and (except for
directors' qualifying shares) are owned directly or indirectly by the
Company, free and clear of all liens, encumbrances, equities or claims
except as otherwise set forth in or contemplated by the Prospectus;
(h) The Securities have been duly authorized and, when issued and
delivered pursuant to this Agreement, will have been duly executed,
authenticated, issued and delivered and will constitute valid and legally
binding obligations of the Company entitled to the benefits provided by the
indenture dated as of September __, 1996 (the "Indenture") between the
Company and Bankers Trust Company, as Trustee (the "Trustee"), under which
they are to be issued, which is substantially in the form filed as an
exhibit to the Registration Statement; the Indenture has been duly
authorized and duly qualified under the Trust Indenture Act and, when
executed and delivered by the Company and the Trustee, will constitute a
valid and legally binding instrument, enforceable in accordance with its
terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles; and the
Securities and the Indenture will conform to the descriptions thereof in
the Prospectus;
(i) The issue and sale of the Securities by the Company hereunder and
the compliance by the Company with all of the provisions of this Agreement
and the consummation by the Company of the transactions to be performed by
the Company herein contemplated will not conflict with or result in a
breach or violation of or constitute a default under, any of the existing
terms or provisions of, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company or any of
its Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound or to which any of the property or assets of the
Company or any of its Subsidiaries is subject except for such conflicts,
breaches, violations or defaults
-4-
<PAGE>
that individually or in the aggregate would not result in a material
adverse change to the financial position or results of operations of the
Company and its subsidiaries taken as a whole, nor will such action result
in any violation of the provisions of the Certificate of Incorporation or
By-laws of the Company or any existing United States federal or state
statute (excluding for purposes of this paragraph (i) United States federal
or state securities laws) or any existing order, rule or regulation of any
United States federal or state court or governmental agency or body having
jurisdiction over the Company or any of its Subsidiaries or any of their
properties except for such violations (other than any relating to the
Certificate of Incorporation or By-Laws of the Company) that individually
or in the aggregate would not result in a material adverse change to the
financial position or results of operations of the Company and its
subsidiaries taken as a whole; and no consent, approval, authorization,
order, registration or qualification of or with any such United States
federal or state court or governmental agency or body is required to be
obtained by the Company on the date hereof or at any Time of Delivery for
the issue and sale of the Securities by the Company to the Underwriters or
the consummation by the Company of the transactions to be performed by the
Company contemplated by this Agreement, except the registration under the
Act of the Securities and the shares of Common Stock issuable upon
conversion thereof, such as have been obtained under the Trust Indenture
Act and such consents, approvals, authorizations, registrations or
qualifications as may be required under state or foreign securities or Blue
Sky laws in connection with the purchase and distribution of the Securities
by the Underwriters and the International Underwriters;
(j) Neither the Company nor any of its Subsidiaries is in violation
of its Certificate of Incorporation or By-laws; and neither the Company nor
any of its Subsidiaries is in default in the performance or observance of
any material obligation, agreement, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement, lease or other
agreement or instrument to which it is a party or by which it or any of its
properties may be bound except for such violations and defaults as would
not result in a material adverse change to the financial position or
results of operations of the Company and its subsidiaries taken as a whole;
(k) The statements set forth in the Prospectus under the caption
"Description of Notes" and "Description of Capital Stock", insofar as they
purport to describe the terms of the Securities and the Stock and under the
caption "Taxation", insofar as they purport to describe the provisions of
the laws and documents referred to therein, present in all material
respects a fair description of such provisions and documents;
(l) Other than as set forth or contemplated in the Prospectus, there
are no legal or governmental proceedings pending to which the Company or
any of its subsidiaries is a party or of which any property of the Company
or any of its subsidiaries is the subject which could reasonably be
expected to be determined adversely to the Company and any of its
subsidiaries and, if so determined, would individually or in the aggregate
have a material adverse effect on the current or future consolidated
financial position, stockholders' equity or results of operations of the
Company and its
-5-
<PAGE>
subsidiaries taken as a whole; and, to the best of the Company's knowledge,
no such proceedings are threatened or contemplated by governmental
authorities or threatened by others;
(m) The Company and its subsidiaries own, or possess adequate rights
to use, all trademarks, service marks, trade names, copyrights and licenses
(including the names, "Saks Fifth Avenue", "SFA", "Off 5th", "S5A" and
"Folio") necessary to conduct their businesses currently and as proposed to
be conducted, and neither the Company nor its subsidiaries has received any
notice of infringement of or conflict with (or knows of any such
infringement or conflict with) asserted rights of others with respect to
such trademarks, service marks, tradenames, copyrights or licenses;
(n) The Company is not and, after giving effect to the offering and
sale of the Securities, will not be (i) an "investment company" or (ii) an
entity "controlled" by an "investment company" required to be registered
under the Investment Company Act of 1940, as amended (the "Investment
Company Act") (for purposes of this paragraph (n), "investment company" and
"controlled" shall have the meanings ascribed to such terms in the
Investment Company Act);
(o) Neither the Company nor any of its affiliates does business with
the government of Cuba or with any person or affiliate located in Cuba
within the meaning of Section 517.075, Florida Statutes;
(p) Coopers & Lybrand L.L.P., who have certified certain financial
statements of the Company and its subsidiaries, are independent public
accountants as required by the Act and the rules and regulations of the
Commission thereunder;
(q) Each of the Company and its Subsidiaries (i) is in compliance
with any and all applicable federal, state and local laws and regulations
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), (ii) has received all permits, licenses or other
approvals required of it under applicable Environmental Laws to conduct its
business and (iii) is in compliance with all terms and conditions of any
such permit, license or approval, except in the case of (i), (ii) or (iii)
where such noncompliance with Environmental Laws, failure to receive
required permits, licenses or other approvals or failure to comply with the
terms and conditions of such permits, licenses or approvals would not,
singly or in the aggregate, have a material adverse effect on the Company
and its subsidiaries taken as a whole;
(r) The Shares issuable upon conversion of the Securities have been
approved for listing on the New York Stock Exchange, subject to official
notice of issuance;
(s) Except for the Registration Rights Agreement, dated as of August
__, 1996, among the Company and certain stockholders of the Company party
thereto, there are no contracts, agreements, or understandings between the
Company and any person
-6-
<PAGE>
granting such person the right to require the Company to include any
securities of the Company in the Registration Statement for sale by such
person; and
(t) There are no contracts or other documents of a character required
to be filed as an exhibit to the Registration Statement or required to be
described in the Registration Statement or the Prospectus which are not
filed or described as required.
2. (a) Subject to the terms and conditions herein set forth, (i) the
Company agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company, at
a purchase price of __% of the principal amount thereof, plus accrued interest,
if any, from September __, 1996 to the Time of Delivery hereunder, the principal
amount of Securities set forth opposite the name of such Underwriter in Schedule
I hereto and (ii) in the event and to the extent that the Underwriters shall
exercise the election to purchase Optional Securities as provided below, the
Company agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company, at
the same purchase price set forth in clause (i) of this Section 2, that portion
of the aggregate principal amount of the Optional Securities as to which such
election shall have been exercised (to be adjusted by you so as to eliminate
fractions of $1,000) determined by multiplying such aggregate principal amount
of Optional Securities by a fraction, the numerator of which is the maximum
aggregate principal amount of Optional Securities which such Underwriter is
entitled to purchase as set forth opposite the name of such Underwriter in
Schedule I hereto and the denominator of which is the maximum aggregate
principal amount of Optional Securities that all of the Underwriters are
entitled to purchase hereunder.
The Company hereby grants to the Underwriters the right to purchase at
their election up to $30,000,000 aggregate principal amount of Optional
Securities, at the purchase price set forth in clause (i) of the paragraph
above, for the sole purpose of covering overallotments in the sale of the Firm
Securities. Any such election to purchase Optional Securities may be exercised
only by written notice from you to the Company, given within a period of 30
calendar days after the date of this Agreement, setting forth the aggregate
principal amount of Optional Securities to be purchased and the date on which
such Optional Securities are to be delivered, as determined by you but in no
event earlier than the First Time of Delivery (as defined in Section 4 hereof)
or, unless you and the Company otherwise agree in writing, earlier than two or
later than ten business days after the date of such notice.
(b) The Company hereby confirms its engagement of Goldman, Sachs & Co. as,
and Goldman, Sachs & Co. hereby confirms its agreement with the Company to
render services as, a "qualified independent underwriter" within the meaning of
Section 2(o) of Schedule E to the By-Laws of the National Association of
Securities Dealers, Inc. (the "NASD") with respect to the offering and sale of
the Securities. Goldman, Sachs & Co., in its capacity as qualified independent
underwriter and not otherwise, is referred to herein as the "QIU". As
compensation for the services of the QIU hereunder, the Company agrees to pay
the QIU $10,000 on the Closing Date.
-7-
<PAGE>
3. Upon the authorization by you of the release of the Firm Securities,
the several Underwriters propose to offer the Firm Securities for sale upon the
terms and conditions set forth in the Prospectus.
4. (a) The Securities to be purchased by each Underwriter hereunder will
be represented by one or more definitive global Securities in book-entry form
which will be deposited by or on behalf of the Company with The Depository Trust
Company ("DTC") or its designated custodian. The Company will deliver the
Securities to Goldman, Sachs & Co., for the account of each Underwriter, against
payment by or on behalf of such Underwriter of the purchase price therefor by
wire transfer or by certified or official bank check or checks, payable to the
order of the Company in Federal (same day) funds, by causing DTC to credit the
Securities to the account of Goldman, Sachs & Co. at DTC. The Company will
cause the certificates representing the Securities to be made available to
Goldman, Sachs & Co. for checking at least twenty-four hours prior to the Time
of Delivery (as defined below) at the office of DTC or its designated custodian
(the "Designated Office"). The time and date of such delivery and payment shall
be, with respect to the Firm Securities, 9:30 a.m., New York City time, on
September , 1996 or such other time and date as Goldman, Sachs & Co. and the
Company may agree upon in writing, and, with respect to the Optional Securities,
9:30 a.m., New York time, on the date specified by Goldman, Sachs & Co. in the
written notice given by Goldman, Sachs & Co. of the Underwriters' election to
purchase such Optional Securities, or such other time and date as Goldman, Sachs
& Co. and the Company may agree upon in writing. Such time and date for
delivery of the Firm Securities is herein called the "First Time of Delivery",
such time and date for delivery of the Optional Securities, if not the First
Time of Delivery, is herein called the "Second Time of Delivery", and each such
time and date for delivery is herein called a "Time of Delivery".
(b) The documents to be delivered at each Time of Delivery by or on behalf
of the parties hereto pursuant to Section 7 hereof, including the cross receipt
for the Securities and any additional documents requested by the Underwriters
pursuant to Section 7(k) hereof, will be delivered at the offices of Sullivan &
Cromwell, 125 Broad Street, New York, New York 10004 (the "Closing Location"),
and the Securities will be delivered at the Designated Office, all at such Time
of Delivery. A meeting will be held at the Closing Location at 2:00 p.m., New
York City time, on the New York Business Day next preceding such Time of
Delivery, at which meeting the final drafts of the documents to be delivered
pursuant to the preceding sentence will be available for review by the parties
hereto. For the purposes of this Section 4, "New York Business Day" shall mean
each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in New York are generally authorized or obligated by law or
executive order to close.
5. The Company agrees with each of the Underwriters:
(a) To prepare the Prospectus in a form approved by you and to file
such Prospectus pursuant to Rule 424(b) under the Act not later than the
Commission's close of business on the second business day following the
execution and delivery of this Agreement (or to transmit such Prospectus by
a means reasonably calculated to result in filing with the Commission by
such date), or, if applicable, such earlier time
-8-
<PAGE>
as may be required by Rule 430A(a)(3) under the Act; to make no further
amendment or any supplement to the Registration Statement or Prospectus
prior to the last Time of Delivery which shall be disapproved by you
promptly after reasonable notice thereof; to advise you, promptly after it
receives notice thereof, of the time when any amendment to the Registration
Statement has been filed with the Commission or becomes effective or any
supplement to the Prospectus or any amended Prospectus has been filed with
the Commission and to furnish you with copies of any such amendment or
supplement; to advise you, promptly after it receives notice thereof, of
the issuance by the Commission of any stop order or of any order preventing
or suspending the use of any Preliminary Prospectus or prospectus, of the
suspension of the qualification of the Securities for offering or sale in
any jurisdiction, of the initiation or threatening of any proceeding for
any such purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement or Prospectus or for additional
information; and, in the event of the issuance of any stop order or of any
order preventing or suspending the use of any Preliminary Prospectus or
prospectus or suspending any such qualification, promptly to use its
reasonable best efforts to obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Securities and the shares of Stock
issuable upon conversion of the Securities for offering and sale under the
securities laws of such jurisdictions within the United States as you may
request and to comply with such laws so as to permit the continuance of
sales and dealings therein in such jurisdictions for as long as may be
necessary to complete the distribution of the Securities, provided that in
connection therewith the Company shall not be required to qualify as a
foreign corporation or to file a general consent to service of process in
any jurisdiction;
(c) On the New York Business Day next succeeding the date of this
Agreement and from time to time, to furnish the Underwriters with copies of
the Prospectus in New York City in such quantities as you may reasonably
request, and, if the delivery of a prospectus is required at any time prior
to the expiration of nine months after the time of issue of the Prospectus
in connection with the offering or sale of the Securities and the shares of
Stock issuable upon conversion of the Securities and if at such time any
event shall have occurred as a result of which the Prospectus as then
amended or supplemented would include an untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made when such Prospectus is delivered, not misleading, or, if for any
other reason it shall be necessary during such period to amend or
supplement the Prospectus in order to comply with the Act, to notify you
and upon your request to prepare and furnish without charge to each
Underwriter and to any dealer in securities as many copies as you may from
time to time reasonably request of an amended Prospectus or a supplement to
the Prospectus which will correct such statement or omission or effect such
compliance, and in case any Underwriter is required to deliver a prospectus
in connection with sales of any of the Securities at any time nine months
or more after the time of issue of the Prospectus, upon your request but at
the expense of such Underwriter, to prepare and deliver to such Underwriter
as
-9-
<PAGE>
many copies as you may request of an amended or supplemented Prospectus
complying with Section 10(a)(3) of the Act;
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c)
under the Act), an earnings statement of the Company and its subsidiaries
(which need not be audited) complying with Section 11(a) of the Act and the
rules and regulations thereunder (including, at the option of the Company,
Rule 158);
(e) During the period beginning from the date hereof and continuing
to and including the date 90 days after the date of the Prospectus, not to
offer, sell, contract to sell or otherwise dispose of, except as provided
hereunder and under the underwriting agreement and the international
underwriting agreement of even date herewith regarding a secondary offering
of Stock by certain stockholders of the Company, any securities of the
Company that are substantially similar to the Securities or the Stock,
including but not limited to any securities that are convertible into or
exchangeable for, or that represent the right to receive, Stock or any such
substantially similar securities (other than (i) in connection with the
acquisition of or merger with any other corporation or other entity or the
acquisition of any assets or properties thereof or (ii) pursuant to
employee stock option, stock purchase or other employee benefit plans
existing on the date hereof, provided that in the case of (i) above, prior
to the issuance of such securities, the Company obtains and delivers to the
Underwriters executed copies of an agreement from any such corporation or
entity substantially to the effect set forth in this Section 5(e) in form
satisfactory to you), without your prior written consent;
(f) To furnish to its stockholders as soon as practicable after the
end of each fiscal year an annual report (including a balance sheet and
statements of income, stockholders' equity and cash flows of the Company
and its consolidated subsidiaries certified by independent public
accountants) and, as soon as practicable after the end of each of the first
three quarters of each fiscal year (beginning with the fiscal quarter
ending after the effective date of the Registration Statement),
consolidated summary financial information of the Company and its
subsidiaries for such quarter in reasonable detail;
(g) During a period of three years from the effective date of the
Registration Statement, to furnish to you copies of all reports or other
communications (financial or other) generally furnished to stockholders,
and to deliver to you (i) as soon as they are available, copies of any
reports and financial statements furnished to or filed with the Commission
pursuant to the Securities Exchange Act of 1934; and (ii) such additional
information, which additional information shall be kept confidentially by
you, concerning the business and financial condition of the Company as you
may from time to time reasonably request (such financial statements to be
on a consolidated basis to the extent the accounts of the Company and its
subsidiaries are consolidated in reports furnished to its stockholders
generally or to the Commission);
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(h) To use the net proceeds received by it from the sale of the
Securities pursuant to this Agreement in substantially the manner specified
in the Prospectus under the caption "Use of Proceeds";
(i) To use its best efforts to list, subject to notice of issuance,
the shares of Stock issuable upon conversion of the Securities on the
New York Stock Exchange (the "Exchange");
(j) To reserve and keep available at all times, free of preemptive
rights, shares of Stock for the purpose of enabling the Company to satisfy
any obligations to issue shares of Stock upon conversion of the Securities;
and
(k) If the Company elects to rely upon Rule 462(b), the Company shall
file a Rule 462(b) Registration Statement with the Commission in compliance
with Rule 462(b) by 10:00 p.m., Washington, D.C. time, on the date of this
Agreement, and the Company shall at the time of filing either pay to the
Commission the filing fee for the Rule 462(b) Registration Statement or
give irrevocable instructions for the payment of such fee pursuant to Rule
111(b) under the Act.
6. The Company covenants and agrees with the several Underwriters that
the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Securities and the shares of Stock
issuable upon conversion of the Securities under the Act and all other expenses
in connection with the preparation, printing and filing of the Registration
Statement, any Preliminary Prospectus and the Prospectus and amendments and
supplements thereto and the mailing and delivering of copies thereof to the
Underwriters and dealers; (ii) the cost of printing or producing any Agreement
among Underwriters, this Agreement, the Blue Sky Memorandum, closing documents
and any other documents that the Company may request in connection with the
offering, purchase, sale and delivery of the Securities; (iii) all expenses in
connection with the qualification of the Securities and the Shares of Stock
issuable upon conversion of the Securities for offering and sale under state
securities laws as provided in Section 5(b) hereof, including the fees and
disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky survey; (iv) any fees charged
by securities rating services for rating the Securities; (v) all fees and
expenses in connection with listing the shares of Stock issuable upon conversion
of the Securities on the New York Stock Exchange; (vi) the filing fees incident
to, and the fees and disbursements of counsel for the Underwriters in connection
with, securing any required review by the National Association of Securities
Dealers, Inc. of the terms of the sale of the Securities; (vii) the cost of
preparing the Securities; (viii) the fees and expenses of the Trustee and any
agent of the Trustee and the fees and disbursements of counsel for the Trustee
in connection with the Indenture and the Securities; and (ix) all other costs
and expenses incident to the performance by the Company of its obligations
hereunder which are not otherwise specifically provided for in this Section. It
is understood, however, that, except as provided in this Section, and Sections 8
and 12 hereof, the Underwriters will pay all of their own costs and expenses,
including the fees of their counsel, stock transfer taxes on resale of any of
the Securities by them, and any advertising expenses connected with any offers
they may make.
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7. The obligations of the Underwriters hereunder, as to the Securities to
be delivered at each Time of Delivery, shall be subject, in their discretion, to
the condition that all representations and warranties and other statements of
the Company herein are, at and as of such Time of Delivery, true and correct,
the condition that the Company shall have performed all of its obligations
hereunder theretofore to be performed, and the following additional conditions:
(a) The Prospectus shall have been filed, or transmitted by a means
reasonably calculated to result in filing, with the Commission pursuant to
Rule 424(b) within the applicable time period prescribed for such filing by
the rules and regulations under the Act and in accordance with Section 5(a)
hereof; if the Company has elected to rely upon Rule 462(b), the Rule
462(b) Registration Statement shall have become effective by 10:00 p.m.,
Washington D.C. time, on the date of this Agreement; no stop order
suspending the effectiveness of the Registration Statement or any part
thereof shall have been issued and no proceeding for that purpose shall
have been initiated or threatened by the Commission; and all requests for
additional information on the part of the Commission shall have been
complied with to your reasonable satisfaction;
(b) Sullivan & Cromwell, counsel for the Underwriters, shall have
furnished to you such opinion or opinions (a draft of each such opinion is
attached as Annex II(a) hereto), dated such Time of Delivery, with respect
to the matters covered in paragraphs (i), (ii), (vii), (xi) and (xiii) of
subsection (c) below as well as such other related matters as you may
reasonably request, and such counsel shall have received such papers and
information as they may reasonably request to enable them to pass upon such
matters;
(c) Gibson, Dunn & Crutcher LLP, special counsel for the Company,
shall have furnished to you their written opinion (a draft of such opinion
is attached as Annex II(b) hereto), dated such Time of Delivery, in form
and substance satisfactory to you, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the state
of Delaware with corporate power and authority to own its properties
and conduct its business as described in the Prospectus;
(ii) The Company has an authorized capitalization as set forth in
the Prospectus, and all of the issued shares of capital stock of the
Company have been duly authorized and validly issued and are fully
paid and nonassessable; and the shares of Stock initially issuable
upon conversion of the Securities have been duly authorized and
reserved for issuance and, when issued and delivered in accordance
with the provisions of the Securities and the Indenture, will be
validly issued and fully paid and non-assessable; and the shares of
Stock initially issuable upon conversion of the Securities currently
conform to the description of the Stock contained in the Prospectus;
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(iii) This Agreement has been duly authorized, executed and
delivered by the Company;
(iv) The Securities have been duly authorized and, when executed
and authenticated in accordance with the terms of the Indenture and
issued and delivered to and paid for by the Underwriters pursuant to
the Underwriting Agreement, will constitute valid and legally binding
obligations of the Company entitled to the benefits provided by the
Indenture; and the Securities and the Indenture conform to the
descriptions thereof in the Prospectus;
(v) The Indenture has been duly authorized, executed and
delivered by the Company and, assuming due authorization, execution
and delivery by the Trustee, constitutes a valid and legally binding
instrument of the Company, enforceable in accordance with its terms,
subject to bankruptcy, insolvency, reorganization, moratorium and
similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles; and the Indenture
has been duly qualified under the Trust Indenture Act;
(vi) The issue and sale of the Securities being delivered to the
Underwriters at such Time of Delivery and the compliance by the
Company with all of the provisions of this Agreement and the
consummation by the Company of the transactions to be performed by the
Company herein contemplated will not conflict with or result in a
breach or violation of, or constitute a default under, any of the
existing terms or provisions of, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument filed as an
exhibit to the Registration Statement, nor will such action result in
any violation of the provisions of the Certificate of Incorporation or
By-laws of the Company or any existing statute or any existing order,
rule or regulation (other than foreign and state securities laws, as
to which such counsel expresses no opinion and other than federal
securities laws, as to which such counsel expresses no opinion except
as otherwise set forth herein) known to such counsel of any United
States federal or state court or governmental agency or body having
jurisdiction over the Company or any of its Subsidiaries;
(vii) No consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body
is required to be obtained by the Company for the issue and sale by
the Company of the Securities to the Underwriters or the consummation
by the Company of the transactions to be performed by the Company
contemplated by this Agreement, except the registration under the Act
of the Securities, the qualification of the Indenture under the Trust
Indenture Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under state or
foreign securities or Blue Sky laws; and
(viii) The Company is not, and after giving effect to the sale of
the Securities, will not be (i) an "investment company" or (ii) an
entity "controlled"
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by an "investment company" required to be registered under the
Investment Company Act (for purposes of this paragraph (viii),
"investment company" and "controlled" shall have the meanings ascribed
to such terms in the Investment Company Act); and
In addition, such counsel shall state that such counsel has
participated in the preparation of the Registration Statement and the Prospectus
and in conferences with officers and other representatives of the Company,
counsel for the Company, representatives of the independent auditors of the
Company and your representatives at which the contents of the Registration
Statement and Prospectus and related matters were discussed. Such counsel may
also state that because the purpose of their professional engagement was not to
establish or confirm factual matters and because the scope of their examination
of the affairs of the Company did not permit them to verify the accuracy,
completeness or fairness of the statements set forth in the Registration
Statement or Prospectus, they are not passing upon and do not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement or Prospectus, except to the extent set
forth in the last sentence of this paragraph. Such counsel also shall state
that, on the basis of the foregoing, except for the financial statements and
schedules and other financial data included therein, as to which such counsel
need express no opinion or belief, (a) such counsel is of the opinion that the
Registration Statement at the time it became effective, and the Prospectus as of
the date thereof and as of the date of such opinion, appeared on their face to
be appropriately responsive in all material respects to the relevant
requirements of the Securities Act and the General Rules and Regulations
promulgated thereunder and (b) no facts have come to such counsel's attention
that lead such counsel to believe that the Registration Statement at the time it
became effective contained an untrue statement of a material fact or omits or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, or the Prospectus as of its date and
as of the date of such opinion contained or contains an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading. Such counsel also shall state that,
insofar as the statements contained in the Registration Statement and the
Prospectus under the caption "Description of Capital Stock" constitute a summary
of the documents and legal matters referred to therein, such counsel is of the
opinion that such statements fairly present the information called for with
respect to such documents and legal matters by the Securities Act and the
applicable rules and regulations of the Commission thereunder relating to
registration statements on Form S-1 and prospectuses, and, insofar as the
statements contained in the Prospectus under the caption "Certain United States
Tax Consequences to Non-U.S. Holders" purport to describe the legal matters
referred to therein, such counsel is of the opinion that such description of
legal matters is accurate in all material respects.
In rendering such opinion, such counsel may state that they express no
opinion as to the laws of any jurisdiction other than the States of New York and
California, the General Corporation Law of the State of Delaware and the federal
law of the United States.
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(d) Joan F. Krey, general counsel of the Company, shall have
furnished to you her written opinion (a draft of such opinion is attached
as Annex II(c) hereto), dated such Time of Delivery, in form and substance
satisfactory to you, to the effect that:
(i) The Company has been duly qualified as a foreign corporation
for the transaction of business and is in good standing under the laws
of each jurisdiction in which it owns or leases properties or conducts
any business so as to require such qualification, or is subject to no
material liability or disability by reason of failure to be so
qualified in any such jurisdiction (such counsel being entitled to
rely in respect of the opinion in this clause upon opinions of local
counsel and in respect of matters of fact upon certificates of
officers of the Company or State officials);
(ii) Each Subsidiary of the Company has been duly incorporated
and is validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation and has been duly qualified
as a foreign corporation for the transaction of business and is in
good standing under the laws of each other jurisdiction in which it
owns or leases properties or conducts any business so as to require
such qualification, or is subject to no material liability or
disability by reason of the failure to be so qualified in any such
jurisdiction; and all of the issued shares of capital stock of each
such Subsidiary have been duly authorized and validly issued, are
fully paid and (except, with respect to any Subsidiary incorporated in
the State of New York, as provided in Section 630 of the Business
Corporations Law of the State of New York) non-assessable, and (except
for directors' qualifying shares) are owned directly or indirectly by
the Company, free and clear of all liens, encumbrances, equities or
claims and except as otherwise described or referred to in the
Prospectus (such counsel being entitled to rely in respect of the
opinion in this clause upon opinions of local counsel and in respect
to matters of fact upon certificates of officers of the Company or its
subsidiaries and state officials, provided that such counsel shall
state that they believe that both you and they are justified in
relying upon such opinions and certificates);
(iii) To such counsel's knowledge and other than as set forth in
the Prospectus, there are no legal or governmental proceedings pending
to which the Company or any of its subsidiaries is a party or of which
any property of the Company or any of its subsidiaries is the subject
which could reasonably be expected to be determined adversely to the
Company and any of its subsidiaries and, if so determined, would
individually or in the aggregate have a material adverse effect on the
current or future consolidated financial position, stockholders'
equity or results of operations of the Company and its subsidiaries;
and, to such counsel's knowledge, no such proceedings are threatened
or contemplated by governmental authorities or threatened by others;
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(iv) The issue and sale of the Securities being delivered to the
Underwriters at such Time of Delivery and the compliance by the
Company with all of the provisions of this Agreement and the
consummation by the Company of the transactions to be performed by the
Company herein contemplated will not conflict with or result in a
breach or violation of, or constitute a default under, any of the
existing terms or provisions of, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument filed as an
exhibit to the Registration Statement, nor will such action result in
any violation of the provisions of the Certificate of Incorporation or
By-laws of the Company or any existing statute or any existing order,
rule or regulation (other than foreign and state securities laws, as
to which such counsel expresses no opinion and other than federal
securities laws, as to which such counsel expresses no opinion except
as otherwise set forth herein) known to such counsel of any United
States federal or state court or governmental agency or body having
jurisdiction over the Company or any of its Subsidiaries; and
(v) Neither the Company nor any of its Subsidiaries is in
violation of its Certificate of Incorporation or By-laws or in default
in any material respect in the performance or observance of any
material obligation, agreement, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement, lease or other
agreement or instrument to which it is a party or by which it or any
of its properties may be bound.
(e) On the date of the Prospectus at a time prior to the execution of
this Agreement, at 9:30 a.m., New York City time, on the effective date of
any post-effective amendment to the Registration Statement filed subsequent
to the date of this Agreement and also at each Time of Delivery, Coopers &
Lybrand shall have furnished to you a letter or letters, dated the
respective dates of delivery thereof, in form and substance satisfactory to
you, to the effect set forth in Annex I hereto (the executed copy of the
letter delivered prior to the execution of this Agreement is attached as
Annex I(a) hereto and a draft of the form of letter to be delivered on the
effective date of any post-effective Amendment to the Registration
Statement and as of each Time of Delivery is attached as Annex I(b)
hereto);
(f)(i) Neither the Company nor any of its Subsidiaries shall have
sustained since the date of the latest audited financial statements
included in the Prospectus any loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action, order
or decree, which loss or interference is material to the financial position
or results of operations of the Company and its Subsidiaries taken as a
whole, otherwise than as set forth or contemplated in the Prospectus, and
(ii) since the respective dates as of which information is given in the
Prospectus there shall not have been any change in the capital stock (other
than pursuant to the exercise of existing options and other than as
described in or referred to in the Prospectus) or increase in the long-term
debt (other than pursuant to the accounts receivable sale program) of the
Company or any of its Subsidiaries, any material revaluation of
inventories, or any
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change, or any development involving a prospective change, in or affecting
the general affairs, management, financial position, stockholders' equity
or results of operations of the Company and its subsidiaries taken as a
whole, otherwise than as set forth or contemplated in the Prospectus, the
effect of which, in any such case described in Clause (i) or (ii), is in
the judgment of the Representatives so material and adverse as to make it
impracticable or inadvisable to proceed with the public offering or the
delivery of the Securities being delivered at such Time of Delivery on the
terms and in the manner contemplated in the Prospectus;
(g) On or after the date hereof (i) no downgrading shall have
occurred in the rating accorded the Company's debt securities by any
"nationally recognized statistical rating organization", as that term is
defined by the Commission for purposes of Rule 436(g)(2) under the Act, and
(ii) no such organization shall have publicly announced that it has under
surveillance or review, with possible negative implications, its rating of
any of the Company's debt securities;
(h) On or after the date hereof there shall not have occurred any of
the following: (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange; (ii) a suspension or
material limitation in trading in the Company's securities on the New York
Stock Exchange; (iii) a general moratorium on commercial banking activities
declared by either Federal or New York State authorities; or (iv) the
outbreak or escalation of hostilities involving the United States or the
declaration by the United States of a national emergency or war, if the
effect of any such event specified in this Clause (iv) in the judgment of
the Representatives makes it impracticable or inadvisable to proceed with
the public offering or the delivery of the Securities being delivered at
such Time of Delivery on the terms and in the manner contemplated in the
Prospectus;
(i) The shares of Stock issuable upon conversion of the Securities to
be sold at such Time of Delivery shall have been duly listed, subject to
notice of issuance, on the Exchange;
(j) The Company has obtained and delivered to the Underwriters
executed copies of an agreement from Investcorp S.A. ("Investcorp")
covering all shares of Common Stock beneficially owned by Investcorp that
were not purchased in the Company's initial public offering, substantially
to the effect set forth in Subsection 5(e) hereof and in form and substance
satisfactory to you;
(k) The Company shall have complied with the provisions of Section
5(c) hereto with respect to the furnishing of prospectuses on the New York
Business Day next succeeding the date of this Agreement; and
(l) The Company shall have furnished or caused to be furnished to you
at such Time of Delivery certificates of officers of the Company
satisfactory to you as to the accuracy of the representations and
warranties of the Company herein at and as of such Time of Delivery, as to
the performance by the Company of all of its obligations
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hereunder to be performed at or prior to such Time of Delivery, as to the
matters set forth in subsections (a) and (f) of this Section and as to such
other matters as you may reasonably request.
8. (a) The Company will indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue
statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the Prospectus, or
any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading, and will reimburse each Underwriter for any legal or other
expenses reasonably incurred by such Underwriter in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that the Company shall not be liable in any
such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in any Preliminary
Prospectus, the Registration Statement or the Prospectus or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through Goldman,
Sachs & Co. expressly for use therein.
(b) Each Underwriter will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the Company may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon an untrue statement or alleged untrue statement of a material
fact contained in any Preliminary Prospectus, the Registration Statement or
the Prospectus, or any amendment or supplement thereto, or arise out of or
are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent,
that such untrue statement or alleged untrue statement or omission or
alleged omission was made in any Preliminary Prospectus, the Registration
Statement or the Prospectus or any such amendment or supplement in reliance
upon and in conformity with written information furnished to the Company by
such Underwriter through Goldman, Sachs & Co. expressly for use therein;
and will reimburse the Company for any legal or other expenses reasonably
incurred by the Company in connection with investigating or defending any
such action or claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under such subsection, notify the
indemnifying party in writing of the commencement thereof; but the omission
so to notify the indemnifying party shall not relieve it from any liability
which it may have to any indemnified party otherwise than under such
subsection. In
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case any such action shall be brought against any indemnified party and it
shall notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate therein and, to the
extent that it shall wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party (which consent shall not be unreasonably
withheld), be counsel to the indemnifying party), and, after notice from
the indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party shall not be liable to
such indemnified party under such subsection for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by
such indemnified party, in connection with the defense thereof other than
reasonable costs of investigation. The indemnifying party shall not be
liable for any settlement of an action or claim for monetary damages which
an indemnified party may effect without the consent of the indemnifying
party which consent will not be unreasonably withheld. No indemnifying
party shall, without the written consent of the indemnified party, effect
the settlement or compromise of, or consent to the entry of any judgment
with respect to, any pending or threatened action or claim in respect of
which indemnification or contribution may be sought hereunder (whether or
not the indemnified party is an actual or potential party to such action or
claim) unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability arising
out of such action or claim and (ii) does not include a statement as to or
an admission of fault, culpability or a failure to act, by or on behalf of
any indemnified party.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the
one hand and the Underwriters on the other from the offering of the
Securities. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law or if the indemnified
party failed to give the notice required under subsection (c) above, then
each indemnifying party shall contribute to such amount paid or payable by
such indemnified party in such proportion as is appropriate to reflect not
only such relative benefits but also the relative fault of the Company on
the one hand and the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Company on
the one hand and the Underwriters on the other shall be deemed to be in the
same proportion as the total net proceeds from the offering of the
Securities purchased under this Agreement (before deducting expenses)
received by the Company bear to the total underwriting discounts and
commissions received by the Underwriters with respect to the Securities
purchased under this Agreement, in each case as set forth in the table on
the cover page of the Prospectus. The relative fault shall be
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determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Company on the one hand or the Underwriters on the other and the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and the
Underwriters agree that it would not be just and equitable if contributions
pursuant to this subsection (d) were determined by pro rata allocation
(even if the Underwriters were treated as one entity for such purpose) or
by any other method of allocation which does not take account of the
equitable considerations referred to above in this subsection (d). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to
above in this subsection (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (d), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at
which the Securities underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Act) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation. The Underwriters' obligations in
this subsection (d) to contribute are several in proportion to their
respective underwriting obligations and not joint.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who
controls any Underwriter within the meaning of the Act; and the obligations
of the Underwriters under this Section 8 shall be in addition to any
liability which the respective Underwriters may otherwise have and shall
extend, upon the same terms and conditions, to each officer and director of
the Company and to each person, if any, who controls the Company within the
meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to
purchase the Securities which it has agreed to purchase hereunder at a Time
of Delivery, you may in your discretion arrange for you or another party or
other parties to purchase such Securities on the terms contained herein.
If within thirty-six hours after such default by any Underwriter you do not
arrange for the purchase of such Securities, then the Company shall be
entitled to a further period of thirty-six hours within which to procure
another party or other parties satisfactory to you to purchase such
Securities on such terms. In the event that, within the respective
prescribed periods, you notify the Company that you have so arranged for
the purchase of such Securities, or the Company notifies you that it has so
arranged for the purchase of such Securities, you or the Company shall have
the right to postpone such Time of Delivery for a period of not more than
seven days, in order to effect whatever changes may thereby be made
necessary in the Registration Statement or the Prospectus, or in any other
documents
-20-
<PAGE>
or arrangements, and the Company agrees to file promptly any amendments to
the Registration Statement or the Prospectus which in your opinion may
thereby be made necessary. The term "Underwriter" as used in this
Agreement shall include any person substituted under this Section with like
effect as if such person had originally been a party to this Agreement with
respect to such Securities.
(b) If, after giving effect to any arrangements for the purchase of
the Securities of a defaulting Underwriter or Underwriters by you and the
Company as provided in subsection (a) above, the aggregate number of such
Securities which remains unpurchased does not exceed one-eleventh of the
aggregate number of all the Securities to be purchased at such Time of
Delivery, then the Company shall have the right to require each
non-defaulting Underwriter to purchase the number of Securities which such
Underwriter agreed to purchase hereunder at such Time of Delivery and, in
addition, to require each non-defaulting Underwriter to purchase its pro
rata share (based on the number of Securities which such Underwriter agreed
to purchase hereunder) of the Securities of such defaulting Underwriter or
Underwriters for which such arrangements have not been made; but nothing
herein shall relieve a defaulting Underwriter from liability for its
default.
(c) If, after giving effect to any arrangements for the purchase of
the Securities of a defaulting Underwriter or Underwriters by you and the
Company as provided in subsection (a) above, the aggregate number of such
Securities which remains unpurchased exceeds one-eleventh of the aggregate
number of all the Securities to be purchased at such Time of Delivery, or
if the Company shall not exercise the right described in subsection (b)
above to require non-defaulting Underwriters to purchase Securities of a
defaulting Underwriter or Underwriters, then this Agreement (or, with
respect to the Second Time of Delivery, the obligations of the Underwriters
to purchase and of the Company to sell the Optional Securities) shall
thereupon terminate, without liability on the part of any non-defaulting
Underwriter or the Company, except for the expenses to be borne by the
Company and the Underwriters as provided in Section 6 hereof and the
indemnity and contribution agreements in Section 8 hereof; but nothing
herein shall relieve a defaulting Underwriter from liability for its
default.
10. (a) The Company will indemnify and hold harmless Goldman, Sachs &
Co., in its capacity as QIU, against any losses, claims, damages or liabilities,
joint or several, to which the QIU may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and will reimburse the QIU for any legal
or other expenses reasonably incurred by the QIU in connection with
investigating or defending any such action or claim as such expenses are
incurred.
-21-
<PAGE>
(b) Promptly after receipt by the QIU under subsection (a) above of
notice of the commencement of any action, the QIU shall, if a claim in respect
thereof is to be made against the Company under such subsection, notify the
Company in writing of the commencement thereof; but the omission so to notify
the Company shall not relieve it from any liability which it may have to the QIU
otherwise than under such subsection. In case any such action shall be brought
against the QIU and it shall notify the Company of the commencement thereof, the
Company shall be entitled to participate therein and, to the extent that it
shall wish, jointly with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel satisfactory to the QIU (who shall not,
except with the consent of the QIU (which consent shall not be unreasonably
withheld), be counsel to the Company), and, after notice from the indemnifying
party to the QIU of its election so to assume the defense thereof, the
indemnifying party shall not be liable to the QIU under such subsection for any
legal expenses of other counsel or any other expenses, in each case subsequently
incurred by the QIU, in connection with the defense thereof other than
reasonable costs of investigation. The Company shall not be liable to the QIU
for any settlement of an action or claim for monetary damages which the QIU may
effect without the consent of the Company which consent will not be unreasonably
withheld. The Company shall not, without the written consent of the indemnified
party, effect the settlement or compromise of, or consent to the entry of any
judgment with respect to, any pending or threatened action or claim in respect
of which indemnification or contribution may be sought hereunder (whether or not
the QIU is an actual or potential party to such action or claim) unless such
settlement, compromise or judgment (i) includes an unconditional release of the
QIU from all liability arising out of such action or claim and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of QIU.
(c) If the indemnification provided for in this Section 10 is
unavailable to or insufficient to hold harmless Goldman, Sachs & Co., in its
capacity as QIU, under subsection (a) above in respect of any losses, claims,
damages or liabilities (or actions in respect thereof) referred to therein, then
the Company shall contribute to the amount paid or payable by the QIU as a
result of such losses, claims, damages or liabilities (or actions in respect
thereof) in such proportion as is appropriate to reflect the relative benefits
received by the Company on the one hand and the QIU on the other from the
offering of the Securities. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law or if the QIU
failed to give the notice required under subsection (b) above, then the Company
shall contribute to such amount paid or payable by the QIU in such proportion as
is appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and the QIU on the other in connection with
the statements or omissions which resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and the QIU on the other shall be deemed to be in the same proportion
as the total net proceeds from the offering (before deducting expenses) received
by the Company, as set forth in the table on the cover page of the Prospectus,
bear to the fee payable to the QIU pursuant to Section 2(b) hereof. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company on the one hand or the QIU on the other and the parties' relative
intent,
-22-
<PAGE>
knowledge, access to information and opportunity to correct or prevent such
statement of omission. The Company and the QIU agree that it would not be just
and equitable if contributions pursuant to this subsection (c) were determined
by pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to above in this
subsection (c). The amount paid or payable by the QIU as a result of the
losses, claims, damages or liabilities (or actions in respect thereof) referred
to above in this subsection (c) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
(d) The obligations of the Company under this Section 10 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls the QIU
within the meaning of the Act.
11. The respective indemnities, agreements, representations, warranties
and other statements of the Company and the several Underwriters, as set forth
in this Agreement or made by or on behalf of them, respectively, pursuant to
this Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of any Underwriter, or the Company,
or any officer or director or controlling person of the Company, and shall
survive delivery of and payment for the Securities.
12. If this Agreement shall be terminated pursuant to Section 9 hereof or
as a result of the failure of a condition set forth in Section 7(h) hereof, the
Company shall not then be under any liability to any Underwriter except as
provided in Sections 6 and 8 hereof; but, if for any other reason, any
Securities are not delivered by or on behalf of the Company as provided herein,
the Company will reimburse the Underwriters through you for all out-of-pocket
expenses approved in writing by you, including fees and disbursements of
counsel, reasonably incurred by the Underwriters in making preparations for the
purchase, sale and delivery of the Securities not so delivered, but the Company
shall then be under no further liability to any Underwriter in respect of the
Securities not so delivered except as provided in Sections 6 and 8 hereof.
13. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by Goldman, Sachs & Co. on behalf of you as the
representatives.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to you as the representatives in care of Goldman, Sachs &
Co., 85 Broad Street, New York, New York 10004, Attention: Registration
Department; and if to the Company shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: Secretary; provided, however, that any notice
to an
-23-
<PAGE>
Underwriter pursuant to Section 8(c) hereof shall be delivered or sent by mail,
telex or facsimile transmission to such Underwriter at its address set forth in
its Underwriters' Questionnaire, or telex constituting such Questionnaire, which
address will be supplied to the Company by you upon request. Any such
statements, requests, notices or agreements shall take effect at the time of
receipt thereof.
14. This Agreement shall be binding upon, and inure solely to the benefit
of, the Underwriters, the Company and, to the extent provided in Sections 8 and
11 hereof, the officers and directors of the Company and each person who
controls the Company or any Underwriter, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. No purchaser of any of the
Securities from any Underwriter shall be deemed a successor or assign by reason
merely of such purchase.
15. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
16. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
17. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
-24-
<PAGE>
If the foregoing is in accordance with your understanding, please sign and
return to seven counterparts hereof, and upon the acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof shall
constitute a binding agreement between each of the Underwriters and the Company.
It is understood that your acceptance of this letter on behalf of each of the
Underwriters is pursuant to the authority set forth in a form of Agreement among
Underwriters, the form of which shall be submitted to the Company for
examination upon request, but without warranty on your part as to the authority
of the signers thereof.
Very truly yours,
Saks Holdings, Inc.
By:
----------------------------
Name:
Title:
Accepted as of the date hereof:
Goldman, Sachs & Co.
CS First Boston Corporation
Morgan Stanley & Co. Incorporated
Salomon Brothers Inc
By:
----------------------------------------------
(Goldman, Sachs & Co.)
On behalf of each of the Underwriters
-25-
<PAGE>
SCHEDULE I
<TABLE><CAPTION>
Number of Optional
Securities to be
Total Number of Purchased if
Firm Securities Maximum Option
Underwriter to be Purchased Exercised
----------- --------------- ------------------
<S> <C> <C>
Goldman, Sachs & Co. . . . . . . . . . $ $
CS First Boston Corporation . . . . . .
Morgan Stanley & Co. Incorporated . . .
Salomon Brothers Inc . . . . . . . . .
Total . . . . . . . . . . . . . . $200,000,000 $30,000,000
============ ===========
</TABLE>
-26-
<PAGE>
SCHEDULE II
SIGNIFICANT SUBSIDIARIES
------------------------
1. Saks & Company
2. Win Realty Holdings II, Inc.
3. Calwin Realty II, Inc.
4. SFA Folio Collections, Inc.
5. Fifth Win, Inc.
6. SFA Finance Company
-27-
<PAGE>
ANNEX I
FORM OF ANNEX I DESCRIPTION OF COMFORT LETTER
Pursuant to Section 7(e) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect to
the Company and its subsidiaries within the meaning of the Act and the
applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules (and, if applicable, financial
forecasts and/or pro forma financial information) examined by them and
included in the Prospectus or the Registration Statement comply as to form
in all material respects with the applicable accounting requirements of the
Act and the related published rules and regulations thereunder; and, if
applicable, they have made a review in accordance with standards
established by the American Institute of Certified Public Accountants of
the unaudited consolidated interim financial statements, selected financial
data, pro forma financial information, financial forecasts and/or condensed
financial statements derived from audited financial statements of the
Company for the periods specified in such letter, as indicated in their
reports thereon, copies of which have been furnished to the representatives
of the Underwriters (the "Representatives");
(iii) They have made a review in accordance with standards
established by the American Institute of Certified Public Accountants of
the unaudited condensed consolidated statements of income, consolidated
balance sheets and consolidated statements of cash flows included in the
Prospectus as indicated in their reports thereon copies of which have been
separately furnished to the Representatives and on the basis of specified
procedures including inquiries of officials of the Company who have
responsibility for financial and accounting matters regarding whether the
unaudited condensed consolidated financial statements referred to in
paragraph (vi)(A)(i) below comply as to form in all material respects with
the applicable accounting requirements of the Act and the related published
rules and regulations, nothing came to their attention that caused them to
believe that the unaudited condensed consolidated financial statements do
not comply as to form in all material respects with the applicable
accounting requirements of the Act and the related published rules and
regulations;
(iv) The unaudited selected financial information with respect to the
consolidated results of operations and financial position of the Company
for the five most recent fiscal years included in the Prospectus agrees
with the corresponding amounts (after restatements where applicable) in the
audited consolidated financial statements for such five fiscal years;
<PAGE>
(v) They have compared the information in the Prospectus under
selected captions with the disclosure requirements of Regulation S-K and on
the basis of limited procedures specified in such letter nothing came to
their attention as a result of the foregoing procedures that caused them to
believe that this information does not conform in all material respects
with the disclosure requirements of Items 301, 302, 402 and 503(d),
respectively, of Regulation S-K;
(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available interim
financial statements of the Company and its subsidiaries, inspection of the
minute books of the Company and its subsidiaries since the date of the
latest audited financial statements included in the Prospectus, inquiries
of officials of the Company and its subsidiaries responsible for financial
and accounting matters and such other inquiries and procedures as may be
specified in such letter, nothing came to their attention that caused them
to believe that:
(A) (i) the unaudited consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the Act and
the related published rules and regulations, or (ii) any material
modifications should be made to the unaudited condensed consolidated
statements of income, consolidated balance sheets and consolidated
<PAGE>
statements of cash flows included in the Prospectus for them to be in
conformity with generally accepted accounting principles;
(B) any other unaudited income statement data and balance sheet
items included in the Prospectus do not agree with the corresponding
items in the unaudited consolidated financial statements from which
such data and items were derived, and any such unaudited data and
items were not determined on a basis substantially consistent with the
basis for the corresponding amounts in the audited consolidated
financial statements included in the Prospectus;
(C) the unaudited financial statements which were not included
in the Prospectus but from which were derived any unaudited condensed
financial statements referred to in Clause (A) and any unaudited
income statement data and balance sheet items included in the
Prospectus and referred to in Clause (B) were not determined on a
basis substantially consistent with the basis for the audited
consolidated financial statements included in the Prospectus;
(D) any unaudited pro forma consolidated condensed financial
statements included in the Prospectus do not comply as to form in all
material respects with the applicable accounting requirements of the
Act and the published rules and regulations thereunder or the pro
forma adjustments have not been properly applied to the historical
amounts in the compilation of those statements;
-2-
<PAGE>
(E) as of a specified date not more than five days prior to the
date of such letter, there have been any changes in the consolidated
capital stock (other than issuances of capital stock upon exercise of
options and stock appreciation rights, upon earn-outs of performance
shares and upon conversions of convertible securities, in each case
which were outstanding on the date of the latest financial statements
included in the Prospectus) or any increase in the consolidated
long-term debt of the Company and its subsidiaries, or any decreases
in consolidated net current assets or stockholders' equity or other
items specified by the Representatives, or any increases in any items
specified by the Representatives, in each case as compared with
amounts shown in the latest balance sheet included in the Prospectus,
except in each case for changes, increases or decreases which the
Prospectus discloses have occurred or may occur or which are described
in such letter; and
(F) for the period from the date of the latest financial
statements included in the Prospectus to the specified date referred
to in Clause (E) there were any decreases in consolidated net revenues
or operating profit or the total or per share amounts of consolidated
net income or other items specified by the Representatives, or any
increases in any items specified by the Representatives, in each case
as compared with the comparable period of the preceding year and with
any other period of corresponding length specified by the
Representatives, except in each case for decreases or increases which
the Prospectus discloses have occurred or may occur or which are
described in such letter; and
(vii) In addition to the examination referred to in their report(s)
included in the Prospectus and the limited procedures, inspection of minute
books, inquiries and other procedures referred to in paragraphs (iii) and
(vi) above, they have carried out certain specified procedures, not
constituting an examination in accordance with generally accepted auditing
standards, with respect to certain amounts, percentages and financial
information specified by the Representatives, which are derived from the
general accounting records of the Company and its subsidiaries, which
appear in the Prospectus, or in Part II of, or in exhibits and schedules
to, the Registration Statement specified by the Representatives, and have
compared certain of such amounts, percentages and financial information
with the accounting records of the Company and its subsidiaries and have
found them to be in agreement.
<PAGE>
ANNEX I(a)
ANNEX I(a) COMFORT LETTER OF COOPERS & LYBRAND L.L.P.
<PAGE>
ANNEX I(b)
FORM OF ANNEX I(b) BRING DOWN COMFORT LETTER OF COOPERS & LYBRAND L.L.P.
<PAGE>
ANNEX II(a)
FORM OF ANNEX II(a) OPINION OF SULLIVAN & CROMWELL
<PAGE>
ANNEX II(b)
FORM OF ANNEX II(b) OPINION OF GIBSON, DUNN & CRUTCHER LLP
<PAGE>
ANNEX II(c)
FORM OF ANNEX II(c) OPINION OF JOAN F. KREY,
GENERAL COUNSEL OF SAKS HOLDINGS, INC.
EXHIBIT 4.01
S&C Draft of 9/17/96
------------------------------------------------------------
SAKS HOLDINGS, INC.
TO
BANKERS TRUST COMPANY
TRUSTEE
________________
INDENTURE
Dated as of September __, 1996
________________
$200,000,000
_____% CONVERTIBLE SUBORDINATED NOTES
DUE SEPTEMBER __, 2006
------------------------------------------------------------
<PAGE>
Certain Sections of this Indenture relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
Trust Indenture Indenture
Act Section Section
- --------------- ---------
Sec. 310 (a) (1) . . . . . . . . . . . . . . . . . . . 609
(a) (2) . . . . . . . . . . . . . . . . . . . 609
(a) (3) . . . . . . . . . . . . . . . . . . . Not
Applicable
(a) (4) . . . . . . . . . . . . . . . . . . . Not
Applicable
(b) . . . . . . . . . . . . . . . . . . . 608
610
Sec. 311 (a) . . . . . . . . . . . . . . . . . . . 613
(b) . . . . . . . . . . . . . . . . . . . 613
Sec. 312 (a) . . . . . . . . . . . . . . . . . . . 701
702 (a)
(b) . . . . . . . . . . . . . . . . . . . 702 (b)
(c) . . . . . . . . . . . . . . . . . . . 702 (c)
Sec. 313 (a) . . . . . . . . . . . . . . . . . . . 703 (a)
(b) . . . . . . . . . . . . . . . . . . . 703 (a)
(c) . . . . . . . . . . . . . . . . . . . 703 (a)
(d) . . . . . . . . . . . . . . . . . . . 703 (b)
Sec. 314 (a) . . . . . . . . . . . . . . . . . . . 704
(b) . . . . . . . . . . . . . . . . . . . Not
Applicable
(c) (1) . . . . . . . . . . . . . . . . . . . 102
(c) (2) . . . . . . . . . . . . . . . . . . . 102
(c) (3) . . . . . . . . . . . . . . . . . . . Not
Applicable
(d) . . . . . . . . . . . . . . . . . . . Not
Applicable
(e) . . . . . . . . . . . . . . . . . . . 102
Sec. 315 (a) . . . . . . . . . . . . . . . . . . . 601
. . . . . . . . . . . . . . . . . . . 603 (a)
(b) . . . . . . . . . . . . . . . . . . . 602
(c) . . . . . . . . . . . . . . . . . . . 601
(d) . . . . . . . . . . . . . . . . . . . 601
(e) . . . . . . . . . . . . . . . . . . . 514
Sec. 316 (a) (1) (A) . . . . . . . . . . . . . . . . . . . 512
(a) (1) (B) . . . . . . . . . . . . . . . . . . . 513
(a) (2) . . . . . . . . . . . . . . . . . . . Not
Applicable
(b) . . . . . . . . . . . . . . . . . . . 508
(c) . . . . . . . . . . . . . . . . . . . 104
Sec. 317 (a) (1) . . . . . . . . . . . . . . . . . . . 503
(a) (2) . . . . . . . . . . . . . . . . . . . 504
(b) . . . . . . . . . . . . . . . . . . . 1003
Sec. 318 (a) . . . . . . . . . . . . . . . . . . . 107
______________
Note: This reconciliation and tie shall not, for any purpose, be deemed to
be a part of the Indenture.
<PAGE>
TABLE OF CONTENTS
Page
----
Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Recitals of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE ONE
Definitions and Other Provisions
of General Application
SECTION 101. Definitions . . . . . . . . . . . . . . . . . . . . . . 1
-----------
Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Agent Member . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Amended and Restated Credit Agreement . . . . . . . . . . . . . . 2
Applicable Procedures . . . . . . . . . . . . . . . . . . . . . . 2
Authenticating Agent . . . . . . . . . . . . . . . . . . . . . . 3
Board of Directors . . . . . . . . . . . . . . . . . . . . . . . 3
Board Resolution . . . . . . . . . . . . . . . . . . . . . . . . 3
Business Day . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Change of Control . . . . . . . . . . . . . . . . . . . . . . . . 3
Closing Price Per Share . . . . . . . . . . . . . . . . . . . . . 3
Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . 4
common stock . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Company Notice . . . . . . . . . . . . . . . . . . . . . . . . . 4
Company Request or Company Order . . . . . . . . . . . . . . . . 4
Constituent Person . . . . . . . . . . . . . . . . . . . . . . . 4
Conversion Agent . . . . . . . . . . . . . . . . . . . . . . . . 4
Conversion Price . . . . . . . . . . . . . . . . . . . . . . . . 4
Conversion Rate . . . . . . . . . . . . . . . . . . . . . . . . . 4
Corporate Trust Office . . . . . . . . . . . . . . . . . . . . . 5
corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Custodian . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Defaulted Interest . . . . . . . . . . . . . . . . . . . . . . . 5
Depositary . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
DTC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Event of Default . . . . . . . . . . . . . . . . . . . . . . . . 5
Exchange Act . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Expiration Date . . . . . . . . . . . . . . . . . . . . . . . . . 5
Expiration Time . . . . . . . . . . . . . . . . . . . . . . . . . 5
___________
Note: This table of contents shall not, for any purpose,
be deemed to be a part of the Indenture.
-i-
<PAGE>
Page
----
Global Security . . . . . . . . . . . . . . . . . . . . . . . . . 5
Holder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Interest Payment Date . . . . . . . . . . . . . . . . . . . . . . 6
Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Non-electing Share . . . . . . . . . . . . . . . . . . . . . . . 6
Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . 6
Officers' Certificate . . . . . . . . . . . . . . . . . . . . . . 6
Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . 6
Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Place of Conversion . . . . . . . . . . . . . . . . . . . . . . . 7
Place of Payment . . . . . . . . . . . . . . . . . . . . . . . . 7
Predecessor Security . . . . . . . . . . . . . . . . . . . . . . 7
Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Redemption Date . . . . . . . . . . . . . . . . . . . . . . . . . 8
Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . 8
Reference Date . . . . . . . . . . . . . . . . . . . . . . . . . 8
Regular Record Date . . . . . . . . . . . . . . . . . . . . . . . 8
Repurchase Date . . . . . . . . . . . . . . . . . . . . . . . . . 8
Repurchase Price . . . . . . . . . . . . . . . . . . . . . . . . 8
Responsible Officer . . . . . . . . . . . . . . . . . . . . . . . 8
Saks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Securities Act . . . . . . . . . . . . . . . . . . . . . . . . . 8
Security Register and Security Registrar . . . . . . . . . . . . 8
Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . . . 9
Special Record Date . . . . . . . . . . . . . . . . . . . . . . . 9
Stated Maturity . . . . . . . . . . . . . . . . . . . . . . . . . 9
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Trading Days . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . 10
Vice President . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 102. Compliance Certificates and Opinions . . . . . . . . . 10
------------------------------------
SECTION 103. Form of Documents Delivered to Trustee . . . . . . . . 11
--------------------------------------
SECTION 104. Acts of Holders; Record Dates . . . . . . . . . . . . . 12
-----------------------------
SECTION 105. Notices, Etc., to Trustee and Company . . . . . . . . . 14
-------------------------------------
SECTION 106. Notice to Holders; Waiver . . . . . . . . . . . . . . . 15
-------------------------
SECTION 107. Conflict with Trust Indenture Act . . . . . . . . . . . 15
---------------------------------
___________
Note: This table of contents shall not, for any purpose,
be deemed to be a part of the Indenture.
-ii-
<PAGE>
Page
----
SECTION 108. Effect of Headings and Table of Contents . . . . . . . 16
----------------------------------------
SECTION 109. Successors and Assigns . . . . . . . . . . . . . . . . 16
----------------------
SECTION 110. Separability Clause . . . . . . . . . . . . . . . . . . 16
-------------------
SECTION 111. Benefits of Indenture . . . . . . . . . . . . . . . . . 16
---------------------
SECTION 112. Governing Law . . . . . . . . . . . . . . . . . . . . . 16
-------------
SECTION 113. Legal Holidays . . . . . . . . . . . . . . . . . . . . 16
--------------
SECTION 114. Incorporators, Stockholders, Officers and Directors of
------------------------------------------------------
the Company Exempt from Individual Liability . . . . . 17
--------------------------------------------
ARTICLE TWO
Security Forms
SECTION 201. Forms Generally . . . . . . . . . . . . . . . . . . . . 18
---------------
SECTION 202. Form of Face of Security . . . . . . . . . . . . . . . 18
------------------------
SECTION 203. Form of Reverse of Security . . . . . . . . . . . . . . 22
---------------------------
SECTION 204. Form of Trustee's Certificate of Authentication . . . . 30
-----------------------------------------------
SECTION 205. Form of Conversion Notice . . . . . . . . . . . . . . . 30
-------------------------
ARTICLE THREE
The Securities
SECTION 301. Title and Terms . . . . . . . . . . . . . . . . . . . . 31
---------------
SECTION 302. Denominations . . . . . . . . . . . . . . . . . . . . . 32
-------------
SECTION 303. Execution, Authentication, Delivery and Dating . . . . 32
----------------------------------------------
SECTION 304. Temporary Securities . . . . . . . . . . . . . . . . . 33
--------------------
SECTION 305. Registration, Registration of Transfer and Exchange . . 33
---------------------------------------------------
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities . . . 36
------------------------------------------------
SECTION 307. Payment of Interest; Interest Rights Preserved . . . . 36
----------------------------------------------
SECTION 308. Persons Deemed Owners . . . . . . . . . . . . . . . . . 38
---------------------
SECTION 309. Cancellation . . . . . . . . . . . . . . . . . . . . . 38
------------
SECTION 310. Computation of Interest . . . . . . . . . . . . . . . . 39
-----------------------
___________
Note: This table of contents shall not, for any purpose,
be deemed to be a part of the Indenture.
-iii-
<PAGE>
Page
----
ARTICLE FOUR
Satisfaction and Discharge
SECTION 401. Satisfaction and Discharge of Indenture . . . . . . . . 39
---------------------------------------
SECTION 402. Application of Trust Money . . . . . . . . . . . . . . 40
--------------------------
ARTICLE FIVE
Remedies
SECTION 501. Events of Default . . . . . . . . . . . . . . . . . . . 41
-----------------
SECTION 502. Acceleration of Maturity; Rescission and Annulment . . 43
--------------------------------------------------
SECTION 503. Collection of Indebtedness and Suits for Enforcement by
-------------------------------------------------------
Trustee . . . . . . . . . . . . . . . . . . . . . . . . 44
-------
SECTION 504. Trustee May File Proofs of Claim . . . . . . . . . . . 45
--------------------------------
SECTION 505. Trustee May Enforce Claims Without Possession of
------------------------------------------------
Securities . . . . . . . . . . . . . . . . . . . . . . 46
----------
SECTION 506. Application of Money Collected . . . . . . . . . . . . 46
------------------------------
SECTION 507. Limitation on Suits . . . . . . . . . . . . . . . . . . 47
-------------------
SECTION 508. Unconditional Right of Holders to Receive Principal,
----------------------------------------------------
Premium and Interest and to Convert . . . . . . . . . . 48
-----------------------------------
SECTION 509. Restoration of Rights and Remedies . . . . . . . . . . 48
----------------------------------
SECTION 510. Rights and Remedies Cumulative . . . . . . . . . . . . 48
------------------------------
SECTION 511. Delay or Omission Not Waiver . . . . . . . . . . . . . 49
----------------------------
SECTION 512. Control by Holders . . . . . . . . . . . . . . . . . . 49
------------------
SECTION 513. Waiver of Past Defaults . . . . . . . . . . . . . . . . 49
-----------------------
SECTION 514. Undertaking for Costs . . . . . . . . . . . . . . . . . 50
---------------------
SECTION 515. Waiver of Stay or Extension Laws . . . . . . . . . . . 50
--------------------------------
ARTICLE SIX
The Trustee
SECTION 601. Certain Duties and Responsibilities . . . . . . . . . . 50
-----------------------------------
SECTION 602. Notice of Defaults . . . . . . . . . . . . . . . . . . 52
------------------
SECTION 603. Certain Rights of Trustee . . . . . . . . . . . . . . . 52
-------------------------
___________
Note: This table of contents shall not, for any purpose,
be deemed to be a part of the Indenture.
-iv-
<PAGE>
Page
----
SECTION 604. Not Responsible for Recitals or Issuance of Securities 53
------------------------------------------------------
SECTION 605. May Hold Securities . . . . . . . . . . . . . . . . . . 53
-------------------
SECTION 606. Money Held in Trust . . . . . . . . . . . . . . . . . . 54
-------------------
SECTION 607. Compensation and Reimbursement . . . . . . . . . . . . 54
------------------------------
SECTION 608. Disqualification; Conflicting Interests . . . . . . . . 55
---------------------------------------
SECTION 609. Corporate Trustee Required; Eligibility . . . . . . . . 55
---------------------------------------
SECTION 610. Resignation and Removal; Appointment of Successor . . . 55
-------------------------------------------------
SECTION 611. Acceptance of Appointment by Successor . . . . . . . . 57
--------------------------------------
SECTION 612. Merger, Conversion, Consolidation or Succession to
--------------------------------------------------
Business . . . . . . . . . . . . . . . . . . . . . . . 57
--------
SECTION 613. Preferential Collection of Claims Against Company . . . 58
-------------------------------------------------
SECTION 614. Appointment of Authenticating Agent . . . . . . . . . . 58
-----------------------------------
ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Company
SECTION 701. Company to Furnish Trustee Names and Addresses of
-------------------------------------------------
Holders . . . . . . . . . . . . . . . . . . . . . . . . 60
-------
SECTION 702. Preservation of Information; Communications to Holders 60
------------------------------------------------------
SECTION 703. Reports by Trustee . . . . . . . . . . . . . . . . . . 61
------------------
SECTION 704. Reports by Company . . . . . . . . . . . . . . . . . . 61
------------------
ARTICLE EIGHT
Consolidation, Merger, Conveyance, Transfer or Lease
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms . 62
----------------------------------------------------
SECTION 802. Successor Substituted . . . . . . . . . . . . . . . . . 63
---------------------
___________
Note: This table of contents shall not, for any purpose,
be deemed to be a part of the Indenture.
-v-
<PAGE>
Page
----
ARTICLE NINE
Supplemental Indentures
SECTION 901. Supplemental Indentures Without Consent of Holders . . 63
--------------------------------------------------
SECTION 902. Supplemental Indentures with Consent of Holders . . . . 64
-----------------------------------------------
SECTION 903. Execution of Supplemental Indentures . . . . . . . . . 65
------------------------------------
SECTION 904. Effect of Supplemental Indentures . . . . . . . . . . . 65
---------------------------------
SECTION 905. Conformity with Trust Indenture Act . . . . . . . . . . 66
-----------------------------------
SECTION 906. Reference in Securities to Supplemental Indentures . . 66
--------------------------------------------------
SECTION 907. Notice of Supplemental Indentures . . . . . . . . . . . 66
---------------------------------
ARTICLE TEN
Covenants
SECTION 1001. Payment of Principal, Premium and Interest . . . . . . 66
------------------------------------------
SECTION 1002. Maintenance of Office or Agency . . . . . . . . . . . . 66
-------------------------------
SECTION 1003. Money for Security Payments to Be Held in Trust . . . . 67
-----------------------------------------------
SECTION 1004. Statement by Officers as to Default . . . . . . . . . . 69
-----------------------------------
SECTION 1005. Existence . . . . . . . . . . . . . . . . . . . . . . . 69
---------
SECTION 1006. Maintenance of Properties . . . . . . . . . . . . . . . 69
-------------------------
SECTION 1007. Payment of Taxes and Other Claims . . . . . . . . . . . 70
---------------------------------
SECTION 1008. Book-Entry System . . . . . . . . . . . . . . . . . . . 70
-----------------
SECTION 1009. Waiver of Certain Covenants . . . . . . . . . . . . . . 70
---------------------------
ARTICLE ELEVEN
Redemption of Securities
SECTION 1101. Right of Redemption . . . . . . . . . . . . . . . . . . 71
-------------------
SECTION 1102. Applicability of Article . . . . . . . . . . . . . . . 71
------------------------
SECTION 1103. Election to Redeem; Notice to Trustee . . . . . . . . . 71
-------------------------------------
___________
Note: This table of contents shall not, for any purpose,
be deemed to be a part of the Indenture.
-vi-
<PAGE>
Page
----
SECTION 1104. Selection by Trustee of Securities to Be Redeemed . . . 71
-------------------------------------------------
SECTION 1105. Notice of Redemption . . . . . . . . . . . . . . . . . 72
--------------------
SECTION 1106. Deposit of Redemption Price . . . . . . . . . . . . . . 73
---------------------------
SECTION 1107. Securities Payable on Redemption Date . . . . . . . . . 73
-------------------------------------
SECTION 1108. Securities Redeemed in Part . . . . . . . . . . . . . . 74
---------------------------
ARTICLE TWELVE
Subordination of Securities
SECTION 1201. Securities Subordinate to Senior Indebtedness . . . . . 74
---------------------------------------------
SECTION 1202. Payment Over of Proceeds Upon Dissolution, Etc. . . . . 74
-----------------------------------------------
SECTION 1203. Prior Payment to Senior Indebtedness Upon Acceleration
------------------------------------------------------
of Securities . . . . . . . . . . . . . . . . . . . . . 76
-------------
SECTION 1204. No Payment When Senior Indebtedness
------------------------------------
in Default . . . . . . . . . . . . . . . . . . . . . 76
----------
SECTION 1205. Payment Permitted If No Default . . . . . . . . . . . . 77
-------------------------------
SECTION 1206. Subrogation to Rights of Holders of Senior
------------------------------------------
Indebtedness . . . . . . . . . . . . . . . . . . . . . 77
------------
SECTION 1207. Provisions Solely to Define Relative Rights . . . . . . 78
-------------------------------------------
SECTION 1208. Trustee to Effectuate Subordination . . . . . . . . . . 78
-----------------------------------
SECTION 1209. No Waiver of Subordination Provisions . . . . . . . . . 78
-------------------------------------
SECTION 1210. Notice to Trustee . . . . . . . . . . . . . . . . . . . 79
-----------------
SECTION 1211. Reliance on Judicial Order or Certificate of
--------------------------------------------
Liquidating Agent . . . . . . . . . . . . . . . . . . . 80
-----------------
SECTION 1212. Trustee Not Fiduciary for Holders of Senior
-------------------------------------------
Indebtedness . . . . . . . . . . . . . . . . . . . . . 80
------------
SECTION 1213. Rights of Trustee as Holder of Senior Indebtedness;
---------------------------------------------------
Preservation of Trustee's Rights . . . . . . . . . . . 81
--------------------------------
SECTION 1214. Article Applicable to Paying Agents . . . . . . . . . . 81
-----------------------------------
SECTION 1215. Certain Conversions Deemed Payment . . . . . . . . . . 81
----------------------------------
SECTION 1216. Amendment of Subordination
--------------------------
Provisions . . . . . . . . . . . . . . . . . . . . . . 82
----------
___________
Note: This table of contents shall not, for any purpose,
be deemed to be a part of the Indenture.
-vii-
<PAGE>
Page
----
ARTICLE THIRTEEN
Conversion of Securities
SECTION 1301. Conversion Privilege and Conversion Rate . . . . . . . 82
----------------------------------------
SECTION 1302. Exercise of Conversion Privilege . . . . . . . . . . . 83
--------------------------------
SECTION 1303. Fractions of Shares . . . . . . . . . . . . . . . . . . 84
-------------------
SECTION 1304. Adjustment of Conversion Rate . . . . . . . . . . . . . 85
-----------------------------
SECTION 1305. Notice of Adjustments of Conversion Rate . . . . . . . 89
----------------------------------------
SECTION 1306. Notice of Certain Corporate Action . . . . . . . . . . 90
----------------------------------
SECTION 1307. Company to Reserve Common Stock . . . . . . . . . . . . 91
-------------------------------
SECTION 1308. Taxes on Conversions . . . . . . . . . . . . . . . . . 92
--------------------
SECTION 1309. Covenant as to Common Stock . . . . . . . . . . . . . . 92
---------------------------
SECTION 1310. Cancellation of Converted Securities . . . . . . . . . 92
------------------------------------
SECTION 1311. Provision in Case of Consolidation, Merger or Sale of
-----------------------------------------------------
Assets . . . . . . . . . . . . . . . . . . . . . . . . 92
------
SECTION 1312. Responsibility of Trustee for Conversion Provisions . . 94
---------------------------------------------------
ARTICLE FOURTEEN
Repurchase of Securities at the Option of the
Holder Upon a Change of Control
SECTION 1401. Right to Require Repurchase . . . . . . . . . . . . . . 94
---------------------------
SECTION 1402. Conditions to the Company's Election to Pay the
-----------------------------------------------
Repurchase Price in Common Stock or Cash . . . . . . . 95
----------------------------------------
SECTION 1403. Notices; Method of Exercising Repurchase Right, Etc. . 96
----------------------------------------------------
SECTION 1404. Certain Definitions . . . . . . . . . . . . . . . . . . 99
-------------------
SECTION 1405. Consolidation, Merger, Etc. . . . . . . . . . . . . . . 101
---------------------------
___________
Note: This table of contents shall not, for any purpose,
be deemed to be a part of the Indenture.
-viii-
<PAGE>
INDENTURE, dated as of September __, 1996, between Saks Holdings,
Inc., a corporation duly organized and existing under the laws of the State of
Delaware (herein called the "Company"), having its principal office at 12 East
49th Street, New York, New York 10017, and Bankers Trust Company, a New York
banking corporation, as Trustee (herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an issue of its
______% Convertible Subordinated Notes Due September __, 2006 (herein called the
"Securities") of substantially the tenor and amount hereinafter set forth, and
to provide therefor the Company has duly authorized the execution and delivery
of this Indenture.
All things necessary to make the Securities, when executed by the
Company and authenticated and delivered hereunder and duly issued by the
Company, the valid obligations of the Company, and to make this Indenture a
valid agreement of the Company, in accordance with their and its terms, have
been done. Further, all things necessary to duly authorize the issuance of the
Common Stock of the Company issuable upon the conversion of the Securities, and
to duly reserve for issuance the number of shares of Common Stock issuable upon
such conversion, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually agreed, for the equal and
proportionate benefit of all Holders of the Securities, as follows:
ARTICLE ONE
Definitions and Other Provisions
of General Application
SECTION 101. Definitions.
-----------
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article One have the meanings
assigned to them in this Article and include the plural as well as the
singular;
<PAGE>
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the
meanings assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted
accounting principles, and, except as otherwise herein expressly
provided, the term "generally accepted accounting principles" with
respect to any computation required or permitted hereunder shall mean
such accounting principles as are generally accepted at the date of
such computation; and
(4) 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.
"Act", when used with respect to any Holder, has the meaning specified
in Section 104.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control", when used with respect to any specified Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agent Member" means any member of, or participant in, the Depositary.
"Amended and Restated Credit Agreement" means the Amended and Restated
Credit Agreement, dated as of July 1, 1993 (as amended, supplemented, or
otherwise modified from time to time (the "Credit Agreement"), among Saks &
Company, the Lenders (as defined therein) from time to time parties thereto (the
"Banks"), and The Chase Manhattan Bank, as administrative agent for the Banks
(in such capacity, the "Administrative Agent").
"Applicable Procedures" means, with respect to any transfer or
transaction involving a Global Security or beneficial interest therein, the
rules and procedures of the Depositary for such Global Security to the extent
applicable to such transaction and as in effect from time to time.
-2-
<PAGE>
"Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 614 to act on behalf of the Trustee to authenticate
Securities.
"Board of Directors" means either the board of directors of the
Company or any duly authorized committee of that board.
"Board Resolution" means a resolution duly adopted by the Board of
Directors, a copy of which, certified by the Secretary or an Assistant Secretary
of the Company to have been duly adopted by the Board of Directors and to be in
full force and effect on the date of such certification, shall have been
delivered to the Trustee.
"Business Day" means, with respect to any Place of Payment, Place of
Conversion or any other place, as the case may be, each Monday, Tuesday,
Wednesday, Thursday and Friday, other than any such day on which banking
institutions in The City of New York, New York or in such particular place are
authorized or obligated by law or executive order to close.
"Change of Control" has the meaning specified in Section 1404(b).
"Closing Price Per Share" means, with respect to the Common Stock of
the Company, for any day, the reported last sales price regular way per share
or, in case no such reported sale takes place on such day, the average of the
reported closing bid and asked prices regular way, in either case (i) on the New
York Stock Exchange or, if the Common Stock is not listed or admitted to trading
on the New York Stock Exchange, on the principal national securities exchange on
which the Common Stock is listed or admitted to trading, or (ii) if not listed
on or admitted to trading on any national securities exchange then on the Nasdaq
National Market or (iii) if the Common Stock is not listed or admitted to
trading on any national securities exchange or quoted on such National Market,
the average of the closing bid and asked prices in the over-the-counter market
as furnished by any New York Stock Exchange member firm selected from time to
time by the Company for that purpose.
"Code" has the meaning specified in Section 201.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Exchange Act, or, if at any time
after the execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then the
body performing such duties at such time.
-3-
<PAGE>
"Common Stock" means the Common Stock, par value $0.01 per share, of
the Company authorized at the date of this instrument as originally executed.
Subject to the provisions of Section 1311, shares issuable on conversion or
repurchase of Securities shall include only shares of Common Stock or shares of
any class or classes of common stock resulting from any reclassification or
reclassifications thereof; provided, however, that if at any time there shall be
-------- -------
more than one such resulting class, the shares so issuable on conversion of
Securities shall include shares of all such classes, and the shares of each such
class then so issuable shall be substantially in the proportion which the total
number of shares of such class resulting from all such reclassifications bears
to the total number of shares of all such classes resulting from all such
reclassifications.
"common stock" includes any stock of any class of capital stock which
has no preference in respect of dividends or of amounts payable in the event of
any voluntary or involuntary liquidation, dissolution or winding up of the
issuer thereof and which is not subject to redemption by the issuer thereof.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Company Notice" has the meaning specified in Section 1403.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its Vice
Chairman of the Board, its President or a Vice President, and by its Treasurer,
an Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered
to the Trustee.
"Constituent Person" has the meaning specified in Section 1311.
"Conversion Agent" means any Person authorized by the Company to
convert Securities in accordance with Article Thirteen. The Company has
initially appointed the Trustee as its Conversion Agent.
"Conversion Price" has the meaning specified in Section 1404.
"Conversion Rate" has the meaning specified in Section 1301.
-4-
<PAGE>
"Corporate Trust Office" means the principal office of the Trustee at
which at any particular time its corporate trust business shall be administered,
which office on the date hereof is located at Four Albany Street, New York, N.Y.
10006.
"corporation" means a corporation, association, company, joint-stock
company or business trust.
"Custodian" means Bankers Trust Company, as custodian with respect to
any Global Security, or any successor entity thereto.
"Defaulted Interest" has the meaning specified in Section 307.
"Depositary" means, with respect to any Global Securities, a clearing
agency that is registered as such under the Exchange Act and is designated by
the Company to act as Depositary for such Global Securities (or any successor
securities clearing agency so registered).
"DTC" means The Depository Trust Company, a New York corporation.
"Event of Default" has the meaning specified in Section 501.
"Exchange Act" means the United States Securities Exchange Act of 1934
(or any successor statute), as amended from time to time.
"Expiration Date" has the meaning specified in Section 104.
"Expiration Time" has the meaning specified in Section 1304.
"Global Security" means a Security that is registered in the Security
Register in the name of a Depositary or a nominee thereof.
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this instrument and any such supplemental
indenture, the provisions of the Trust Indenture Act that are
-5-
<PAGE>
deemed to be a part of and govern this instrument and any such supplemental
indenture, respectively.
"Interest Payment Date" means the Stated Maturity of an installment of
interest on the Securities.
"Maturity", when used with respect to any Security, means the date on
which the principal of such Security becomes due and payable as therein or
herein provided, whether at the Stated Maturity or by declaration of
acceleration, call for redemption, submission for repurchase or otherwise.
"Non-electing Share" has the meaning specified in Section 1311.
"Notice of Default" means a written notice of the kind specified in
Section 501(4) or 501(5).
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, a Vice Chairman of the Board, the President or a Vice President, and
by the Treasurer, an Assistant Treasurer, the Secretary or an Assistant
Secretary, of the Company, and delivered to the Trustee. One of the officers
signing an Officers' Certificate given pursuant to Section 1004 shall be the
principal executive, financial or accounting officer of the Company.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company, and who shall be reasonably acceptable to the Trustee.
"Outstanding", when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
------
(i) Securities theretofore cancelled by the Trustee or
delivered to the Trustee for cancellation;
(ii) Securities for payment or redemption of which money in
the necessary amount has been theretofore deposited with the Trustee
or any Paying Agent (other than the Company) in trust or set aside and
segregated in trust by the Company (if the Company shall act as its
own Paying Agent) for the Holders of such Securities; provided that,
--------
if such Securities are to be redeemed, notice of such redemption has
been duly given pursuant to this Indenture or provision therefor
satisfactory to the Trustee has been made;
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<PAGE>
(iii) Securities which have been paid pursuant to Section 306
or in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any
such Securities in respect of which there shall have been presented to
the Trustee proof satisfactory to it that such Securities are held by
a bona fide purchaser in whose hands such Securities are valid
obligations of the Company; and
(iv) Securities converted into Common Stock pursuant to Article
Thirteen.
provided, however, that in determining whether the Holders of the requisite
- -------- -------
principal amount of Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the
Company or of such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Securities which a Responsible Officer of the Trustee
actually knows to be so owned shall be so disregarded. Securities so owned
which have been pledged in good faith may be regarded as Outstanding if the
pledgee establishes to the satisfaction of the Trustee the pledgee's right so to
act with respect to such Securities and that the pledgee is not the Company or
any other obligor upon the Securities or any Affiliate of the Company or of such
other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest on any Securities on behalf of
the Company.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, joint stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
"Place of Conversion" has the meaning specified in Section 1302.
"Place of Payment" means any city in which a Paying Agent is located.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of a
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mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"Record Date" means any Regular Record Date or Special Record Date.
"Redemption Date", when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price", when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Reference Date" has the meaning specified in Section 1304.
"Regular Record Date" for the interest payable on any Interest Payment
Date means the __________ or ________ (whether or not a Business Day), as the
case may be, next preceding such Interest Payment Date.
"Repurchase Date" has the meaning specified in Section 1401.
"Repurchase Price" has the meaning specified in Section 1401.
"Responsible Officer", when used with respect to the Trustee, means
any officer within the Corporate Trust Office including any Vice President,
Assistant Vice President, Secretary, Assistant Secretary, Managing Director or
any other officer of the Trustee customarily performing functions similar to
those performed by the above designated officers and also, with respect to a
particular matter, any other officer to whom such matter is referred because of
his knowledge and familiarity with the particular subject.
"Saks" means the Company or Saks & Company, a wholly-owned subsidiary
of the Company.
"Securities" has the meaning ascribed to it in the first paragraph
under the caption "Recitals of the Company".
"Securities Act" means the United States Securities Act of 1933 (or
any successor statute), as amended from time to time.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.
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<PAGE>
"Senior Indebtedness" means the principal of (and premium, if any) and
interest (including all interest accruing subsequent to the commencement of any
bankruptcy or similar proceeding, whether or not a claim for post-petition
interest is allowable as a claim in any such proceeding) on, and all fees and
other amounts payable in connection with, the following, whether absolute or
contingent, secured or unsecured, due or to become due, outstanding on the date
of the Indenture or thereafter created, incurred or assumed: (a) indebtedness
of the Company to banks, insurance companies and other financial institutions
evidenced by credit or loan agreements, notes or other written obligations,
(b) all other indebtedness of the Company (including indebtedness of others
guaranteed by the Company) other than the Securities, whether outstanding on the
date of this Indenture or thereafter created, incurred or assumed, which is
(i) for money borrowed or (ii) evidenced by a note, security, debenture, bond or
similar instrument given in connection with the acquisition of any businesses,
properties or assets of any kind, (c) obligations of the Company as lessee under
leases required to be capitalized on the balance sheet of the lessee under
generally accepted accounting principles, (d) obligations of the Company under
interest rate and currency swaps, caps, floors, collars or similar agreements or
arrangements intended to protect the Company against fluctuations in interest or
currency exchange rates, and (e) renewals, extensions, modifications,
restatements and refundings of, or any indebtedness or obligation issued in
exchange for, any such indebtedness or obligation described in clauses (a)
through (d) of this paragraph; provided, however, that Senior Indebtedness shall
-------- -------
not include any such indebtedness or obligation (i) if the terms of such
indebtedness or obligation (or the terms of the instrument under which, or
pursuant to which, it is issued) expressly provide that such indebtedness or
obligation is not superior in right of payment to the Securities, or expressly
provide that such indebtedness or obligation is pari passu with or junior to the
---- -----
Securities, (ii) if such indebtedness or obligation is non-recourse to the
Company or (iii) if such indebtedness or obligation is a conditional sale
contract or any account payable or any other similar indebtedness created or
assumed by the Company in the ordinary course of business in connection with the
obtaining of materials, inventories or services.
"Special Record Date" for the payment of any Defaulted Interest means
a date fixed by the Trustee pursuant to Section 307.
"Stated Maturity", when used with respect to any Security or any
installment of interest thereon, means the date specified in such Security as
the fixed date on which the principal of such Security or such installment of
interest is due and payable.
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<PAGE>
"Subsidiary" means a corporation more than 50% of the outstanding
voting stock of which is owned, directly or indirectly, by the Company or by one
or more other Subsidiaries, or by the Company and one or more other
Subsidiaries. For the purposes of this definition, "voting stock" means stock
which ordinarily has voting power for the election of directors, whether at all
times or only so long as no senior class of stock has such voting power by
reason of any contingency.
"Trading Days" means (i) if the Common Stock is listed or admitted for
trading on any national securities exchange, days on which such national
securities exchange is open for business or (ii) if the Common Stock is not
listed or admitted for trading on any national securities exchange, days on
which trades may be made on the Nasdaq National Market or any similar system of
automated dissemination of quotations of securities prices on which the Common
Shares are quoted or (iii) if the Common Stock is not listed or admitted for
trading on any national securities exchange or quoted on the Nasdaq National
Market or any other system of automated dissemination of quotation of securities
prices, days on which the Common Stock is traded regular way in the over-the-
counter market and for which a closing bid and a closing asked price for the
Common Stock are available.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor Trustee.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in
force at the date as of which this instrument was executed; provided, however,
-------- -------
that in the event the Trust Indenture Act of 1939 is amended after such date,
"Trust Indenture Act" means, to the extent required by any such amendment, the
Trust Indenture Act of 1939 as so amended.
"Vice President", when used with respect to the Company or the
Trustee, means any vice president, whether or not designated by a number or a
word or words added before or after the title "vice president".
SECTION 102. Compliance Certificates and Opinions.
------------------------------------
Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company shall furnish to
the Trustee an Officers' Certificate stating that all conditions precedent, if
any, provided for in this Indenture relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of
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such counsel all such conditions precedent, if any, have been complied with,
except that in the case of any such application or request as to which the
furnishing of such documents is specifically required by any provision of this
Indenture relating to such particular application or request, no additional
certificate or opinion need be furnished.
Every certificate (including certificates provided pursuant to
Section 1004) or opinion with respect to compliance with a condition or covenant
provided for in this Indenture shall include, without limitation:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(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 such individual, he has
made such examination or investigation as is necessary to enable him
to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 103. Form of Documents Delivered to Trustee.
--------------------------------------
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which such certificate or opinion is based are
erroneous.
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<PAGE>
Any such certificate or opinion of counsel may be based, insofar as it
relates to factual matters, upon a certificate or opinion of, or representations
by, an officer or officers of the Company stating that the information with
respect to such factual matters is in the possession of the Company, unless such
counsel knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to such matters are
erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. Acts of Holders; Record Dates.
-----------------------------
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 601) conclusive in favor of the Trustee and
the Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where
such execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.
(c) The ownership of Securities shall be proved by the Security
Register.
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<PAGE>
(d) The Company may set any day as a record date for the purpose of
determining the Holders entitled to give, make or take any request, demand,
authorization, direction, notice, consent, waiver or other action provided or
permitted by this Indenture to be given, made or taken by Holders, provided that
the Company may not set a record date for, and the provisions of this
Section 104(d) shall not apply with respect to, the giving or making of any
notice, declaration, request or direction referred to in Section 104(e). If any
record date is set pursuant to this Section 104(d), the Holders on such record
date, and only such Holders, shall be entitled to take the relevant action,
whether or not such Holders remain Holders after such record date; provided that
--------
no such action shall be effective hereunder unless taken on or prior to the
applicable Expiration Date by Holders of the requisite principal amount of
Securities on such record date. Nothing in this Section 104(d) shall be
construed to prevent the Company from setting a new record date for any action
for which a record date has previously been set pursuant to this Section 104(d)
(whereupon the record date previously set shall automatically and with no action
by any Person be cancelled and of no effect), and nothing in this Section 104(d)
shall be construed to render ineffective any action taken by Holders of the
requisite principal amount of Securities on the date such action is taken.
Promptly after any record date is set pursuant to this Section 104(d), the
Company, at its own expense, shall cause notice of such record date, the
proposed action by Holders and the applicable Expiration Date to be given to the
Trustee in writing and to each Holder in the manner set forth in Section 106.
(e) The Trustee may set any day as a record date for the purpose of
determining the Holders entitled to join in the giving or making of (i) any
Notice of Default, (ii) any declaration of acceleration referred to in
Section 502, (iii) any request to institute proceedings referred to in
Section 507(2), or (iv) any direction referred to in Section 512. If any record
date is set pursuant to this Section 104(e), the Holders on such record date,
and only such Holders, shall be entitled to join in such notice, declaration,
request or direction, whether or not such Holders remain Holders after such
record date; provided that no such action shall be effective hereunder unless
--------
taken on or prior to the applicable Expiration Date by Holders of the requisite
principal amount of Securities on such record date. Nothing in this
Section 104(e) shall be construed to prevent the Trustee from setting a new
record date for any action for which a record date has previously been set
pursuant to this Section 104(e) (whereupon the record date previously set shall
automatically and with no action by any Person be cancelled and of no effect),
and nothing in this Section 104(e) shall be construed to render ineffective any
action taken by Holders of the requisite principal amount of Securities on the
date such
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<PAGE>
action is taken. Promptly after any record date is set pursuant to this Sec-
tion 104(e), the Trustee, at the Company's expense, shall cause notice of such
record date, the proposed action by Holders and the applicable Expiration Date
to be given to the Company in writing and to each Holder of Securities in the
manner set forth in Section 106.
(f) With respect to any record date set pursuant to Sections 104(d)
or 104(e), the party hereto which sets such record date may designate any day as
the "Expiration Date" and from time to time may change the Expiration Date to
any earlier or later day; provided that no such change shall be effective unless
notice of the proposed new Expiration Date is given to the other party hereto in
writing, and to each Holder in the manner set forth in Section 106, on or prior
to the existing Expiration Date. If an Expiration Date is not designated with
respect to any record date set pursuant to Sections 104(d) or 104(e), the party
hereto which set such record date shall be deemed to have initially designated
the 180th day after such record date as the Expiration Date with respect
thereto, subject to its right to change the Expiration Date as provided in this
Section 104(f). Notwithstanding the foregoing, no Expiration Date shall be
later than the 180th day after the applicable record date.
(g) Without limiting the foregoing, a Holder entitled hereunder to
take any action hereunder with regard to any particular Security may do so with
regard to all or any part of the principal amount of such Security or by one or
more duly appointed agents each of which may do so pursuant to such appointment
with regard to all or any part of such principal amount.
(h) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future Holder
of the same Security and the Holder of every Security issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee or the
Company in reliance thereon, whether or not notation of such action is made upon
such Security.
SECTION 105. Notices, Etc., to Trustee and Company.
-------------------------------------
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if
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<PAGE>
made, given, furnished or filed in writing to or with the Trustee at its
Corporate Trust Office, Attention: Corporate Market Services, or
(2) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage
prepaid, to the Company to the attention of the Treasurer at the
address of the Company's principal office specified in the first
paragraph of this instrument or at any other address previously
furnished in writing to the Trustee by the Company.
SECTION 106. Notice to Holders; Waiver.
-------------------------
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at his address as it appears in the Security Register, not later
than the latest date (if any), and not earlier than the earliest date (if any),
prescribed for the giving of such notice. In any case where notice to Holders
is given by mail, neither the failure to mail such notice, nor any defect in any
notice so mailed, to any particular Holder shall affect the sufficiency of such
notice with respect to other Holders. Where this Indenture provides for notice
in any manner, such notice may be waived in writing by the Person entitled to
receive such notice, either before or after the event, and such waiver shall be
the equivalent of such notice. Waivers of notice by Holders shall be filed with
the Trustee, but such filing shall not be a condition precedent to the validity
of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
SECTION 107. Conflict with Trust Indenture Act.
---------------------------------
If any provision hereof limits, qualifies or conflicts with a
provision of the Trust Indenture Act that is required under such Act to be a
part of and govern this Indenture, the latter provision shall control. If any
provision of this Indenture modifies or excludes any provision of the Trust
Indenture Act that may be so modified or excluded, the latter
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provision shall be deemed to apply to this Indenture as so modified or to be
excluded, as the case may be.
SECTION 108. Effect of Headings and Table of Contents.
----------------------------------------
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 109. Successors and Assigns.
----------------------
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
SECTION 110. Separability Clause.
-------------------
In case any provision in this Indenture or in the Securities 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 111. Benefits of Indenture.
---------------------
Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder, the holders of Senior Indebtedness and the Holders of Securities, any
benefit or any legal or equitable right, remedy or claim under this Indenture.
SECTION 112. Governing Law.
-------------
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 113. Legal Holidays.
--------------
In any case where any Interest Payment Date, Redemption Date,
Repurchase Date or Stated Maturity of any Security or the last date on which a
Holder has the right to convert his Securities shall not be a Business Day at a
Place of Payment or Place of Conversion, as the case may be, then
(notwithstanding any other provision of this Indenture or of the Securities)
payment of interest or principal (and premium, if any) or delivery for
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<PAGE>
conversion of such Security need not be made on such date, but may be made on
the next succeeding Business Day at such Place of Payment or Place of
Conversion, as the case may be, with the same force and effect as if made on the
Interest Payment Date, Redemption Date, Repurchase Date or at the Stated
Maturity, or on such last day for conversion, provided that no interest shall
--------
accrue for the period from and after such Interest Payment Date, Redemption
Date, Repurchase Date, Stated Maturity or the last day for conversion, as the
case may be, so long as payment is made on such succeeding Business Day.
SECTION 114. Incorporators, Stockholders, Officers and Directors of the
----------------------------------------------------------
Company Exempt from Individual Liability.
----------------------------------------
No recourse under or upon any obligation, covenant or agreement in
this Indenture or any indenture supplemental hereto or of any Security, or for
any claim based thereon or otherwise in respect thereof, shall be had against
any incorporator, stockholder, officer or director, as such, past, present or
future, of the Company or of any successor Person, either directly or through
the Company or any successor Person, whether by virtue of any constitution,
statute or rule of law, or by the enforcement of any assessment or penalty or
otherwise; it being expressly understood that this Indenture and the obligations
issued hereunder are solely corporate obligations, and that no such personal
liability whatever shall attach to, or is or shall be incurred by, the
incorporators, stockholders, officers or directors, as such, of the Company or
of any successor Person, or any of them, because of the creation of the
indebtedness hereby authorized, or under or by reason of the obligations,
covenants or agreements contained in this Indenture or in any of the Securities
or implied therefrom; and that any and all such personal liability of every name
and nature, either at common law or in equity or by constitution or statute, of,
and any and all such rights and claims against, every such incorporator,
stockholder, officer or director, as such, because of the creation of the
indebtedness hereby authorized, or under or by reason of the obligations,
covenants or agreements contained in this Indenture or in any of the Securities
or implied therefrom are hereby expressly waived and released as a condition of,
and as a consideration for, the execution of this Indenture and the issue of
such Securities.
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ARTICLE TWO
Security Forms
SECTION 201. Forms Generally.
---------------
The Securities and the Trustee's certificates of authentication shall
be in substantially the forms set forth in this Article, with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture, and may have such letters, numbers or other marks
of identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange, the Internal
Revenue Code of 1986, as amended, and the regulations thereunder (the "Code"),
or as may, consistently herewith, be determined by the officers executing such
Securities, as evidenced by their execution of the Securities.
Any definitive Securities shall be printed, lithographed or engraved
or produced by any combination of these methods or may be produced in any other
manner permitted by the rules of any automated quotation system or securities
exchange on which the Securities may be quoted or listed, as the case may be,
all as determined by the officers executing such Securities, as evidenced by
their execution of such Securities.
SECTION 202. Form of Face of Security.
------------------------
[The following legend shall appear on the face of each Global Security:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITARY OR A
NOMINEE OF THE DEPOSITARY, WHICH MAY BE TREATED BY THE COMPANY, THE TRUSTEE AND
ANY AGENT THEREOF AS OWNER AND HOLDER OF THIS SECURITY FOR ALL PURPOSES.]
[The following legend shall appear on the face of each Global Security for which
The Depository Trust Company is to be the Depositary:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR 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
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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.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR REGISTERED
SECURITIES IN DEFINITIVE REGISTERED FORM IN THE LIMITED CIRCUMSTANCES REFERRED
TO IN THE INDENTURE, THIS GLOBAL SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A
WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE
DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE
DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OR SUCH
SUCCESSOR DEPOSITARY.]
SAKS HOLDINGS, INC.
_____% CONVERTIBLE SUBORDINATED NOTE
DUE SEPTEMBER __, 2006
No. __________ $________
Saks Holdings, Inc., a corporation duly organized and existing under
the laws of Delaware (herein called the "Company", which term includes any
successor Person under the Indenture hereinafter referred to), for value
received, hereby promises to pay to __________________, or registered assigns,
the principal sum of _____________________ Dollars ($_______) on _________,
____, and to pay interest thereon from _________, ____ or from the most recent
Interest Payment Date to which interest has been paid or duly provided for,
semi-annually in arrears on ________ and _________ in each year (each, an
"Interest Payment Date"), commencing _________________ at the rate of _____% per
annum, until the principal hereof is due, and at the rate of _____% per annum on
any overdue principal and premium, if any, and, to the extent permitted by law,
on any overdue interest. The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in the Indenture,
be paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest, which shall be the __________ or ________ (whether or not a
Business Day), as the case may be, next preceding such Interest Payment Date.
Except as otherwise provided in the Indenture, any such interest not so
punctually paid or duly provided for will forthwith cease to be payable to the
Holder on such Regular Record Date and may either be paid to the Person in whose
name this Security (or one or more Predecessor Securities) is registered at the
close of business on a Special Record Date for the payment of such Defaulted
Interest to be fixed by the Company, notice whereof shall be given to Holders of
Securities not less than 10 days prior to such Special Record Date, or be paid
at any time in any other lawful manner
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not inconsistent with the requirements of any automated quotation system or
securities exchange on which the Securities may be listed, and upon such notice
as may be required by such quotation system or exchange, as the case may be, all
as more fully provided in the Indenture. Payments of principal shall be made
upon the surrender of this Security at the option of the Holder at the Corporate
Trust Office of the Trustee, or at such other office or agency of the Company as
may be designated by it for such purpose in the Borough of Manhattan, The City
of New York, in such coin or currency of the United States of America as at the
time of payment shall be legal tender for the payment of public and private
debts; provided, however, that at the option of the Company payment of interest
-------- -------
may be made by check, mailed to the address of the Person entitled thereto as
such address shall appear in the Security Register, or, upon written application
by the Holder to the Security Registrar.
Except as specifically provided in the Indenture, the Company shall
not be required to make any payment with respect to any tax, assessment or other
governmental charge imposed by any governmental or any political subdivision or
taxing authority thereof or therein.
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
-20-
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated:
SAKS HOLDINGS, INC.
[Corporate Seal]
By_________________________________
Title:
Name:
Attest:
______________________________
Title:
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<PAGE>
SECTION 203. Form of Reverse of Security.
---------------------------
This Security is one of a duly authorized issue of Securities of the
Company designated as its ____% Convertible Subordinated Notes due September __,
2006 (herein called the "Securities"), limited in aggregate principal amount to
$200,000,000, as such amount may be increased, but not by an amount in excess of
$30,000,000, solely as a result of the exercise of the underwriters' over-
allotment option granted by the Company under the underwriting agreement, dated
September __, 1996, among the Company, Goldman, Sachs & Co., CS First Boston,
Morgan Stanley & Co. Incorporated, and Salomon Brothers Inc, issued and to be
issued under an Indenture, dated as of September __, 1996 (herein called the
"Indenture"), between the Company and Bankers Trust Company, as Trustee (herein
called the "Trustee", which term includes any successor trustee under the
Indenture), to which Indenture and all indentures supplemental thereto reference
is hereby made for a statement of the respective rights, limitations of rights,
duties and immunities thereunder of the Company, the Trustee, the holders of
Senior Indebtedness and the Holders of the Securities and of the terms upon
which the Securities are, and are to be, authenticated and delivered. The
Securities are issuable in registered form only without coupons in denominations
of $1,000 and any integral multiple thereof.
Subject to and upon compliance with the provisions of the Indenture,
the Holder of this Security is entitled, at his option, at any time before the
close of business on _________, ____, or in case this Security or a portion
hereof is called for redemption or the Holder hereof has exercised his right to
require the Company to repurchase this Security or a portion hereof, then in
respect of this Security until and including, but (unless the Company defaults
in making the payment due upon redemption or repurchase, as the case may be) not
after, the close of business on the Redemption Date or Repurchase Date, as the
case may be, to convert this Security (or any portion of the principal amount
hereof that is an integral multiple of $1,000, provided that the unconverted
--------
portion of such principal amount is $1,000 or any integral multiple of $1,000 in
excess thereof) into fully paid and nonassessable shares of Common Stock of the
Company at an initial Conversion Rate of _______ shares of Common Stock for each
$1,000 principal amount of Securities (or at the then current adjusted
Conversion Rate if an adjustment has been made as provided in the Indenture) by
surrender of this Security, duly endorsed or assigned to the Company or in blank
and, in case such surrender shall be made during the period from the close of
business on any Regular Record Date next preceding any Interest Payment Date to
the opening of business on such Interest Payment Date (except if this Security
has been called for redemption on a Redemption Date or is repurchasable on a
Repurchase Date
-22-
<PAGE>
occurring, in either case, during such period and is surrendered for such
conversion during such period (including any Securities or portions thereof
called for redemption on a Redemption Date that is a Regular Record Date or an
Interest Payment Date, as the case may be)), also accompanied by payment in New
York Clearing House or other funds acceptable to the Company of an amount equal
to the interest payable on such Interest Payment Date on the principal amount of
this Security then being converted, and also the conversion notice hereon duly
executed, to the Company at the Corporate Trust Office of the Trustee, or at
such other office or agency of the Company, subject to any laws or regulations
applicable thereto and subject to the right of the Company to terminate the
appointment of any Conversion Agent (as defined below) as may be designated by
it for such purpose in the Borough of Manhattan, The City of New York, or at
such other offices or agencies as the Company may designate (each a "Conversion
Agent"), provided further, that if this Security or portion hereof has been
-------- -------
called for redemption on a Redemption Date or is repurchasable on a Repurchase
Date occurring, in either case, during the period from the close of business on
any Regular Record Date next preceding any Interest Payment Date to the opening
of business on such succeeding Interest Payment Date and is surrendered for
conversion during such period, then the Holder of this Security who converts
this Security or a portion hereof during such period will be entitled to receive
the interest accruing hereon from the Interest Payment Date next preceding the
date of such conversion to such succeeding Interest Payment Date and shall not
be required to pay such interest upon surrender of this Security for conversion.
Subject to the provisions of the preceding sentence and, in the case of a
conversion after the close of business on the Regular Record Date next preceding
any Interest Payment Date and on or before the close of business on such
Interest Payment Date, to the right of the Holder of this Security (or any
Predecessor Security of record as of such Regular Record Date) to receive the
related installment of interest to the extent and under the circumstances
provided in the Indenture, no cash payment or adjustment is to be made on
conversion for interest accrued hereon from the Interest Payment Date next
preceding the day of conversion, or for dividends on the Common Stock issued on
conversion hereof. The Company shall thereafter deliver to the Holder the fixed
number of shares of Common Stock (together with any cash adjustment, as provided
in the Indenture) into which this Security is convertible and such delivery will
be deemed to satisfy the Company's obligation to pay the principal amount of
this Security. No fractions of shares or scrip representing fractions of shares
will be issued on conversion, but instead of any fractional interest (calculated
to the nearest 1/100th of a share) the Company shall pay a cash adjustment as
provided in the Indenture. The Conversion Rate is subject to adjustment as
provided in the Indenture. In addition, the Indenture provides that in the case
of certain consolidations
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<PAGE>
or mergers to which the Company is a party or the conveyance, transfer, sale or
lease of all or substantially all of the property and assets of the Company, the
Indenture shall be amended, without the consent of any Holders of Securities, so
that this Security, if then Outstanding, will be convertible thereafter, during
the period this Security shall be convertible as specified above, only into the
kind and amount of securities, cash and other property receivable upon such
consolidation, merger, conveyance, transfer, sale or lease by a holder of the
number of shares of Common Stock of the Company into which this Security could
have been converted immediately prior to such consolidation, merger, conveyance,
transfer, sale or lease (assuming such holder of Common Stock is not a
Constituent Person, failed to exercise any rights of election and received per
share the kind and amount received per share by a plurality of Non-electing
Shares). No adjustment in the Conversion Rate will be made until such
adjustment would require an increase or decrease of at least one percent of such
Conversion Rate, provided that any adjustment that would otherwise be made will
be carried forward and taken into account in the computation of any subsequent
adjustment.
The Securities are subject to redemption upon not less than 20 nor
more than 60 days' notice by mail, at any time on or after ___________, 1999, as
a whole or in part, at the election of the Company, at the following Redemption
Prices (expressed as percentages of the principal amount): If redeemed during
the 12-month period beginning ___________ of the years indicated,
Redemption
Year Price
---- ----------
1999 ______%
2000 ______%
2001 ______%
2002 ______%
2003 ______%
2004 ______%
and thereafter at a Redemption Price equal to 100% of the principal amount, in
each case together with accrued interest to the Redemption Date; provided,
--------
however, that interest installments whose Stated Maturity is on or prior to such
- -------
Redemption Date will be payable to the Holders of such Securities, or one or
more Predecessor Securities, of record at the close of business on the relevant
Record Dates referred to on the face hereof, all as provided in the Indenture.
In the event of redemption, repurchase or conversion of this Security
in part only, a new Security or Securities for the
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<PAGE>
unredeemed, unrepurchased or unconverted portion hereof will be issued in the
name of the Holder hereof upon the cancellation hereof.
In any case where the due date for the payment of the principal of,
premium, if any, or interest on any Security or the last day on which a Holder
of a Security has a right to convert his Security shall be, at any Place of
Payment or Place of Conversion, as the case may be, a day on which banking
institutions at such Place of Payment or Place of Conversion are authorized or
obligated by law or executive order to close, then payment of principal,
premium, if any, or interest, or delivery for conversion of such Security need
not be made on or by such date at such place but may be made on or by the next
succeeding day at such place which is not a day on which banking institutions
are authorized or obligated by law or executive order to close, with the same
force and effect as if made on the date for such payment or the date fixed for
redemption or repurchase, or by such last day for conversion, and no interest
shall accrue on the amount so payable for the period after such date so long as
payment is made on the next succeeding day at such place which is not a day on
which banking institutions are authorized or obligated by law or executive order
to close.
If a Change of Control occurs, the Holder of this Security, at the
Holder's option, shall have the right, in accordance with the provisions of the
Indenture, to require the Company to repurchase this Security (or any portion of
the principal amount hereof that equal to $1,000 or any integral multiple of
$1,000 in excess thereof) for cash at a Repurchase Price equal to 100% of the
principal amount thereof plus interest accrued to the Repurchase Date. At the
option of the Company, the Repurchase Price may be paid in cash or, subject to
the conditions provided in the Indenture, by delivery of shares of Common Stock
having a fair market value equal to the Repurchase Price. For purposes of this
paragraph, the fair market value of shares of Common Stock shall be determined
by the Company and shall be equal to 95% of the average of the Closing Prices
Per Share for the five consecutive Trading Days ending on and including the
third Trading Day immediately preceding the Repurchase Date. Whenever in this
Security there is a reference, in any context, to the principal of any Security
as of any time, such reference shall be deemed to include reference to the
Repurchase Price payable in respect of such Security to the extent that such
Repurchase Price is, was or would be so payable at such time, and express
mention of the Repurchase Price in any provision of this Security shall not be
construed as excluding the Repurchase Price so payable in those provisions of
this Security when such express mention is not made; provided, however, that,
-------- -------
for the purposes of the next paragraph, such
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<PAGE>
reference shall be deemed to include reference to the Repurchase Price only to
the extent the Repurchase Price is payable in cash.
The indebtedness evidenced by this Security is, to the extent provided
in the Indenture, subordinate and subject in right of payment to the prior
payment in full of all Senior Indebtedness, and this Security is issued subject
to the provisions of the Indenture with respect thereto. Each Holder of this
Security, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on his behalf to take such
action as may be necessary or appropriate to effectuate the subordination so
provided and (c) appoints the Trustee his attorney-in-fact for any and all such
purposes.
If an Event of Default shall occur and be continuing, the principal of
all the Securities may be declared due and payable in the manner and with the
effect provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities under the Indenture at
any time by the Company and the Trustee with the consent of the Holders of not
less than a majority in aggregate principal amount of the Securities at the time
Outstanding. The Indenture also contains provisions permitting the Holders of
specified percentages in aggregate principal amount of the Securities at the
time Outstanding, on behalf of the Holders of all the Securities, to waive
compliance by the Company with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Security shall be conclusive and binding upon such
Holder and upon all future Holders of this Security and of any Security issued
upon the registration of transfer hereof or in exchange herefor or in lieu
hereof, whether or not notation of such consent or waiver is made upon this
Security.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of (and premium, if any) and
interest on this Security on the respective Stated Maturities expressed herein
(or in the case of redemption or repurchase, on the Redemption Date or
Repurchase Date, as the case may be) or to convert this Security as provided in
the Indenture.
As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy
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<PAGE>
thereunder, unless such Holder shall have previously given the Trustee written
notice of a continuing Event of Default, the Holders of not less than 25% in
principal amount of the Outstanding Securities shall have made written request
to the Trustee to institute proceedings in respect of such Event of Default as
Trustee and offered the Trustee indemnity satisfactory to it and the Trustee
shall not have received from the Holders of a majority in principal amount of
the Securities Outstanding a direction inconsistent with such request, and shall
have failed to institute any such proceeding, for 60 days after receipt of such
notice, request and offer of indemnity. The foregoing shall not apply to any
suit instituted by the Holder of this Security for the enforcement of any
payment of principal hereof, premium, if any, or interest hereon on or after the
respective due dates expressed herein or for the enforcement of the right to
convert this Security as provided in the Indenture.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company maintained for that purpose pursuant to
Section 1002, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Company and the Security Registrar duly
executed by, the Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Securities, of authorized denominations and for the
same aggregate principal amount, will be issued to the designated transferee or
transferees.
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee, and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
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<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription of the face of
this Security, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT--______________
TEN ENT - as tenants by the entireties (Cust)
JT TEN - as joint tenants with right Custodian _____________ under Uniform
of survivorship and not as (Minor)
tenants in common Gifts to Minors Act ________________
(State)
Additional abbreviations may also be used
though not in the above list.
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<PAGE>
ELECTION OF HOLDER TO REQUIRE REPURCHASE
1. Pursuant to Section 1401 of the Indenture, the
undersigned hereby elects to have this Security repurchased by the Company.
2. The undersigned hereby directs the Trustee or the Company
to pay it or __________________ an amount in cash or, at the Company's election,
Common Stock valued as set forth in the Indenture, equal to 100% of the
principal amount to be repurchased (as set forth below), plus interest accrued
to the Repurchase Date, as provided in the Indenture.
Dated:
______________________________
______________________________
Signature(s)
Signature(s) must be guaranteed by an Eligible Guarantor
Institution with membership in an approved signature
guarantee program pursuant to Rule 17Ad-15 under the
Securities Exchange Act of 1934.
______________________________
Signature Guaranteed
Principal amount to be repurchased
(an integral multiple of $1,000): __________________________
Remaining principal amount following such repurchase: ____________________
NOTICE: The signature to the foregoing Election must correspond to the Name as
written upon the face of this Security in every particular, without alteration
or any change whatsoever.
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<PAGE>
SECTION 204. Form of Trustee's Certificate of Authentication.
-----------------------------------------------
This is one of the Securities referred to in the within-mentioned
Indenture.
Bankers Trust Company,
as Trustee
By ____________________
Authorized Signatory
SECTION 205. Form of Conversion Notice.
-------------------------
The undersigned Holder of this Security hereby irrevocably exercises
the option to convert this Security, or any portion of the principal amount
hereof (which is an integral multiple of $1,000, provided that the unconverted
portion of such principal amount is $1,000 or any integral multiple of $1,000 in
excess thereof) below designated, into shares of Common Stock in accordance with
the terms of the Indenture referred to in this Security, and directs that such
shares, together with a check in payment for any fractional share and any
Securities representing any unconverted principal amount hereof, be delivered to
and be registered in the name of the undersigned unless a different name has
been indicated below. If shares of Common Stock or Securities are to be
registered in the name of a Person other than the undersigned, (a) the
undersigned will pay all transfer taxes payable with respect thereto and
(b) signature(s) must be guaranteed by an Eligible Guarantor Institution with
membership in an approved signature guarantee program pursuant to Rule 17Ad-15
under the Securities Exchange Act of 1934. Any amount required to be paid by
the undersigned on account of interest accompanies this Security.
Dated:________________________ _______________________________
Fill in for registration of _______________________________
shares of Common Stock if to Signature(s)
be issued, and Securities if
to be delivered, other than
to and in the name of the
registered holder:
______________________________
(Name)
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<PAGE>
ARTICLE THREE
The Securities
SECTION 301. Title and Terms.
---------------
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is limited to $200,000,000, as
such amount may be increased, but not by an amount in excess of $30,000,000,
solely as a result of the purchase of additional Securities (referred to in the
Underwriting Agreement as "Additional Securities") pursuant exercise of the
underwriters' over-allotment option granted by the Company under the
underwriting agreement, dated September __, 1996 (the "Underwriting Agreement"),
among the Company, Goldman, Sachs & Co., CS First Boston, Morgan Stanley & Co.
Incorporated, and Salomon Brothers Inc (collectively, the "Underwriters"),
except for Securities authenticated and delivered upon registration of transfer
of, or in exchange for, or in lieu of, other Securities pursuant to Section 304,
305, 306, 906, 1108, 1302 or 1403(e).
The Securities shall be known and designated as the "____% Convertible
Subordinated Notes due September __, 2006" of the Company. Their Stated
Maturity shall be September __, 2006, and they shall bear interest at the rate
of _______% per annum, from September __, 1996 or from the most recent Interest
Payment Date to which interest has been paid or duly provided for, as the case
may be, payable semi-annually in arrears on _________ and __________ in each
year, commencing _________, 1997, until the principal thereof is paid or made
available for payment, and, to the fullest extent permitted by law, at the rate
of ____% per annum on any overdue principal and on any overdue installment of
interest.
Upon receipt by the Trustee of an Officers' Certificate stating that
the Underwriters have elected to purchase from the Company a specified aggregate
principal amount of Additional Securities not to exceed a total of $30,000,000
for all such elections in accordance with this paragraph pursuant to the
Underwriting Agreement, the Trustee shall authenticate and make available for
delivery such specified aggregate principal amount of such Additional Securities
to or upon a Company Request, and such specified aggregate principal amount of
such Additional Securities shall be considered part of the original aggregate
principal amount of the Securities.
The principal of (and premium, if any) and interest on the Securities
shall be payable at the office or agency of the Company maintained for such
purpose pursuant to Section 1002; provided, however, that at the option of the
-------- -------
Company payment of
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<PAGE>
interest may be made by check mailed to the address of the Person entitled
thereto as such address shall appear in the Security Register.
The Securities shall be redeemable as provided in Article Eleven.
The Securities are not entitled to the benefit of any sinking fund.
The Securities shall be subordinated in right of payment to Senior
Indebtedness as provided in Article Twelve.
The Securities shall be convertible as provided in Article Thirteen.
The Securities shall be subject to repurchase at the option of the
Holders upon a Change of Control as provided in Article Fourteen.
SECTION 302. Denominations.
-------------
The Securities shall be issuable only in registered form without
coupons and only in denominations of $1,000 and any integral multiple thereof.
SECTION 303. Execution, Authentication, Delivery and Dating.
----------------------------------------------
The Securities shall be executed on behalf of the Company by its
Chairman of the Board, its Vice Chairman of the Board, its President, or one of
its Vice Presidents, under its corporate seal reproduced thereon attested by its
Secretary or one of its Assistant Secretaries. The signature of any of these
officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities executed by the Company to
the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities; and the Trustee in accordance
with such Company Order shall authenticate and deliver such Securities as in
this Indenture provided and not otherwise.
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<PAGE>
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder.
SECTION 304. Temporary Securities.
--------------------
Pending the preparation of definitive Securities, the Company may
execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Securities which are printed, lithographed, typewritten, mimeographed
or otherwise produced, in any authorized denomination, substantially of the
tenor of the definitive Securities in lieu of which they are issued and with
such appropriate insertions, omissions, substitutions and other variations as
the officers executing such Securities may determine, as evidenced by their
execution of such Securities.
If temporary Securities are issued, the Company will cause definitive
Securities to be prepared without unreasonable delay. After the preparation of
definitive Securities, the temporary Securities shall be exchangeable for
definitive Securities upon surrender of the temporary Securities at any office
or agency of the Company designated pursuant to Section 1002, without charge to
the Holder. Upon surrender for cancellation of any one or more temporary
Securities, the Company shall execute and the Trustee shall authenticate and
deliver in exchange therefor a like principal amount of definitive Securities of
authorized denominations. Until so exchanged the temporary Securities shall in
all respects be entitled to the same benefits under this Indenture as definitive
Securities.
For purposes of this Section 304, each Global Security shall be
considered a definitive Security.
SECTION 305. Registration, Registration of Transfer and Exchange.
---------------------------------------------------
The Company shall cause to be kept at the Corporate Trust Office of
the Trustee a register (the register maintained in such office and in any other
office or agency designated pursuant to Section 1002 being herein sometimes
collectively referred to as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
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registration of Securities and of transfers of Securities. The Trustee is hereby
appointed "Security Registrar" for the purpose of registering Securities and
transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Security at an
office or agency of the Company designated pursuant to Section 1002 for such
purpose, the Company shall execute, and the Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Securities of any authorized denominations and of a like aggregate principal
amount.
At the option of the Holder, Securities may be exchanged for other
Securities of any authorized denominations and of a like aggregate principal
amount, upon surrender of the Securities to be exchanged at such office or
agency. Whenever any Securities are so surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and deliver, the Securities
which the Holder making the exchange is entitled to receive.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer
or for exchange shall (if so required by the Company or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 304, 906, 1108, 1302 or 1403(e) not involving any
transfer.
The Company shall not be required (i) to issue, register the transfer
of or exchange any Security during a period beginning at the opening of business
15 days before the day of the mailing of a notice of redemption of Securities
selected for redemption under Section 1104 and ending at the close of business
on the day of such mailing, or (ii) to register the transfer of or exchange any
Security so selected for redemption in whole or in part, except the unredeemed
portion of any Security being redeemed in part.
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<PAGE>
The provisions of Clauses (1), (2), (3), (4) and (5) below shall apply
only to Global Securities:
(1) Each Global Security authenticated under this Indenture shall be
registered in the name of the Depositary designated for such Global
Security or a nominee thereof and delivered to such Depositary or a nominee
thereof or Custodian therefor, and each such Global Security shall
constitute a single Security for all purposes of this Indenture.
(2) Notwithstanding any other provision in this Indenture, no Global
Security may be exchanged in whole or in part for Securities registered,
and no transfer of a Global Security in whole or in part may be registered,
in the name of any Person other than the Depositary for such Global
Security or a nominee thereof unless (A) such Depositary (i) has notified
the Company that it is unwilling or unable to continue as Depositary for
such Global Security or (ii) has ceased to be a clearing agency registered
under the Exchange Act, or (B) there shall have occurred and be continuing
an Event of Default with respect to such Global Security.
(3) Subject to Clause (2) above, any exchange of a Global Security
for other Securities may be made in whole or in part, and all Securities
issued in exchange for a Global Security or any portion thereof shall be
registered in such names as the Depositary for such Global Security shall
direct.
(4) Every Security authenticated and delivered upon registration of
transfer of, or in exchange for or in lieu of, a Global Security or any
portion thereof, whether pursuant to this Article Three or otherwise, shall
be authenticated and delivered in the form of, and shall be, a Global
Security, unless such Security is registered in the name of a Person other
than the Depositary for such Global Security or a nominee thereof.
(5) The Depositary or its nominee, as registered owner of a Global
Security, shall be the Holder of such Global Security for all purposes
under the Indenture and the Securities, and owners of beneficial interests
in a Global Security shall hold such interests pursuant to the Applicable
Procedures. Accordingly, any such owner's beneficial interest in a Global
Security will be shown only on, and the transfer of such interest shall be
effected only through, records maintained by the Depositary or its nominee
or its Agent Members and such owners of beneficial interests in a Global
Security will not be considered the owners or holders thereof.
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<PAGE>
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.
------------------------------------------------
If any mutilated Security is surrendered to the Trustee, the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of like tenor and principal amount and bearing a number
not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee
(i) evidence to their satisfaction of the destruction, loss or theft of any
Security and (ii) such security or indemnity as may be satisfactory to them to
save each of them and any agent of either of them harmless, then, in the absence
of notice to the Company or the Trustee that such Security has been acquired by
a bona fide purchaser, the Company shall execute and the Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or stolen
Security, a new Security of like tenor and principal amount and bearing a number
not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 307. Payment of Interest; Interest Rights Preserved.
----------------------------------------------
Interest on any Security which is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid to the Person in
whose name that Security (or one or more Predecessor Securities) is registered
at the close of business on the Regular Record Date for such interest.
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Any interest on any Security which is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date (herein called
"Defaulted Interest") shall forthwith cease to be payable to the Holder on the
relevant Regular Record Date by virtue of having been such Holder, and such
Defaulted Interest may be paid by the Company, at its election in each case, as
provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Securities (or their
respective Predecessor Securities) are registered at the close of
business on a Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company
shall notify the Trustee in writing of the amount of Defaulted
Interest proposed to be paid on each Security and the date of the
proposed payment, and at the same time the Company shall deposit with
the Trustee an amount of money equal to the aggregate amount proposed
to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the
date of the proposed payment, such money when deposited to be held in
trust for the benefit of the Persons entitled to such Defaulted
Interest as in this Clause provided. Thereupon the Trustee shall fix
a Special Record Date for the payment of such Defaulted Interest which
shall be not more than 15 days and not less than 10 days prior to the
date of the proposed payment and not less than 10 days after the
receipt by the Trustee of the notice of the proposed payment. The
Trustee shall promptly notify the Company of such Special Record Date
and, in the name and at the expense of the Company, shall cause notice
of the proposed payment of such Defaulted Interest and the Special
Record Date therefor to be mailed, first-class postage prepaid, to
each Holder at his address as it appears in the Security Register, not
less than 10 days prior to such Special Record Date. Notice of the
proposed payment of such Defaulted Interest and the Special Record
Date therefor having been so mailed, such Defaulted Interest shall be
paid to the Persons in whose names the Securities (or their respective
Predecessor Securities) are registered at the close of business on
such Special Record Date and shall no longer be payable pursuant to
the following Clause (2).
(2) The Company may make payment of any Defaulted Interest in
any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon
such notice
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as may be required by such exchange, if, after notice given by the Company
to the Trustee of the proposed payment pursuant to this Clause, such manner
of payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
In the case of any Security which is converted in accordance with
Section 1302 after any Regular Record Date and on or prior to the next
succeeding Interest Payment Date (other than a Security whose Maturity is prior
to such Interest Payment Date), interest whose Stated Maturity is on such
Interest Payment Date shall be payable on such Interest Payment Date
notwithstanding such conversion, and such interest (whether or not punctually
paid or duly provided for) shall be paid to the Person in whose name such
Security (or one or more Predecessor Securities) is registered at the close of
business on such Regular Record Date. Except as otherwise expressly provided in
the immediately preceding sentence or in Section 1302, in the case of any
Security which is converted, interest whose Stated Maturity is after the date of
conversion of such Security shall not be payable.
SECTION 308. Persons Deemed Owners.
---------------------
Prior to due presentment of a Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name such Security is registered as the owner of such
Security for the purpose of receiving payment of principal of (and premium, if
any) and (subject to Section 307) interest on such Security and for all other
purposes whatsoever, whether or not such Security be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.
SECTION 309. Cancellation.
------------
All Securities surrendered for payment, redemption, repurchase,
registration of transfer or exchange or conversion shall, if surrendered to any
Person other than the Trustee, be delivered to the Trustee and shall be promptly
cancelled by it. The Company may at any time deliver to the Trustee for
cancellation any Securities previously authenticated and delivered hereunder
which the Company may have acquired in any manner whatsoever, and all Securities
so delivered shall be promptly cancelled by the Trustee. No Securities shall be
authenticated in lieu of or in
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exchange for any Securities cancelled as provided in this Section, except as
expressly permitted by this Indenture. All cancelled Securities held by the
Trustee shall be disposed of in accordance with the Trustee's normal procedures.
SECTION 310. Computation of Interest.
-----------------------
Interest on the Securities shall be computed on the basis of a 360-day
year of twelve 30-day months.
ARTICLE FOUR
Satisfaction and Discharge
SECTION 401. Satisfaction and Discharge of Indenture.
---------------------------------------
This Indenture shall cease to be of further effect (except as to any
surviving rights of conversion, or registration of transfer or exchange of
Securities herein expressly provided for), and the Trustee, on demand of and at
the expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when
(1) either
(A) all Securities theretofore
authenticated and delivered (other than
(i) Securities which have been
destroyed, lost or stolen and which have
been replaced or paid as provided in
Section 306 and (ii) Securities for
whose payment money has theretofore been
deposited in trust or segregated and
held in trust by the Company and
thereafter repaid to the Company or
discharged from such trust, as provided
in Section 1003) have been delivered to
the Trustee for cancellation; or
(B) all such Securities not
theretofore delivered to the Trustee for
cancellation
(i) have become due and
payable, or
(ii) will become due and payable
at their Stated Maturity within one
year, or
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(iii) are to be called for
redemption within one year under
arrangements satisfactory to the
Trustee for the giving of notice of
redemption by the Trustee in the
name, and at the expense, of the
Company,
and the Company, in the case of (i),
(ii) or (iii) above, has deposited or
caused to be deposited with the Trustee
as trust funds in trust for the purpose
an amount sufficient to pay and
discharge the entire indebtedness on
such Securities not theretofore
delivered to the Trustee for
cancellation, for principal (and
premium, if any) and interest to the
date of such deposit (in the case of
Securities which have become due and
payable) or to the Stated Maturity or
Redemption Date, as the case may be;
(2) the Company has paid or caused to
be paid all other sums payable hereunder by
the Company; and
(3) the Company has delivered to the
Trustee an Officers' Certificate and an
Opinion of Counsel, each stating that all
conditions precedent herein provided for
relating to the satisfaction and discharge of
this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 607, the obligations of
the Trustee to any Authenticating Agent under Section 614 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of Clause (1) of
this Section, the obligations of the Trustee under Section 402 and the last
paragraph of Section 1003 shall survive. Funds held in trust pursuant to this
Section are not subject to the provisions of Article Twelve.
SECTION 402. Application of Trust Money.
--------------------------
Subject to the provisions of the last paragraph of Section 1003, all
money deposited with the Trustee pursuant to Section 401 shall be held in trust
and applied by it, in accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the
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Company acting as its own Paying Agent) as the Trustee may determine, to the
Persons entitled thereto, of the principal (and premium, if any) and interest
for whose payment such money has been deposited with the Trustee. All moneys
deposited with the Trustee pursuant to Section 401 (and held by it or any Paying
Agent) for the payment of Securities subsequently converted shall be returned to
the Company upon Company Request.
The Trustee and the Paying Agent shall pay to the Company upon request any
money held by them for the payment of principal and interest that remains
unclaimed for two years. After payment to the Company, any Holder of Securities
entitled to money must look to the Company for payment of general creditors
unless an applicable abandoned property law designates another person.
ARTICLE FIVE
Remedies
SECTION 501. Events of Default.
-----------------
"Event of Default", wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be occasioned by the provisions of Article Twelve or be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(1) default in the payment of the principal or Redemption Price
of any Security at its Maturity whether or not such payment is
prohibited pursuant to Article Thirteen; or
(2) default in the payment of any interest upon any Security
when it becomes due and payable whether or not such payment is
prohibited pursuant to Article Thirteen, and continuance of such
default for a period of 30 days; or
(3) failure by the Company to give the Company Notice in accordance
with Section 1403; or
(4) default in the performance, or breach, of any covenant or
warranty of the Company in this Indenture (other than a covenant or
warranty a default in whose performance or whose breach is elsewhere
in this Section specifically dealt with), and continuance of such
default or breach for a period of 60 days after there has been given,
by registered or certified mail,
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to the Company by the Trustee or to the Company and the Trustee by the
Holders of at least 25% in aggregate principal amount of the Outstanding
Securities a written notice specifying such default or breach and requiring
it to be remedied and stating that such notice is a "Notice of Default"
hereunder; or
(5) a default under any indebtedness of Saks for money borrowed or
under any mortgage, indenture or instrument under which there may be issued
or by which there may be secured or evidenced any indebtedness for money
borrowed by Saks in an aggregate outstanding principal amount then
outstanding in excess of $5,000,000, whether such indebtedness now exists
or shall hereafter be created, such indebtedness is not paid at final
maturity (either upon its stated maturity or acceleration thereof) and such
default in payment or acceleration has not been cured or rescinded, within
a period of 30 days after there shall have been given, by registered or
certified mail, to Saks by the Trustee or to Saks and the Trustee by the
Holders of at least 25% in aggregate principal amount of the Outstanding
Securities, a written notice specifying such default and requiring Saks to
cause such indebtedness to be discharged or cause such default to be cured
or waived or such acceleration to be rescinded or annulled and stating that
such notice is a "Notice of Default" hereunder; or
(6) the entry by a court having jurisdiction in the premises of
(A) a decree or order for relief in respect of Saks in an involuntary
case or proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or (B) a decree or
order adjudging Saks a bankrupt or insolvent, or approving as properly
filed a petition seeking reorganization, arrangement, adjustment or
composition of or in respect of Saks under any applicable federal or
state law, or appointing a custodian, receiver, liquidator, assignee,
trustee, sequestrator or other similar official of Saks or of any
substantial part of its property, or ordering the winding up or
liquidation of its affairs, and the continuance of any such decree or
order for relief or any such other decree or order unstayed and in
effect for a period of 60 consecutive days; or
(7) the commencement by Saks of a voluntary case or proceeding
under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding
to be adjudicated a bankrupt or insolvent, or the consent by it to the
entry of a decree or order for relief in respect of Saks
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<PAGE>
in an involuntary case or proceeding under any applicable federal or state
bankruptcy, insolvency, reorganization or other similar law or to the
commencement of any bankruptcy or insolvency case or proceeding against it,
or the filing by it of a petition or answer or consent seeking
reorganization or relief under any applicable federal or state law, or the
consent by Saks to the filing of such petition or to the appointment of or
taking possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of Saks or of any substantial part
of its property, or the making by it of an assignment for the benefit of
creditors, or the admission by it in writing of its inability to pay its
debts generally as they become due, or the taking of corporate action by
the Saks in furtherance of any such action.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
--------------------------------------------------
If an Event of Default (other than an Event of Default specified in
Section 501(1),(2),(6) or 501(7)) occurs and is continuing, then and in every
such case the Trustee or the Holders of not less than 25% in principal amount of
the Outstanding Securities may declare the principal of all the Securities to be
due and payable immediately, by a notice in writing to the Company (and to the
Trustee if given by Holders), and upon any such declaration such principal and
all accrued interest thereon shall become immediately due and payable. If an
Event of Default specified in Section 502(1) or (2) occurs and is continuing,
the Holder of any Outstanding Security may, by notice in writing to the Company
(with a copy to the Trustee), declare the principal of such Security to be due
and payable immediately, and upon any such declaration such principal and
(subject to Section 307) any accrued interest thereon shall become immediately
due and payable. If an Event of Default specified in Section 501(6) or 501(7)
occurs and is continuing, the principal of and any accrued interest thereon, all
Outstanding Securities shall ipso facto become due and payable without any
---- -----
declaration or other Act on the part of the Trustee or any Holder.
At any time after such a declaration of acceleration has been made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter in this Article Five provided, the Holders of a
majority in principal amount of the Outstanding Securities, by written notice to
the Company and the Trustee, may rescind and annul such declaration and its
consequences if
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(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest on all Securities,
(B) the principal of (and premium, if any, on) any
Securities which have become due otherwise than by such
declaration of acceleration and interest thereon at the rate
borne by the Securities,
(C) to the extent that payment of such interest is lawful,
interest upon overdue interest at a rate of [ ]% per annum, and
(D) all sums paid or advanced by the Trustee hereunder and
the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel;
and
(2) all Events of Default, other than the nonpayment of the
principal of Securities which have become due solely by such
declaration of acceleration, have been cured or waived as provided in
Section 513.
No such rescission or annulment referred to above shall affect any subsequent
default or Event of Default or impair any right consequent thereon.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee.
---------------------------------------------------------------
The Company covenants that if
(1) default is made in the payment of any interest on any
Security when such interest becomes due and payable and such default
continues for a period of 30 days, or
(2) default is made in the payment of the principal of (or
premium, if any, on) any Security at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal (and premium, if any) and interest, and, to the extent
that payment of such interest shall be legally enforceable, interest on any
overdue principal
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<PAGE>
(and premium, if any) and on any overdue interest, at a rate of [ ]% per
annum, and, in addition thereto, such further amount as shall be sufficient to
cover the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon the Securities and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of
the property of the Company or any other obligor upon the Securities, wherever
situated.
If an Event of Default occurs and is continuing, the Trustee may in
its discretion proceed to protect and enforce its rights and the rights of the
Holders by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 504. Trustee May File Proofs of Claim.
--------------------------------
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or the
creditors of either, the Trustee (irrespective of whether the principal of, and
any interest on, the Securities shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the Trustee
shall have made any demand on the Company for the payment of overdue principal
or interest) shall be entitled and empowered, by intervention in such proceeding
or otherwise,
(1) to file and prove a claim for the whole amount of principal,
premium, if any, and interest owing and unpaid in respect of the Securities
and take such other actions, including participating as a member, voting or
otherwise, of any official committee of creditors appointed in such matter,
and to file such other papers or documents, in each of the foregoing cases,
as may be necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and of
the Holders of Securities allowed in such judicial proceeding, and
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(2) to collect and receive any moneys or other property payable or
deliverable on any such claim and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due to it for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel and
any other amounts due the Trustee under Section 607.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder of a Security
any plan of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof or to authorize the Trustee to
vote in respect of the claim of any Holder of a Security in any such proceeding;
provided, however, that the Trustee may, on behalf of such Holders, vote for the
- -------- -------
election of a trustee in bankruptcy or similar official.
SECTION 505. Trustee May Enforce Claims Without Possession of Securities.
-----------------------------------------------------------
All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in its own name
as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
SECTION 506. Application of Money Collected.
------------------------------
Subject to Article Twelve, any money collected by the Trustee pursuant
to this Article Five shall be applied in the following order, at the date or
dates fixed by the Trustee and, in case of the distribution of such money on
account of principal (or premium, if any) or interest, upon presentation of the
Securities and the notation thereon of the payment if only partially paid and
upon surrender thereof if fully paid:
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FIRST: To the payment of all amounts due the Trustee under
Section 607;
SECOND: To the payment of the amounts then due and unpaid for
principal of (and premium, if any) and interest on the Securities in
respect of which or for the benefit of which such money has been
collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on such Securities for
principal (and premium, if any) and interest, respectively; and
THIRD: Any remaining amounts shall be repaid to the Company.
SECTION 507. Limitation on Suits.
-------------------
No Holder of any Security shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless
(1) such Holder has previously given written notice to the
Trustee of a continuing Event of Default;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities shall have made written request to the Trustee
to institute proceedings in respect of such Event of Default in its
own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee indemnity
satisfactory to it against the costs, expenses and liabilities to be
incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(5) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a
majority in principal amount of the Outstanding Securities;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders,
or to obtain or to seek to obtain priority or preference over any other Holders
or to enforce any
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right under this Indenture, except in the manner herein provided and for the
equal and ratable benefit of all the Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and
----------------------------------------------------------------
Interest and to Convert.
-----------------------
Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of (and premium, if any) and (subject to
Section 307) interest on such Security on the respective Stated Maturities
expressed in such Security (or, in the case of redemption or repurchase, on the
Redemption Date or Repurchase Date, as the case may be) and to convert such
Security in accordance with Article Thirteen and to institute suit for the
enforcement of any such payment and right to convert, and such rights shall not
be impaired without the consent of such Holder.
SECTION 509. Restoration of Rights and Remedies.
----------------------------------
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative.
------------------------------
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in the last paragraph
of Section 306, no right or remedy herein conferred upon or reserved to the
Trustee or to the Holders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
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SECTION 511. Delay or Omission Not Waiver.
----------------------------
No delay or omission of the Trustee or of any Holder of any Security
to exercise any right or remedy accruing upon any Event of Default shall impair
any such right or remedy or constitute a waiver of any such Event of Default or
an acquiescence therein. Every right and remedy given by this Article Five or
by law to the Trustee or to the Holders may be exercised from time to time, and
as often as may be deemed expedient, by the Trustee or by the Holders, as the
case may be.
SECTION 512. Control by Holders.
------------------
The Holders of a majority in principal amount of the Outstanding
Securities shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee, provided that
--------
(1) such direction shall not be in conflict with any rule of law
or with this Indenture, and
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 513. Waiver of Past Defaults.
-----------------------
The Holders of not less than a majority in principal amount of the
Outstanding Securities may on behalf of the Holders of all the Securities waive
any past default hereunder and its consequences, except a default
(1) in the payment of the principal of (or premium, if any) or
interest on any Security, or
(2) in respect of a covenant or provision hereof which under
Article Nine cannot be modified or amended without the consent of the
Holder of each Outstanding Security affected.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
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SECTION 514. 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, suffered or
omitted by it as Trustee, a court may require any party litigant in such suit to
file an undertaking to pay the costs of such suit, and may assess costs against
any such party litigant, in the manner and to the extent provided in the Trust
Indenture Act; provided that the provisions of this Section 514 (to the extent
--------
permitted by law) shall not apply to any suit instituted by the Trustee, to any
suit instituted by any Holder, or group of Holders, holding in the aggregate
more than ten (10) percent in principal amount of Outstanding Securities, or to
any suit instituted by any Holder of any Security for the enforcement of the
payment of the principal of, premium, if any, or interest on any Security or to
any suit for the enforcement of the right to convert any Security in accordance
with the provisions of Article Thirteen or to require the Company to repurchase
any Security in accordance with the provisions of Article Fourteen.
SECTION 515. Waiver of Stay or Extension Laws.
--------------------------------
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay, usury or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE SIX
The Trustee
SECTION 601. Certain Duties and Responsibilities.
-----------------------------------
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise the rights and powers vested in it by this Indenture and
use the same degree of care and skill in its exercise as a prudent person would
exercise or use under the circumstances in the conduct of such person's own
affairs.
(b) Except during the continuance of an Event of Default,
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(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of the Indenture; but in the
case of any such certificates or opinions which by any provision hereof are
specifically required to be furnished to the Trustee, the Trustee shall be
under a duty to examine the same to determine whether or not they conform
to the requirements of this Indenture.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own wilful misconduct, except that
(1) this paragraph (c) shall not be construed to limit the effect of
paragraph (b) of this Section;
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the direction
of the Holders of a majority in principal amount of the Outstanding
Securities relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust
or power conferred upon the Trustee, under this Indenture; and
(4) no provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder, or in the exercise of any
of its rights or powers, if it shall have reasonable grounds for believing
that repayment of such funds or indemnity satisfactory to it against such
risk or liability is not assured to it.
(d) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section.
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SECTION 602. Notice of Defaults.
------------------
Within 90 days after the occurrence of any default hereunder as to
which the Trustee has received written notice, the Trustee shall give to all
Holders of Securities, in the manner provided in Section 106, notice of such
default, unless such default shall have been cured or waived; provided, however,
-------- -------
that in the case of any default of the character specified in Section 501(4), no
such notice to Holders of Securities shall be given until at least 30 days after
the occurrence of such default. For the purpose of this Section, the term
"default" means any event which is, or after notice or lapse of time or both
would become, an Event of Default.
SECTION 603. Certain Rights of Trustee.
-------------------------
Subject to the provisions of Section 601:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, Officers' Certificate,
other certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document believed by it to
be genuine and to have been signed or presented by the proper party or
parties;
(b) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order
and any resolution of the Board of Directors may be sufficiently
evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior
to taking, suffering or omitting any action hereunder, the Trustee
(unless other evidence be herein specifically prescribed) may, in the
absence of bad faith on their part, conclusively rely upon an
Officers' Certificate;
(d) 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 in respect of any action taken, suffered
or omitted by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request or
direction of any of the
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Holders pursuant to this Indenture, unless such Holders shall have offered
to the Trustee security or indemnity satisfactory to it against the costs,
expenses and liabilities which might be incurred by it in compliance with
such request or direction;
(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, personally or by agent or
attorney during reasonable business hours and after reasonable notice;
and
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder.
SECTION 604. Not Responsible for Recitals or Issuance of Securities.
------------------------------------------------------
The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Securities. The Trustee shall not be accountable for the
use or application by the Company of Securities or the proceeds thereof.
SECTION 605. May Hold Securities.
-------------------
The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and, subject to
Sections 608 and 613, may otherwise deal with the Company with the same rights
it would have if it were not Trustee, Authenticating Agent, Paying Agent,
Security Registrar or such other agent.
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SECTION 606. Money Held in Trust.
-------------------
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed with the Company in writing.
SECTION 607. Compensation and Reimbursement.
------------------------------
The Company agrees
(1) to pay to the Trustee from time to time reasonable
compensation for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to reimburse
the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the
reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense, disbursement or advance
as may be attributable to its negligence or bad faith; and
(3) to indemnify the Trustee and its directors, officers,
employees and agents for, and to hold them harmless against, any loss,
liability or expense incurred without negligence or bad faith on their
part, arising out of or in connection with the acceptance or admin-
istration of this trust, including the costs and expenses of defending
itself against any claim or liability in connection with the exercise
or performance of any of its powers or duties hereunder.
To secure the Company's payment obligations under this Section, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee including, without limitation, all money or property
held or collected by the Trustee in trust to pay the principal of, or interest
on, or any other amounts on any Securities, and such lien shall survive the
satisfaction and discharge of the Indenture and any other termination of the
Indenture including any termination under any bankruptcy law. When the Trustee
incurs expenses or renders services in connection with an Event of Default
specified in Sections 501(6) or (7), the Holders by their acceptance of the
Securities hereby agree that such expenses and the compensation for
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such services are intended to constitute expenses of administration under
Title 11 of the United States Code or any other applicable Federal or state
bankruptcy, insolvency or similar law. "Trustee" for purposes of this
Section 607 shall include any predecessor Trustee, but the negligence or bad
faith of any Trustee shall not affect the indemnification of any other Trustee.
SECTION 608. Disqualification; Conflicting Interests.
---------------------------------------
If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture.
SECTION 609. Corporate Trustee Required; Eligibility.
---------------------------------------
There shall at all times be a Trustee hereunder which shall be a
Person that is eligible pursuant to the Trust Indenture Act to act as such,
having a combined capital and surplus of at least $50,000,000 subject to
supervision or examination by federal or state authority, in good standing and
having an established place of business in the Borough of Manhattan, The City of
New York. If such Person publishes reports of condition at least annually,
pursuant to law or to the requirements of said supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such Person shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
the Trustee shall cease to be eligible in accordance with the provisions of this
Section 609, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article and a successor shall be appointed
pursuant to Section 610.
SECTION 610. Resignation and Removal; Appointment of Successor.
-------------------------------------------------
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee under Section 611.
(b) The Trustee may resign at any time by giving written notice
thereof to the Company. If an instrument of acceptance by a successor Trustee
shall not have been delivered to the Trustee within 30 days after the giving of
such notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
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(c) The Trustee may be removed at any time by Act of the Holders of a
majority in principal amount of the Outstanding Securities, delivered to the
Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 608 after
written request therefor by the Company or by any Holder who has been
a bona fide Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 609 and
shall fail to resign after written request therefor by the Company or
by any such Holder, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of
its property shall be appointed or any public officer shall take
charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee, or (ii) subject to Section 514, any Holder who has been a bona fide
Holder of a Security for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, the
Company, by a Board Resolution, shall promptly appoint a successor Trustee. If,
within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee shall be appointed by Act of the
Holders of a majority in principal amount of the Outstanding Securities
delivered to the Company and the retiring Trustee, the successor Trustee so
appointed shall, forthwith upon its acceptance of such appointment, become the
successor Trustee and supersede the successor Trustee appointed by the Company.
If no successor Trustee shall have been so appointed by the Company or the
Holders and accepted appointment in the manner hereinafter provided, any Holder
who has been a bona fide Holder of a Security for at least six months may, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor Trustee.
(f) The Company shall give notice of each resignation and each
removal of the Trustee and each appointment of a successor
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Trustee to all Holders in the manner provided in Section 106. Each notice shall
include the name of the successor Trustee and the address of its Corporate Trust
Office.
(g) No retiring Trustee shall be liable for the acts or omissions of
any successor Trustee hereunder.
(h) All fees, charges and expenses of the retiring Trustee shall
become immediately due and payable upon the appointment of a successor Trustee
hereunder.
SECTION 611. Acceptance of Appointment by Successor.
--------------------------------------
Every successor Trustee appointed hereunder shall execute, acknowledge
and deliver to the Company and to the retiring Trustee an instrument accepting
such appointment, and thereupon the resignation or removal of the retiring
Trustee shall become effective and such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers, trusts
and duties of the retiring Trustee; but, on request of the Company or the suc-
cessor Trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor Trustee all the
rights, powers and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder. Upon request of any such successor Trustee,
the Company shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Trustee all such rights, powers and
trusts.
No successor Trustee shall accept its appointment unless at the time
of such acceptance such successor Trustee shall be qualified and eligible under
this Article.
SECTION 612. Merger, Conversion, Consolidation or Succession to Business.
-----------------------------------------------------------
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee (including the trust created by this Indenture), shall be the
successor of the Trustee hereunder, provided such corporation shall be otherwise
qualified and eligible under this Article, without the execution or filing of
any paper or any further act on the part of any of the parties hereto. In case
any Securities shall have been authenticated, but not delivered, by the Trustee
then in office, any successor by merger, conversion or consolidation to such
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authenticating Trustee may adopt such authentication and deliver the Securities
so authenticated with the same effect as if such successor Trustee had itself
authenticated such Securities.
SECTION 613. Preferential Collection of Claims Against Company.
-------------------------------------------------
If and when the Trustee shall be or become a creditor of the Company
(or any other obligor upon the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other obligor).
SECTION 614. Appointment of Authenticating Agent.
-----------------------------------
The Trustee may appoint an Authenticating Agent or Agents reasonably
acceptable to the Company which shall be authorized to act on behalf of the
Trustee to authenticate Securities issued upon original issue and upon exchange,
registration of transfer, partial conversion or partial redemption or pursuant
to Section 306, and Securities so authenticated shall be entitled to the
benefits of this Indenture and shall be valid and obligatory for all purposes as
if authenticated by the Trustee hereunder. Wherever reference is made in this
Indenture to the authentication and delivery of Securities by the Trustee or the
Trustee's certificate of authentication, such reference shall be deemed to
include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a corporation organized and
doing business under the laws of the United States of America, any State thereof
or the District of Columbia, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less than $50,000,000 and
subject to supervision or examination by federal or state authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
an Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any
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corporation succeeding to the corporate agency or corporate trust business of an
Authenticating Agent, shall continue to be an Authenticating Agent, provided
such corporation shall be otherwise eligible under this Section, without the
execution or filing of any paper or any further act on the part of the Trustee
or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof
to such Authenticating Agent and to the Company. Upon receiving such a notice
of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall mail written notice of
such appointment by first-class mail, postage prepaid, to all Holders as their
names and addresses appear in the Security Register. Any successor
Authenticating Agent upon acceptance of its appointment hereunder shall become
vested with all the rights, powers and duties of its predecessor hereunder, with
like effect as if originally named as an Authenticating Agent. No successor
Authenticating Agent shall be appointed unless eligible under the provisions of
this Section.
The Trustee agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section, and the
Trustee shall be entitled to be reimbursed for such payments, subject to the
provisions of Section 607.
An Authenticating Agent hereunder shall be entitled to all of the
rights, protections and immunities of the Trustee hereunder.
If an appointment is made pursuant to this Section, the Securities may
have endorsed thereon, in addition to the Trustee's certificate of
authentication, an alternative certificate of authentication in the following
form:
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This is one of the Securities described in the within-mentioned
Indenture.
Bankers Trust Company,
As Trustee
By [Authenticating Agent]
as Authenticating Agent
By: ________________________
Authorized Signatory
ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Company
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders.
---------------------------------------------------------
The Company will furnish or cause to be furnished to the Trustee
(a) semi-annually, not more than 15 days after each Regular
Record Date, a list, in such form as the Trustee may reasonably
require, of the names and addresses of the Holders as of such Regular
Record Date, and
(b) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company of any such request, a
list of similar form and content as of a date not more than 15 days
prior to the time such list is furnished;
provided that such list need not be furnished by the Company so long as the
- --------
Trustee is acting as Security Registrar.
SECTION 702. Preservation of Information; Communications to Holders.
------------------------------------------------------
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as
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provided in Section 701 and the names and addresses of Holders received by the
Trustee in its capacity as Security Registrar. The Trustee may destroy any list
furnished to it as provided in Section 701 upon receipt of a new list so
furnished.
(b) The rights of Holders to communicate with other Holders with
respect to their rights under this Indenture or under the Securities, and the
corresponding rights and duties of the Trustee, shall be as provided by the
Trust Indenture Act.
(c) Every Holder, by receiving and holding the Securities, agrees
with the Company and the Trustee that neither the Company nor the Trustee nor
any agent of either of them shall be held accountable by reason of any
disclosure of information as to names and addresses of Holders made pursuant to
the Trust Indenture Act.
SECTION 703. Reports by Trustee.
------------------
(a) The Trustee shall transmit to Holders such reports concerning the
Trustee and its actions under this Indenture as may be required pursuant to the
Trust Indenture Act at the times and in the manner provided pursuant thereto.
(b) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock exchange upon
which the Securities are listed, with the Commission and with the Company. The
Company will notify the Trustee if and when the Securities are listed on any
stock exchange.
SECTION 704. Reports by Company.
------------------
The Company shall file with the Trustee and the Commission, and
transmit to Holders, such information, documents and other reports, and such
summaries thereof, as may be required pursuant to the Trust Indenture Act at the
times and in the manner provided pursuant to such Act; provided that any such
--------
information, documents or reports required to be filed with the Commission
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 shall be
filed with the Trustee within 15 days after the same is so required to be filed
with the Commission.
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ARTICLE EIGHT
Consolidation, Merger, Conveyance, Transfer or Lease
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms.
----------------------------------------------------
The Company (a) shall not consolidate with or merge into any other
Person or, directly or indirectly, convey, transfer, sell, lease or otherwise
dispose of its properties and assets substantially as an entirety to any Person,
and (b) shall not permit any Person to consolidate or merge with or into the
Company or convey, transfer, sell, lease or otherwise dispose of such Person's
properties and assets substantially as an entirety to the Company, unless:
(1) in case the Company shall consolidate with or merge into
another Person or convey, transfer, sell, lease or otherwise dispose
of its properties and assets substantially as an entirety to any
Person, the Person formed by such consolidation or into or with which
the Company is merged or the Person which acquires by conveyance,
transfer or sale, or which leases or otherwise acquires, the
properties and assets of the Company substantially as an entirety
shall be a corporation, limited liability company, partnership or
trust, shall be organized and validly existing under the laws of the
United States of America, any State thereof or the District of
Columbia and shall expressly assume, by an indenture supplemental
hereto, executed and delivered to the Trustee, in form satisfactory to
the Trustee, the due and punctual payment of the principal of (and
premium, if any) and interest on all the Securities and the
performance or observance of every covenant of this Indenture on the
part of the Company to be performed or observed and shall have
provided for conversion rights in accordance with Article Thirteen;
(2) immediately after giving effect to such transaction and
treating any indebtedness which becomes due an obligation of the
Company at the time of such transaction, no Event of Default, and no
event which, after notice or lapse of time or both, would become an
Event of Default, shall have happened and be continuing; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and, if a
supplemental indenture is required in connection with such
transaction, such
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supplemental indenture comply with this Article and that all conditions
precedent herein provided for relating to such transaction have been
complied with.
SECTION 802. Successor Substituted.
---------------------
Upon any consolidation or merger of the Company with or into any other
Person, or any conveyance, transfer, sale or lease of the properties and assets
of the Company substantially as an entirety in accordance with Section 801, the
successor Person formed by such consolidation or merger or into or with which
the Company is merged or to which such conveyance, transfer, sale or lease is
made 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 Person had been named as the Company herein, and thereafter, except in
the case of a lease, the predecessor Person shall be relieved of all obligations
and covenants under this Indenture and the Securities.
ARTICLE NINE
Supplemental Indentures
SECTION 901. Supplemental Indentures Without Consent of Holders.
--------------------------------------------------
Without the consent of any Holders, the Company, when authorized by a
Board Resolution, and the Trustee, at any time and from time to time, may enter
into one or more indentures supplemental hereto, in form satisfactory to the
Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the Company
and the assumption by any such successor of the covenants and
obligations of the Company herein and in the Securities; or
(2) to add to the covenants of the Company for the benefit of
the Holders, or to surrender any right or power herein conferred upon
the Company; or
(3) to secure the Securities; or
(4) to make provision with respect to the conversion rights of
Holders pursuant to the requirements of Section 1311 or the repurchase
obligations of the Company pursuant to the requirements of
Section 1405; or
(5) to cure any ambiguity, to correct or supplement any provision
herein which may be inconsistent with any other
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provision herein, or to make any other provisions with respect to matters
or questions arising under this Indenture which shall not be inconsistent
with the provisions of this Indenture, provided that such action pursuant
--------
to this Clause (5) shall not adversely affect the interests of the Holders
in any material respect.
SECTION 902. Supplemental Indentures with Consent of Holders.
-----------------------------------------------
With the written consent of the Holders of not less than a majority in
principal amount of the Outstanding Securities, by the Act of said Holders
delivered to the Company and the Trustee, the Company, when authorized by a
Board Resolution, and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or of
modifying in any manner the rights of the Holders under this Indenture;
provided, however, that no such supplemental indenture shall, without the
- -------- -------
consent of the Holder of each Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or any
installment of interest on, any Security, or reduce the principal
amount thereof or the rate of interest thereon or the amounts payable
upon the redemption or repurchase thereof, or change the place of
payment where, or the place or currency in which, any Security or any
premium or interest thereon or any other amount in respect thereof is
payable, or impair the right to institute suit for the enforcement of
any payment in respect of any Security on or after the Stated Maturity
thereof (or, in the case of redemption or any repurchase, on or after
the Redemption Date or Repurchase Date, as the case may be), or,
except as provided by Section 1311, adversely affect the right to
convert any Security as provided in Article Thirteen, or modify the
provisions of this Indenture with respect to the subordination of the
Securities in a manner adverse to the Holders, or
(2) reduce the percentage in principal amount of the Outstanding
Securities the consent of whose Holders is required for any such
supplemental indenture or the consent of whose Holders is required for any
waiver (of compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences) provided for in this Indenture,
or
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(3) modify the obligation of the Company to maintain an office or
agency in the Borough of Manhattan, The City of New York pursuant to
Section 1002, or
(4) modify any of the provisions of this Section, Section 513 or
Section 1009, except to increase any percentage contained herein or therein
or to provide that certain other provisions of this Indenture cannot be
modified or waived without the consent of the Holder of each Outstanding
Security affected thereby; or
(5) modify the provisions of Article Twelve, Article Thirteen or
Article Fourteen in a manner adverse to the Holders.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
SECTION 903. Execution of Supplemental Indentures.
------------------------------------
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article Nine or the modifications
thereby of the trusts created by this Indenture, the Trustee shall be entitled
to receive, and (subject to Section 601) shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of such supplemental
indenture is authorized or permitted by this Indenture and an Officers'
Certificate stating that all conditions precedent to the execution of such
supplemental indenture have been fulfilled. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures.
---------------------------------
Upon the execution of any supplemental indenture under this Article
Nine, this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes; and
every Holder of Securities theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby.
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SECTION 905. Conformity with Trust Indenture Act.
-----------------------------------
Every supplemental indenture executed pursuant to this Article Nine
shall conform to the requirements of the Trust Indenture Act, as then in effect.
SECTION 906. Reference in Securities to Supplemental Indentures.
--------------------------------------------------
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article Nine may, and shall if required
by the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities so modified as to conform, in the opinion of the Trustee and the
Company, to any such supplemental indenture may be prepared and executed by the
Company and authenticated and delivered by the Trustee in exchange for
Outstanding Securities.
SECTION 907. Notice of Supplemental Indentures.
---------------------------------
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of Section 902, the Company
shall, or shall cause the Trustee to, give notice to all Holders of Securities
of such fact, setting forth in general terms the substance of such supplemental
indenture, in the manner provided in Section 106. Any failure of the Company or
the Trustee to give such notice, or any defect therein, shall not in any way
impair or affect the validity of any such supplemental indenture.
ARTICLE TEN
Covenants
SECTION 1001. Payment of Principal, Premium and Interest.
------------------------------------------
The Company will duly and punctually pay the principal of (and
premium, if any) and interest on the Securities in accordance with the terms of
the Securities and this Indenture.
SECTION 1002. Maintenance of Office or Agency.
-------------------------------
The Company hereby appoints Bankers Trust Company, as its agent in The
City of New York where Securities may be presented or surrendered for payment,
where Securities may be surrendered for registration of transfer or exchange,
where conversion notices, certificates and other items required to be delivered
to effect
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conversion may be delivered and where notices and demands to or upon the Company
in respect of the Securities and this Indenture may be served.
The Company hereby also appoints the Corporate Trust Office of the Trustee
as Paying Agent for the payment of principal of and interest on the Securities
and as Conversion Agent for the Conversion of any of the Securities in
accordance with Article Thirteen, and appoints the Corporate Trust Office of the
Trustee as transfer agent where Securities may be surrendered for registration
of transfer or exchange.
The Company may at any time and from time to time vary or terminate the
appointment of any such agent or appoint any additional agents with or without
cause for any or all of such purposes; provided, however, that until all of the
-------- -------
Securities have been delivered to the Trustee for cancellation, or moneys
sufficient to pay the principal of and interest on the Securities have been made
available for payment and either paid or returned to the Company pursuant to the
provisions of Section 1003, the Company will maintain in the Borough of
Manhattan, The City of New York, an office or agency where Securities may be
presented or surrendered for payment, where Securities may be surrendered for
registration of transfer or exchange, where Securities may be surrendered for
conversion and where notices and demands to or upon the Company, in respect of
the Securities and this Indenture may be served. The Company will give prompt
written notice to the Trustee, and the Company will, or will cause the Trustee
to, give notice to Holders of Securities in the manner specified in Section 106,
of the appointment or termination of any such agents and of the location and any
change in the location of any such office or agency.
If at any time the Company shall fail to maintain any such required office
or agency, or shall fail to furnish the Trustee with the address thereof, pre-
sentations and surrenders may be made and notices and demands may be served on
and Securities may be surrendered for conversion to the Corporate Trust Office
of the Trustee, and the Company hereby appoints the same as its agent to receive
such respective presentations, surrenders, notices and demands.
SECTION 1003. Money for Security Payments to Be Held in Trust.
-----------------------------------------------
If the Company shall act as its own Paying Agent, it will, on or
before each due date of the principal of, premium, if any, or interest on any of
the Securities, segregate and hold in trust for the benefit of the Persons
entitled thereto a sum sufficient to pay the principal, premium, if any, or
interest so becoming due until such sums shall be paid to such Persons or
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otherwise disposed of as herein provided and the Company will promptly notify
the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents, it will, on
or prior to 10:00 a.m. on each due date of the principal of, premium, if any, or
interest on any Securities (including any Repurchase Date), deposit with such
Paying Agent(s) a sum in immediately available funds on the payment date
sufficient to pay the principal, premium, if any, or interest so becoming due,
such sum to be held as provided by the Trust Indenture Act, and (unless such
Paying Agent is the Trustee) the Company will promptly notify the Trustee of any
failure so to act.
The Company will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will:
(1) comply with the provisions of the Trust Indenture Act applicable
to it as a Paying Agent;
(2) give the Trustee notice of any default by the Company (or any
other obligor upon the Securities) in the making of any payment of
principal, premium, if any, or interest; and
(3) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so
held by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of, premium, if any,
or interest on any Security and remaining unclaimed for two years after such
principal, premium, if any, or interest has become due and payable shall be paid
to the Company on Company Request, or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Security shall thereafter, as
an unsecured general creditor, look only to the Company for payment thereof, and
all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease;
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provided, however, that the Trustee or such Paying Agent, before being required
- -------- -------
to make any such repayment, may at the expense of the Company cause to be
published once, in a newspaper in the English language, customarily published on
each Business Day and of general circulation in the Borough of Manhattan, The
City of New York, notice that such money remains unclaimed and that, after a
date specified therein, which shall not be less than 30 days from the date of
such publication, any unclaimed balance of such money then remaining will be
repaid to the Company.
SECTION 1004. Statement by Officers as to Default.
-----------------------------------
The Company shall deliver to the Trustee, within 120 days after the
end of each fiscal year of the Company, an Officers' Certificate stating whether
or not to the best knowledge of the signers thereof the Company is in compliance
on such date with all conditions and covenants under the Indenture (without
regard to any period of grace or requirement of notice provided hereunder).
The Company will deliver to the Trustee, forthwith upon becoming aware
of any default or Event of Default under this Indenture, an Officers'
Certificate specifying with particularity such default or Event of Default and
further stating what action the Company has taken, is taking or proposes to take
with respect thereto. For the purpose of this Section, the term "default" means
any event which is, or after notice or lapse of time or both would become, an
Event of Default.
Any notice required to be given under this Section 1004 shall be
delivered to the Trustee at its Corporate Trust Office.
SECTION 1005. Existence.
---------
Subject to Article Eight, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its existence,
rights (charter and statutory) and franchises; provided, however, that the
-------- -------
Company shall not be required to preserve any such right or franchise if the
Company shall determine that the preservation thereof is no longer desirable in
the conduct of the business of the Company and that the loss thereof is not
disadvantageous in any material respect to the Holders.
SECTION 1006. Maintenance of Properties.
-------------------------
The Company will cause all properties used or useful in the conduct of
its business or the business of any Subsidiary to be
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maintained and kept in good condition, repair and working order and supplied
with all necessary equipment and will cause to be made all necessary repairs,
renewals, replacements, betterments and improvements thereof, all as in the
judgment of the Company may be necessary so that the business carried on in
connection therewith may be properly and advantageously conducted at all times;
provided, however, that nothing in this Section shall prevent the Company from
- -------- -------
discontinuing the operation or maintenance of any of such properties if such
discontinuance is, in the judgment of the Company, desirable in the conduct of
its business or the business of any Subsidiary and not disadvantageous in any
material respect to the Holders.
SECTION 1007. Payment of Taxes and Other Claims.
---------------------------------
The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (1) all taxes, assessments and
governmental charges levied or imposed upon the Company or any Subsidiary or
upon the income, profits or property of the Company or any Subsidiary, (2) all
lawful claims for labor, materials and supplies which, if unpaid, might by law
become a lien upon the property of the Company or any Subsidiary; provided,
--------
however, that the Company shall not be required to pay or discharge or cause to
- -------
be paid or discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings.
SECTION 1008. Book-Entry System.
-----------------
If the Securities cease to trade in DTC's book-entry settlement
system, the Company covenants and agrees that it shall use reasonable efforts to
make such other book-entry arrangements that it determines are reasonable for
the Securities.
SECTION 1009. Waiver of Certain Covenants.
---------------------------
The Company may omit in any particular instance to comply with any
covenant or condition set forth in Sections 1006 and 1007, inclusive, if before
the time for such compliance the Holders of not less than a majority in
principal amount of the Outstanding Securities shall, by Act of such Holders,
either waive such compliance in such instance or generally waive compliance with
such covenant or condition, but no such waiver shall extend to or affect such
covenant or condition except to the extent so expressly waived, and, until such
waiver shall become effective, the obligations of the Company and the duties of
the Trustee in respect of any such covenant or condition shall remain in full
force and effect.
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ARTICLE ELEVEN
Redemption of Securities
SECTION 1101. Right of Redemption.
-------------------
The Securities may be redeemed at the election of the Company, as a
whole or from time to time in part, at any time on or after _________, 1999, at
the Redemption Prices specified in the form of Security hereinbefore set forth,
together with accrued interest to the Redemption Date.
SECTION 1102. Applicability of Article.
------------------------
Redemption of Securities at the election of the Company, as permitted
or required by any provision of this Indenture, shall be made in accordance with
such provision and this Article Eleven.
SECTION 1103. Election to Redeem; Notice to Trustee.
-------------------------------------
The election of the Company to redeem any Securities pursuant to
Section 1101 shall be evidenced by a Board Resolution. In case of any
redemption at the election of the Company, the Company shall, at least 30 days
prior to the Redemption Date fixed by the Company (unless a shorter notice shall
be satisfactory to the Trustee), notify the Trustee of such Redemption Date and
of the principal amount of Securities to be redeemed.
SECTION 1104. Selection by Trustee of Securities to Be Redeemed.
-------------------------------------------------
If less than all the Securities are to be redeemed, the particular
Securities to be redeemed shall be selected not more than 30 days prior to the
Redemption Date by the Trustee, from the Outstanding Securities not previously
called for redemption, by such method as the Trustee shall deem fair and
appropriate and which may provide for the selection for redemption of portions
(equal to $1,000 or any integral multiple thereof) of the principal amount of
Securities of a denomination larger than $1,000.
If any Security selected for partial redemption is converted in part
before termination of the conversion right with respect to the portion of the
Security so selected, the converted portion of such Security shall be deemed (so
far as may be) to be the portion selected for redemption. Securities which have
been converted during a selection of Securities to be redeemed shall be treated
by the Trustee as Outstanding for the purpose of such selection.
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The Trustee shall promptly notify the Company and each Security
Registrar in writing of the Securities selected for redemption and, in the case
of any Securities selected for partial redemption, the principal amount thereof
to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Securities redeemed or to be redeemed only in part, to the
portion of the principal amount of such Securities which has been or is to be
redeemed.
SECTION 1105. Notice of Redemption.
--------------------
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 20 nor more than 60 days prior to the Redemption
Date, to each Holder of Securities to be redeemed, at such Holder's address
appearing in the Security Register.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price and accrued interest, if any,
(3) if less than all the Outstanding Securities are to be
redeemed, the identification (and, in the case of partial redemption
of any Securities, the principal amounts) of the particular Securities
to be redeemed,
(4) that on the Redemption Date the Redemption Price and accrued
interest, if any, will become due and payable upon each such Security
to be redeemed and that interest thereon will cease to accrue on and
after said date,
(5) the Conversion Rate, the date on which the right to convert
the Securities to be redeemed will terminate and the place or places
where such Securities may be surrendered for conversion, and
(6) the place or places where such Securities are to be
surrendered for payment of the Redemption Price and accrued interest,
if any.
Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's written request,
by the Trustee in the name and at the
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expense of the Company, and such notice, when given to the Holders, shall be
irrevocable.
SECTION 1106. Deposit of Redemption Price.
---------------------------
Not less than one Business Day prior to any Redemption Date, the
Company shall deposit with the Trustee or with a Paying Agent (or, if the
Company is acting as its own Paying Agent, segregate and hold in trust as
provided in Section 1003) an amount of money (which shall be in immediately
available funds on such Redemption Date) sufficient to pay the Redemption Price
of, and (except if the Redemption Date shall be an Interest Payment Date)
accrued interest on, all the Securities which are to be redeemed on that date
other than any Securities called for redemption on that date which have been
converted prior to the date of such deposit.
If any Security called for redemption is converted, any money
deposited with the Trustee or with any Paying Agent or so segregated and held in
trust for the redemption of such Security shall (subject to any right of the
Holder of such Security or any Predecessor Security to receive interest as
provided in the last paragraph of Section 307) be paid to the Company upon
Company Request or, if then held by the Company, shall be discharged from such
trust.
SECTION 1107. Securities Payable on Redemption Date.
-------------------------------------
Notice of redemption having been given as aforesaid, the Securities so
to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price, including accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
such Security for redemption in accordance with said notice, such Security shall
be paid by the Company at the Redemption Price, together with accrued interest
to the Redemption Date; provided, however, that installments of interest whose
-------- -------
Stated Maturity is on or prior to the Redemption Date shall be payable to the
Holders of such Securities, or one or more Predecessor Securities, registered as
such at the close of business on the relevant Record Dates according to their
terms and the provisions of Section 307.
If any Security 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 a rate of [ ]% per
annum.
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SECTION 1108. Securities Redeemed in Part.
---------------------------
Any Security which is to be redeemed only in part shall be surrendered
at an office or agency of the Company designated for that purpose pursuant to
Section 1002 (with, if the Company or the Trustee so requires, due endorsement
by, or a written instrument of transfer in form satisfactory to the Company and
the Trustee duly executed by, the Holder thereof or his attorney duly authorized
in writing), and the Company shall execute, and the Trustee shall authenticate
and deliver to the Holder of such Security without service charge, a new
Security or Securities, of any authorized denomination as requested by such
Holder, in aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Security so surrendered.
ARTICLE TWELVE
Subordination of Securities
SECTION 1201. Securities Subordinate to Senior Indebtedness.
---------------------------------------------
The Company covenants and agrees, and each Holder of a Security, by
his acceptance thereof, likewise covenants and agrees, that, to the extent and
in the manner hereinafter set forth in this Article Twelve (subject to the
provisions of Article Four), the indebtedness represented by the Securities and
the payment of the principal of (and premium, if any) and interest on each and
all of the Securities are hereby expressly made subordinate and subject in right
of payment to the prior payment in full of all Senior Indebtedness. Whenever in
this Article Twelve there is a reference, in any context, to the principal of
any Security as of any time, such reference shall be deemed to include reference
to the Repurchase Price payable in cash or Redemption Price in respect of such
Security to the extent that such Repurchase Price payable in cash or Redemption
Price is, was or would be so payable at such time, and express mention of the
Repurchase Price and the Redemption Price in any provision of this Article
Twelve shall not be construed as excluding the Repurchase Price payable in cash
or Redemption Price in those provisions of this Article Twelve when such express
mention is not made.
SECTION 1202. Payment Over of Proceeds Upon Dissolution, Etc.
-----------------------------------------------
In the event of (a) any insolvency or bankruptcy case or proceeding,
or any receivership, liquidation, reorganization or other similar case or
proceeding in connection therewith, relative to the Company or to its creditors,
as such, or to its assets, or (b) any liquidation, dissolution or other winding
up of the Company, whether voluntary or involuntary and whether or not
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involving insolvency or bankruptcy, or (c) any assignment for the benefit of
creditors or any other marshalling of assets and liabilities of the Company,
then and in any such event the holders of Senior Indebtedness shall be entitled
to receive payment in full of all amounts due or to become due on or in respect
of all Senior Indebtedness in cash or other immediately available funds, or pro-
vision shall be made for such payment in cash or other immediately available
funds or otherwise in a manner satisfactory to each holder of Senior
Indebtedness with respect to its indebtedness, before the Holders of the
Securities are entitled to receive any payment on account of principal of (or
premium, if any) or interest on the Securities, and to that end the holders of
Senior Indebtedness shall be entitled to receive, for application to the payment
thereof, any payment or distribution of any kind or character, whether in cash,
property or securities, which may be payable or deliverable in respect of the
Securities in any such case, proceeding, dissolution, liquidation or other
winding up or event.
In the event that, notwithstanding the foregoing provisions of this
Section, the Trustee or the Holder of any Security shall have received any
payment or distribution of assets of the Company of any kind or character,
whether in cash, securities or other property, before all Senior Indebtedness is
paid in full or payment thereof provided for, and if such fact shall, at or
prior to the time of such payment or distribution, have been made known to the
Trustee or, as the case may be, such Holder, then and in such event such payment
or distribution shall be paid over or delivered forthwith to the trustee in
bankruptcy, receiver, liquidating trustee, custodian, assignee, agent or other
Person making payment or distribution of assets of the Company for application
to the payment of all Senior Indebtedness remaining unpaid, to the extent
necessary to pay all Senior Indebtedness in full, after giving effect to any
concurrent payment or distribution to or for the holders of Senior Indebtedness.
For purposes of this Article only, the words "cash, securities or
other property" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment which shares of stock
are subordinated in right of payment to all then outstanding Senior Indebtedness
to substantially the same extent as, or to a greater extent than, the Securities
are so subordinated as provided in this Article Twelve. The consolidation of
the Company with, or the merger of the Company into, another Person or the
liquidation or dissolution of the Company following the conveyance or transfer
of its properties and assets substantially as an entirety to another Person upon
the terms and conditions set forth in Article Eight shall not be deemed a
dissolution, winding up, liquidation, reorganization, assignment for the benefit
of creditors or marshalling of assets and liabilities of the Company for the
purposes of
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this Section if the Person formed by such consolidation or into which the
Company is merged or which acquires by conveyance or transfer such properties
and assets substantially as an entirety, as the case may be, shall, as a part of
such consolidation, merger, conveyance or transfer, comply with the conditions
set forth in Article Eight.
SECTION 1203. Prior Payment to Senior Indebtedness Upon Acceleration of
---------------------------------------------------------
Securities.
----------
In the event that any Securities are declared due and payable before
their Stated Maturity, then and in such event the holders of the Senior
Indebtedness outstanding at the time such Securities so become due and payable
shall be entitled to receive payment in full of all amounts due or to become due
on or in respect of such Senior Indebtedness, or provision shall be made for
such payment in money or money's worth, before the Holders of the Securities are
entitled to receive any payment by the Company on account of the principal of
(or premium, if any) or interest on the Securities or on account of the purchase
or other acquisition of Securities.
In the event that, notwithstanding the foregoing, the Company shall
make any payment to the Trustee or the Holder of any Security prohibited by the
foregoing provisions of this Section, and if such fact shall, at or prior to the
time of such payment, have been made known to the Trustee or, as the case may
be, such Holder, then and in such event such payment shall be paid over and
delivered forthwith to the Company.
The provisions of this Section shall not apply to any payment with
respect to which Section 1202 would be applicable.
SECTION 1204. No Payment When Senior Indebtedness in Default.
----------------------------------------------
(a) In the event and during the continuation of any default in the
payment of principal of (or premium, if any) or interest on (including a default
under any redemption or repurchase obligation with respect to) any Senior
Indebtedness beyond any applicable grace period with respect thereto or in the
event that any other event of default with respect to any Senior Indebtedness
shall have occurred and be continuing which would then permit the holders of
such Senior Indebtedness to declare such Senior Indebtedness due and payable
prior to the date on which it would otherwise have become due and payable,
unless and until such event of default shall have been cured or waived or shall
have ceased to exist after written notice to the Company and the Trustee by any
holder of such Senior Indebtedness, or (b) in the event any judicial proceeding
shall be pending with respect to any such
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default in payment or event of default, then no payment shall be made by the
Company on account of principal of (or premium, if any) or interest on the
Securities or on account of the purchase, redemption or other acquisition of
Securities.
In the event that, notwithstanding the foregoing, the Company shall
make any payment to the Trustee or the Holder of any Security prohibited by the
foregoing provisions of this Section, and if such fact shall, at or prior to the
time of such payment, have been made known to the Trustee or, as the case may
be, such Holder, then and in such event such payment shall be paid over and
delivered forthwith to the Company, in the case of the Trustee, or the Trustee,
in the case of such Holder.
The provisions of this Section shall not apply to any payment with
respect to which Section 1202 would be applicable.
SECTION 1205. Payment Permitted If No Default.
-------------------------------
Nothing contained in this Article or elsewhere in this Indenture or in
any of the Securities shall prevent (a) the Company, at any time except during
the pendency of any case, proceeding, dissolution, liquidation or other winding
up, assignment for the benefit of creditors or other marshalling of assets and
liabilities of the Company referred to in Section 1202, or under the conditions
described in Sections 1203 and 1204, from making payments at any time of
principal of (and premium, if any) or interest on the Securities, or (b) the
application by the Trustee of any money deposited with it hereunder to the
payment of or on account of the principal of (and premium, if any) or interest
on the Securities or the retention of such payment by the Holders, if, at the
time of such application by the Trustee, it did not have knowledge that such
payment would have been prohibited by the provisions of this Article.
SECTION 1206. Subrogation to Rights of Holders of Senior Indebtedness.
-------------------------------------------------------
Subject to the payment in full of all Senior Indebtedness, the Holders
of the Securities shall be subrogated to the extent of the payments or
distributions made to the holders of such Senior Indebtedness pursuant to the
provisions of this Article to the rights of the holders of such Senior
Indebtedness to receive payments and distributions of cash, property and
securities applicable to the Senior Indebtedness until the principal of (and
premium, if any) and interest on the Securities shall be paid in full. For
purposes of such subrogation, no payments or distributions to the holders of the
Senior Indebtedness of any cash, property or securities to which the Holders of
the Securities or
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the Trustee would be entitled except for the provisions of this Article, and no
payments over pursuant to the provisions of this Article to the holders of
Senior Indebtedness by Holders of the Securities or the Trustee, shall, as among
the Company, its creditors other than holders of Senior Indebtedness and the
Holders of the Securities, be deemed to be a payment or distribution by the
Company to or on account of the Senior Indebtedness.
SECTION 1207. Provisions Solely to Define Relative Rights.
-------------------------------------------
The provisions of this Article are and are intended solely for the
purpose of defining the relative rights of the Holders of the Securities on the
one hand and the holders of Senior Indebtedness on the other hand. Nothing
contained in this Article or elsewhere in this Indenture or in the Securities is
intended to or shall (a) impair, as among the Company, its creditors other than
holders of Senior Indebtedness and the Holders of the Securities, the obligation
of the Company, which is absolute and unconditional, to pay to the Holders of
the Securities the principal of (and premium, if any) and interest on the
Securities as and when the same shall become due and payable in accordance with
their terms; or (b) affect the relative rights against the Company of the
Holders of the Securities and creditors of the Company other than the holders of
Senior Indebtedness; or (c) prevent the Trustee or the Holder of any Security
from exercising all remedies otherwise permitted by applicable law upon default
under this Indenture, subject to the rights, if any, under this Article of the
holders of Senior Indebtedness to receive cash, property and securities
otherwise payable or deliverable to the Trustee or such Holder.
SECTION 1208. Trustee to Effectuate Subordination.
-----------------------------------
Each holder of a Security by his acceptance thereof authorizes and
directs the Trustee on his behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article and
appoints the Trustee his attorney-in-fact for any and all such purposes.
SECTION 1209. No Waiver of Subordination Provisions.
-------------------------------------
No right of any present or future holder of any Senior Indebtedness to
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act, in good faith, by any such holder of any Senior
Indebtedness, or by any non-compliance by the Company with the terms, provisions
and covenants of this Indenture, regardless of any knowledge thereof any such
holder may have or be otherwise charged with.
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Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Indebtedness may, at any time and from time to time,
without the consent of or notice to the Trustee or the Holders of the
Securities, without incurring responsibility to the Holders of the Securities
and without impairing or releasing the subordination provided in this Article or
the obligations hereunder of the Holders of the Securities to the holders of
Senior Indebtedness, do any one or more of the following: (i) change the
manner, place or terms of payment or extend the time of payment of, or renew,
increase or alter, Senior Indebtedness, or otherwise amend or supplement in any
manner Senior Indebtedness or any instrument evidencing the same or any
agreement under which Senior Indebtedness is outstanding; (ii) sell, exchange,
release or otherwise deal with any property pledged, mortgaged or otherwise
securing Senior Indebtedness; (iii) release any Person liable in any manner for
the collection of Senior Indebtedness; and (iv) exercise or refrain from
exercising any rights against the Company and any other Person.
SECTION 1210. Notice to Trustee.
-----------------
The Company shall give prompt written notice to the Trustee of any
fact known to the Company which would prohibit the making of any payment to or
by the Trustee in respect of the Securities. Notwithstanding the provisions of
this Article or any other provision of this Indenture, the Trustee shall not be
charged with knowledge of the existence of any facts which would prohibit the
making of any payment to or by the Trustee in respect of the Securities, unless
and until the Trustee shall have received written notice thereof from the
Company or a holder of Senior Indebtedness or from any trustee therefor; and,
prior to the receipt of any such written notice, the Trustee, subject to the
provisions of Section 601, shall be entitled in all respects to assume that no
such facts exist; provided, however, that if the Trustee shall not have received
-------- -------
the notice provided for in this Section at least two Business Days prior to the
date upon which by the terms hereof any money may become payable for any purpose
(including, without limitation, the payment of the principal of (and premium, if
any) or interest on any Security), then, anything herein contained to the
contrary notwithstanding, the Trustee shall have full power and authority to
receive such money and to apply the same to the purpose for which such money was
received and shall not be affected by any notice to the contrary which may be
received by it within two Business Days prior to such date.
Notwithstanding anything in this Article Twelve to the contrary,
nothing shall prevent any payment by the Trustee to the Holders of monies
deposited with it pursuant to Section 401, and any such payment shall not be
subject to the provisions of Sections 1202, 1203 or 1204.
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Subject to the provisions of Article Six, the Trustee shall be
entitled to conclusively rely on the delivery to it of a written notice by a
Person representing himself to be a holder of Senior Indebtedness (or a trustee
therefor) to establish that such notice has been given by a holder of Senior
Indebtedness (or a trustee therefor). 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 Article, the Trustee may request such Person to
furnish evidence to the reasonable satisfaction of the Trustee as to the amount
of Senior Indebtedness held by such Person, the extent to which such Person is
entitled to participate in such payment or distribution and any other facts
pertinent to the rights of such Person under this Article, and if such evidence
is not furnished, the Trustee may defer any payment to such Person pending
judicial determination as to the right of such Person to receive such payment.
SECTION 1211. Reliance on Judicial Order or Certificate of Liquidating Agent.
--------------------------------------------------------------
Upon any payment or distribution of assets of the Company referred to
in this Article, the Trustee, subject to the provisions of Section 601, and the
Holders of the Securities shall be entitled to conclusively rely upon any order
or decree entered by any court of competent jurisdiction in which such
insolvency, bankruptcy, receivership, liquidation, reorganization, dissolution,
winding up or similar case or proceeding is pending, or a certificate of the
trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee for
the benefit of creditors, agent or other Person making such payment or
distribution, delivered to the Trustee or to the Holders of Securities, for the
purpose of ascertaining the Persons entitled to participate in such payment or
distribution, the holders of the Senior Indebtedness and other indebtedness of
the Company, the amount thereof or payable thereon, the amount or amounts paid
or distributed thereon and all other facts pertinent thereto or to this Article.
SECTION 1212. Trustee Not Fiduciary for Holders of Senior Indebtedness.
--------------------------------------------------------
The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness and shall not be liable to any such holders if it
shall in good faith mistakenly pay over or distribute to Holders of Securities
or to the Company or to any other Person cash, property or securities to which
any holders of Senior Indebtedness shall be entitled by virtue of this Article
or otherwise.
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SECTION 1213. Rights of Trustee as Holder of Senior Indebtedness; Preservation
----------------------------------------------------------------
of Trustee's Rights.
-------------------
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article with respect to any 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 this Indenture shall deprive the Trustee of any of
its rights as such holder.
Nothing in this Article shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 607.
SECTION 1214. Article Applicable to Paying Agents.
-----------------------------------
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term "Trustee"
as used in this Article shall in such case (unless the context otherwise
requires) be construed as extending to and including such Paying Agent within
its meaning as fully for all intents and purposes as if such Paying Agent were
named in this Article in addition to or in place of the Trustee; provided,
--------
however, that Section 1213 shall not apply to the Company or any Affiliate of
- -------
the Company if it or such Affiliate acts as Paying Agent.
SECTION 1215. Certain Conversions Deemed Payment.
----------------------------------
For the purposes of this Article only, (1) the issuance and delivery
of junior securities upon conversion of Securities in accordance with Article
Thirteen or upon the repurchase of Securities in accordance with Article
Fourteen shall not be deemed to constitute a payment or distribution on account
of the principal of or premium or interest on Securities or on account of the
purchase or other acquisition of Securities, and (2) the payment, issuance or
delivery of cash, property or securities (other than junior securities) upon
conversion of a Security shall be deemed to constitute payment on account of the
principal of such Security. For the purposes of this Section, the term "junior
securities" means (a) shares of any stock of any class of the Company and any
cash, securities or other property into which the Securities are convertible
pursuant to Article Thirteen and (b) securities of the Company which are
subordinated in right of payment to all Senior Indebtedness which may be
outstanding at the time of issuance or delivery of such securities to
substantially the same extent as, or to a greater extent than, the Securities
are so subordinated as provided in this Article. Nothing contained in this
Article or elsewhere in this Indenture or in the Securities is intended to or
shall impair, as among the Company, its creditors other than
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holders of Senior Indebtedness and the Holders of the Securities, the right,
which is absolute and unconditional, of the Holder of any Security to convert
such Security in accordance with Article Thirteen or to exchange such Security
for Common Stock in accordance with Article Fourteen if the Company elects to
satisfy its obligation under Article Fourteen by the delivery of Common Stock.
SECTION 1216. Amendment of Subordination Provisions.
-------------------------------------
The Company agrees that so long, and only for so long, as any Commitment
(as defined in the Amended and Restated Credit Agreement) shall remain
outstanding under the Amended and Restated Credit Agreement or any amounts owed
pursuant to the loans made pursuant thereto shall remain unpaid, the Company
shall not amend the provisions of this Article XII or the definition of "Senior
Indebtedness" hereunder in a manner that materially and adversely affects the
Banks without the express written consent of the Administrative Agent.
ARTICLE THIRTEEN
Conversion of Securities
SECTION 1301. Conversion Privilege and Conversion Rate.
----------------------------------------
Subject to and upon compliance with the provisions of this Article
Thirteen, at the option of the Holder thereof, any Security may be converted at
any time into fully paid and nonassessable shares (calculated as to each
conversion to the nearest 1/100th of a share) of Common Stock of the Company at
the Conversion Rate, determined as hereinafter provided, in effect at the time
of conversion. Such conversion right shall expire at the close of business on
__________, ____, subject, in the case of conversion of any Global Security, to
any Applicable Procedures. In case a Security or portion thereof is called for
redemption at the election of the Company or the Holder thereof exercises his
right to require the Company to repurchase a Security or portion thereof, such
conversion right in respect of such Security, shall expire (a) at the close of
business on the Redemption Date, in the case of a Security called for
redemption, and (b) at the close of business on the Repurchase Date, in the case
of a Security tendered for repurchase, in each case unless the Company defaults
in making the payment due upon redemption or repurchase, as the case may be, and
in each case subject as aforesaid to any Applicable Procedures with respect to
any Global Security.
The rate at which shares of Common Stock shall be delivered upon
conversion (herein called the "Conversion Rate") shall be initially __________
shares of Common Stock for each $1,000 principal amount of Securities. The
Conversion Rate shall
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be adjusted in certain instances as provided in this Article Thirteen.
SECTION 1302. Exercise of Conversion Privilege.
--------------------------------
In order to exercise the conversion privilege, the Holder of any
Security to be converted shall surrender such Security, duly endorsed or
assigned to the Company or in blank, at any office or agency of the Company
maintained for that purpose pursuant to Section 1002 (any city in which any
Conversion Agent is located being called herein a "Place of Conversion"),
accompanied by a duly signed conversion notice substantially in the form set
forth in Section 205 stating that the Holder elects to convert such Security or,
if less than the entire principal amount thereof is to be converted, the portion
thereof to be converted. Each Security surrendered for conversion (in whole or
in part) during the period from the close of business on any Regular Record Date
next preceding any Interest Payment Date to the opening of business on such
Interest Payment Date shall (except in the case of any Security or portion
thereof which has been called for redemption on a Redemption Date, or which is
repurchasable on a Repurchase Date, occurring, in either case, within such
period) be accompanied by payment in New York Clearing House funds or other
funds acceptable to the Company of an amount equal to the interest payable on
such Interest Payment Date on the principal amount of such Security (or part
thereof, as the case may be) being surrendered for conversion. The interest so
payable on such Interest Payment Date with respect to any Security (or portion
thereof, if applicable) which has been called for redemption on a Redemption
Date, or is repurchasable on a Repurchase Date, occurring, in either case,
during the period from the close of business on any Regular Record Date next
preceding any Interest Payment Date to the opening of business on such Interest
Payment Date, which Security (or portion thereof, if applicable) is surrendered
for conversion during such period, shall be paid to the Holder of such Security
being converted in an amount equal to the interest that would have been payable
on such Security if such Security had been converted as of the close of business
on such Interest Payment Date. The interest so payable on such Interest Payment
Date in respect of any Security (or portion thereof, as the case may be) which
has not been called for redemption on a Redemption Date, or is not eligible for
repurchase on a Repurchase Date, occurring, in either case, during the period
from the close of business on any Regular Record Date next preceding any
Interest Payment Date to the opening of business on such Interest Payment Date,
which Security (or portion thereof, as the case may be) is surrendered for
conversion during such period, shall be paid to the Holder of such Security as
of such Regular Record Date. Interest payable in respect of any Security
surrendered for conversion on or after an Interest Payment Date shall be paid to
the Holder of such Security as of the next
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preceding Regular Record Date, notwithstanding the exercise of the right of
conversion. Except as provided in this paragraph and subject to the last
paragraph of Section 307, no cash payment or adjustment shall be made upon any
conversion on account of any interest accrued from the Interest Payment Date
next preceding the conversion date, in respect of any Security (or part thereof,
as the case may be) surrendered for conversion, or on account of any dividends
on the Common Stock issued upon conversion. The Company's delivery to the
Holder of the number of shares of Common Stock (and cash in lieu of fractions
thereof, as provided in this Indenture) into which a Security is convertible
will be deemed to satisfy the Company's obligation to pay the principal amount
of the Security.
Securities shall be deemed to have been converted immediately prior to
the close of business on the day of surrender of such Securities for conversion
in accordance with the foregoing provisions, and at such time the rights of the
Holders of such Securities as Holders shall cease, and the Person or Persons
entitled to receive the Common Stock issuable upon conversion shall be treated
for all purposes as the record holder or holders of such Common Stock at such
time. As promptly as practicable on or after the conversion date, the Company
shall issue and deliver to the Trustee, for delivery to the Holder, a
certificate or certificates for the number of full shares of Common Stock
issuable upon conversion, together with payment in lieu of any fraction of a
share, as provided in Section 1303.
In the case of any Security which is converted in part only, upon such
conversion the Company shall execute and the Trustee shall authenticate and
deliver to the Holder thereof, at the expense of the Company, a new Security or
Securities of authorized denominations in an aggregate principal amount equal to
the unconverted portion of the principal amount of such Security. A Security
may be converted in part, but only if the principal amount of such Security to
be converted is any integral multiple of $1,000 and the principal amount of such
security to remain Outstanding after such conversion is equal to $1,000 or any
integral multiple of $1,000 in excess thereof.
SECTION 1303. Fractions of Shares.
-------------------
No fractional shares of Common Stock shall be issued upon conversion
of any Security or Securities. If more than one Security shall be surrendered
for conversion at one time by the same Holder, the number of full shares which
shall be issuable upon conversion thereof shall be computed on the basis of the
aggregate principal amount of the Securities (or specified portions thereof) so
surrendered. Instead of any fractional share of Common Stock which would
otherwise be issuable upon conversion of any Security
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or Securities (or specified portions thereof), the Company shall calculate and
pay a cash adjustment in respect of such fraction (calculated to the nearest
1/100th of a share) in an amount equal to the same fraction of the Closing Price
Per Share at the close of business on the day of conversion.
SECTION 1304. Adjustment of Conversion Rate.
-----------------------------
The Conversion Rate shall be subject to adjustments from time to time
as follows:
(1) In case the Company shall pay or make a dividend or other
distribution on any class of capital stock of the Company payable in shares of
Common Stock, the Conversion Rate in effect at the opening of business on the
day following the date fixed for the determination of shareholders entitled to
receive such dividend or other distribution shall be increased by dividing such
Conversion Rate by a fraction of which the numerator shall be the number of
shares of Common Stock outstanding at the close of business on the date fixed
for such determination and the denominator shall be the sum of such number of
shares and the total number of shares constituting such dividend or other
distribution, such increase to become effective immediately after the opening of
business on the day following the date fixed for such determination. For the
purposes of this paragraph (1), the number of shares of Common Stock at any time
outstanding shall not include shares held in the treasury of the Company but
shall include shares issuable in respect of scrip certificates issued in lieu of
fractions of shares of Common Stock. The Company will not pay any dividend or
make any distribution on shares of Common Stock held in the treasury of the
Company.
(2) In case the Company shall issue rights, options or warrants to
all holders of its Common Stock entitling them to subscribe for or purchase
shares of Common Stock at a price per share less than the current market price
per share (determined as provided in paragraph (8) of this Section 1304) of the
Common Stock on the date fixed for the determination of stockholders entitled to
receive such rights, options or warrants, the Conversion Rate in effect at the
opening of business on the day following the date fixed for such determination
shall be increased by dividing such Conversion Rate by a fraction of which the
numerator shall be the number of shares of Common Stock outstanding at the close
of business on the date fixed for such determination plus the number of shares
of Common Stock which the aggregate of the offering price of the total number of
shares of Common Stock so offered for subscription or purchase would purchase at
such current market price and the denominator shall be the number of shares of
Common Stock outstanding at the close of business on the date fixed for such
determination plus the number of shares of Common Stock so
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offered for subscription or purchase, such increase to become effective
immediately after the opening of business on the day following the date fixed
for such determination. For the purposes of this paragraph (2), the number of
shares of Common Stock at any time outstanding shall not include shares held in
the treasury of the Company but shall include shares issuable in respect of
scrip certificates issued in lieu of fractions of shares of Common Stock. The
Company will not issue any rights, options or warrants in respect of shares of
Common Stock held in the treasury of the Company.
(3) In case outstanding shares of Common Stock shall be subdivided
into a greater number of shares of Common Stock, the Conversion Rate in effect
at the opening of business on the day following the day upon which such
subdivision becomes effective shall be proportionately increased, and,
conversely, in case outstanding shares of Common Stock shall each be combined
into a smaller number of shares of Common Stock, the Conversion Rate in effect
at the opening of business on the day following the day upon which such
combination becomes effective shall be proportionately reduced, such increase or
reduction, as the case may be, to become effective immediately after the opening
of business on the day following the day upon which such subdivision or
combination becomes effective.
(4) In case the Company shall, by dividend or otherwise, distribute
to all holders of its Common Stock evidences of its indebtedness, shares of any
class of capital stock, or other property (including securities, but excluding
(i) any rights, options or warrants referred to in paragraph (2) of this
Section, (ii) any dividend or distribution paid exclusively in cash, (iii) any
dividend or distribution referred to in paragraph (1) of this Section and (iv)
any merger or consolidation to which Section 1311 applies), the Conversion Rate
shall be adjusted so that the same shall equal the rate determined by dividing
the Conversion Rate in effect immediately prior to the close of business on the
date fixed for the determination of stockholders entitled to receive such
distribution by a fraction of which the numerator shall be the current market
price per share (determined as provided in paragraph (8) of this Section 1304)
of the Common Stock on the date fixed for such determination (the "Reference
Date") less the then fair market value (as determined by the Board of Directors,
whose determination shall be conclusive and described in a Board Resolution
filed with the Trustee) on the Reference Date of the portion of the assets,
shares or evidences of indebtedness so distributed applicable to one share of
Common Stock and the denominator shall be the current market price per share of
the Common Stock on the Reference Date, such adjustment to become effective
immediately prior to the opening of business on the day following the Reference
Date.
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(5) In case the Company shall, by dividend or otherwise, distribute to
all holders of its Common Stock cash (excluding any cash that is distributed as
part of a distribution referred to in paragraph (4) of this Section) in an
aggregate amount that, combined together with (I) the aggregate amount of any
other cash distributions to all holders of its Common Stock made exclusively in
cash within the 12 months preceding the date of payment of such distribution and
in respect of which no adjustment pursuant to this paragraph (5) has been made
and (II) the aggregate of any cash plus the fair market value (as determined by
the Board of Directors, whose determination shall be conclusive and described in
a Board Resolution) of consideration payable in respect of any tender offer by
the Company or any of its subsidiaries for all or any portion of the Common
Stock concluded within the 12 months preceding the date of payment of such
distribution and in respect of which no adjustment pursuant to paragraph (6) of
this Section 1304 has been made (the "combined cash and tender amount"), exceeds
10% of the product of the current market price per share (determined as provided
in paragraph (8) of this Section 1304) of the Common Stock on the date for the
determination of holders of shares of Common Stock entitled to receive such
distribution times the number of shares of Common Stock outstanding on such date
(the "aggregate current market price"), then, and in each such case, immediately
after the close of business on such date for determination, the Conversion Rate
shall be adjusted so that the same shall equal the rate determined by dividing
the Conversion Rate in effect immediately prior to the close of business on the
date fixed for determination of the stockholders entitled to receive such
distribution by a fraction (i) the numerator of which shall be equal to the
current market price per share (determined as provided in paragraph (8) of this
Section) of the Common Stock on the date fixed for such determination less an
amount equal to the quotient of (x) the excess of such combined cash and tender
amount over 10% of such aggregate current market price divided by (y) the number
of shares of Common Stock outstanding on such date for determination and (ii)
the denominator of which shall be equal to the current market price per share
(determined as provided in paragraph (8) of this Section 1304) of the Common
Stock on such date for determination.
(6) In case a tender offer made by the Company or any Subsidiary for
all or any portion of the Common Stock shall expire and such tender offer or
exchange (as amended upon the expiration thereof) shall require the payment to
stockholders (based on the acceptance (up to any maximum specified in the terms
of the tender offer) of Purchased Shares (as defined below)) of an aggregate
consideration having a fair market value (as determined by the Board of
Directors, whose determination shall be conclusive
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and described in a Board Resolution) that combined together with (I) the
aggregate of the cash plus the fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and described in a Board
Resolution), as of the expiration of such tender or exchange offer, of
consideration payable in respect of any other tender or exchange offer by the
Company or any Subsidiary for all or any portion of the Common Stock expiring
within the 12 months preceding the expiration of such tender or exchange offer
and in respect of which no adjustment pursuant to this paragraph (6) has been
made and (II) the aggregate amount of any cash distributions to all holders of
the Company's Common Stock within 12 months preceding the expiration of such
tender or exchange offer and in respect of which no adjustment pursuant to
paragraph (5) of this Section has been made (the "combined tender and cash
amount") exceeds 10% of the product of the current market price per share of the
Common Stock (determined as provided in paragraph (8) of this Section 1304) as
of the last time (the "Expiration Time") tenders or exchanges could have been
made pursuant to such tender or exchange offer (as it may be amended) times the
number of shares of Common Stock outstanding (including any tendered or
exchanged shares) as of the Expiration Time, then, and in each such case,
immediately prior to the opening of business on the day after the date of the
Expiration Time, the Conversion Rate shall be adjusted so that the same shall
equal the rate determined by dividing the Conversion Rate immediately prior to
close of business on the date of the Expiration Time by a fraction (i) the
numerator of which shall be equal to (A) the product of (I) the current market
price per share of the Common Stock (determined as provided in paragraph (8) of
this Section 1304) on the date of the Expiration Time multiplied by (II) the
number of shares of Common Stock outstanding (including any tendered or
exchanged shares) on the date of the Expiration Time less (B) the combined
tender and cash amount, and (ii) the denominator of which shall be equal to the
product of (A) the current market price per share of the Common Stock
(determined as provided in paragraph (8) of this Section 1304) as of the
Expiration Time multiplied by (B) the number of shares of Common Stock
outstanding (including any tendered or exchanged shares) as of the Expiration
Time less the number of all shares validly tendered or exchanged and not
withdrawn as of the Expiration Time (the shares deemed so accepted up to any
such maximum, being referred to as the "Purchased Shares").
(7) The reclassification of Common Stock into securities other than
Common Stock (other than any reclassification upon a consolidation or merger to
which Section 1311 applies) shall be deemed to involve (a) a distribution of
such securities other than Common Stock to all holders of Common Stock (and the
effective date of such reclassification shall be deemed to be "the date fixed
for the determination of stockholders entitled to receive such distribution" and
"the date fixed for such determination" within the meaning of paragraph (4) of
this Section), and (b) a subdivision or combination, as the case may be, of the
number of shares of Common Stock outstanding immediately prior to such
reclassification into the number of shares of Common Stock outstanding
immediately
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thereafter (and the effective date of such reclassification shall be deemed to
be "the day upon which such subdivision becomes effective" or "the day upon
which such combination becomes effective", as the case may be, and "the day upon
which such subdivision or combination becomes effective" within the meaning of
paragraph (3) of this Section 1304).
(8) For the purpose of any computation under paragraphs (2), (4), (5)
or (6) of this Section 1304, the current market price per share of Common Stock
on any date shall be calculated by the Company and be deemed to be the average
of the daily Closing Prices Per Share for the five consecutive Trading Days
selected by the Company commencing not more than 10 Trading Days before, and
ending not later than, the earlier of the day in question and the day before the
"ex" date with respect to the issuance or distribution requiring such
computation. For purposes of this paragraph, the term "'ex' date", when used
with respect to any issuance or distribution, means the first date on which the
Common Stock trades regular way in the applicable securities market or on the
applicable securities exchange without the right to receive such issuance or
distribution.
(9) No adjustment in the Conversion Rate shall be required unless
such adjustment (plus any adjustments not previously made by reason of this
paragraph (9)) would require an increase or decrease of at least one percent in
such rate; provided, however, that any adjustments which by reason of this
-------- -------
paragraph (9) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this Article
shall be made to the nearest cent or to the nearest one-hundredth of a share, as
the case may be.
(10) The Company may make such increases in the Conversion Rate, for
the remaining term of the Securities or any shorter term, in addition to those
required by paragraphs (1), (2), (3), (4), (5) and (6) of this Section 1304, as
it considers to be advisable in order to avoid or diminish any income tax to any
holders of shares of Common Stock resulting from any dividend or distribution of
stock or issuance of rights or warrants to purchase or subscribe for stock or
from any event treated as such for income tax purposes. The Company shall have
the power to resolve any ambiguity or correct any error in this paragraph (10)
and its actions in so doing shall, absent manifest error, be final and
conclusive.
SECTION 1305. Notice of Adjustments of Conversion Rate.
----------------------------------------
Whenever the Conversion Rate is adjusted as herein provided:
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(1) the Company shall compute the adjusted Conversion Rate in
accordance with Section 1304 and shall prepare a certificate signed by
the principal accounting or financial officer of the Company setting
forth the adjusted Conversion Rate and showing in reasonable detail
the facts upon which such adjustment is based, and such certificate
shall promptly be filed with the Trustee and with each Conversion
Agent; and
(2) a notice stating that the Conversion Rate has been adjusted
and setting forth the adjusted Conversion Rate shall forthwith be
prepared, and as soon as practicable after it is prepared, such notice
shall be provided by the Company, or the Company shall cause such
notice to be provided by the Trustee to, all Holders in accordance
with Section 106.
Neither the Trustee nor any Conversion Agent shall be under any duty or
responsibility with respect to any such certificate or the information and
calculations contained therein, except to exhibit the same to any Holder of
Securities desiring inspection thereof at its office during normal business
hours.
SECTION 1306. Notice of Certain Corporate Action.
----------------------------------
In case:
(a) the Company shall declare a dividend (or any other
distribution) on its Common Stock payable (i) otherwise than
exclusively in cash or (ii) exclusively in cash in an amount that
would require any adjustment pursuant to Section 1304; or
(b) the Company shall authorize the granting to the holders of
its Common Stock generally of rights, options or warrants to subscribe
for or purchase any shares of capital stock of any class or of any
other rights; or
(c) of any reclassification of the Common Stock of the Company,
or of any consolidation, merger or share exchange to which the Company
is a party and for which approval of any stockholders of the Company
is required, or of the conveyance, sale, transfer or lease of all or
substantially all of the assets of the Company; or
(d) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company; or
(e) the Company or any Subsidiary shall commence a tender offer
for all or a portion of the Company's
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outstanding shares of Common Stock (or shall amend any such tender offer);
then the Company shall cause to be filed, or the Company shall cause the Trustee
to cause to be filed, at each office or agency maintained for the purpose of
conversion of Securities pursuant to Section 1002, and the Company shall cause
to be provided, or the Company shall cause the Trustee to cause to be provided,
to all Holders in accordance with Section 106, at least 20 days (or 10 days in
any case specified in clause (a) or (b) above) prior to the applicable record,
expiration or effective date hereinafter specified, a notice stating (x) the
date on which a record is to be taken for the purpose of such dividend,
distribution, rights, options or warrants, or, if a record is not to be taken,
the date as of which the holders of Common Stock of record to be entitled to
such dividend, distribution, rights, options or warrants are to be determined,
(y) the date on which the right to make tenders under such tender offer expires
or (z) the date on which such reclassification, consolidation, merger,
conveyance, transfer, sale, lease, dissolution, liquidation or winding up is
expected to become effective, and the date as of which it is expected that
holders of Common Stock of record shall be entitled to exchange their shares of
Common Stock for securities, cash or other property deliverable upon such
reclassification, consolidation, merger, conveyance, transfer, sale, lease,
dissolution, liquidation or winding up. Neither the failure to give such notice
or the notice referred to in the following paragraph nor any defect therein
shall affect the legality or validity of the proceedings described in clauses
(a) through (e) of this Section 1306. If at the time the Trustee shall not be a
Conversion Agent, a copy of such notice shall also forthwith be filed by the
Company with the Trustee.
The preceding paragraph to the contrary notwithstanding, the Company
shall cause to be filed, or the Company shall cause the Trustee to cause to be
filed, at each office or agency maintained for the purpose of conversion of
Securities pursuant to Section 1002, and the Company shall cause to be provided,
or the Company shall cause the Trustee to cause to be provided, to all Holders
in accordance with Section 106, notice of any tender offer by the Company or any
Subsidiary for all or any portion of the Common Stock on or after the time that
such notice of tender offer is provided to the public generally.
SECTION 1307. Company to Reserve Common Stock.
-------------------------------
The Company shall at all times reserve and keep available, free from
preemptive rights, out of its authorized but unissued Common Stock, for the
purpose of effecting the conversion of Securities, the full number of shares of
Common Stock then issuable upon the conversion of all Outstanding Securities.
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SECTION 1308. Taxes on Conversions.
--------------------
Except as provided in the next sentence, the Company will pay any and
all taxes and duties that may be payable in respect of the issue or delivery of
shares of Common Stock on conversion of Securities pursuant hereto. The Company
shall not, however, be required to pay any tax or duty which may be payable in
respect of (i) income of the holder or (ii) any transfer involved in the issue
and delivery of shares of Common Stock in a name other than that of the Holder
of the Security or Securities to be converted, and no such issue or delivery
shall be made unless and until the Person requesting such issue has paid to the
Company the amount of any such tax or duty, or has established to the
satisfaction of the Company that such tax or duty has been paid.
SECTION 1309. Covenant as to Common Stock.
---------------------------
The Company agrees that all shares of Common Stock which may be
delivered upon conversion of Securities will be newly issued shares and, upon
such delivery, will have been duly authorized and validly issued and will be
fully paid and nonassessable and, except as provided in Section 1308, the
Company will pay all taxes, liens and charges with respect to the issue thereof.
SECTION 1310. Cancellation of Converted Securities.
------------------------------------
All Securities delivered for conversion shall be delivered to the
Trustee to be canceled by or at the direction of the Trustee, which shall
dispose of the same as provided in Section 309.
SECTION 1311. Provision in Case of Consolidation, Merger or Sale of Assets.
------------------------------------------------------------
In case of any consolidation or merger of the Company with or into any
other Person, any merger of another Person with or into the Company (other than
a merger which does not result in any reclassification, conversion, exchange or
cancellation of outstanding shares of Common Stock of the Company) or any
conveyance, sale, transfer or lease of all or substantially all of the assets of
the Company, the Person formed by such consolidation or resulting from such
merger or which acquires such assets, as the case may be, shall execute and
deliver to the Trustee a supplemental indenture providing that the Holder of
each Security then Outstanding shall have the right thereafter, during the
period such Security shall be convertible as specified in Section 1301, to
convert such Security only into the kind and amount of securities, cash and
other
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property receivable upon such consolidation, merger, conveyance, sale, transfer
or lease by a holder of the number of shares of Common Stock of the Company into
which such Security might have been converted immediately prior to such
consolidation, merger, conveyance, sale, transfer or lease, assuming such holder
of Common Stock of the Company (i) is not a Person with which the Company con-
solidated or merged with or into or which merged into or with the Company or to
which such conveyance, sale, transfer or lease was made, as the case may be
("Constituent Person"), or an Affiliate of a Constituent Person and (ii) failed
to exercise his rights of election, if any, as to the kind or amount of
securities, cash and other property receivable upon such consolidation, merger,
conveyance, sale, transfer or lease (provided that if the kind or amount of
securities, cash and other property receivable upon such consolidation, merger,
conveyance, sale, transfer, or lease is not the same for each share of Common
Stock of the Company held immediately prior to such consolidation, merger,
conveyance, sale, transfer or lease by others than a Constituent Person or an
Affiliate thereof and in respect of which such rights of election shall not have
been exercised ("Non-electing Share"), then for the purpose of this Section 1311
the kind and amount of securities, cash and other property receivable upon such
consolidation, merger, conveyance, sale, transfer or lease by the holders of
each Non-electing Share shall be deemed to be the kind and amount so receivable
per share by a plurality of the Non-electing Shares). Such supplemental
indenture shall provide for adjustments which, for events subsequent to the
effective date of such supplemental indenture, shall be as nearly equivalent as
may be practicable to the adjustments provided for in this Article. The above
provisions of this Section 1311 shall similarly apply to successive consolida-
tions, mergers, conveyances, sales, transfers or leases. Notice of the
execution of such a supplemental indenture shall be given by the Company, or the
Company shall cause the Trustee to give such notice, to the Holder of each
Security as provided in Section 106 promptly upon such execution.
Neither the Trustee, any Paying Agent nor any Conversion Agent shall
be under any responsibility to determine the correctness of any provisions
contained in any such supplemental indenture relating either to the kind or
amount of shares of stock or other securities or property or cash receivable by
Holders of Securities upon the conversion of their Securities after any such
consolidation, merger, conveyance, transfer, sale or lease or to any such
adjustment, but may accept as conclusive evidence of the correctness of any such
provisions, and shall be protected in relying upon, an Opinion of Counsel with
respect thereto, which the Company shall cause to be furnished to the Trustee
upon request.
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<PAGE>
SECTION 1312. Responsibility of Trustee for Conversion Provisions.
---------------------------------------------------
The Trustee, subject to the provisions of Article Six, and any
Conversion Agent shall not at any time be under any duty or responsibility to
any Holder of Securities to determine whether any facts exist which may require
any adjustment of the Conversion Rate, or with respect to the nature or extent
of any such adjustment when made, or with respect to the method employed, or
herein or in any supplemental indenture provided to be employed, in making the
same, or whether a supplemental indenture need be entered into. Neither the
Trustee, subject to the provisions of Article Six, nor any Conversion Agent
shall be accountable with respect to the validity or value (or the kind or
amount) of any Common Stock, or of any other securities or property or cash,
which may at any time be issued or delivered upon the conversion of any
Security; and it or they do not make any representation with respect thereto.
Neither the Trustee, subject to the provisions of Article Six, nor any
Conversion Agent shall be responsible for any failure of the Company to make or
calculate any cash payment or to issue, transfer or deliver any shares of Common
Stock or share certificates or other securities or property or cash upon the
surrender of any Security for the purpose of conversion; and the Trustee,
subject to the provisions of Article Six, and any Conversion Agent shall not be
responsible for any failure of the Company to comply with any of the covenants
of the Company contained in this Article.
ARTICLE FOURTEEN
Repurchase of Securities at the Option of the
Holder Upon a Change of Control
SECTION 1401. Right to Require Repurchase.
---------------------------
In the event that a Change of Control (as hereinafter defined) shall
occur, then each Holder shall have the right, at the Holder's option, but
subject to the provisions of Section 1402, to require the Company to repurchase,
and upon the exercise of such right the Company shall repurchase, all of such
Holder's Securities, or any portion of the principal amount thereof that is
equal to $1,000 or any integral multiple of $1,000 in excess thereof, on the
date (the "Repurchase Date") that is 45 days after the date of the Company
Notice (as defined in Section 1403) at a purchase price equal to 100% of the
principal amount of the Securities to be repurchased plus interest accrued to
the Repurchase Date (the "Repurchase Price"); provided, however, that
-------- -------
installments of interest on Securities whose Stated Maturity is on or prior to
the Repurchase Date shall be payable to the Holders of such Securities, or one
or more Predecessor Securities, registered as such at the close of business on
the relevant Record Date according to their
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<PAGE>
terms and the provisions of Section 307. Such right to require the repurchase
of the Securities shall not continue after a discharge of the Company from its
obligations with respect to the Securities in accordance with Article Four,
unless a Change of Control shall have occurred prior to such discharge. At the
option of the Company, the Repurchase Price may be paid (i) subject to the
provisions of Section 1402(B) in cash, or (ii) subject to the fulfillment by
the Company of the conditions set forth in Section 1402(A), by delivery of
shares of Common Stock having a fair market value equal to the Repurchase Price;
provided, however, that failure of the Company to pay the Repurchase Price on
- -------- -------
the Repurchase Date either in cash or by delivery of shares of Common Stock
shall constitute an Event of Default for purposes of Section 501(1) hereof
notwithstanding the Company's inability to comply with the provisions of or
satisfy any conditions set forth in Section 1402. Whenever in this Indenture
(including Sections 202, 301, 501(1) and 508) there is a reference, in any
context, to the principal of any Security as of any time, such reference shall
be deemed to include reference to the Repurchase Price payable in respect of
such Security to the extent that such Repurchase Price is, was or would be so
payable at such time, and express mention of the Repurchase Price in any
provision of this Indenture shall not be construed as excluding the Repurchase
Price in those provisions of this Indenture when such express mention is not
made; provided, however, that for the purposes of Article Twelve such reference
-------- -------
shall be deemed to include reference to the Repurchase Price only to the extent
the Repurchase Price is payable in cash.
SECTION 1402. Conditions to the Company's Election to Pay the Repurchase Price
----------------------------------------------------------------
in Common Stock or Cash.
-----------------------
(A) The Company may elect to pay the Repurchase Price by delivery of
shares of Common Stock pursuant to Section 1401 if and only if the following
conditions shall have been satisfied:
(i) The shares of Common Stock deliverable in payment of the
Repurchase Price shall have a fair market value as of the Repurchase Date of not
less than the Repurchase Price. For purposes of this Section 1402, the fair
market value of shares of Common Stock shall be determined by the Company and
shall be equal to 95% of the average of the Closing Prices Per Share for the
five consecutive Trading Days ending on and including the third Trading Day
immediately preceding the Repurchase Date;
(ii) The shares of Common Stock deliverable in payment of the
Repurchase Price are, or shall have been, approved for quotation on the Nasdaq
National Market or are, or shall have been, listed on a national securities
exchange, in either case, prior to the Repurchase Date; and
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<PAGE>
(iii) All shares of Common Stock deliverable in payment of the
Repurchase Price shall be issued out of the Company's authorized but unissued
Common Stock and, will upon issue, be duly and validly issued and fully paid and
nonassessable and free of any preemptive rights.
If all of the conditions set forth in this Section 1402(A) are not
satisfied in accordance with the terms thereof, the Repurchase Price shall be
paid by the Company only in cash.
(B) The Company may elect to pay the Repurchase Price in cash if and only
if on or prior to the Repurchase Date there shall not remain any amounts
outstanding under the Amended and Restated Credit Agreement and all Commitments
(as defined therein) shall have terminated or expired.
SECTION 1403. Notices; Method of Exercising Repurchase Right, Etc.
----------------------------------------------------
(a) Unless the Company shall have theretofore called for redemption
all of the Outstanding Securities or unless all of the Outstanding Securities
shall have theretofore been converted in accordance with Article Thirteen, on or
before the 30th day after the occurrence of a Change of Control, the Company or,
at the request and expense of the Company on or before the 15th day after such
occurrence, the Trustee, shall give to all Holders, in the manner provided in
Section 106, notice (the "Company Notice") of the occurrence of the Change of
Control and of the repurchase right set forth herein arising as a result
thereof. The Company shall also deliver a copy of such notice of a repurchase
right to the Trustee.
Each notice of a repurchase right shall state:
(1) the Repurchase Date,
(2) the date by which the repurchase right must be exercised,
(3) the Repurchase Price, and whether the Repurchase Price shall be
paid by the Company in cash or by delivery of shares of Common Stock,
(4) a description of the procedure which a Holder must follow to
exercise a repurchase right, and the place or places where such Securities
are to be surrendered for payment of the Repurchase Price and accrued
interest, if any,
(5) that on the Repurchase Date the Repurchase Price, including
accrued interest, if any, will become due and payable upon each such
Security designated by the Holder to be
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<PAGE>
repurchased, and that interest thereon shall cease to accrue on and after
said date,
(6) the Conversion Rate then in effect, the date on which the right
to convert the principal amount of the Securities to be repurchased will
terminate and the place or places where such Securities may be surrendered
for conversion, and
(7) the place or places that the form of certificate required by
Section 203 shall be delivered, and the form of such certificate.
No failure of the Company to give the foregoing notices or defect
therein shall limit any Holder's right to exercise a repurchase right or affect
the validity of the proceedings for the repurchase of Securities.
If any of the foregoing provisions or other provisions of this Article
Fourteen are inconsistent with applicable law, such law shall govern.
(b) To exercise a repurchase right, a Holder shall deliver to the
Trustee or any Paying Agent on or before the 30th day after the date of the
Company Notice (i) written notice of the Holder's exercise of such right, which
notice shall set forth the name of the Holder, the principal amount of the
Securities to be repurchased (and, if any Security is to be repurchased in part,
the portion of the principal amount thereof to be repurchased and the name of
the Person in which the portion thereof to remain Outstanding after such
repurchase is to be registered) and a statement that an election to exercise the
repurchase right is being made thereby, and, in the event that the Repurchase
Price shall be paid in shares of Common Stock, the name or names (with
addresses) in which the certificate or certificates for shares of Common Stock
shall be issued, and (ii) the Securities with respect to which the repurchase
right is being exercised. Such written notice shall be irrevocable, except that
the right of the Holder to convert the Securities with respect to which the
repurchase right is being exercised shall continue until the close of business
on the Repurchase Date.
(c) In the event a repurchase right shall be exercised in accordance
with the terms hereof, the Company shall pay or cause to be paid to the Trustee
or the Paying Agent the Repurchase Price in cash or shares of Common Stock, as
provided above, for payment to the Holder on the Repurchase Date or, if shares
of Common Stock are to be paid, as promptly after the Repurchase Date as
practicable, together with accrued and unpaid interest to the Repurchase Date
payable with respect to the Securities as to which the purchase right has been
exercised; provided, however, that
-------- -------
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<PAGE>
installments of interest that mature on or prior to the Repurchase Date shall be
payable in cash to the Holders of such Securities, or one or more Predecessor
Securities, registered as such at the close of business on the relevant Regular
Record Date according to the terms and provisions of Section 307.
(d) If any Security (or portion thereof) surrendered for repurchase
shall not be so paid on the Repurchase Date, the principal amount of such
Security (or portion thereof, as the case may be) shall, until paid, bear
interest to the extent permitted by applicable law from the Repurchase Date at
the rate of [ ] per annum, and each Security shall remain convertible into
Common Stock until the principal of such Security (or portion thereof, as the
case may be) shall have been paid or duly provided for.
(e) Any Security which is to be repurchased only in part shall be
surrendered to the Trustee (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and make available for delivery to the Holder of such
Security without service charge, a new Security or Securities, containing
identical terms and conditions, each in an authorized denomination in aggregate
principal amount equal to and in exchange for the unrepurchased portion of the
principal of the Security so surrendered.
(f) Any issuance of shares of Common Stock in respect of the
Repurchase Price shall be deemed to have been effected immediately prior to the
close of business on the Repurchase Date and the Person or Persons in whose name
or names any certificate or certificates for shares of Common Stock shall be
issuable upon such repurchase shall be deemed to have become on the Repurchase
Date the holder or holders of record of the shares represented thereby;
provided, however, that any surrender for repurchase on a date when the stock
- -------- -------
transfer books of the Company shall be closed shall constitute the Person or
Persons in whose name or names the certificate or certificates for such shares
are to be issued as the record holder or holders thereof for all purposes at the
opening of business on the next succeeding day on which such stock transfer
books are open. No payment or adjustment shall be made for dividends or
distributions on any Common Stock issued upon repurchase of any Security
declared prior to the Repurchase Date.
(g) No fractions of shares shall be issued upon repurchase of
Securities. If more than one Security shall be repurchased from the same Holder
and the Repurchase Price shall be payable in shares of Common Stock, the number
of full shares which shall be issuable upon such repurchase shall be computed on
the basis of the aggregate principal amount of the Securities so
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<PAGE>
repurchased. Instead of any fractional share of Common Stock which would
otherwise be issuable on the repurchase of any Security or Securities, the
Company will deliver to the applicable Holder its check for the current market
value of such fractional share. The current market value of a fraction of a
share is determined by multiplying the current market price of a full share by
the fraction, and rounding the result to the nearest cent. For purposes of this
Section, the current market price of a share of Common Stock is the Closing
Price Per Share of the Common Stock on the Trading Day immediately preceding the
Repurchase Date.
(h) Any issuance and delivery of certificates for shares of Common
Stock on repurchase of Securities shall be made without charge to the Holder of
Securities being repurchased for such certificates or for any tax or duty in
respect of the issuance or delivery of such certificates or the securities
represented thereby; provided, however, that the Company shall not be required
-------- -------
to pay any tax or duty which may be payable in respect of (i) income of the
Holder or (ii) any transfer involved in the issuance or delivery of certificates
for shares of Common Stock in a name other than that of the Holder of the
Securities being repurchased, and no such issuance or delivery shall be made
unless and until the Person requesting such issuance or delivery has paid to the
Company the amount of any such tax or duty or has established, to the
satisfaction of the Company, that such tax or duty has been paid.
(i) All Securities delivered for repurchase shall be delivered to the
Trustee, the Paying Agent or any other agents (as shall be set forth in the
Company Notice) to be canceled by or at the direction of the Trustee, which
shall dispose of the same as provided in Section 309.
SECTION 1404. Certain Definitions.
-------------------
For purposes of this Article Fourteen,
(a) the term "beneficial owner" shall be determined in accordance
with Rule 13d-3, as in effect on the date of the original execution of this
Indenture, promulgated by the Commission pursuant to the Exchange Act;
(b) a "Change of Control" shall be deemed to have occurred at the
time, after the original issuance of the Securities, of:
(i) the acquisition by any Person of beneficial ownership, directly
or indirectly, through a purchase, merger or other acquisition
transaction or series of transactions, of shares of capital stock
of the Company entitling such person to
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<PAGE>
exercise 50% or more of the total voting power of all shares of
capital stock of the Company entitled to vote generally in the
elections of directors (any shares of voting stock of which such
person or group is the beneficial owner that are not then
outstanding being deemed outstanding for purposes of calculating
such percentage), other than any such acquisition by the Company,
any Subsidiary of the Company or any employee benefit plan of the
Company existing on the date of this Indenture; or
(ii) any consolidation or merger of the Company with or into any other
Person, any merger of another Person into the Company, or any
conveyance, sale, transfer, or lease of all or substantially all
of the assets (other than (a) any such transaction (x) which does
not result in any reclassification, conversion, exchange or
cancellation of outstanding shares of Common Stock, and
(y) pursuant to which the holders of 50% or more of the total
voting power of all shares of capital stock of the Company
entitled to vote generally in elections of directors immediately
prior to such transaction have the entitlement to exercise,
directly or indirectly, 50% or more of the total voting power of
all shares of capital stock of the continuing or surviving
corporation entitled to vote generally in elections of directors
of the continuing or surviving corporation immediately after such
transaction and (b) a merger which is effected solely to change
the jurisdiction of incorporation of the Company and results in a
reclassification, conversion or exchange of outstanding shares of
Common Stock into solely shares of common stock);
provided, however, that a Change of Control shall not be deemed to have occurred
- -------- -------
if the Closing Price Per Share on any five Trading Days within the period of
10 consecutive Trading Days ending immediately after the later of the date of
the Change of Control or the date of the public announcement of the Change of
Control (in the case of a Change of Control under Clause (i) above) or the
period of 10 consecutive Trading Days ending immediately prior to the date of
the Change of Control (in the case of a Change of Control under Clause (ii)
above) shall equal or exceed 105% of the Conversion Price in effect on each such
Trading Day.
(c) the term "Conversion Price" shall equal $1,000 divided by the
Conversion Rate; and
(d) for the purposes of Section 1404(b)(i), the term "Person" shall
include any syndicate or group which would be deemed
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<PAGE>
to be a "person" under Section 13(d)(3) of the Exchange Act, as in effect on the
date of the original execution of this Indenture.
SECTION 1405. Consolidation, Merger, Etc.
---------------------------
In the case of any conveyance, sale, transfer, lease, or merger, to
which Section 1311 applies, in which the Common Stock of the Company is changed
or exchanged as a result into the right to receive shares of stock and other
securities or property or assets (including cash) which includes shares of
Common Stock of the Company or common stock of another person that are, or upon
issuance will be, traded on a United States national securities exchange or
approved for trading on an established automated over-the-counter trading market
in the United States and such shares constitute at the time such change or
exchange becomes effective in excess of 50% of the aggregate fair market value
of such shares of stock and other securities, property and assets (including
cash) (as determined by the Company, which determination shall be conclusive and
binding), then the person formed by such consolidation or resulting from such
merger or combination or which acquires the properties or assets (including
cash) of the Company, as the case may be, shall execute and deliver to the
Trustee a supplemental indenture (which shall comply with the Trust Indenture
Act as in force at the date of execution of such supplemental indenture)
modifying the provisions of this Indenture relating to the right of Holders to
cause the Company to repurchase the Securities following a Change of Control,
including without limitation the applicable provisions of this Article Fourteen
and the definitions of the Common Stock and Change of Control, as appropriate,
and such other related definitions set forth herein as determined in good faith
by the Company (which determination shall be conclusive and binding), to make
such provisions apply to the common stock and the issuer thereof if different
from the Company and Common Stock of the Company (in lieu of the Company and the
Common Stock of the Company).
____________________
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
SAKS HOLDINGS, INC.
By: ______________________
[SEAL] Name:
Title:
Attest:
__________________________
Name: BANKERS TRUST COMPANY,
Title: Trustee:
[SEAL] By: _______________________
Name:
Title:
Attest:
___________________________
Name:
Title:
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<PAGE>
STATE OF NEW YORK ) ss.:
COUNTY OF )
On the _____ day of __________, 1996, before me personally came
___________________________, to me known, who, being by me duly sworn, did
depose and say that he/she is
___________________________________________________ of SAKS HOLDINGS, INC., one
of the corporations described in and which executed the foregoing instrument;
that he/she knows the seal of said corporation; that the seal affixed to said
instrument is such corporate seal; that it was so affixed by authority of the
Board of Directors of said corporation, and that he/she signed his/her name
thereto by like authority.
______________________________
Notary Public
STATE OF NEW YORK ) ss.:
COUNTY OF )
On the _____ day of __________, 1996, before me personally came
___________________________, to me known, who, being by me duly sworn, did
depose and say that he/she is
___________________________________________________ of BANKERS TRUST COMPANY,
one of the corporations described in and which executed the foregoing
instrument; that he/she knows the seal of said corporation; that the seal
affixed to said instrument is such corporate seal; that it was so affixed by
authority of the Board of Directors of said corporation, and that he/she signed
his/her name thereto by like authority.
______________________________
Notary Public
-103-
Exhibit 4.11
SAKS & COMPANY
__% SUBORDINATED NOTE DUE 2006
$200,000,000 Date: September ___, 1996
Saks & Company, a corporation duly organized and existing under the
laws of New York ("Saks"), for value received, hereby promises to pay to Saks
Holdings, Inc., a corporation duly organized and existing under the laws of
Delaware ("Holdings"), the principal sum of Two Hundred Million Dollars
($200,000,000) on September , 2006, and to pay interest thereon from
---
_________, ____ or from the most recent Interest Payment Date to which interest
has been paid or duly provided for, semi-annually in arrears on ________ and
_________ in each year (each, an "Interest Payment Date"), commencing
______________, 1997 at the rate of _____% per annum, until the principal hereof
is due, and at the rate of _____% per annum on any overdue principal and
premium, if any, and, to the extent permitted by law, on any overdue interest.
Except as otherwise defined herein, all capitalized terms shall have
the meanings set forth in the Indenture dated as of September __, 1996 (the
"Indenture"), between Holdings and Bankers Trust Company, as Trustee, with
regard to ____% Convertible Subordinated Notes due September , 2006 of
---
Holdings (the "Securities").
A. Payment of Interest.
Interest on this note shall be punctually paid on each Interest Payment
Date. Any interest on this note not punctually paid on any Interest Payment
Date ("Defaulted Interest on the Note") shall be paid to Holdings on the date
set pursuant to the terms of the Indenture for the payment of defaulted interest
on the Securities.
B.Event of Default.
If any Securities become due and payable pursuant to an Event of Default
under the Indenture, subject to the provisions of paragraph F hereof, Saks shall
make a mandatory prepayment hereunder to Holdings in an amount equal to the
amount of the principal of and interest on the Securities then due and payable.
Saks shall make such payment to Holdings in funds immediately available to
Holdings prior to or at the time required for the payment of such principal of
and interest on the Securities pursuant to the terms of the Indenture. The
aggregate principal amount outstanding under this note shall be reduced by the
amount of any such payment of principal so made. Holdings shall enter and
initial on Schedule I hereto the date and amount of any such principal reduction
and Saks agrees that this note, upon such entry being duly made, shall evidence
the indebtedness of Saks absent manifest error.
<PAGE>
C. Redemption.
If Holdings elects to redeem any Securities pursuant to the terms of the
Indenture and unless prohibited by the terms of any outstanding Senior
Indebtedness (and such prohibition shall not have been waived or such action
shall not have been otherwise consented to by the holders of such Senior
Indebtedness), Saks shall redeem an aggregate principal amount of this note
equal to the aggregate principal amount of Securities to be so redeemed by
Holdings, at the following redemption prices (expressed as percentages of the
principal amount): If redeemed during the 12-month period beginning ________ of
the years indicated,
Year Redemption Price
---- ----------------
1999 ____________%
2000 ____________%
2001 ____________%
2002 ____________%
2003 ____________%
2004 ____________%
and thereafter at a redemption price equal to 100% of the principal amount, in
each case together with accrued interest to the date of such redemption. Saks
shall make such payment to Holdings in funds immediately available to Holdings
prior to or at the time required for payment of principal of and interest on the
Securities redeemed by Holdings pursuant to the terms of the Indenture.
Holdings shall give Saks notice of its intention to redeem Securities not less
than 15 days prior to the Redemption Date. The aggregate principal amount
outstanding under this note shall be reduced by the amount of payments of
principal (exclusive of any redemption premium) so made. Holdings shall enter
and initial on Schedule I hereto the date and amount of any such principal
reduction and Saks agrees that this note, upon such entry being made, shall
evidence the indebtedness of Saks absent manifest error.
D. Conversion.
If any Securities shall be converted into shares of Common Stock as
permitted under the Indenture, the aggregate principal amount outstanding under
this note shall be reduced by an amount equal to the aggregate principal amount
of the Securities so converted. Unless Saks and Holdings shall otherwise agree,
any such reduction of the principal amount of this note shall be treated as a
contribution of capital by Holdings to Saks. Holdings shall enter and initial
on Schedule I hereto the date and amount of any such principal reduction and
Saks agrees that this note, upon such entry being duly made, shall evidence the
indebtedness of Saks absent manifest error.
E. Change of Control.
If any Securities shall be required to be repurchased pursuant to a Change
of Control under the Indenture and Holdings elects, and is permitted pursuant to
the terms of the Indenture, to pay the Repurchase Price thereof in cash, subject
to the provisions of paragraph F hereof, Saks
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<PAGE>
shall make a mandatory prepayment hereunder to Holdings in an amount equal to
the amount of the principal of and interest on the Securities then being
repurchased. Holdings shall give Saks notice of the principal amount of such
mandatory prepayment not more than 40 days after the date of the Company Notice
required under the Indenture. Saks shall make such prepayment to Holdings in
funds immediately available to Holdings prior to or at the time required for
repurchase of the Securities by Holdings pursuant to the terms of the Indenture.
The aggregate principal amount outstanding under this note shall be reduced by
the amount of any such payment of principal so made. Holdings shall enter and
initial on Schedule I hereto the date and amount of any such principal reduction
and Saks agrees that this note, upon such entry being duly made, shall evidence
the indebtedness of Saks absent manifest error.
If any Securities shall be required to be repurchased pursuant to a
Change of Control under the Indenture and Holdings elects to pay the Repurchase
Price thereof by shares of Common Stock having a fair market value equal to the
Repurchase Price, the aggregate principal amount outstanding under this note
shall be reduced by an amount equal to the aggregate principal amount of the
Securities so repurchased. Unless Saks and Holdings shall otherwise agree, any
such reduction of the principal amount of this note shall be treated as a
contribution of capital by Holdings to Saks. Holdings shall enter and initial
on Schedule I hereto the date and amount of any such principal reduction and
Saks agrees that this note, upon such entry being duly made, shall evidence the
indebtedness of Saks absent manifest error.
F. Subordination.
(1) Securities Subordinate to Senior Indebtedness. By acceptance of this
---------------------------------------------
note, Holdings covenants and agrees, that, to the extent and in the manner
hereinafter set forth in this Section F, the indebtedness represented by this
note and the payment of the principal of (and premium, if any) and interest
thereon are hereby expressly made subordinate and subject in right of payment to
the prior payment in full of all Senior Indebtedness. "Senior Indebtedness"
shall mean the principal of (and premium, if any) and interest (including all
interest accruing subsequent to the commencement of any bankruptcy or similar
proceeding, whether or not a claim for post-petition interest is allowable as a
claim in any such proceeding) on, and all fees and other amounts payable in
connection with, the following, whether absolute or contingent, secured or
unsecured, due or to become due, outstanding on the date of this note or
thereafter created, incurred or assumed: (a) indebtedness of Saks to banks,
insurance companies and other financial institutions evidenced by credit or loan
agreements, notes or other written obligations (including indebtedness issued
pursuant to the Indenture dated as of July 1, 1993 between Saks and AIBC
Services N.V., as amended or supplemented), (b) all other indebtedness of Saks
(including indebtedness of others guaranteed by Saks) other than this note,
whether outstanding on the date hereof or thereafter created, incurred or
assumed, which is (i) for money borrowed or (ii) evidenced by a note, security,
debenture, bond or similar instrument given in connection with the acquisition
of any businesses, properties or assets of any kind, (c) obligations of Saks as
lessee under leases required to be capitalized on the balance sheet of the
lessee under generally accepted accounting principles, (d) obligations of Saks
under interest rate and currency swaps, caps, floors, collars or similar
agreements or arrangements intended to protect Saks against fluctuations in
interest or currency exchange rates, and (e) renewals, extensions,
modifications, restatements and refundings of, or any indebtedness or obligation
issued in exchange for, any such indebtedness or obligation
-3-
<PAGE>
described in clauses (a) through (d) of this paragraph; provided, however, that
-------- -------
Senior Indebtedness shall not include any such indebtedness or obligation (i) if
the terms of such indebtedness or obligation (or the terms of the instrument
under which, or pursuant to which, it is issued) expressly provide that such
indebtedness or obligation is not superior in right of payment to this note, or
expressly provide that such indebtedness or obligation is pari passu with or
---- -----
junior to this note, (ii) if such indebtedness or obligation is non-recourse to
Saks or (iii) if such indebtedness or obligation is a conditional sale contract
or any account payable or any similar indebtedness created or assumed by Saks in
the ordinary course of business in connection with the obtaining of materials,
inventories or services.
(2) Payment Over of Proceeds Upon Dissolution, Etc. In the event of (a)
----------------------------------------------
any insolvency or bankruptcy case or proceeding, or any receivership,
liquidation, reorganization or other similar case or proceeding in connection
therewith, relative to Saks or to its creditors, as such, or to its assets, or
(b) any liquidation, dissolution or other winding up of Saks, whether voluntary
or involuntary and whether or not involving insolvency or bankruptcy, or (c) any
assignment for the benefit of creditors or any other marshalling of assets and
liabilities of Saks, then and in any such event the holders of Senior
Indebtedness shall be entitled to receive payment in full of all amounts due or
to become due on or in respect of all Senior Indebtedness in cash or other
immediately available funds, or provision shall be made for such payment in cash
or other immediately available funds or otherwise in a manner satisfactory to
each holder of Senior Indebtedness with respect to its indebtedness, before
Holdings is entitled to receive any payment on account of principal of (or
premium, if any) or interest on this note, and to that end the holders of Senior
Indebtedness shall be entitled to receive, for application to the payment
thereof, any payment or distribution of any kind or character, whether in cash,
property or securities, which may be payable or deliverable in respect of this
note in any such case, proceeding, dissolution, liquidation or other winding up
or event.
In the event that, notwithstanding the foregoing provisions of this
Section, Holdings shall have received any payment or distribution of assets of
Saks of any kind or character, whether in cash, securities or other property,
before all Senior Indebtedness is paid in full or payment thereof provided for,
then and in such event such payment or distribution shall be paid over or
delivered forthwith to the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee, agent or other Person making payment or distribution of
assets of Saks for application to the payment of all Senior Indebtedness
remaining unpaid, to the extent necessary to pay all Senior Indebtedness in
full, after giving effect to any concurrent payment or distribution to or for
the holders of Senior Indebtedness.
The consolidation of Saks with, or the merger of Saks into, another
Person or the liquidation or dissolution of Saks following the conveyance or
transfer of its properties and assets substantially as an entirety to another
Person shall not be deemed a dissolution, winding up, liquidation,
reorganization, assignment for the benefit of creditors or marshalling of assets
and liabilities of Saks for the purposes of this Section if the Person formed by
such consolidation or into or with which Saks is merged or the Person which
acquires by conveyance, transfer or sale, or which leases or otherwise acquires,
the properties and assets of Saks substantially as an entirety shall be a
corporation, limited liability company, partnership or trust, shall be organized
and validly existing under the laws of the United States of America, any State
thereof or the District of
-4-
<PAGE>
Columbia and shall expressly assume the due and punctual payment of the
principal of (and premium, if any) and interest on this note and the performance
or observance of every covenant of this note on the part of Saks to be performed
or observed.
Upon any consolidation or merger of Saks with or into any other
Person, or any conveyance, transfer, sale or lease of the properties and assets
of Saks substantially as an entirety in accordance with the preceding sentence,
the successor Person formed by such consolidation or merger or into or with
which Saks is merged or to which such conveyance, transfer, sale or lease is
made shall succeed to, and be substituted for, and may exercise every right and
power of, Saks under this note with the same effect as if such successor Person
had been named as Saks herein, and thereafter, except in the case of a lease,
the predecessor Person shall be relieved of all obligations and covenants under
this note.
(3) Prior Payment to Senior Indebtedness Upon Mandatory Prepayment of
-----------------------------------------------------------------
Note Due to Acceleration of Securities. In the event that a mandatory
- --------------------------------------
prepayment is required under this note as a result of any Securities being
declared due and payable before their Stated Maturity, then and in such event
the holders of the Senior Indebtedness outstanding at the time such prepayment
is required shall be entitled to receive payment in full of all amounts due or
to become due on or in respect of such Senior Indebtedness, or provision shall
be made for such payment in money or money's worth, before Holdings is entitled
to receive any payment by Saks on account of the principal of (or premium, if
any) or interest on this note.
In the event that, notwithstanding the foregoing, Saks shall make any
payment to Holdings prohibited by the foregoing provisions of this Section, then
and in such event such payment shall be paid over and delivered forthwith to
Saks.
The provisions of this Section shall not apply to any payment with
respect to which paragraph (2) would be applicable.
(4) No Payment When Senior Indebtedness in Default.(a) In the event and
----------------------------------------------
during the continuation of any default in the payment of principal of (or
premium, if any) or interest on (including a default under any redemption or
repurchase obligation with respect to) any Senior Indebtedness beyond any
applicable grace period with respect thereto or in the event that any other
event of default with respect to any Senior Indebtedness shall have occurred and
be continuing which would then permit the holders of such Senior Indebtedness to
declare such Senior Indebtedness due and payable prior to the date on which it
would otherwise have become due and payable, unless and until such event of
default shall have been cured or waived or shall have ceased to exist after
written notice to Saks by any holder of such Senior Indebtedness, or (b) in the
event any judicial proceeding shall be pending with respect to any such default
in payment or event of default, then no payment shall be made by Saks on account
of principal of (or premium, if any) or interest on this note.
In the event that, notwithstanding the foregoing, Saks shall make any
payment to Holdings prohibited by the foregoing provisions of this Section, then
and in such event such payment shall be paid over and delivered forthwith to
Saks.
-5-
<PAGE>
The provisions of this Section shall not apply to any payment with
respect to which paragraph (2) would be applicable.
(5) Payment Permitted if No Default. Nothing contained in this Section F
-------------------------------
or elsewhere in this note shall prevent Saks, at any time except during the
pendency of any case, proceeding, dissolution, liquidation or other winding up,
assignment for the benefit of creditors or other marshalling of assets and
liabilities of Saks or other event referred to in clause (a), (b) or (c) of
paragraph (2), or under the conditions described in paragraphs (3) and (4)
hereof, from making payments at any time of principal of (and premium, if any)
or interest on this note.
(6) Subrogation to Rights of Holders of Senior Indebtedness. Subject to
-------------------------------------------------------
the payment in full of all Senior Indebtedness, Holdings shall be subrogated to
the extent of the payments or distributions made to the holders of such Senior
Indebtedness pursuant to the provisions of this Section F to the rights of the
holders of such Senior Indebtedness to receive payments and distributions of
cash, property and securities applicable to the Senior Indebtedness until the
principal of (and premium, if any) and interest on this note shall be paid in
full. For purposes of such subrogation, no payments or distributions to the
holders of the Senior Indebtedness of any cash, property or securities to which
Holdings would be entitled except for the provisions of this Section F, and no
payments over pursuant to the provisions of this Section F to Holdings, shall,
as among Saks, its creditors other than holders of Senior Indebtedness and
Holdings, be deemed to be a payment or distribution by Saks to or on account of
the Senior Indebtedness.
(7) Provisions Solely to Define Relative Rights. The provisions in this
-------------------------------------------
Section F are intended solely for the purpose of defining the relative rights of
Holdings on the one hand and the holders of Senior Indebtedness on the other
hand. Nothing contained in this Section F or elsewhere in this note is intended
to or shall (a) impair, as among Saks, its creditors other than holders of
Senior Indebtedness and Holdings, the obligation of Saks, which is absolute and
unconditional, to pay to Holdings the principal of (and premium, if any) and
interest on this note as and when the same shall become due and payable in
accordance with its terms; or (b) affect the relative rights against Saks of
Holdings and creditors of Saks other than the holders of Senior Indebtedness; or
(c) prevent Holdings from exercising all remedies otherwise permitted by
applicable law upon default under this note, subject to the rights, if any,
under this Section F of the holders of Senior Indebtedness to receive cash,
property and securities otherwise payable or deliverable to Holdings.
(8) No Waiver of Subordination Provisions. No right of any present or
-------------------------------------
future holder of any Senior Indebtedness to enforce subordination as herein
provided shall at any time in any way be prejudiced or impaired by any act or
failure to act on the part of Saks or by any act or failure to act, in good
faith, by any such holder of any Senior Indebtedness, or by any non-compliance
by Saks with the terms, provisions and covenants of this note, regardless of any
knowledge thereof any such holder may have or be otherwise charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Indebtedness may, at any time and from time to time,
without the consent of or notice to Holdings, without incurring responsibility
to Holdings and without impairing or releasing the subordination provided in
this Section F or the obligations hereunder of Holdings to the holders
-6-
<PAGE>
of Senior Indebtedness, do any one or more of the following: (i) change the
manner, place or terms of payment or extend the time of payment of, or renew,
increase or alter, Senior Indebtedness, or otherwise amend or supplement in any
manner Senior Indebtedness or any instrument evidencing the same or any
agreement under which Senior Indebtedness is outstanding; (ii) sell, exchange,
release or otherwise deal with any property pledged, mortgaged or otherwise
securing Senior Indebtedness; (iii) release any Person liable in any manner for
the collection of Senior Indebtedness; and (iv) exercise or refrain from
exercising any rights against the Company and any other Person.
G. Governing Law.
THIS NOTE SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE
STATE OF NEW YORK, AND FOR ALL PURPOSES SHALL BE CONSTRUED IN ACCORDANCE WITH
AND GOVERNED BY THE LAWS THEREOF.
-7-
<PAGE>
IN WITNESS WHEREOF, Saks has caused this instrument to be duly
executed under its corporate seal.
Dated:
SAKS & COMPANY
By_______________________
Title:
Name:
Attest:
______________________________
Title:
-8-
<PAGE>
SCHEDULE I
Amount of Principal Total Outstanding
Date Reduction Amount of Principal Notation Made By
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-9-
Exhibit 4.12
SECOND SUPPLEMENTAL INDENTURE
This SECOND SUPPLEMENTAL INDENTURE (this "Second Supplemental
Indenture") is dated as of September , 1996 between SAKS & COMPANY, a New
York corporation (the "Company"), and AIBC SERVICES, N.V., a Netherlands
Antilles corporation, as trustee (the "Trustee") under the Indenture (as
hereinafter defined).
R E C I T A L S
---------------
A. The Company has heretofore executed and delivered to the
Trustee a certain Indenture dated as of July 1, 1993, providing for the issuance
of $50,000,000 principal amount of its 9% Subordinated Notes due May 31, 2001
(the "Notes"), which Indenture has been amended by the First Supplemental
Indenture thereto dated as of April 22, 1996 (as so amended, the "Indenture").
All terms used in this Second Supplemental Indenture which are defined in the
Indenture shall have the same meanings assigned to them in the Indenture.
B. Pursuant to Section 8.02 of the Indenture, a supplemental
indenture to amend the Indenture may be entered into by the Company and the
Trustee with the consent of each of the Holders of the Outstanding Notes.
C. All things necessary to make this Second Supplemental Indenture
when executed by the parties hereto a valid and binding amendment of and
supplement to the Indenture have been done and performed.
A G R E E M E N T
- - - - - - - - -
NOW, THEREFORE, for and in consideration of the premises and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto do hereby mutually covenant and agree as
follows:
SECTION 1. Amendment to Indenture. The Indenture shall be amended as
----------------------
follows:
(a) The First Recital shall be amended by deleting therefrom the
date "May 31, 2001" and substituting therefor the date "December 29, 1997".
(b) Section 1.01 shall be amended by inserting the following new
definition in its appropriate alphabetic location:
"Sinking Fund Payment Date means a single Business Day after
-------------------------
August 31, 1996 and on or prior to September 16, 1996 that is specified in
a written notice from the Company to the Trustee; provided that if the
--------
Company does not provide such notice to the Trustee on or prior to
September 15, 1996, such date shall be September 16, 1996."
(c) Section 2.02 shall be amended by deleting therefrom the date
"May 31, 2001" and substituting therefor the date "December 29, 1997".
(d) Section 2.03 shall be amended by deleting from the first
paragraph thereof the date "May 31, 2001" and substituting therefor the date
"December 29, 1997".
- ------------------------
[Footnote continued from previous page]
<PAGE>
(e) Section 10.04 shall be amended by deleting clause (a) thereof in
its entirety and substituting the following in its place:
"(a) (i) The particular Notes to be redeemed pursuant to
Section 10.01, if less than all the Outstanding Notes are to be redeemed
pursuant thereto, shall be selected by the Company not more than 60 days
nor less than 30 days prior to the Redemption Date, from the Outstanding
Notes not previously called for redemption and, subject to Section 10.04(c)
hereof, shall be redeemed pro rata among the Holders in the proportion that
the aggregate amount of Notes held by a Holder bears to the aggregate
amount of Notes Outstanding, provided Notes shall be selected for
redemption in denomination of $1,000 or integral multiples thereof.
(ii) The particular Notes to be redeemed pursuant to
Section 10.09 shall be selected by the Company from the Outstanding Notes
not previously called for redemption and, subject to Section 10.04(c)
hereof, shall be redeemed pro rata among the Holders in the proportion that
the aggregate amount of Notes held by a Holder bears to the aggregate
amount of Notes Outstanding, provided Notes shall be selected for
redemption in denomination of $1,000 or integral multiples thereof."
(f) A new Section 10.09 shall be inserted immediately following
Section 10.08:
"SECTION 10.09. Mandatory Redemption.
--------------------
If any of the Notes remain outstanding on such date, the
Company shall redeem on the Sinking Fund Payment Date Notes having an
aggregate principal amount equal to 70% of the aggregate principal amount
of Notes outstanding on the Sinking Fund Payment Date, at 100% of the
principal amount thereof, together with all accrued interest to such
Sinking Fund Payment Date."
SECTION 2. Amendment to Exhibit A. Exhibit A (9% Subordinated Note
----------------------
Due May 31, 2001) shall be amended as follows:
(a) The title of the Note shall be amended by deleting therefrom
the date "May 31, 2001" and substituting therefor the date "December 29, 1997".
(b) The last paragraph on the first page of the Note shall be
amended by deleting therefrom the date "May 31, 2001" and substituting therefor
the date "December 29, 1997" in the first sentence thereof.
(c) The first paragraph on the Reverse of Note shall be amended by
deleting therefrom the date "May 31, 2001" and substituting therefor the date
"December 29, 1997".
(d) A new paragraph shall be inserted on the Reverse of Note
immediately following the Optional Redemption Price chart:
"Subject to the terms of Articles Ten and Eleven of the
Indenture, 70% of the aggregate principal amount of the Notes then
outstanding are
- -----------------------
<PAGE>
required to be redeemed by the Company, as provided in the Indenture, on a
day after August 31, 1996 and on or prior to September 16, 1996 that is
specified by the Company to the Trustee, at a price equal to 100% of the
principal amount redeemed, plus accrued interest thereon to the date of
such redemption on the amount redeemed."
SECTION 3. Severability. In case any provision in this Second
------------
Supplemental Indenture 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 4. No Third Party Beneficiaries. Nothing in this Second
----------------------------
Supplemental Indenture, express or implied, shall give to any Person other than
the parties hereto and their successors under the Indenture, the Senior Lenders
and the Holders of the Notes, any benefit or any legal or equitable right,
remedy or claim under the Indenture.
SECTION 5. Effect of Second Supplemental Indenture. This Second
---------------------------------------
Supplemental Indenture supplements the Indenture and shall be a part and subject
to all the terms thereof. Except as supplemented hereby, the Indenture shall
continue in full force and effect.
SECTION 6. Governing Law. THIS SECOND SUPPLEMENTAL INDENTURE SHALL
-------------
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK.
SECTION 7. Counterparts. This Second Supplemental Indenture may be
------------
executed in any number of counterparts, each of which so executed shall be
deemed to be an original, but all such counterparts shall together constitute
but one and the same instrument.
[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]
- -----------------------
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Second
Supplemental Indenture to be duly executed and their respective corporate seals,
if any, to be hereunto affixed and attested, all as of the day and year first
above written.
SAKS & COMPANY
By:
------------------------------
Name:
Title:
Attest:
By:
----------------------
Name:
Title:
AIBC SERVICES N.V.
By: AMACO (Curacao) N.V.
By:
-----------------------------
Name:
Title:
- -----------------------
<PAGE>
ACT OF HOLDER
The foregoing Second Supplemental Indenture is hereby consented and
agreed to as of the date first above written by Act of the Holder of each
Outstanding Note in accordance with Section 8.02 of the Indenture. Pursuant to
Section 1.06 of the Indenture, the Holder hereby irrevocably waives any notice
from the Company that may be required under Section 10.05 with respect to the
Sinking Fund Payment Date.
TOCADE S.A.
By:
-----------------------------
Name:
Title:
Attest:
By:
----------------------------
Name:
Title:
- -----------------------
Exhibit 4.13
============================================================================
REGISTRATION RIGHTS AGREEMENT
among
SAKS HOLDINGS, INC.
a Delaware corporation
and
the SHAREHOLDERS
listed on the signature pages hereof
---------------
Dated as of August 16, 1996
============================================================================
<PAGE>
i
TABLE OF CONTENTS
-----------------
Page
----
PREAMBLE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 2. Incidental Registration . . . . . . . . . . . . . . . . . . . . 3
Section 3. Limitations on Incidental Registration . . . . . . . . . . . . . 4
Section 4. Registration on Request . . . . . . . . . . . . . . . . . . . . 5
Section 5. Underwritten Offerings . . . . . . . . . . . . . . . . . . . . . 5
Section 6. Registration Procedures . . . . . . . . . . . . . . . . . . . . 7
Section 7. Expenses of Registration . . . . . . . . . . . . . . . . . . . . 7
Section 8. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 9. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . 10
Exhibit A Sample IPO Lock-Up Agreement
Exhibit B Schedule of Registrable Stock
<PAGE>
1
REGISTRATION RIGHTS AGREEMENT
-----------------------------
REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of August
16, 1996, among SAKS HOLDINGS, INC., a Delaware corporation (the "Company"), and
the entities listed on the signature pages of this Agreement as the
"SHAREHOLDERS" (the "Shareholders").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, in connection with the Company's initial public offering of
its Common Stock on May 21, 1996 (the "IPO"), the Shareholders agreed with the
representatives of the underwriters, pursuant to certain lock-up agreements (the
"IPO Lock-Up Agreements"), for the benefit of the Company, not to offer, sell,
transfer or otherwise dispose of any shares of Common Stock for a period of 180
days after the date of the Initial Public Offering without the prior written
consent of the representatives of the underwriters (the "IPO Lock-Up Period");
WHEREAS, upon expiration of the IPO Lock-Up Period, the 44,785,365
shares of Common Stock held by the Shareholders are eligible for sale in the
public market in compliance with Rule 144 or Regulation S, each promulgated
under the Securities Act of 1933, as amended (the "Act");
WHEREAS, the Company believes that unorganized sales of shares of
Common Stock by the Shareholders in the public market could have an adverse
effect on prevailing market prices for the Common Stock and could adversely
impact the Company's ability to participate in the capital markets;
WHEREAS, in order to provide for the orderly distribution of the
shares of Common Stock held by the Shareholders, the Company has agreed to grant
registration rights to the Shareholders with respect to the shares of Common
Stock as set forth herein.
NOW, THEREFORE, the parties hereto agree as follows:
1.Definitions.
-----------
(a)As used in this Agreement the following terms shall have the
following meanings:
"Act": as defined in the preamble.
-----
"Commission": the Securities and Exchange Commission or any
----------
other federal agency at the time administering the Act.
<PAGE>
2
"Common Stock": the common stock, $0.01 par value, of the
------------
Company.
"Company": as defined in the preamble.
-------
"Effective Date": August 16, 1996.
--------------
"Exchange Act": the Securities Exchange Act of 1934, as amended,
------------
and the rules and regulations of the Commission thereunder.
"GAAP": generally accepted accounting principles in the United
----
States of America in effect from time to time.
"Holder": a Shareholder or a Permitted Transferee.
------
"Initiating Shareholder": means Investcorp S.A., so long as such
----------------------
entity or one or more of its affiliates is holding Registrable Stock outstanding
at the time and initiating a request for registration pursuant to Section 4(a).
"IPO": as defined in the preamble.
---
"IPO Lock-Up Agreements": as defined in the preamble and a copy
----------------------
of which is attached hereto as Exhibit A.
"IPO Lock-Up Period": as defined in the preamble.
------------------
"Permitted Transfer": any transfer of the Common Stock that is
------------------
permitted under the terms of the IPO Lock-Up Agreements.
"Permitted Transferee": any transferee that receives Common
--------------------
Stock in a transfer of the Common Stock which is permitted under the terms of
the IPO Lock-Up Agreements, and who agrees in writing to become bound by the
terms of this Agreement.
"Person": an individual, partnership, joint venture,
------
corporation, trust, unincorporated organization or a government or any
department or agency thereof.
"Piggyback Notice": as defined in Section 2.
----------------
"Prospective Seller": with respect to any registration, a Holder
------------------
that proposes to include shares of Registrable Stock in such registration.
"register," "registered" and "registration": a registration
-------- ---------- ------------
effected by preparing and filing a registration statement in compliance with the
Act, the declaration or ordering of effectiveness of such registration statement
by the Commission and the compliance with all applicable state securities or
blue sky laws which will permit the sale of Registrable Stock to the public.
<PAGE>
3
"Registrable Stock": (i) those shares of Common Stock held by
-----------------
Shareholders that were received by such Shareholders upon conversion of shares
of the Company's Class A Stock, Class B Stock, Class C Stock or Class D Stock to
Common Stock upon the consummation of the IPO pursuant to the Company's
Certificate of Designations and (ii) any Common Stock issued or issuable with
respect to or in exchange for such shares of Common Stock by reason of a stock
dividend or other distribution on such shares or stock split or in connection
with a combination of shares, recapitalization, reclassification, exchange,
offer, merger, consolidation or other reorganization. Each share of Registrable
Stock shall cease to be Registrable Stock when (a) a registration statement with
respect to the sale of such stock shall have become effective under the Act and
such stock shall have been disposed of in accordance with such registration
statement, (b) such stock ceases to be outstanding, (c) such stock is no longer
held by a Holder or (d) the fourth anniversary of the IPO has occurred. A
schedule of the number of shares of Registrable Stock held by each Shareholder
as of the date of this Agreement is attached hereto as Exhibit B.
"Registration Expenses": as defined in Section 7.
---------------------
"Underwritten Offering": a registration in which securities of
---------------------
the Company are sold to an underwriter for reoffering to the public.
(b)Unless otherwise specified therein, all terms defined in this
Agreement shall have the defined meanings when used in any certificate or
document made or delivered pursuant hereto.
(c)As used herein and in any certificate or other documents made
or delivered pursuant hereto, accounting terms not defined in Section 1(a) and
accounting terms partly defined in Section 1(a) to the extent not defined, shall
have the respective meanings given to them under GAAP.
(d)Any reference to any provision of or rule under the Act shall
encompass any successor provision or rule.
(e)The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and section,
subsection, schedule and exhibit references are to this Agreement unless
otherwise specified.
(f)The meanings given to terms defined herein shall be equally
applicable to the singular and plural forms of such terms.
2.Incidental Registration. If the Company proposes to register any of its
-----------------------
securities for sale (other than a registration relating to the sale of
securities to employees of the Company pursuant to a stock option, stock
purchase or similar plan including a registration statement on Form S-8, an
exchange offer, a Rule 145 transaction or in connection with the acquisition of
the assets or shares of or merger or consolidation with another company), and
the
<PAGE>
4
registration form to be used may also be used for the registration of the
Registrable Stock, then it shall give written notice (a "Piggyback Notice"), at
its expense, to all Holders then holding Registrable Stock of its intention to
do so at least 10 business days prior to the filing of a registration statement
with respect to such registration with the Commission. The Company shall
specify in the Piggyback Notice the form and manner of, and the other relevant
facts involved in, such proposed registration. If any Holder desires to dispose
of all or part of its Registrable Stock in such registration, it shall deliver
to the Company, within 10 business days after receipt of the Piggyback Notice,
written notice of such request stating the number of shares of Registrable Stock
so proposed to be sold by such Holder. Any Holder may withdraw its request for
inclusion at any time prior to five days prior to the effective date of the
registration statement for such registration. The Company shall use its
commercially reasonable efforts (and, in any event, shall comply with the
provisions of Section 6) to cause all shares of Registrable Stock specified in
such written notice to be included in such registration, subject, however, to
the limitations set forth in Section 3 and provided that, for purposes of this
sentence, commercially reasonable efforts shall not require the Company or any
other seller of securities of the Company (other than a Holder of Registrable
Stock), to reduce the amount or sale price of such securities proposed to be so
registered. No registration of Registrable Stock effected under this Section 2
shall relieve the Company of its obligation to effect registration of
Registrable Stock upon the request of the Initiating Shareholder pursuant to
Section 4.
3. Limitations on Incidental Registration.
--------------------------------------
(a) If the registration of which the Company gives notice
pursuant to Section 2 is for the purpose of permitting a disposition of
securities pursuant to an Underwritten Offering, the Piggyback Notice shall so
state, and, if requested to do so by the managing underwriter of the offering,
the Company shall have the right to limit the aggregate size of the offering or
the number of shares of Registrable Stock to be included therein by the Holders
in accordance with the provisions of Section 3(b) below.
(b) Whenever the number of shares that may be registered
pursuant to Section 2 is limited by the provisions of Section 3(a) above, the
Company shall have priority as to sales over the Holders, and each Holder
hereby agrees that he or she shall withdraw his or her securities from such
registration to the extent necessary to allow the Company or any other seller
of securities of the Company (other than a Holder of Registrable Stock) to
include all the shares it desires to include in such registration, and
thereafter the number of shares of Registrable Stock to be included in such
registration shall be allocated pro rata among holders of Registrable Stock
with such allocation to be made on the basis of the number of shares requested
to be included in such registration by such holders.
(c) Nothing herein shall be construed as creating an obligation
on the part of the Company to register Registrable Stock if the Board of
Directors of the Company shall have determined in its sole discretion not to
proceed with a registration of its securities whether or not a Piggyback Notice
shall have previously been sent by the Company.
<PAGE>
5
4. Registration on Request.
-----------------------
(a) At any time following the expiration of the IPO Lock-Up
Period, the Initiating Shareholder may make by written notice a request that the
Company effect the registration under the Act of all or part of such Initiating
Shareholder's Registrable Stock, specifying the intended method or methods of
disposition thereof; provided that the Initiating Shareholder is entitled to an
aggregate of four such registrations pursuant to this Section 4(a).
(b) Upon receipt of the request of the Initiating Shareholder
under Section 4(a), the Company shall give written notice of the requested
registration within 15 days of receipt of such request to all Holders of
Registrable Stock and thereupon shall use its commercially reasonable efforts to
effect the registration under the Act of:
(i) the Registrable Stock that the Company has been so
requested to register by the Initiating Shareholder, for
disposition in accordance with the intended method or
methods of disposition stated in such request; and
(ii) all other Registrable Stock that the Company has been
requested to register by the Holders thereof by written
request delivered to the Company within 15 days after the
giving of such written notice by the Company (which request
shall specify the intended method or methods of disposition
of such Registrable Stock);
all to the extent requisite to permit the disposition (in accordance with the
intended methods thereof as aforesaid) of the Registrable Stock so to be
registered, provided that if the Initiating Shareholder shall determine that the
--------
number of shares of Common Stock to be included in such registration should be
limited due to market conditions or otherwise, the Company shall include in such
registration the number of shares of Common Stock which the Company is so
advised by the Initiating Shareholder can be sold in such offering allocated
first pro rata among the shares of Registrable Stock requested to be registered
- ----- --- ----
by the Initiating Shareholder, and the shares of Registrable Stock held by
Holders requesting pursuant to Section 4(b)(ii) that such shares be included in
such registration and second, if and to the extent additional shares may be
------
included, pro rata among the Company and any other holders of shares of Common
--- ----
Stock, in each case such allocation to be made on the basis of the number of
shares requested to be included in such registration by such holders and the
Company.
(c) Each registration requested pursuant to this Section 4
shall be effected by the filing of a registration statement on the applicable
form agreed to in writing by the Initiating Shareholder.
5. Underwritten Offerings.
----------------------
(a) Selection of Underwriters. Whenever a registration
-------------------------
requested pursuant to Section 4 hereof is for an Underwritten Offering, the
Initiating Shareholder shall select managing underwriter(s) of recognized
standing to administer the offering, subject to approval by the Company with
such approval not to be unreasonably withheld, and each Holder
<PAGE>
6
requesting registration of its Registrable Stock for disposition in an
Underwritten Offering agrees to include such Registrable Stock in such
underwritten offering and shall be bound by the provisions of this
Section 5.
(b) Underwriting Agreement. If requested by the
----------------------
underwriters for any Underwritten Offering of Registrable Stock pursuant to a
registration requested under Section 4 hereof, the Company shall enter into an
underwriting agreement with such underwriters for such offering, such agreement
to contain representations and warranties by the Company and other terms and
provisions not inconsistent with this Agreement as are customarily contained in
underwriting agreements with respect to secondary distributions, including,
without limitation, indemnities to the effect and to the extent provided in
Section 8 hereof; and the Company will cooperate with such Holders of
Registrable Stock to the end that the conditions precedent to the obligations of
such Holders of Registrable Stock under such underwriting agreement shall not
include conditions that are not customary in underwriting agreements with
respect to secondary distributions and shall be otherwise satisfactory to such
Holders. The Holders on whose behalf shares of Registrable Stock are to be
distributed by such underwriters shall be parties to any such underwriting
agreement and the representations and warranties by, and the other agreements on
the part of the Company to and for the benefit of such underwriters, shall also
be made to and for the benefit of such Holders selling Registrable Stock. Such
Holders shall not be required by the Company to make any representations or
warranties to or agreements with the Company or the underwriters (including any
restrictions on sales inconsistent with Section 5(c) hereof) other than
reasonable representations, warranties or agreements regarding such Holder, such
Holder's Registrable Stock and such Holder's intended method or methods of
disposition and any other representation required by law. If requested by the
underwriters for any Underwritten Offering of Registrable Stock pursuant to a
registration under Section 2 hereof, the Holders on whose behalf shares of
Registrable Stock are to be distributed by such underwriters shall execute and
deliver to such underwriters and the Company an Underwriting Agreement, subject
to the limitations set forth in the preceding two sentences.
(c) Restrictions on Sales by Holders. If any
--------------------------------
registration subject to Section 2 or 4 shall be in connection with an
Underwritten Offering on a firm commitment basis, each Holder agrees, if and to
the extent requested in writing by the managing underwriter, not to effect any
public sales or distribution (other than as part of such Underwritten Offering
pursuant to Section 2 or 4, respectively) of Common Stock, any securities of
the Company similar to Common Stock or any securities of the Company
convertible, exchangeable or exercisable for Common Stock, including a sale
pursuant to Rule 144 or pursuant to a registered offering not being distributed
on a firm commitment basis by or through one or more underwriters, within the
period from seven days prior to the effective date of such registration
statement up to ninety (90) days after the effective date of such registration
statement or such other period not to exceed one hundred and eighty (180) days
after the effective date of such registration statement as may be required by
such managing underwriter.
(d) Restrictions on Sales by the Company. The Company
------------------------------------
agrees not to effect any public sale or distribution of any Common Stock, any
securities of the Company
<PAGE>
7
similar to Common Stock or any securities of the Company convertible,
exchangeable or exercisable for Common Stock (including pursuant to a
registered offering not being distributed on a firm commitment basis by or
through one or more underwriters) within the period from seven days prior to
the effective date of any registration statement that includes Registrable
Stock to be distributed by or through one or more underwriters on a firm
commitment basis up to ninety (90) days after the effective date of such
registration statement or such other period not to exceed one hundred and
eighty (180) days after the effective date of such registration statement as
may be required by such managing underwriter unless such sale or distribution
is pursuant to such registration statement (or a separate registration
statement filed concurrently); provided, however, that the foregoing shall not
-------- -------
prevent the conversion or exchange of any securities pursuant to their terms
into or for other securities or the offer or sale of securities by the Company
pursuant to a dividend reinvestment plan or to its employees or directors
pursuant to an employee benefit plan.
6. Registration Procedures.
-----------------------
(a) Each Prospective Seller shall furnish to the Company such
information as the Company may reasonably require for inclusion in the
registration statement (and the prospectus included therein).
(b) The Prospective Sellers shall not (until further notice)
effect sales of the shares covered by the registration statement after receipt
of telegraphic or written notice from the Company to suspend sales to permit the
Company to correct or update a registration statement or prospectus.
7. Expenses of Registration. All expenses of registration pursuant
------------------------
to either Section 2 or Section 4, including, without limitation, all
registration and filing fees, printing expenses (including reasonable expenses
of printing prospectuses), expenses of compliance with securities or blue sky
laws (including reasonable fees and disbursements of counsel in connection with
blue sky qualifications or registrations (or the obtaining of exemptions
therefrom) of Registrable Stock), fees and disbursements of counsel, auditors
or experts for the Company, expenses of any audits incidental to or required by
any such registration, expenses of all marketing and promotional efforts
requested by the managing underwriter ("Registration Expenses") shall be borne
by the Company; provided, however, that each Prospective Seller shall bear all
-------- -------
underwriting discounts, commissions or fees and all brokerage fees or
commissions relating to the sale of its Registrable Stock and the fees and
expenses of counsel for such Prospective Seller.
8. Indemnification.
----------------
(a) Indemnification by the Company. In connection with any
------------------------------
registration statement filed pursuant to Section 2 or 4 hereof, the Company
shall indemnify and hold harmless each Holder selling Registrable Stock covered
by such registration statement, its directors, officers, employees, agents,
each other Person who participates as an underwriter in the
<PAGE>
8
offering or sale of such securities and each other Person, if any, who controls
such Holder or such underwriter within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act (each, an "Indemnified Person"), against any
losses, claims, damages, liabilities or expenses (including reasonable costs of
investigation and reasonable legal expenses), joint or several, to which such
Person may become subject, insofar as such losses, claims, damages, liabilities
or expenses (or actions or proceedings in respect thereof) arise out of or are
based upon (i) any untrue statement or alleged untrue statement of any material
fact contained in any registration statement under which such securities were
registered under the Act, any preliminary prospectus, final prospectus or
summary prospectus contained therein, or any amendment thereof or supplement
thereto, or any document incorporated by reference therein, or (ii) any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, or (iii) any
violation by the Company of any federal, state or common law rule or regulation
applicable to the Company and relating to action required of or inaction by the
Company in connection with any such registration, and the Company shall
reimburse such Indemnified Person for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, liability, action or proceeding, provided that the Company shall not be
--------
liable in any such case to the extent that any such loss, claim, damage,
liability or expense (or action or proceeding in respect thereof) arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in such registration statement, any such preliminary
prospectus, final prospectus, summary prospectus, amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company through an instrument duly executed by such Indemnified Person
specifically stating that it is for use in the preparation of such registration
statement, preliminary prospectus, final prospectus, summary prospectus,
amendment or supplement. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of such Indemnified Person
and shall survive the transfer of such securities by such seller. The Company
shall agree to a provision for contribution relating to such indemnity as shall
be reasonably requested by any seller of Registrable Shares or the
underwriters.
(b) Indemnification by the Seller. The Company may require, as a
-----------------------------
condition to including any Registrable Stock in any registration statement filed
pursuant to Section 2 or 4 hereof, that the Company shall have received an
undertaking satisfactory to it from each Prospective Seller to indemnify and
hold harmless such Person, each director of such Person, each officer of such
Person who shall sign such registration statement, each Person who participates
as an underwriter (if such underwriter so requests) in the offering or sale of
such securities and each other Person, if any, who controls the Company or any
such underwriter within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act, against any losses, claims, damages, liabilities or expenses
(including reasonable costs of investigation and reasonable legal expenses),
joint or several, to which such Person may become subject, insofar as such
losses, claims, damages, liabilities or expenses (or actions or proceedings in
respect thereof) arise out of or are based upon (i) any untrue statement or
alleged untrue statement of any material fact contained in any registration
statement under which such securities were registered under the Act, any
preliminary prospectus, final prospectus or summary prospectus contained
therein, or
<PAGE>
9
any amendment thereof or supplement thereto, or any document incorporated by
reference therein, or (ii) any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, if such actual or alleged statement or omission
described in (i) or (ii) above was made in reliance upon and in conformity with
written information furnished to such Person through an instrument duly executed
by such Prospective Seller specifically stating that it is for use in the
preparation of such registration statement, preliminary prospectus, final
prospectus, summary prospectus, amendment or supplement. The indemnification
obligations of any Prospective Seller shall not be greater than the dollar
amount of the net proceeds received by such Prospective Seller upon the sale of
the Registrable Stock giving rise to such obligation. Such indemnity shall
remain in full force and effect regardless of any investigation made by or on
behalf of such Person or any such director, officer, participating Person or
controlling Person and shall survive the transfer of such securities by such
Prospective Seller.
(c) Notice of Claims, etc. Promptly after
----------------------
receipt by an indemnified party of notice of the commencement of any action,
proceeding, investigation or threat involving a claim referred to in
Section 8(a) or 8(b), such indemnified party shall, if a claim in respect
thereof is to be made against an indemnifying party, give written notice to the
latter of the commencement of such action, proceeding, investigation or threat;
provided that the failure of any indemnified party to give notice as provided
- --------
herein shall not relieve the indemnifying party of its obligations under the
preceding subdivisions of this Section 8 except to the extent that the
indemnifying party is actually prejudiced by such failure to give notice. In
case any such action is brought against an indemnified party, unless a conflict
of interest between such indemnified and indemnifying parties exists in respect
of such claim, the indemnifying party shall be entitled to participate in and to
assume the defense thereof, jointly with any other indemnifying party similarly
notified, to the extent that it may wish, and after notice from the indemnifying
party to such indemnified party of its elections so to assume the defense
thereof, the indemnifying party shall not be liable to such indemnified party
for any legal or other expenses subsequently incurred by the latter in
connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the consent of the
indemnified party, which consent shall not be unreasonably withheld or delayed,
consent to entry of any judgment or enter into any settlement that does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such indemnified party of a release from all liability in respect to such
claim or litigation.
(d) Other Indemnification. Indemnification similar to that
---------------------
specified in the preceding subdivisions of this Section 8 (with appropriate
modifications) shall be given by the Company and each seller of Registrable
Stock with respect to any required registration or other qualification of such
Registrable Stock under any state securities or blue sky law or regulation of a
governmental authority other than the Act.
(e) Contribution. If the indemnification provided for in Section
------------
8(a) or 8(b) above is unavailable or insufficient to hold harmless an
indemnified party in respect of any losses, claims, damages or liabilities
referred to therein, then each indemnifying party, in lieu of
<PAGE>
10
indemnifying such indemnified party thereunder, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities, in such proportion as is appropriate to reflect the
relative fault of the indemnifying party on the one hand and of the indemnified
parties on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. Such relative fault shall be determined by
reference to, among other things, whether any untrue or alleged untrue statement
of a material fact or any omission or alleged omission to state a material fact
relates to information supplied by the indemnifying party, or by the indemnified
parties, and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Company and the Holders agree that it would not be just and
equitable if contribution pursuant to this Section 8(e) were determined by pro
---
rata allocation or by any other method of allocation that does not take into
- ----
account the equitable considerations referred to in the immediately preceding
paragraph; provided that the Company and each holder of Registrable Stock shall
--------
agree with each other and the underwriters of the Registrable Stock, if
requested by such underwriters, that the underwriter's portion of such
contribution shall not exceed the underwriting discount. The amount paid or
payable by an indemnified party as a result of the losses, claims, damages and
liabilities or actions in respect thereof referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
The contribution obligations of any Prospective Seller shall not be greater than
the excess of (A) the dollar amount of the net proceeds received by such
Prospective Seller upon the sale of the Registrable Stock giving rise to such
contribution obligation over (B) the dollar amount of any damages that such
Holder has otherwise been required to pay by reason of the untrue or alleged
untrue statement or omission or alleged omission giving rise to such obligation.
No Person guilty of fraudulent misrepresentations (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any Person who
was not guilty of such fraudulent misrepresentation.
(f)Indemnification Payments. The indemnification required by
------------------------
this Section 8 shall be made by periodic payments of the amount thereof during
the course of the investigation or defense, as and when bills are received or
expense, loss, damage or liability is incurred.
9. Miscellaneous.
-------------
(a) Notices. Any notice or other communication required or
-------
permitted to be given hereunder shall be in writing and shall be sent by
overnight courier service; or delivered (in person or by telecopy) against
receipt, in each case to the party to whom it is given: (i) if to the Company,
to it at 12 East 49th Street, 19th Floor, New York, New York 10017, with a copy
to Gibson, Dunn & Crutcher LLP, 200 Park Avenue, 48th Floor, New York, New York
10016, attention: Charles K. Marquis; and (ii) if to the Holders, to each at
the address set forth on Exhibit B to this Agreement.
<PAGE>
11
Any notice or other communication given hereunder shall be deemed
given when sent, except for a notice changing a party's address, which shall be
deemed given at the time of receipt thereof.
(b) Assignment. Except with respect to Permitted Transferees,
----------
neither this Agreement nor any of the rights, interests or obligations hereunder
shall be assigned by the Company or the Holders without the prior written
consent of the other party, and any purported assignment shall be void.
(c) Binding Effect. The provisions of this Agreement shall be
--------------
binding upon and inure to the benefit of the Company and the Holders and their
respective successors and permitted assigns.
(d) Third-Party Beneficiaries. This Agreement does not create,
-------------------------
and shall not be construed as creating, any rights enforceable by any Person not
a party to this Agreement other than any assignee with respect to whom the
respective assignment was made in accordance with the terms hereof.
(e) Effectiveness. This Agreement shall be effective as of the
-------------
Effective Date.
(f) Counterparts. This Agreement may be executed in any number
------------
of counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(g) Governing Law. This Agreement and the rights and
-------------
obligations of the parties under this Agreement shall be governed by, and
construed and interpreted in accordance with, the substantive law of the State
of New York without regard to principles of choice or conflicts of laws.
(h) Attorney's Fees. In the event of litigation arising between
---------------
the parties respecting the subject matter hereof, the prevailing party shall be
entitled to recover its reasonable attorney's fees and costs.
(i) Expenses. Except as otherwise specifically set forth
--------
herein, each party shall bear its own costs and expenses incurred in connection
with this Agreement or the transactions herein contemplated.
<PAGE>
12
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement or
caused this Agreement to be executed by their respective officers thereunto duly
authorized as of the day and year first written above.
SAKS HOLDINGS, INC.
By:___________________________________
Name:
Title:
SHAREHOLDERS:
FIFTH AVENUE HOLDINGS LIMITED
By:___________________________________
Name:
Title:
FIFTH AVENUE INVESTMENTS LIMITED
By:___________________________________
Name:
Title:
FIFTH AVENUE EQUITY LIMITED
By:___________________________________
Name:
Title:
SFA HOLDINGS LIMITED
By:___________________________________
Name:
Title:
<PAGE>
13
SFA INVESTMENTS LIMITED
By:___________________________________
Name:
Title:
SFA EQUITY LIMITED
By:___________________________________
Name:
Title:
REAL CLOTHES HOLDINGS LIMITED
By:___________________________________
Name:
Title:
REAL CLOTHES INVESTMENTS LIMITED
By:___________________________________
Name:
Title:
REAL CLOTHES EQUITY LIMITED
By:___________________________________
Name:
Title:
<PAGE>
14
WORKS HOLDINGS LIMITED
By:___________________________________
Name:
Title:
J.C. ORR & CO.
By:___________________________________
Name:
Title:
MACRO INTERNATIONAL LTD
By:___________________________________
Name:
Title:
GOVERNMENT OF KUWAIT
By:___________________________________
Name:
Title:
SAKS FIFTH AVENUE HOLDINGS II LIMITED
By:___________________________________
Name:
Title:
<PAGE>
15
SAKS FIFTH AVENUE INVESTMENTS II
LIMITED
By:___________________________________
Name:
Title:
SFA SAUDI INVESTMENTS LIMITED
By:___________________________________
Name:
Title:
SFA SAUDI HOLDINGS LIMITED
By:___________________________________
Name:
Title:
SFA LABEL INVESTMENTS LIMITED
By:___________________________________
Name:
Title:
ESTATE OF BERNICE PAUAHI BISHOP
By:___________________________________
Name:
Title:
<PAGE>
16
SFA FOLIO LIMITED
By:___________________________________
Name:
Title:
SFA LABEL LIMITED
By:___________________________________
Name:
Title:
SFA COLLECTION LIMITED
By:___________________________________
Name:
Title:
SFA DESIGNER LIMITED
By:___________________________________
Name:
Title:
SAKS FIFTH AVENUE EQUITY LIMITED
By:___________________________________
Name:
Title:
FLAIR LIMITED
By:___________________________________
Name:
Title:
<PAGE>
17
CHEMICAL NOMINEES (GUERNSEY) LTD.
By:___________________________________
Name:
Title:
SAKS INVESTMENTS LIMITED
By:___________________________________
Name:
Title:
SAKS EQUITY LIMITED
By:___________________________________
Name:
Title:
SAKS CAPITAL LIMITED
By:___________________________________
Name:
Title:
BALLET LIMITED
By:___________________________________
Name:
Title:
DENARY LIMITED
By:___________________________________
Name:
Title:
<PAGE>
18
GLEAM LIMITED
By:___________________________________
Name:
Title:
HIGHLANDS LIMITED
By:___________________________________
Name:
Title:
NOBLE LIMITED
By:___________________________________
Name:
Title:
OUTRIGGER LIMITED
By:___________________________________
Name:
Title:
QUILL LIMITED
By:___________________________________
Name:
Title:
RADIAL LIMITED
By:___________________________________
Name:
Title:
<PAGE>
19
SHORELINE LIMITED
By:___________________________________
Name:
Title:
ZINNIA LIMITED
By:___________________________________
Name:
Title:
Exhibit 5.01
September 17, 1996
(212) 351-4000 C 80337-00058
Saks Holdings, Inc.
12 East 49th Street
New York, New York 10017
Re: "Registration Statement on Form S-1
-----------------------------------
Ladies and Gentlemen:
We have examined the Registration Statement on Form S-1 (the
"Registration Statement"), File No. 333-11101, of Saks Holdings, Inc., a
Delaware corporation (the "Company"), filed with the Securities and
Exchange Commission (the "Commission") pursuant to the Securities Act of
1933, as amended (the "Securities Act"), in connection with the public
offering by the Company of up to $230,000,000 aggregate principal amount of
_____% Convertible Subordinated Notes due 2006 (the "Notes"). The Notes
are convertible into shares of the Company's Common Stock, par value $.01
per share ("the Common Stock"). The Notes are to be publicly offered and
sold by Goldman Sachs & Co., CS First Boston, Morgan Stanley & Co. and
Salomon Brothers Inc (collectively, the "Underwriters"). The Notes will be
issued by the Company pursuant to the terms of an Indenture (the
"Indenture") to be entered into between the Company and Bankers Trust
Company, as Trustee (the "Trustee"). The Notes will be acquired by the
Underwriters pursuant to the terms of an Underwriting Agreement (the
"Underwriting Agreement") to be entered into between the Company and the
Underwriters. Forms of the Underwriting Agreement and the Indenture have
been filed as exhibits to the Registration Statement.
<PAGE>
Saks Holdings, Inc.
September 17, 1996
Page 2
For the purposes of the opinions set forth below, we have
examined and are familiar with the proceedings taken and proposed to be
taken by the Company in connection with the issuance and sale of the Notes,
as well as the issuance of shares of Common Stock upon conversion of the
Notes. In arriving at the following opinions, we have relied, among other
things, upon our examination of such corporate records of the Company and
certificates of officers of the Company and of public officials and such
other documents as we have deemed appropriate. In such examination, we
have assumed the genuineness of all signatures, the authenticity of all
documents submitted to us as originals, the conformity to original
documents of all documents submitted to us as certified or photostatic
copies and the authenticity of the originals of such copies.
Based upon the foregoing examination and in reliance thereon, and
subject to the assumptions stated and relying on statements of fact
contained in the documents that we have examined and subject to the
completion of the proceedings to be taken by the Company, the Trustee and
the Underwriters prior to the sale of the Notes and subject to the receipt
from the Commission of an order declaring the Registration Statement
effective, it is our opinion that:
1. The Notes, when executed, issued and delivered in accordance
with the terms of the Indenture and the Underwriting Agreement (assuming
due execution and delivery of the Indenture and authentication of the Notes
by the Trustee and payment for the Notes by the Underwriters), will be
binding obligations of the Company.
2. The shares of Common Stock issuable upon conversion of the
Notes, when issued in accordance with the terms and conditions of the Notes
and the Indenture, will be validly issued, fully paid and non-assessable.
Our opinion is subject to (i) the effect of
applicable bankruptcy, insolvency, reorganization, moratorium, arrangement
and other laws affecting creditor's rights, including, without limitation,
the effect of statutory or other laws regarding fraudulent conveyances,
fraudulent transfers and preferential transfers; (ii) the limitations
imposed by general principles of equity (regardless of whether such
enforceability is considered in a proceeding at law or in equity); and
(iii) our assumption that there exist no agreements, understandings or
negotiations among the parties to the Indenture or to the
<PAGE>
Saks Holdings, Inc.
September 17, 1996
Page 3
Underwriting Agreement that would modify the terms of either thereof or the
respective rights or obligations of the parties thereunder.
We render no opinion herein as to matters involving the laws of
any jurisdiction other than the laws of the United States of America, the
laws of the State of New York and, for the purposes of our opinion set
forth in paragraph 2 above, the General Corporation Law of the State of
Delaware. In rendering this opinion, we assume no obligation to revise or
supplement this opinion should current laws, or the interpretations
thereof, be changed.
We consent to the filing of this opinion as an exhibit to the
Registration Statement, and we further consent to the use of our name under
the caption "Validity of Notes" in the Registration Statement and the
Prospectus which forms a part thereof. In giving these consents, we do not
thereby admit that we are within the category of persons whose consent is
required under Section 7 of the Securities Act or the Rules and Regulations
of the Commission.
Very truly yours,
/s/ GIBSON, DUNN & CRUTCHER LLP
Exhibit 8.01
September 17, 1996
(212) 351-4000 C 80337-00058
Saks Holdings, Inc.
12 East 49th Street
New York, New York 10017
Re: Registration Statement on Form S-1
Ladies and Gentlemen:
At your request and in connection with the public offering by
Saks Holdings, Inc., a Delaware corporation (the "Company"), of up to
$230,000,000 aggregate principal amount of Convertible Subordinated Notes
due 2006, we have examined the Company's Registration Statement on Form S-1
(File No. 333-11101) (the "Registration Statement") filed with the
Securities and Exchange Commission (the "Commission") on August 29, 1996,
as amended by Amendment No. 1 thereto (the "Amendment"), filed with the
Commission on September 5, 1996 and Amendment No. 2 thereto, filed with the
Commission on the date hereof.
We hereby confirm our opinions set forth in the prospectus
contained in the Amendment under the caption "Certain Tax Considerations."
We hereby consent to the filing of this opinion as an exhibit to
the Registration Statement, and we further consent to the use of our name
under the captions "Validity of Notes" and "Certain Tax Considerations".
In giving this consent, we do not thereby admit that we are
<PAGE>
within the category of persons whose consent is required under Section 7 of
the Securities Act of 1933, as amended, or the rules and regulations
promulgated thereunder.
Very truly yours,
/s/ GIBSON, DUNN & CRUTCHER LLP
--------------------
[Footnote continued from previous page]
EXHIBIT 25.01
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION
DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) ___________
BANKERS TRUST COMPANY
(Exact name of trustee as specified in its charter)
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NEW YORK 13-4941247
(Jurisdiction of Incorporation or (I.R.S. Employer
organization if not a U.S. national bank) Identification no.)
FOUR ALBANY STREET
NEW YORK, NEW YORK 10006
(Address of principal (Zip Code)
executive offices)
Bankers Trust Company
Legal Department
130 Liberty Street, 31st Floor
New York, New York 10006
(212) 250-2201
(Name, address and telephone number of agent for service)
---------------------------------
Saks Holdings, Inc.
(Exact name of obligor as specified in its charter)
Delaware 52-1685667
(State or other jurisdiction of (I.R.S. employer
Incorporation or organization) Identification no.)
12 East 49th Street New York, NY 10017
(Address of principal executive offices) (Zip Code)
_____% CONVERTIBLE SUBORDINATED NOTES DUE SEPTEMBER ___, 2006
(Title of the indenture securities)
<PAGE>
Item 1. General Information.
Furnish the following information as to the trustee.
(a) Name and address of each examining or supervising authority
to which it is subject.
Name Address
Federal Reserve Bank (2nd District) New York, NY
Federal Deposit Insurance Corporation Washington, D.C.
New York State Banking Department Albany, NY
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with Obligor.
If the obligor is an affiliate of the Trustee, describe each such
affiliation.
None.
Item 3. -15. Not Applicable
Item 16. List of Exhibits.
Exhibit 1 - Restated Organization Certificate of Bankers Trust
Company dated August 7, 1990 and Certificate of
Admendment of the Organization Certificate of
Bankers Trust Company dated March 21, 1996, copy
attached.
Exhibit 2 - Certificate of Authority to commence business
- Incorporated herein by reference to Exhibit 2
filed with Form T-1 Statement, Registration No.
33-21047.
Exhibit 3 - Authorization of the Trustee to exercise
corporate trust powers Incorporated herein by
reference to Exhibit 2 filed with Form T-1
Statement, Registration No. 33-21047.
Exhibit 4 - Existing By-Laws of Bankers Trust Company,
dated as amended on October 19, 1995. -
Incorporated herein by reference to Exhibit 4
filed with Form T-1 Statement, Registration No.
33-65171.
-2-
<PAGE>
Exhibit 5 - Not applicable.
Exhibit 6 - Consent of Bankers Trust Company required by
Section 321(b) of the Act. Incorporated herein by
reference to Exhibit 4 filed with Form T-1
Statement, Registration No. 22-18864.
Exhibit 7 - A copy of the latest report of condition of
Bankers Trust Company dated as of June 30, 1996.
Exhibit 8 - Not Applicable.
Exhibit 9 - Not Applicable.
-3-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Bankers Trust Company, a corporation organized and
existing under the laws of the State of New York, has duly caused this statement
of eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in The City of New York, and State of New York, on the 29th day
of August, 1996.
BANKERS TRUST COMPANY
By: /s/ Jenna Kaufman
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Jenna Kaufman
Vice President
<PAGE>
<TABLE>
<S> <C> <C> <C>
Legal Title of Bank: Bankers Trust Company Call Date: 6/30/96 ST-BK: 36-4840 FFIEC 031
Address: 130 Liberty Street Vendor ID: D CERT: 00623 Page RC-1
City, State ZIP: New York, NY 10006 11
FDIC Certificate No.: | 0 | 0 | 6 | 2 | 3
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks June 30, 1996
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, reported the amount outstanding as of the last business day of the
quarter.
Schedule RC--Balance Sheet
</TABLE>
<TABLE><CAPTION>
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C400
Dollar Amounts in Thousands | RCFD Bil Mil Thou
ASSETS
<S> <C> <C>
1. Cash and balances due from depository institutions (from Schedule RC-A):
a. Noninterest-bearing balances and currency and coin(1) ........... 0081 1,631,000 1.a.
b. Interest-bearing balances(2) .................................... 0071 2,066,000 1.b.
2. Securities:
a. Held-to-maturity securities (from Schedule RC-B, column A) ...... 1754 0 2.a.
b. Available-for-sale securities (from Schedule RC-B, column D)..... 1773 3,761,000 2.b.
3 Federal funds sold and securities purchased under agreements to resell
in domestic offices
of the bank and of its Edge and Agreement subsidiaries, and in IBFs:
a. Federal funds sold ............................................... 0276 5,162,000 3.a.
b. Securities purchased under agreements to resell .................. 0277 4,192,000 3.b.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income (from Schedule RC-C) RCFD 2122 24,849,000 4.a.
b. LESS: Allowance for loan and lease losses........................RCFD 3123 923,000 4.b.
c. LESS: Allocated transfer risk reserve ...........................RCFD 3128 0 4.c.
d. Loans and leases, net of unearned income,
allowance, and reserve (item 4.a minus 4.b and 4.c) ............... 2125 23,926,000 4.d.
5. Assets held in trading accounts ......................................... 3545 33,052,000 5.
6. Premises and fixed assets (including capitalized leases) ................ 2145 858,000 6.
7. Other real estate owned (from Schedule RC-M) ............................ 2150 216,000 7.
8. Investments in unconsolidated subsidiaries and associated companies
(from Schedule RC-M) 2130 271,000 8.
9. Customers' liability to this bank on acceptances outstanding ............ 2155 572,000 9.
10. Intangible assets (from Schedule RC-M) ................................... 2143 18,000 10.
11. Other assets (from Schedule RC-F) ........................................ 2160 7,612,000 11.
12. Total assets (sum of items 1 through 11) ................................ 2170 83,337,000 12.
</TABLE>
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(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held in trading accounts.
<PAGE>
<TABLE>
<S> <C> <C> <C>
Legal Title of Bank: Bankers Trust Company Call Date: 6/30/96 ST-BK: 36-4840 FFIEC 031
Address: 130 Liberty Street Vendor ID: D CERT: 00623 Page RC-2
City, State Zip: New York, NY 10006 12
FDIC Certificate No.: | 0 | 0 | 6 | 2 | 3
Schedule RC--Continued
</TABLE>
<TABLE><CAPTION>
Dollar Amounts in Thousands Bil Mil Thou
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LIABILITIES
<S> <C> <C> <C>
13. Deposits:
a. In domestic offices (sum of totals of columns A and C from Schedule RC-E, part I) RCON 2200 9,040,000 13.a.
(1) Noninterest-bearing(1) ..........RCON 6631 3,569,000.......... 13.a.(1)
(2) Interest-bearing .................RCON 6636 5,471,000.......... 13.a.(2)
b. In foreign offices, Edge and Agreement subsidiaries, and IBFs (from Schedule RC-E
part II) RCFN 2200 19,648,000 13.b.
(1) Noninterest-bearing .......................RCFN 6631 494,000 13.b.(1)
(2) Interest-bearing .................RCFN 6636 19,154,000 13.b.(2)
14. Federal funds purchased and securities sold under agreements to repurchase in
domestic offices of the bank and of its Edge and Agreement subsidiaries, and in IBFs:
a. Federal funds purchased ........................................................ RCFD 0278 2,564,000 14.a.
b. Securities sold under agreements to repurchase ................................. RCFD 0279 790,000 14.b.
15. a. Demand notes issued to the U.S. Treasury ....................................... RCON 2840 0 15.a.
b. Trading liabilities ............................................................ RCFD 3548 18,177,000 15.b.
16. Other borrowed money:
a. With original maturity of one year or less ..................................... RCFD 2332 16,421,000 16.a.
b. With original maturity of more than one year ................................... RCFD 2333 3,388,000 16.b.
17. Mortgage indebtedness and obligations under capitalized leases ...................... RCFD 2910 31,000 17.
18. Bank's liability on acceptances executed and outstanding ............................ RCFD 2920 572,000 18.
19. Subordinated notes and debentures ................................................... RCFD 3200 1,227,000 19.
20. Other liabilities (from Schedule RC-G) .............................................. RCFD 2930 6,911,000 20.
21. Total liabilities (sum of items 13 through 20) ...................................... RCFD 2948 78,769,000 21.
22. Limited-life preferred stock and related surplus .................................... RCFD 3282 0 22.
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus ....................................... RCFD 3838 500,000 23.
24. Common stock ........................................................................ RCFD 3230 1,002,000 24.
25. Surplus (exclude all surplus related to preferred stock) ............................ RCFD 3839 528,000 25.
26. a. Undivided profits and capital reserves ......................................... RCFD 3632 2,915,000 26.a.
b. Net unrealized holding gains (losses) on available-for-sale securities ......... RCFD 8434 (5,000) 26.b.
27. Cumulative foreign currency translation adjustments ................................. RCFD 3284 (372,000) 27.
28. Total equity capital (sum of items 23 through 27) ................................... RCFD 3210 4,568,000 28.
29. Total liabilities, limited-life preferred stock, and equity capital (sum of items 21, 22,
and 28) .......................................................................... RCFD 3300 83,337,000 29.
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Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that best
describes the most comprehensive level of auditing work performed for the Number
bank by independent external auditors as of any date during 1995 ............... RCFD 6724 N/A M.1
1 = Independent audit of the bank conducted in accordance 4 = Directors'
examination of the bank performed by other with generally accepted
auditing standards by a certified external auditors (may be required by
state chartering public accounting firm which submits a report on the
bank authority)
2 = Independent audit of the bank's parent holding company conducted in
accordance with generally accepted auditing standards by a certified
public accounting firm which submits a report on the consolidated
holding company (but not on the bank separately)
3 = Directors' examination of the bank conducted in accordance with
generally accepted auditing standards by a certified public accounting
firm (may be required by state chartering authority)
4 = Director's examination of the bank performed by other externa auditors
(may be required by state chartering authority).
5 = Review of the bank's financial statements by external auditors
6 = Compilation of the bank's financial statements by external auditors
7 = Other audit procedures (excluding tax preparation work)
8 = No external audit work
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(1) Including total demand deposits and noninterest-bearing time and savings
deposits.
</TABLE>
<PAGE>
State of New York,
Banking Department
I, PETER M. PHILBIN, Deputy Superintendent of Bank of the State of New
York, DO HEREBY APPROVE the annexed Certificate entitled "CERTIFICATE OF
AMENDMENT OF THE ORGANIZATION CERTIFICATE OF BANKERS TRUST COMPANY Under Section
8005 of the Banking Law," dated March 20, 1996, providing for an increase in
authorized capital stock from $1,351,666,670 consisting of 85,166,667 shares
with a par value of $10 each designated as Common Stock and 500 shares with a
par value of $1,000,000 each designated as Series Preferred Stock to
$1,501,666,670 consisting of 100,166,667 shares with a par value of $10 each
designated as Common Stock and 500 shares with a par value of $1,000,000 each
designated as Series Preferred Stock.
Witness, my hand and official seal of the Banking Department at the City of New
York, this 21st day of March in the Year of our Lord one thousand nine hundred
and ninety-six.
Peter M. Philbin
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Deputy Superintendent of Banks
<PAGE>
CERTIFICATE OF AMENDMENT
OF THE
ORGANIZATION CERTIFICATE
OF BANKERS TRUST
Under Section 8005 of the Banking Law
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We, James T. Byrne, Jr. and Lea Lahtinen, being respectively a Managing
Director and an Assistant Secretary of Bankers Trust Company, do hereby certify:
1. The name of the corporation is Bankers Trust Company.
2. The organization certificate of said corporation was filed by the
Superintendent of Banks on the 5th of March, 1903.
3. The organization certificate as heretofore amended is hereby amended
to increase the aggregate number of shares which the corporation shall have
authority to issue and to increase the amount of its authorized capital stock in
conformity therewith.
4. Article III of the organization certificate with reference to the
authorized capital stock, the number of shares into which the capital stock
shall be divided, the par value of the shares and the capital stock outstanding,
which reads as follows:
"III. The amount of capital stock which the corporation is hereafter to
have is One Billion, Three Hundred Fifty One Million, Six Hundred
Sixty-Six Thousand, Six Hundred Seventy Dollars ($1,351,666,670),
divided into Eighty-Five Million, One Hundred Sixty-Six Thousand, Six
Hundred Sixty-Seven (85,166,667) shares with a par value of $10 each
designated as Common Stock and 500 shares with a par value of One
Million Dollars ($1,000,000) each designated as Series Preferred Stock."
is hereby amended to read as follows:
"III. The amount of capital stock which the corporation is hereafter to
have is One Billion, Five Hundred One Million, Six Hundred Sixty-Six
Thousand, Six Hundred Seventy Dollars ($1,501,666,670), divided into One
Hundred Million, One Hundred Sixty Six Thousand, Six Hundred Sixty-Seven
(100,166,667) shares with a par value of $10 each designated as Common
Stock and 500 shares with a par value of One Million Dollars
($1,000,000) each designated as Series Preferred Stock."
<PAGE>
6. The foregoing amendment of the organization certificate was
authorized by unanimous written consent signed by the holder of all outstanding
shares entitled to vote thereon.
IN WITNESS WHEREOF, we have made and subscribed this certificate this
20th day of March , 1996.
James T. Byrne, Jr.
-------------------
James T. Byrne, Jr.
Managing Director
Lea Lahtinen
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Lea Lahtinen
Assistant Secretary
State of New York )
) ss:
County of New York )
Lea Lahtinen, being fully sworn, deposes and says that she is an
Assistant Secretary of Bankers Trust Company, the corporation described in the
foregoing certificate; that she has read the foregoing certificate and knows the
contents thereof, and that the statements herein contained are true.
Lea Lahtinen
------------
Lea Lahtinen
Sworn to before me this 20th day of March, 1996.
Sandra L. West
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Notary Public
SANDRA L. WEST Counterpart filed in the
Notary Public State of New York Office of the Superintendent of
No. 31-4942101 Banks, State of New York,
Qualified in New York County This 21st day of March, 1996
Commission Expires September
19, 1996
