<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 10-Q
(Mark One)
<TABLE>
<S> <C>
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended July 12, 1997
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 1-8140
</TABLE>
------------------------
FLEMING COMPANIES, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
OKLAHOMA 48-0222760
(State of Incorporation) (I.R.S. Employer
Identification No.)
6301 WATERFORD
BOULEVARD, BOX 26647
OKLAHOMA CITY, OKLAHOMA 73126
(Address of principal (Zip code)
executive offices)
</TABLE>
Registrant's telephone number, including area code: (405) 840-7200
(Former name, former address and former fiscal year, if changed since last
report.)
------------------------
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes _X_ No ____
The number of shares outstanding of each of the issuer's classes of common
stock, as of August 8, 1997 is as follows:
<TABLE>
<S> <C>
Class Shares Outstanding
Common stock, $2.50 par value 37,804,000
</TABLE>
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<PAGE>
INDEX
<TABLE>
<CAPTION>
PAGE NUMBER
-----------
<S> <C>
PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements
Consolidated Condensed Statements of Earnings --
12 Weeks Ended July 12, 1997, and July 13, 1996................................................... 3
Consolidated Condensed Statements of Earnings --
28 Weeks Ended July 12, 1997, and July 13, 1996................................................... 4
Consolidated Condensed Balance Sheets--
July 12, 1997, and December 28, 1996.............................................................. 5
Consolidated Condensed Statements of Cash Flows--
28 Weeks Ended July 12, 1997, and July 13, 1996................................................... 6
Notes to Consolidated Condensed Financial Statements................................................ 7
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations........................................................................ 14
PART II. OTHER INFORMATION:
Item 1. Legal Proceedings............................................................................ 23
Item 6. Exhibits and Reports on Form 8-K............................................................. 25
Signatures.............................................................................................. 26
</TABLE>
2
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
FLEMING COMPANIES, INC.
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
FOR THE 12 WEEKS ENDED JULY 12, 1997, AND JULY 13, 1996
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
1997 1996
------------ ------------
<S> <C> <C>
Net sales............................................................................. $ 3,550,654 $ 3,742,331
Costs and expenses:
Cost of sales....................................................................... 3,219,989 3,397,509
Selling and administrative.......................................................... 274,878 301,532
Interest expense.................................................................... 36,223 37,660
Interest income..................................................................... (10,940) (11,301)
Equity investment results........................................................... 3,239 4,099
Litigation charge................................................................... -- (6,460)
------------ ------------
Total costs and expenses.......................................................... 3,523,389 3,723,039
------------ ------------
Earnings before taxes................................................................. 27,265 19,292
Taxes on income....................................................................... 12,378 9,858
------------ ------------
Earnings before extraordinary charge.................................................. 14,887 9,434
Extraordinary charge from early retirement of debt (net of taxes)..................... 13,330 --
------------ ------------
Net earnings.......................................................................... $ 1,557 $ 9,434
------------ ------------
------------ ------------
Net earnings per share:
Earnings before extraordinary charge................................................ $ .39 $ .25
Extraordinary charge................................................................ .35 --
------------ ------------
Net earnings........................................................................ $ .04 $ .25
------------ ------------
------------ ------------
Dividends paid per share.............................................................. $ .02 $ .02
------------ ------------
------------ ------------
Weighted average shares outstanding................................................... 37,804 37,788
------------ ------------
------------ ------------
</TABLE>
See notes to consolidated condensed financial statements.
3
<PAGE>
FLEMING COMPANIES, INC.
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
FOR THE 28 WEEKS ENDED JULY 12, 1997, AND JULY 13, 1996
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
1997 1996
------------ ------------
<S> <C> <C>
Net sales............................................................................. $ 8,302,685 $ 8,910,565
Costs and expenses:
Cost of sales....................................................................... 7,539,338 8,108,623
Selling and administrative.......................................................... 638,594 699,275
Interest expense.................................................................... 85,045 90,090
Interest income..................................................................... (25,294) (26,725)
Equity investment results........................................................... 7,317 7,264
Litigation charge................................................................... 19,218 650
------------ ------------
Total costs and expenses.......................................................... 8,264,218 8,879,177
------------ ------------
Earnings before taxes................................................................. 38,467 31,388
Taxes on income....................................................................... 18,316 16,039
------------ ------------
Earnings before extraordinary charge.................................................. 20,151 15,349
Extraordinary charge from early retirement of debt (net of taxes)..................... 13,330 --
------------ ------------
Net earnings.......................................................................... $ 6,821 $ 15,349
------------ ------------
------------ ------------
Net earnings per share:
Earnings before extraordinary charge................................................ $ .53 $ .41
Extraordinary charge................................................................ .35 --
------------ ------------
Net earnings........................................................................ $ .18 $ .41
------------ ------------
------------ ------------
Dividends paid per share.............................................................. $ .04 $ .32
------------ ------------
------------ ------------
Weighted average shares outstanding................................................... 37,802 37,760
------------ ------------
------------ ------------
</TABLE>
See notes to consolidated condensed financial statements.
4
<PAGE>
FLEMING COMPANIES, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(IN THOUSANDS)
ASSETS
<TABLE>
<CAPTION>
JULY 12, DECEMBER 28,
1997 1996
------------ ------------
<S> <C> <C>
Current assets:
Cash and cash equivalents.......................................................... $ 3,888 $ 63,667
Receivables........................................................................ 323,531 329,505
Inventories........................................................................ 930,368 1,051,313
Other current assets............................................................... 84,623 119,123
------------ ------------
Total current assets............................................................. 1,342,410 1,563,608
Investments and notes receivable..................................................... 182,501 205,683
Investment in direct financing leases................................................ 204,779 212,202
Property and equipment............................................................... 1,578,707 1,562,382
Less accumulated depreciation and amortization..................................... (659,232) (603,241)
------------ ------------
Net property and equipment........................................................... 919,475 959,141
Other assets......................................................................... 124,949 118,096
Goodwill............................................................................. 982,303 996,446
------------ ------------
Total assets......................................................................... $ 3,756,417 $4,055,176
------------ ------------
------------ ------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable................................................................... $ 758,365 $ 952,769
Current maturities of long-term debt............................................... 38,043 124,613
Current obligations under capital leases........................................... 20,465 19,715
Other current liabilities.......................................................... 236,227 245,774
------------ ------------
Total current liabilities........................................................ 1,053,100 1,342,871
Long-term debt....................................................................... 1,110,415 1,091,606
Long-term obligations under capital leases........................................... 350,584 361,685
Deferred income taxes................................................................ 26,683 37,729
Other liabilities.................................................................... 132,902 145,327
Commitments and contingencies
Shareholders' equity:
Common stock, $2.50 par value per share............................................ 94,510 94,494
Capital in excess of par value..................................................... 503,886 503,595
Reinvested earnings................................................................ 519,726 514,408
Cumulative currency translation adjustment......................................... (4,700) (4,700)
------------ ------------
1,113,422 1,107,797
Less ESOP note..................................................................... (5,792) (6,942)
Less additional minimum pension liabilities........................................ (24,897) (24,897)
------------ ------------
Total shareholders' equity..................................................... 1,082,733 1,075,958
------------ ------------
Total liabilities and shareholders' equity........................................... $ 3,756,417 $4,055,176
------------ ------------
------------ ------------
</TABLE>
See notes to consolidated condensed financial statements.
5
<PAGE>
FLEMING COMPANIES, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
FOR THE 28 WEEKS ENDED JULY 12, 1997, AND JULY 13, 1996
(IN THOUSANDS)
<TABLE>
<CAPTION>
1997 1996
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net earnings.......................................................................... $ 6,821 $ 15,349
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization....................................................... 98,625 97,681
Credit losses....................................................................... 11,235 14,953
Deferred income taxes............................................................... 14,644 (4,277)
Equity investment results........................................................... 7,317 7,264
Gain on sale of businesses.......................................................... (1,023) (3,578)
Cost of early debt retirement....................................................... 22,227 --
Consolidation and reserve payments.................................................. (14,630) (8,704)
Change in assets and liabilities, excluding effect of acquisitions:
Receivables....................................................................... 5,300 (2,950)
Inventories....................................................................... 120,583 190,034
Accounts payable.................................................................. (192,448) (137,943)
Other assets and liabilities...................................................... (22,153) 8,898
Other adjustments, net.............................................................. (1,197) (1,779)
----------- -----------
Net cash provided by operating activities......................................... 55,301 174,948
----------- -----------
Cash flows from investing activities:
Collections on notes receivable....................................................... 32,536 37,385
Notes receivable funded............................................................... (24,859) (35,158)
Purchase of property and equipment.................................................... (49,405) (69,408)
Proceeds from sale of property and equipment.......................................... 8,665 8,985
Investments in customers.............................................................. (1,405) (156)
Proceeds from sale of investment...................................................... 2,196 1,665
Businesses acquired................................................................... (9,572) --
Proceeds from sale of businesses...................................................... 1,811 9,244
Other investing activities............................................................ 4,378 4,315
----------- -----------
Net cash used in investing activities............................................. (35,655) (43,128)
----------- -----------
Cash flows from financing activities:
Proceeds from long-term borrowings.................................................... 110,000 128,000
Principal payments on long-term debt.................................................. (177,493) (191,641)
Principal payments on capital lease obligations....................................... (10,697) (10,879)
Sale of common stock under incentive stock and stock ownership plans.................. 301 1,808
Dividends paid........................................................................ (1,505) (11,876)
Other financing activities............................................................ (31) (5,221)
----------- -----------
Net cash used in financing activities............................................. (79,425) (89,809)
----------- -----------
Net increase (decrease) in cash and cash equivalents.................................... (59,779) 42,011
Cash and cash equivalents, beginning of period.......................................... 63,667 4,426
----------- -----------
Cash and cash equivalents, end of period................................................ $ 3,888 $ 46,437
----------- -----------
----------- -----------
Supplemental information:
Cash paid for interest................................................................ $ 82,145 $ 84,626
Cash paid for taxes................................................................... $ 24,817 $ 22,112
----------- -----------
----------- -----------
</TABLE>
See notes to consolidated condensed financial statements.
6
<PAGE>
FLEMING COMPANIES, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1. The consolidated condensed balance sheet as of July 12, 1997, and the
consolidated condensed statements of earnings and cash flows for the 12-week and
28-week periods ended July 12, 1997, and for the 12-week and 28-week periods
ended July 13, 1996, have been prepared by the company, without audit. In the
opinion of management, all adjustments necessary to present fairly the company's
financial position at July 12, 1997, and the results of operations and cash
flows for the periods presented have been made. All such adjustments are of a
normal, recurring nature except as disclosed. Earnings per share disclosures are
computed using weighted average shares outstanding. The impact of common stock
options on earnings per share is immaterial. Certain reclassifications have been
made to the prior year amounts to conform to the current year's classification.
The preparation of the consolidated financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
2. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. These consolidated condensed
financial statements should be read in conjunction with the consolidated
financial statements and related notes included in the company's 1996 annual
report on Form 10-K.
3. The LIFO method of inventory valuation is used for determining the cost
of most grocery and certain perishable inventories. The excess of current cost
of LIFO inventories over their stated value was $32 million at July 12, 1997,
and $28 million at December 28, 1996.
4. During the first and second quarters of 1997, the company undertook
various activities and received a series of commitments which culminated in the
implementation of an $850 million senior secured credit facility and the sale of
$500 million of privately placed senior subordinated notes on July 25, 1997.
Proceeds from the senior subordinated notes plus initial borrowings under the
senior secured credit facility were used to repay all outstanding bank debt
(which totaled approximately $550 million) and the balance, together with
additional revolver borrowings, will be used to redeem the company's $200
million of floating rate senior notes which have been irrevocably called for
redemption on September 15, 1997.
The recapitalization resulted in an extraordinary charge of $13.3 million,
after income tax benefits of $8.9 million, or $.35 per share, in the company's
second quarter ended July 12, 1997. Most of the charge represents a non-cash
write-off of unamortized financing costs related to the debt which has been
prepaid. Balance sheet classifications for current maturities have been
determined based on the scheduled debt maturities resulting from the
recapitalization.
The new $850 million senior secured credit facility consists of a $600
million revolving credit facility with a maturity date of July 25, 2003, and a
$250 million amortizing term loan with a maturity date of July 25, 2004. The new
credit facility is secured by the inventory and accounts receivable of the
company and its subsidiaries and is guaranteed by substantially all of the
company's subsidiaries. The stated interest rate on borrowings under the new
credit agreement is equal to the London interbank offered interest rate
("LIBOR") plus a margin. The level of the margin is dependent on credit ratings
on the company's senior secured bank debt.
The $500 million of privately placed senior subordinated notes ("Notes")
consists of two issues: $250 million of 10 1/2% Notes due December 1, 2004 and
$250 million of 10 5/8% Notes due July 31, 2007. The Notes are general unsecured
obligations of the company, subordinated in right of payment to all existing and
future senior indebtedness of the company, and senior to or pari passu with all
future
7
<PAGE>
FLEMING COMPANIES, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)
subordinated indebtedness of the company (the company currently has no other
subordinated indebtedness outstanding). The payment of principal, interest and
premium, if any, payable on the Notes is guaranteed by substantially all of the
company's subsidiaries. See Note 6.
5. In accordance with applicable accounting standards, the company records
a charge reflecting contingent liabilities (including those associated with
litigation matters) when management determines that a material loss is
"probable" and either "quantifiable" or "reasonably estimable". Additionally,
the company discloses material loss contingencies when the likelihood of a
material loss is deemed to be greater than "remote" but less than "probable".
Set forth below is information regarding certain material loss contingencies:
PREMIUM
The company and several other defendants were named in two suits filed in
U.S. District Court in Miami, Florida in 1993. The suits involved an allegedly
fraudulent scheme conducted by a failed grocery diverter--Premium Sales
Corporation ("Premium")--and others in which large losses in the Premium-related
entities occurred to the detriment of a class of investors which brought one of
the suits. The other suit was brought by the receiver/trustee of the estates of
Premium and certain of its affiliated entities (the "Trustee"). Plaintiffs
sought actual damages of approximately $300 million, treble damages, punitive
damages, attorneys' fees, costs, expenses and other appropriate relief.
The company denied plaintiffs' accusations; however, to avoid future expense
and eliminate uncertainty, the company entered into a settlement agreement in
December 1996. Under the agreement, the plaintiffs will dismiss their actions
against the company, with prejudice, in exchange for a $19.5 million payment
plus $500,000 for costs and expenses.
The company recorded a charge of $20 million during the third quarter of
1996 in anticipation of the settlement and deposited that amount into an escrow
account in December 1996 pending finalization of the settlement. The settlement
remains subject to, among other conditions, receipt by the company of releases
from Premium investors, including those who might not be bound by the
settlement.
Plaintiffs failed to deliver to the company releases sufficient to meet the
requirements of the settlement agreement in a timely manner. If no satisfactory
resolution is reached, the company will be entitled to terminate the settlement
and withdraw its $20 million deposit. If a settlement is not consummated, the
company expects the litigation will resume. In that event, while management is
unable to predict the potential range of monetary exposure to the company, an
unfavorable outcome could have a material adverse effect on the company.
DAVID'S
The company and certain of its affiliates were named in a lawsuit filed by
David's Supermarkets, Inc. ("David's") in the District Court of Johnson County,
Texas in 1993 alleging product overcharges during a three year period. In April
1996, judgment in excess of $210 million was entered against the company and the
company recorded a $7.1 million liability. During the second quarter of 1996,
the judgment was vacated, a new trial granted and the accrual was reduced to
$650,000.
The company denied the plaintiff's allegations; however, to eliminate the
uncertainty and expense of protracted litigation, the company paid $19.9 million
to the plaintiff in April 1997 in exchange for dismissal, with prejudice, of all
of plaintiff's claims against the company, resulting in a charge to first
quarter earnings of $19.2 million.
8
<PAGE>
FLEMING COMPANIES, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)
FURR'S
Furr's Supermarkets, Inc. ("Furr's"), which purchased approximately $545
million of products from the company in 1996 under a supply agreement expiring
in 2001, filed a lawsuit in the District Court of Bernalillo County, New Mexico,
in February 1997 naming as defendants the company, certain company officers and
a company employee. Furr's claims it has been overcharged for products under the
supply agreement and alleges various causes of action including breach of
contract, misrepresentation, fraud and violation of certain of New Mexico's
trade practices statutes. Furr's seeks an award of actual, consequential,
incidental and punitive damages, treble damages, interest, attorneys' fees and
court costs. The company has removed the case to the United States District
Court for New Mexico. In June 1997, Furr's sought court approval to amend its
complaint against Fleming; the complaint, if amended, will contain allegations
of violations of the federal Racketeering Influenced and Corrupt Organizations
Act ("RICO"), and other claims, and seek damages in excess of $75 million under
RICO, prior to trebling. The company believes it has substantially complied with
its obligations to Furr's in good faith.
Prior to filing the lawsuit, Furr's sought to exercise the supply
agreement's competitiveness clause and was seeking to audit the company's
pricing under the contract. Furr's submitted what it asserted is a "qualified
competitive bid" as defined in the supply agreement. If a qualifying bid is
submitted and found to be competitive (as defined in the supply agreement)
Fleming may either match the bid (within an established range) or Furr's may
accept the competitor's bid. Fleming has rejected the bid as not qualifying
under the contract and invoked the arbitration clause of the supply agreement.
All issues regarding the competitiveness clause are pending in arbitration in
New Mexico.
Management is unable to predict the potential range of monetary exposure to
the company resulting from this litigation. However, the effect of an
unfavorable outcome or the loss of Furr's business, for any reason, could have a
material adverse effect on the company.
MEGAFOODS
In August 1994, a former customer, Megafoods Stores, Inc. ("Megafoods" or
the "debtor"), and certain of its affiliates filed chapter 11 bankruptcy
proceedings in Arizona. The company filed claims, including a claim for
indebtedness for goods sold on open account, equipment leases and secured loans,
totaling approximately $28 million (including claims for future payments and
other non-recorded assets). Additionally, the debtor was liable or contingently
liable to the company under store subleases and lease guarantees extended by the
company for the debtor's benefit. The debtor objected to the company's claims
and filed an adversary proceeding against the company seeking subordination of
the company's claims, return of an approximate $12 million deposit and
affirmative relief for damages which was subsequently amended to include
allegations of overcharges for products.
In August 1996, the court approved a settlement of both the debtor's
adversary proceeding against the company and the company's disputed claims in
the bankruptcy. The settlement, which is subject to approval by the creditors of
a revised plan which encompasses the settlement, provides that the company will
retain the $12 million deposit, relinquish its secured and unsecured claims in
exchange for the right to receive 10% of distributions, if any, made to the
unsecured creditors and pay the debtor $2.5 million in exchange for the
furniture, fixtures and equipment from 17 stores and two storage facilities. The
company agreed to lease to the reorganized debtor the furniture, fixtures and
equipment in fourteen of the stores for nine years (or until, in each case, the
expiration of the store lease) at an annual rental of $18 thousand per store.
9
<PAGE>
FLEMING COMPANIES, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)
During the fourth quarter of 1996, the debtor sold its 16 Phoenix stores; no
distribution was made to the unsecured creditors. In January 1997, the debtor
filed a joint liquidating plan which incorporates the settlement agreement. The
confirmation hearing for the debtor's plan has been postponed and no new date
set. During the second quarter of 1997, the debtor sold its Texas assets and the
purchaser agreed to assume the debtor's obligation to lease furniture, fixtures
and equipment from the company. The consummation of this sale resulted in the
disposition of substantially all of the debtor's remaining physical assets. The
company did not receive any distribution from the sale of the debtor's Texas
assets.
The company recorded charges relating to Megafoods of approximately $6.5
million in 1994, $3.5 million in 1995, $5.8 million in 1996 and has not recorded
any charges in 1997. At July 12, 1997, approximately $3.1 million of recorded
net assets relating to Megafoods remained on the company's books.
RANDALL'S
On July 30, 1997, Randall's Food Markets, Inc. ("Randall's") initiated
arbitration proceedings against Fleming before the American Arbitration
Association in Dallas, Texas. Randall's alleges that Fleming conspired with a
group of manufacturers and vendors to defraud Randall's by cooperating to
inflate prices charged to Randall's. Randall's alleges breach of contract, fraud
and RICO violations, and seeks actual damages, punitive damages, treble damages
under RICO, termination of its supply agreement and attorneys' fees and court
costs. The contract on which Randall's bases its claim prohibits either party
from recovering any amount other than actual damages; recovery of consequential
damages, punitive damages and all similar forms of damages are expressly
prohibited. Randall's asserts that such provision is contrary to public policy
and therefore not binding on it.
Randall's has been a Fleming customer for over 30 years. In 1996 Randall's
purchased approximately $485 million of products from Fleming under an eight
year supply agreement entered into in 1993 in connection with Fleming's purchase
of certain distribution assets from Randall's. Prior to initiating the
arbitration proceeding and making allegations against Fleming for overcharges,
Randall's had sought unsuccessfully to terminate the supply agreement.
The company believes it has complied with its obligations to Randall's in
good faith and that punitive and consequential damages are not recoverable under
the supply agreement; the company will vigorously defend its interests in the
arbitration. While management is unable to predict the potential range of
monetary exposure to Randall's, if any, the effect of an unfavorable outcome or
the loss of Randall's business could have a material adverse effect on the
company.
CLASS ACTION SUITS
In 1996, the company and certain of its present and former officers and
directors, including the chief executive officer, were named as defendants in
nine purported class action lawsuits filed by certain stockholders and one
purported class action lawsuit filed by a noteholder. In April 1997, the court
consolidated the nine stockholder cases as City of Philadelphia, et al. v.
Fleming Companies, Inc., et al.; the noteholder case was also consolidated, but
only for pre-trial purposes. A complaint has been filed in the consolidated
cases alleging liability for the company's failure to properly account for and
disclose the contingent liability created by the David's litigation and the
company's "deceptive business practices" which allegedly led to the David's
litigation and to other material contingent liabilities, caused the company to
change its manner of doing business at great cost and loss of profit, and
materially inflated the trading price of the company's common stock. The company
denies each of these allegations.
10
<PAGE>
FLEMING COMPANIES, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)
Plaintiffs seek undetermined but significant damages. Management is unable
to predict the ultimate outcome of these cases or the potential range of
monetary exposure, if any, to the company. However, an unfavorable outcome in
this litigation could have a material adverse effect on the company.
OTHER
The company supplies goods and services to some of its customers
(particularly to its large customers) pursuant to supply agreements containing a
"competitiveness" clause. Under this clause, a customer may submit a "qualified
bid" from a third-party supplier to provide the customer with a range of goods
and services comparable to those goods and services offered by Fleming. If the
prices to be charged under the qualifying bid are lower than those charged by
the company by more than an agreed percentage, the company may lower its prices
to come within the agreed percentage or, if the company chooses not to lower its
prices, the customer may accept the competitor's bid. The competitiveness clause
is not exercised frequently and disputes regarding the clause must generally be
submitted to binding arbitration. Additionally, the company believes that most
of its supply agreements prohibit recovery of both punitive and consequential
damages if any dispute ever arises.
From time to time, customers may seek to renegotiate the terms of their
supply agreements, or exercise the competitiveness clause of such agreements or
otherwise alter the terms of their contractual obligations to the company to
obtain financial concessions. The company does not believe such efforts have had
a material adverse effect on its operations or financial condition to date.
The company utilizes numerous computer systems which were developed
employing six digit date structures (i.e., two digits each for the month, day
and year). Where date logic requires the year 2000 or beyond, such date
structures may produce inaccurate results. Management has implemented a program
to comply with year 2000 requirements on a system-by-system basis. Fleming's
plan includes extensive systems testing and is expected to be completed by the
first quarter of 1999. The solution for each system is potentially unique and
may be dependent on third-party software providers and developers. A failure on
the part of the company to ensure that its computer systems are year 2000
compliant could have a material adverse effect on the company's operations.
The company has purchased insurance to secure its obligations to indemnify
its officers and directors against certain liabilities which may result from
actions taken on behalf of the company. The company believes this insurance
covers some of the allegations made in the David's litigation, as well as
allegations made in other lawsuits. The company is pursuing a declaratory
judgment action against certain of its insurance carriers to resolve certain
coverage issues. While the company intends to vigorously assert its rights under
the policies, there can be no assurance as to the amount of coverage which may
ultimately be available.
The company's facilities and operations are subject to various laws,
regulations and judicial and administrative orders concerning protection of the
environment and human health, including provisions regarding the transportation,
storage, distribution, disposal or discharge of materials. In conformity with
these provisions, the company has a comprehensive program for testing and
removal, replacement or repair of its underground fuel storage tanks and for
site remediation where necessary. The company has established reserves that it
believes will be sufficient to satisfy anticipated costs of all known
remediation requirements. In addition, the company is addressing several other
environmental cleanup matters involving its properties, all of which the company
believes are immaterial.
The company and others have been designated by the U.S. Environmental
Protection Agency ("EPA") and by similar state agencies as potentially
responsible parties under the Comprehensive Environmental
11
<PAGE>
FLEMING COMPANIES, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)
Response, Compensation and Liability Act ("CERCLA") or similar state laws, as
applicable, with respect to EPA or state-designated Superfund sites. While
liability under such laws for remediation at such sites is generally joint and
several with other potential responsible parties, the company believes that, to
the extent it is ultimately determined to be liable for the expense of
remediation at any site, such liability will not result in a material adverse
effect on its consolidated financial position or results of operations. The
company is committed to maintaining the environment and protecting natural
resources and human health and to achieving full compliance with all applicable
laws, regulations and orders.
The company is a party to various other litigation and contingent loss
situations arising in the ordinary course of its business including: disputes
with customers; disputes with employees regarding wages, workers' compensation
and alleged discrimination; tax assessments and other matters. The ultimate
effect of such actions, some of which are for substantial amounts, cannot be
predicted with certainty. Although the resolution of any of these matters may
have a material adverse impact on interim or annual results of operations, the
company expects that the outcome of these matters will not result in a material
adverse effect on the company's liquidity or consolidated financial position.
6. Certain company indebtedness is guaranteed by all direct and indirect
subsidiaries of the company (except for certain inconsequential subsidiaries),
all of which are wholly owned. The guarantees are joint and several, full,
complete and unconditional. There are no restrictions on the ability of the
subsidiary guarantors to transfer funds to the company in the form of cash
dividends, loans or advances. Full financial statements for the subsidiary
guarantors are not presented herein because management does not believe such
information would be material.
The following summarized financial information, which includes allocations
of material corporate-related expenses, for the combined subsidiary guarantors
may not necessarily be indicative of the results of operations or financial
position had the subsidiary guarantors been operated as independent entities.
<TABLE>
<CAPTION>
JULY 12, JULY 13,
1997 1996
----------- -----------
<S> <C> <C>
(IN MILLIONS)
Current assets............................................................. $ 20 $ 25
Noncurrent assets.......................................................... $ 55 $ 50
Current liabilities........................................................ $ 13 $ 10
Noncurrent liabilities..................................................... $ 6 $ 9
<CAPTION>
28 WEEKS ENDED
------------------------
JULY 12, JULY 13,
1997 1996
----------- -----------
(IN MILLIONS)
<S> <C> <C>
Net sales.................................................................. $ 179 $ 183
Costs and expenses......................................................... $ 181 $ 187
Net earnings (loss)........................................................ -- $ (2)
</TABLE>
During the last three years, a significant number of subsidiary guarantors
have been merged into the parent company, resulting in a substantial reduction
in the amounts appearing in the summarized financial information.
12
<PAGE>
FLEMING COMPANIES, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)
7. The accompanying earnings statements include the following:
<TABLE>
<CAPTION>
28 WEEKS 12 WEEKS
-------------------- --------------------
1997 1996 1997 1996
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
(IN THOUSANDS)
Depreciation and amortization (includes amortized costs in
interest expense)......................................... $ 98,625 $ 97,681 $ 42,053 $ 42,030
Amortized costs in interest expense......................... $ 5,497 $ 6,927 $ 2,452 $ 3,044
</TABLE>
13
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
GENERAL
The food marketing and distribution industry is undergoing accelerated
changes as producers, manufacturers, distributors and retailers seek to lower
costs and increase services in an increasingly competitive environment of
relatively static overall demand. The company believes these changes have led to
reduced sales, reduced margins and lower profitability among many of the
company's customers as well as at Fleming itself.
Traditionally, food wholesalers have competed through their willingness to
invest capital in their customers. Beginning in 1995, the company imposed
stricter credit policies and applied more stringent cost/benefit analysis before
making loans to or investments in its customers. The company believes these
credit practices have caused the company to lose business to competitors.
Furthermore, the company has been subjected to considerable unfavorable
media coverage stemming from the jury verdict announced in the David's
litigation in early 1996. Although the David's verdict was subsequently set
aside and the matter ultimately settled, other customers have made similar
allegations in an attempt to alter their contractual arrangements with the
company. See Note 5 to the company's financial statements. The company believes
that perceptions generated by such legal proceedings have also negatively
impacted sales.
However, the company believes that its ultimate success will depend on its
ability to continue to cut costs while expanding profitable operations. The
company has revised its marketing plans and is taking other steps to reverse
sales declines. The company has also recently completed a $1.35 billion
recapitalization program to provide it with greater financial flexibility to
redeploy assets and to increase the more profitable facets of both its food
distribution and retail food segments. These initiatives include increased
marketing emphasis and expanded offerings of retail services, streamlining and
expanding the company's store brands offerings, developing and marketing of
additional foodservice products and growth of retail food operations through
remodels, new store development and selective acquisitions.
While the company believes considerable progress has been made to date, no
assurance can be given that the company will be successful in continuing to cut
costs, in reversing sales declines or in increasing higher margin activities.
14
<PAGE>
RESULTS OF OPERATIONS
Set forth in the following table is information for the second interim and
year-to-date periods of 1997 and 1996 regarding components of the company's
earnings expressed as a percentage of net sales.
<TABLE>
<CAPTION>
SECOND INTERIM PERIOD 1997 1996
---------- ----------
<S> <C> <C>
Net sales............................................... 100.00% 100.00%
Gross margin............................................ 9.31 9.21
Less:
Selling and administrative............................ 7.74 8.05
Interest expense...................................... 1.02 1.01
Interest income....................................... (.31) (.30)
Equity investment results............................. .09 .11
Litigation charge..................................... (.17)
---------- ----------
Total expenses...................................... 8.54 8.70
---------- ----------
Earnings before taxes................................... .77 .51
Taxes on income......................................... .35 .26
---------- ----------
Earnings before extraordinary charge.................... .42 .25
Extraordinary charge from early retirement of debt...... .38 --
---------- ----------
Net earnings............................................ .04% .25%
---------- ----------
---------- ----------
<CAPTION>
YEAR TO DATE 1997 1996
---------- ----------
<S> <C> <C>
Net sales............................................... 100.00% 100.00%
Gross margin............................................ 9.19 9.00
Less:
Selling and administrative............................ 7.69 7.85
Interest expense...................................... 1.02 1.01
Interest income....................................... (.30) (.30)
Equity investment results............................. .09 .08
Litigation charge..................................... .23 .01
---------- ----------
Total expenses...................................... 8.73 8.65
---------- ----------
Earnings before taxes................................... .46 .35
Taxes on income......................................... .22 .18
---------- ----------
Earnings before extraordinary charge.................... .24 .17
Extraordinary charge from early retirement of debt...... .16 --
---------- ----------
Net earnings............................................ .08% .17%
---------- ----------
---------- ----------
</TABLE>
NET SALES
Sales for the second quarter (12 weeks) of 1997 decreased by $.2 billion, or
5%, to $3.6 billion from $3.7 billion for the same period in 1996. Year to date,
sales decreased by $.6 billion, or 7%, to $8.3 billion from $8.9 billion for the
28 weeks in 1996. Several trends and events adversely impacted sales as
described above. Additionally, the closing or sale of certain company-owned
retail stores negatively impacted sales.
Retail sales generated by the same stores for the second quarter and
year-to-date periods in 1997 compared to the same periods in 1996 decreased 3.0%
and 2.5%, respectively. The decrease was attributable, in part, to certain
promotions absent in the current period; to triple coupons offered by certain
competitors; and to new stores opened by competitors in some markets, all of
which negatively affected sales.
15
<PAGE>
Fleming measures inflation using data derived from the average cost of a ton
of product sold by the company. Food price inflation year-to-date 1997 was 1.2%
compared to 2.3% for the same period in 1996.
GROSS MARGIN
Gross margin for the second quarter of 1997 decreased by $14 million, or 4%,
to $331 million from $345 million for the same period of 1996, but increased as
a percentage of net sales to 9.31% from 9.21% for the same period in 1996. Year
to date, gross margin decreased by $39 million, or 5%, to $763 million from $802
million, but also increased as a percentage of net sales to 9.19% from 9.00% for
the same period in 1996. The increase in gross margin percentage was primarily
due to improved gross margins at company-owned retail stores. Food price
inflation resulted in a LIFO charge in 1997 of $1.7 million for the second
quarter and $4.1 million year to date compared to charges of $.7 million for the
quarter and $1.5 million year to date in 1996.
SELLING AND ADMINISTRATIVE EXPENSES
Selling and administrative expenses for the second quarter of 1997 decreased
by $27 million, or 9%, to $275 million from $302 million for the same period in
1996 and decreased as a percentage of net sales to 7.74% for 1997 from 8.05% in
1996. Year to date, selling and administrative expenses decreased by $61
million, or 9%, to $639 million from $699 million for the same period in 1996
and decreased as a percentage of net sales to 7.69% for 1997 from 7.85% in 1996.
The percentage decrease was principally due to reduced operating expenses of
company-owned retail stores. The year-to-date percentage decrease was also due
to reduced corporate expenses in 1997 in the information technology area. The
decrease was partially offset by an increase in incentive compensation expense
in 1997 compared to 1996.
As more fully described in the 1996 Annual Report on Form 10-K, the company
has a significant amount of credit extended to its customers through various
methods. These methods include customary and extended credit terms for inventory
purchases, secured loans with terms generally up to ten years, and equity
investments in and secured and unsecured loans to certain customers. In
addition, the company guarantees debt and lease obligations of certain
customers.
Credit loss expense is included in selling and administrative expenses and
for the second quarter of 1997 decreased by $2 million to $5 million from $7
million for the comparable period in 1996. Year to date, credit loss expense was
$11 million in 1997 compared to $15 million in 1996 for a decrease of $4
million. Since 1994, tighter credit practices and reduced emphasis on credit
extensions to and investments in customers have resulted in less exposure and a
decrease in credit loss expense. Further material reductions are not expected.
INTEREST EXPENSE
Interest expense for the second quarter of 1997 decreased to $36 million
from $38 million for the same period in 1996. Year to date, interest expense
decreased to $85 million from $90 million in 1996. Lower average borrowing
levels in 1997 compared to 1996 primarily accounted for the improvement. If
current levels of debt and interest rates prevail in the future, interest
expense will increase because the interest rates on the new senior subordinated
notes are higher than the rates on debt which was repaid. See Note 4 to the
company's financial statements.
The stated interest rate on the company's floating rate indebtedness is
equal to the London interbank offered interest rate ("LIBOR") plus a margin. The
company employs interest rate swaps and caps from time to time to manage
exposure to changing interest rates and interest expense. In the second quarter
of 1997, interest rate swaps and caps covering $650 million aggregate principal
amount of floating rate indebtedness were employed. Interest rate hedge
agreements contributed $1.7 million of net interest expense in the 1997 second
quarter compared to $1.8 million of net interest expense for the same period of
1996. Year to date, interest rate hedge agreements contributed $4.4 million of
net interest expense in 1997 compared to $4.9 million in 1996.
16
<PAGE>
In conjunction with the recapitalization program (see "Liquidity and Capital
Resources"), the company terminated interest rate swaps and caps covering $400
million aggregate principal amount of floating rate indebtedness. The
extraordinary charge from the early retirement of debt of $13 million recorded
in the second quarter of 1997 included $1.2 million after-tax in hedge
termination costs for interest rate swaps and caps covering $200 million of debt
to be retired with the proceeds from the recapitalization program. The cost to
terminate the interest rate swaps and caps covering the remaining $200 million
of debt was immaterial.
INTEREST INCOME
Interest income for the second quarter of 1997 decreased nominally to remain
at $11 million which is consistent with the same period in 1996. Year to date,
interest income decreased to $25 million in 1997 from $27 million in 1996. The
decrease is primarily due to the company's sale in the third quarter of 1996 of
$35 million of notes receivable with limited recourse. The decrease is partly
offset by new notes funded since the note sale.
EQUITY INVESTMENT RESULTS
The company's portion of operating losses from equity investments for the
second quarter of 1997 decreased to $3 million from $4 million for the same
period in 1996. Year to date, operating losses from equity investments were
relatively unchanged from $7 million in 1996. The reduction in losses is due to
improved results of operations in certain of the underlying equity investments.
LITIGATION CHARGE
In the first quarter of 1997, the company paid $19.9 million in complete
settlement of the David's litigation. In the first quarter of 1996, the company
accrued $7.1 million as the result of a jury verdict regarding the case. In the
second quarter of 1996, the accrual was reversed following the vacation of the
judgment resulting from the jury verdict, and a new accrual for $650,000 was
established. See Note 5 to the company's financial statements.
TAXES ON INCOME
The effective tax rate for 1997 is presently estimated at 58.0%. The 58.0%
rate was used in calculating both the second quarter and year-to-date income tax
amounts. The presentation of the tax is split by reflecting a tax benefit at the
statutory rate of 40% for the extraordinary charge and reflecting the balance of
the tax amount on the taxes on income line. The rate used for the second quarter
and year to date for 1996 was 51.1%. The increase is primarily due to lower
earnings in 1997 compared to 1996 (primarily due to the litigation charge and
write-off of costs associated with the early retirement of debt) with basically
no change in nondeductible dollar amounts (permanent differences) from 1996.
OTHER
Several factors negatively affecting earnings in the second quarter of 1997
are likely to continue for the near term. Management believes that these factors
include lower sales, operating losses in certain company-owned retail stores and
legal fees and expenses related to litigation.
17
<PAGE>
SEGMENT INFORMATION
Sales and operating earnings for the company's food distribution and retail
food segments are presented below.
<TABLE>
<CAPTION>
28 WEEKS 12 WEEKS
-------------------- --------------------
1997 1996 1997 1996
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
(IN MILLIONS)
Sales:
Food distribution.............................................. $ 6,449 $ 6,873 $ 2,761 $ 2,892
Retail food.................................................... 1,854 2,038 790 851
--------- --------- --------- ---------
Total sales...................................................... $ 8,303 $ 8,911 $ 3,551 $ 3,743
--------- --------- --------- ---------
--------- --------- --------- ---------
Operating earnings:
Food distribution.............................................. $ 149 $ 162 $ 64 $ 73
Retail food.................................................... 47 20 21 5
Corporate expense.............................................. (71) (79) (29) (34)
--------- --------- --------- ---------
Total operating earnings......................................... $ 125 $ 103 $ 56 $ 44
--------- --------- --------- ---------
--------- --------- --------- ---------
</TABLE>
Operating earnings for industry segments consist of net sales less related
operating expenses. Operating expenses exclude interest expense, interest
income, equity investment results, litigation charge and taxes on income.
General corporate expenses are not allocated to food distribution and retail
food segments. The transfer pricing between segments is at cost. 1996 corporate
expense has been restated to exclude litigation charge which is a separate line
on the earnings statements.
LIQUIDITY AND CAPITAL RESOURCES
Set forth below is certain information regarding the company's capital
structure at the end of the second quarter of 1997 and at the end of fiscal
1996:
<TABLE>
<CAPTION>
CAPITAL STRUCTURE JULY 12, 1997 DECEMBER 28, 1996
--------------------- ---------------------
<S> <C> <C> <C> <C>
(IN MILLIONS)
Long-term debt.................................... $ 1,148 44.1% $ 1,216 45.5%
Capital lease obligations......................... 371 14.3 381 14.2
--------- ----- --------- -----
Total debt........................................ 1,519 58.4 1,597 59.7
Shareholders' equity.............................. 1,083 41.6 1,076 40.3
--------- ----- --------- -----
Total capital................................... $ 2,602 100.0% $ 2,673 100.0%
--------- ----- --------- -----
--------- ----- --------- -----
</TABLE>
- ------------------------
Note: The above table includes current maturities of long-term debt and current
obligations under capital leases.
Operating activities generated positive net cash flows of $55 million for
the 28 weeks ended July 12, 1997 compared to positive net cash flows of $175
million for the same period in 1996. The variance is explained primarily by a
lower reduction in inventories and higher decrease in accounts payable and the
David's litigation settlement, offset in part by higher deferred income taxes,
higher earnings before the extraordinary charge, and a higher decrease in
accounts receivable. Working capital was $289 million at the end of the second
quarter of 1997, an increase from $221 million at year-end 1996. The current
ratio increased to 1.27 to 1 at the end of the second quarter 1997 from 1.16 to
1 at year-end 1996.
18
<PAGE>
Capital expenditures were $49 million for the 28 weeks ended July 12, 1997
compared to $69 million for the same period in 1996. Management expects total
capital expenditures for 1997, excluding acquisitions, will approximate $145
million compared to $129 million actual expenditures in 1996. Completion of the
company's recapitalization program permits the company to increase its total
investment spending for capital expenditures and acquisitions. The company
intends to increase its retail segment operations by increasing investments in
new and remodeled stores in the company's existing retail chains and by making
selective acquisitions of supermarket chains or groups as opportunities arise.
The debt-to-capital ratio at the end of the second quarter of 1997 was
58.4%, down from 59.7% at year-end 1996. The company's long-term target ratio is
between 50% and 55%.
On July 29, 1997, the board of directors approved a quarterly cash dividend
of $.02 per share for the third quarter of 1997 payable September 10, 1997. For
the previous five fiscal quarters the board of directors has approved a $.02 per
share quarterly dividend.
The company's principal sources of liquidity and capital have been cash
flows from operating activities, borrowings under its credit facility and the
public and private debt capital markets.
On July 25, 1997, the company entered into a new $850 million senior secured
credit facility and sold $500 million of privately placed senior subordinated
notes. Proceeds from the initial borrowings under the new credit facility and
the sale of the senior subordinated notes were used to repay all outstanding
bank debt under the previous credit facility and the balance, together with
additional revolver borrowings, will be used to redeem the company's $200
million floating rate senior notes due 2001 which have been irrevocably called
for redemption on September 15, 1997. Until then, $145 million of such proceeds
will remain in escrow and will be invested (directly or indirectly) in U.S.
government securities. The recapitalization program provides the company with
increased flexibility to re-deploy assets and pursue new business investment,
such as the expansion of the company's retail food operations, strengthens
Fleming's capital structure by reducing senior secured bank loans and repaying
the floating rate senior notes, extends the average life of total debt
outstanding, and reduces annual scheduled debt maturities.
The new $850 million senior secured credit facility consists of a $600
million revolving credit facility, with a final maturity of July 25, 2003, and a
$250 million amortizing term loan, with a maturity of July 25, 2004. Up to $300
million of the revolving credit portion may be used for issuing letters of
credit. Borrowings and letters of credit issued under the new credit facility
may be used for general corporate purposes and are secured by a first priority
security interest in the accounts receivable and inventories of the company and
its subsidiaries and in the capital stock or other equity interests owned by the
company in its subsidiaries. In addition, the new credit facility is guaranteed
by substantially all company subsidiaries (see Note 6 to the company's financial
statements). The stated interest rate on borrowings under the new credit
agreement is equal to the London interbank offered interest rate ("LIBOR") plus
a margin. The level of the margin is dependent on credit ratings on the
company's senior secured bank debt.
At the end of the second quarter of 1997, borrowings under the previous bank
credit facility totaled $504 million in term loans and $40 million of revolver
borrowings; and $90 million of letters of credit had been issued. At July 25,
1997, borrowings under the new $850 million credit facility totaled $250 million
in term loans, with no borrowings under the revolving facility and with $90
million of letters of credit issued (reducing the capacity of the revolving
portion on a dollar-for-dollar basis).
The $500 million of privately placed senior subordinated notes ("Notes")
consists of two issues: $250 million of 10 1/2% Notes due December 1, 2004 and
$250 million of 10 5/8% Notes due July 31, 2007. The Notes are general unsecured
obligations of the company, subordinated in right of payment to all existing and
future senior indebtedness of the company, and senior to or pari passu with all
future subordinated indebtedness of the company (the company currently has no
other subordinated indebtedness outstanding).
19
<PAGE>
The company's total debt outstanding at the end of the second quarter of
1997 and at July 25, 1997 is as follows (in millions).
<TABLE>
<CAPTION>
ACTUAL AT ACTUAL AT
JULY 12, JULY 25,
1997 1997
----------- -----------
<S> <C> <C>
Previous credit agreement:
Revolving credit....................................................... $ 40 $ --
Term loans............................................................. 504 --
10 5/8% Senior notes due 2001............................................ 300 300
Floating rate senior notes due 2001...................................... 200 200
Medium-term notes........................................................ 99 99
Other debt............................................................... 5 5
New credit agreement:
Revolving credit....................................................... -- --
Term loans............................................................. -- 250
10 5/8% Subordinated notes due 2004...................................... -- 250
10 1/2% Subordinated notes due 2007...................................... -- 250
----------- -----------
Total long-term funded debt.............................................. 1,148 1,354
Capitalized lease obligations............................................ 371 371
----------- -----------
Total debt............................................................... 1,519 1,725
Less current maturities, long-term debt.................................. 38 38
Less current maturities, capital leases.................................. 20 20
Less funds held in escrow................................................ -- 145
----------- -----------
Total debt, net long-term portion........................................ $ 1,461 $ 1,522
----------- -----------
----------- -----------
</TABLE>
Until September 15, 1997, $145 million has been set aside in escrow for the
redemption of the floating rate senior notes. On September 15, 1997, these notes
will be redeemed with the funds held in escrow, plus borrowings under the new
credit facility, as needed. Current maturities of long-term funded debt have
been presented here and on the balance sheet at the end of the second quarter of
1997 based on the scheduled debt maturities resulting from the recapitalization.
The company's annual scheduled amortization for long-term funded debt
obligations now requires principal reductions of approximately $48 million in
1998, $44 million in 1999, $72 million in 2000, $339 million in 2001, and $51
million in 2002.
The composite interest rate for total debt before the effect of interest
rate hedges was 8.8% at July 12, 1997, versus 8.9% at July 13, 1996. Including
the effect of the interest rate hedges, the composite interest rate was 9.2% and
9.4% at the respective quarter ends. The composite interest rate for total debt
at July 25, 1997 before the effect of interest rate hedges was 9.5% and after
the effect of such hedges was 9.6%.
The new credit agreement and the indentures under which other company debt
instruments were issued contain customary covenants associated with similar
facilities. The credit agreement currently contains the following more
significant financial covenants: maintenance of a fixed charge coverage ratio of
at least 1.7 to 1, based on earnings before interest, taxes, depreciation and
amortization and net rent expense; maintenance of a ratio of
inventory-plus-accounts receivable to funded-bank-debt (including letters of
credit) of at least 1.4 to 1; and a limitation on restricted payments, including
dividends. Covenants contained in the company's indentures under which other
company debt instruments were issued are generally less restrictive than those
of the new credit agreement.
The new credit agreement may be terminated in the event of a defined change
of control. Under the company's indentures, noteholders may require the company
to repurchase notes in the event of a defined change of control coupled with a
defined decline in credit ratings.
At the end of the second quarter of 1997, the company would have been
allowed to borrow an additional $470 million under the revolving credit facility
contained in the new credit agreement based on
20
<PAGE>
the actual borrowings and letters of credits outstanding. Under the company's
most restrictive borrowing covenant, which is the new fixed charges coverage
ratio contained in the new credit agreement, $36 million of additional fixed
charges could have been incurred. The company is in compliance with all
financial covenants under the new credit agreement and its indentures.
On June 27, 1997, Moody's Investors Service (Moody's) announced it had
revised its credit ratings for Fleming. Moody's downgraded its rating for the
company's senior secured credit facility with banks and other lenders to Ba3
from Ba2, senior unsecured notes to B1 from Ba3, and counterparty ratings to B1
from Ba3. Moody's assigned a Ba3 rating to the company's new $850 million credit
agreement, and a B3 rating for the new $500 million of senior subordinated
notes.
On June 30, 1997, Standard & Poor's Rating Group (S&P) announced it had
revised its outlook on Fleming to stable from negative and had affirmed the
company's BB corporate credit rating. Additionally, S&P raised its rating on the
company's senior unsecured notes to BB- from B+. It also assigned a B+ rating to
the company's new $500 million senior subordinated notes. On July 2, 1997, S&P
announced it had assigned a BB+ rating to the company's new $850 million credit
facility.
At the end of the second quarter of 1997, the company had a total of $90
million of contingent obligations outstanding under undrawn letters of credit,
primarily related to insurance reserves associated with the company's normal
risk management activities. To the extent that any of these letters of credit
would be drawn, payments would be financed by borrowings under the credit
agreement.
During the second quarter of 1997, the company employed interest rate swaps
and hedges covering a total of $650 million of floating rate indebtedness (see
"Results of Operations--Interest expense"). On July 25, 1997, the company
terminated interest rate swaps and caps covering $400 million of floating rate
indebtedness. The company now has outstanding interest rate swaps covering $250
million of its floating rate indebtedness, with an average fixed interest rate
of 7.2% and an average remaining term of 2.8 years. Payments made or received
under interest rate swaps are included in interest expense.
Management believes that the cash flows from operating activities and the
company's ability to borrow under the new credit agreement (which will be the
company's principal sources of liquidity and capital for the foreseeable future)
will be adequate to meet working capital needs, capital expenditures (including
expenditures for acquisitions, if any) and other cash needs for the next twelve
months.
RECENT ACCOUNTING PRONOUNCEMENTS
In February 1997, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 128--Earnings Per
Share, which is effective for the company's fiscal year ending December 27,
1997. The statement establishes standards for computing and presenting earnings
per share. Adoption of SFAS No. 128 is not expected to have a material impact on
earnings per share.
Also in February 1997, the FASB issued SFAS No. 129--Disclosure of
Information about Capital Structure, which is effective for the company's fiscal
year ending December 27, 1997. The statement establishes standards for
disclosing information about a reporting company's capital structure. Adoption
of SFAS No. 129 relates to disclosure within the financial statements and will
not have a material effect on the company's financial statements.
In June 1997, the FASB issued SFAS No. 130--Reporting Comprehensive Income
which is effective for the company's fiscal year ending December 26, 1998. The
statement addresses the reporting and displaying of comprehensive income and its
components. Earnings per share will only be reported for net income and not for
comprehensive income. The company has not had adequate time to determine the
differences between comprehensive income and net income.
Also in June 1997, the FASB issued SFAS No. 131--Disclosures about Segments
of an Enterprise and Related Information. SFAS No. 131 modifies current segment
reporting requirements and establishes, for public companies, criteria for
reporting disclosures about a company's products and services, geographic
21
<PAGE>
areas and major customers in annual and interim financial statements. The
company will adopt SFAS No. 131 for the fiscal year ending December 26, 1998.
LITIGATION AND OTHER CONTINGENCIES
From time to time the company faces litigation or other contingent loss
situations resulting from owning and operating its assets, conducting its
business or complying (or allegedly failing to comply) with federal, state and
local laws, rules and regulations which may subject the company to material
contingent liabilities. In accordance with applicable accounting standards, the
company records as a liability amounts reflecting such exposure when a material
loss is deemed by management to be both "probable" and "quantifiable" or
"reasonably estimable."
In addition, the company discloses material loss contingencies in the notes
to its financial statements when the likelihood of a material loss is deemed to
be greater than "remote" but less than "probable." Such material contingent
matters are discussed in Note 5 to the company's financial statements and others
are discussed in Part II--Item 1 of this report ("Legal Proceedings"), both of
which are incorporated herein by reference. An adverse outcome experienced in
one or more of such matters, or an increase in the likelihood of such an
outcome, could have a material adverse effect on the company's business, results
of operations, cash flow, capital, access to capital or financial condition.
Fleming has numerous computer systems which were developed employing six
digit date structures (i.e., two digits each for month, day and year). Where
date logic requires the year 2000 or beyond, such date structures may produce
inaccurate results. Management has implemented a program to comply with year
2000 requirements on a system-by-system basis. Fleming's plan includes extensive
systems testing and is expected to be completed by the first quarter of 1999.
The solution for each system is potentially unique and may be dependent on
third-party software providers and developers. A failure on the part of the
company to ensure that its computer systems are year 2000-compliant could have a
material adverse effect on the company's operations.
FORWARD-LOOKING INFORMATION
This report contains forward-looking statements of expected future
developments. The company wishes to ensure that such statements are accompanied
by meaningful cautionary statements pursuant to the safe harbor established in
the Private Securities Litigation Reform Act of 1995. The forward-looking
statements herein refer to, among other matters, the company's ability to
implement measures to reverse sales declines, cut costs and improve earnings;
the company's assessment of the probability and materiality of losses associated
with litigation and other contingent liabilities; the company's ability to
develop and implement year-2000 systems solutions; the company's ability to
expand portions of its business or enter new facets of its business; the
company's expectations regarding the adequacy of capital and liquidity; and the
receptiveness of the company's customers to its alternative marketing plans.
These forward-looking statements reflect management's expectations and are based
upon currently available data; however, actual results are subject to future
events and uncertainties which could materially impact actual performance.
The company's future performance also involves a number of risks and
uncertainties which may cause actual performance to differ materially. Among
these factors are: the continuation of changes in the food distribution industry
which have increased competitive pressures and reduced operating margins in both
food distribution and retail food operations; the potential negative effects of
the company's substantial indebtedness; limitations on management's discretion
with respect to certain business matters imposed by restrictive covenants
contained in the company's credit facility and indentured debt instruments;
failure of the company to successfully implement its alternative marketing
plans; an inability to achieve cost savings due to unexpected developments or
changed plans regarding capital expenditures; potential adverse developments
with respect to litigation and other contingency matters; general economic
conditions and the impact of such conditions, or any of the factors listed
above, on consumer spending.
22
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Set forth below is information regarding litigation which became reportable,
or as to which a material development has occurred, since the date of the
company's Quarterly Report on Form 10-Q for the 16-week period ended April 19,
1997:
(1) Tropin v. Thenen, et al.(U.S. District Court, Southern District of
Florida); Walco Investments, Inc., et al. v. Thenen, et al. (U.S. District
Court, Southern District of Florida)
Plaintiffs failed to deliver releases sufficient to meet the requirements of
the settlement agreement in a timely manner or to submit an acceptable proposal
to protect the company from exposure to non-releasing investors. If adequate
releases are not obtained and no acceptable proposal is submitted, the company
has the right to terminate the settlement and withdraw its $20 million escrow
deposit. If a settlement is not consummated, the company expects that the
litigation will resume. See "Premium" in Note 5 to the company's financial
statements included elsewhere herein for a further description of these cases.
(2) Furr's Supermarkets, Inc. v. Fleming Companies, Inc. (Second Judicial
District Court, Bernalillo County, New Mexico)
Furr's has sought the court's permission to amend its complaint to include
allegations of violations of the federal Racketeer Influenced and Corrupt
Organizations Act ("RICO") and other claims and to seek damages in excess of $75
million under RICO, before trebling. See "Furr's" in Note 5 to the company's
financial statements included elsewhere herein for a further description of this
case. The company has filed a shareholder's derivative suit in the Delaware
Court of Chancery alleging certain directors and shareholders of Furr's,
including its majority shareholder, have engaged in mismanagement of Furr's and
waste of corporate assets.
(3) In re: Megafoods Stores, Inc. (U.S. Bankruptcy Court for the District of
Arizona)
The hearing date for confirmation of the debtor's plan of liquidation has
been postponed and no new hearing date scheduled. During the second quarter of
1997, the debtor sold its Texas assets and the purchaser agreed to assume the
debtor's obligation to lease furniture, fixtures and equipment from the company.
The consummation of this sale resulted in the disposition of substantially all
of the debtor's remaining physical assets. The company did not receive any
distribution from the sale of the debtor's Texas assets. See "Megafoods" in Note
5 to the company's financial statements included elsewhere herein for a further
description of this case.
(4) Century Shopping Center Fund I v. Malone & Hyde, Inc. (Milwaukee County
Circuit Court, State of Wisconsin); Marquette Pharmacy, Inc., et al. v. Malone &
Hyde, Inc. (Milwaukee County Circuit Court, State of Wisconsin); Ronald P.
Huntley, trustee v. Malone & Hyde, Inc. (Milwaukee County Circuit Court, State
of Wisconsin)
In July 1997, the trial court granted plaintiffs' motion for summary
judgment with respect to its breach of contract claim against Fleming (as to
liability only, not as to damages). The company will petition the Wisconsin
Court of Appeals for a certification of an interlocutory appeal of that
decision. Plaintiffs have alleged $1.7 million of actual damages resulted from
the breach of contract. Total damages sought, after trebling but before
consideration of any punitive damages, approximate $18 million.
(5) Randall's Food Markets, Inc. v. Fleming Companies, Inc. (Proceeding
before the American Arbitration Association, Dallas, Texas)
On July 30, 1997, Randall's initiated arbitration proceedings against
Fleming before the American Arbitration Association in Dallas, Texas. Randall's
alleges that Fleming conspired with a group of manufacturers and vendors to
defraud Randall's by cooperating to inflate prices charged to Randall's
23
<PAGE>
under a supply agreement with the company expiring in 2001. Randall's alleges
breach of contract, fraud and RICO violations, and seeks actual damages,
punitive damages, attorneys' fees, treble damages under RICO, and termination of
the supply agreement. The contract on which Randall's bases its claim prohibits
either party from recovering any amount other than actual damages; recovery of
consequential damages, punitive damages and all similar forms of damages are
expressly prohibited. Randall's asserts that such a provision is contrary to
public policy and therefore not binding on it.
The company believes it has complied with its obligations to Randall's in
good faith and that punitive and consequential damages are not recoverable under
the supply agreement; the company will vigorously defend its interests in the
arbitration. This matter has not previously been reported. See "Randall's" in
Note 5 to the company's financial statements included elsewhere herein for a
further description of this case.
(6) Tobacco Cases
In August 1996, Richard E. Ieyoub, the Attorney General of the State of
Louisiana, brought an action in the 14th Judicial District Court of Louisiana
against numerous defendants including the company. In January 1997, a purported
class action was brought in the 10th Judicial District Court of Louisiana
against numerous defendants (Morgan v. U.S. Tobacco Co., et al.), including the
company. Since then eleven individual plaintiffs (Joseph Aezen; Najiyya
El-Haddi; Victoria Lynn Katz; Robert R. Applebaum; Carla Boyce; Robert J. Ruiz;
Rosalind K. Orr; Florence Ferguson; Ella Daly; Janet Anes; and Kym Glasser) have
commenced litigation against the company (or one of its predecessors) in the
Court of Common Pleas, Philadelphia County, Pennsylvania; one individual (Doyle
Smith) and his spouse commenced an action in the Court of Common Pleas, Dauphin
County, Pennsylvania; and one individual (Olanda Carter) has commenced action
against the company in Circuit Court for Shelby County, Tennessee. Each of these
cases involves substantial monetary liability on the part of the company for the
company's part in the distribution of tobacco products.
The company is being indemnified by substantial third parties with respect
to these cases. Additionally, the United States Congress is currently working
toward a global settlement of tobacco related issues which could include a
complete bar to future litigation against intermediate distributors such as the
company. No assurance, however, can be given that such a global settlement will
be successfully achieved.
24
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
<TABLE>
<CAPTION>
EXHIBIT NUMBER
- -----------------
<S> <C>
4.16 Credit Agreement, dated as of July 25, 1997, among the company; the Lenders party thereto;
BancAmerica Securities, Inc., as syndication agent; Societe Generale, as documentation
agent; and The Chase Manhattan Bank, as administrative agent (schedules and exhibits
omitted)
4.17 Security Agreement, dated as of July 25, 1997, among the company, each of the company
subsidiaries party thereto and The Chase Manhattan Bank, as collateral agent (schedules
and exhibits omitted)
4.18 Pledge Agreement, dated as of July 25, 1997, among the company, each of the company
subsidiaries party thereto and The Chase Manhattan Bank, as collateral agent (schedules
and exhibits omitted)
4.19 Guarantee Agreement, dated as of July 25, 1997, among each of the company subsidiaries
party thereto and The Chase Manhattan Bank, as collateral agent (schedules and exhibits
omitted)
4.20 Indenture, dated July 25, 1997 for 10 5/8% Senior Subordinated Notes due 2007
4.21 Indenture, dated July 25, 1997 for 10 1/2% Senior Subordinated Notes due 2004
4.22 Registration Rights Agreement, dated as of July 25, 1997, among the company, each of the
company subsidiaries party thereto and the Initial Purchasers party thereto (schedules
and exhibits omitted)
12 Computation of Ratio of Earnings to Fixed Charges
27 Financial Data Schedule
</TABLE>
(b) Reports on Form 8-K:
On June 16, 1997, registrant reported under Item 5 announcing that its Board
of Directors approved a $1.35 billion recapitalization program for the company.
On June 23, 1997, registrant reported certain developments in the Furr's
litigation under Item 5.
On July 25, 1997, registrant reported under Item 5 that the company had
closed its recapitalization program resulting in an extraordinary after-tax
charge of $13.3 million, or $.35 per share, in the company's second quarter
ended July 12, 1997.
25
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FLEMING COMPANIES, INC.
(Registrant)
/s/ KEVIN J. TWOMEY
--------------------------------------
Kevin J. Twomey
VICE PRESIDENT--CONTROLLER
(PRINCIPAL ACCOUNTING OFFICER)
Date: August 25, 1997
26
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NUMBER
- -----------------
<S> <C>
4.16 Credit Agreement, dated as of July 25, 1997, among the company; the Lenders party thereto;
BancAmerica Securities, Inc., as syndication agent; Societe Generale, as documentation
agent; and The Chase Manhattan Bank, as administrative agent (schedules and exhibits
omitted)
4.17 Security Agreement, dated as of July 25, 1997, among the company, each of the company
subsidiaries party thereto and The Chase Manhattan Bank, as collateral agent (schedules
and exhibits omitted)
4.18 Pledge Agreement, dated as of July 25, 1997, among the company, each of the company
subsidiaries party thereto and The Chase Manhattan Bank, as collateral agent (schedules
and exhibits omitted)
4.19 Guarantee Agreement, dated as of July 25, 1997, among each of the company subsidiaries
party thereto and The Chase Manhattan Bank, as collateral agent (schedules and exhibits
omitted)
4.20 Indenture, dated July 25, 1997 for 10 5/8% Senior Subordinated Notes due 2007
4.21 Indenture, dated July 25, 1997 for 10 1/2% Senior Subordinated Notes due 2004
4.22 Registration Rights Agreement, dated as of July 25, 1997, among the company, each of the
company subsidiaries party thereto and the Initial Purchasers party thereto (schedules
and exhibits omitted)
12 Computation of Ratio of Earnings to Fixed Charges
27 Financial Data Schedule
</TABLE>
<PAGE>
CONFORMED COPY
- -----------------------------------------------------------------
$850,000,000 CREDIT AGREEMENT
dated as of
July 25, 1997
among
FLEMING COMPANIES, INC.,
The Lenders Party Hereto,
BANCAMERICA SECURITIES, INC.,
as Syndication Agent,
SOCIETE GENERALE,
as Documentation Agent,
and
THE CHASE MANHATTAN BANK,
as Administrative Agent
- ---------------------------
CHASE SECURITIES INC.,
as Advisor and Arranger
- -----------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Term. . . . . . . . . . . . . . . . . . 1
SECTION 1.02. Classification of Loans and
Borrowing . . . . . . . . . . . . . . . . . .
20
SECTION 1.03. Terms Generally . . . . . . . . . . . . . . . . 20
SECTION 1.04. Accounting Terms; GAA . . . . . . . . . . . . . 21
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments . . . . . . . . . . . . . . . . . . 21
SECTION 2.02. Loans and Borrowings. . . . . . . . . . . . . . 21
SECTION 2.03. Requests for Borrowings . . . . . . . . . . . . 22
SECTION 2.04. Swingline Loans . . . . . . . . . . . . . . . . 23
SECTION 2.05. Letters of Credit . . . . . . . . . . . . . . . 24
SECTION 2.06. Funding of Borrowings . . . . . . . . . . . . . 29
SECTION 2.07. Interest Elections. . . . . . . . . . . . . . . 30
SECTION 2.08. Termination and Reduction of
Commitments . . . . . . . . . . . . . . . . . 31
SECTION 2.09. Repayment of Loans; Evidence of Debt. . . . . . 32
SECTION 2.10. Amortization of Term Loans. . . . . . . . . . . 33
SECTION 2.11. Prepayment of Loans . . . . . . . . . . . . . . 34
SECTION 2.12. Fees. . . . . . . . . . . . . . . . . . . . . . 37
SECTION 2.13. Interest. . . . . . . . . . . . . . . . . . . . 38
SECTION 2.14. Alternate Rate of Interest. . . . . . . . . . . 39
SECTION 2.15. Increased Costs . . . . . . . . . . . . . . . . 39
SECTION 2.16. Break Funding Payments. . . . . . . . . . . . . 41
SECTION 2.17. Taxes . . . . . . . . . . . . . . . . . . . . . 41
SECTION 2.18. Payments Generally; Pro Rata Treatment;
Sharing of Set-offs . . . . . . . . . . . . . 42
SECTION 2.19. Mitigation Obligations; Replacement
of Lenders. . . . . . . . . . . . . . . . . . 44
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01. Corporate Existence and Power . . . . . . . . . 45
SECTION 3.02. Corporate and Governmental Authorization;
Contravention . . . . . . . . . . . . . . . . 46
SECTION 3.03. Binding Effect. . . . . . . . . . . . . . . . . 46
SECTION 3.04. Financial Information . . . . . . . . . . . . . 46
SECTION 3.05. Litigation . . . . . . . . . . . . . . . . . . 47
SECTION 3.06. Compliance with ERISA . . . . . . . . . . . . . 47
-i-
<PAGE>
SECTION 3.07. Environmental Matters . . . . . . . . . . . . . 47
SECTION 3.08. Taxes . . . . . . . . . . . . . . . . . . . . . 48
SECTION 3.09. Subsidiaries. . . . . . . . . . . . . . . . . . 48
SECTION 3.10. Not an Investment Company . . . . . . . . . . . 48
SECTION 3.11. No Conflicting Requirements . . . . . . . . . . 48
SECTION 3.12. Disclosure. . . . . . . . . . . . . . . . . . . 48
SECTION 3.13. Security Documents. . . . . . . . . . . . . . . 49
ARTICLE IV
CONDITIONS
SECTION 4.01. Effective Date. . . . . . . . . . . . . . . . . 49
SECTION 4.02. Each Credit Even. . . . . . . . . . . . . . . . 52
ARTICLE V
AFFIRMATIVE COVENANTS
SECTION 5.01. Information . . . . . . . . . . . . . . . . . . 53
SECTION 5.02. Payment of Obligations. . . . . . . . . . . . . 55
SECTION 5.03. Maintenance of Property; Insurance. . . . . . . 55
SECTION 5.04. Conduct of Business and Maintenance
of Existence. . . . . . . . . . . . . . . . . 56
SECTION 5.05. Compliance with Laws. . . . . . . . . . . . . . 56
SECTION 5.06. Inspection of Property, Books and Records . . . 56
SECTION 5.07. Use of Proceeds . . . . . . . . . . . . . . . . 57
SECTION 5.08. Guarantee Requirement; Further Assurances . . . 57
ARTICLE VI
NEGATIVE COVENANTS
SECTION 6.01. Liens . . . . . . . . . . . . . . . . . . . . . 58
SECTION 6.02. Mergers, Consolidations and Sales
of Assets . . . . . . . . . . . . . . . . . . 59
SECTION 6.03. Indebtedness. . . . . . . . . . . . . . . . . . 60
SECTION 6.04. Restricted Payments . . . . . . . . . . . . . . 62
SECTION 6.05. Transactions with Affiliates. . . . . . . . . . 62
SECTION 6.06. Acquisitions and Investments. . . . . . . . . . 63
SECTION 6.07. Limitation on Payment Restrictions
Affecting Subsidiaries. . . . . . . . . . . . 65
SECTION 6.08. Fixed Charge Coverage Ratio . . . . . . . . . . 65
SECTION 6.09. Ratio of Inventory and Accounts Receivable
to Funded Bank Debt . . . . . . . . . . . . . 65
-ii-
<PAGE>
ARTICLE VII
EVENTS OF DEFAULT . . . . . . . . . . . . . . . 65
ARTICLE VIII
THE ADMINISTRATIVE AGENT . . . . . . . . . . . . . 68
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices . . . . . . . . . . . . . . . . . . . . 71
SECTION 9.02. Waivers; Amendments . . . . . . . . . . . . . . 72
SECTION 9.03. Expenses; Indemnity; Damage Waiver. . . . . . . 73
SECTION 9.04. Successors and Assigns. . . . . . . . . . . . . 75
SECTION 9.05. Survival. . . . . . . . . . . . . . . . . . . . 77
SECTION 9.06. Counterparts; Integration;
Effectiveness . . . . . . . . . . . . . . . . 78
SECTION 9.07. Severability. . . . . . . . . . . . . . . . . . 78
SECTION 9.08. Right of Setoff . . . . . . . . . . . . . . . . 78
SECTION 9.09. Governing Law; Jurisdiction; Consent to
Service of Process. . . . . . . . . . . . . . 79
SECTION 9.10. WAIVER OF JURY TRIAL. . . . . . . . . . . . . . 79
SECTION 9.11. Headings . . . . . . . . . . . . . . . . . . . 80
SECTION 9.12. Confidentiality . . . . . . . . . . . . . . . . 80
SECTION 9.13. Interest Rate Limitation. . . . . . . . . . . . 81
SCHEDULES:
Schedule 2.01 -- Commitments
Schedule 2.05 -- Rolled-In Letters of Credit
Schedule 3.06 -- ERISA Matters
Schedule 3.09 -- Subsidiaries
Schedule 6.01 -- Existing Liens
Schedule 6.03(a)(ii) -- Existing Indebtedness
Schedule 6.03(b)(ii) -- Other Indebtedness
Schedule 6.05 -- Existing Affiliate Transactions with PDM, Inc.
Schedule 6.06(vii) -- 1994 Credit Agreement Adjustments to
Acquisitions and Investments Basket
-iii-
<PAGE>
EXHIBITS:
Exhibit A -- Form of Assignment and Acceptance
Exhibit B-1 -- Form of Opinion of Borrower's Counsel
Exhibit B-2 -- Form of Opinion of Borrower's General Counsel
Exhibit C -- Guarantee Agreement
Exhibit D -- Indemnity, Subrogation and Contribution Agreement
Exhibit E -- Pledge Agreement
Exhibit F -- Security Agreement
-iv-
<PAGE>
CREDIT AGREEMENT dated as of July 25, 1997, among FLEMING
COMPANIES, INC. (the "Borrower"), the LENDERS party hereto, BANCAMERICA
SECURITIES, INC., as Syndication Agent, SOCIETE GENERALE, as
Documentation Agent, and THE CHASE MANHATTAN BANK, as Administrative
Agent.
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINED TERMS. As used in this Agreement, the
following terms have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Alternate Base Rate.
"ACCOUNTS RECEIVABLE" has the meaning assigned to such term in the
Security Agreement.
"ACQUISITION" means (i) an investment by the Borrower or any of the
Subsidiaries in any Person (other than the Borrower or any of its
Subsidiaries) pursuant to which such Person shall become a Subsidiary or
shall be merged into or consolidated with the Borrower or any of its
Subsidiaries or (ii) an acquisition by the Borrower or any of its
Subsidiaries of the property and assets of any Person (other than the
Borrower or any of its Subsidiaries) that constitute substantially all of the
assets of such Person or of any division or line of business of such Person.
"ADJUSTED LIBO RATE" means, with respect to any Eurodollar
Borrowing for any Interest Period, an interest rate per annum (rounded
upwards, if necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for
such Interest Period multiplied by (b) the Statutory Reserve Rate.
"ADJUSTED NIBO RATE" means, with respect to any Eurodollar
Borrowing for any Interest Period, an interest rate per annum (rounded
upwards, if necessary, to the next 1/16 of 1%) equal to (a) the NIBO Rate for
such Interest Period multiplied by (b) the Statutory Reserve Rate.
"ADMINISTRATIVE AGENT" means The Chase Manhattan Bank, in its
capacity as administrative agent for the Lenders hereunder.
"ADMINISTRATIVE QUESTIONNAIRE" means an Administrative
Questionnaire in a form supplied by the Administrative Agent.
"AFFILIATE" means, with respect to a specified Person, another
Person that directly, or indirectly through one or more intermediaries,
Controls or is Controlled by or is under common
<PAGE>
Control with the Person specified.
"AGENTS" means the Administrative Agent, Syndication Agent and
Documentation Agent.
"ALTERNATE BASE RATE" means, for any day, a rate per annum equal
to the greater of (a) the Prime Rate in effect on such day and (b) the
Federal Funds Effective Rate in effect on such day plus 1/2 of 1%. Any
change in the Alternate Base Rate due to a change in the Prime Rate or the
Federal Funds Effective Rate shall be effective from and including the
effective date of such change in the Prime Rate or the Federal Funds
Effective Rate, respectively.
"APPLICABLE PERCENTAGE" means, with respect to any Revolving
Lender, the percentage of the total Revolving Commitments represented by such
Lender's Revolving Commitment. If the Revolving Commitments have terminated
or expired, the Applicable Percentages shall be determined based upon the
Revolving Commitments most recently in effect, giving effect to any
assignments.
"APPLICABLE RATE" means, for any day (a) with respect to the
commitment fees payable hereunder, or with respect to any Eurodollar Loan
that is a Revolving Loan or a Term Loan, as the case may be, the applicable
rate per annum set forth below under the caption "Commitment Fee Rate",
"Revolving Facility Spread" or "Term Loan Spread", as the case may be, based
upon the Ratings in effect on such day and, in the case of the Revolving
Facility Spread, the percentage of the aggregate Revolving Commitments that
shall be utilized on such day:
<TABLE>
<CAPTION>
REVOLVING FACILITY SPREAD
-------------------------
RATINGS COMMITMENT LESS THAN 25% GREATER THAN OR GREATER THAN OR TERM LOAN
(S&P/MOODY'S) FEE RATE UTILIZATION EQUAL TO 25% BUT EQUAL TO 50% SPREAD
------------ -------- ----------- LESS THAN 50% UTILIZATION ------
UTILIZATION -----------
-----------
<S> <C> <C> <C> <C> <C> <C>
Category 1 BBB+/Baa1 or higher 0.100% 0.250% 0.275% 0.300% 0.350%
Category 2 BBB/Baa2 0.150% 0.375% 0.400% 0.425% 0.475%
Category 3 BBB-/Baa3 0.200% 0.500% 0.550% 0.600% 0.650%
Category 4 BB+/Ba1 0.300% 0.750% 0.8125% 0.875% 1.000%
Category 5 BB/Ba2 0.375% 1.000% 1.125% 1.250% 1.375%
Category 6 Less than BB/Ba2 0.500% 1.500% 1.625% 1.750% 1.875%
</TABLE>
and (b) with respect to any ABR Loan, a rate per annum equal to the greater
of (i) zero and (ii) the applicable rate for a Eurodollar Loan of the same
Class, determined according to the above table, minus 1.00% per annum.
For purposes of the foregoing, (i) if the Ratings in effect on any
date fall in different Categories, the Applicable Rate shall be
-2-
<PAGE>
determined by reference to the superior (numerically lower) Category, unless
the Ratings differ by more than one Category, in which case the applicable
Category shall be the Category next below the superior (numerically lower) of
the two; (ii) if either Moody's or S&P shall not have in effect a Rating
(other than because such rating agency shall no longer be in the business of
rating corporate debt obligations), then such rating agency will be deemed to
have established a Rating in Category 6; and (iii) if any rating established
or deemed to have been established by Moody's or S&P shall be changed (other
than as a result of a change in the rating system of either Moody's or S&P),
such change shall be effective as of the day on which such change is first
announced by the rating agency making such change. Each change in the
Applicable Rate shall apply during the period commencing on the effective
date of such change and ending on the date immediately preceding the
effective date of the next such change. If the rating system of either
Moody's or S&P shall change, or if either such rating agency shall cease to
be in the business of rating corporate debt obligations, the Borrower and the
Administrative Agent shall negotiate in good faith to amend the references to
specific ratings in this definition to reflect such changed rating system or
the non-availability of ratings from such rating agency. For purposes of
determining the portion of the Revolving Commitments that has been utilized
at any time, (i) the Revolving Commitment of a Lender shall be deemed to be
utilized to the extent of the outstanding Revolving Loans, LC Exposure and
Swingline Exposure of such Lender and (ii) if the Revolving Commitments have
been terminated pursuant to Article VII, such Commitments shall at all times
thereafter be deemed to have been utilized in full.
"ASSET DISPOSITION" means (a) any sale, transfer or other
disposition of any capital stock of any Subsidiary to any Person other than
the Borrower or any Wholly Owned Subsidiary (including, without limitation,
through the merger of any Subsidiary with or into any Person other than the
Borrower or any Wholly Owned Subsidiary), (b) any sale, transfer or other
disposition of any other property or asset of the Borrower or any Subsidiary
to any Person other than the Borrower or any Wholly Owned Subsidiary, other
than any sale, transfer or other disposition of: (i) any current asset in the
ordinary course of business; (ii) any property or assets in connection with a
Permitted Note Financing; (iii) any property or assets within 180 days after
the acquisition, or completion of construction, thereof, to a Person other
than the Borrower or a Subsidiary who then leases such property to the
Borrower or a Subsidiary; (iv) existing property or assets in consideration
(in whole or in part) for the acquisition of new property or assets of a
similar character in the ordinary course of business; (v) inventory in the
ordinary course of business; and (vi) any other property or assets in the
ordinary course of business if the total consideration received by the
Borrower and its Subsidiaries in respect thereof and any property or assets
sold concurrently or in a related transaction or series of transactions does
not exceed $500,000, or (c) any casualty or other insured damage to, or any
taking under power of eminent domain or by condemnation or similar proceeding
of, properties or assets of the Borrower or any Subsidiary where the total
consideration received by the Borrower and its Subsidiaries in respect of
such event or proceeding, or series of
-3-
<PAGE>
events or proceedings, exceeds $500,000.
"ASSIGNMENT AND ACCEPTANCE" means an assignment and acceptance
entered into by a Lender and an assignee (with the consent of any party whose
consent is required by Section 9.04), and accepted by the Administrative
Agent, in the form of Exhibit A or any other form approved by the
Administrative Agent.
"BENEFIT ARRANGEMENT" means at any time an employee benefit plan
within the meaning of Section 3(3) of ERISA which is not a Plan or a
Multiemployer Plan and which is maintained or otherwise contributed to by any
ERISA Affiliate.
"BOARD" means the Board of Governors of the Federal Reserve System
of the United States of America.
"BORROWER" means Fleming Companies, Inc., an Oklahoma corporation.
"BORROWER'S KNOWLEDGE" means the knowledge of any executive officer
of the Borrower or any other employee of the Borrower charged with the
responsibility of administering this Agreement.
"BORROWING" means (a) any group of Loans of the same Class and
Type, made, converted or continued on the same date and, in the case of
Eurodollar Loans, as to which a single Interest Period is in effect, or (b) a
Swingline Loan.
"BORROWING REQUEST" means a request by the Borrower for a Borrowing
in accordance with Section 2.03.
"BUSINESS DAY" means any day that is not a Saturday, Sunday or
other day on which commercial banks in New York City are authorized or
required by law to remain closed; provided that, when used in connection with
a Eurodollar Loan, the term "Business Day" shall also exclude any day on
which banks are not open for dealings in dollar deposits in the London
interbank market.
"BUSINESS DEVELOPMENT PROGRAM" means the business practice of the
Borrower and its Subsidiaries of making or guaranteeing loans to, or making
equity investment in, third parties engaged in the retail grocery business in
exchange for long-term supply agreements with the Borrower or any Subsidiary.
"BUSINESS DEVELOPMENT VENTURE" means any Person participating in
the Business Development Program.
"CAPITAL LEASE OBLIGATIONS" of any Person means the obligations of
such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
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"CHANGE IN CONTROL" means (a) the acquisition of ownership,
directly or indirectly, beneficially or of record, by any Person or group
(within the meaning of the Securities Exchange Act of 1934 and the rules of
the Securities and Exchange Commission thereunder as in effect on the date
hereof) other than the 1989 ESOP, of shares representing 20% or more of the
aggregate ordinary voting power represented by the issued and outstanding
capital stock of the Borrower; or (b) the occupation at any time of a
majority of the seats (other than vacant seats) on the board of directors of
the Borrower by Persons who were neither (i) nominated by the board of
directors of the Borrower nor (ii) appointed by directors so nominated.
"CHANGE IN LAW" means (a) the adoption of any law, rule or
regulation after the date of this Agreement, (b) any change in any law, rule
or regulation or in the interpretation or application thereof by any
Governmental Authority after the date of this Agreement or (c) compliance by
any Lender or any Issuing Bank (or, for purposes of Section 2.15(b), by any
lending office of such Lender or by such Lender's or such Issuing Bank's
holding company, if any) with any request, guideline or directive (whether or
not having the force of law) of any Governmental Authority made or issued
after the date of this Agreement.
"CLASS", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are Revolving
Loans, Term Loans or Swingline Loans and, when used in reference to any
Commitment, refers to whether such Commitment is a Revolving Commitment or
Term Loan Commitment.
"CODE" means the Internal Revenue Code of 1986, as amended from
time to time.
"COLLATERAL" means any and all "Collateral", as defined in the
Security Documents.
"COLLATERAL AGENT" has the meaning ascribed to it in the Security
Agreement.
"COLLATERAL REQUIREMENT" means at any date that (a) the Pledge
Agreement creates in favor of the Collateral Agent, for the benefit of the
Lenders, first priority perfected pledges of and security interests in all
capital stock or other equity interests owned by the Borrower or any
Subsidiary in any Subsidiary, and (b) the Security Agreement creates in favor
of the Collateral Agent, for the benefit of the Lenders, first priority
perfected security interests in Inventory and Accounts Receivable
representing at least 95% of the consolidated Inventory and Accounts
Receivable of the Borrower; PROVIDED, that (i) the Borrower and the
Subsidiaries will in no event be required, in order to satisfy the Collateral
Requirement, to subject to the Lien of the Security Agreement Inventory or
Accounts Receivable of Joint Ventures and (ii) the Borrower will not be
required to cause Richmar Foods, Inc. to pledge the capital stock of Netco
Foods, Inc. unless and until Richmar Foods, Inc. becomes a Wholly Owned
Subsidiary.
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"COMMITMENT" means a Revolving Commitment or Term Loan Commitment
or any combination thereof (as the context requires).
"CONSOLIDATED NET INCOME" means, for any period, the net income or
loss of the Borrower and the Subsidiaries for such period determined on a
consolidated basis in accordance with GAAP, PROVIDED that there shall be
excluded the income (or loss) of any Person accrued prior to the date it
becomes a Subsidiary or is merged into or consolidated with the Borrower or
any of the Subsidiaries or the date that Person's assets are acquired by the
Borrower or any of the Subsidiaries.
"CONSOLIDATED SUBSIDIARY" means at any date any Subsidiary or other
entity the accounts of which would be consolidated with those of the Borrower
in its consolidated financial statements as of such date.
"CONTROL" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
Person, whether through the ability to exercise voting power, by contract or
otherwise. "CONTROLLING" and "CONTROLLED" have meanings correlative thereto.
"DEFAULT" means any event or condition which constitutes an Event
of Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"DESIGNATED SUBSIDIARY" means a Subsidiary that is neither an
Equity Store nor a Business Development Venture.
"DOCUMENTATION AGENT" means Societe Generale, in its capacity as
documentation agent under this Agreement.
"DOLLARS" or "$" refers to lawful money of the United States of
America.
"EBITDAR" means, for any period, Consolidated Net Income for such
period plus, to the extent deducted in determining such Consolidated Net
Income, the sum of income tax expense, depreciation expense, amortization
expense, Interest Expense, Rent Expense, Equity Investment Results and
non-cash charges taken after the Effective Date ("DESIGNATED NON-CASH
CHARGES") with respect to (i) write-downs of certain retail and distribution
facilities and related assets in connection with the proposed disposition of
such facilities or discontinuance of operations at such facilities, or
otherwise in accordance with GAAP or (ii) other consolidation and
restructuring of facilities and operations (PROVIDED, that any cash payment
made with respect to any such Designated Non-Cash Charge shall be subtracted
in computing EBITDAR during the period in which such cash payment is made),
minus, to the extent added in determining such Consolidated Net Income,
non-cash gains and income and Equity Investment Results all as determined in
accordance with GAAP on a consolidated basis for the Borrower and the
Subsidiaries; PROVIDED that, for purposes of determining EBITDAR, all cash
and non-cash charges incurred in
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connection with the execution and delivery of this Agreement or the issuance
and sale of the Subordinated Notes shall be excluded.
"EFFECTIVE DATE" means the date on which the conditions specified
in Section 4.01 are satisfied (or waived in accordance with Section 9.02).
"ENVIRONMENTAL LAWS" means all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or reclamation of
natural resources, the management, release or threatened release of any
Hazardous Material or to health and safety matters.
"ENVIRONMENTAL LIABILITY" means any liability, contingent or
otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of the Borrower or any
Subsidiary directly or indirectly resulting from or based upon (a) violation
of any Environmental Law, (b) the generation, use, handling, transportation,
storage, treatment or disposal of any Hazardous Materials, (c) exposure to
any Hazardous Materials, (d) the release or threatened release of any
Hazardous Materials into the environment or (e) any contract, agreement or
other consensual arrangement pursuant to which liability is assumed or
imposed with respect to any of the foregoing.
"EQUITY INVESTMENT RESULTS" shall have the meaning given such term
in the consolidated financial statements of the Borrower referred to in
Section 3.04, and shall be computed in a manner consistent with that used in
preparing such statements.
"EQUITY STORE" means any Person participating in the Equity Store
Program.
"EQUITY STORE PROGRAM" means the business practice of the Borrower
and its Subsidiaries of making equity investment in Persons, and making or
guaranteeing loans to such Persons, for the purposes of assisting such Person
in acquiring, remodeling, refurbishing, expanding or operating one or more
retail grocery stores and pursuant to which such Person is permitted or
required to reduce the Borrower's or the Subsidiary's equity interest to a
minority position over time (usually five to 10 years).
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) that, together with the Borrower, is treated as a single
employer under Section 414(b) or (c) of the Code or, solely for purposes of
Section 302 of ERISA and Section 412 of the Code, is treated as a single
employer under Section 414 of the Code.
"EURODOLLAR", when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans comprising such
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Borrowing, are LIBOR Loans or NIBOR Loans.
"EVENT OF DEFAULT" has the meaning assigned to such term in Article
VII.
"EXCLUDED TAXES" means, with respect to the Administrative Agent,
any Lender, any Issuing Bank or any other recipient of any payment to be made
by or on account of any obligation of the Borrower hereunder, (a) income or
franchise taxes imposed on (or measured by) its net income by the United
States of America, or by the jurisdiction under the laws of which such
recipient is organized or in which its principal office is located or, in the
case of any Lender, in which its applicable lending office is located, (b)
any branch profits taxes imposed by the United States of America or any
similar tax imposed by any other jurisdiction in which the Borrower is
located and (c) in the case of a Foreign Lender (other than an assignee
pursuant to a request by the Borrower under Section 2.19(b)), any withholding
tax that is imposed on amounts payable to such Foreign Lender at the time
such Foreign Lender becomes a party to this Agreement (or designates a new
lending office) or is attributable to such Foreign Lender's failure to comply
with Section 2.17(e), except to the extent that such Foreign Lender (or its
assignor, if any) was entitled, at the time of designation of a new lending
office (or assignment), to receive additional amounts from the Borrower with
respect to such withholding tax pursuant to Section 2.17(a).
"FLOATING RATE SENIOR NOTES" means the Borrower's Floating Rate
Senior Notes due 2001.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any day, the weighted
average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates
on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers, as published on the next succeeding
Business Day by the Federal Reserve Bank of New York, or, if such rate is not
so published for any day that is a Business Day, the average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the quotations for such
day for such transactions received by the Administrative Agent from three
Federal funds brokers of recognized standing selected by it.
"FINANCIAL OFFICER" means the chief financial officer, principal
accounting officer, treasurer or controller of the Borrower.
"FINANCING NOTES" means notes receivable arising from investments
in direct financing leases or in retailer notes or chattel paper (other than
any retailer note or chattel paper received in exchange or substitution for
or in payment or other satisfaction of any Account Receivable).
"FOREIGN LENDER" means any Lender that is organized under the laws
of a jurisdiction other than that in which the Borrower is located. For
purposes of this definition, the United States of America, each State thereof
and the District of Columbia shall be deemed to constitute a single
jurisdiction.
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"FUNDED BANK DEBT" means, as of any date, the aggregate principal
amount of Loans and undrawn Letters of Credit outstanding hereunder and other
Indebtedness of the Borrower or any Subsidiary incurred under one or more
uncommitted lines of credit and the aggregate termination value of all
Hedging Agreements that are secured by the Collateral.
"GAAP" means generally accepted accounting principles in the United
States of America.
"GOVERNMENTAL AUTHORITY" means the government of the United States
of America, any other nation or any political subdivision thereof, whether
state or local, and any agency, authority, instrumentality, regulatory body,
court, central bank or other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.
"GRANTOR" means the Borrower and each Subsidiary that is, or is
required by Section 5.08 to be, a party to the Pledge Agreement or the
Security Agreement.
"GUARANTEE" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any
Indebtedness of any other Person and, without limiting the generality of the
foregoing, any obligation, direct or indirect, contingent or otherwise, of
such Person (i) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Indebtedness (whether arising by virtue of
partnership arrangements, by agreement to keep-well, to purchase assets,
goods, securities or services, to take-or-pay, or to maintain financial
statement conditions or otherwise) or (ii) entered into for the purpose of
assuring in any other manner the obligee of such Indebtedness of the payment
thereof or to protect such obligee against loss in respect thereof (in whole
or in part), PROVIDED that the term Guarantee shall not include (a)
endorsements for collection or deposit in the ordinary course of business or
(b) agreements entered into in the ordinary course of business to purchase
inventory or retail store fixtures of another Person at a price not greater
than the market value thereof. The term "Guarantee" used as a verb has a
corresponding meaning.
"GUARANTEE AGREEMENT" means a Guarantee Agreement in substantially
the form of Exhibit C hereto among the Guarantors and the Administrative
Agent acting on behalf of the Lenders, as the same may be amended, modified
or supplemented from time to time in accordance with the provisions hereof.
"GUARANTEE REQUIREMENT" means at any date that (a) all Wholly Owned
Subsidiaries are Guarantors and (b) the assets of the Guarantors, together
with the assets of the Borrower, constituted as at the last day of the most
recently ended fiscal quarter of the Borrower at least 95% of the
consolidated total assets of the Borrower and its Subsidiaries; PROVIDED,
HOWEVER, that the Guarantee Requirement shall in no event be met unless each
Subsidiary that guarantees the Subordinated Notes or any other subordinated
Indebtedness of the Borrower shall be a Guarantor. For purposes of
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this definition, assets shall be taken at their book value and all stock or
other equity interests in Subsidiaries and other intercompany items shall be
disregarded.
"GUARANTORS" means the Subsidiaries listed on Schedule 3.09 hereto
and each other Subsidiary that becomes party to the Guarantee Agreement
pursuant to Section 5.08 or otherwise, PROVIDED, that for purposes of the
definition of "Guarantee Requirement", a Subsidiary that is an indirect
Subsidiary of the Borrower shall not be considered a Guarantor unless each
intermediate Subsidiary is also a Guarantor.
"HAZARDOUS MATERIALS" means all explosive or radioactive
substances or wastes and all hazardous or toxic substances, wastes or other
pollutants, including petroleum or petroleum distillates, asbestos or
asbestos containing materials, polychlorinated biphenyls, radon gas,
infectious or medical wastes and all other substances or wastes of any nature
regulated pursuant to any Environmental Law.
"HEDGING AGREEMENT" means any interest rate protection agreement,
foreign currency exchange agreement, commodity price protection agreement or
other interest or currency exchange rate or commodity price hedging
arrangement. The "principal amount" or "termination value" of the
obligations of the Borrower or any Subsidiary in respect of any Hedging
Agreement at any time shall be the maximum aggregate amount (giving effect to
any netting agreements) that the Borrower or such Subsidiary would be
required to pay if such Hedging Agreement were terminated at such time.
"INDEBTEDNESS" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
upon which interest charges are customarily paid, (d) all obligations of such
Person under conditional sale or other title retention agreements relating to
property acquired by such Person, (e) all obligations of such Person in
respect of the deferred purchase price of property or services (excluding
current accounts payable incurred in the ordinary course of business), (f)
all Indebtedness of others secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured
by) any Lien on property owned or acquired by such Person, whether or not the
Indebtedness secured thereby has been assumed, (g) all Guarantees by such
Person of Indebtedness of others, (h) all Capital Lease Obligations of such
Person, (i) all obligations, contingent or otherwise, of such Person as an
account party in respect of letters of credit and letters of guaranty and (j)
all obligations, contingent or otherwise, of such Person in respect of
bankers' acceptances. The Indebtedness of any Person shall include the
Indebtedness of any other entity (including any partnership in which such
Person is a general partner) to the extent such Person is liable therefor as
a result of such Person's ownership interest in or other relationship with
such entity, except to the extent the terms of such Indebtedness provide that
such Person is not liable therefor.
"INDEMNIFIED TAXES" means Taxes other than Excluded Taxes.
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"INFORMATION MEMORANDUM" means the Confidential Information
Memorandum dated June 1997 distributed by the Borrower to prospective Lenders.
"INTEREST ELECTION REQUEST" means a request by the Borrower to
convert or continue a Revolving Borrowing or Term Borrowing in accordance
with Section 2.07.
"INTEREST EXPENSE" means, for any period, the gross interest
expense of the Borrower and its Subsidiaries for such period determined on a
consolidated basis in accordance with GAAP.
"INTEREST PAYMENT DATE" means (a) with respect to any ABR Loan
(other than a Swingline Loan), the last day of each March, June, September
and December, (b) with respect to any Eurodollar Loan, the last day of the
Interest Period applicable to the Borrowing of which such Loan is a part and,
in the case of a Eurodollar Borrowing with an Interest Period of more than
three months' duration, each day of such Interest Period that occurs at
intervals of three months' duration after the first day of such Interest
Period, and (c) with respect to any Swingline Loan, the day that such Loan is
required to be repaid.
"INTEREST PERIOD" means (a) with respect to any LIBOR Borrowing,
the period commencing on the date of such Borrowing and ending on the
numerically corresponding day in the calendar month that is one, two, three
or six months (or, if each Lender shall make interest periods of such
duration available, nine or twelve months) thereafter, as the Borrower may
elect, and (b) with respect to any NIBOR Borrowing, the period commencing on
the date of such Borrowing and ending on the numerically corresponding day in
the following calendar week; PROVIDED, that (i) if any Interest Period would
end on a day other than a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless, in the case of a LIBOR
Borrowing, such next succeeding Business Day would fall in the next calendar
month, in which case such Interest Period shall end on the next preceding
Business Day and (ii) in the case of a LIBOR Borrowing, any Interest Period
that commences on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the last calendar month of
such Interest Period) shall end on the last Business Day of the last calendar
month of such Interest Period. For purposes hereof, the date of a Borrowing
initially shall be the date on which such Borrowing is made and thereafter
shall be the effective date of the most recent conversion or continuation of
such Borrowing.
"INVENTORY" has the meaning assigned to such term in the Security
Agreement.
"INVESTMENT" means any investment in any Person, whether by means
of share purchase, capital contribution, loan, Guarantee, time deposit or
otherwise; PROVIDED that Accounts Receivable arising in the ordinary course
of business do not constitute Investments.
"ISSUING BANKS" means The Chase Manhattan Bank, Societe
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Generale and Bank of America National Trust and Savings Association in their
capacity as issuers of Letters of Credit hereunder, and their successors in
such capacity as provided in Section 2.05(i). Any Issuing Bank may, in its
discretion, arrange for one or more Letters of Credit to be issued by one or
more Affiliates of such Issuing Bank, PROVIDED, in each case, that the
Borrower does not reasonably object based on such Affiliate's
creditworthiness, and the term "Issuing Bank" shall include any such
Affiliate with respect to Letters of Credit issued by it.
"JOINT VENTURE" means any Person, other than an Equity Store or
Business Development Venture, (a) that is formed by the Borrower after the
date hereof pursuant to arm's length negotiations with one or more Persons
that are not Affiliates of the Borrower, (b) in which the Borrower directly
or indirectly owns less than 80% of the equity and (c) no part of the
Borrower's investment in which was obtained through the conversion or
forgiveness of Indebtedness.
"LATER MATURING INDEBTEDNESS" means unsecured Indebtedness of the
Borrower incurred after the date hereof that has a final maturity at least
six months after the Term Loan Maturity Date and no portion of which is
subject to mandatory repayment or repurchase at the option of the holders
thereof or otherwise prior to such time (other than as a result of a change
in control of the Borrower).
"LC DISBURSEMENT" means a payment made by any Issuing Bank pursuant
to a Letter of Credit.
"LC EXPOSURE" means, at any time, the sum of (a) the aggregate
undrawn amount of all outstanding Letters of Credit at such time plus (b) the
aggregate amount of all LC Disbursements that have not yet been reimbursed by
or on behalf of the Borrower at such time. The LC Exposure of any Revolving
Lender at any time shall be its Applicable Percentage of the total LC
Exposure at such time.
"LENDERS" means the Persons listed on Schedule 2.01 and any other
Person that shall have become a party hereto pursuant to an Assignment and
Acceptance, other than any such Person that ceases to be a party hereto
pursuant to an Assignment and Acceptance. Unless the context otherwise
requires, the term "Lenders" includes the Swingline Lender.
"LETTER OF CREDIT" means any letter of credit issued pursuant to
this Agreement, including the letters of credit issued by Societe Generale
that are set forth on Schedule 2.05.
"LIBO RATE" means, with respect to any Eurodollar Borrowing for any
Interest Period, the rate appearing on the LIBO Page of the Reuters
Information Service (or on any successor or substitute page of such service,
or any successor to or substitute for such service, providing rate quotations
comparable to those currently provided on such page of such service, as
determined by the Administrative Agent from time to time for purposes of
providing quotations of interest rates applicable to dollar deposits in the
London interbank market) at approximately 11:00 a.m., London time, two
Business Days prior to the
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commencement of such Interest Period, as the rate for dollar deposits with a
maturity comparable to such Interest Period. In the event that such rate is
not available at such time for any reason, then the "LIBO RATE" with respect
to such Eurodollar Borrowing for such Interest Period shall be the rate at
which dollar deposits of $5,000,000 and for a maturity comparable to such
Interest Period are offered by the principal London office of the
Administrative Agent in immediately available funds in the London interbank
market at approximately 11:00 a.m., London time, two Business Days prior to
the commencement of such Interest Period.
"LIBOR" means, with respect to any Loan or Borrowing, any Loan or
Borrowing that bears interest at a rate determined by reference to the
Adjusted LIBO Rate.
"LIEN" means, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, hypothecation, encumbrance, charge or security interest
in, on or of such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or
any financing lease having substantially the same economic effect as any of
the foregoing) relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.
"LOAN DOCUMENTS" means this Agreement, the Guarantee Agreement and
the Security Documents.
"LOAN PARTIES" means the Borrower and the Subsidiary Loan Parties.
"LOANS" means the loans made by the Lenders to the Borrower
pursuant to this Agreement.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (a)
the business, assets, operations, prospects or condition, financial or
otherwise, of the Borrower and the Subsidiaries taken as a whole, (b) the
ability of any Loan Party to perform any of its obligations under any Loan
Document or (c) the rights of or benefits available to the Lenders under any
Loan Document.
"MATERIAL PLAN" means at any time a Plan or Plans having aggregate
Unfunded Liabilities in excess of $35,000,000.
"MATERIAL INDEBTEDNESS" means Indebtedness (other than Indebtedness
outstanding hereunder), or obligations in respect of one or more Hedging
Agreements, of any one or more of the Borrower and its Subsidiaries in an
aggregate principal amount of $10,000,000 or more.
"MOODY'S" means Moody's Investors Service, Inc.
"MULTIEMPLOYER PLAN" means a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
"NET PROCEEDS" means, with respect to any event (a) the cash
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proceeds received by the Borrower and the Subsidiaries in respect of such
event including (i) any cash received in respect of any non-cash proceeds,
but only as and when received, (ii) in the case of a casualty, insurance
proceeds, and (iii) in the case of a condemnation or similar event,
condemnation awards and similar payments, net of (b) the sum of (i) all
reasonable fees and out-of-pocket expenses paid by the Borrower and the
Subsidiaries to third parties (other than Affiliates) in connection with such
event, (ii) in the case of a sale or other disposition of an asset (including
pursuant to a casualty or condemnation), the amount of all payments required
to be made by the Borrower and the Subsidiaries as a result of such event to
repay Indebtedness (other than Loans) secured by such asset or otherwise
subject to mandatory prepayment as a result of such event, and (iii) the
amount of all taxes paid (or reasonably estimated to be payable) by the
Borrower and the Subsidiaries that are directly attributable to such event
(as determined reasonably and in good faith by the chief financial officer or
another Financial Officer of the Borrower).
"NIBO RATE" means, with respect to any Eurodollar Borrowing for any
Interest Period, the rate (rounded upwards, if necessary, to the next 1/16 of
1%) equal to the interest rate at which dollar deposits for an amount
approximately equal to the principal amount of such Borrowing and for a
seven-day maturity are offered in immediately available funds to the
Administrative Agent at the Eurodollar lending office where its foreign
currency and exchange operations are customarily conducted in the
international interbank market at approximately 10:00 a.m., New York City
time, two Business Days prior to the commencement of such Interest Period.
"NIBOR" means, with respect to any Loan or Borrowing, any Loan or
Borrowing that bears interest at a rate determined by reference to the
Adjusted NIBO Rate.
"1989 ESOP" means that portion of the Consolidated Saving Plus and
Stock Ownership Plan for Fleming Companies, Inc. and its Subsidiaries,
effective September 1, 1989, entitled "Fleming Stock Ownership Plan", or any
similar stock ownership plan for the sole benefit of employees of the
Borrower and its Subsidiaries.
"1994 CREDIT AGREEMENT" means the $2,200,000,000 Credit Agreement
dated as of July 19, 1994, as amended, among the Borrower, the several banks
and financial institutions from time to time party thereto and Morgan
Guaranty Trust Company of New York.
"OBLIGATIONS" has the meaning assigned to such term in the Security
Agreement.
"OTHER TAXES" means any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made under any Loan Document or from the
execution, delivery or enforcement of, or otherwise with respect to, any Loan
Document.
"PBGC" means the Pension Benefit Guaranty Corporation referred to
and defined in ERISA and any successor entity performing
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similar functions.
"PERFECTION CERTIFICATE" means a certificate in the form of Annex I
to the Security Agreement or any other form approved by the Collateral Agent.
"PERMITTED NOTE FINANCING" means any transaction involving the
transfer (by way of sale, pledge, or otherwise) by the Borrower or any of its
Subsidiaries of Financing Notes to any other Person, PROVIDED that after
giving effect to such transaction the sum of (i) the aggregate uncollected
balances of Financing Notes so transferred ("Transferred Notes") plus (ii)
the aggregate amount of all collections on Transferred Notes theretofore
received by the seller but not yet remitted to the purchaser, in each case at
the date of determination, would not exceed $500,000,000.
"PERSON" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership,
Governmental Authority or other entity.
"PLAN" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which the Borrower
or any ERISA Affiliate is (or, if such plan were terminated, would under
Section 4069 of ERISA be deemed to be) an "employer" as defined in Section
3(5) of ERISA.
"PLEDGE AGREEMENT" means the Pledge Agreement substantially in the
form of Exhibit E hereto among the Borrower, the applicable Subsidiaries and
the Collateral Agent acting on behalf of the Secured Parties, as the same may
be amended, modified or supplemented from time to time in accordance with the
provisions hereof.
"PRIME RATE" means the rate of interest per annum publicly
announced from time to time by The Chase Manhattan Bank as its prime rate in
effect at its principal office in New York City; each change in the Prime
Rate shall be effective from and including the date such change is publicly
announced as being effective.
"RATINGS" shall refer to the ratings of Moody's and S&P applicable
to the Borrower's senior secured bank debt.
"REGISTER" has the meaning set forth in Section 9.04.
"RELATED PARTIES" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.
"RENT EXPENSE" means, for any period, the rent expense (net of
sub-lease income) of the Borrower and its Subsidiaries for such period for
leases of real and personal property, determined on a consolidated basis in
accordance with GAAP (excluding any such expense that is included in Interest
Expense for such period).
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"REQUIRED LENDERS" means, at any time, Lenders having Revolving
Exposures, Term Loans and unused Commitments representing more than 50% of
the sum of the total Revolving Exposures, outstanding Term Loans and unused
Commitments at such time.
"REVOLVING AVAILABILITY PERIOD" means the period from and including
the Effective Date to but excluding the earlier of the Revolving Maturity
Date and the date of termination of the Revolving Commitments.
"REVOLVING COMMITMENT" means, with respect to each Lender, the
commitment, if any, of such Lender to make Revolving Loans and to acquire
participations in Letters of Credit and Swingline Loans hereunder, expressed
as an amount representing the maximum aggregate amount of such Lender's
Revolving Exposure hereunder, as such commitment may be (a) reduced from time
to time pursuant to Section 2.08 and (b) reduced or increased from time to
time pursuant to assignments by or to such Lender pursuant to Section 9.04.
The initial amount of each Lender's Revolving Commitment is set forth on
Schedule 2.01, or in the Assignment and Acceptance pursuant to which such
Lender shall have assumed its Revolving Commitment, as applicable. The
initial aggregate amount of the Lenders' Revolving Commitments is
$600,000,000.
"REVOLVING EXPOSURE" means, with respect to any Lender at any time,
the sum of the outstanding principal amount of such Lender's Revolving Loans
and its LC Exposure and Swingline Exposure at such time.
"REVOLVING LENDER" means a Lender with a Revolving Commitment or,
if the Revolving Commitments have terminated or expired, a Lender with
Revolving Exposure.
"REVOLVING LOAN" means a Loan made pursuant to clause (b) of
Section 2.01.
"REVOLVING MATURITY DATE" means July 25, 2003.
"S&P" means Standard & Poor's Rating Group.
"SECURED PARTIES" shall have the meaning ascribed to such term in
the Security Agreement.
"SECURITY AGREEMENT" means the Security Agreement substantially in
the form of Exhibit F hereto among the Borrower, the applicable Subsidiaries
and the Collateral Agent acting on behalf of the Secured Parties, as the same
may be amended, modified or supplemented from time to time in accordance with
the provisions hereof.
"SECURITY DOCUMENTS" means the Security Agreement, the Pledge
Agreement and each other security agreement or other instrument or document
executed and delivered pursuant to Section 4.01 or 5.08 in satisfaction of
the Collateral Requirement.
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"10-5/8% SENIOR NOTE INDENTURE" means the Indenture dated as of
December 15, 1994, under which the 10-5/8% Senior Notes were issued.
"10-5/8% SENIOR NOTES" means the Borrower's 10-5/8% Senior Notes
due 2001.
"STATUTORY RESERVE RATE" means a fraction (expressed as a decimal),
the numerator of which is the number one and the denominator of which is the
number one minus the aggregate of the maximum reserve percentages (including
any marginal, special, emergency or supplemental reserves) expressed as a
decimal established by the Board to which the Administrative Agent is subject
with respect to the Adjusted LIBO Rate or Adjusted NIBO Rate, for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D of the Board). Such reserve percentages shall include those
imposed pursuant to such Regulation D. Eurodollar Loans shall be deemed to
constitute eurocurrency funding and to be subject to such reserve
requirements without benefit of or credit for proration, exemptions or
offsets that may be available from time to time to any Lender under such
Regulation D or any comparable regulation. The Statutory Reserve Rate shall
be adjusted automatically on and as of the effective date of any change in
any reserve percentage.
"SUBORDINATED NOTE DOCUMENTS" means the indentures under which the
Subordinated Notes are issued and all other instruments, agreements and other
documents evidencing or governing the Subordinated Notes or providing for any
Guarantee or other right in respect thereof.
"SUBORDINATED NOTES" means the Borrower's senior subordinated notes
due 2004 and 2007.
"SUBSIDIARY" means, with respect to any Person (the "PARENT") at
any date, any corporation, limited liability company, partnership,
association or other entity the accounts of which would be consolidated with
those of the parent in the parent's consolidated financial statements if such
financial statements were prepared in accordance with GAAP as of such date,
as well as any other corporation, limited liability company, partnership,
association or other entity (a) of which securities or other ownership
interests representing more than 50% of the equity or more than 50% of the
ordinary voting power or, in the case of a partnership, more than 50% of the
general partnership interests are, as of such date, owned, controlled or
held, or (b) that is, as of such date, otherwise Controlled, by the parent or
one or more subsidiaries of the parent or by the parent and one or more
subsidiaries of the parent.
"SUBSIDIARY" means any subsidiary of the Borrower.
"SWINGLINE EXPOSURE" means, at any time, the aggregate principal
amount of all Swingline Loans outstanding at such time. The Swingline
Exposure of any Lender at any time shall be its Applicable Percentage of the
total Swingline Exposure at such time.
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"SWINGLINE LENDER" means The Chase Manhattan Bank, in its capacity
as lender of Swingline Loans hereunder.
"SWINGLINE LOAN" means a Loan made pursuant to Section 2.04.
"SYNDICATION AGENT" means BancAmerica Securities, Inc., in its
capacity as syndication agent under this Agreement.
"TAXES" means any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"TEMPORARY CASH INVESTMENT" means any Investment in (i) direct
obligations of the United States or any agency thereof, or obligations
guaranteed by the United States or any agency thereof, (ii) commercial paper
rated at least A-1 by S&P and P-1 by Moody's, (iii) time deposits with,
including certificates of deposit issued by, any office located in the United
States of any bank or trust company which is organized under the laws of the
United States or any state thereof and has capital, surplus and undivided
profits aggregating at least $500,000,000, (iv) repurchase agreements with
respect to securities described in clause (i) above entered into with an
office of a bank or trust company meeting the criteria specified in clause
(iii) above, (v) short-term tax exempt bonds rated at least AA- by S&P or AA3
by Moody's or (vi) shares in a mutual fund, the investment objectives and
policies of which require it to invest substantially all of its assets in
short-term tax exempt bonds rated at least AA- by S&P or AA3 by Moody's,
PROVIDED that in the case of clauses (i) through (v) above such Investment
matures within one year from the date of acquisition thereof by the Borrower
or a Subsidiary.
"TERM LENDER" means a Lender with a Term Loan Commitment or an
outstanding Term Loan.
"TERM LOAN" means a Loan made pursuant to clause (a) of Section
2.01.
"TERM LOAN COMMITMENT" means, with respect to each Lender, the
commitment, if any, of such Lender to make a Term Loan hereunder on the
Effective Date, expressed as an amount representing the maximum principal
amount of the Term Loan to be made by such Lender hereunder, as such
commitment may be (a) reduced from time to time pursuant to Section 2.08 and
(b) reduced or increased from time to time pursuant to assignments by or to
such Lender pursuant to Section 9.04. The initial amount of each Lender's
Term Loan Commitment is set forth on Schedule 2.01, or in the Assignment and
Acceptance pursuant to which such Lender shall have assumed its Term Loan
Commitment, as applicable. The initial aggregate amount of the Lenders' Term
Loan Commitments is $250,000,000.
"TERM LOAN MATURITY DATE" means July 25, 2004.
"TERM LENDER" means a Lender with a Term Loan Commitment or an
outstanding Term Loan.
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"TYPE", when used in reference to any Loan or Borrowing, refers to
whether the rate of interest on such Loan, or on the Loans comprising such
Borrowing, is determined by reference to the Adjusted LIBO Rate, the Adjusted
NIBO Rate or the Alternate Base Rate.
"UNFUNDED LIABILITIES" means, with respect to any Plan at any time,
the amount (if any) by which (i) the value of all benefit liabilities under
such Plan, determined on a plan termination basis using the assumptions
prescribed by the PBGC for purposes of Section 4044 of ERISA, exceeds (ii)
the fair market value of all Plan assets allocable to such liabilities under
Title IV of ERISA (excluding any accrued but unpaid contributions), all
determined as of the then most recent valuation date for such Plan, but only
to the extent that such excess represents a potential liability of an ERISA
Affiliate to the PBGC or any other Person under Title IV of ERISA.
"WHOLLY OWNED SUBSIDIARY" means any Subsidiary all of the shares of
capital stock or other ownership interests of which (except directors'
qualifying shares) are at the time directly or indirectly owned by the
Borrower.
"WITHDRAWAL LIABILITY" means liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as
such terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. CLASSIFICATION OF LOANS AND BORROWINGS. For purposes
of this Agreement, Loans may be classified and referred to by Class (E.G., a
"Revolving Loan") or by Type (E.G., a "Eurodollar Loan") or by Class and Type
(E.G., a "Eurodollar Revolving Loan"). Borrowings also may be classified and
referred to by Class (E.G., a "Revolving Borrowing") or by Type (E.G., a
"Eurodollar Borrowing") or by Class and Type (E.G., a "Eurodollar Revolving
Borrowing").
SECTION 1.03. TERMS GENERALLY. The definitions of terms herein
shall apply equally to the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without
limitation". The word "will" shall be construed to have the same meaning and
effect as the word "shall". Unless the context requires otherwise (a) any
definition of or reference to any agreement, instrument or other document
herein shall be construed as referring to such agreement, instrument or other
document as from time to time amended, supplemented or otherwise modified
(subject to any restrictions on such amendments, supplements or modifications
set forth herein), (b) any reference herein to any Person shall be construed
to include such Person's successors and assigns, (c) the words "herein",
"hereof" and "hereunder", and words of similar import, shall be construed to
refer to this Agreement in its entirety and not to any particular provision
hereof, (d) all references herein to Articles, Sections, Exhibits and
Schedules shall be construed to refer to Articles and Sections of, and
Exhibits and Schedules to, this Agreement and (e) the words "asset" and
"property"
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shall be construed to have the same meaning and effect and to refer to any
and all tangible and intangible assets and properties, including cash,
securities, accounts and contract rights.
SECTION 1.04. ACCOUNTING TERMS; GAAP. Except as otherwise
expressly provided herein, all terms of an accounting or financial nature
shall be construed in accordance with GAAP, as in effect from time to time;
PROVIDED that, if the Borrower notifies the Administrative Agent that the
Borrower requests an amendment to any provision hereof to eliminate the
effect of any change occurring after the date hereof in GAAP or in the
application thereof on the operation of such provision (or if the
Administrative Agent notifies the Borrower that the Administrative Agent or
the Required Lenders request an amendment to any provision hereof for such
purpose), regardless of whether any such notice is given before or after such
change in GAAP or in the application thereof, then such provision shall be
interpreted on the basis of GAAP as in effect and applied immediately before
such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith.
ARTICLE II
THE CREDITS
SECTION 2.01. COMMITMENTS. Subject to the terms and conditions
set forth herein, each Lender agrees (a) to make a Term Loan or Term Loans to
the Borrower on the Effective Date in a principal amount equal to its Term
Loan Commitment and (b) to make Revolving Loans to the Borrower from time to
time during the Revolving Availability Period in an aggregate principal
amount up to its Revolving Commitment, subject to the limitation that such
Lender's Revolving Exposure shall not exceed such Lender's Revolving
Commitment at any time. Within the foregoing limits and subject to the terms
and conditions set forth herein, the Borrower may borrow, prepay and reborrow
Revolving Loans. Amounts repaid in respect of Term Loans may not be
reborrowed.
SECTION 2.02. LOANS AND BORROWINGS. (a) Each Loan (other than a
Swingline Loan) shall be made as part of a Borrowing consisting of Loans of
the same Class and Type made by the Lenders ratably in accordance with their
respective Commitments of the applicable Class. The failure of any Lender to
make any Loan required to be made by it shall not relieve any other Lender of
its obligations hereunder; PROVIDED that the Commitments of the Lenders are
several and no Lender shall be responsible for any other Lender's failure to
make Loans as required.
(b) Subject to Section 2.14, each Revolving Borrowing and Term
Borrowing shall be comprised entirely of ABR Loans or Eurodollar Loans as the
Borrower may request in accordance herewith. Each Swingline Loan shall be an
ABR Loan. Each Lender at its option may make any Eurodollar Loan by causing
any domestic or foreign branch or Affiliate of such Lender to make such Loan;
PROVIDED that any exercise of such option shall not affect the obligation of
the Borrower to
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repay such Loan in accordance with the terms of this Agreement.
(c) At the commencement of each Interest Period for any Eurodollar
Borrowing, such Borrowing shall be in an aggregate amount that is an integral
multiple of $1,000,000 and not less than $10,000,000. At the time that each
ABR Revolving Borrowing is made, such Borrowing shall be in an aggregate
amount that is an integral multiple of $1,000,000 and not less than
$10,000,000; PROVIDED that an ABR Revolving Borrowing may be in an aggregate
amount that is equal to the entire unused balance of the total Revolving
Commitments or that is required to finance the reimbursement of an LC
Disbursement as contemplated by Section 2.05(e). Each Swingline Loan shall
be in an amount that is an integral multiple of $100,000 and not less than
$1,000,000. Borrowings of more than one Type and Class may be outstanding at
the same time; PROVIDED that there shall not at any time be more than a total
of 20 Eurodollar Revolving Borrowings and 20 Eurodollar Term Borrowings
outstanding.
(d) Notwithstanding any other provision of this Agreement, the
Borrower shall not be entitled to request, or to elect to convert or
continue, any Borrowing if the Interest Period requested with respect thereto
would end after the Revolving Maturity Date or Term Loan Maturity Date, as
applicable.
SECTION 2.03. REQUESTS FOR BORROWINGS. To request a Revolving
Borrowing or Term Borrowing, the Borrower shall notify the Administrative
Agent of such request by telephone (a) in the case of a Eurodollar Borrowing,
not later than 12:00 noon, New York City time, three Business Days before the
date of the proposed Borrowing or (b) in the case of an ABR Borrowing, not
later than 11:00 a.m., New York City time, on the date of the proposed
Borrowing. Each such telephonic Borrowing Request shall be irrevocable and
shall be confirmed promptly by hand delivery or telecopy to the
Administrative Agent of a written Borrowing Request in a form approved by the
Administrative Agent and signed by the Borrower. Each such telephonic and
written Borrowing Request shall specify the following information in
compliance with Section 2.02:
(i) whether the requested Borrowing is to be a
Revolving Borrowing or Term Borrowing;
(ii) the aggregate amount of such Borrowing;
(iii) the date of such Borrowing, which shall be a
Business Day;
(iv) whether such Borrowing is to be an ABR Borrowing
or a Eurodollar Borrowing, and, in the case of a Eurodollar
Borrowing, whether such Borrowing is to be a LIBOR Borrowing
or a NIBOR Borrowing;
(v) in the case of a LIBOR Borrowing, the initial
Interest Period to be applicable thereto, which shall be a
period contemplated by the definition of the term "Interest
Period"; and
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(vi) the location and number of the Borrower's account
to which funds are to be disbursed, which shall comply with
the requirements of Section 2.06.
If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing. If no Interest Period is specified with
respect to any requested LIBOR Revolving Borrowing, then the Borrower shall
be deemed to have selected an Interest Period of one month's duration.
Promptly following receipt of a Borrowing Request in accordance with this
Section, the Administrative Agent shall advise each Lender of the details
thereof and of the amount of such Lender's Loan to be made as part of the
requested Borrowing.
SECTION 2.04. SWINGLINE LOANS. (a) Subject to the terms and
conditions set forth herein, the Swingline Lender agrees to make Swingline
Loans to the Borrower from time to time during the Revolving Availability
Period, in an aggregate principal amount at any time outstanding that will
not result in (i) the aggregate principal amount of outstanding Swingline
Loans exceeding $30,000,000 or (ii) the sum of the total Revolving Exposures
exceeding the total Revolving Commitments; PROVIDED that the Swingline Lender
shall not be required to make a Swingline Loan to refinance an outstanding
Swingline Loan. Within the foregoing limits and subject to the terms and
conditions set forth herein, the Borrower may borrow, prepay and reborrow
Swingline Loans.
(b) To request a Swingline Loan, the Borrower shall notify the
Administrative Agent of such request by telephone (confirmed by telecopy),
not later than 1:00 p.m., New York City time, on the day of a proposed
Swingline Loan. Each such notice shall be irrevocable and shall specify the
date (which shall be a Business Day) and amount of the requested Swingline
Loan. The Administrative Agent will promptly advise the Swingline Lender of
any such notice received from the Borrower. The Swingline Lender shall make
each Swingline Loan available to the Borrower by means of a credit to the
general deposit account of the Borrower with the Swingline Lender (or, in the
case of a Swingline Loan made to finance the reimbursement of an LC
Disbursement as provided in Section 2.06(e), by remittance to the applicable
Issuing Bank) by 3:00 p.m., New York City time, on the requested date of such
Swingline Loan.
(c) The Swingline Lender may by written notice given to the
Administrative Agent not later than 1:00 p.m., New York City time, on any
Business Day require the Revolving Lenders to acquire participations on such
Business Day in all or a portion of the Swingline Loans outstanding. Such
notice shall specify the aggregate amount of Swingline Loans in which
Revolving Lenders will participate. Promptly upon receipt of such notice,
the Administrative Agent will give notice thereof to each Revolving Lender,
specifying in such notice such Lender's Applicable Percentage of such
Swingline Loan or Loans. Each Revolving Lender hereby absolutely and
unconditionally agrees, upon receipt of notice as provided above, to pay to
the Administrative Agent, for the account of the Swingline Lender, such
Lender's Applicable Percentage of such Swingline Loan or Loans and the
interest accrued and not yet paid thereon. Each Revolving Lender
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acknowledges and agrees that its obligation to acquire participations in
Swingline Loans pursuant to this paragraph is absolute and unconditional and
shall not be affected by any circumstance whatsoever, including the
occurrence and continuance of a Default or reduction or termination of the
Commitments, and that each such payment shall be made without any offset,
abatement, withholding or reduction whatsoever. Each Revolving Lender shall
comply with its obligation under this paragraph by wire transfer of
immediately available funds, in the same manner as provided in Section 2.06
with respect to Loans made by such Lender (and Section 2.06 shall apply,
MUTATIS MUTANDIS, to the payment obligations of the Revolving Lenders), and
the Administrative Agent shall promptly pay to the Swingline Lender the
amounts so received by it from the Revolving Lenders. The Administrative
Agent shall notify the Borrower of any participations in any Swingline Loan
acquired pursuant to this paragraph, and thereafter payments in respect of
such Swingline Loan shall be made to the Administrative Agent and not to the
Swingline Lender. Any amounts received by the Swingline Lender from the
Borrower (or other party on behalf of the Borrower) in respect of a Swingline
Loan after receipt by the Swingline Lender of the proceeds of a sale of
participations therein shall be promptly remitted to the Administrative
Agent; any such amounts received by the Administrative Agent shall be
promptly remitted by the Administrative Agent to the Revolving Lenders that
shall have made their payments pursuant to this paragraph and to the
Swingline Lender, as their interests may appear. The purchase of
participations in a Swingline Loan pursuant to this paragraph shall not
relieve the Borrower of any default in the payment thereof.
SECTION 2.05. LETTERS OF CREDIT. (a) GENERAL. Subject to the
terms and conditions set forth herein, the Borrower may request the issuance
of Letters of Credit for its own account, in a form reasonably acceptable to
the Administrative Agent and the applicable Issuing Banks, at any time and
from time to time during the Revolving Availability Period. In the event of
any inconsistency between the terms and conditions of this Agreement and the
terms and conditions of any form of letter of credit application or other
agreement submitted by the Borrower to, or entered into by the Borrower with,
an Issuing Bank relating to any Letter of Credit, the terms and conditions of
this Agreement shall control. All letters of credit issued by Societe
Generale for the account of the Borrower that are set forth on Schedule 2.05
shall be deemed for all purposes to be Letters of Credit issued under this
Agreement.
(b) NOTICE OF ISSUANCE, AMENDMENT, RENEWAL, EXTENSION; CERTAIN
CONDITIONS. To request the issuance of a Letter of Credit (or the amendment,
renewal or extension of an outstanding Letter of Credit), the Borrower shall
hand deliver or telecopy (or transmit by electronic communication, if
arrangements for doing so have been approved by the applicable Issuing Bank)
to an Issuing Bank and the Administrative Agent (reasonably in advance of the
requested date of issuance, amendment, renewal or extension) a notice
requesting the issuance of a Letter of Credit, or identifying the Letter of
Credit to be amended, renewed or extended, and specifying the date of
issuance, amendment, renewal or extension (which shall be a Business Day),
the
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date on which such Letter of Credit is to expire (which shall comply with
paragraph (c) of this Section), the amount of such Letter of Credit, the name
and address of the beneficiary thereof and such other information as shall be
necessary to prepare, amend, renew or extend such Letter of Credit. If
requested by such Issuing Bank, the Borrower also shall submit a letter of
credit application on such Issuing Bank's standard form in connection with
any request for a Letter of Credit. A Letter of Credit shall be issued,
amended, renewed or extended only if (and upon issuance, amendment, renewal
or extension of each Letter of Credit the Borrower shall be deemed to
represent and warrant that), after giving effect to such issuance, amendment,
renewal or extension (i) the LC Exposure shall not exceed $300,000,000 and
(ii) the total Revolving Exposures shall not exceed the total Revolving
Commitments.
(c) EXPIRATION DATE. Each Letter of Credit shall expire at or
prior to the close of business on the earlier of (i) the date one year after
the date of the issuance of such Letter of Credit (or, in the case of any
renewal or extension thereof, one year after such renewal or extension) and
(ii) the date that is 10 Business Days prior to the Revolving Maturity Date.
(d) PARTICIPATIONS. By the issuance of a Letter of Credit (or an
amendment to a Letter of Credit increasing the amount thereof) and without
any further action on the part of the applicable Issuing Bank or the Lenders,
the applicable Issuing Bank hereby grants to each Revolving Lender, and each
Revolving Lender hereby acquires from the applicable Issuing Bank, a
participation in such Letter of Credit equal to such Lender's Applicable
Percentage from time to time of the aggregate amount available to be drawn
under such Letter of Credit. In consideration and in furtherance of the
foregoing, each Revolving Lender hereby absolutely and unconditionally agrees
to pay to the Administrative Agent, for the account of the applicable Issuing
Bank, such Lender's Applicable Percentage of each LC Disbursement made by the
applicable Issuing Bank and not reimbursed by the Borrower on the date due as
provided in paragraph (e) of this Section, or of any reimbursement payment
required to be refunded to the Borrower for any reason. Each Lender
acknowledges and agrees that its obligation to acquire participations
pursuant to this paragraph in respect of Letters of Credit is absolute and
unconditional and shall not be affected by any circumstance whatsoever,
including any amendment, renewal or extension of any Letter of Credit or the
occurrence and continuance of a Default or reduction or termination of the
Commitments, and that each such payment shall be made without any offset,
abatement, withholding or reduction whatsoever.
(e) REIMBURSEMENT. If the applicable Issuing Bank shall make any
LC Disbursement in respect of a Letter of Credit, the Borrower shall
reimburse such LC Disbursement by paying to the Administrative Agent an
amount equal to such LC Disbursement not later than 12:00 noon, New York City
time, on the date that such LC Disbursement is made, if the Borrower shall
have received notice of such LC Disbursement prior to 10:00 a.m., New York
City time, on such date, or, if such notice has not been received by the
Borrower prior to such time on such date, then not later than 12:00 noon, New
York
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City time, on the Business Day immediately following the day that the
Borrower receives such notice; PROVIDED that the Borrower may, subject to the
conditions to borrowing set forth herein, request in accordance with Section
2.03 or 2.04 that such payment be financed with an ABR Revolving Borrowing or
Swingline Loan in an equivalent amount and, to the extent so financed, the
Borrower's obligation to make such payment shall be discharged and replaced
by the resulting ABR Revolving Borrowing or Swingline Loan. If the Borrower
fails to make such payment when due, the Administrative Agent shall notify
each Revolving Lender of the applicable LC Disbursement, the payment then due
from the Borrower in respect thereof and such Lender's Applicable Percentage
thereof. Promptly following receipt of such notice, each Revolving Lender
shall pay to the Administrative Agent its Applicable Percentage of the
payment then due from the Borrower, in the same manner as provided in Section
2.06 with respect to Loans made by such Lender (and Section 2.06 shall apply,
MUTATIS MUTANDIS, to the payment obligations of the Revolving Lenders), and
the Administrative Agent shall promptly pay to the applicable Issuing Bank
the amounts so received by it from the Revolving Lenders. Promptly following
receipt by the Administrative Agent of any payment from the Borrower pursuant
to this paragraph, the Administrative Agent shall distribute such payment to
the applicable Issuing Bank or, to the extent that Revolving Lenders have
made payments pursuant to this paragraph to reimburse such Issuing Bank, then
to such Lenders and such Issuing Bank as their interests may appear. Any
payment made by a Revolving Lender pursuant to this paragraph to reimburse
the applicable Issuing Bank for any LC Disbursement (other than the funding
of ABR Revolving Loans or a Swingline Loan as contemplated above) shall not
constitute a Loan and shall not relieve the Borrower of its obligation to
reimburse such LC Disbursement.
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(f) OBLIGATIONS ABSOLUTE. The Borrower's obligation to reimburse
LC Disbursements as provided in paragraph (e) of this Section shall be
absolute, unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement under any and all circumstances
whatsoever and irrespective of (i) any lack of validity or enforceability of
any Letter of Credit or this Agreement, or any term or provision therein,
(ii) any draft or other document presented under a Letter of Credit proving
to be forged, fraudulent or invalid in any respect or any statement therein
being untrue or inaccurate in any respect, (iii) payment by any Issuing Bank
under a Letter of Credit against presentation of a draft or other document
that does not comply with the terms of such Letter of Credit, or (iv) any
other event or circumstance whatsoever, whether or not similar to any of the
foregoing, that might, but for the provisions of this Section, constitute a
legal or equitable discharge of, or provide a right of setoff against, the
Borrower's obligations hereunder. Neither the Administrative Agent, the
Lenders nor the Issuing Banks, nor any of their Related Parties, shall have
any liability or responsibility by reason of or in connection with the
issuance or transfer of any Letter of Credit or any payment or failure to
make any payment thereunder (irrespective of any of the circumstances
referred to in the preceding sentence), or any error, omission, interruption,
loss or delay in transmission or delivery of any draft, notice or other
communication under or relating to any Letter of Credit (including any
document required to make a drawing thereunder), any error in interpretation
of technical terms or any consequence arising from causes beyond the control
of the Issuing Banks; provided that the foregoing shall not be construed to
excuse the Issuing Banks from liability to the Borrower to the extent of any
direct damages (as opposed to consequential damages, claims in respect of
which are hereby waived by the Borrower to the extent permitted by applicable
law) suffered by the Borrower that are caused by any Issuing Bank's failure
to exercise care when determining whether drafts and other documents
presented under a Letter of Credit comply with the terms thereof. The
parties hereto expressly agree that, in the absence of gross negligence or
wilful misconduct on the part of any Issuing Bank, the applicable Issuing
Bank shall be deemed to have exercised care in each such determination. In
furtherance of the foregoing and without limiting the generality thereof, the
parties agree that, with respect to documents presented which appear on their
face to be in substantial compliance with the terms of a Letter of Credit,
the applicable Issuing Bank may, in its sole discretion, either accept and
make payment upon such documents without responsibility for further
investigation, regardless of any notice or information to the contrary, or
refuse to accept and make payment upon such documents if such documents are
not in strict compliance with the terms of such Letter of Credit.
(g) DISBURSEMENT PROCEDURES. The applicable Issuing Bank shall,
promptly following its receipt thereof, examine all documents purporting to
represent a demand for payment under a Letter of Credit. The applicable
Issuing Bank shall promptly notify the Administrative Agent and the Borrower
by telephone (confirmed by telecopy) of such demand for payment and whether
such Issuing Bank has made or will make an LC Disbursement thereunder;
PROVIDED that any failure to give or
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delay in giving such notice shall not relieve the Borrower of its obligation
to reimburse such Issuing Bank and the Revolving Lenders with respect to any
such LC Disbursement.
(h) INTERIM INTEREST. If any Issuing Bank shall make any LC
Disbursement, then, unless the Borrower shall reimburse such LC Disbursement
in full on the date such LC Disbursement is made, the unpaid amount thereof
shall bear interest, for each day from and including the date such LC
Disbursement is made to but excluding the date that the Borrower reimburses
such LC Disbursement, at the rate per annum then applicable to ABR Revolving
Loans; PROVIDED that, if the Borrower fails to reimburse such LC Disbursement
when due pursuant to paragraph (e) of this Section, then Section 2.13(c)
shall apply. Interest accrued pursuant to this paragraph shall be for the
account of the applicable Issuing Bank, except that interest accrued on and
after the date of payment by any Revolving Lender pursuant to paragraph (e)
of this Section to reimburse the applicable Issuing Bank shall be for the
account of such Lender to the extent of such payment.
(i) REPLACEMENT OF AN ISSUING BANK. An Issuing Bank may be
replaced at any time by written agreement among the Borrower, the
Administrative Agent, the replaced Issuing Bank and the successor Issuing
Bank. The Administrative Agent shall notify the Lenders of any such
replacement of an Issuing Bank. At the time any such replacement shall become
effective, the Borrower shall pay all unpaid fees accrued for the account of
the replaced Issuing Bank pursuant to Section 2.12(b). From and after the
effective date of any such replacement, (i) the successor Issuing Bank shall
have all the rights and obligations of the replaced Issuing Bank under this
Agreement with respect to Letters of Credit to be issued thereafter and (ii)
references herein to the term "Issuing Bank" shall be deemed to include such
successor or any previous Issuing Bank, or such successor and all previous
Issuing Banks, as the context shall require. After the replacement of an
Issuing Bank hereunder, the replaced Issuing Bank shall remain a party hereto
and shall continue to have all the rights and obligations of an Issuing Bank
under this Agreement with respect to Letters of Credit issued by it prior to
such replacement, but shall not be required to issue additional Letters of
Credit.
(j) CASH COLLATERALIZATION. If any Event of Default shall occur
and be continuing, on the Business Day that the Borrower receives notice from
the Administrative Agent or the Required Lenders (or, if the maturity of the
Loans has been accelerated, Revolving Lenders with LC Exposures representing
greater than 50% of the total LC Exposure) demanding the deposit of cash
collateral pursuant to this paragraph, the Borrower shall deposit in an
account with the Administrative Agent, in the name of the Administrative
Agent and for the benefit of the Lenders, an amount in cash up to 100% of the
LC Exposure (as requested by the Administrative Agent or relevant Lenders, as
the case may be) as of such date plus any accrued and unpaid interest
thereon; PROVIDED that the obligation to deposit such cash collateral shall
become effective immediately, and such deposit shall become immediately due
and payable, without demand or other notice of any kind, upon the occurrence
of any Event of Default with respect to the Borrower described in clause (h)
or (i) of Article VII.
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Each such deposit shall be held by the Administrative Agent as collateral for
the payment and performance of the obligations of the Borrower under this
Agreement. The Administrative Agent shall have exclusive dominion and
control, including the exclusive right of withdrawal, over such account.
Other than any interest earned on the investment of such deposits, which
investments shall be made at the discretion of the Administrative Agent and
at the Borrower's risk and expense, such deposits shall not bear interest.
Interest or profits, if any, on such investments shall accumulate in such
account. Moneys in such account shall be applied by the Administrative Agent
to reimburse the applicable Issuing Bank for LC Disbursements for which it
has not been reimbursed and, to the extent not so applied, shall be held for
the satisfaction of the reimbursement obligations of the Borrower for the LC
Exposure at such time or, if the maturity of the Loans has been accelerated
(but subject to the consent of Revolving Lenders with LC Exposure
representing greater than 50% of the total LC Exposure), be applied to
satisfy other obligations of the Borrower under this Agreement. If the
Borrower is required to provide an amount of cash collateral hereunder as a
result of the occurrence of an Event of Default, such amount (to the extent
not applied as aforesaid) shall be returned to the Borrower within three
Business Days after all Events of Default have been cured or waived.
SECTION 2.06. FUNDING OF BORROWINGS. (a) Each Lender shall make
each Loan (other than any Swingline Loan) to be made by it hereunder on the
proposed date thereof by wire transfer of immediately available funds by
12:30 p.m., New York City time, to the account of the Administrative Agent
most recently designated by it for such purpose by notice to the Lenders;
PROVIDED that Swingline Loans shall be made as provided in Section 2.04. The
Administrative Agent will make such Loans available to the Borrower by
promptly crediting the amounts so received, in like funds, to an account of
the Borrower maintained with the Administrative Agent in New York City and
designated by the Borrower in the applicable Borrowing Request; PROVIDED that
ABR Revolving Loans made to finance the reimbursement of an LC Disbursement
as provided in Section 2.05(e) shall be remitted by the Administrative Agent
to the applicable Issuing Bank.
(b) Unless the Administrative Agent shall have received notice
from a Lender prior to the proposed date of any Borrowing that such Lender
will not make available to the Administrative Agent such Lender's share of
such Borrowing, the Administrative Agent may assume that such Lender has made
such share available on such date in accordance with paragraph (a) of this
Section and may, in reliance upon such assumption, make available to the
Borrower a corresponding amount. In such event, if a Lender has not in fact
made its share of the applicable Borrowing available to the Administrative
Agent, then the applicable Lender and the Borrower severally agree to pay to
the Administrative Agent forthwith on demand such corresponding amount with
interest thereon, for each day from and including the date such amount is
made available to the Borrower to but excluding the date of payment to the
Administrative Agent, at (i) in the case of such Lender, the greater of the
Federal Funds Effective Rate and a rate determined by the Administrative
Agent in accordance with banking industry rules on interbank compensation or
(ii) in the case of the
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Borrower, the interest rate applicable to ABR Loans. If such Lender pays
such amount to the Administrative Agent, then such amount shall constitute
such Lender's Loan included in such Borrowing.
SECTION 2.07. INTEREST ELECTIONS. (a) Each Revolving Borrowing
and Term Borrowing initially shall be of the Type specified in the applicable
Borrowing Request and, in the case of a LIBOR Borrowing, shall have an
initial Interest Period as specified in such Borrowing Request. Thereafter,
the Borrower may elect to convert such Borrowing to a different Type or to
continue such Borrowing and, in the case of a LIBOR Borrowing, may elect
Interest Periods therefor, all as provided in this Section. The Borrower may
elect different options with respect to different portions of the affected
Borrowing, in which case each such portion shall be allocated ratably among
the Lenders holding the Loans comprising such Borrowing, and the Loans
comprising each such portion shall be considered a separate Borrowing. This
Section shall not apply to Swingline Borrowings, which may not be converted
or continued.
(b) To make an election pursuant to this Section, the Borrower
shall notify the Administrative Agent of such election by telephone by the
time that a Borrowing Request would be required under Section 2.03 if the
Borrower were requesting a Revolving Borrowing of the Type resulting from
such election to be made on the effective date of such election. Each such
telephonic Interest Election Request shall be irrevocable and shall be
confirmed promptly by hand delivery or telecopy to the Administrative Agent
of a written Interest Election Request in a form approved by the
Administrative Agent and signed by the Borrower.
(c) Each telephonic and written Interest Election Request shall
specify the following information, which shall be consistent with the
requirements of Section 2.02 and paragraph (f) of this Section:
(i) the Borrowing to which such Interest Election Request applies
and, if different options are being elected with respect to different
portions thereof, the portions thereof to be allocated to each resulting
Borrowing (in which case the information to be specified pursuant to
clauses (iii) and (iv) below shall be specified for each resulting
Borrowing);
(ii) the effective date of the election made pursuant to such Interest
Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR Borrowing, a
LIBOR Borrowing or a NIBOR Borrowing; and
(iv) if the resulting Borrowing is a LIBOR Borrowing, the Interest
Period to be applicable thereto after giving effect to such election, which
shall be a period contemplated by the definition of the term "Interest
Period".
If any such Interest Election Request requests a LIBOR Borrowing but does not
specify an Interest Period, then the Borrower shall be deemed
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to have selected an Interest Period of one month's duration.
(d) Promptly following receipt of an Interest Election Request,
the Administrative Agent shall advise each Lender of the details thereof and
of such Lender's portion of each resulting Borrowing.
(e) If the Borrower fails to deliver a timely Interest Election
Request with respect to a Eurodollar Borrowing prior to the end of the
Interest Period applicable thereto, then, unless such Borrowing is repaid as
provided herein, at the end of such Interest Period such Borrowing shall be
converted to an ABR Borrowing. Notwithstanding any contrary provision
hereof, if an Event of Default has occurred and is continuing and the
Administrative Agent, at the request of the Required Lenders, so notifies the
Borrower, then, so long as an Event of Default is continuing (i) no
outstanding Borrowing may be converted to or continued as a Eurodollar
Borrowing and (ii) unless repaid, each Eurodollar Borrowing shall be
converted to an ABR Borrowing at the end of the Interest Period applicable
thereto.
(f) A Borrowing of any Class may not be converted to or continued
as a Eurodollar Borrowing if after giving effect thereto (i) the Interest
Period therefor would commence before and end after a date on which any
principal of the Loans of such Class is scheduled to be repaid and (ii) the
sum of the aggregate principal amount of outstanding Eurodollar Borrowings of
such Class with Interest Periods ending on or prior to such scheduled
repayment date plus the aggregate principal amount of outstanding ABR
Borrowings of such Class would be less than the aggregate principal amount of
Loans of such Class required to be repaid on such scheduled repayment date.
SECTION 2.08. TERMINATION AND REDUCTION OF COMMITMENTS. (a)
Unless previously terminated, (i) the Term Loan Commitments shall terminate
at 5:00 p.m., New York City time, on the Effective Date,(ii) the Revolving
Commitments shall terminate on the Revolving Maturity Date and (iii) all the
Commitments shall terminate if the initial borrowing hereunder shall not have
occurred by September 15, 1997.
(b) The Borrower may at any time terminate, or from time to time
reduce, the Commitments of any Class; PROVIDED that (i) each reduction of the
Commitments of any Class shall be in an amount that is an integral multiple
of $1,000,000 and not less than $10,000,000 and (ii) the Borrower shall not
terminate or reduce the Revolving Commitments if, after giving effect to any
concurrent prepayment of the Revolving Loans in accordance with Section 2.11,
the sum of the Revolving Exposures would exceed the total Revolving
Commitments.
(c) The Borrower shall notify the Administrative Agent of any
election to terminate or reduce the Commitments under paragraph (b) of this
Section at least three Business Days prior to the effective date of such
termination or reduction, specifying such election and the effective date
thereof. Promptly following receipt of any notice, the Administrative Agent
shall advise the Lenders of the contents thereof. Each notice delivered by
the Borrower pursuant to this Section shall be irrevocable; PROVIDED that a
notice of
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termination of the Revolving Commitments delivered by the Borrower may state
that such notice is conditioned upon the effectiveness of other credit
facilities, in which case such notice may be revoked by the Borrower (by
notice to the Administrative Agent on or prior to the specified effective
date) if such condition is not satisfied. Any termination or reduction of the
Commitments of any Class shall be permanent. Each reduction of the
Commitments of any Class shall be made ratably among the Lenders in
accordance with their respective Commitments of such Class.
SECTION 2.09. REPAYMENT OF LOANS; EVIDENCE OF DEBT. (a) The
Borrower hereby unconditionally promises to pay (i) to the Administrative
Agent for the account of each Lender the then unpaid principal amount of each
Revolving Loan of such Lender on the Revolving Maturity Date, (ii) to the
Administrative Agent for the account of each Lender the then unpaid principal
amount of each Term Loan of such Lender as provided in Section 2.10 and (iii)
to the Swingline Lender the then unpaid principal amount of each Swingline
Loan on the seventh Business Day after the date on which such Swingline Loan
is made.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of the Borrower
to such Lender resulting from each Loan made by such Lender, including the
amounts of principal and interest payable and paid to such Lender from time
to time hereunder.
(c) The Administrative Agent shall maintain accounts in which it
shall record (i) the amount of each Loan made hereunder, the Class and Type
thereof and the Interest Period applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and payable from the
Borrower to each Lender hereunder and (iii) the amount of any sum received by
the Administrative Agent hereunder for the account of the Lenders and each
Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to
paragraph (b) or (c) of this Section shall be PRIMA FACIE evidence of the
existence and amounts of the obligations recorded therein; PROVIDED that the
failure of any Lender or the Administrative Agent to maintain such accounts
or any error therein shall not in any manner affect the obligation of the
Borrower to repay the Loans in accordance with the terms of this Agreement.
(e) Any Lender may request that Loans of any Class made by it be
evidenced by a promissory note. In such event, the Borrower shall prepare,
execute and deliver to such Lender a promissory note payable to the order of
such Lender (or, if requested by such Lender, to such Lender and its
registered assigns) and in a form approved by the Administrative Agent.
Thereafter, the Loans evidenced by such promissory note and interest thereon
shall at all times (including after assignment pursuant to Section 9.04) be
represented by one or more promissory notes in such form payable to the order
of the payee named therein (or, if such promissory note is a registered note,
to such payee and its registered assigns).
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SECTION 2.10. AMORTIZATION OF TERM LOANS. (a) Subject to
adjustment pursuant to paragraph (c) of this Section, the Borrower shall
repay Term Borrowings on each date set forth below in the aggregate principal
amount set forth opposite such date:
Date Amount
---- ------
December 31, 1997 $6,250,000
March 31, 1998 $6,250,000
June 30, 1998 $6,250,000
September 30, 1998 $6,250,000
December 31, 1998 $6,250,000
March 31, 1999 $6,250,000
June 30, 1999 $6,250,000
September 30, 1999 $6,250,000
December 31, 1999 $8,750,000
March 31, 2000 $8,750,000
June 30, 2000 $8,750,000
September 30, 2000 $8,750,000
December 31, 2000 $8,750,000
March 31, 2001 $8,750,000
June 30, 2001 $8,750,000
September 30, 2001 $8,750,000
December 31, 2001 $10,000,000
March 31, 2002 $10,000,000
June 30, 2002 $10,000,000
September 30, 2002 $10,000,000
December 31, 2002 $10,000,000
March 31, 2003 $10,000,000
June 30, 2003 $10,000,000
September 30, 2003 $10,000,000
December 31, 2003 $12,500,000
March 31, 2004 $12,500,000
June 30, 2004 $12,500,000
July 25, 2004 $12,500,000
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(b) To the extent not previously paid, all Term Loans shall be due
and payable on the Term Loan Maturity Date.
(c) If the initial aggregate amount of the Lenders' Term Loan
Commitments exceeds the aggregate principal amount of Term Loans that are
made on the Effective Date, then the scheduled repayments of Term Borrowings
to be made pursuant to this Section shall be reduced ratably by an aggregate
amount equal to such excess. Any prepayment of a Term Borrowing shall be
applied ratably to reduce the subsequent scheduled repayments of the Term
Borrowings to be made pursuant to this Section.
(d) Prior to any repayment or prepayment of any Term Borrowings
hereunder, the Borrower shall select the Borrowing or Borrowings to be repaid
and shall notify the Administrative Agent by telephone (confirmed by
telecopy) of such selection not later than 12:00 noon, New York City time,
three Business Days before the scheduled date of such repayment or
prepayment. Each repayment or prepayment of a Borrowing shall be applied
ratably to the Loans included in the repaid Borrowing. Repayments or
prepayments of Term Borrowings shall be accompanied by accrued interest on
the amount repaid or prepaid.
SECTION 2.11. PREPAYMENT OF LOANS. (a) The Borrower shall have
the right at any time and from time to time to prepay any Borrowing in whole
or in part, subject to the requirements of this Section.
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(b) In the event and on each occasion that any Net Proceeds are
received by or on behalf of the Borrower or any Subsidiary in respect of any
Asset Disposition, the Borrower shall, within 10 Business Days after such Net
Proceeds are received, prepay Term Borrowings in an aggregate amount equal to
50% of such Net Proceeds; PROVIDED that the Borrower shall not be subject to
such prepayment obligation to the extent that (i) within such period of 10
Business Days the Borrower applies such Net Proceeds to prepay, repurchase
and retire, or redeem (A) 10-5/8% Senior Notes, (B) other senior term
Indebtedness that is not Later Maturing Indebtedness or (C) Indebtedness
incurred in compliance with Section 6.03(a)(xiv) that refinances such Notes
or such senior term Indebtedness, in each case that is owed to Persons other
than the Borrower or any Subsidiary and is permitted to be prepaid,
repurchased or redeemed under Section 6.03(b), (ii) within such period of 10
Business Days the Borrower gives irrevocable notice of the prepayment or
redemption of Indebtedness referred to in the preceding clause (i) at the
earliest permissible date pursuant to the indenture or other instrument
governing such Indebtedness, or notifies the Administrative Agent of its
intent within 30 days to commence a tender offer for, or market purchases of,
such Indebtedness, and, pending the prepayment, redemption or purchase of
such Indebtedness, either (x) deposits such Net Proceeds with a trustee for
such Indebtedness or with the Administrative Agent (which shall invest such
Net Proceeds in Temporary Cash Investments if and as instructed by the
Borrower), in either case on terms reasonably satisfactory to the
Administrative Agent, or (y) applies such Net Proceeds to prepay Revolving
Loans (in which case an amount of the Revolving Commitments equal to the
amount of such prepayment shall be held available on the terms and conditions
of this Agreement for borrowing at the time funds are required to effect such
repayment, redemption or purchase and shall not be available for any other
purpose until such prepayment, redemption or purchase has been effected), or
(iii) within such period of 10 Business Days the Borrower notifies the
Administrative Agent that it intends to reinvest such Net Proceeds in capital
assets within 12 months after the receipt thereof, and within such 12 month
period the Borrower delivers to the Administrative Agent a notice certifying
that such Net Proceeds have in fact been so invested. If the Borrower gives
a notice pursuant to clause (ii) above and later determines that it is not
practical or not advisable to complete the repayment, redemption or purchase
contemplated by such notice, the Borrower may give a notice pursuant to
clause (iii) above. If the Borrower gives a notice pursuant to clause (ii)
above and Indebtedness is not prepaid, redeemed or repurchased within 120
days of such notice (and a notice pursuant to the preceding sentence is not
given), or if the Borrower gives a notice pursuant to clause (iii) above and
Net Proceeds are not reinvested within the 12-month period referred to in
such clause, the Borrower shall forthwith apply the relevant Net Proceeds to
prepay Term Borrowings.
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(c) In the event and on each occasion that any Net Proceeds are
received by or on behalf of the Borrower or any Subsidiary in respect of any
incurrence of Indebtedness under Section 6.03(a)(iii), (iv) or (v), the
Borrower shall, within 10 Business Days after such Net Proceeds are received,
prepay Term Borrowings in an aggregate amount equal to such Net Proceeds;
PROVIDED that the Borrower shall not be subject to such prepayment obligation
to the extent that (i) within such period of 10 Business Days, the Net
Proceeds of such debt financing are applied to prepay, repurchase and retire,
or redeem (A) 10-5/8% Senior Notes, (B) other senior term Indebtedness that
is not Later Maturing Indebtedness or (C) Indebtedness incurred in compliance
with Section 6.03(a)(xiv) that refinances such Notes or such senior term
Indebtedness, in each case that is owed to Persons other than the Borrower or
any Subsidiary and is permitted to be prepaid, repurchased or redeemed under
Section 6.03(b), or (ii) within such period of 10 Business Days the Borrower
gives irrevocable notice of the prepayment or redemption of Indebtedness
referred to in the preceding clause (i) at the earliest permissible date
pursuant to the indenture or other instrument governing such Indebtedness, or
notifies the Administrative Agent of its intent within 30 days to commence a
tender offer for, or market purchases of, such Indebtedness, and, pending the
prepayment, redemption or purchase of such Indebtedness, either (x) deposits
such Net Proceeds with a trustee for such Indebtedness or with the
Administrative Agent (which shall invest such Net Proceeds in Temporary Cash
Investments if and as instructed by the Borrower), in either case on terms
reasonably satisfactory to the Administrative Agent, or (y) applies such Net
Proceeds to prepay Revolving Loans (in which case an amount of the Revolving
Commitments equal to the amount of such prepayment shall be held available on
the terms and conditions of this Agreement for borrowing at the time funds
are required to effect such repayment, redemption or purchase and shall not
be available for any other purpose until such prepayment, redemption or
purchase has been effected). If the Borrower gives a notice pursuant to
clause (ii) above and Indebtedness is not prepaid, redeemed or repurchased
within 120 days, the Borrower shall forthwith apply the relevant Net Proceeds
to prepay Term Borrowings.
(d) Prior to any optional or mandatory prepayment of Borrowings
hereunder, the Borrower shall select the Borrowing or Borrowings to be
prepaid and shall specify such selection in the notice of such prepayment
pursuant to paragraph (e) of this Section.
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(e) The Borrower shall notify the Administrative Agent (and, in
the case of prepayment of a Swingline Loan, the Swingline Lender) by
telephone (confirmed by telecopy) of any prepayment hereunder (i) in the case
of prepayment of a Eurodollar Revolving Borrowing, not later than 12:00 noon,
New York City time, three Business Days before the date of prepayment, (ii)
in the case of prepayment of an ABR Revolving Borrowing, not later than 11:00
a.m., New York City time, on the date of prepayment or (iii) in the case of
prepayment of a Swingline Loan, not later than 1:00 p.m., New York City time,
on the date of prepayment. Each such notice shall be irrevocable and shall
specify the prepayment date, the principal amount of each Borrowing or
portion thereof to be prepaid and, in the case of a mandatory prepayment
required by reason of any Asset Disposition or series of related Asset
Dispositions for Net Proceeds in excess of $25,000,000, a reasonably detailed
calculation of the amount of such prepayment; PROVIDED that, if a notice of
optional prepayment is given in connection with a conditional notice of
termination of the Revolving Commitments as contemplated by Section 2.08,
then such notice of prepayment may be revoked if such notice of termination
is revoked in accordance with Section 2.08. Promptly following receipt of
any such notice (other than a notice relating solely to Swingline Loans), the
Administrative Agent shall advise the Lenders of the contents thereof. Each
partial prepayment of any Borrowing shall be in an amount that would be
permitted in the case of an advance of a Borrowing of the same Type as
provided in Section 2.02, except as necessary to apply fully the required
amount of a mandatory prepayment. Each prepayment of a Borrowing shall be
applied ratably to the Loans included in the prepaid Borrowing. Prepayments
shall be accompanied by accrued interest to the extent required by Section
2.13.
SECTION 2.12. FEES. (a) The Borrower agrees to pay to the
Administrative Agent for the account of each Lender a commitment fee, which
shall accrue at the Applicable Rate on the average daily unused amount of
each Commitment of such Lender during the period from and including the date
hereof to but excluding the date on which such Commitment terminates.
Accrued commitment fees shall be payable in arrears (i) in the case of
commitment fees in respect of the Revolving Commitments, on the last day of
March, June, September and December of each year and on the date on which the
Revolving Commitments terminate, commencing on the first such date to occur
after the date hereof, and (ii) in the case of commitment fees in respect of
the Term Loan Commitments, on the Effective Date or any earlier date on which
such Commitments terminate. All commitment fees shall be computed on the
basis of a year of 365 or 366 days, as the case may be, and shall be payable
for the actual number of days elapsed (including the first day but excluding
the last day). For purposes of determining the unused portion of the
Revolving Commitments, the Revolving Commitment of a Lender shall be deemed
to be used to the extent of the outstanding Revolving Loans and LC Exposure
of such Lender (and the Swingline Exposure of such Lender shall be
disregarded for such purpose).
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(b) The Borrower agrees to pay (i) to the Administrative Agent for
the account of each Revolving Lender a participation fee with respect to its
participations in Letters of Credit, which shall accrue at the same
Applicable Rate as interest on Eurodollar Revolving Loans on the average
daily amount of such Lender's LC Exposure (excluding any portion thereof
attributable to unreimbursed LC Disbursements) during the period from and
including the Effective Date to but excluding the later of the date on which
such Lender's Revolving Commitment terminates and the date on which such
Lender ceases to have any LC Exposure, and (ii) to each Issuing Bank a
fronting fee, which shall accrue at the rate or rates per annum separately
agreed upon between the Borrower and such Issuing Bank on the average daily
amount of the LC Exposure (excluding any portion thereof attributable to
unreimbursed LC Disbursements) during the period from and including the
Effective Date to but excluding the later of the date of termination of the
Revolving Commitments and the date on which there ceases to be any LC
Exposure, as well as the applicable Issuing Bank's standard fees with respect
to the issuance, amendment, renewal or extension of any Letter of Credit or
processing of drawings thereunder. Participation fees and fronting fees
accrued through and including the last day of March, June, September and
December of each year shall be payable on the third Business Day following
such last day, commencing on the first such date to occur after the Effective
Date; PROVIDED that all such fees shall be payable on the date on which the
Revolving Commitments terminate and any such fees accruing after the date on
which the Revolving Commitments terminate shall be payable on demand. Any
other fees payable to an Issuing Bank pursuant to this paragraph shall be
payable within five days after demand. All participation fees and fronting
fees shall be computed on the basis of a year of 365 or 366 days, as the case
may be, and shall be payable for the actual number of days elapsed (including
the first day but excluding the last day).
(c) The Borrower agrees to pay to the Administrative Agent, for
its own account, fees payable in the amounts and at the times separately
agreed upon between the Borrower and the Administrative Agent.
(d) All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the Administrative Agent (or to each Issuing
Bank, in the case of fees payable to it) for distribution, in the case of
commitment fees and participation fees, to the Lenders entitled thereto.
Fees paid shall not be refundable.
SECTION 2.13. INTEREST. (a) The Loans comprising each ABR
Borrowing (including each Swingline Loan) shall bear interest at the
Alternate Base Rate plus the Applicable Rate.
(b) The Loans comprising each Eurodollar Borrowing shall bear
interest at the Adjusted LIBO Rate or Adjusted NIBO Rate, as the case may be,
for the Interest Period in effect for such Borrowing plus the Applicable Rate.
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(c) Notwithstanding the foregoing, if any principal of or interest
on any Loan or any fee or other amount payable by the Borrower hereunder is
not paid when due, whether at stated maturity, upon acceleration or
otherwise, such overdue amount shall bear interest, after as well as before
judgment, at a rate per annum equal to (i) in the case of overdue principal
of any Loan, 1% plus the rate otherwise applicable to such Loan as provided
in the preceding paragraphs of this Section or (ii) in the case of any other
amount, 1% plus the rate applicable to ABR Revolving Loans as provided in
paragraph (a) of this Section.
(d) Accrued interest on each Loan shall be payable in arrears on
each Interest Payment Date for such Loan and, in the case of Revolving Loans,
upon termination of the Revolving Commitments; PROVIDED that (i) interest
accrued pursuant to paragraph (c) of this Section shall be payable on demand,
(ii) in the event of any repayment or prepayment of any Loan (other than a
prepayment of an ABR Revolving Loan prior to the end of the Revolving
Availability Period), accrued interest on the principal amount repaid or
prepaid shall be payable on the date of such repayment or prepayment and
(iii) in the event of any conversion of any Eurodollar Loan prior to the end
of the current Interest Period therefor, accrued interest on such Loan shall
be payable on the effective date of such conversion.
(e) All interest hereunder shall be computed on the basis of a
year of 360 days, except that interest computed by reference to the Alternate
Base Rate at times when the Alternate Base Rate is based on the Prime Rate
shall be computed on the basis of a year of 365 days (or 366 days in a leap
year), and in each case shall be payable for the actual number of days
elapsed (including the first day but excluding the last day). The applicable
Alternate Base Rate, Adjusted LIBO Rate or Adjusted NIBO Rate shall be
determined by the Administrative Agent, and such determination shall be
conclusive absent manifest error.
SECTION 2.14. ALTERNATE RATE OF INTEREST. If prior to the
commencement of any Interest Period for a Eurodollar Borrowing:
(a) the Administrative Agent determines (which determination shall
be conclusive absent manifest error) that adequate and reasonable means
do not exist for ascertaining the Adjusted LIBO Rate or the Adjusted NIBO
Rate, as applicable, for such Interest Period; or
(b) the Administrative Agent is advised by the Required Lenders that
the Adjusted LIBO Rate or the Adjusted NIBO Rate, as applicable, for such
Interest Period will not adequately and fairly reflect the cost to such
Lenders (or Lender) of making or maintaining their Loans (or its Loan)
included in such Borrowing for such Interest Period;
then the Administrative Agent shall give notice thereof to the Borrower and
the Lenders by telephone or telecopy as promptly as practicable thereafter
and, until the Administrative Agent notifies the Borrower and the Lenders
that the circumstances giving rise to
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such notice no longer exist, (i) any Interest Election Request that requests
the conversion of any Borrowing to, or continuation of any Borrowing as, a
Eurodollar Borrowing shall be ineffective and (ii) if any Borrowing Request
requests a Eurodollar Borrowing, such Borrowing shall be made as an ABR
Borrowing; PROVIDED that if the circumstances giving rise to such notice
affect only one Type of Borrowings, then the other Type of Borrowings shall
be permitted.
SECTION 2.15. INCREASED COSTS. (a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit
or similar requirement against assets of, deposits with or for the
account of, or credit extended by, any Lender (except any such reserve
requirement reflected in the Adjusted LIBO Rate or the Adjusted NIBO Rate)
or any Issuing Bank; or
(ii) impose on any Lender, any Issuing Bank, the London interbank
market or other relevant interbank market any other condition affecting
this Agreement or Eurodollar Loans made by such Lender or any Letter of
Credit or participation therein;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender or
Issuing Bank of participating in, issuing or maintaining any Letter of Credit
or to reduce the amount of any sum received or receivable by such Lender or
Issuing Bank hereunder (whether of principal, interest or otherwise), then
the Borrower will pay to such Lender or Issuing Bank, as the case may be,
such additional amount or amounts as will compensate such Lender or Issuing
Bank, as the case may be, for such additional costs incurred or reduction
suffered; PROVIDED, that no Lender or Issuing Bank shall be entitled under
this paragraph to receive compensation for any Excluded Taxes paid by it.
(b) If any Lender or Issuing Bank determines that any Change in
Law regarding capital requirements has or would have the effect of reducing
the rate of return on such Lender's or the Issuing Bank's capital or on the
capital of such Lender's or the Issuing Bank's holding company, if any, as a
consequence of this Agreement or the Loans made by, or participations in
Letters of Credit held by, such Lender, or the Letters of Credit issued by
the Issuing Bank, to a level below that which such Lender or the Issuing Bank
or such Lender's or Issuing Bank's holding company could have achieved but
for such Change in Law (taking into consideration such Lender's or Issuing
Bank's policies and the policies of such Lender's or Issuing Bank's holding
company with respect to capital adequacy), then from time to time the
Borrower will pay to such Lender or Issuing Bank, as the case may be, such
additional amount or amounts as will compensate such Lender or Issuing Bank
or such Lender's or Issuing Bank's holding company for any such reduction
suffered.
(c) A certificate of a Lender or Issuing Bank setting forth the
amount or amounts necessary to compensate such Lender or Issuing
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Bank or its holding company, as the case may be, as specified in paragraph
(a) or (b) of this Section shall be delivered to the Borrower and shall be
conclusive absent manifest error. The Borrower shall pay such Lender or
Issuing Bank, as the case may be, the amount shown as due on any such
certificate within 10 days after receipt thereof.
(d) Failure or delay on the part of any Lender or Issuing Bank to
demand compensation pursuant to this Section shall not constitute a waiver of
such Lender's or Issuing Bank's right to demand such compensation; PROVIDED
that the Borrower shall not be required to compensate a Lender or Issuing
Bank pursuant to this Section for any increased costs or reductions incurred
more than 270 days prior to the date that such Lender or Issuing Bank, as the
case may be, notifies the Borrower of the Change in Law giving rise to such
increased costs or reductions and of such Lender's or Issuing Bank's
intention to claim compensation therefor; PROVIDED FURTHER that, if the
Change in Law giving rise to such increased costs or reductions is
retroactive, then the 270-day period referred to above shall be extended to
include the period of retroactive effect thereof.
SECTION 2.16. BREAK FUNDING PAYMENTS. In the event of (a) the
payment of any principal of any Eurodollar Loan other than on the last day of
an Interest Period applicable thereto (including as a result of an Event of
Default), (b) the conversion of any Eurodollar Loan other than on the last
day of the Interest Period applicable thereto, (c) the failure to borrow,
convert, continue or prepay any Revolving Loan or Term Loan on the date
specified in any notice delivered pursuant hereto (regardless of whether such
notice may be revoked under Section 2.11(g) and is revoked in accordance
therewith), or (d) the assignment of any Eurodollar Loan other than on the
last day of the Interest Period applicable thereto as a result of a request
by the Borrower pursuant to Section 2.19, then, in any such event, the
Borrower shall compensate each Lender for the economic loss, cost and expense
(but not for loss of profits) attributable to such event. In the case of a
Eurodollar Loan, such loss, cost or expense to any Lender shall be deemed to
include an amount determined by such Lender to be the excess, if any, of (i)
the amount of interest which would have accrued on the principal amount of
such Loan had such event not occurred, at the Adjusted LIBO Rate or the
Adjusted NIBO Rate, as the case may be, that would have been applicable to
such Loan, for the period from the date of such event to the last day of the
then current Interest Period therefor (or, in the case of a failure to
borrow, convert or continue, for the period that would have been the Interest
Period for such Loan), over (ii) the amount of interest which would accrue on
such principal amount for such period at the interest rate which such Lender
would bid were it to bid, at the commencement of such period, for dollar
deposits of a comparable amount and period from other banks in the Eurodollar
market. A certificate of any Lender setting forth any amount or amounts that
such Lender is entitled to receive pursuant to this Section shall be
delivered to the Borrower and shall be conclusive absent manifest error. The
Borrower shall pay such Lender the amount shown as due on any such
certificate within 10 days after receipt thereof.
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SECTION 2.17. TAXES. (a) Any and all payments by or on account
of any obligation of the Borrower hereunder or under any other Loan Document
shall be made free and clear of and without deduction for any Indemnified
Taxes or Other Taxes; provided that if the Borrower shall be required to
deduct any Indemnified Taxes or Other Taxes from such payments, then (i) the
sum payable shall be increased as necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section) the Administrative Agent, Lender or Issuing Bank (as the case
may be) receives an amount equal to the sum it would have received had no
such deductions been made, (ii) the Borrower shall make such deductions and
(iii) the Borrower shall pay the full amount deducted to the relevant
Governmental Authority in accordance with applicable law.
(b) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) The Borrower shall indemnify the Administrative Agent, each
Lender and each Issuing Bank, within 10 days after written demand therefor,
for the full amount of any Indemnified Taxes or Other Taxes paid by the
Administrative Agent, such Lender or such Issuing Bank, as the case may be,
on or with respect to any payment by or on account of any obligation of the
Borrower hereunder or under any other Loan Document (including Indemnified
Taxes or Other Taxes imposed or asserted on or attributable to amounts
payable under this Section) and any penalties, interest and reasonable
expenses arising therefrom or with respect thereto, whether or not such
Indemnified Taxes or Other Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. A certificate as to the
amount of such payment or liability delivered to the Borrower by a Lender or
Issuing Bank, or by the Administrative Agent on its own behalf or on behalf
of a Lender or Issuing Bank, shall be conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified Taxes
or Other Taxes by the Borrower to a Governmental Authority, the Borrower
shall deliver to the Administrative Agent the original or a certified copy of
a receipt issued by such Governmental Authority evidencing such payment, a
copy of the return reporting such payment or other evidence of such payment
reasonably satisfactory to the Administrative Agent.
(e) Any Foreign Lender that is entitled to an exemption from or
reduction of withholding tax under the law of the jurisdiction in which the
Borrower is located, or any treaty to which such jurisdiction is a party,
with respect to payments under this Agreement shall deliver to the Borrower
(with a copy to the Administrative Agent), at the time or times prescribed by
applicable law, such properly completed and executed documentation prescribed
by applicable law or reasonably requested by the Borrower as will permit such
payments to be made without withholding or at a reduced rate.
SECTION 2.18. PAYMENTS GENERALLY; PRO RATA TREATMENT; SHARING OF
SET-OFFS. (a) The Borrower shall make each payment required to be made by
it hereunder or under any other Loan Document (whether of principal, interest
or fees, or of amounts payable under
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Section 2.15, 2.16 or 2.17, or otherwise, where time of payment has not been
specified) prior to 12:30 p.m., New York City time, on the date when due, in
immediately available funds, without set-off or counterclaim. Any amounts
received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon. All such payments
shall be made to the Administrative Agent at its offices at 270 Park Avenue,
New York, New York, except payments to be made directly to the applicable
Issuing Bank or Swingline Lender as expressly provided herein and except that
payments pursuant to Sections 2.15, 2.16, 2.17 and 9.03 shall be made
directly to the Persons entitled thereto and payments pursuant to other Loan
Documents shall be made to the Persons specified therein. The Administrative
Agent shall distribute any such payments received by it for the account of
any other Person to the appropriate recipient promptly following receipt
thereof. If any payment under any Loan Document shall be due on a day that
is not a Business Day, the date for payment shall be extended to the next
succeeding Business Day, and, in the case of any payment accruing interest,
interest thereon shall be payable for the period of such extension. All
payments under each Loan Document shall be made in dollars.
(b) If at any time insufficient funds are received by and
available to the Administrative Agent to pay fully all amounts of principal,
unreimbursed LC Disbursements, interest and fees then due hereunder, such
funds shall be applied (i) first, towards payment of interest and fees then
due hereunder, ratably among the parties entitled thereto in accordance with
the amounts of interest and fees then due to such parties, and (ii) second,
towards payment of principal and unreimbursed LC Disbursements then due
hereunder, ratably among the parties entitled thereto in accordance with the
amounts of principal and unreimbursed LC Disbursements then due to such
parties.
(c) If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Revolving Loans, Term Loans or participations in LC
Disbursements or Swingline Loans resulting in such Lender receiving payment
of a greater proportion of the aggregate amount of its Revolving Loans, Term
Loans and participations in LC Disbursements and Swingline Loans and accrued
interest thereon than the proportion received by any other Lender, then the
Lender receiving such greater proportion shall purchase (for cash at face
value) participations in the Revolving Loans, Term Loans and participations
in LC Disbursements and Swingline Loans of other Lenders to the extent
necessary so that the benefit of all such payments shall be shared by the
Lenders ratably in accordance with the aggregate amount of principal of and
accrued interest on their respective Revolving Loans, Term Loans and
participations in LC Disbursements and Swingline Loans; PROVIDED that (i) if
any such participations are purchased and all or any portion of the payment
giving rise thereto is recovered, such participations shall be rescinded and
the purchase price restored to the extent of such recovery, without interest,
and (ii) the provisions of this paragraph shall not be construed to apply to
any payment made by the Borrower pursuant to and in accordance with the
express terms
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of this Agreement or any payment obtained by a Lender as consideration for
the assignment of or sale of a participation in any of its Loans or
participations in LC Disbursements to any assignee or participant, other than
to the Borrower or any Subsidiary or Affiliate thereof (as to which the
provisions of this paragraph shall apply). The Borrower consents to the
foregoing and agrees, to the extent it may effectively do so under applicable
law, that any Lender acquiring a participation pursuant to the foregoing
arrangements may exercise against the Borrower rights of set-off and
counterclaim with respect to such participation as fully as if such Lender
were a direct creditor of the Borrower in the amount of such participation.
(d) Unless the Administrative Agent shall have received notice
from the Borrower prior to the date on which any payment is due to the
Administrative Agent for the account of the Lenders or an Issuing Bank
hereunder that the Borrower will not make such payment, the Administrative
Agent may assume that the Borrower has made such payment on such date in
accordance herewith and may, in reliance upon such assumption, distribute to
the Lenders or the applicable Issuing Bank, as the case may be, the amount
due. In such event, if the Borrower has not in fact made such payment, then
each of the Lenders or Issuing Banks, as the case may be, severally agrees to
repay to the Administrative Agent forthwith on demand the amount so
distributed to such Lender or Issuing Bank with interest thereon, for each
day from and including the date such amount is distributed to it to but
excluding the date of payment to the Administrative Agent, at the greater of
the Federal Funds Effective Rate and a rate determined by the Administrative
Agent in accordance with banking industry rules on interbank compensation.
(e) If any Lender shall fail to make any payment required to be
made by it pursuant to Section 2.04(c), 2.05(d) or (e), 2.06(b), 2.18(d) or
9.03(c), then the Administrative Agent may, in its discretion
(notwithstanding any contrary provision hereof), apply any amounts thereafter
received by the Administrative Agent pursuant to the Loan Documents for the
account of such Lender to satisfy such Lender's obligations under such
Sections until all such unsatisfied obligations are fully paid.
SECTION 2.19. MITIGATION OBLIGATIONS; REPLACEMENT OF LENDERS. (a)
If any Lender requests compensation under Section 2.15, or if the Borrower
is required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.17, then such
Lender shall use reasonable efforts to designate a different lending office
for funding or booking its Loans hereunder or to assign its rights and
obligations hereunder to another of its offices, branches or affiliates if,
in the judgment of such Lender, such designation or assignment (i) would
eliminate or reduce amounts payable pursuant to Section 2.15 or 2.17, as the
case may be, in the future and (ii) would not subject such Lender to any
unreimbursed cost or expense and would not otherwise be disadvantageous to
such Lender. The Borrower hereby agrees to pay all reasonable costs and
expenses incurred by any Lender in connection with any such designation or
assignment.
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(b) The Borrower may upon notice to any Lender and the
Administrative Agent, require such Lender (the "Departing Lender") to assign
and delegate, without recourse (in accordance with and subject to the
restrictions contained in Section 9.04), all its interests, rights and
obligations under this Agreement to an assignee that shall assume such
obligations (which assignee may be another Lender, if a Lender accepts such
assignment) (i) if the Commitments and Loans of the Departing Lender, taken
together with the Commitments and Loans of all other Lenders that have been
required to assign and delegate their interests, rights and obligations
pursuant to this clause (i), represent less than 10% of the aggregate
Commitments and Loans of all Lenders at the time of such notice; (ii) whether
or not the conditions of the preceding clause (i) are met, if the Departing
Lender has requested compensation under Section 2.15, or the Borrower is
required to pay any additional amount to such Lender or any Governmental
Authority for the account of such Lender pursuant to Section 2.17, or such
Lender has defaulted in its obligation to fund Loans hereunder; or (iii) if
the Required Lenders consent to such required assignment and delegation;
PROVIDED that (x) the Borrower shall have received the prior written consent
of the Administrative Agent (and, if a Revolving Commitment is being
assigned, each Issuing Bank and Swingline Lender), which consent shall not
unreasonably be withheld, (y) such Lender shall have received payment of an
amount equal to the outstanding principal of its Loans and participations in
LC Disbursements and Swingline Loans, accrued interest thereon, accrued fees
and all other amounts payable to it hereunder, from the assignee (to the
extent of such outstanding principal and accrued interest and fees) or the
Borrower (in the case of all other amounts) and (z) in the case of any such
assignment resulting from a claim for compensation under Section 2.15 or
payments required to be made pursuant to Section 2.17, such assignment will
result in a reduction in such compensation or payments. A Lender shall not
be required to make any assignment and delegation under clause (ii) of this
paragraph (b) if, prior thereto, as a result of a waiver by such Lender or
otherwise, the circumstances entitling the Borrower to require such
assignment and delegation cease to apply.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lenders that:
SECTION 3.01. CORPORATE EXISTENCE AND POWER. The Borrower is a
corporation duly incorporated, validly existing and in good standing under
the laws of Oklahoma, and has all corporate powers and all material
governmental licenses, authorizations, consents and approvals required to
carry on its business as now conducted.
SECTION 3.02. CORPORATE AND GOVERNMENTAL AUTHORIZATION;
CONTRAVENTION. The execution, delivery and performance by the Borrower of
this Agreement are within the Borrower's corporate powers, have been duly
authorized by all necessary corporate action, require no action by or in
respect of, or filing with, any Governmental
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Authority and do not contravene, or constitute a default under, any provision
of applicable law or regulation or of the certificate of incorporation or
by-laws of the Borrower or of any judgment, injunction, order or decree or
the 10-5/8% Senior Note Indenture or any other material agreement or material
instrument binding upon the Borrower or result in the creation or imposition
of any Lien (other than those contemplated by the Security Documents) on any
asset of the Borrower or any of its Subsidiaries.
SECTION 3.03. BINDING EFFECT. This Agreement constitutes a valid
and binding agreement of the Borrower.
SECTION 3.04. FINANCIAL INFORMATION. (a) The consolidated
balance sheet of the Borrower and its Consolidated Subsidiaries as of
December 28, 1996, and the related consolidated statement of earnings and
statement of cash flows for the fiscal year then ended, reported on by
Deloitte & Touche and set forth in the Borrower's annual report to the
Securities and Exchange Commission on Form 10-K for such fiscal year, a copy
of which has been delivered to each of the Lenders and the Administrative
Agent, fairly present, in conformity with GAAP, the financial position of the
Borrower and its Subsidiaries as of such date and their results or operations
and cash flows for such fiscal year.
(b) The unaudited condensed consolidated balance sheet of the
Borrower and its Subsidiaries as of April 19, 1997, and the related unaudited
consolidated statement of earnings and condensed consolidated statement of
cash flows for the 16 weeks then ended, set forth in the Borrower's quarterly
report to the Securities and Exchange Commission on Form 10-Q for the fiscal
quarter ended April 19, 1997, a copy of which has been delivered to each of
the Lenders and the Administrative Agent, fairly present, in conformity with
GAAP applied on a basis consistent with the financial statements referred to
in paragraph (a) of this Section (except for the omission of substantially
all footnote disclosure as permitted by Regulation S-X promulgated by the
Securities and Exchange Commission under the Securities Act of 1933, as
amended), the financial position of the Borrower and its Consolidated
Subsidiaries as of such date and their results of operations and cash flows
for such 16-week period (subject to normal year-end adjustments).
(c) Other than as disclosed in the Borrower's quarterly report on
Form 10-Q for the fiscal quarter ended April 19, 1997, there has been no
event or change in circumstances resulting in a Material Adverse Effect since
December 28, 1996.
SECTION 3.05. LITIGATION. There is no action, suit or proceeding
pending against, or to the knowledge of the Borrower threatened against or
affecting, the Borrower or any of its Subsidiaries before any court or
arbitrator or any Governmental Authority that draws into question the
validity of any Loan Document or in which there is a reasonable possibility
of an adverse decision that would be reasonably likely to result in a
material adverse effect on the creditworthiness of the Borrower (it being
understood that disclosure of any action, suit or proceeding in any filing
with the
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Securities and Exchange Commission will not, in and of itself, be deemed to
establish a breach of this representation).
SECTION 3.06. COMPLIANCE WITH ERISA. Except as set forth in
Schedule 3.06, each ERISA Affiliate has fulfilled its obligations under the
minimum funding standards of ERISA and the Code with respect to each Plan and
is in compliance in all material respects with the presently applicable
provisions of ERISA and the Code with respect to each Plan. Except as set
forth in Schedule 3.06, no ERISA Affiliate has (i) sought a currently
outstanding waiver of the minimum funding standard under Section 412 of the
Code in respect of any Plan, (ii) failed to make any contribution or payment
to any Plan or Multiemployer Plan or in respect of any Benefit Arrangement,
or made any amendment to any such Plan or Benefit Arrangement, which has
resulted or could result in the imposition of a Lien or the posting of a bond
or other security under ERISA or the Code or (iii) incurred any liability
under Title IV of ERISA other than a liability to the PBGC for premiums under
Section 4007 of ERISA.
SECTION 3.07. ENVIRONMENTAL MATTERS. In the ordinary course of
its business, the Borrower reviews the effect of Environmental Laws which
could reasonably be expected to have any material effect, individually or in
the the aggregate, on the business, operations and properties of the Borrower
and its Subsidiaries, in the course of which it evaluates associated
liabilities and costs which it has identified (including, without limitation,
any capital or operating expenditures required for clean-up or closure of
properties presently or previously owned, any capital or operating
expenditures required to achieve or maintain compliance with environmental
protection standards imposed by Environmental Laws or as a condition of any
license, permit or contract, any related constraints on operating activities,
including any periodic or permanent shutdown of any facility or reduction in
the level of or change in the nature of operations conducted thereat, any
costs or liabilities in connection with off-site disposal of wastes or
Hazardous Materials, and any actual or potential liabilities to third
parties, including employees, and any related costs and expenses). On the
basis of this review, the Borrower has reasonably concluded that such
associated liabilities and costs, including the costs of compliance with
Environmental Laws, are unlikely to have a Material Adverse Effect.
SECTION 3.08. TAXES. Tax returns of the Borrower and its
Subsidiaries have been examined and closed through the fiscal year ended
December 26, 1992. The Borrower and its Subsidiaries have filed all Tax
returns that are required to be filed by them and have paid all Taxes due
pursuant to such returns or pursuant to any assessment received by the
Borrower or any Subsidiary, except such Taxes, if any, as are being contested
in good faith and as to which adequate reserves have been provided. The
charges, accruals and reserves on the books of the Borrower and its
Subsidiaries in respect of taxes or other governmental charges are, in the
opinion of the Borrower, adequate.
SECTION 3.09. SUBSIDIARIES. (a) Each of the Guarantors, and each
Subsidiary that is a Grantor, is a corporation or other
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business entity duly incorporated or organized (as the case may be), validly
existing and in good standing under the laws of its jurisdiction of
incorporation or organization (as the case may be), and has all corporate or
other relevant organizational powers and all material licenses,
authorizations, consents and approvals of Governmental Authorities required
to carry on its business as now conducted. The execution, delivery and
performance by each Guarantor of the Guarantee Agreement are within such
Guarantor's corporate or other relevant organizational powers, have been duly
authorized by all corporate or other organizational action, require no action
by or in respect of, or filing with, any Governmental Authority and do not
contravene, or constitute a default under, any provision of applicable law or
regulation or of the certificate of incorporation or by-laws of any such
Guarantor or of any judgment, injunction, order or decree or any material
agreement or material instrument binding upon such Guarantor.
(b) The Borrower does not have any subsidiaries other than the
Subsidiaries set forth on Schedule 3.09, which sets forth the name of, and
the ownership interest of the Borrower in, each Subsidiary and identifies
each Subsidiary that is a Guarantor or Grantor, in each case as of the date
hereof.
SECTION 3.10. NOT AN INVESTMENT COMPANY. The Borrower is not an
"investment company" within the meaning of the Investment Company Act of
1940, as amended.
SECTION 3.11. NO CONFLICTING REQUIREMENTS. Neither the Borrower
nor any Subsidiary is in violation of, or in default under, any provision of
applicable law, rule or regulation, or of its certificate of incorporation or
by-laws or of any agreement, judgment, injunction, order, decree or other
instrument binding upon it or any of its properties, which violation or
default could reasonably be expected to have consequences that would have a
Material Adverse Effect.
SECTION 3.12. DISCLOSURE. The material furnished to the
Administrative Agent and the Lenders by, or on behalf and with the consent
of, the Borrower (including the Information Memorandum) in connection with
the negotiation, execution and delivery of this Agreement, taken as a whole,
and as supplemented from time to time prior to the date of this Agreement,
does not contain as of the date hereof, any untrue statement of a material
fact and does not as of the date hereof omit to state any material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. Any projections
and appraisals provided by the Borrower to the Administrative Agent and the
Lenders in connection herewith were prepared in good faith on the basis of
information and assumptions that the Borrower believed to be reasonable as of
the date such material was provided, and the Borrower believes that such
assumptions are reasonable as of the date hereof.
SECTION 3.13. SECURITY DOCUMENTS. (a) The Pledge Agreement is
effective to create in favor of the Collateral Agent, for the ratable benefit
of the Secured Parties, a legal, valid and
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enforceable security interest in that portion of the Collateral covered in
the Pledge Agreement and, when the certificates and other instruments
referred to in Section 4.01(f) have been delivered to the Collateral Agent,
the Pledge Agreement shall constitute a fully perfected first priority Lien
on, and security interest in, all right, title and interest of the pledgors
thereunder in such Collateral, in each case prior and superior in right to
any other person.
(b) The Security Agreement is effective to create in favor of the
Collateral Agent, for the ratable benefit of the Secured Parties, a legal,
valid and enforceable security interest in that portion of the Collateral
covered in the Security Agreement and, when financing statements in
appropriate form are filed in the offices specified on Schedule 6 to the
Perfection Certificate, the Security Agreement shall constitute a fully
perfected Lien on, and security interest in, all right, title and interest of
the Grantors thereunder in such Collateral, in each case prior and superior
in right to any other person, other than with respect to Liens expressly
permitted by Section 6.01 and the Security Agreement.
ARTICLE IV
CONDITIONS
SECTION 4.01. EFFECTIVE DATE. The obligations of the Lenders to
make Loans and of the Issuing Banks to issue Letters of Credit hereunder
shall not become effective until the date on which each of the following
conditions is satisfied (or waived in accordance with Section 9.02):
(a) The Administrative Agent (or its counsel) shall have received
from each party hereto either (i) a counterpart of this Agreement signed
on behalf of such party or (ii) written evidence satisfactory to the
Administrative Agent (which may include telecopy transmission of a signed
signature page of this Agreement) that such party has signed a
counterpart of this Agreement.
(b) The Administrative Agent shall have received a favorable written
opinion (addressed to the Administrative Agent and the Lenders and
dated the Effective Date) of each of (i) McAfee & Taft A Professional
Corporation, counsel for the Borrower, substantially in the form of
Exhibit B-1, and (ii) General Counsel of the Borrower, substantially in
the form of Exhibit B-2, and, in the case of each such opinion required
by this paragraph, covering such other matters as the Required Lenders
or Administrative Agent shall reasonably request. The Borrower hereby
requests such counsel to deliver such opinions.
(c) The Administrative Agent shall have received such documents and
certificates as the Administrative Agent or its counsel may reasonably
request relating to the organization, existence and good standing of each
Loan Party and the authorization of the transactions contemplated hereby,
all in
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form and substance satisfactory to the Administrative Agent and its
counsel.
(d) The Administrative Agent shall have received a certificate,
dated the Effective Date and signed by the President, a Vice President
or a Financial Officer of the Borrower, confirming compliance with
the conditions set forth in paragraph (i) of this Section 4.01 and
paragraphs (a) and (b) of Section 4.02.
(e) The Administrative Agent shall have received all fees and
other amounts due and payable on or prior to the Effective Date,
including, to the extent invoiced, reimbursement or payment of all
out-of-pocket expenses required to be reimbursed or paid by any Loan
Party hereunder or under any other Loan Document.
(f) The Administrative Agent shall have received counterparts
of the Pledge Agreement signed on behalf of the Borrower and each
Subsidiary party thereto, together with stock certificates or other
instruments (if any) representing all the shares of capital stock or
other equity interests pledged thereunder and stock powers and instruments
of transfer, endorsed in blank, with respect to such stock certificates
and other equity interests.
(g) The Administrative Agent shall have received counterparts of
the Security Agreement signed on behalf of the Borrower and each
Subsidiary party thereto, together with:
(i) all documents and instruments, including Uniform
Commercial Code financing statements, required by law or reasonably
requested by the Administrative Agent to be filed, registered or
recorded to create or perfect the Liens intended to be created
under the Security Agreement; and
(ii) a completed Perfection Certificate dated the Effective
Date and signed by an executive officer or Financial Officer of the
Borrower, together with all attachments contemplated thereby,
including the results of a search of the Uniform Commercial Code
(or equivalent) filings made with respect to the Loan Parties in
the jurisdictions contemplated by the Perfection Certificate and
copies of the financing statements (or similar documents) disclosed
by such search and evidence reasonably satisfactory to the
Administrative Agent that the Liens indicated by such financing
statements (or similar documents) are permitted by Section 6.02 and
the Security Agreement or have been released.
(h) The Administrative Agent shall have received counterparts of
the Guarantee Agreement signed on behalf of the Borrower and each
Subsidiary party thereto.
(i) The Collateral Requirement and the Guarantee Requirement shall
have been satisfied as of the Effective Date.
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(j) The Borrower shall have received or shall
substantially simultaneously with the effectiveness of the
Lenders' obligations hereunder receive, in cash, the net
proceeds from the issuance and sale by the Borrower of not
less than $400,000,000 of Subordinated Notes. The price at
which such Subordinated Notes shall have been sold shall not
be significantly less than their principal amount. The
Administrative Agent shall have received satisfactory
evidence of the foregoing and copies of the Subordinated
Note Documents, certified by a Financial Officer as complete
and correct.
(k) (i) The Borrower shall have given irrevocable
notice such that the 1994 Credit Agreement and all
commitments thereunder to lend shall terminate within three
days of the Effective Date, (ii) the principal of and
interest on all loans and all letter of credit reimbursement
obligations under the 1994 Credit Agreement, and all accrued
fees due thereunder, shall have been or shall simultaneously
on the Effective Date be paid in full and all Liens on the
assets of the Borrower or any Subsidiary securing any
obligations thereunder or under any related agreement shall
have been or shall simultaneously be permanently released
and (iii) the Administrative Agent shall have received or
shall simultaneously receive evidence satisfactory in form
and substance to it demonstrating such notice, payment and
release. The Borrower covenants that it shall pay promptly
(and in any event not later than 30 days after the Effective
Date) all accrued expenses and other amounts due under the
1994 Credit Agreement not specified in the preceding clause
(ii).
(l) The Administrative Agent shall have received
evidence satisfactory to it that (i) at least $200,000,000
aggregate principal amount of the Floating Rate Senior Notes
shall have been or shall, substantially simultaneously with
the effectiveness of the Lenders' obligations hereunder, be
redeemed or (ii) the Borrower shall have given irrevocable
notice of the redemption of such Notes at the earliest
permissible date pursuant to the indenture governing such
Notes and, pending such prepayment or redemption, shall have
deposited an amount sufficient to effect such redemption
with the trustee for such Notes or with the Administrative
Agent, in either case on terms reasonably satisfactory to
the Administrative Agent.
The Administrative Agent shall notify the Borrower and the Lenders of the
Effective Date, and such notice shall be conclusive and binding.
Notwithstanding the foregoing, the obligations of the Lenders to make Loans
and of the Issuing Banks to issue Letters of Credit hereunder shall not
become effective unless each of the foregoing conditions is satisfied (or
waived pursuant to Section 9.02) at or prior to 12:00 noon, New York City
time, on September 15, 1997 (and, in the event such conditions are not so
satisfied or waived, the Commitments shall terminate at such time).
SECTION 4.02. EACH CREDIT EVENT. The obligation of each
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Lender to make a Loan on the occasion of any Borrowing, and of the Issuing
Banks to issue, renew, extend or amend so as to increase the stated amount of
any Letter of Credit, is subject to the receipt of an appropriate Borrowing
Request under Section 2.03 or request for issuance, renewal, extension or
amendment of a Letter of Credit under Section 2.05, as the case may be, and
to the satisfaction of the following conditions:
(a) The representations and warranties of the Borrower
set forth in this Agreement shall be true and correct in all
material respects, and the representations and warranties of
the Borrower and the other Loan Parties set forth in the
other Loan Documents, taken as a whole, shall be true and
correct in all material respects, on and as of the date of
such Borrowing or the date of such issuance, amendment,
renewal or extension of such Letter of Credit, as
applicable.
(b) At the time of and immediately after giving effect
to such Borrowing or such issuance, amendment, renewal or
extension of such Letter of Credit, as applicable, no
Default shall have occurred and be continuing.
Each Borrowing and each such issuance, amendment, renewal or extension of a
Letter of Credit shall be deemed to constitute a representation and warranty
by the Borrower on the date thereof as to the matters specified in paragraphs
(a) and (b) of this Section.
ARTICLE V
AFFIRMATIVE COVENANTS
Until the Commitments have expired or been terminated and the
principal of and interest on each Loan and all fees payable hereunder shall
have been paid in full and all Letters of Credit shall have expired or
terminated and all LC Disbursements shall have been reimbursed, the Borrower
covenants and agrees with the Lenders that:
SECTION 5.01. INFORMATION. The Borrower will deliver to each of
the Lenders:
(a) as soon as available and in any event within
95 days after the end of each fiscal year of the Borrower, a
consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of the end of such fiscal year
and the related consolidated statements of earnings and cash
flows for such fiscal year, setting forth in each case in
comparative form the figures for the previous fiscal year,
all reported on in a manner acceptable to the Securities and
Exchange Commission by Deloitte & Touche or other
independent public accountants of nationally recognized
standing;
(b) as soon as available and in any event within
50 days after the end of each of the first three quarters of
each fiscal year of the Borrower, (i) a consolidated
condensed balance sheet
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of the Borrower and its Consolidated Subsidiaries as of the end
of such quarter setting forth in comparative form the figures
for the previous fiscal year end, (ii) the related consolidated
statement of earnings of the Borrower and its Consolidated
Subsidiaries for such quarter and for the portion of the
Borrower's fiscal year ended at the end of such quarter setting
forth in comparative form the figures for the corresponding quarter
and the corresponding portion of the Borrower's previous
fiscal year, and (iii) the related consolidated condensed
statement of cash flows of the Borrower and its Consolidated
Subsidiaries for the portion of the Borrower's fiscal year
ended at the end of such quarter setting forth in
comparative form the figures for the corresponding portion
of the Borrower's previous fiscal year, all certified
(subject to normal year-end adjustments) as to fairness of
presentation, generally accepted accounting principles
(except for the omission of substantially all footnote
disclosure as permitted by Regulation S-X promulgated by the
Securities and Exchange Commission under the Securities Act
of 1933, as amended) and consistency by the chief financial
officer or the chief accounting officer of the Borrower;
(c) simultaneously with the delivery of each set of
financial statements referred to in clauses (a) and (b)
above, a certificate of the chief financial officer, the
treasurer or the chief accounting officer of the Borrower
(i) setting forth in reasonable detail the calculations
required to establish whether the Borrower was in compliance
with the requirements of Sections 6.03, 6.06, 6.08 and 6.09
on the date of such financial statements and (ii) stating
whether any Default exists on the date of such certificate
and, if any Default then exists, setting forth the details
thereof and the action which the Borrower is taking or
proposes to take with respect thereto;
(d) simultaneously with the delivery of each set of
financial statements referred to in clause (a) above, a
statement of the firm of independent public accountants that
reported on such statements (i) stating whether anything has
come to their attention to cause them to believe that any
Default existed on the date of such statements and
(ii) confirming the calculations set forth in the officer's
certificate delivered simultaneously therewith pursuant to
clause (c) above;
(e) simultaneously with the delivery of the financial
statements referred to in clause (a) above, a certificate
updating Schedule 3.09 (listing Subsidiaries and related
information) as of the end of the applicable fiscal year;
(f) within five Business Days after the obtaining of
the Borrower's Knowledge of any Default, a certificate of
the chief financial officer, treasurer or the chief
accounting officer of the Borrower setting forth the details
thereof and the action which the Borrower is taking or
proposes to take with respect thereto;
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(g) promptly upon the mailing thereof to the
shareholders of the Borrower generally, copies of all
financial statements, reports and proxy statements so
mailed;
(h) promptly upon the filing thereof, copies of all
registration statements (other than the exhibits thereto and
any registration statements on Form S-8 or its equivalent)
and reports on Forms 10-K, 10-Q and 8-K (or their
equivalents) that the Borrower shall have filed with the
Securities and Exchange Commission;
(i) if and when any ERISA Affiliate (i) gives or is
required to give notice to the PBGC of any "reportable
event" (as defined in Section 4043 of ERISA) with respect to
any Plan that might constitute grounds for a termination of
such Plan under Title IV of ERISA, or knows that the plan
administrator of any Plan has given or is required to give
notice of any such reportable event, a copy of the notice of
such reportable event given or required to be given to the
PBGC; (ii) receives notice of complete or partial withdrawal
liability under Title IV of ERISA or notice that any
Multiemployer Plan is in reorganization, is insolvent or has
been terminated, a copy of such notice; (iii) receives
notice from the PBGC under Title IV of ERISA of an intent to
terminate, impose liability (other than for premiums under
Section 4007 of ERISA) in respect of, or appoint a trustee
to administer any Plan, a copy of such notice; (iv) applies
for a waiver of the minimum funding standing under
Section 412 of the Internal Revenue Code, a copy of such
application; (v) gives notice of intent to terminate any
Plan under Section 4041(c) of ERISA, a copy of such notice
and other information filed with the PBGC; (vi) gives notice
of withdrawal from any Plan pursuant to Section 4063 of
ERISA, a copy of such notice; or (vii) fails to make any
payment or contribution to any Plan or Multiemployer Plan or
in respect of any Benefit Arrangement or makes any amendment
to any Plan or Benefit Arrangement which has resulted or
could result in the imposition of a Lien or the posting of a
bond or other security, a certificate of the chief financial
officer, treasurer or the chief accounting officer of the
Borrower setting forth details as to such occurrence and
action, if any, which the Borrower or applicable ERISA
Affiliate is required or proposes to take; and
(j) from time to time such additional information
regarding the financial position or business of the Borrower
as the Administrative Agent, at the request of any Lender,
may reasonably request.
SECTION 5.02. PAYMENT OF OBLIGATIONS. The Borrower
will pay and discharge, and will cause each Subsidiary to pay and
discharge, at or before maturity, all their respective material
obligations and liabilities, including, without limitation, tax
liabilities, except where the same may be contested in good faith
by appropriate proceedings or where the failure to do so would
not result in a Material Adverse Effect, and will maintain, and
will cause each Subsidiary to maintain, in accordance with
generally accepted
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accounting principles, appropriate reserves for the accrual of any of the
same.
SECTION 5.03. MAINTENANCE OF PROPERTY; INSURANCE. (a) The
Borrower will keep, and will cause each Subsidiary to keep, all property
useful and necessary in its business in good working order and condition,
ordinary wear and tear excepted, except where the failure to do so would not
have a Material Adverse Effect.
(b) The Borrower will, and will cause each of its Subsidiaries to,
maintain (either in the name of the Borrower or in such Subsidiary's own
name) with financially sound and responsible insurance companies, insurance
on all their respective properties in at least such amounts and against at
least such risks (and with such risk retention) as are usually insured
against in the same general areas by companies of established repute engaged
in the same or a similar business; and will furnish to the Lenders, upon
request from the Administrative Agent, information presented in reasonable
detail as to the insurance so carried.
SECTION 5.04. CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE.
The Borrower will continue, and will cause its Subsidiaries to continue, to
engage in business of the same general type as conducted by the Borrower and
its Subsidiaries taken as a whole, and will preserve, renew and keep in full
force and effect, and, except as permitted by Section 6.02, will cause each
Subsidiary to preserve, renew and keep in full force and effect their
respective corporate existence and their respective rights, privileges and
franchises necessary or desirable in the normal conduct of business.
SECTION 5.05. COMPLIANCE WITH LAWS. The Borrower will comply, and
cause each Subsidiary to comply, in all material respects with all applicable
laws, ordinances, rules, regulations, and requirements of Governmental
Authorities (including, without limitation, Environmental Laws and ERISA and
the rules and regulations thereunder) except where the necessity of
compliance therewith or the resultant penalty, fine or cost for
non-compliance is contested in good faith by appropriate proceedings or where
the failure to do so would not have a Material Adverse Effect.
SECTION 5.06. INSPECTION OF PROPERTY, BOOKS AND RECORDS. The
Borrower will keep, and will cause each Guarantor to keep, proper books of
record and account in which full, true and correct entries shall be made of
all dealings and transactions in relation to its business and activities; and
will permit, and will cause each Subsidiary to permit, representatives of any
Lender at such Lender's expense to visit and inspect any of their respective
properties, to examine and make abstracts from any of their respective books
and records and to discuss their respective affairs, finances and accounts
with their respective officers, employees and independent public accountants,
all at such reasonable times and as often as may reasonably be requested;
PROVIDED that this section shall not be construed to require the Borrower to
waive or cause to be waived any attorney-client privilege applicable to
information in the Borrower's or a Subsidiary's possession. Each Lender
agrees to maintain in
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confidence any information conspicuously identified by the Borrower or any
Subsidiary as trade secrets or proprietary information which such Lender may
obtain as a result of the inspections, examinations and discussions
undertaken pursuant to this section; provided that each Lender (i) may
discuss any such information with any other Lenders; (ii) may furnish any
such information to its attorneys and accountants; (iii) may furnish any such
information to any agency, authority, commission or other regulatory body to
whose jurisdiction it may be subject, to any shareholder, director or other
person to whom it in good faith believes it owes a duty of disclosure under
applicable law and to any other person if required by law; and (iv) shall not
be prohibited from using, or seeking to admit as evidence, any such
information in connection with any litigation to which such Lender is a party.
SECTION 5.07. USE OF PROCEEDS. The proceeds of the Loans made
under this Agreement will be used by the Borrower only for general corporate
purposes.
SECTION 5.08. GUARANTEE REQUIREMENT; FURTHER ASSURANCES. (a) If
at any date the Guarantee Requirement is not met, the Borrower will promptly
cause one or more Subsidiaries that are not then Guarantors to become parties
to the Guarantee Agreement so as to cause the Guarantee Requirement to be met.
(b) If at any date the Collateral Requirement is not met, the
Borrower will promptly take and cause the Subsidiaries to take all such
actions as shall be necessary, or as the Required Lenders, the Administrative
Agent or the Collateral Agent may reasonably request, to cause the Collateral
Requirement to be met.
(c) The Borrower will, and will cause each Subsidiary to, execute
any and all further documents, financing statements, agreements and
instruments, and take all further action (including filing Uniform Commercial
Code and other financing statements) that may be required under applicable
law, or that the Required Lenders, the Administrative Agent or the Collateral
Agent may reasonably request, in order to grant, confirm, preserve, protect
and perfect the validity and priority of the security interests created or
intended to be created by the Security Documents. Such security interests
and Liens shall be created under the Security Documents and other security
agreements, mortgages, deeds of trust and other instruments and documents in
form and substance satisfactory to the Collateral Agent, and the Borrower
shall deliver or cause to be delivered to the Lenders all such instruments
and documents (including legal opinions and lien searches) as the Collateral
Agent shall reasonably request to evidence compliance with this paragraph
(c). The Borrower shall provide from time to time such evidence as the
Collateral Agent shall reasonably request as to the perfection and priority
status of each such security interest.
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ARTICLE VI
NEGATIVE COVENANTS
Until the Commitments have expired or terminated and the principal
of and interest on each Loan and all fees payable hereunder have been paid in
full and all Letters of Credit have expired or terminated and all LC
Disbursements have been reimbursed, the Borrower covenants and agrees with
the Lenders that:
SECTION 6.01. LIENS. The Borrower will not, and will not permit
any Designated Subsidiary to, create, incur, assume or permit to exist any
Lien on any asset now owned or hereafter acquired by it, except:
(a) Liens created under the Loan Documents;
(b) Liens existing on the date hereof and described in
Schedule 6.01 hereto;
(c) any Lien existing on any asset of any Person at the
time (if after the date hereof) such Person becomes a
Consolidated Subsidiary and not created in contemplation of
such event;
(d) any Lien on any asset securing Indebtedness
incurred or assumed (after the date hereof) for the purpose
of financing all or any part of the cost of acquiring or
constructing such asset (other than any Lien on Inventory),
PROVIDED that such Lien attaches to such asset concurrently
with or within 180 days after the acquisition or completion
of construction thereof;
(e) any Lien on any asset of any Person existing at the
time (if after the date hereof) such Person is merged or
consolidated with or into the Borrower or a Consolidated
Subsidiary and not created in contemplation of such event;
(f) any Lien existing on any asset prior to the
acquisition thereof (if after the date hereof) by the
Borrower or a Consolidated Subsidiary and not created in
contemplation of such acquisition;
(g) any Lien arising out of the refinancing, extension,
renewal or refunding of any Indebtedness secured by any Lien
permitted by any of the foregoing clauses of this Section,
PROVIDED that such Indebtedness is not increased other than
by an amount equal to any reasonable financing fees and is
not secured by any additional assets;
(h) Liens arising in the ordinary course of its
business which (i) either (x) do not secure Indebtedness or
Hedging Agreements, (y) are statutory Liens or (z) apply to
equipment purchased pursuant to a title retention document
and (ii) either (x) do not in the aggregate materially
detract from the value of its assets or materially impair
the use thereof in the operation of its business or (y) are
being contested in good faith by appropriate proceedings,
which proceedings have the effect of
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preventing the forfeiture or sale of the property or asset subject
to such Lien;
(i) any Lien on a Financing Note that is transferred in
a Permitted Note Financing;
(j) Liens in favor of the Borrower or another
Consolidated Subsidiary;
(k) Liens securing Indebtedness of the type described
in subsections 6.03(a)(viii) and (ix); and
(l) Liens not otherwise permitted by the foregoing
clauses of this Section securing Indebtedness or Hedging
Agreements, in an aggregate principal or stated amount at
any time outstanding not in excess of $30,000,000.
SECTION 6.02. MERGERS, CONSOLIDATIONS AND SALES OF ASSETS. The
Borrower will not, and will not permit any Designated Subsidiary to, be a
party to any merger or consolidation, PROVIDED that:
(a) any Subsidiary may consolidate with or merge into
the Borrower or another Subsidiary if in any such merger or
consolidation involving the Borrower, the Borrower shall be
the surviving or continuing corporation;
(b) any other corporation may consolidate with or merge
into the Borrower or any Subsidiary if (i) in any such
merger or consolidation involving the Borrower, the Borrower
shall be the surviving or continuing corporation, (ii) in
any such merger or consolidation involving a Subsidiary the
corporation resulting from such merger or consolidation
shall be a Subsidiary, and (iii) at the time of such merger
or consolidation and after giving effect thereto no Default
shall have occurred and be continuing;
(c) the Borrower may engage in a reorganization
pursuant to Section 368(a)(1)(F) of the Internal Revenue
Code solely for the purpose of changing its place of
organization; and
(d) this paragraph shall not prohibit any merger or
consolidation that would otherwise be permitted under the
immediately following paragraph.
Other than Permitted Notes Financings, the Borrower will not, and
will not permit any Designated Subsidiary to, sell, lease, transfer or
otherwise dispose of (by merger or otherwise to a Person who is not a Wholly
Owned Subsidiary) all or any part of its property if such transaction
involves a substantial part of the property of the Borrower and its
Subsidiaries. As used in this paragraph, a sale, lease, transfer or other
disposition of the property of the Borrower or a Subsidiary shall be deemed
to be a substantial part of such property if the amount of property proposed
to be disposed of when added to the amount of all other property sold,
leased, transferred or disposed of (other than in the ordinary course of
business and other
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than as permitted by the next sentence) during any one fiscal year of the
Borrower contributed more than 20% of Consolidated Net Income for any one of
the immediately preceding three fiscal years of the Borrower. Notwithstanding
any other provision of this paragraph, the Borrower or any Subsidiary may
sell, lease, transfer or otherwise dispose of one or more warehouse
facilities, PROVIDED that (i) such transactions do not in the aggregate
involve all or substantially all of the property of the Borrower and its
Subsidiaries and (ii) the Borrower or any Subsidiary retains the right to
receive at least 85% of the revenue derived from such warehouse facilities,
notwithstanding the sale thereof.
SECTION 6.03. INDEBTEDNESS. (a) The Borrower will not, and will
not permit any Designated Subsidiary to, incur or at any time be liable with
respect to any Indebtedness except:
(i) Indebtedness outstanding under the Loan Documents;
(ii) the Subordinated Notes (and the related
Guarantees) and other Indebtedness outstanding on the date
hereof listed on Schedule 6.03(a)(ii);
(iii) Later Maturing Indebtedness the proceeds of which
are used to refinance the 10-5/8% Senior Notes, but only to
the extent the principal amount of such Later Maturing
Indebtedness does not exceed the principal amount of the 10-5/8%
Senior Notes so refinanced (plus the amount of any premium
actually paid on the Indebtedness so refinanced and the amount
of any expenses incurred in connection with such refinancing);
(iv) Later Maturing Indebtedness that is subordinated
to the Obligations on terms not less favorable to the
Lenders than the terms applicable to the Subordinated Notes;
(v) other Later Maturing Indebtedness in an aggregate
principal amount not to exceed $200,000,000;
(vi) Indebtedness of the Borrower to a Wholly Owned
Subsidiary or of a Consolidated Subsidiary to the Borrower
or a Wholly Owned Subsidiary or Indebtedness of the Borrower
to a Subsidiary that is not a Wholly Owned Subsidiary that
arises out of the Borrower's cash management activities in
the ordinary course of business;
(vii) (A) a Guarantor may Guarantee, on terms no more
favorable to the beneficiary than the Guarantee Agreement,
Later Maturing Indebtedness, the net proceeds of which are
used solely to repay Term Loans; PROVIDED that such
Indebtedness shall not be secured by the Security Documents
or otherwise; and (B) Guarantees of Indebtedness used to
refinance other Guaranteed Indebtedness where the
refinancing is permitted by this Section 6.03(a), so long as
no new guarantors are added and the terms of such Guarantee
are no more favorable to the beneficiaries than the
Guarantee of the refinanced Indebtedness;
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(viii) obligations of the Borrower or any Subsidiary as
lessee under capital leases, and any Guarantees of such
obligations, but only to the extent that the Borrower or
such Subsidiary has entered into (and not terminated), or
has a binding commitment for, subleases on terms which, to
the Borrower, are at least as favorable, on a current basis,
as the terms of the corresponding capital lease;
(ix) obligations of the Borrower or its Subsidiaries
(other than as covered by clause (viii) above) as lessee
under capital leases the aggregate capitalized amount of
which does not exceed $580,000,000, and any Guarantees of
such obligations;
(x) Indebtedness assumed by the Borrower or any
Subsidiary in connection with an Acquisition (if after the
date hereof) and not created in contemplation of such
Acquisition;
(xi) Indebtedness of any corporation outstanding at the
time (if after the date hereof) such corporation becomes a
Consolidated Subsidiary and not created in contemplation of
such event;
(xii) Guarantees made by the Borrower or any Subsidiary
in connection with a Permitted Notes Financing;
(xiii) other unsecured Indebtedness maturing or
expiring less than one year after the incurrence thereof in
an aggregate principal amount outstanding at any time not to
exceed the unutilized portion of the Revolving Commitments
hereunder; and
(xiv) Indebtedness the proceeds of which are used to
refinance Indebtedness permitted by clause (ii), (iii), (iv)
(v), (x) or (xi) of this Section 6.03(a); PROVIDED that (A)
the principal amount of such Indebtedness does not exceed
that of the Indebtedness so refinanced (plus the amount of
any premium actually paid on the Indebtedness so refinanced
and the amount of any expenses incurred in connection with
such refinancing), (B) such Indebtedness does not have a
final maturity or weighted average life to maturity shorter
than that of the Indebtedness so refinanced, (C) the terms
of such Indebtedness (including any applicable subordination
terms) are no less favorable to the Borrower or the Lenders
than the terms of the Indebtedness so refinanced, (D) the
obligor on such Indebtedness is the same as the obligor on
the Indebtedness so refinanced (except with respect to the
Indebtedness permitted by clauses (x) and (xi) of this
Section 6.03(a)), (E) the Liens, Guarantees or other credit
support for such Indebtedness are no more favorable to the
obligee of such Indebtedness than such support for the
Indebtedness being refinanced and (F) intercompany
Indebtedness may only be so refinanced with other
intercompany Indebtedness.
(b) The Borrower will not, and will not permit any Subsidiary to,
make any prepayment of the principal of, or repurchase, redeem, defease or
otherwise retire prior to its stated maturity, any Indebtedness, except:
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(i) Indebtedness created under the Loan Documents;
(ii) Indebtedness outstanding on the date hereof that
is repaid on the Effective Date (or that is designated to be
repaid within a specific period after the Effective Date on
Schedule 6.03(b)(ii)) with the proceeds of Loans made under
this Agreement or the proceeds of the Subordinated Notes;
(iii) Indebtedness of the Borrower to a Consolidated
Subsidiary or of a Consolidated Subsidiary to the Borrower
or another Consolidated Subsidiary;
(iv) Indebtedness of the character described in
clauses (vi), (viii), (ix), (x), (xi), (xii), (xiii) and
(xiv) of Section 6.03(a) that is not Later Maturing
Indebtedness;
(v) Later Maturing Indebtedness in an aggregate
principal amount not in excess of $10,000,000; and
(vi) in connection with the refinancing of such
Indebtedness where such refinancing is expressly permitted
by Section 6.03(a).
(c) The Borrower will not, and will not permit any of its
Subsidiaries, to enter into any Hedging Agreement, other than Hedging
Agreements entered into in the ordinary course of business to hedge or
mitigate risks to which the Borrower or any Subsidiary is exposed in the
conduct of its business or the management of its liabilities, and not for
speculative purposes.
SECTION 6.04. RESTRICTED PAYMENTS. The Borrower will not, and will
not permit any Subsidiary to, pay any dividend or other distribution with
respect to any shares of any class of the Borrower's capital stock, or
purchase, redeem or retire any shares of any class of such capital stock (or
any option, warrant or other right to acquire any shares of such capital
stock), if such dividend or distribution, or such purchase, redemption or
retirement, would be prohibited under any covenant contained in the
Subordinated Note Documents as originally executed.
SECTION 6.05. TRANSACTIONS WITH AFFILIATES. The Borrower will
not, and will not permit any Subsidiary to, directly or indirectly, pay any
funds to or for the account of, make any investment (whether by acquisition
of stock or indebtedness, by loan, advance, transfer of property, guarantee
or other agreement to pay, purchase or service, directly or indirectly, any
Indebtedness, or otherwise) in, lease, sell, transfer or otherwise dispose of
any assets, tangible or intangible, to, or participate in, or effect any
transaction in connection with any joint enterprise or other joint
arrangement with, any Affiliate; PROVIDED HOWEVER, that the foregoing
provisions of this Section shall not prohibit (a) the Borrower from declaring
or paying any lawful dividend so long as, after giving effect thereto, no
Default shall have occurred and be continuing, (b) the Borrower or any
Subsidiary from making sales to or purchases
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from any Affiliate and, in connection therewith, extending credit or making
payments, or from making payments for services rendered by any Affiliate, if
such sales or purchases are made or such services are rendered in the
ordinary course of business and on terms and conditions at least as favorable
to the Borrower or such Subsidiary as the terms and conditions which would
apply in a similar transaction with a Person not an Affiliate, (c) the
Borrower or any Subsidiary from making payments of principal, interest and
premium on any Indebtedness of the Borrower or such Subsidiary held by an
Affiliate if the terms of such Indebtedness are substantially as favorable to
the Borrower or such Subsidiary as the terms which could have been obtained
at the time of the creation of such Indebtedness from a lender which was not
an Affiliate, (d) the Borrower or any Subsidiary from participating in, or
effecting any transaction in connection with, any joint enterprise or other
joint arrangement with any Affiliate if the Borrower or such Subsidiary
participates in the ordinary course of its business and on a basis no less
advantageous than the basis on which such Affiliate participates, (e) the
Borrower or any Subsidiary from making payments of reasonable compensation,
fees and expenses to their respective directors and executive officers for
services rendered to the board of directors of the Borrower or any Subsidiary
or any committee of any thereof and (f) the Borrower or any Subsidiary from
performing its obligations under certain real property leases listed on
Schedule 6.05 or other leases or obligations entered or undertaken by a
Subsidiary before it becomes a Subsidiary.
SECTION 6.06. ACQUISITIONS AND INVESTMENTS. Neither the Borrower
nor any Designated Subsidiary will make any Acquisitions or Investments
except:
(i) Temporary Cash Investments;
(ii) Investments by the Borrower in any Wholly Owned
Subsidiary and Investments by any Wholly Owned Subsidiary in
the Borrower or in any other Wholly Owned Subsidiary;
(iii) any Acquisition or Investment, to the extent the
consideration therefor consists of shares of capital stock
of the Borrower;
(iv) the reclassification of any Investment originally
made in the form of Indebtedness as an Investment by way of
capital contribution or share purchase or the
reclassification of any Investment originally made by way of
capital contribution or share purchase as an Investment in
the form of Indebtedness;
(v) Accounts Receivable converted to Investments, so
long as such Investments either mature within one year or
are in an outstanding aggregate unrecovered amount
(excluding those maturing within one year) not exceeding
$20,000,000 in any year;
(vi) Investments deemed to exist as a result of
Guarantees permitted under Section 6.03(a); and
(vii) other Acquisitions or Investments (other than
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Acquisitions and Investments covered by clauses (i) through
(vi) above) where the consideration for such Acquisition or
Investment, when aggregated with the total consideration for
all other Acquisitions and Investments made from the date
hereof through the applicable date of measurement (other
than Acquisitions and Investments covered by clauses (i)
through (vi) above), does not exceed the amount set forth
below for the year in which such Acquisition or Investment
is to be made:
Period Amount
------ ------
Effective Date through December 31,1997 $250,000,000
January 1,1998 through December 31,1998 $300,000,000
January 1,1999 through December 31,1999 $350,000,000
Thereafter $400,000,000
PROVIDED that as at any time of determination the amount set
forth above for any year shall be increased by (A) the net
proceeds received at any time after the date hereof by the
Borrower or any Subsidiary in respect of sales or other
transfers of Financing Notes, less any non-contingent amount
paid or payable by the Borrower or any Subsidiary with
respect to credit losses associated with, or other recourse
to the Borrower or any Subsidiary with respect to, any such
Financing Notes, (B) the amount of cash or Temporary Cash
Investments received by the Borrower or any Subsidiary
representing the net proceeds of any loan repayment or
return of capital in respect of an Investment previously
made which was either permitted only by this
subsection (vii) or would have been permitted only by this
subsection (vii) if this Agreement had been in effect at the
time such Investment was made, (C) the amount of any
Guarantee previously issued which was either permitted only
by this subsection (vii) or would have been permitted only
by this subsection (vii) if this Agreement had been in
effect at the time such Guarantee was issued, to the extent
such Guarantee is subsequently terminated without any
payment having been made pursuant thereto and (D) an amount
equal to 50% of the Net Proceeds of Asset Dispositions
received by the Borrower and the Subsidiaries after the date
hereof; PROVIDED FURTHER that the amounts set forth above
shall be increased as under the 1994 Credit Agreement in
accordance with Schedule 6.06(vii) hereto.
SECTION 6.07. LIMITATION ON PAYMENT RESTRICTIONS AFFECTING
SUBSIDIARIES. The Borrower will not, and will not permit any of its
Subsidiaries that are Guarantors or Grantors to, create or otherwise cause or
suffer to exist or become effective any consensual restriction on the ability
of such Subsidiary to pay, directly or indirectly, to the Borrower or another
Subsidiary any dividends or other distributions on such Subsidiary's capital
stock or make or
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repay loans or advances to or from the Borrower or another Subsidiary.
SECTION 6.08. FIXED CHARGE COVERAGE RATIO. The Borrower shall not
permit the ratio of EBITDAR to the sum of (i) Interest Expense, (ii) Rent
Expense and (iii) dividends paid on preferred stock of the Borrower for any
period of four consecutive fiscal quarters ending after the date hereof to be
less than 1.70 to 1.00.
SECTION 6.09. RATIO OF INVENTORY AND ACCOUNTS RECEIVABLE TO FUNDED
BANK DEBT. The Borrower shall not permit the ratio of Inventory and Accounts
Receivable of the Borrower and its Subsidiaries on a consolidated basis (net
of the allowance for doubtful accounts and excluding Inventory and Accounts
Receivable subject to consensual Liens in favor of third parties (PROVIDED
that in the case of any such consensual Lien securing obligations not greater
than $250,000, Inventory and Accounts Receivable will be excluded only in the
amount of the obligations so secured) or in which the Administrative Agent,
on behalf of the Lenders, does not have a perfected security interest prior
to any other Lien that can be perfected by filing under the Uniform
Commercial Code) to Funded Bank Debt on any date to be less than 1.40 to 1.00.
ARTICLE VII
EVENTS OF DEFAULT
If any of the following events ("EVENTS OF DEFAULT") shall occur:
(a) the Borrower shall fail to pay any principal of any
Loan or any reimbursement obligation in respect of any LC
Disbursement when and as the same shall become due and
payable, whether at the due date thereof or at a date fixed
for prepayment thereof or otherwise;
(b) the Borrower shall fail to pay any interest on any
Loan or any fee or any other amount (other than an amount
referred to in clause (a) of this Article) payable under
this Agreement or any other Loan Document, when and as the
same shall become due and payable, and such failure shall
continue unremedied for a period of five days;
(c) (i) any representation, warranty, certification or
statement made by the Borrower in this Agreement or in any
certificate, financial statement or other document delivered
pursuant to this Agreement (other than any such document
covered by clause (ii) of this paragraph (c)) shall prove to
have been incorrect or misleading in any material respect
when made (or deemed made) or (ii) the representations,
warranties, certifications and statements made by the
Borrower and each Loan Party in the other Loan Documents and
in the certificates, financial statements and other
documents delivered thereunder, taken as a whole, shall
prove to have been incorrect or misleading in any material
respect when made (or deemed made);
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(d) the Borrower shall fail to observe or perform any
covenant, condition or agreement contained in
Section 5.01(f), 5.04 (insofar as it relates to the
corporate existence of the Borrower), Section 5.07 or
Article VI;
(e) any Loan Party shall fail to observe or perform any
covenant, condition or agreement contained in any Loan
Document (other than those specified in clause (a), (b) or
(d) of this Article), and such failure shall continue
unremedied for a period of 30 days after notice thereof from
the Administrative Agent to the Borrower (which notice will
be given at the request of any Lender);
(f) the Borrower or any Subsidiary shall fail to make
any payment (whether of principal or interest and regardless
of amount) in respect of any Material Indebtedness, when and
as the same shall become due and payable or within any
applicable grace period;
(g) any event or condition occurs that results in any
Material Indebtedness becoming due prior to its scheduled
maturity or that enables or permits (with or without the
giving of notice, the lapse of time or both) the holder or
holders of any Material Indebtedness or any trustee or agent
on its or their behalf to cause any Material Indebtedness to
become due, or to require the prepayment, repurchase,
redemption or defeasance thereof, prior to its scheduled
maturity; PROVIDED that this clause (g) shall not apply to
secured Indebtedness that becomes due as a result of the
voluntary sale or transfer of the property or assets
securing such Indebtedness;
(h) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed seeking (i) liquidation,
reorganization or other relief in respect of the Borrower or
any Guarantor or Grantor or its debts, or of a substantial
part of its assets, under any Federal, state or foreign
bankruptcy, insolvency, receivership or similar law now or
hereafter in effect or (ii) the appointment of a receiver,
trustee, custodian, sequestrator, conservator or similar
official for the Borrower or any Guarantor or Grantor or for
a substantial part of its assets, and, in any such case,
such proceeding or petition shall continue undismissed for
60 days or an order or decree approving or ordering any of
the foregoing shall be entered;
(i) the Borrower or any Guarantor or Grantor shall
(i) voluntarily commence any proceeding or file any petition
seeking liquidation, reorganization or other relief under
any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect,
(ii) consent to the institution of, or fail to contest in a
timely and appropriate manner, any proceeding or petition
described in clause (h) of this Article, (iii) apply for or
consent to the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for
the Borrower or any Guarantor or Grantor or
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for a substantial part of its assets, (iv) file an answer
admitting the material allegations of a petition filed
against it in any such proceeding, (v) make a general
assignment for the benefit of creditors or (vi) take any
action for the purpose of effecting any of the foregoing;
(j) the Borrower or any Guarantor or Grantor shall
become unable, admit in writing its inability or fail
generally to pay its debts as they become due;
(k) one or more judgments for the payment of money in
an aggregate amount in excess of $10,000,000 shall be
rendered against the Borrower, any Subsidiary or any
combination thereof and the same shall remain undischarged
for a period of 60 days during which execution shall not be
effectively stayed, or any judgment creditor shall legally
take possession of or sell any significant assets of the
Borrower or any Subsidiary to enforce any such judgment;
(l) (i) any ERISA Affiliate shall fail to pay when due
an amount or amounts aggregating in excess of $15,000,000
which it shall have become liable to pay under Title IV of
ERISA; (ii) or notice of intent to terminate a Material
Plan shall be filed under Title IV of ERISA by any ERISA
Affiliate, any plan administrator or any combination of the
foregoing; (iii) or the PBGC shall institute proceedings
under Title IV of ERISA to terminate, to impose liability
(other than for premiums under Section 4007 of ERISA) in
respect of, or to cause a trustee to be appointed to
administer any Material Plan; (iv) or a condition shall
exist by reason of which the PBGC would be entitled to
obtain a decree adjudicating that any Material Plan must be
terminated; (v) or there shall occur a complete or partial
withdrawal from, or a default, within the meaning of Section
4219(c)(5) of ERISA (a "4219 Default"), with respect to, one
or more Multiemployer Plans which could cause one or more
ERISA Affiliates to incur a current payment obligation in
excess of $15,000,000;
(m) any Lien purported to be created under any Security
Document shall cease to be, or shall be asserted by any Loan
Party not to be, a valid and perfected Lien on any
Collateral, with the priority required by the applicable
Security Document, except (i) as a result of the sale or
other disposition of the applicable Collateral in a
transaction permitted under the Loan Documents or (ii) as a
result of the Administrative Agent's failure to maintain
possession of any stock certificates or instruments
delivered to it under the Pledge Agreement; or
(n) a Change in Control shall occur;
then, and in every such event (other than an event with respect to the
Borrower described in clause (h) or (i) of this Article), and at any time
thereafter during the continuance of such event, the Administrative Agent
may, and at the request of the Required Lenders shall, by notice to the
Borrower, take either or both of the following
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actions, at the same or different times: (i) terminate the Commitments, and
thereupon the Commitments shall terminate immediately, and (ii) declare the
Loans then outstanding to be due and payable in whole (or in part, in which
case any principal not so declared to be due and payable may thereafter be
declared to be due and payable), and thereupon the principal of the Loans so
declared to be due and payable, together with accrued interest thereon and
all fees and other obligations of the Borrower accrued hereunder, shall
become due and payable immediately, without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Borrower; and
in case of any event with respect to the Borrower described in clause (h) or
(i) of this Article, the Commitments shall automatically terminate and the
principal of the Loans then outstanding, together with accrued interest
thereon and all fees and other obligations of the Borrower accrued hereunder,
shall automatically become due and payable, without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by the
Borrower.
ARTICLE VIII
THE ADMINISTRATIVE AGENT
Each of the Lenders and the Issuing Banks hereby irrevocably
appoints the Administrative Agent as its agent and authorizes the
Administrative Agent to take such actions on its behalf and to exercise such
powers as are delegated to the Administrative Agent by the terms of the Loan
Documents, together with such actions and powers as are reasonably incidental
thereto.
The bank serving as the Administrative Agent hereunder shall have
the same rights and powers in its capacity as a Lender as any other Lender
and may exercise the same as though it were not the Administrative Agent, and
such bank and its Affiliates may accept deposits from, lend money to and
generally engage in any kind of business with the Borrower or any Subsidiary
or other Affiliate thereof as if it were not the Administrative Agent
hereunder.
The Administrative Agent shall not have any duties or obligations
except those expressly set forth in the Loan Documents. Without limiting the
generality of the foregoing, (a) the Administrative Agent shall not be
subject to any fiduciary or other implied duties, regardless of whether a
Default has occurred and is continuing, (b) the Administrative Agent shall
not have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly
contemplated by the Loan Documents that the Administrative Agent is required
to exercise in writing by the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 9.02), and (c) except as expressly set forth in the Loan
Documents, the Administrative Agent shall not have any duty to disclose, and
shall not be liable for the failure to disclose, any information relating to
the Borrower or any of its Subsidiaries that is communicated to or obtained
by the bank serving as Administrative
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Agent or any of its Affiliates in any capacity. The Administrative Agent
shall not be liable for any action taken or not taken by it with the consent
or at the request of the Required Lenders (or such other number or percentage
of the Lenders as shall be necessary under the circumstances as provided in
Section 9.02) or in the absence of its own gross negligence or wilful
misconduct. The Administrative Agent shall not be deemed to have knowledge
of any Default unless and until written notice thereof is given to the
Administrative Agent by the Borrower or a Lender, and the Administrative
Agent shall not be responsible for or have any duty to ascertain or inquire
into (i) any statement, warranty or representation made in or in connection
with any Loan Document, (ii) the contents of any certificate, report or other
document delivered thereunder or in connection therewith, (iii) the
performance or observance of any of the covenants, agreements or other terms
or conditions set forth in any Loan Document, (iv) the validity,
enforceability, effectiveness or genuineness of any Loan Document or any
other agreement, instrument or document, or (v) the satisfaction of any
condition set forth in Article IV or elsewhere in any Loan Document, other
than to confirm receipt of items expressly required to be delivered to the
Administrative Agent.
The Administrative Agent shall be entitled to rely upon, and shall
not incur any liability for relying upon, any notice, request, certificate,
consent, statement, instrument, document or other writing believed by it to
be genuine and to have been signed or sent by the proper Person. The
Administrative Agent also may rely upon any statement made to it orally or by
telephone and believed by it to be made by the proper Person, and shall not
incur any liability for relying thereon. The Administrative Agent may
consult with legal counsel (who may be counsel for the Borrower), independent
accountants and other experts selected by it, and shall not be liable for any
action taken or not taken by it in accordance with the advice of any such
counsel, accountants or experts.
The Administrative Agent may perform any and all its duties and
exercise its rights and powers by or through any one or more sub-agents
appointed by the Administrative Agent. The Administrative Agent and any such
sub-agent may perform any and all its duties and exercise its rights and
powers through their respective Related Parties. The exculpatory provisions
of the preceding paragraphs shall apply to any such sub-agent and to the
Related Parties of each Administrative Agent and any such sub-agent, and
shall apply to their respective activities in connection with the syndication
of the credit facilities provided for herein as well as activities as
Administrative Agent. Neither the Syndication Agent nor the Documentation
Agent shall have any obligation, liability, responsibility or duty under this
Agreement.
Subject to the appointment and acceptance of a successor
Administrative Agent as provided in this paragraph, the Administrative Agent
may resign at any time by notifying the Lenders, the Issuing Banks and the
Borrower. Upon any such resignation, the Required Lenders shall have the
right, in consultation with the Borrower, to appoint a successor. If no
successor shall have been so appointed by
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the Required Lenders and shall have accepted such appointment within 30 days
after the retiring Administrative Agent gives notice of its resignation, then
the retiring Administrative Agent may, on behalf of the Lenders and the
Issuing Banks, appoint a successor Administrative Agent which shall be a bank
with an office in New York, New York, or an Affiliate of any such bank. Upon
the acceptance of its appointment as Administrative Agent hereunder by a
successor, such successor shall succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Administrative Agent,
and the retiring Administrative Agent shall be discharged from its duties and
obligations hereunder. The fees payable by the Borrower to a successor
Administrative Agent shall be the same as those payable to its predecessor
unless otherwise agreed between the Borrower and such successor. After the
Administrative Agent's resignation hereunder, the provisions of this Article
and Section 9.03 shall continue in effect for the benefit of such retiring
Administrative Agent, its sub-agents and their respective Related Parties in
respect of any actions taken or omitted to be taken by any of them while it
was acting as Administrative Agent.
Each Lender acknowledges that it has, independently and without
reliance upon the Agents or any other Lender and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Agents or any other Lender
and based on such documents and information as it shall from time to time
deem appropriate, continue to make its own decisions in taking or not taking
action under or based upon this Agreement, any other Loan Document or related
agreement or any document furnished hereunder or thereunder.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. NOTICES. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(a) if to the Borrower, to Fleming Companies, Inc. at
P.O. Box 26647, 6301 Waterford Boulevard, Oklahoma City,
OK 73126, Attention of Mr. John M. Thompson (Telecopy
No. (405) 840-7202) with a copy to McAfee & Taft A
Professional Corporation at Two Leadership Square, 10th
Floor, 211 North Robinson, Oklahoma City, OK 73102-7103,
Attention of Brice Tarzwell, Esq. (Telecopy No. (405) 235-0439);
(b) if to the Administrative Agent, to The Chase
Manhattan Bank, Loan and Agency Services Group, One Chase
Manhattan Plaza, 8th Floor, New York, New York 10081,
Attention of Ms. Sandra
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Miklave (Telecopy No. (212) 552-5658), with a copy to
The Chase Manhattan Bank, 2200 Ross Avenue, 3rd Floor,
Dallas, TX 75201, Attention of Mr. Matthew Hildreth
(Telecopy No. (214) 965-2044);
(c) if to the Issuing Banks, to them at (i) The Chase
Manhattan Bank, Loan and Agency Services Group, One Chase
Manhattan Plaza, 8th Floor, New York, NY 10081, Attention of
Ms. Sandra Miklave (Telecopy No. (212) 552-5658), (ii) Bank
of America National Trust and Savings Association, 333 Clay
Street, Suite 4550, Houston, TX 77002, Attention of Mr.
Steve Mernick (Telecopy No. (713) 651-4841) and
(iii) Societe Generale, 2001 Ross Avenue, Suite 4800,
Dallas, TX 75201, Attention of Mr. Richard M. Lewis
(Telecopy No. (214) 979-1104);
(d) if to the Swingline Lender, to The Chase Manhattan
Bank, Loan and Agency Services Group, One Chase Manhattan
Plaza, 8th Floor, New York, NY 10081, Attention of
Ms. Sandra Miklave (Telecopy No. (212) 552-5658); and
(e) if to any other Lender, to it at its address (or
telecopy number) set forth in its Administrative
Questionnaire.
Any party hereto may change its address or telecopy number for
notices and other communications hereunder by notice to the other
parties hereto. All notices and other communications given to
any party hereto in accordance with the provisions of this
Agreement shall be deemed to have been given on the date of
receipt.
SECTION 9.02. WAIVERS; AMENDMENTS. (a) No failure or delay by
the Administrative Agent, any Issuing Bank or any Lender in exercising any
right or power hereunder or under any other Loan Document shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right
or power, preclude any other or further exercise thereof or the exercise of
any other right or power. The rights and remedies of the Administrative
Agent, the Issuing Banks and the Lenders hereunder and under the other Loan
Documents are cumulative and are not exclusive of any rights or remedies that
they would otherwise have. No waiver of any provision of any Loan Document
or consent to any departure by any Loan Party therefrom shall in any event be
effective unless the same shall be permitted by paragraph (b) of this
Section, and then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given. Without limiting the
generality of the foregoing, the making of a Loan or issuance of a Letter of
Credit shall not be construed as a waiver of any Default, regardless of
whether the Administrative Agent, any Lender or any Issuing Bank may have had
notice or knowledge of such Default at the time.
(b) Neither this Agreement nor any other Loan Document nor any
provision hereof or thereof may be waived, amended or modified except, in the
case of this Agreement, pursuant to an agreement or agreements in writing
entered into by the Borrower and the Required Lenders or, in the case of any
other Loan Document, pursuant to an agreement or agreements in writing
entered into by the Administrative
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Agent or Collateral Agent, as the case may be, and the Loan Party or Loan
Parties that are parties thereto, in each case with the consent of the
Required Lenders; PROVIDED that no such agreement shall (i) increase the
Commitment of any Lender without the written consent of such Lender, (ii)
reduce the principal amount of any Loan or LC Disbursement or reduce the rate
of interest thereon, or reduce any fees payable hereunder, without the
written consent of each Lender affected thereby, (iii) postpone the scheduled
date of payment of the principal amount of any Loan or LC Disbursement, or
any interest thereon, or any fees payable hereunder, or reduce the amount of,
waive or excuse any such payment, or postpone the scheduled date of
expiration of any Commitment, without the written consent of each Lender
affected thereby, (iv) change Section 2.18(b) or (c) in a manner that would
alter the pro rata sharing of payments required thereby, without the written
consent of each Lender, (v) change any of the provisions of this Section or
the definition of "Required Lenders" or any other provision of any Loan
Document specifying the number or percentage of Lenders (or Lenders of any
Class) required to waive, amend or modify any rights thereunder or make any
determination or grant any consent thereunder, without the written consent of
each Lender (or each Lender of such Class, as the case may be), (vi) release
any Guarantor from its Guarantee under the Guarantee Agreement (except as
expressly provided therein), or limit its liability in respect of such
Guarantee, without the written consent of each Lender, (vii) release all or
substantially all of the Collateral from the Liens of the Security Documents,
without the written consent of each Lender or (viii) change any provisions of
any Loan Document in a manner that by its terms adversely affects the rights
in respect of payments due to Lenders holding Loans of any Class differently
than those holding Loans of any other Class, without the written consent of
Lenders holding a majority in interest of the outstanding Loans and unused
Commitments of each affected Class; PROVIDED FURTHER that (A) no such
agreement shall amend, modify or otherwise affect the rights or duties of the
Administrative Agent, the Issuing Banks or the Swingline Lender without the
prior written consent of the Administrative Agent, the Issuing Banks or the
Swingline Lender, as the case may be, and (B) any waiver, amendment or
modification of this Agreement that by its terms affects the rights or duties
under this Agreement of the Revolving Lenders (but not the Term Lenders) or
the Term Lenders (but not the Revolving Lenders) may be effected by an
agreement or agreements in writing entered into by the Borrower and requisite
percentage in interest of the affected Class of Lenders.
SECTION 9.03. EXPENSES; INDEMNITY; DAMAGE WAIVER. (a) The
Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the
Administrative Agent and its Affiliates, including the reasonable fees,
charges and disbursements of counsel for the Administrative Agent, in
connection with the syndication of the credit facilities provided for herein,
the preparation and administration of the Loan Documents or any amendments,
modifications or waivers of the provisions thereof (whether or not the
transactions contemplated hereby or thereby shall be consummated), (ii) all
reasonable out-of-pocket expenses incurred by the Issuing Banks in connection
with the issuance, amendment, renewal or extension of any Letter of Credit or
any demand for payment thereunder and (iii) all out-of-pocket expenses
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incurred upon an Event of Default by the Administrative Agent, any Issuing
Bank or any Lender, including the fees, charges and disbursements of any
counsel for the Administrative Agent, any Issuing Bank or any Lender, in
connection with the enforcement or protection of its rights in connection
with the Loan Documents, including its rights under this Section, or in
connection with the Loans made or Letters of Credit issued hereunder,
including all such out-of-pocket expenses incurred during any workout,
restructuring or negotiations in respect of such Loans or Letters of Credit.
(b) The Borrower shall indemnify the Administrative Agent, each
Issuing Bank and each Lender, and each Related Party of any of the foregoing
Persons (each such Person being called an "INDEMNITEE") against, and hold
each Indemnitee harmless from, any and all losses, claims, damages,
liabilities and related expenses, including the fees, charges and
disbursements of any counsel for any Indemnitee, incurred by or asserted
against any Indemnitee arising out of, in connection with, or as a result of
(i) the execution or delivery of any Loan Document or any other agreement or
instrument contemplated hereby, the performance by the parties to the Loan
Documents of their respective obligations thereunder or the consummation of
the transactions contemplated hereby, (ii) any Loan or Letter of Credit or
the use of the proceeds therefrom (including any refusal by any Issuing Bank
to honor a demand for payment under a Letter of Credit if the documents
presented in connection with such demand do not strictly comply with the
terms of such Letter of Credit), (iii) any actual or alleged presence or
release of Hazardous Materials on or from any property owned or operated by
the Borrower or any of its Subsidiaries, or any Environmental Liability
related in any way to the Borrower or any of its Subsidiaries, or (iv) any
actual or prospective claim, litigation, investigation or proceeding relating
to any of the foregoing, whether based on contract, tort or any other theory
and regardless of whether any Indemnitee is a party thereto; PROVIDED that
such indemnity shall not, as to any Indemnitee, be available to the extent
that such losses, claims, damages, liabilities or related expenses resulted
from the gross negligence or wilful misconduct of such Indemnitee.
(c) To the extent that the Borrower fails to pay any amount
required to be paid by it to the Administrative Agent, an Issuing Bank or the
Swingline Lender under paragraph (a) or (b) of this Section, each Lender
severally agrees to pay to the Administrative Agent, such Issuing Bank or the
Swingline Lender, as the case may be, such Lender's pro rata share
(determined as of the time that the applicable unreimbursed expense or
indemnity payment is sought) of such unpaid amount; PROVIDED that the
unreimbursed expense or indemnified loss, claim, damage, liability or related
expense, as the case may be, was incurred by or asserted against the
Administrative Agent, such Issuing Bank or the Swingline Lender in its
capacity as such. For purposes hereof, a Lender's "pro rata share" shall be
determined based upon its share of the sum of the total Revolving Exposures,
outstanding Term Loans and unused Commitments at the time. To the extent
such amounts are later reimbursed by the Borrower, the Administrative Agent
shall promptly reimburse the Lenders for the amount thereof.
(d) To the extent permitted by applicable law, the Borrower
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shall not assert, and hereby waives, any claim against any Indemnitee, on any
theory of liability, for special, indirect, consequential or punitive damages
(as opposed to direct or actual damages) arising out of, in connection with,
or as a result of, this Agreement or any agreement or instrument contemplated
hereby, the transactions contemplated hereby, any Loan or Letter of Credit or
the use of the proceeds thereof.
(e) All amounts due under this Section shall be payable not later
than 10 days after written demand therefor.
SECTION 9.04. SUCCESSORS AND ASSIGNS. (a) The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns permitted hereby
(including any Affiliate of an Issuing Bank that issues any Letter of
Credit), except that the Borrower may not assign or otherwise transfer any of
its rights or obligations hereunder without the prior written consent of each
Lender (and any attempted assignment or transfer by the Borrower without such
consent shall be null and void). Nothing in this Agreement, expressed or
implied, shall be construed to confer upon any Person (other than the parties
hereto, their respective successors and assigns permitted hereby (including
any Affiliate of an Issuing Bank that issues any Letter of Credit) and, to
the extent expressly contemplated hereby, the Related Parties of each of the
Administrative Agent, the Issuing Banks and the Lenders) any legal or
equitable right, remedy or claim under or by reason of this Agreement.
(b) Any Lender may assign to one or more assignees all or a
portion of its rights and obligations under this Agreement (including all or
a portion of its Commitment and the Loans at the time owing to it); PROVIDED
that (i) except in the case of an assignment to a Lender or a Federal Reserve
Bank, each of the Borrower and the Administrative Agent (and, in the case of
an assignment of all or a portion of a Revolving Commitment or any Lender's
obligations in respect of its LC Exposure or Swingline Exposure, the
applicable Issuing Bank and the Swingline Lender as the case may be) must
give their prior written consent to such assignment (which consent shall not
be unreasonably withheld), (ii) except in the case of an assignment to a
Lender or an Affiliate of a Lender or an assignment of the entire remaining
amount of the assigning Lender's Commitment or Loans, the amount of the
Commitment or Loans of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Acceptance with respect to such
assignment is delivered to the Administrative Agent) shall not be less than
$10,000,000 unless each of the Borrower and the Administrative Agent
otherwise consent, (iii) each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender's rights and
obligations under this Agreement, except that this clause (iii) shall not be
construed to prohibit the assignment of a proportionate part of all the
assigning Lender's rights and obligations in respect of one Class of
Commitments or Loans, (iv) the parties to each assignment shall execute and
deliver to the Administrative Agent an Assignment and Acceptance, together
with a processing and recordation fee of $3,500, and (v) the assignee, if it
shall not be a Lender, shall
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deliver to the Administrative Agent an Administrative Questionnaire; and
PROVIDED FURTHER that any consent of the Borrower otherwise required under
this paragraph shall not be required if an Event of Default under clause (h)
or (i) of Article VII has occurred and is continuing. Subject to acceptance
and recording thereof pursuant to paragraph (d) of this Section, from and
after the effective date specified in each Assignment and Acceptance the
assignee thereunder shall be a party hereto and, to the extent of the
interest assigned by such Assignment and Acceptance, have the rights and
obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment
and Acceptance, be released from its obligations under this Agreement (and,
in the case of an Assignment and Acceptance covering all of the assigning
Lender's rights and obligations under this Agreement, such Lender shall cease
to be a party hereto but shall continue to be entitled to the benefits of
Sections 2.15, 2.16, 2.17 and 9.03). Any assignment or transfer by a Lender
of rights or obligations under this Agreement that does not comply with this
paragraph shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
paragraph (e) of this Section.
(c) The Administrative Agent, acting for this purpose as an agent
of the Borrower, shall maintain at one of its offices in The City of New York
a copy of each Assignment and Acceptance delivered to it and a register for
the recordation of the names and addresses of the Lenders, and the Commitment
of, and principal amount of the Loans and LC Disbursements owing to, each
Lender pursuant to the terms hereof from time to time (the "REGISTER"). The
entries in the Register shall be conclusive, and the Borrower, the
Administrative Agent, the Issuing Banks and the Lenders may treat each Person
whose name is recorded in the Register pursuant to the terms hereof as a
Lender hereunder for all purposes of this Agreement, notwithstanding notice
to the contrary. The Register shall be available for inspection by the
Borrower, any Issuing Bank and any Lender, at any reasonable time and from
time to time upon reasonable prior notice.
(d) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee, the assignee's completed
Administrative Questionnaire (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in paragraph (b)
of this Section and any written consent to such assignment required by
paragraph (b) of this Section, the Administrative Agent shall accept such
Assignment and Acceptance and record the information contained therein in the
Register. No assignment shall be effective for purposes of this Agreement
unless it has been recorded in the Register as provided in this paragraph.
(e) Any Lender may, without the consent of the Borrower, the
Administrative Agent, the Issuing Banks or the Swingline Lender, sell
participations to one or more banks or other entities (a "PARTICIPANT") in
all or a portion of such Lender's rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans owing to it);
PROVIDED that (i) such Lender's obligations under this Agreement shall remain
unchanged, (ii) such
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Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (iii) the Borrower, the Administrative
Agent, the Issuing Banks and the other Lenders shall continue to deal solely
and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement. Any agreement or instrument pursuant to
which a Lender sells such a participation shall provide that such Lender
shall retain the sole right to enforce the Loan Documents and to approve any
amendment, modification or waiver of any provision of the Loan Documents;
PROVIDED that such agreement or instrument may provide that such Lender will
not, without the consent of the Participant, agree to any amendment,
modification or waiver described in the first proviso to Section 9.02(b) that
affects such Participant. Subject to paragraph (f) of this Section, the
Borrower agrees that each Participant shall be entitled to the benefits of
Sections 2.15, 2.16 and 2.17 to the same extent as if it were a Lender and
had acquired its interest by assignment pursuant to paragraph (b) of this
Section. To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 9.08 as though it were a Lender, provided
such Participant agrees to be subject to Section 2.18(c) as though it were a
Lender.
(f) A Participant shall not be entitled to receive any greater
payment under Section 2.15 or 2.17 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such
Participant, unless the sale of the participation to such Participant is made
with the Borrower's prior written consent. A Participant that would be a
Foreign Lender if it were a Lender shall not be entitled to the benefits of
Section 2.17 unless the Borrower is notified of the participation sold to
such Participant and such Participant agrees, for the benefit of the
Borrower, to comply with Section 2.17(e) as though it were a Lender.
(g) Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement to secure
obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section shall not apply to
any such pledge or assignment of a security interest; PROVIDED that no such
pledge or assignment of a security interest shall release a Lender from any
of its obligations hereunder or substitute any such pledgee or assignee for
such Lender as a party hereto.
SECTION 9.05. SURVIVAL. All covenants, agreements,
representations and warranties made by the Loan Parties in the Loan Documents
and in the certificates or other instruments delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the other parties hereto and shall survive the
execution and delivery of the Loan Documents and the making of any Loans and
issuance of any Letters of Credit, regardless of any investigation made by
any such other party or on its behalf and notwithstanding that the
Administrative Agent, any Issuing Bank or any Lender may have had notice or
knowledge of any Default or incorrect representation or warranty at the time
any credit is extended hereunder, and shall continue in full force and
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effect as long as the principal of or any accrued interest on any Loan or any
fee or any other amount payable under this Agreement is outstanding and
unpaid or any Letter of Credit is outstanding and so long as the Commitments
have not expired or terminated. The provisions of Sections 2.15, 2.16, 2.17
and 9.03 and Article VIII shall survive and remain in full force and effect
regardless of the consummation of the transactions contemplated hereby, the
repayment of the Loans, the expiration or termination of the Letters of
Credit and the Commitments or the termination of this Agreement or any
provision hereof.
SECTION 9.06. COUNTERPARTS; INTEGRATION; EFFECTIVENESS. This
Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all
of which when taken together shall constitute a single contract. This
Agreement, the other Loan Document and any separate letter agreements with
respect to fees payable to the Administrative Agent constitute the entire
contract among the parties relating to the subject matter hereof and
supersede any and all previous agreements and understandings, oral or
written, relating to the subject matter hereof. Except as provided in
Section 4.01, this Agreement shall become effective when it shall have been
executed by the Administrative Agent and when the Administrative Agent shall
have received counterparts hereof which, when taken together, bear the
signatures of each of the other parties hereto, and thereafter shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns. Delivery of an executed counterpart of a
signature page of this Agreement by telecopy shall be effective as delivery
of a manually executed counterpart of this Agreement.
SECTION 9.07. SEVERABILITY. Any provision of this Agreement held
to be invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability
of the remaining provisions hereof; and the invalidity of a particular
provision in a particular jurisdiction shall not invalidate such provision in
any other jurisdiction.
SECTION 9.08. RIGHT OF SETOFF. If an Event of Default shall have
occurred and be continuing, each Lender and each of its Affiliates is hereby
authorized at any time and from time to time, to the fullest extent permitted
by law, to set off and apply any and all deposits (general or special, time
or demand, provisional or final) at any time held and other obligations at
any time owing by such Lender or Affiliate to or for the credit or the
account of the Borrower against any of and all the obligations of the
Borrower now or hereafter existing under this Agreement held by such Lender,
irrespective of whether or not such Lender shall have made any demand under
this Agreement and although such obligations may be unmatured. The rights of
each Lender under this Section are in addition to other rights and remedies
(including other rights of setoff) which such Lender may have.
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SECTION 9.09. GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF
PROCESS. (a) This Agreement shall be construed in accordance with and
governed by the law of the State of New York.
(b) The Borrower hereby irrevocably and unconditionally submits,
for itself and its property, to the nonexclusive jurisdiction of the Supreme
Court of the State of New York sitting in New York County and of the United
States District Court of the Southern District of New York, and any appellate
court from any thereof, in any action or proceeding arising out of or
relating to any Loan Document, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the
extent permitted by law, in such Federal court. Each of the parties hereto
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment
or in any other manner provided by law. Nothing in this Agreement or any
other Loan Document shall affect any right that the Administrative Agent, any
Issuing Bank or any Lender may otherwise have to bring any action or
proceeding relating to this Agreement or any other Loan Document against the
Borrower or its properties in the courts of any jurisdiction.
(c) The Borrower hereby irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection which
it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or any other Loan
Document in any court referred to in paragraph (b) of this Section. Each of
the parties hereto hereby irrevocably waives, to the fullest extent permitted
by law, the defense of an inconvenient forum to the maintenance of such
action or proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to service
of process in the manner provided for notices in Section 9.01. Nothing in
this Agreement or any other Loan Document will affect the right of any party
to this Agreement to serve process in any other manner permitted by law.
SECTION 9.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY
HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY
ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY
OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT
OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO
HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 9.11. HEADINGS. Article and Section headings and the
Table of Contents used herein are for convenience of reference
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only, are not part of this Agreement and shall not affect the construction
of, or be taken into consideration in interpreting, this Agreement.
SECTION 9.12. CONFIDENTIALITY. The Administrative Agent, each
Issuing Bank and each Lender agrees to maintain the confidentiality of the
Information (as defined below), except that Information may be disclosed (a)
to its and its Affiliates' directors, officers, employees and agents,
including accountants, legal counsel and other advisors (it being understood
that the Persons to whom such disclosure is made will be informed of the
confidential nature of such Information and instructed to keep such
Information confidential), (b) to the extent requested by any Governmental
Authority, (c) to the extent required by applicable laws or regulations or by
any subpoena or similar legal process, (d) to any other party to this
Agreement, (e) in connection with the exercise of any remedies hereunder or
any suit, action or proceeding relating to this Agreement or any other Loan
Document or the enforcement of rights hereunder or thereunder, (f) subject to
an agreement containing provisions substantially the same as those of this
Section, to any assignee of or Participant in, or any prospective assignee of
or Participant in, any of its rights or obligations under this Agreement, (g)
with the consent of the Borrower or (h) to the extent such Information (i)
becomes publicly available other than as a result of a breach by it of this
Section or (ii) becomes available to it on a nonconfidential basis from a
source other than the Borrower. For the purposes of this Section,
"INFORMATION" means all information received from the Borrower and relating
to the business and affairs of Borrower or any Subsidiary, other than any
such information that is available to the Administrative Agent, any Issuing
Bank or any Lender on a nonconfidential basis prior to disclosure by the
Borrower or any Subsidiary; PROVIDED that, in the case of information
received from the Borrower or any Subsidiary after the date hereof, such
information is clearly identified at the time of delivery as confidential.
Any Person required to maintain the confidentiality of Information as
provided in this Section shall be considered to have complied with its
obligation to do so if such Person has exercised the same degree of care to
maintain the confidentiality of such Information as such Person would accord
to its own confidential information. The provisions of this Section shall
supersede and replace any confidentiality agreement heretofore delivered to
the Borrower by the Administrative Agent, any Issuing Bank or any Lender.
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SECTION 9.13. INTEREST RATE LIMITATION. Notwithstanding anything
herein to the contrary, if at any time the interest rate applicable to any
Loan, together with all fees, charges and other amounts which are treated as
interest on such Loan under applicable law (collectively the "CHARGES"),
shall exceed the maximum lawful rate (the "MAXIMUM RATE") which may be
contracted for, charged, taken, received or reserved by the Lender holding
such Loan in accordance with applicable law, the rate of interest payable in
respect of such Loan hereunder, together with all Charges payable in respect
thereof, shall be limited to the Maximum Rate and, to the extent lawful, the
interest and Charges that would have been payable in respect of such Loan but
were not payable as a result of the operation of this Section shall be
cumulated and the interest and Charges payable to such Lender in respect of
other Loans or periods shall be increased (but not above the Maximum Rate
therefor) until such cumulated amount, together with interest thereon at the
Federal Funds Effective Rate to the date of repayment, shall have been
received by such Lender.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed by their respective authorized officers as of the day and
year first above written.
FLEMING COMPANIES, INC.
by
/s/ John M. Thompson
--------------------------------------------------
Name: John M. Thompson
Title: Vice President and
Treasurer
THE CHASE MANHATTAN BANK, individually and as Administrative Agent,
by
/s/ Marian N. Schulman
--------------------------------------------------
Name: Marian N. Schulman
Title: Vice President
BANCAMERICA SECURITIES, INC., as Syndication Agent,
by
/s/ Robert Karen
--------------------------------------------------
Name: Robert Karen
Title: Vice President
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
by
/s/ J. Stephen Mernick
--------------------------------------------------
Name: J. Stephen Mernick
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Title: Senior Vice President
BANK OF HAWAII,
by
/s/ Kenneth M. Loveless
--------------------------------------------------
Name: Kenneth M. Loveless
Title: Assistant Vice President
BANK OF MONTREAL,
by
/s/ Julia B. Buthman
--------------------------------------------------
Name: Julia B. Buthman
Title: Managing Director
BANK OF SCOTLAND,
by
/s/ Janet Taffe
--------------------------------------------------
Name: Janet Taffe
Title: Assistant Vice President
COMERICA BANK,
by
/s/ Reginald M. Goldsmith, III
--------------------------------------------------
Name: Reginald M. Goldsmith, III
Title: Vice President
CREDIT LYONNAIS, NEW YORK BRANCH,
by
/s/ Robert Ivosevich
--------------------------------------------------
Name: Robert Ivosevich
Title: Senior Vice President
THE DAI-ICHI KANGYO BANK, LIMITED,
by
/s/ Masayoshi Komaki
--------------------------------------------------
Name: Masayoshi Komaki
Title: Vice President
FIRST HAWAIIAN BANK,
by
/s/ Travis Ruetenik
--------------------------------------------------
Name: Travis Ruetenik
Title: Corporate Banking Officer
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THE FUJI BANK, LIMITED, HOUSTON AGENCY
by
/s/ Philip C. Lauinger III
Name: Philip C. Lauinger III
--------------------------------------------------
Title: Vice President &
Manager
LIBERTY BANK AND TRUST COMPANY OF OKLAHOMA CITY, N.A.,
by
/s/ Mark C. Demos
--------------------------------------------------
Name: Mark C. Demos
Title: Vice President
THE LONG-TERM CREDIT BANK OF JAPAN, LIMITED,
by
/s/ Sadao Muraoka
--------------------------------------------------
Name: Sadao Muraoka
Title: Head of Southwest Region
MANUFACTURERS AND TRADERS TRUST COMPANY,
by
/s/ Geoffrey R. Fenn
--------------------------------------------------
Name: Geoffrey R. Fenn
Title: Vice President
MEESPIERSON N.V.,
by
/s/ Karel Louman
--------------------------------------------------
Name: Karel Louman
Title: Senior Vice President
THE MITSUBISHI TRUST & BANKING CORPORATION, CHICAGO BRANCH,
by
/s/ Hachiro Rosoda
--------------------------------------------------
Name: Mr. Hachiro Rosoda
Title: Deputy General Manager
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NATIONAL BANK OF CANADA,
by
/s/ Larry L. Sears
--------------------------------------------------
Name: Larry L. Sears
Title: Group Vice President
by
/s/ Randall K. Wilhoit
--------------------------------------------------
Name: Randall K. Wilhoit
Title: Vice President
NATIONAL CITY BANK KENTUCKY,
by
/s/ Todd W. Ethington
--------------------------------------------------
Name: Todd W. Ethington
Title: Vice President
THE SANWA BANK, LIMITED,
by
/s/ Matthew G. Patrick
--------------------------------------------------
Name: Matthew G. Patrick
Title: Vice President
THE SUMITOMO BANK OF CALIFORNIA,
by
/s/ Shuji Ito
--------------------------------------------------
Name: Shuji Ito
Title: Vice President
THE SUMITOMO BANK, LIMITED,
by
/s/ Harumitsu Seki
--------------------------------------------------
Name: Harumitsu Seki
Title: General Manager
THE SUMITOMO TRUST AND BANKING
CO., LTD., NEW YORK BRANCH,
by
/s/ Suraj Bhatia
--------------------------------------------------
Name: Suraj Bhatia
Title: Senior Vice President
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TRANSAMERICA BUSINESS CREDIT CORPORATION,
by
/s/ Steven Fischer
--------------------------------------------------
Name: Steven Fischer
Title: Senior Vice President
VAN KAMPEN AMERICAN CAPITAL PRIME RATE INCOME TRUST,
by
/s/ Jeffrey W. Maillet
--------------------------------------------------
Name: Jeffrey W. Maillet
Title: Senior Vice President & Director
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CONFORMED COPY
SECURITY AGREEMENT dated as of July 25, 1997 among FLEMING
COMPANIES, INC. an Oklahoma corporation (the "BORROWER"), each
subsidiary of the Borrower listed on Schedule I hereto or
becoming a party hereto as provided herein (each such subsidiary
individually a "SUBSIDIARY GRANTOR" and collectively, the
"SUBSIDIARY GRANTORS"; the Subsidiary Grantors and the Borrower
are referred to collectively herein as the "GRANTORS") and THE
CHASE MANHATTAN BANK, a New York banking corporation ("CHASE"),
as collateral agent ("COLLATERAL AGENT") for the Secured Parties
(as defined herein).
Reference is made to (a) the Credit Agreement dated as of July 25,
1997 (as amended, supplemented or otherwise modified from time to time, the
"CREDIT AGREEMENT"), among the Borrower, the Lenders (such term and each
other capitalized term used but not otherwise defined herein being defined as
provided in Article I) from time to time party thereto, Chase, as
Administrative Agent for the Lenders and Collateral Agent, BancAmerica
Securities, Inc., as Syndication Agent, and Societe Generale, as
Documentation Agent, and (b) the Guarantee Agreement dated as of July 25,
1997 (as amended, supplemented or otherwise modified from time to time, the
"GUARANTEE AGREEMENT"), among the Guarantors (as defined therein) and the
Collateral Agent.
The Lenders have agreed to make Loans to the Borrower, and the
Issuing Banks have agreed to issue Letters of Credit for the account of the
Borrower, pursuant to, and upon the terms and subject to the conditions
specified in, the Credit Agreement. Each of the Guarantors has agreed to
guarantee, among other things, all the obligations of the Borrower under the
Credit Agreement. The obligations of the Lenders to make Loans and of the
Issuing Banks to issue Letters of Credit are conditioned upon, among other
things, the execution and delivery by the Grantors of an agreement in the
form hereof to secure (a) the due and punctual payment by the Borrower of (i)
the principal of and premium, if any, and interest (including interest
accruing during the pendency of any bankruptcy, insolvency, receivership or
other similar proceeding, regardless of whether allowed or allowable in such
proceeding) on the Loans, when and as due, whether at maturity, by
acceleration, upon one or more dates set for prepayment or otherwise, (ii)
each payment required to be made by the Borrower under the Credit Agreement
in respect of any Letter of Credit, when and as due, including payments in
respect of reimbursement of disbursements, interest thereon and obligations
to provide cash collateral and (iii) all other monetary obligations,
including fees, costs, expenses and indemnities, whether primary, secondary,
direct, contingent, fixed or otherwise (including monetary obligations
incurred during the pendency of any bankruptcy, insolvency, receivership or
other similar proceeding, regardless of whether allowed or allowable in such
proceeding), of the Borrower to the Secured Parties under the Credit
Agreement and the other Loan Documents, (b) the due and punctual performance
of all covenants,
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agreements, obligations and liabilities of the Borrower under or pursuant to
the Credit Agreement and the other Loan Documents, (c) the due and punctual
payment and performance of all the covenants, agreements, obligations and
liabilities of each Loan Party under or pursuant to this Agreement and the
other Loan Documents and (d) the due and punctual payment and performance of
all obligations of the Borrower under each Hedging Agreement entered into
with any counterparty that was a Lender at the time such Hedging Agreement
was entered into or that is a Lender on the date hereof (all the monetary and
other obligations described in the preceding clauses (a) through (d) being
collectively called the "OBLIGATIONS").
Accordingly, the Grantors and the Collateral Agent, on behalf of
itself and each Secured Party (and each of their respective successors or
assigns), hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINITION OF TERMS USED HEREIN. Unless the context
otherwise requires, all capitalized terms used but not defined herein shall
have the meanings set forth in the Credit Agreement.
SECTION 1.02. DEFINITION OF CERTAIN TERMS USED HEREIN. As used
herein, the following terms shall have the following meanings:
"ACCOUNT DEBTOR" means any person who is or who may become
obligated to any Grantor under, with respect to or on account of an Account.
"ACCOUNTS" mean any and all right, title and interest of any
Grantor to payment for goods and services sold or leased, including any such
right evidenced by chattel paper, whether due or to become due, whether or
not it has been earned by performance, and whether now or hereafter acquired
or arising in the future, excluding accounts receivable from Affiliates of
the Grantors and Financing Notes.
"ACCOUNTS RECEIVABLE" means all Accounts and all right, title and
interest in any returned goods, together with all rights, titles, securities
and guarantees with respect thereto, including, without limitation, any
rights to stoppage in transit, replevin, reclamation and resales, and all
related security interests, liens and pledges, whether voluntary or
involuntary, and any liens or security interests taken in an Account Debtor
to secure any Accounts, in each case whether now existing or owned or
hereafter arising or acquired.
"COLLATERAL" means all (a) Accounts Receivable, (b) Documents, (c)
Inventory and (d) Proceeds.
"CREDIT AGREEMENT" shall have the meaning assigned to such term in
the preliminary statement of this Agreement.
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"DOCUMENTS" mean all instruments, files, records, ledger sheets and
documents covering or relating to any of the Collateral.
"GRANTORS" means the Borrower and each Subsidiary listed on
Schedule I hereto, as modified from time to time in accordance with Section
4.02(a) and Section 7.15.
"INVENTORY" means all goods of any Grantor, whether now owned or
hereafter acquired, held for sale or lease, or furnished or to be furnished
by any Grantor under contracts of service, or consumed in any Grantor's
business, including raw materials, intermediates, work in process, packaging
materials, finished goods, semi-finished inventory, scrap inventory,
manufacturing supplies and spare parts, and all such goods that have been
returned to or repossessed by or on behalf of any Grantor.
"OBLIGATIONS" shall have the meaning assigned to such term in the
preliminary statement of this Agreement.
"PERFECTION CERTIFICATE" means a certificate substantially in the
form of Annex 1 hereto, completed and supplemented with the schedules and
attachments contemplated thereby, and duly executed by a Financial Officer of
the Borrower.
"PROCEEDS" shall mean any consideration received from the sale,
exchange, lease or other disposition of any asset or property that
constitutes Collateral, any value received as a consequence of the possession
of any Collateral and any payment received from any insurer or other person
or entity as a result of the destruction, loss, theft, damage or other
involuntary conversion of whatever nature of any asset or property which
constitutes Collateral, including any and all amounts from time to time paid
or payable under or in connection with any of the Collateral.
"SECURED PARTIES" means (a) the Lenders, (b) the Administrative
Agent, (c) the Collateral Agent, (d) the Issuing Banks, (e) each counterparty
to a Hedging Agreement entered into with the Borrower if such counterparty
was a Lender at the time the Hedging Agreement was entered into or that is a
Lender on the date hereof, (f) the beneficiaries of each indemnification
obligation undertaken by any Grantor under any Loan Document and (g) the
successors and assigns of each of the foregoing.
"SECURITY INTEREST" shall have the meaning assigned to such term in
Section 2.01.
SECTION 1.03. RULES OF INTERPRETATION. The rules of
interpretation specified in Section 1.03 of the Credit Agreement shall be
applicable to this Agreement.
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ARTICLE II
SECURITY INTEREST
SECTION 2.01. SECURITY INTEREST. As security for the payment or
performance, as the case may be, in full of the Obligations, each Grantor
hereby bargains, sells, conveys, assigns, sets over, mortgages, pledges,
hypothecates and transfers to the Collateral Agent, its successors and
assigns, for the ratable benefit of the Secured Parties, and hereby grants to
the Collateral Agent, its successors and assigns, for the ratable benefit of
the Secured Parties, a security interest in, all of such Grantor's right,
title and interest in, to and under the Collateral (the "Security Interest").
Without limiting the foregoing, the Collateral Agent is hereby authorized to
file one or more financing statements, continuation statements or other
documents for the purpose of perfecting, confirming, continuing, enforcing or
protecting the Security Interest granted by each Grantor, without the
signature of any Grantor, and naming any Grantor or the Grantors as debtors
and the Collateral Agent as secured party.
SECTION 2.02. NO ASSUMPTION OF LIABILITY. The Security Interest
is granted as security only and shall not subject the Collateral Agent or any
other Secured Party to, or in any way alter or modify, any obligation or
liability of any Grantor with respect to or arising out of the Collateral.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Grantors jointly and severally represent and warrant to the
Collateral Agent and the Secured Parties that:
SECTION 3.01. TITLE AND AUTHORITY. Each Grantor has good and
valid rights in and title to the Collateral with respect to which it has
purported to grant a Security Interest hereunder and has full power and
authority to grant to the Collateral Agent the Security Interest in such
Collateral pursuant hereto and to execute, deliver and perform its
obligations in accordance with the terms of this Agreement, without the
consent or approval of any other person other than any consent or approval
which has been obtained.
SECTION 3.02. FILINGS. The Perfection Certificate has been duly
prepared, completed and executed and the information set forth therein is
correct and complete. Fully executed Uniform Commercial Code financing
statements or other appropriate filings containing a description of the
Collateral have been delivered to the Collateral Agent for filing in each
governmental, municipal or other office specified in Schedule 6 to the
Perfection Certificate, which are all the filings that are necessary to
publish notice of and protect the validity of and to establish a legal, valid
and perfected security interest in favor of the Collateral Agent (for the
ratable benefit of the Secured Parties) in respect of all Collateral in which
the Security Interest may be perfected by filing in the United States (or
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any political subdivision thereof) and its territories and possessions, and
no further or subsequent filing or refiling is necessary in any such
jurisdiction, except as provided under applicable law with respect to the
filing of continuation statements.
SECTION 3.03. VALIDITY OF SECURITY INTEREST. The Security
Interest constitutes (a) a legal and valid security interest in all the
Collateral securing the payment and performance of the Obligations and (b)
subject to the filings described in Section 3.02 above, a perfected security
interest in all Collateral in which a security interest may be perfected by
filing, recording or registering a financing statement or analogous document
in the United States (or any political subdivision thereof) and its
territories and possessions pursuant to the Uniform Commercial Code or other
applicable law in such jurisdictions. The Security Interest is and shall be
prior to any other Lien on any of the Collateral, other than Liens that are
permitted to exist under paragraphs (b), (c), (e), (f) and (h) of Section
6.01 of the Credit Agreement and Liens that are permitted under Section
6.01(g) of the Credit Agreement that arise in connection with paragraphs (b),
(c), (e) and (f) of such Section.
SECTION 3.04. ABSENCE OF OTHER LIENS. The Collateral is owned by
the Grantors free and clear of any Lien, except for Liens expressly permitted
pursuant to Section 6.01 of the Credit Agreement. No Grantor has filed or
consented to the filing of (a) any financing statement or analogous document
under the Uniform Commercial Code or any other applicable laws covering any
Collateral or (b) any assignment in which any Grantor assigns any Collateral
or any security agreement or similar instrument covering any Collateral with
any foreign governmental, municipal or other office, which financing
statement or analogous document, assignment, security agreement or similar
instrument is still in effect, except, in each case, for Liens expressly
permitted pursuant to Section 6.01 of the Credit Agreement.
ARTICLE IV
COVENANTS
SECTION 4.01. CHANGE OF NAME; LOCATION OF COLLATERAL; RECORDS;
PLACE OF BUSINESS. (a) Each Grantor agrees promptly to notify the
Collateral Agent in writing of any change (i) in its corporate name or in any
trade name used to identify it in the conduct of its business or in the
ownership of its properties, (ii) in the location of its chief executive
office, its principal place of business, any office in which it maintains
books or records relating to Collateral owned by it or any office or facility
at which Collateral owned by it is located (including the establishment of
any such new office or facility), (iii) in its identity or corporate
structure or (iv) in its Federal Taxpayer Identification Number. Each
Grantor agrees not to effect or permit any change referred to in the
preceding sentence unless all filings have been made under the Uniform
Commercial Code or otherwise that are required in order for the Collateral
Agent to continue at all times following such change to
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have a valid, legal and perfected first priority security interest in all the
Collateral. Each Grantor agrees promptly to notify the Collateral Agent if
any material portion of the Collateral owned or held by such Grantor is
damaged or destroyed.
(b) Each Grantor agrees to maintain, at its own cost and expense,
such complete and accurate records with respect to the Collateral owned by it
as is consistent with its current practices and in accordance with such
prudent and standard practices used in industries that are the same as or
similar to those in which such Grantor is engaged, but in any event to
include complete accounting records indicating all payments and proceeds
received with respect to any part of the Collateral, and, at such time or
times as the Collateral Agent may reasonably request, promptly to prepare and
deliver to the Collateral Agent a duly certified schedule or schedules in
form and detail satisfactory to the Collateral Agent showing the identity,
amount and location of any and all Collateral.
SECTION 4.02. PERIODIC CERTIFICATION. Each year, at the time of
delivery of annual financial statements with respect to the preceding fiscal
year pursuant to Section 5.01(a) of the Credit Agreement, the Borrower shall
deliver to the Collateral Agent a certificate executed by a Financial Officer
(a) setting forth the information required pursuant to Section 2 of the
Perfection Certificate or confirming that there has been no change in such
information since the date of such certificate or the date of the most recent
certificate delivered pursuant to this Section 4.02 and (b) certifying that
all Uniform Commercial Code financing statements or other appropriate
filings, including all refilings (other than continuation statements),
containing a description of the Collateral have been filed of record in each
governmental, municipal or other appropriate office in each jurisdiction
identified pursuant to clause (b) above to the extent necessary to protect
and perfect the Security Interest.
SECTION 4.03. PROTECTION OF SECURITY. Each Grantor shall, at its
own cost and expense, take any and all actions necessary to defend title to
the Collateral against all persons and to defend the Security Interest of the
Collateral Agent in the Collateral and the priority thereof against any Lien
not expressly permitted pursuant to Section 6.01 of the Credit Agreement.
SECTION 4.04. FURTHER ASSURANCES. Each Grantor agrees, at its
own expense, to execute, acknowledge, deliver and cause to be duly filed all
such further instruments and documents and take all such actions as the
Collateral Agent may from time to time request to better assure, preserve,
protect and perfect the Security Interest and the rights and remedies created
hereby, including the payment of any fees and taxes required in connection
with the execution and delivery of this Agreement, the granting of the
Security Interest and the filing of any financing statements or other
documents in connection herewith or therewith. If any amount payable under
or in connection with any of the Collateral shall be or become evidenced by
any
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promissory note or other instrument, such note or instrument shall be
immediately pledged and delivered to the Collateral Agent, duly endorsed in a
manner satisfactory to the Collateral Agent.
SECTION 4.05. INSPECTION AND VERIFICATION. The Collateral Agent
and such persons as the Collateral Agent may reasonably designate shall have
the right to inspect the Collateral, all records related thereto (and to make
extracts and copies from such records) and the premises upon which any of the
Collateral is located, to discuss the Grantors' affairs with the officers of
the Grantors and their independent accountants and to verify under reasonable
procedures the validity, amount, quality, quantity, value, condition and
status of, or any other matter relating to, the Collateral, including, in the
case of Accounts or Collateral in the possession of any third person, by
contacting Account Debtors or the third person possessing such Collateral for
the purpose of making such a verification. The Grantors shall bear the cost
and expense of any such inspection and verification that is conducted once
per year or upon the occurrence and during the continuance of an Event of
Default. The Collateral Agent shall have the absolute right to share any
information it gains from such inspection or verification with any Secured
Party (it being understood that any such information shall be deemed to be
"Information" subject to the provisions of Section 9.12 of the Credit
Agreement).
SECTION 4.06. TAXES; ENCUMBRANCES. At its option and upon giving
10 days' written notice to the Borrower, the Collateral Agent may discharge
past due taxes, assessments, charges, fees, Liens, security interests or
other encumbrances at any time levied or placed on the Collateral and not
permitted pursuant to Section 6.01 of the Credit Agreement, and may pay for
the maintenance and preservation of the Collateral to the extent any Grantor
fails to do so as required by the Credit Agreement or this Agreement, and
each Grantor jointly and severally agrees to reimburse the Collateral Agent
on demand for any payment made or any expense incurred by the Collateral
Agent pursuant to the foregoing authorization; PROVIDED, HOWEVER, that
nothing in this Section 4.06 shall be interpreted as excusing any Grantor
from the performance of, or imposing any obligation on the Collateral Agent
or any Secured Party to cure or perform, any covenants or other promises of
any Grantor with respect to taxes, assessments, charges, fees, Liens,
security interests or other encumbrances and maintenance as set forth herein
or in the other Loan Documents.
SECTION 4.07. CONTINUING OBLIGATIONS OF THE GRANTORS. Each
Grantor shall remain liable to observe and perform all the conditions and
obligations to be observed and performed by it under each contract, agreement
or instrument relating to the Collateral, all in accordance with the terms
and conditions thereof, and each Grantor jointly and severally agrees to
indemnify and hold harmless the Collateral Agent and the Secured Parties from
and against any and all liability for such performance.
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SECTION 4.08. USE AND DISPOSITION OF COLLATERAL. None of the
Grantors shall make or permit to be made an assignment, pledge or
hypothecation of the Collateral or shall grant any other Lien in respect of
the Collateral, except as expressly permitted by Section 6.01 of the Credit
Agreement. None of the Grantors shall make or permit to be made any transfer
of the Collateral and each Grantor shall remain at all times in possession of
the Collateral owned by it, except that (a) Inventory may be sold in the
ordinary course of business and (b) unless and until the Collateral Agent or
the Required Lenders shall notify the Grantors that an Event of Default shall
have occurred and be continuing and that during the continuance thereof the
Grantors shall not sell, convey, lease, assign, transfer or otherwise dispose
of any Collateral (which notice may be given by telephone if promptly
confirmed in writing), the Grantors may use and dispose of the Collateral in
any lawful manner not inconsistent with the provisions of this Agreement, the
Credit Agreement or any other Loan Document.
SECTION 4.09. LIMITATION ON MODIFICATION OF ACCOUNTS. None of
the Grantors will, without the Collateral Agent's prior written consent,
grant any extension of the time of payment of any of the Accounts Receivable,
compromise, compound or settle the same for less than the full amount
thereof, release, wholly or partly, any person liable for the payment thereof
or allow any credit or discount whatsoever thereon, other than extensions,
credits, discounts, compromises or settlements granted or made in the
ordinary course of business and consistent with its current practices and in
accordance with such prudent and standard practices used in industries that
are the same as or similar to those in which such Grantor is engaged.
SECTION 4.10. INSURANCE. The Grantors shall at all times keep the
Inventory insured at the Grantors' own expense, to the Collateral Agent's
reasonable satisfaction, against fire, theft and all other risks to which the
Collateral may be subject, in such amounts and with such deductibles as would
be maintained by operators of businesses similar to the businesses of the
Grantors. Within 30 days of the date hereof, each policy or certificate with
respect to such insurance shall be endorsed to the Collateral Agent's
satisfaction for the benefit of the Collateral Agent (including, without
limitation, by naming the Collateral Agent as an additional insured and as
provided in the next succeeding sentence) and such policy or certificate
shall be delivered to the Collateral Agent. Each such policy shall state
that (i) it cannot be canceled without 30 days' prior written notice to the
Collateral Agent, (ii) no claim in excess of $25,000,000 shall be settled
with the insurance provider without the prior consent of the Collateral Agent
and (iii) the Collateral Agent shall be a loss payee on any claim in excess
of $25,000,000. At least 10 days prior to the expiration of any such policy
of insurance, the relevant Grantor shall deliver to the Collateral Agent
either (1) an extension or renewal policy or an insurance certificate
evidencing renewal or extension of such policy, or (2) notice that such
policy has not been extended or renewed. If such policy has not been
extended or renewed, such Grantor agrees to
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consult with the Collateral Agent, and to furnish any information that the
Collateral Agent may request, as to the status of negotiations with such
insurance provider. If such Grantor shall fail to insure such Collateral in
accordance with prudent industry practices or if such Grantor shall fail to
so endorse and deposit, or to extend or renew prior to expiration, all such
insurance policies or certificates with respect thereto, the Collateral Agent
shall have the right (but shall be under no obligation) to advance funds to
procure or renew or extend such insurance and such Grantor agrees to
reimburse the Collateral Agent for all costs and expenses thereof, with
interest on all such funds from the date advanced until paid in full at the
rate specified in Section 2.13(c)(ii) of the Credit Agreement.
SECTION 4.11. CASUALTY. Upon the occurrence and during the
continuance of an Event of Default, the Collateral Agent, as directed by the
Required Banks, shall have the option to apply any Net Proceeds of insurance
received by it pursuant to this Agreement toward the payment of the
Obligations in accordance with Section 6.02 hereof or to continue to hold
such proceeds as additional collateral to secure the performance of the
Obligations. So long as no Event of Default shall have occurred and be
continuing, the relevant Grantor shall have the option (i) to direct the
Collateral Agent to apply any Net Proceeds of insurance received by it toward
payment of the Obligations in accordance with Section 6.02 hereof or (ii) to
elect, by delivery of written notice to the Collateral Agent, to apply such
proceeds to the repair or replacement of the item or items of Collateral in
respect of which such proceeds were received. In the event that such Grantor
elects to apply such proceeds to the repair or replacement of any item of
Collateral pursuant to clause (ii) of the preceding sentence, the Collateral
Agent shall release such proceeds as soon as practicable following its
receipt of such Grantor's written notice of such election. Such Grantor
shall upon its receipt of such proceeds promptly commence and diligently
continue to perform such repair or promptly effect such replacement.
SECTION 4.12. LEGEND. Each Grantor shall legend, in form and
manner satisfactory to the Collateral Agent, its Accounts Receivable and its
books, records and documents evidencing or pertaining thereto to the extent
such Accounts Receivable are evidenced by chattel paper, with an appropriate
reference to the fact that such Accounts Receivable have been assigned to the
Collateral Agent for the benefit of the Secured Parties and that the
Collateral Agent has a security interest therein.
ARTICLE V
POWER OF ATTORNEY
Each Grantor irrevocably makes, constitutes and appoints the
Collateral Agent (and all officers, employees or agents designated by the
Collateral Agent) as such Grantor's true and lawful agent and attorney-in-fact,
and in such capacity the Collateral Agent shall have the right, with power of
substitution for each Grantor and in each
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Grantor's name or otherwise, for the use and benefit of the Collateral Agent
and the Secured Parties, upon either the termination of the Commitments or
acceleration of Loans pursuant to Article VII of the Credit Agreement (a) to
receive, endorse, assign and/or deliver any and all notes, acceptances,
checks, drafts, money orders or other evidences of payment relating to the
Collateral or any part thereof; (b) to demand, collect, receive payment of,
give receipt for and give discharges and releases of all or any of the
Collateral; (c) to sign the name of any Grantor on any invoice or bill of
lading relating to any of the Collateral; (d) to send verifications of
Accounts Receivable to any Account Debtor; (e) to commence and prosecute any
and all suits, actions or proceedings at law or in equity in any court of
competent jurisdiction to collect or otherwise realize on all or any of the
Collateral or to enforce any rights in respect of any Collateral; (f) to
settle, compromise, compound, adjust or defend any actions, suits or
proceedings relating to all or any of the Collateral; (g) to notify, or to
require any Grantor to notify, Account Debtors to make payment directly to
the Collateral Agent; and (h) to use, sell, assign, transfer, pledge, make
any agreement with respect to or otherwise deal with all or any of the
Collateral, and to do all other acts and things necessary to carry out the
purposes of this Agreement, as fully and completely as though the Collateral
Agent were the absolute owner of the Collateral for all purposes; PROVIDED,
HOWEVER, that nothing herein contained shall be construed as requiring or
obligating the Collateral Agent or any Secured Party to make any commitment
or to make any inquiry as to the nature or sufficiency of any payment
received by the Collateral Agent or any Secured Party, or to present or file
any claim or notice, or to take any action with respect to the Collateral or
any part thereof or the moneys due or to become due in respect thereof or any
property covered thereby, and no action taken or omitted to be taken by the
Collateral Agent or any Secured Party with respect to the Collateral or any
part thereof shall give rise to any defense, counterclaim or offset in favor
of any Grantor or to any claim or action against the Collateral Agent or any
Secured Party. It is understood and agreed that the appointment of the
Collateral Agent as the agent and attorney-in-fact of the Grantors for the
purposes set forth above is coupled with an interest and is irrevocable. The
provisions of this Section shall in no event relieve any Grantor of any of
its obligations hereunder or under any other Loan Document with respect to
the Collateral or any part thereof or impose any obligation on the Collateral
Agent or any Secured Party to proceed in any particular manner with respect
to the Collateral or any part thereof, or in any way limit the exercise by
the Collateral Agent or any Secured Party of any other or further right which
it may have on the date of this Agreement or hereafter, whether hereunder,
under any other Loan Document, by law or otherwise.
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ARTICLE VI
REMEDIES
SECTION 6.01. REMEDIES UPON DEFAULT. Upon the occurrence and
during the continuance of an Event of Default, each Grantor agrees to deliver
each item of Collateral to the Collateral Agent on demand, and it is agreed
that the Collateral Agent shall have the right, with or without legal
process and with or without prior notice or demand for performance, to take
possession of the Collateral and without liability for trespass to enter any
premises where the Collateral may be located for the purpose of taking
possession of or removing the Collateral and, generally, to exercise any and
all rights afforded to a secured party under the Uniform Commercial Code or
other applicable law. Without limiting the generality of the foregoing, each
Grantor agrees that the Collateral Agent shall have the right, subject to the
mandatory requirements of applicable law, to sell or otherwise dispose of all
or any part of the Collateral, at public or private sale or at any broker's
board or on any securities exchange, for cash, upon credit or for future
delivery as the Collateral Agent shall deem appropriate. Each purchaser at
any such sale shall hold the property sold absolutely, free from any claim or
right on the part of any Grantor, and each Grantor hereby waives (to the
extent permitted by law) all rights of redemption, stay and appraisal which
such Grantor now has or may at any time in the future have under any rule of
law or statute now existing or hereafter enacted.
The Collateral Agent shall give the Grantors 10 days' written
notice (which each Grantor agrees is reasonable notice within the meaning of
Section 9-504(3) of the Uniform Commercial Code as in effect in the State of
New York or its equivalent in other jurisdictions) of the Collateral Agent's
intention to make any sale of Collateral. Such notice, in the case of a
public sale, shall state the time and place for such sale and, in the case of
a sale at a broker's board or on a securities exchange, shall state the board
or exchange at which such sale is to be made and the day on which the
Collateral, or portion thereof, will first be offered for sale at such board
or exchange. Any such public sale shall be held at such time or times within
ordinary business hours and at such place or places as the Collateral Agent
may fix and state in the notice (if any) of such sale. At any such sale, the
Collateral, or portion thereof, to be sold may be sold in one lot as an
entirety or in separate parcels, as the Collateral Agent may (in its sole and
absolute discretion) determine. The Collateral Agent shall not be obligated
to make any sale of any Collateral if it shall determine not to do so,
regardless of the fact that notice of sale of such Collateral shall have been
given. The Collateral Agent may, without notice or publication, adjourn any
public or private sale or cause the same to be adjourned from time to time by
announcement at the time and place fixed for sale, and such sale may, without
further notice, be made at the time and place to which the same was so
adjourned. In case any sale of all or any part of the Collateral is made on
credit or for future delivery, the Collateral so sold may be retained by the
Collateral
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Agent until the sale price is paid by the purchaser or purchasers thereof,
but the Collateral Agent shall not incur any liability in case any such
purchaser or purchasers shall fail to take up and pay for the Collateral so
sold and, in case of any such failure, such Collateral may be sold again upon
like notice. At any public (or, to the extent permitted by law, private)
sale made pursuant to this Section, any Secured Party may bid for or
purchase, free (to the extent permitted by law) from any right of redemption,
stay, valuation or appraisal on the part of any Grantor (all said rights
being also hereby waived and released to the extent permitted by law), the
Collateral or any part thereof offered for sale and may make payment on
account thereof by using any claim then due and payable to such Secured Party
from any Grantor as a credit against the purchase price, and such Secured
Party may, upon compliance with the terms of sale, hold, retain and dispose
of such property without further accountability to any Grantor therefor. For
purposes hereof, a written agreement to purchase the Collateral or any
portion thereof shall be treated as a sale thereof; the Collateral Agent
shall be free to carry out such sale pursuant to such agreement and no
Grantor shall be entitled to the return of the Collateral or any portion
thereof subject thereto, notwithstanding the fact that after the Collateral
Agent shall have entered into such an agreement all Events of Default shall
have been remedied and the Obligations paid in full. As an alternative to
exercising the power of sale herein conferred upon it, the Collateral Agent
may proceed by a suit or suits at law or in equity to foreclose this
Agreement and to sell the Collateral or any portion thereof pursuant to a
judgment or decree of a court or courts having competent jurisdiction or
pursuant to a proceeding by a court-appointed receiver.
SECTION 6.02. APPLICATION OF PROCEEDS. The Collateral Agent shall
apply the proceeds of any collection or sale of the Collateral, as well as
any Collateral consisting of cash, as follows:
FIRST, to the payment of all costs and expenses incurred by the
Administrative Agent or the Collateral Agent (in its capacity as such
hereunder or under any other Loan Document) in connection with such
collection or sale or otherwise in connection with this Agreement or any of
the Obligations, including all court costs and the fees and expenses of its
agents and legal counsel, the repayment of all advances made by the
Collateral Agent hereunder or under any other Loan Document on behalf of
any Grantor and any other costs or expenses incurred in connection with the
exercise of any right or remedy hereunder or under any other Loan Document;
SECOND, to the payment in full of the Obligations (the amounts so
applied to be distributed among the Secured Parties pro rata in accordance
with the amounts of the Obligations owed to them on the date of any such
distribution); and
THIRD, to the Grantors, their successors or assigns, or as a court of
competent jurisdiction may otherwise direct.
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The Collateral Agent shall have absolute discretion as to the time of
application of any such proceeds, moneys or balances in accordance with this
Agreement. Upon any sale of the Collateral by the Collateral Agent
(including pursuant to a power of sale granted by statute or under a judicial
proceeding), the receipt of the Collateral Agent or of the officer making the
sale shall be a sufficient discharge to the purchaser or purchasers of the
Collateral so sold and such purchaser or purchasers shall not be obligated to
see to the application of any part of the purchase money paid over to the
Collateral Agent or such officer or be answerable in any way for the
misapplication thereof.
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. NOTICES. All communications and notices hereunder
shall (except as otherwise expressly permitted herein) be in writing and
given as provided in Section 9.01 of the Credit Agreement. All
communications and notices hereunder to any Subsidiary Grantor shall be given
to it in care of the Borrower.
SECTION 7.02. SECURITY INTEREST ABSOLUTE. All rights of the
Collateral Agent hereunder, the Security Interest and all obligations of the
Grantors hereunder shall be absolute and unconditional irrespective of (a)
any lack of validity or enforceability of the Credit Agreement, any other
Loan Document, any agreement with respect to any of the Obligations or any
other agreement or instrument relating to any of the foregoing, (b) any
change in the time, manner or place of payment of, or in any other term of,
all or any of the Obligations, or any other amendment or waiver of or any
consent to any departure from the Credit Agreement, any other Loan Document
or any other agreement or instrument, (c) any exchange, release or
non-perfection of any Lien on other collateral, or any release or amendment
or waiver of or consent under or departure from any guarantee, securing or
guaranteeing all or any of the Obligations, or (d) any other circumstance
that might otherwise constitute a defense available to, or a discharge of,
any Grantor in respect of the Obligations or this Agreement.
SECTION 7.03. SURVIVAL OF AGREEMENT. All covenants, agreements,
representations and warranties made by any Grantor herein and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement shall be considered to have been relied upon by
the Secured Parties and shall survive the making by the Lenders of the Loans,
and the execution and delivery to the Lenders of any notes evidencing such
Loans, regardless of any investigation made by the Lenders or on their
behalf, and shall continue in full force and effect until this Agreement
shall terminate.
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SECTION 7.04. BINDING EFFECT; SEVERAL AGREEMENT. This Agreement
shall become effective as to any Grantor when a counterpart hereof executed
on behalf of such Grantor shall have been delivered to the Collateral Agent
and a counterpart hereof shall have been executed on behalf of the Collateral
Agent, and thereafter shall be binding upon such Grantor and the Collateral
Agent and their respective successors and assigns, and shall inure to the
benefit of such Grantor, the Collateral Agent and the other Secured Parties
and their respective successors and assigns, except that no Grantor shall
have the right to assign or transfer its rights or obligations hereunder or
any interest herein or in the Collateral (and any such assignment or transfer
shall be void) except as expressly contemplated by this Agreement or the
Credit Agreement. This Agreement shall be construed as a separate agreement
with respect to each Grantor and may be amended, modified, supplemented,
waived or released with respect to any Grantor without the approval of any
other Grantor and without affecting the obligations of any other Grantor
hereunder.
SECTION 7.05. SUCCESSORS AND ASSIGNS. Whenever in this Agreement
any of the parties hereto is referred to, such reference shall be deemed to
include the successors and assigns of such party; and all covenants, promises
and agreements by or on behalf of any Grantor or the Collateral Agent that
are contained in this Agreement shall bind and inure to the benefit of their
respective successors and assigns.
SECTION 7.06. COLLATERAL AGENT'S FEES AND EXPENSES;
INDEMNIFICATION. (a) Each Grantor jointly and severally agrees to pay upon
demand to the Collateral Agent the amount of any and all reasonable expenses,
including the reasonable fees, disbursements and other charges of its counsel
and of any experts or agents, which the Collateral Agent may incur in
connection with (i) the administration of this Agreement, (ii) the custody or
preservation of, or the sale of, collection from or other realization upon
any of the Collateral, (iii) the exercise, enforcement or protection of any
of the rights of the Collateral Agent hereunder or (iv) the failure of any
Grantor to perform or observe any of the provisions hereof.
(b) Without limitation of its indemnification obligations under
the other Loan Documents, each Grantor jointly and severally agrees to
indemnify the Collateral Agent, each Secured Party and each Related Party
thereof (each such person being called an "INDEMNITEE") against, and hold
each of them harmless from, any and all losses, claims, damages, liabilities
and related expenses, including reasonable fees, disbursements and other
charges of counsel, incurred by or asserted against any of them arising out
of, in any way connected with, or as a result of, the execution, delivery or
performance of this Agreement or any claim, litigation, investigation or
proceeding relating hereto or to the Collateral, whether or not any
Indemnitee is a party thereto; PROVIDED that such indemnity shall not, as to
any Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses resulted from the gross negligence or willful
misconduct of such Indemnitee.
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(c) Any such amounts payable as provided hereunder shall be
additional Obligations secured hereby and by the other Security Documents.
The provisions of this Section 7.06 shall remain operative and in full force
and effect regardless of the termination of this Agreement or any other Loan
Document, the consummation of the transactions contemplated hereby, the
repayment of any of the Loans, the invalidity or unenforceability of any term
or provision of this Agreement or any other Loan Document, or any
investigation made by or on behalf of the Collateral Agent or any Lender.
All amounts due under this Section 7.06 shall be payable on written demand
therefor.
SECTION 7.07. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
SECTION 7.08. WAIVERS; AMENDMENT. (a) No failure or delay of
the Collateral Agent in exercising any power or right hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise of any such
right or power, or any abandonment or discontinuance of steps to enforce such
a right or power, preclude any other or further exercise thereof or the
exercise of any other right or power. The rights and remedies of the
Collateral Agent hereunder and of the Collateral Agent, the Issuing Banks,
the Administrative Agent and the Lenders under the other Loan Documents are
cumulative and are not exclusive of any rights or remedies that they would
otherwise have. No waiver of any provisions of this Agreement or any other
Loan Document or consent to any departure by any Grantor therefrom shall in
any event be effective unless the same shall be permitted by paragraph (b)
below, and then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given. No notice to or
demand on any Grantor in any case shall entitle such Grantor or any other
Grantor to any other or further notice or demand in similar or other
circumstances.
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by the Collateral Agent and the Grantor or Grantors with respect
to which such waiver, amendment or modification is to apply, with any consent
required under Section 9.02 of the Credit Agreement.
SECTION 7.09. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY
HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY
ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE
OTHER LOAN DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT
AND THE OTHER LOAN
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<PAGE>
DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 7.09.
SECTION 7.10. SEVERABILITY. In the event any one or more of the
provisions contained in this Agreement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of
the remaining provisions contained herein shall not in any way be affected or
impaired thereby (it being understood that the invalidity of a particular
provision in a particular jurisdiction shall not in and of itself affect the
validity of such provision in any other jurisdiction). The parties shall
endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
SECTION 7.11. COUNTERPARTS. This Agreement may be executed in two
or more counterparts, each of which shall constitute an original but all of
which when taken together shall constitute but one contract (subject to
Section 7.04), and shall become effective as provided in Section 7.04.
Delivery of an executed signature page to this Agreement by facsimile
transmission shall be effective as delivery of a manually executed
counterpart hereof.
SECTION 7.12. HEADINGS. Article and Section headings used herein
are for the purpose of reference only, are not part of this Agreement and are
not to affect the construction of, or to be taken into consideration in
interpreting, this Agreement.
SECTION 7.13. JURISDICTION; CONSENT TO SERVICE OF PROCESS. (a)
Each Grantor hereby irrevocably and unconditionally submits, for itself and
its property, to the nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America sitting in New York City, and
any appellate court from any thereof, in any action or proceeding arising out
of or relating to this Agreement or the other Loan Documents, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of
any such action or proceeding may be heard and determined in such New York
State court or, to the extent permitted by law, in such Federal court. Each
of the parties hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this
Agreement shall affect any right that the Collateral Agent, the
Administrative Agent, the Issuing Banks or any Lender may otherwise have to
bring any action or proceeding relating to this Agreement or the other Loan
Documents against any Grantor or its properties in the courts of any
jurisdiction.
(b) Each Grantor hereby irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection which it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to
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<PAGE>
this Agreement or the other Loan Documents in any New York State or Federal
court. Each of the parties hereto hereby irrevocably waives, to the fullest
extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.
(c) Each party to this Agreement irrevocably consents to service
of process in the manner provided for notices in Section 7.01. Nothing in
this Agreement shall affect the right of any party to this Agreement to serve
process in any other manner permitted by law.
SECTION 7.14. TERMINATION. This Agreement and the Security
Interest shall terminate when all the Obligations have been paid in full, the
Lenders have no further commitment to lend, the L/C Exposure has been reduced
to zero and the Issuing Banks have no further commitment to issue Letters of
Credit under the Credit Agreement, at which time the Collateral Agent shall
execute and deliver to the Grantors, at the Grantors' expense, all Uniform
Commercial Code termination statements and similar documents which the
Grantors shall reasonably request to evidence such termination. Any
execution and delivery of termination statements or documents pursuant to
this Section 7.14 shall be without recourse to or warranty by the Collateral
Agent. In the event that all the capital stock of a Subsidiary Grantor (or
assets of any Grantor) shall be sold, transferred or otherwise disposed of to
a person that is not an Affiliate of the Borrower in accordance with the
terms of the Credit Agreement, such Subsidiary Grantor shall automatically be
released from its obligations hereunder, the Security Interest in the
Collateral of such Subsidiary Grantor (or the Security Interest in such
assets) shall be automatically released and the Collateral Agent shall sign
applicable release statements as reasonably requested by the applicable
Grantor; PROVIDED that the Required Lenders shall have consented to such
sale, transfer or other disposition (if and as required by the Credit
Agreement) and the terms of such consent did not provide otherwise.
SECTION 7.15. ADDITIONAL GRANTORS. Upon execution and delivery by
the Collateral Agent and a Subsidiary of an instrument in the form of Annex 2
hereto, such Subsidiary shall become a Grantor hereunder with the same force
and effect as if originally named as a Grantor herein. The execution and
delivery of any such instrument shall not require the consent of any Grantor
hereunder. The rights and obligations of each Grantor hereunder shall remain
in full force and effect notwithstanding the addition of any new Grantor as a
party to this Agreement.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
FLEMING COMPANIES, INC.,
by
/s/ John M. Thompson
-----------------------------------------
Name: John M. Thompson
Title: Vice President and Treasurer
EACH OF THE SUBSIDIARY GRANTORS LISTED ON SCHEDULE I HERETO,
by
/s/ John M. Thompson
-----------------------------------------
Name: John M. Thompson
Title: Vice President and Treasurer
THE CHASE MANHATTAN BANK, as Collateral Agent,
by
/s/ Marian N. Shulman
-----------------------------------------
Name: Marian N. Shulman
Title: Vice President
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<PAGE>
CONFORMED COPY
PLEDGE AGREEMENT dated as of July 25, 1997, among FLEMING
COMPANIES, INC., an Oklahoma corporation (the "BORROWER"), each
Subsidiary of the Borrower listed on Schedule I hereto or
becoming a party hereto pursuant to Section 24 (each such
Subsidiary individually a "SUBSIDIARY PLEDGOR" and collectively,
the "SUBSIDIARY PLEDGORS"; the Borrower and the Subsidiary
Pledgors are referred to collectively herein as the "PLEDGORS")
and THE CHASE MANHATTAN BANK, a New York banking corporation
("CHASE"), as Collateral Agent for the Secured Parties referred
to below.
The Lenders (such term and each other capitalized term used and not
otherwise defined herein having the meaning assigned to it in Section 1) have
agreed to make Loans to the Borrower, and the Issuing Banks have agreed to
issue Letters of Credit for the account of the Borrower, pursuant to, upon
the terms and subject to the conditions set forth in, the Credit Agreement.
The obligations of the Lenders to make Loans and of the Issuing Banks to
issue Letters of Credit are conditioned on, among other things, the execution
and delivery by the Pledgors of a Pledge Agreement in the form hereof to
secure the Secured Obligations. Accordingly, the Pledgors and the Collateral
Agent, on behalf of itself and each Secured Party (and each of their
respective successors or assigns), hereby agree as follows:
SECTION 1. RULES OF CONSTRUCTION; DEFINITIONS. (a) The rules of
construction set forth in Section 1.03 of the Credit Agreement will apply
equally to this Agreement.
(b) Capitalized terms used and not otherwise defined herein are
used with the meanings assigned to such terms in the Credit Agreement. As
used in this Agreement, the following terms shall have the meanings assigned
to them below:
"CLASS A COLLATERAL" means all Collateral other than Class B
Collateral.
"CLASS B COLLATERAL" means, at any time, (i) shares of capital
stock of or other equity interests in Domestic Subsidiaries that own
Principal Properties at such time, (ii) subject to Section 6, all payments of
principal or interest, dividends, cash, instruments and other property from
time to time received, receivable or otherwise distributed in respect of, in
exchange for or upon the conversion of the capital stock or equity interests
referred to in clause (i) above, (iii) subject to Section 6, all rights and
privileges of the Pledgor with respect to the securities and other property
referred to in clauses (i) and (ii) above; and (iv) all proceeds of any of
the foregoing.
"CLASS I SECURED OBLIGATIONS" means the due and punctual payment
of (i) the principal of and interest (including interest
<PAGE>
accruing during the pendency of any bankruptcy, insolvency, receivership or
other similar proceeding, regardless of whether allowed or allowable in such
proceeding) on the Loans, when and as due, whether at maturity, by
acceleration, upon one or more dates set for prepayment or otherwise, (ii)
each payment required to be made by the Borrower under the Credit Agreement
in respect of any Letter of Credit, when and as due, including payments in
reimbursement of L/C Disbursements and interest thereon and obligations to
provide cash collateral, and (iii) all other monetary obligations of the
Borrower and the other Loan Parties under the Credit Agreement or any of the
other Loan Documents (including obligations incurred during the pendency of
any bankruptcy, insolvency, receivership or other similar proceeding,
regardless of whether allowed or allowable in such proceeding).
"CLASS II SECURED OBLIGATIONS" means the due and punctual payment
of all principal of, premium, if any, and interest on the 10-5/8% Senior
Notes and the Floating Rate Senior Notes and the due and punctual payment of
all amounts due in respect of the Hedge Obligations.
"CLASS III SECURED OBLIGATIONS" means the due and punctual payment
of all principal of, premium, if any, and interest on the Medium Term Notes
and the 1986 Notes.
"CLASS I SECURED PARTIES" means the holders from time to time of
the Class I Secured Obligations.
"CLASS II SECURED PARTIES" means the holders from time to time of
the Class II Secured Obligations.
"CLASS III SECURED PARTIES" means the holders from time to time of
the Class III Secured Obligations.
"COLLATERAL" means all of the Pledgors' right, title and interest
in, to and under (a) the shares of capital stock or other equity interests
owned by the Pledgors and listed on Schedule II hereto and any other shares
of capital stock of or other equity interests in any Subsidiary which are now
or shall at any time hereafter be owned by any Pledgor, and the certificates
representing all such shares or equity interests (collectively, the "PLEDGED
STOCK"); (b) all other property that may be delivered to and held by the
Collateral Agent pursuant to the terms hereof; (c) subject to Section 6, all
payments of principal or interest, dividends, cash, instruments and other
property from time to time received, receivable or otherwise distributed in
respect of, in exchange for or upon the conversion of the Pledged Stock or
any securities referred to in clause (b) above; (d) subject to Section 6, all
rights and privileges of the Pledgor with respect to the securities and other
property referred to in clauses (a), (b), and (c) above; and (e) all proceeds
of any of the foregoing.
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"CREDIT AGREEMENT" means the Credit Agreement dated as of July 25,
1997, among the Borrower, the Lenders from time to time party thereto, Chase,
as Administrative Agent for the Lenders and as Collateral Agent, BancAmerica
Securities, Inc., as Syndication Agent, and Societe Generale, as
Documentation Agent, as the same may be amended, supplemented or otherwise
modified from time to time.
"DOMESTIC SUBSIDIARY" means any Subsidiary that owns a Principal
Property.
"HEDGE OBLIGATIONS" means all obligations of the Borrower under
interest rate swaps, caps or collars or other interest rate protection
agreements that (i) are in effect on the date hereof and the counterparties
under which are Lenders on the date hereof or (ii) are hereafter entered into
with counterparties that are Lenders at the time such agreements are entered
into.
"MEDIUM TERM NOTES" means Borrower's notes issued under the MTN
Indenture.
"MTN INDENTURE" means the Indenture dated as of December 1, 1989.
"1986 NOTES" means the Borrower's Notes issued under the 1986
Indenture.
"1986 INDENTURE" means the Indenture dated as of March 15, 1986.
"PRINCIPAL PROPERTY" means any manufacturing or processing plant,
office facility, retail store (other than an Equity Store), warehouse or
distribution center, including, in each case, the fixtures appurtenant
thereto, located within the continental United States of America and owned
and operated now or hereafter acquired by the Borrower or any Subsidiary and
having a book value on the date as of which the determination is being made
of more than two percent of Consolidated Net Tangible Assets (as defined in
the MTN Indenture).
"SECURED OBLIGATIONS" shall mean the Class I Secured Obligations,
the Class II Secured Obligations and the Class III Secured Obligations.
"SECURED PARTIES" shall mean the Class I Secured Parties, the Class
II Secured Parties and the Class III Secured Parties.
SECTION 2. PLEDGE. (a) As security for the payment and
performance, as the case may be, in full of the Class I Obligations, each
Pledgor hereby transfers, grants, bargains, sells, conveys, hypothecates,
pledges, sets over and delivers unto the Collateral Agent, its successors and
assigns, and hereby grants to the Collateral Agent, its successors and
assigns, for the ratable benefit of the Class I Secured Parties, a first lien
upon and first security interest in the Class A Collateral.
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<PAGE>
(b) As security for the payment and performance, as the case may
be, in full of the Class II Obligations, each Pledgor hereby transfers,
grants, bargains, sells, conveys, hypothecates, pledges, sets over and
delivers unto the Collateral Agent, its successors and assigns, and hereby
grants to the Collateral Agent, its successors and assigns, for the ratable
benefit of the Class II Secured Parties, a second and junior lien upon and a
second and junior security interest in the Class A Collateral.
(c) As security for the payment and performance, as the case may
be, in full of the Class I Obligations, the Class II Obligations and the
Class III Obligations, each Pledgor hereby transfers, grants, bargains,
sells, conveys, hypothecates, pledges, sets over and delivers unto the
Collateral Agent, its successors and assigns, and hereby grants to the
Collateral Agent, its successors and assigns, for the ratable benefit of the
Class I Secured Parties, the Class II Secured Parties and the Class III
Secured Parties, a first lien upon and first security interest in the Class B
Collateral.
TO HAVE AND TO HOLD the Collateral, together with all right, title,
interest, powers, privileges and preferences pertaining or incidental
thereto, unto the Collateral Agent, its successors and assigns, for the
ratable benefit of the Secured Parties, forever; SUBJECT, HOWEVER, to the
terms, covenants and conditions hereinafter set forth.
SECTION 3. DELIVERY OF THE COLLATERAL. Each Pledgor agrees
promptly to deliver or cause to be delivered to the Collateral Agent any and
all Pledged Stock, and any and all certificates or other instruments or
documents representing the Collateral, in each case accompanied by undated
stock powers or other instruments of transfer satisfactory to the Collateral
Agent and executed in blank by the appropriate Pledgor.
Upon delivery to the Collateral Agent, (i) any stock certificates,
notes or other securities now or hereafter comprising the Pledged Stock and
included in the Collateral shall be accompanied by stock powers duly executed
in blank or other instruments of transfer satisfactory to the Collateral
Agent and by such other instruments and documents as the Collateral Agent may
reasonably request and (ii) all other property comprising part of the
Collateral shall be accompanied by proper instruments of assignment duly
executed by the applicable Pledgor and such other instruments or documents as
the Collateral Agent may reasonably request. Each delivery of Pledged Stock
shall be accompanied by a schedule describing the securities theretofore and
then being pledged hereunder and stating whether such securities at the time
constitute Class A Collateral or Class B Collateral, which schedule shall be
attached hereto as Schedule II and made a part hereof. Each schedule so
delivered shall supersede any prior schedules so delivered.
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SECTION 4. REPRESENTATIONS, WARRANTIES AND COVENANTS. (a) Each
Pledgor hereby represents, warrants and covenants, as to itself and the
Collateral pledged by it hereunder, to and with the Collateral Agent that:
(i) the Pledged Stock represents the percentage set forth on
Schedule II of the issued and outstanding shares of each class of the
capital stock or other equity interest of the issuer with respect thereto;
(ii) except for the security interests granted hereunder, such Pledgor
(w) is and will at all times continue to be the direct owner, beneficially
and of record, of the Pledged Stock pledged by it hereunder, (x) holds the
same free and clear of all Liens, (y) will make no assignment, pledge,
hypothecation or transfer of, or create or permit to exist any security
interest in or other Lien on, the Collateral pledged by such Pledgor, other
than pursuant hereto, and (z) subject to Section 6, will cause any and all
Collateral, whether obtained for value paid by such Pledgor or otherwise,
to be forthwith deposited with the Collateral Agent and pledged or assigned
hereunder;
(iii) such Pledgor (x) has the power and authority to pledge the
Collateral in the manner hereby done or contemplated and (y) will defend
its title or interest thereto or therein against any and all Liens (other
than the Lien created by this Agreement), however arising, of all Persons
whomsoever;
(iv) no consent of any other Person (including stockholders or
creditors of any Pledgor) and no consent or approval of any Governmental
Authority or any securities exchange was or is necessary to the validity of
the pledge effected hereby;
(v) by virtue of the execution and delivery by the Pledgors of this
Agreement, when the Pledged Stock, certificates or other documents
representing or evidencing the Collateral are delivered to the Collateral
Agent in accordance with this Agreement, the Collateral Agent will obtain a
valid and perfected lien upon and security interest in such Pledged Stock
as security, to the extent and with the priority provided herein, for the
payment and performance of the applicable Secured Obligations;
(vi) the pledge effected hereby is effective to vest in the Collateral
Agent, on behalf of the Secured Parties, the rights of the Collateral Agent
in the Collateral as set forth herein;
(vii) all the Pledged Stock has been duly authorized and validly
issued and is fully paid and nonassessable;
(viii) all information set forth herein relating to the Pledged Stock
is accurate and complete in all material respects as of the date hereof;
and
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(ix) the pledge of the Pledged Stock pursuant to this Agreement does
not violate Regulation G, T, U or X of the Board or any successor thereto
as of the date hereof.
(b) Each year, at the time of delivery of annual financial
statements with respect to the preceding fiscal year pursuant to Section
5.01(a) of the Credit Agreement, the Borrower shall deliver to the Collateral
Agent a certificate executed by a Financial Officer and the chief legal
officer of the Borrower setting forth the information required by Section
4(a)(i) and listed on Schedule II or confirming that there has been no change
in such information since the date such information was delivered or most
recently updated pursuant to this Section 4(b).
SECTION 5. REGISTRATION IN NOMINEE NAME; DENOMINATIONS. The
Collateral Agent, on behalf of the Secured Parties, shall have the right (in
its sole and absolute discretion) to hold the Pledged Stock in its own name
as pledgee, the name of its nominee (as pledgee or as sub-agent) or the name
of the Pledgors, endorsed or assigned in blank or in favor of the Collateral
Agent. Each Pledgor will promptly give to the Collateral Agent copies of any
notices or other communications received by it with respect to Pledged Stock
registered in the name of such Pledgor. The Collateral Agent shall at all
times have the right to exchange the certificates representing Pledged Stock
for certificates of smaller or larger denominations for any purpose
consistent with this Agreement.
SECTION 6. VOTING RIGHTS; DIVIDENDS AND INTEREST, ETC. (a)
Unless and until an Event of Default shall have occurred and be continuing:
(i) Each Pledgor shall be entitled to exercise any and all voting
and/or other consensual rights and powers inuring to an owner of Pledged
Stock or any part thereof; PROVIDED, HOWEVER, that such Pledgor will not be
entitled to exercise any such right if (A) the result thereof could
materially and adversely affect the rights inuring to a holder of the
Pledged Stock or the rights and remedies of any of the Secured Parties
under this Agreement or any Loan Document or the ability of the Secured
Parties to exercise the same or (B) such exercise would violate the Credit
Agreement.
(ii) The Collateral Agent shall execute and deliver to each Pledgor,
or cause to be executed and delivered to each Pledgor, all such proxies,
powers of attorney and other instruments as such Pledgor may reasonably
request for the purpose of enabling such Pledgor to exercise the voting
and/or consensual rights and powers it is entitled to exercise pursuant to
subparagraph (i) above and to receive the cash dividends it is entitled to
receive pursuant to subparagraph (iii) below.
(iii) Each Pledgor shall be entitled to receive and retain any and all
dividends, interest and principal paid on the Pledged
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Stock to the extent and only to the extent that such dividends, interest
and principal are permitted by, and otherwise paid in accordance with, the
terms and conditions of the Credit Agreement, the other Loan Documents and
applicable laws.
(b) Upon the occurrence and during the continuance of an Event of
Default, all rights of any Pledgor to dividends, interest or principal that
such Pledgor is authorized to receive pursuant to paragraph (a)(iii) above
shall cease, and all such rights shall thereupon become vested in the
Collateral Agent, which shall have the sole and exclusive right and authority
to receive and retain such dividends, interest or principal. All dividends,
interest or principal received by the Pledgor contrary to the provisions of
this Section 6 shall be held in trust for the benefit of the Collateral
Agent, shall be segregated from other property or funds of such Pledgor and
shall be forthwith delivered to the Collateral Agent upon demand in the same
form as so received (with any necessary endorsement). Any and all money and
other property paid over to or received by the Collateral Agent pursuant to
the provisions of this paragraph (b) shall be retained by the Collateral
Agent in an account to be established by the Collateral Agent upon receipt of
such money or other property and shall be applied in accordance with the
provisions of Section 8. After all Events of Default have been cured or
waived, the Collateral Agent shall, within five Business Days, repay to each
Pledgor all cash dividends, interest or principal (without interest), that
such Pledgor would otherwise be permitted to retain pursuant to the terms of
paragraph (a)(iii) above and which remain in such account.
(c) Upon the occurrence and during the continuance of an Event of
Default, all rights of any Pledgor to exercise the voting and consensual
rights and powers it is entitled to exercise pursuant to paragraph (a)(i) of
this Section 6, and the obligations of the Collateral Agent under paragraph
(a)(ii) of this Section 6, shall cease, and all such rights shall thereupon
become vested in the Collateral Agent, which shall have the sole and
exclusive right and authority to exercise such voting and consensual rights
and powers, PROVIDED that, unless otherwise directed by the Required Lenders,
the Collateral Agent shall have the right from time to time following and
during the continuance of an Event of Default to permit the Pledgors to
exercise such rights. After all Events of Default have been cured or waived,
the Pledgors will have the right to exercise the voting and consensual rights
and powers they would otherwise be entitled to exercise pursuant to the terms
of paragraph (a)(i) above.
SECTION 7. REMEDIES UPON DEFAULT. Upon the occurrence and during
the continuance of an Event of Default, subject to applicable regulatory and
legal requirements, the Collateral Agent may sell the Collateral, or any part
thereof, at public or private sale or at any broker's board or on any
securities exchange, for cash, upon credit or for future delivery as the
Collateral Agent shall deem appropriate. The Collateral Agent shall be
authorized at any such sale (if it deems necessary to comply with applicable
law) to restrict the prospective
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bidders or purchasers to persons who will represent and agree that they are
purchasing the Collateral for their own account and not with a view to the
distribution thereof in violation of applicable securities laws, and upon
consummation of any such sale the Collateral Agent shall have the right to
assign, transfer and deliver to the purchaser or purchasers thereof the
Collateral so sold. Each such purchaser at any such sale shall hold the
property sold absolutely free from any claim or right on the part of any
Pledgor, and, to the extent permitted by applicable law, the Pledgors hereby
waive all rights of redemption, stay, valuation and appraisal any Pledgor now
has or may at any time in the future have under any rule of law or statute
now existing or hereafter enacted.
The Collateral Agent shall give a Pledgor 10 days' prior written
notice (which each Pledgor agrees is reasonable notice within the meaning of
Section 9-504(3) of the Uniform Commercial Code as in effect in the State of
New York or its equivalent in other jurisdictions) of the Collateral Agent's
intention to make any sale of such Pledgor's Collateral. Such notice, in the
case of a public sale, shall state the time and place for such sale and, in
the case of a sale at a broker's board or on a securities exchange, shall
state the board or exchange at which such sale is to be made and the day on
which the Collateral, or portion thereof, will first be offered for sale at
such board or exchange. Any such public sale shall be held at such time or
times within ordinary business hours and at such place or places as the
Collateral Agent may fix and state in the notice of such sale. At any such
sale, the Collateral, or portion thereof, to be sold may be sold in one lot
as an entirety or in separate parcels, as the Collateral Agent may (in its
sole and absolute discretion) determine. The Collateral Agent shall not be
obligated to make any sale of any Collateral if it shall determine not to do
so, regardless of the fact that notice of sale of such Collateral shall have
been given. The Collateral Agent may, without notice or publication, adjourn
any public or private sale or cause the same to be adjourned from time to
time by announcement at the time and place fixed for sale, and such sale may,
without further notice, be made at the time and place to which the same was
so adjourned. In case any sale of all or any part of the Collateral is made
on credit or for future delivery, the Collateral so sold may be retained by
the Collateral Agent until the sale price is paid in full by the purchaser or
purchasers thereof, but the Collateral Agent shall not incur any liability in
case any such purchaser or purchasers shall fail to take up and pay for the
Collateral so sold and, in case of any such failure, such Collateral may be
sold again upon like notice. At any public (or, to the extent permitted by
applicable law, private) sale made pursuant to this Section 7, any Secured
Party may bid for or purchase, free from any right of redemption, stay or
appraisal on the part of any Pledgor (all said rights being also hereby
waived and released), the Collateral or any part thereof offered for sale and
may make payment on account thereof by using any claim then due and payable
to it from such Pledgor as a credit against the purchase price, and it may,
upon compliance with the terms of sale, hold, retain and dispose of such
property without further accountability to
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such Pledgor therefor. For purposes hereof, (a) a written agreement to
purchase the Collateral or any portion thereof shall be treated as a sale
thereof, (b) the Collateral Agent shall be free to carry out such sale
pursuant to such agreement and (c) such Pledgor shall not be entitled to the
return of the Collateral or any portion thereof subject thereto,
notwithstanding the fact that after the Collateral Agent shall have entered
into such an agreement all Events of Default shall have been remedied and the
Obligations paid in full. As an alternative to exercising the power of sale
herein conferred upon it, the Collateral Agent may proceed by a suit or suits
at law or in equity to foreclose upon the Collateral and to sell the
Collateral or any portion thereof pursuant to a judgment or decree of a court
or courts having competent jurisdiction or pursuant to a proceeding by a
court-appointed receiver. Any sale pursuant to the provisions of this
Section 7 shall be deemed to conform to the commercially reasonable standards
as provided in Section 9-504(3) of the Uniform Commercial Code as in effect
in the State of New York or its equivalent in other jurisdictions.
SECTION 8. INTERCREDITOR AGREEMENTS; COLLATERAL AGENT. (a) By
acceptance of the benefits of this Agreement, each of the Secured Parties
shall be deemed to have agreed to be bound by the terms hereof. The
provisions of this Section 8 are, and are intended, solely to establish
certain rights as between the Secured Parties and shall not create, and shall
not be construed as creating, any rights enforceable by any Pledgor, any
Subsidiary or any Affiliate of any Pledgor (regardless of whether such
Pledgor, Subsidiary or Affiliate is a Secured Party).
(b) By acceptance of the benefits of this Agreement, each of the
Secured Parties shall be deemed irrevocably (i) to consent to the appointment
of the Collateral Agent as its agent hereunder, (ii) to confirm that the
Collateral Agent shall have the authority to act as the exclusive agent of
such Secured Party for enforcement of any provisions of this Agreement
against any Pledgor or the exercise of remedies hereunder and (iii) to agree
that such Secured Party shall not take any action to enforce any provisions
of this Agreement against any Pledgor or to exercise any remedy hereunder.
(c) The Collateral Agent may act or refrain from acting hereunder,
and shall not incur any liability for acting or refraining from acting
hereunder, in accordance with any such consent, direction or request of the
Required Lenders as shall be required or permitted under the Credit
Agreement. The Class II Secured Parties and Class III Secured Parties shall
not be entitled to, and shall not, (i) direct the actions of the Collateral
Agent hereunder, (ii) take any action, or commence any legal proceeding
seeking, to require, compel or cause the Collateral Agent to enforce any
provisions of this Agreement against any Pledgor or to exercise any remedy
hereunder, (iii) take any action, or commence any legal proceeding seeking,
to prevent or enjoin the Collateral Agent from taking any action (including,
without limitation, the enforcement of any provisions of this Agreement
against any Pledgor, the exercise of any remedy
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hereunder, the release of any Collateral hereunder or the consent to any
amendment or modification of this Agreement or the grant of any waiver
hereunder), or refraining from taking any such action, in accordance with
this Agreement or (iv) take any action, or commence any legal proceeding
seeking, to delay, hinder or otherwise impair the Collateral Agent in taking
any such action in accordance with this Agreement. By acceptance of the
benefits under this Agreement, the Class II Secured Parties and Class III
Secured Parties will be deemed to have acknowledged and agreed that the
provisions of the preceding sentence are intended to induce the Lenders to
permit the Class II Secured Parties and Class III Secured Parties to be
Secured Parties under this Agreement and are being relied upon by the Lenders
as consideration therefor.
(d) THE COLLATERAL AGENT HAS CONSENTED TO SERVE AS COLLATERAL
AGENT HEREUNDER ON THE EXPRESS UNDERSTANDING, AND THE CLASS II SECURED
PARTIES AND CLASS III SECURED PARTIES, BY ACCEPTING THE BENEFITS OF THIS
AGREEMENT, SHALL BE DEEMED TO HAVE AGREED, THAT THE COLLATERAL AGENT SHALL
HAVE NO DUTY AND SHALL OWE NO OBLIGATION OR RESPONSIBILITY (FIDUCIARY OR
OTHERWISE) TO THE CLASS II SECURED PARTIES OR CLASS III SECURED PARTIES,
OTHER THAN THE DUTY TO PERFORM ITS EXPRESS OBLIGATIONS UNDER THIS AGREEMENT
IN ACCORDANCE WITH THEIR TERMS, SUBJECT IN ALL EVENTS TO THE PROVISIONS OF
SECTIONS 9 AND 10 AND THE OTHER PROVISIONS OF THIS AGREEMENT LIMITING THE
RESPONSIBILITY OR LIABILITY OF THE COLLATERAL AGENT HEREUNDER. WITHOUT
LIMITING THE FOREGOING, THE CLASS II SECURED PARTIES, BY ACCEPTING THE
BENEFITS OF THIS AGREEMENT, SHALL BE DEEMED TO HAVE WAIVED ANY RIGHT THEY
MIGHT HAVE AS JUNIOR LIENHOLDERS, UNDER APPLICABLE LAW OR OTHERWISE, TO
COMPEL THE SALE OR OTHER DISPOSITION OF ANY CLASS A COLLATERAL, AND ANY
OBLIGATION THE COLLATERAL AGENT MIGHT HAVE, UNDER APPLICABLE LAW OR
OTHERWISE, TO OBTAIN ANY MINIMUM PRICE FOR ANY CLASS A COLLATERAL UPON THE
SALE THEREOF, IT BEING EXPRESSLY UNDERSTOOD, AND THE AVAILABILITY OF THE
BENEFITS OF THIS AGREEMENT TO THE CLASS II SECURED PARTIES BEING CONDITIONED
UPON THE UNDERSTANDING, THAT THE SOLE RIGHT OF THE CLASS II SECURED PARTIES
WITH RESPECT TO THE CLASS A COLLATERAL SHALL BE TO RECEIVE ANY PROCEEDS OF
SUCH COLLATERAL, OR ANY SUCH COLLATERAL CONSISTING OF CASH, THAT SHALL REMAIN
AFTER THE SATISFACTION IN FULL OF THE CLASS I SECURED OBLIGATIONS.
(e) Each Secured Party shall, ratably in accordance with the
amount of Secured Obligations owed to it, indemnify the Collateral Agent (to
the extent it shall not have been reimbursed by the Pledgors) against any
expense or liability that the Collateral Agent would be entitled to recover
from the Pledgors pursuant to Section 10. Any amount so owed by a Secured
Party can be withheld by the Collateral Agent from any amount owed to such
Secured Party.
SECTION 9. APPLICATION OF PROCEEDS OF SALE. The proceeds of any
sale of Collateral pursuant to Section 7, as well as any
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Collateral consisting of cash, shall be applied by the Collateral Agent as
follows:
FIRST, to the payment of all costs and expenses incurred by the
Collateral Agent in connection with such sale or otherwise in connection
with this Agreement, any other Loan Document or any of the Obligations, and
all other amounts owed to the Collateral Agent hereunder (including under
Section 10 hereof) and not paid by the Pledgors, including all court costs
and the reasonable fees and expenses of its agents and legal counsel, the
repayment of all advances made by the Collateral Agent hereunder or under
any other Loan Document on behalf of any Pledgor and any other costs or
expenses incurred in connection with the exercise of any right or remedy
hereunder or under any other Loan Document;
SECOND, (i) in the case of any proceeds of Class A Collateral or cash
constituting Class A Collateral, to the payment in full of the Class I
Secured Obligations and, after the Class I Secured Obligations shall have
been paid in full, to the payment of the Class II Secured Obligations, and
(ii) in the case of any proceeds of Class B Collateral or cash constituting
Class B Collateral, to the payment in full of the Secured Obligations (the
amounts so applied pursuant to clause (i) or clause (ii) of this paragraph
to be distributed among the applicable Secured Parties pro rata in
accordance with the amounts of the applicable Secured Obligations owed to
them on the date of any such distribution);
THIRD, to the Pledgors, their successors or assigns, or as a court of
competent jurisdiction may otherwise direct.
The Collateral Agent shall have absolute discretion as to the time
of application of any such proceeds, moneys or balances in accordance with
this Agreement. Upon any sale of the Collateral by the Collateral Agent
(including pursuant to a power of sale granted by statute or under a judicial
proceeding), the receipt of the purchase money by the Collateral Agent or of
the officer making the sale shall be a sufficient discharge to the purchaser
or purchasers of the Collateral so sold and such purchaser or purchasers
shall not be obligated to see to the application of any part of the purchase
money paid over to the Collateral Agent or such officer or be answerable in
any way for the misapplication thereof.
SECTION 10. REIMBURSEMENT OF COLLATERAL AGENT; INDEMNITY. (a)
Each Pledgor agrees, jointly and severally with the other Pledgors, to pay
upon demand to the Collateral Agent the amount of any and all reasonable
expenses, including the reasonable fees, other charges and disbursements of
its counsel and of any experts or agents, that the Collateral Agent may incur
in connection with (i) the administration of this Agreement, (ii) the custody
or preservation of, or the sale of, collection from, or other realization
upon, any of the Collateral, (iii) the exercise or enforcement of any of the
rights of
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the Collateral Agent hereunder or (iv) the failure by any Pledgor to perform
or observe any of the provisions hereof.
(b) Without limitation of its indemnification obligations under
the other Loan Documents, each Pledgor agrees to indemnify the Collateral
Agent and the Indemnitees (as defined in Section 9.03(b) of the Credit
Agreement) against, and hold each Indemnitee harmless from, any and all
losses, claims, damages, liabilities and related expenses, including
reasonable counsel fees, other charges and disbursements, incurred by or
asserted against any Indemnitee arising out of, in any way connected with, or
as a result of (i) the execution or delivery of this Agreement or any other
Loan Document or any agreement or instrument contemplated hereby or thereby,
the performance by the parties hereto of their respective obligations
hereunder or the consummation of the transactions contemplated hereby or (ii)
any claim, litigation, investigation or proceeding relating to any of the
foregoing, whether or not any Indemnitee is a party thereto, PROVIDED that
such indemnity shall not, as to any Indemnitee, be available to the extent
that such losses, claims, damages, liabilities or related expenses resulted
from the gross negligence or wilful misconduct of such Indemnitee.
(c) Any amounts payable as provided hereunder shall be additional
Obligations secured hereby and by the other Security Documents. The
provisions of this Section 10 shall remain operative and in full force and
effect regardless of the termination of this Agreement, the consummation of
the transactions contemplated hereby, the repayment of any of the
Obligations, the invalidity or unenforceability of any term or provision of
this Agreement or any other Loan Document or any investigation made by or on
behalf of the Collateral Agent or any other Secured Party. All amounts due
under this Section 10 shall be payable on written demand therefor and shall
bear interest at the rate specified in Section 2.13(c)(ii) of the Credit
Agreement.
SECTION 11. COLLATERAL AGENT APPOINTED ATTORNEY-IN-FACT. Each
Pledgor hereby appoints the Collateral Agent the attorney-in-fact of such
Pledgor for the purpose of carrying out the provisions of this Agreement and
taking any action and executing any instrument that the Collateral Agent may
deem necessary or advisable to accomplish the purposes hereof, which
appointment is irrevocable and coupled with an interest. Without limiting
the generality of the foregoing, the Collateral Agent shall have the right,
upon the occurrence and during the continuance of an Event of Default, with
full power of substitution either in the Collateral Agent's name or in the
name of such Pledgor, to ask for, demand, sue for, collect, receive and give
acquittance for any and all moneys due or to become due under and by virtue
of any Collateral, to endorse checks, drafts, orders and other instruments
for the payment of money payable to the Pledgor representing any interest or
dividend or other distribution payable in respect of the Collateral or any
part thereof or on account thereof and to give full discharge for the same,
to settle, compromise, prosecute or defend any action, claim or proceeding
with respect
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thereto, and to sell, assign, endorse, pledge, transfer and to make any
agreement respecting, or otherwise deal with, the same; PROVIDED, HOWEVER,
that nothing herein contained shall be construed as requiring or obligating
the Collateral Agent to make any commitment or to make any inquiry as to the
nature or sufficiency of any payment received by the Collateral Agent, or to
present or file any claim or notice, or to take any action with respect to
the Collateral or any part thereof or the moneys due or to become due in
respect thereof or any property covered thereby. The Collateral Agent and the
other Secured Parties shall be accountable only for amounts actually received
as a result of the exercise of the powers granted to them herein, and neither
they nor their officers, directors, employees or agents shall be responsible
to any Pledgor for any act or failure to act hereunder, except for their own
gross negligence or wilful misconduct.
SECTION 12. WAIVERS; AMENDMENT. (a) No failure or delay of the
Collateral Agent in exercising any power or right hereunder shall operate as
a waiver thereof, nor shall any single or partial exercise of any such right
or power, or any abandonment or discontinuance of steps to enforce such a
right or power, preclude any other or further exercise thereof or the
exercise of any other right or power. The rights and remedies of the
Collateral Agent hereunder and of the other Secured Parties under the other
Loan Documents are cumulative and are not exclusive of any rights or remedies
that they would otherwise have. No waiver of any provisions of this Agreement
or consent to any departure by any Pledgor therefrom shall in any event be
effective unless the same shall be permitted by paragraph (b) below, and then
such waiver or consent shall be effective only in the specific instance and
for the purpose for which given. No notice or demand on any Pledgor in any
case shall entitle such Pledgor to any other or further notice or demand in
similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into between the Collateral Agent and the Pledgor or Pledgors with
respect to which such waiver, amendment or modification is to apply, subject
to any consent required in accordance with Section 9.02 of the Credit
Agreement.
SECTION 13. SECURITIES ACT, ETC. In view of the position of the
Pledgors in relation to the Pledged Stock, or because of other current or
future circumstances, a question may arise under the Securities Act of 1933,
as now or hereafter in effect, or any similar statute hereafter enacted
analogous in purpose or effect (such Act and any such similar statute as from
time to time in effect being called the "FEDERAL SECURITIES LAWS") with
respect to any disposition of the Pledged Stock permitted hereunder. Each
Pledgor understands that compliance with the Federal Securities Laws might
very strictly limit the course of conduct of the Collateral Agent if the
Collateral Agent were to attempt to dispose of all or any part of the Pledged
Stock, and might also limit the extent to which or the manner in which any
subsequent transferee of any Pledged Stock could dispose of the same.
Similarly, there may be other legal restrictions or limitations
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affecting the Collateral Agent in any attempt to dispose of all or part of
the Pledged Stock under applicable Blue Sky or other state securities laws or
similar laws analogous in purpose or effect. Each Pledgor recognizes that in
light of such restrictions and limitations the Collateral Agent may, with
respect to any sale of the Pledged Stock, limit the purchasers to those who
will agree, among other things, to acquire such Pledged Stock for their own
account, for investment, and not with a view to the distribution thereof in
violation of the Federal Securities Laws. Each Pledgor acknowledges and
agrees that in light of such restrictions and limitations, the Collateral
Agent, in its sole and absolute discretion, (a) may proceed to make such a
sale whether or not a registration statement for the purpose of registering
such Pledged Stock or part thereof shall have been filed under the Federal
Securities Laws and (b) may approach and negotiate with a single potential
purchaser to effect such sale. Each Pledgor acknowledges and agrees that any
such sale might result in prices and other terms less favorable to the seller
than if such sale were a public sale without such restrictions. In the event
of any such sale, the Collateral Agent shall incur no responsibility or
liability for selling all or any part of the Pledged Stock at a price that
the Collateral Agent, in its sole and absolute discretion, may in good faith
deem reasonable under the circumstances, notwithstanding the possibility that
a substantially higher price might have been realized if the sale were
deferred until after registration as aforesaid or if more than a single
purchaser were approached. The provisions of this Section 13 will apply
notwithstanding the existence of a public or private market upon which the
quotations or sales prices may exceed substantially the price at which the
Collateral Agent sells.
SECTION 14. REGISTRATION, ETC. Each Pledgor agrees that, upon the
occurrence and during the continuance of an Event of Default hereunder, if
for any reason the Collateral Agent desires to sell any of the Pledged Stock
of the Borrower at a public sale, it will, at any time and from time to time,
upon the written request of the Collateral Agent, use its best efforts to
take or to cause the issuer of such Pledged Stock to take such action and
prepare, distribute and/or file such documents, as are required or advisable
in the reasonable opinion of counsel for the Collateral Agent to permit the
public sale of such Pledged Stock. Each Pledgor further agrees, upon such
written request referred to above, to use its best efforts to qualify, file
or register, or cause the issuer of such Pledged Stock to qualify, file or
register, any of the Pledged Stock under the Blue Sky or other securities
laws of such states as may be requested by the Collateral Agent and keep
effective, or cause to be kept effective, all such qualifications, filings or
registrations. Each Pledgor will bear all costs and expenses of carrying out
its obligations under this Section 14. Each Pledgor acknowledges that there
is no adequate remedy at law for failure by it to comply with the provisions
of this Section 14 and that such failure would not be adequately compensable
in damages, and therefore agrees that its agreements contained in this
Section 14 may be specifically enforced.
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SECTION 15. SECURITY INTEREST ABSOLUTE. All rights of the
Collateral Agent hereunder, the grant of a security interest in the
Collateral and all obligations of each Pledgor hereunder, shall be absolute
and unconditional irrespective of (a) any lack of validity or enforceability
of the Credit Agreement, any other Loan Document, any agreement with respect
to any of the Obligations or any other agreement or instrument relating to
any of the foregoing, (b) any change in the time, manner or place of payment
of, or in any other term of, all or any of the Obligations, or any other
amendment or waiver of or any consent to any departure from the Credit
Agreement, any other Loan Document or any other agreement or instrument
relating to any of the foregoing, (c) any exchange, release or nonperfection
of any other collateral, or any release or amendment or waiver of or consent
to or departure from any guaranty, for all or any of the Obligations or (d)
any other circumstance that might otherwise constitute a defense available
to, or a discharge of, any Pledgor in respect of the Obligations or in
respect of this Agreement (other than the indefeasible payment in full of all
the Obligations).
SECTION 16. TERMINATION OR RELEASE. (a) This Agreement and the
security interests granted hereby shall terminate when (i) all the Class I
Secured Obligations have been paid in full, the Lenders have no further
commitment to lend under the Credit Agreement, the L/C Exposure has been
reduced to zero and the Issuing Banks have no further obligation to issue
Letters of Credit under the Credit Agreement or (ii) the Collateral Agent and
the Required Lenders (or, to the extent required by Section 9.02 of the
Credit Agreement, all Lenders) have given written instructions to the
Pledgors that the Collateral may be released and this Agreement be terminated.
(b) Upon any sale or other transfer by any Pledgor of any
Collateral that is permitted under the Credit Agreement to any Person that is
not a Pledgor or an Affiliate of the Borrower, or upon the effectiveness of
any written consent to the release of the security interest granted hereby in
any Collateral pursuant to Section 9.02(b) of the Credit Agreement, the
security interest in such Collateral shall be automatically released.
(c) In connection with any termination or release pursuant to
paragraph (a) or (b), the Collateral Agent shall execute and deliver to any
Pledgor, at such Pledgor's expense, all documents that such Pledgor shall
reasonably request to evidence such termination or release. Any execution
and delivery of documents pursuant to this Section 16 shall be without
recourse to or warranty by the Collateral Agent.
SECTION 17. NOTICES. All communications and notices hereunder
shall be in writing and given as provided in Section 9.01 of the Credit
Agreement. All communications and notices hereunder to any Subsidiary Pledgor
shall be given to it in care of the Borrower.
SECTION 18. FURTHER ASSURANCES. Each Pledgor agrees to do such
further acts and things, and to execute and deliver such
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additional conveyances, assignments, agreements and instruments, as the
Collateral Agent may at any time reasonably request in connection with the
administration and enforcement of this Agreement or with respect to the
Collateral or any part thereof or in order better to assure and confirm unto
the Collateral Agent its rights and remedies hereunder.
SECTION 19. BINDING EFFECT; SEVERAL AGREEMENT; ASSIGNMENTS.
Whenever in this Agreement any of the parties hereto, or any party benefitted
hereby, is referred to, such reference shall be deemed to include the
successors and assigns of such party; and all covenants, promises and
agreements by or on behalf of any Pledgor that are contained in this
Agreement shall bind and inure to the benefit of its successors and assigns.
This Agreement shall become effective as to any Pledgor when a counterpart
hereof executed on behalf of such Pledgor shall have been delivered to the
Collateral Agent and a counterpart hereof shall have been executed on behalf
of the Collateral Agent, and thereafter shall be binding upon such Pledgor
and the Collateral Agent and their respective successors and assigns, and
shall inure to the benefit of such Pledgor, the Collateral Agent and the
other Secured Parties, and their respective successors and assigns, except
that no Pledgor shall have the right to assign its rights hereunder or any
interest herein or in the Collateral (and any such attempted assignment shall
be void), except as expressly contemplated by this Agreement or the other
Loan Documents. If all of the capital stock of a Pledgor is sold,
transferred or otherwise disposed of to a Person that is not an Affiliate of
the Borrower pursuant to a transaction permitted by Section 6.02 of the
Credit Agreement, such Pledgor shall be released from its obligations under
this Agreement without further action. This Agreement shall be construed as
a separate agreement with respect to each Pledgor and may be amended,
modified, supplemented, waived or released with respect to any Pledgor
without the approval of any other Pledgor and without affecting the
obligations of any other Pledgor hereunder
SECTION 20. SURVIVAL OF AGREEMENT; SEVERABILITY. (a) All
covenants, agreements, representations and warranties made by each Pledgor
herein and in the certificates or other instruments prepared or delivered in
connection with or pursuant to this Agreement or any other Loan Document
shall be considered to have been relied upon by the Collateral Agent and the
other Secured Parties and shall survive the making by the Lenders of the
Loans and the issuance of the Letters of Credit by the Issuing Banks,
regardless of any investigation made by the Secured Parties or on their
behalf, and shall continue in full force and effect until this Agreement
terminates in accordance with Section 16(a).
(b) In the event any one or more of the provisions contained in this
Agreement should be held invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby (it being understood
that the invalidity of a particular provision in a particular jurisdiction
-16-
<PAGE>
shall not in and of itself affect the validity of such provision in any other
jurisdiction). The parties shall endeavor in good-faith negotiations to
replace the invalid, illegal or unenforceable provisions with valid
provisions the economic effect of which comes as close as possible to that of
the invalid, illegal or unenforceable provisions.
SECTION 21. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 22. COUNTERPARTS. This Agreement may be executed in two
or more counterparts, each of which shall constitute an original, but all of
which, when taken together, shall constitute a single contract, and shall
become effective as provided in Section 19. Delivery of an executed
counterpart of a signature page to this Agreement by facsimile transmission
shall be as effective as delivery of a manually executed counterpart of this
Agreement.
SECTION 23. SECTION HEADINGS. Section headings used herein are
for convenience of reference only, are not part of this Agreement and are not
to affect the construction of, or to be taken into consideration in
interpreting this Agreement.
SECTION 24. JURISDICTION; CONSENT TO SERVICE OF PROCESS. (a)
Each Pledgor hereby irrevocably and unconditionally submits, for itself and
its property, to the nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America sitting in New York City, and
any appellate court from any thereof, in any action or proceeding arising out
of or relating to this Agreement or the other Loan Documents, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that, to the extent permitted
by applicable law, all claims in respect of any such action or proceeding may
be heard and determined in such New York State court or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees
that a final judgment in any such action or proceeding shall be conclusive
and may be enforced in other jurisdictions by suit on the judgment or in any
other manner provided by law. Nothing in this Agreement shall affect any
right that the Collateral Agent or any other Secured Party may otherwise have
to bring any action or proceeding relating to this Agreement or the other
Loan Documents against any Pledgor or its properties in the courts of any
jurisdiction.
(b) Each Pledgor hereby irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection that
it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or the other Loan
Documents in any New York State or Federal court. Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
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<PAGE>
(c) Each party to this Agreement irrevocably consents to service
of process in the manner provided for notices in Section 17. Nothing in this
Agreement will affect the right of any party to this Agreement to serve
process in any other manner permitted by law.
SECTION 25. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY
HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY
ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT. EACH PARTY
HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER
PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.
SECTION 26. ADDITIONAL PLEDGORS. Pursuant to Section 5.08 of the
Credit Agreement, certain Subsidiaries of the Borrower that were not in
existence or not Subsidiaries on the date of the Credit Agreement are
required to enter in this Agreement as Subsidiary Pledgors. Upon execution
and delivery by the Collateral Agent and a Subsidiary of an instrument in the
form of Annex 1, such Subsidiary shall become a Subsidiary Pledgor hereunder
with the same force and effect as if originally named as a Subsidiary Pledgor
herein. The execution and delivery of such instrument shall not require the
consent of any Pledgor hereunder. The rights and obligations of each Pledgor
hereunder shall remain in full force and effect notwithstanding the addition
of any new Subsidiary Pledgor as a party to this Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
FLEMING COMPANIES, INC.,
by
/s/ John M. Thompson
---------------------------------------------------
Name: John M. Thompson
Title: Vice President and Treasurer
THE SUBSIDIARY PLEDGORS LISTED ON SCHEDULE I HERETO,
by
/s/ John M. Thompson
---------------------------------------------------
Name: John M. Thompson
Title: Vice President and Treasurer
THE CHASE MANHATTAN BANK, as Collateral Agent,
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<PAGE>
by
/s/ Marian N. Shulman
---------------------------------------------------
Name: Marian N. Shulman
Title: Vice President
-19-
<PAGE>
CONFORMED COPY
GUARANTEE AGREEMENT dated as of July 25, 1997 among each of
the subsidiaries listed on Schedule I hereto (each such
subsidiary individually, a "GUARANTOR" and collectively, the
"GUARANTORS") of FLEMING COMPANIES, INC., an Oklahoma corporation
(the "BORROWER"), and THE CHASE MANHATTAN BANK, a New York
banking corporation, as collateral agent ("COLLATERAL AGENT") for
the Secured Parties (as defined in the Security Agreement of the
date hereof).
A. Reference is made to the Credit Agreement dated as of July 25,
1997 (as amended, supplemented or otherwise modified from time to time, the
"CREDIT AGREEMENT"), among the Borrower, the Lenders from time to time party
thereto, The Chase Manhattan Bank, as Administrative Agent for the Lenders
and Collateral Agent, BancAmerica Securities, Inc., as Syndication Agent, and
Societe Generale, as Documentation Agent.
B. Capitalized terms used and not otherwise defined herein shall
have the meanings assigned to such terms in the Credit Agreement.
C. The Lenders have agreed to make Loans to the Borrower, and the
Issuing Banks have agreed to issue Letters of Credit for the account of the
Borrower, pursuant to, and upon the terms and subject to the conditions
specified in, the Credit Agreement. Each of the Guarantors is a Subsidiary
of the Borrower and acknowledges that it will derive substantial benefit from
the making of the Loans by the Lenders, and the issuance of the Letters of
Credit by the Issuing Banks. The obligations of the Lenders to make Loans
and of the Issuing Banks to issue Letters of Credit are conditioned on, among
other things, the execution and delivery by the Guarantors of a Guarantee
Agreement in the form hereof. As consideration therefor and in order to
induce the Lenders to make Loans and the Issuing Banks to issue Letters of
Credit, the Guarantors are willing to execute this Agreement.
Accordingly, the parties hereto agree as follows:
SECTION 1. GUARANTEE. Each Guarantor unconditionally guarantees,
jointly with the other Guarantors and severally, as a primary obligor and not
merely as a surety, (a) the due and punctual payment of (i) the principal of
and premium, if any, and interest (including interest accruing during the
pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding) on
the Loans, when and as due, whether at maturity, by acceleration, upon one or
more dates set for prepayment or otherwise, (ii) each payment required to be
made by the Borrower under the Credit Agreement in respect of any Letter of
Credit, when and as due, including payments in respect of reimbursement of
disbursements, interest thereon and obligations to provide cash collateral
and (iii) all other monetary obligations,
<PAGE>
including fees, costs, expenses and indemnities, whether primary, secondary,
direct, contingent, fixed or otherwise (including monetary obligations
incurred during the pendency of any bankruptcy, insolvency, receivership or
other similar proceeding, regardless of whether allowed or allowable in such
proceeding), of the Borrower to the Secured Parties under the Credit
Agreement and the other Loan Documents, (b) the due and punctual performance
of all covenants, agreements, obligations and liabilities of the Borrower
under or pursuant to the Credit Agreement and the other Loan Documents, (c)
the due and punctual payment and performance of all the covenants,
agreements, obligations and liabilities of each Loan Party under or pursuant
to this Agreement and the other Loan Documents and (d) the due and punctual
payment and performance of all obligations of the Borrower under each Hedging
Agreement entered into with any counterparty that was a Lender at the time
such Hedging Agreement was entered into or that is a Lender on the date
hereof (all the monetary and other obligations described in the preceding
clauses (a) through (d) being collectively called the "OBLIGATIONS"). Each
Guarantor further agrees that the Obligations may be extended or renewed, in
whole or in part, without notice to or further assent from it, and that it
will remain bound upon its guarantee notwithstanding any extension or renewal
of any Obligation.
SECTION 2. OBLIGATIONS NOT WAIVED. To the fullest extent
permitted by applicable law, each Guarantor waives presentment to, demand of
payment from and protest to the Borrower of any of the Obligations, and also
waives notice of acceptance of its guarantee and notice of protest for
nonpayment. To the fullest extent permitted by applicable law, the
obligations of each Guarantor hereunder shall not be affected by (a) the
failure of the Collateral Agent or any other Secured Party to assert any
claim or demand or to enforce or exercise any right or remedy against the
Borrower or any other Guarantor under the provisions of the Credit Agreement,
any other Loan Document or otherwise, (b) any rescission, waiver, amendment
or modification of, or any release from any of the terms or provisions of
this Agreement, any other Loan Document, any Guarantee or any other
agreement, including with respect to any other Guarantor under this Agreement
or (c) the failure to perfect any security interest in, or the release of,
any of the security held by or on behalf of the Collateral Agent or any other
Secured Party.
SECTION 3. SECURITY. Each of the Guarantors authorizes the
Collateral Agent and each of the other Secured Parties, to (a) take and hold
security, as provided for in the Security Agreement and Pledge Agreement, for
the payment of this Guarantee and the Obligations and exchange, enforce,
waive and release any such security, (b) apply such security and direct the
order or manner of sale thereof as they in their sole discretion may
determine in accordance with the Security Agreement and Pledge Agreement and
(c) release or substitute any one or more endorsees, other guarantors or
other obligors.
-2-
<PAGE>
SECTION 4. GUARANTEE OF PAYMENT. Each Guarantor further agrees
that its guarantee constitutes a guarantee of payment when due and not of
collection, and waives any right to require that any resort be had by the
Collateral Agent or any
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<PAGE>
other Secured Party to any of the security held for payment of the
Obligations or to any balance of any deposit account or credit on the books
of the Collateral Agent or any other Secured Party in favor of the Borrower
or any other person.
SECTION 5. NO DISCHARGE OR DIMINISHMENT OF GUARANTEE. The
obligations of each Guarantor hereunder shall not be subject to any
reduction, limitation, impairment or termination for any reason (other than
the indefeasible payment in full in cash of the Obligations), including any
claim of waiver, release, surrender, alteration or compromise of any of the
Obligations, and shall not be subject to any defense or setoff, counterclaim,
recoupment or termination whatsoever by reason of the invalidity, illegality
or unenforceability of the Obligations or otherwise. Without limiting the
generality of the foregoing, the obligations of each Guarantor hereunder
shall not be discharged or impaired or otherwise affected by the failure of
the Collateral Agent or any other Secured Party to assert any claim or demand
or to enforce any remedy under the Credit Agreement, any other Loan Document
or any other agreement, by any waiver or modification of any provision of any
thereof, by any default, failure or delay, wilful or otherwise, in the
performance of the Obligations, or by any other act or omission that may or
might in any manner or to any extent vary the risk of any Guarantor or that
would otherwise operate as a discharge of each Guarantor as a matter of law
or equity (other than the indefeasible payment in full in cash of all the
Obligations).
SECTION 6. DEFENSES OF BORROWER WAIVED. To the fullest extent
permitted by applicable law, each of the Guarantors waives any defense based
on or arising out of any defense of the Borrower or the unenforceability of
the Obligations or any part thereof from any cause, or the cessation from any
cause of the liability of the Borrower, other than the final and indefeasible
payment in full in cash of the Obligations. The Collateral Agent and the
other Secured Parties may, at their election, foreclose on any security held
by one or more of them by one or more judicial or nonjudicial sales, accept
an assignment of any such security in lieu of foreclosure, compromise or
adjust any part of the Obligations, make any other accommodation with the
Borrower or any other guarantor or grantor or exercise any other right or
remedy available to them against the Borrower or any other guarantor or
grantor, without affecting or impairing in any way the liability of any
Guarantor hereunder except to the extent the Obligations have been fully,
finally and indefeasibly paid in cash. Pursuant to applicable law, each of
the Guarantors waives any defense arising out of any such election even
though such election operates, pursuant to applicable law, to impair or to
extinguish any right of reimbursement or subrogation or other right or remedy
of such Guarantor against the Borrower or any other Guarantor or guarantor or
grantor, as the case may be, or any security.
SECTION 7. AGREEMENT TO PAY; SUBORDINATION. In furtherance of the
foregoing and not in limitation of any other right that the Collateral Agent or
any other Secured Party has at law or in equity against any Guarantor by virtue
hereof, upon the failure of the
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<PAGE>
Borrower or any other Loan Party to pay any Obligation when and as the same
shall become due, whether at maturity, by acceleration, after notice of
prepayment or otherwise, each Guarantor hereby promises to and will forthwith
pay, or cause to be paid, to the Collateral Agent or such other Secured Party
as designated thereby in cash the amount of such unpaid Obligations. Upon
payment by any Guarantor of any sums to the Collateral Agent or any Secured
Party as provided above, all rights of such Guarantor against the Borrower
arising as a result thereof by way of right of subrogation, contribution,
reimbursement, indemnity or otherwise shall in all respects be subordinate
and junior in right of payment to the prior indefeasible payment in full in
cash of all the Obligations. In addition, any Indebtedness of the Borrower
now or hereafter held by any Guarantor is hereby subordinated in right of
payment to the prior payment in full of the Obligations. If any amount shall
erroneously be paid to any Guarantor on account of (i) such subrogation,
contribution, reimbursement, indemnity or similar right or (ii) any such
Indebtedness of the Borrower, such amount shall be held in trust for the
benefit of the Secured Parties and shall forthwith be paid to the Collateral
Agent to be credited against the payment of the Obligations, whether matured
or unmatured, in accordance with the terms of the Loan Documents.
SECTION 8. INFORMATION. Each of the Guarantors assumes all
responsibility for being and keeping itself informed of the Borrower's
financial condition and assets, and of all other circumstances bearing upon
the risk of nonpayment of the Obligations and the nature, scope and extent of
the risks that such Guarantor assumes and incurs hereunder, and agrees that
none of the Collateral Agent or the other Secured Parties will have any duty
to advise any of the Guarantors of information known to it or any of them
regarding such circumstances or risks.
SECTION 9. REPRESENTATIONS AND WARRANTIES. Each of the Guarantors
represents and warrants as to itself that all representations and warranties
relating to it contained in the Credit Agreement are true and correct.
SECTION 10. TERMINATION. This Agreement and the Guarantees made
hereunder (a) shall terminate when all the Obligations have been indefeasibly
paid in full and the Lenders have no further commitment to lend under the
Credit Agreement, the L/C Exposure has been reduced to zero and the Issuing
Banks have no further obligation to issue Letters of Credit under the Credit
Agreement and (b) shall continue to be effective or be reinstated, as the
case may be, if at any time payment, or any part thereof, of any Obligation
is rescinded or must otherwise be restored by any Secured Party or any
Guarantor or Grantor upon the bankruptcy or reorganization of the Borrower,
any Guarantor, Subsidiary Grantor or otherwise.
SECTION 11. BINDING EFFECT; SEVERAL AGREEMENT; ASSIGNMENTS.
Whenever in this Agreement any of the parties hereto is referred to, such
reference shall be deemed to include the successors and assigns of such
party, and all covenants, promises and agreements by or on
-5-
<PAGE>
behalf of the Guarantors that are contained in this Agreement shall bind and
inure to the benefit of each party hereto and their respective successors and
assigns. This Agreement shall become effective as to any Guarantor when a
counterpart hereof executed on behalf of such Guarantor shall have been
delivered to the Collateral Agent, and a counterpart hereof shall have been
executed on behalf of the Collateral Agent, and thereafter shall be binding
upon such Guarantor and the Collateral Agent and their respective successors
and assigns, and shall inure to the benefit of such Guarantor, the Collateral
Agent and the other Secured Parties, and their respective successors and
assigns, except that no Guarantor shall have the right to assign its rights
or obligations hereunder or any interest herein (and any such attempted
assignment shall be void). If all of the capital stock of a Guarantor is
sold, transferred or otherwise disposed of pursuant to a transaction
permitted by Section 6.02 of the Credit Agreement, such Guarantor shall be
released from its obligations under this Agreement without further action.
This Agreement shall be construed as a separate agreement with respect to
each Guarantor and may be amended, modified, supplemented, waived or released
with respect to any Guarantor without the approval of any other Guarantor and
without affecting the obligations of any other Guarantor hereunder.
SECTION 12. WAIVERS; AMENDMENT. (a) No failure or delay of the
Collateral Agent in exercising any power or right hereunder shall operate as
a waiver thereof, nor shall any single or partial exercise of any such right
or power, or any abandonment or discontinuance of steps to enforce such a
right or power, preclude any other or further exercise thereof or the
exercise of any other right or power. The rights and remedies of the
Collateral Agent hereunder and of the other Secured Parties under the other
Loan Documents are cumulative and are not exclusive of any rights or remedies
that they would otherwise have. No waiver of any provision of this Agreement
or consent to any departure by any Guarantor therefrom shall in any event be
effective unless the same shall be permitted by paragraph (b) below, and then
such waiver or consent shall be effective only in the specific instance and
for the purpose for which given. No notice or demand on any Guarantor in any
case shall entitle such Guarantor to any other or further notice or demand in
similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to a written agreement entered into
between the Guarantors with respect to which such waiver, amendment or
modification relates and the Collateral Agent, with any consent required
under Section 9.02 of the Credit Agreement.
SECTION 13. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 14. NOTICES. All communications and notices hereunder
shall be in writing and given as provided in Section 9.01 of
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<PAGE>
the Credit Agreement. All communications and notices hereunder to each
Guarantor shall be given to it in care of the Borrower.
SECTION 15. SURVIVAL OF AGREEMENT; SEVERABILITY. (a) All
covenants, agreements, representations and warranties made by the Guarantors
herein and in the certificates or other instruments prepared or delivered in
connection with or pursuant to this Agreement or any other Loan Document
shall be considered to have been relied upon by the Collateral Agent and the
other Secured Parties and shall survive the making by the Lenders of the
Loans and the issuance of the Letters of Credit by the Issuing Banks
regardless of any investigation made by the Secured Parties or on their
behalf, and shall continue in full force and effect until this Agreement
terminates in accordance with Section 10.
(b) In the event any one or more of the provisions contained in
this Agreement or in any other Loan Document should be held invalid, illegal
or unenforceable in any respect, the validity, legality and enforceability of
the remaining provisions contained herein and therein shall not in any way be
affected or impaired thereby (it being understood that the invalidity of a
particular provision in a particular jurisdiction shall not in and of itself
affect the validity of such provision in any other jurisdiction). The
parties shall endeavor in good-faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions the economic effect
of which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.
SECTION 16. COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall constitute an original, but all of which
when taken together shall constitute a single contract, and shall become
effective as provided in Section 11. Delivery of an executed signature page
to this Agreement by facsimile transmission shall be as effective as delivery
of a manually executed counterpart of this Agreement.
SECTION 17. RULES OF INTERPRETATION. The rules of interpretation
specified in Section 1.03 of the Credit Agreement shall be applicable to this
Agreement.
SECTION 18. JURISDICTION; CONSENT TO SERVICE OF PROCESS. (a)
Each Guarantor hereby irrevocably and unconditionally submits, for itself and
its property, to the nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America sitting in New York City, and
any appellate court from any thereof, in any action or proceeding arising out
of or relating to this Agreement or the other Loan Documents, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of
any such action or proceeding may be heard and determined in such New York
State court or, to the extent permitted by law, in such Federal court. Each
of the parties hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other
-7-
<PAGE>
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement shall affect any right that the Collateral Agent
or any other Secured Party may otherwise have to bring any action or
proceeding relating to this Agreement or the other Loan Documents against any
Guarantor or its properties in the courts of any jurisdiction.
(b) Each Guarantor hereby irrevocably and unconditionally waives,
to the fullest extent it may legally and effectively do so, any objection
that it may now or hereafter have to the laying of venue of any suit, action
or proceeding arising out of or relating to this Agreement or the other Loan
Documents in any New York State or Federal court. Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
(c) Each party to this Agreement irrevocably consents to service
of process in the manner provided for notices in Section 14. Nothing in this
Agreement will affect the right of any party to this Agreement to serve
process in any other manner permitted by law.
SECTION 19. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY
HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY
ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE OTHER LOAN
DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO
HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS,
AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS
IN THIS SECTION 19.
SECTION 20. ADDITIONAL GUARANTORS. Upon execution and delivery
after the date hereof by the Collateral Agent and any Subsidiary of an
instrument in the form of Annex 1, such Subsidiary shall become a Guarantor
hereunder with the same force and effect as if originally named as a
Guarantor herein. The execution and delivery of any instrument adding an
additional Guarantor as a party to this Agreement shall not require the
consent of any other Guarantor hereunder. The rights and obligations of each
Guarantor hereunder shall remain in full force and effect notwithstanding the
addition of any new Guarantor as a party to this Agreement.
SECTION 21. RIGHT OF SETOFF. If an Event of Default shall have
occurred and be continuing, each Secured Party is hereby authorized at any
time and from time to time, to the fullest extent permitted by law, to set
off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other Indebtedness at any time
owing by such Secured Party to or for the credit or the account of any
Guarantor against any or all the obligations of such Guarantor now or
hereafter existing under this
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<PAGE>
Agreement and the other Loan Documents held by such Secured Party,
irrespective of whether or not such Secured Party shall have made any demand
under this Agreement or any other Loan Document and although such obligations
may be unmatured. The rights of each Secured Party under this Section 21 are
in addition to other rights and remedies (including other rights of setoff)
which such Secured Party may have.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
EACH OF THE SUBSIDIARIES
LISTED ON SCHEDULE I HERETO,
by
/s/ John M. Thompson
---------------------------------------------------
Name: John M. Thompson
Title: Vice President and Treasurer
THE CHASE MANHATTAN BANK, as Collateral Agent,
by
/s/ Marian N. Shulman
---------------------------------------------------
Name: Marian N. Shulman
Title: Vice President
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<PAGE>
EXECUTION COPY
================================================================================
FLEMING COMPANIES, INC.
ISSUER
TO
MANUFACTURERS AND TRADERS TRUST COMPANY
TRUSTEE
THE SUBSIDIARY GUARANTORS NAMED HEREIN
GUARANTORS
---------------------
INDENTURE
Dated as of July 25, 1997
---------------------
$250,000,000
10 5/8% Senior Subordinated Notes due 2007
===============================================================================
<PAGE>
FLEMING COMPANIES, INC.
RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT
OF 1939 AND INDENTURE, DATED AS OF JULY 25, 1997
TRUST INDENTURE
ACT SECTION INDENTURE SECTION
Section 310(a)(1)....................................... 607(a)
(a)(2)....................................... 607(a)
(b).......................................... 607(b), 608
Section 312(c).......................................... 701
Section 314(a).......................................... 703
(a)(4)....................................... 1008(a)
(c)(1)....................................... 102
(c)(2)....................................... 102
(e).......................................... 102
Section 315(b).......................................... 601
Section 316(a)(last
sentence).................................... 101 ("Outstanding")
(a)(1)(A).................................... 502, 512
(a)(1)(B).................................... 513
(b).......................................... 508
(c).......................................... 104(d)
Section 317(a)(1)....................................... 503
(a)(2)....................................... 504
(b).......................................... 1003
Section 318(a).......................................... 111
- ---------------
Note: This reconciliation and tie shall not, for any purpose, be deemed
to be a part of the Indenture.
<PAGE>
TABLE OF CONTENTS
SECTION PAGE
PARTIES....................................................................... 1
RECITALS OF THE COMPANY....................................................... 1
ARTICLE ONE
Definitions and Other Provisions
of General Application
SECTION 101. Definitions................................................... 2
"Acquired Indebtedness".......................................... 2
"Act"............................................................ 2
"Affiliate"...................................................... 3
"Asset Sale"..................................................... 3
"Average Life to Stated Maturity"................................ 3
"Bankruptcy Law"................................................. 3
"Banks".......................................................... 3
"Board of Directors"............................................. 3
"Board Resolution"............................................... 4
"Borrowing Base Amount".......................................... 4
"Business Day"................................................... 4
"Capital Lease Obligation"....................................... 4
"Capital Stock".................................................. 4
"Change of Control".............................................. 4
"Change of Control Purchase Date"................................ 5
"Change of Control Purchase Offer"............................... 5
"Change of Control Purchase Price"............................... 5
"Change of Control Triggering Event"............................. 5
"Commission"..................................................... 5
"Common Stock"................................................... 5
"Company"........................................................ 5
"Company Request" or "Company Order"............................. 6
"Consolidated"................................................... 6
"Consolidated Fixed Charge Coverage Ratio"....................... 6
"Consolidated Income Tax Expense"................................ 6
"Consolidated Interest Expense".................................. 6
"Consolidated Net Income"........................................ 7
"Consolidated Net Sales"......................................... 7
"Consolidated Net Worth"......................................... 7
- -------------------
NOTE: THIS TABLE OF CONTENTS SHALL NOT, FOR ANY PURPOSE, BE DEEMED TO BE A
PART OF THE INDENTURE.
<PAGE>
SECTION ii PAGE
"Consolidated Non-Cash Charges".................................. 8
"Consolidated Tangible Assets"................................... 8
"Consolidated Total Assets"...................................... 8
"Corporate Trust Office"......................................... 8
"Currency Agreements"............................................ 8
"Custodian"...................................................... 8
"Default"........................................................ 8
"Defaulted Interest"............................................. 8
"Depositary"..................................................... 9
"Designated Senior Indebtedness"................................. 9
"Disinterested Director"......................................... 9
"Equity Interest"................................................ 9
"Event of Default"............................................... 9
"Exchange Act"................................................... 9
"Exchange Notes"................................................. 9
"Exchange Offer"................................................. 9
"Exchange Offer Registration Statement".......................... 9
"Excluded Non-Cash Charges"...................................... 9
"Fair Market Value".............................................. 10
"Fixed Rate Senior Note Indenture"............................... 10
"Fixed Rate Senior Notes"........................................ 10
"Floating Rate Senior Note Indenture"............................ 10
"Floating Rate Senior Notes"..................................... 10
"Generally Accepted Accounting Principles" or "GAAP"............. 10
"Guaranteed Debt"................................................ 10
"Guaranteed Obligations"......................................... 10
"Holder"......................................................... 11
"Indebtedness"................................................... 11
"Indenture"...................................................... 11
"Initial Notes".................................................. 11
"Interest Payment Date".......................................... 12
"Interest Rate Agreements"....................................... 12
"Investee Store"................................................. 12
"Investment"..................................................... 12
"Investment Grade"............................................... 12
"Joint Venture".................................................. 12
"Lien"........................................................... 13
"Liquidated Damages"............................................. 13
"Maturity"....................................................... 13
"Medium-Term Notes".............................................. 13
"Medium-Term Notes Indenture".................................... 13
"Moody's"........................................................ 13
<PAGE>
SECTION iii PAGE
"Net Proceeds"................................................... 13
"Net Property and Equipment"..................................... 13
"New Credit Agreement"........................................... 13
"9 1/2% Debentures".............................................. 14
"9 1/2% Debentures Indenture".................................... 14
"Non-Payment Default"............................................ 14
"Non-Recourse Debt".............................................. 14
"Note Guarantee"................................................. 14
"Notes".......................................................... 14
"Notes due 2004"................................................. 14
"Notes due 2004 Indenture"....................................... 14
"Obligations".................................................... 14
"Offering"....................................................... 15
"Officers' Certificate".......................................... 15
"Opinion of Counsel"............................................. 15
"Outstanding".................................................... 15
"PARI PASSU Indebtedness"........................................ 16
"Paying Agent"................................................... 16
"Payment Blockage Notice"........................................ 16
"Payment Default"................................................ 16
"Permitted Consideraton"......................................... 16
"Permitted Indebtedness"......................................... 16
"Permitted Investment"........................................... 19
"Permitted Junior Securities".................................... 20
"Permitted Liens"................................................ 20
"Permitted Receivables Financing"................................ 22
"Person"......................................................... 22
"Predecessor Note"............................................... 22
"Preferred Stock"................................................ 22
"Prior Indentures"............................................... 22
"Public Equity Offering"......................................... 22
"Qualified Capital Stock"........................................ 23
"Qualified Finance Subsidiary"................................... 23
"Qualified TIPS Transaction"..................................... 23
"Qualified Subordinated Indebtedness"............................ 23
"Rating Agency".................................................. 23
"Rating Category"................................................ 23
"Rating Decline"................................................. 24
"Redeemable Capital Stock"....................................... 24
"Redemption Date"................................................ 24
"Redemption Price"............................................... 24
"Registration Rights Agreement".................................. 24
<PAGE>
SECTION iv PAGE
"Regular Record Date"............................................ 24
"Regulation S"................................................... 24
"Regulation S Global Note"....................................... 24
"Responsible Officer"............................................ 24
"Restricted Global Note"......................................... 25
"Restricted Subsidiary".......................................... 25
"Rule 144A"...................................................... 25
"Securities Act"................................................. 25
"Security Register" and "Security Registrar"..................... 25
"Senior Indebtedness"............................................ 25
"Senior Note Guarantees"......................................... 26
"Significant Subsidiary"......................................... 26
"S&P"............................................................ 26
"Special Record Date"............................................ 26
"Stated Maturity"................................................ 26
"Subordinated Indebtedness"...................................... 26
"Subsidiary"..................................................... 26
"Subsidiary Guarantor"........................................... 26
"Tangible Assets"................................................ 26
"Temporary Cash Investments"..................................... 27
"Transferred Receivables"........................................ 27
"Trust Indenture Act"............................................ 27
"Trustee"........................................................ 27
"Unrestricted Subsidiary"........................................ 27
"U.S. Government Obligations".................................... 28
"Vice President"................................................. 29
"Voting Stock"................................................... 29
"Wholly Owned Restricted Subsidiary"............................. 29
102. Compliance Certificates and Opinions.................................. 29
103. Form of Documents Delivered to Trustee................................ 30
104. Acts of Holders....................................................... 30
105. Notices, Etc., to Trustee, Company and Subsidiary Guarantors.......... 32
106. Notice to Holders; Waiver............................................. 32
107. Effect of Headings and Table of Contents.............................. 33
108. Successors and Assigns................................................ 33
109. Separability Clause................................................... 33
110. Benefits of Indenture................................................. 33
111. Governing Law......................................................... 33
112. Legal Holidays........................................................ 33
<PAGE>
SECTION v PAGE
ARTICLE TWO
Note Forms
201. Forms Generally....................................................... 34
202. Restrictive Legends................................................... 35
203. Form of Face of Note.................................................. 37
204. Form of Reverse of Note............................................... 38
205. Form of Trustee's Certificate of Authentication....................... 42
ARTICLE THREE
The Notes
301. Title and Terms....................................................... 42
302. Denominations......................................................... 43
303. Execution, Authentication, Delivery and Dating........................ 43
304. Temporary Notes....................................................... 44
305. Registration, Registration of Transfer and Exchange................... 45
306. Mutilated, Destroyed, Lost and Stolen Notes........................... 46
307. Payment of Interest; Interest Rights Preserved........................ 47
308. Persons Deemed Owners................................................. 48
309. Cancellation.......................................................... 48
310. Computation of Interest............................................... 49
311. Book-Entry Provisions for Global Notes................................ 49
312. Transfer and Exchange................................................. 50
313. CUSIP Numbers.......................................................... 54
ARTICLE FOUR
Satisfaction and Discharge
401. Satisfaction and Discharge of Indenture............................... 54
402. Application of Trust Money......................................... ... 55
ARTICLE FIVE
Remedies
501. Events of Default..................................................... 56
502. Acceleration of Maturity; Rescission and Annulment.................... 58
503. Collection of Indebtedness and Suits for Enforcement by
Trustee............................................................. 59
<PAGE>
SECTION vi PAGE
504. Trustee May File Proofs of Claim...................................... 60
505. Trustee May Enforce Claims Without Possession of Notes................ 61
506. Application of Money Collected........................................ 61
507. Limitation on Suits................................................... 61
508. Unconditional Right of Holders to Receive Principal, Premium
and Interest........................................................ 62
509. Restoration of Rights and Remedies.................................... 62
510. Rights and Remedies Cumulative........................................ 63
511. Delay or Omission Not Waiver.......................................... 63
512. Control by Holders.................................................... 63
513. Waiver of Past Defaults............................................... 64
514. Waiver of Stay or Extension Laws...................................... 64
515. Notice of Defaults.................................................... 64
ARTICLE SIX
The Trustee
601. Notice of Defaults.................................................... 65
602. Certain Rights of Trustee............................................. 65
603. Trustee Not Responsible for Recitals or Issuance of Notes............. 66
604. May Hold Notes........................................................ 67
605. Money Held in Trust................................................... 67
606. Compensation and Reimbursement........................................ 67
607. Corporate Trustee Required; Eligibility............................... 68
608. Resignation and Removal; Appointment of Successor..................... 68
609. Acceptance of Appointment by Successor................................ 69
610. Merger, Conversion, Consolidation or Succession to Business........... 70
ARTICLE SEVEN
Holders' Lists and Reports by Trustee, Company and Subsidiary Guarantors
701. Disclosure of Names and Addresses of Holders.......................... 70
702. Reports by Trustee.................................................... 71
703. Reports by Company and Subsidiary Guarantors.......................... 71
<PAGE>
SECTION vii PAGE
ARTICLE EIGHT
Consolidation, Merger, Sale of Assets
801. Company May Consolidate, Etc., Only on Certain Terms.................. 72
802. Successor Substituted................................................. 74
803. Notes to Be Secured in Certain Events................................. 74
ARTICLE NINE
Supplemental Indentures
901. Supplemental Indentures Without Consent of Holders.................... 74
902. Supplemental Indentures with Consent of Holders....................... 75
903. Execution of Supplemental Indentures.................................. 76
904. Effect of Supplemental Indentures..................................... 77
905. Conformity with Trust Indenture Act................................... 77
906. Reference in Notes to Supplemental Indentures......................... 77
907. Notice of Supplemental Indentures..................................... 77
ARTICLE TEN
Covenants
1001. Payment of Principal, Premium, If Any, and Interest.................. 78
1002. Maintenance of Office or Agency...................................... 78
1003. Money for Note Payments to Be Held in Trust.......................... 79
1004. Corporate Existence.................................................. 80
1005. Payment of Taxes and Other Claims.................................... 80
1006. Maintenance of Properties............................................ 81
1007. Insurance............................................................ 81
1008. Statement by Officers as to Default.................................. 81
1009. Purchase of Notes Upon a Change of Control Triggering Event.......... 81
1010. Limitation on Indebtedness........................................... 83
1011. Limitation on Restricted Payments.................................... 83
1012. Limitation on Layering Indebtedness.................................. 86
1013. Limitation on Transactions with Affiliates........................... 86
1014. Limitation on Liens Securing PARI PASSU Indebtedness or
Subordinated Indebtedness........................................... 87
1015. Limitation on Dividend and Other Payment Restrictions Affecting
Subsidiaries....................................................... 88
1016. Limitation on Sale of Assets......................................... 89
<PAGE>
SECTION viii PAGE
1017. Limitation on Issuances and Sales of Capital Stock of
Subsidiaries....................................................... 91
1018. Additional Guarantees................................................ 91
1019. Provision of Financial Statements; Rule 144A Information............. 92
1020. Payment for Consent.................................................. 92
1021. Termination of Certain Covenants in Event of Investment Grade
Rating............................................................. 92
1022. Waiver of Certain Covenants.......................................... 93
ARTICLE ELEVEN
Redemption of Notes
1101. Right of Redemption.................................................. 93
1102. Applicability of Article............................................. 94
1103. Election to Redeem; Notice to Trustee................................ 94
1104. Selection by Trustee of Notes to Be Redeemed......................... 94
1105. Notice of Redemption................................................. 94
1106. Deposit of Redemption Price.......................................... 95
1107. Notes Payable on Redemption Date..................................... 95
1108. Notes Redeemed in Part............................................... 96
ARTICLE TWELVE
Note Guarantees
1201. Note Guarantees...................................................... 96
1202. Execution and Delivery of Note Guarantee............................. 98
1203. Obligations of the Subsidiary Guarantors Unconditional............... 98
1204. Ranking of Note Guarantees........................................... 99
1205. Limitation of Note Guarantees........................................ 99
1206. Release of Subsidiary Guarantors..................................... 99
1207. Subsidiary Guarantors May Consolidate, Etc., on Certain Terms........ 100
ARTICLE THIRTEEN
Defeasance and Covenant Defeasance
1301. Company's Option to Effect Defeasance or Covenant Defeasance......... 101
1302. Defeasance and Discharge............................................. 101
1303. Covenant Defeasance.................................................. 101
1304. Conditions to Defeasance or Covenant Defeasance...................... 102
1305. Deposited Money and U.S. Government Obligations to Be Held in
Trust; Other Miscellaneous Provisions............................... 103
1306. Reinstatement........................................................ 104
<PAGE>
SECTION ix PAGE
ARTICLE FOURTEEN
Subordination of Notes
1401. Notes Subordinate to Senior Indebtedness............................. 105
1402. Payment Over of Proceeds upon Dissolution, etc....................... 105
1403. Suspension of Payment When Senior Indebtedness in Default............ 106
1404. Payment Permitted If No Default...................................... 107
1405. Subrogation to Rights of Holders of Senior Indebtedness.............. 107
1406. Provisions Solely to Define Relative Rights.......................... 107
1407. Trustee to Effectuate Subordination.................................. 108
1408. No Waiver of Subordination Provisions................................ 108
1409. Notice to Trustee.................................................... 109
1410. Reliance on Judicial Order or Certificate of Liquidating
Agent............................................................... 109
1411. Rights of Trustee As a Holder of Senior Indebtedness; Preservation
of Trustee's Rights................................................. 110
1412. Article Applicable to Paying Agents.................................. 110
1413. No Suspension of Remedies............................................ 110
1414. Trustee Not Fiduciary for Holders of Senior Indebtedness............. 110
EXHIBIT A Certificate to Be Delivered upon Registration of Exchange
or Transfer of Notes............................................ A-1
EXHIBIT B Form of Note Guarantee ......................................... B-1
EXHIBIT C Form of Institutional Accredited Investor Letter................ C-1
Schedule A Indebtedness Outstanding on the Date of the Indenture
Schedule B Leases with PDM, Inc. Outstanding on the Date of the Indenture
Schedule C Dividend and Other Payment Restrictions in Existence on the Date
of the Indenture
<PAGE>
INDENTURE, dated as of July 25, 1997 among FLEMING COMPANIES, INC.,
a corporation duly organized and existing under the laws of the State of
Oklahoma (herein called, the "Company"), having its principal office at 6301
Waterford Boulevard, P.O. Box 26647, Oklahoma City, Oklahoma 73126, each of
the Subsidiary Guarantors (as hereinafter defined), and Manufacturers and
Traders Trust Company, a New York banking corporation and trust company,
trustee (herein called, the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an issue of 10-5/8%
Senior Subordinated Notes due 2007 (the "Initial Notes") and 10-5/8% Series B
Senior Subordinated Notes due 2007 (the "Exchange Notes", and together with
the Initial Notes, the "Notes"), 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.
Upon the issuance of the Exchange Notes, if any, or the
effectiveness of the Shelf Registration Statement, this Indenture shall be
subject to and governed by the provisions of the Trust Indenture Act of 1939,
as amended.
The Company, directly or indirectly, owns beneficially and of
record 100% of the Capital Stock of the Subsidiary Guarantors; the Company
and the Subsidiary Guarantors are members of the same consolidated group of
companies; the Subsidiary Guarantors will derive direct and indirect economic
benefit from the issuance of the Notes; accordingly, the Subsidiary
Guarantors have each duly authorized the execution and delivery of this
Indenture to provide for the guarantee by each of them with respect to the
Notes as set forth in this Indenture.
All things necessary have been done to make the Notes, when
executed by the Company and authenticated and delivered hereunder and duly
issued by the Company, the valid obligations of the Company, to make the Note
Guarantees of each of the Subsidiary Guarantors, when executed by the
respective Subsidiary Guarantors and delivered hereunder, the valid
obligations of the respective Subsidiary Guarantors, and to make this
Indenture a valid agreement of the Company and each of the Subsidiary
Guarantors, in accordance with their and its terms.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Notes by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Notes, as follows:
<PAGE>
2
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:
(a) the terms defined in this Article have the meanings assigned to
them in this Article, and include the plural as well as the singular;
(b) 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, and the terms "cash transaction" and
"self-liquidating paper", as used in TIA Section 311, shall have the
meanings assigned to them in the rules of the Commission adopted under the
Trust Indenture Act;
(c) 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; PROVIDED, HOWEVER,
that with respect to any computation required pursuant to Sections 1009,
1010, 1011 and 1014, such term shall mean such accounting principles as are
generally accepted as of the date of this Indenture; and
(d) 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.
"Acquired Indebtedness" means Indebtedness of a Person (i) existing
at the time such Person becomes a Restricted Subsidiary of the Company or
(ii) assumed in connection with the acquisition of assets from such Person,
in each case, other than Indebtedness incurred in connection with, or in
contemplation of, such Person becoming a Restricted Subsidiary of the Company
or such acquisition.
"Act", when used with respect to any Holder, has the meaning
specified in Section 104.
<PAGE>
3
"Affiliate" means, with respect to any specified Person, (i) any
other Person directly or indirectly controlling or controlled by or under
direct or indirect common control with such specified Person or (ii) any
other Person that owns, directly or indirectly, 5% or more of such Person's
Capital Stock or any executive officer or director of any 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 ownership of
Voting Stock, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Asset Sale" means (i) the sale, lease, conveyance or other
disposition of any assets (including, without limitation, by way of a sale
and leaseback), other than sales of inventory in the ordinary course of
business consistent with past practices (PROVIDED that the sale, lease,
conveyance or other disposition of all or substantially all of the assets of
the Company and its Restricted Subsidiaries taken as a whole will be governed
by Section 1009 and/or Article Eight and not by Section 1016 and (ii) the
issue or sale by the Company or any of its Restricted Subsidiaries of Equity
Interests of any of the Company's Restricted Subsidiaries, whether in a
single transaction or a series of related transactions, in either case, (a)
that have a fair market value in excess of $1.0 million or (b) for net
proceeds in excess of $1.0 million. Notwithstanding the foregoing, a transfer
of assets by the Company to a Wholly Owned Restricted Subsidiary or by a
Wholly Owned Restricted Subsidiary to the Company or to another Wholly Owned
Restricted Subsidiary, or by a Restricted Subsidiary to any other Restricted
Subsidiary in which the Company holds a larger proportionate Equity Interest,
shall not be deemed to be an Asset Sale.
"Average Life to Stated Maturity" means, as of the date of
determination with respect to any Indebtedness, the quotient obtained by
dividing (i) the sum of the products of (A) the number of years from the date
of determination to the date or dates of each successive scheduled principal
payment of such Indebtedness multiplied by (B) the amount of each such
principal payment by (ii) the sum of all such principal payments.
"Bankruptcy Law" means Title 11, United States Bankruptcy Code of
1978, as amended, or any similar United States federal or state law relating
to bankruptcy, insolvency, receivership, winding-up, liquidation,
reorganization or relief of debtors or any amendment to, succession to or
change in any such law.
"Banks" means the banks and other financial institutions from time
to time that are lenders under the New Credit Agreement.
"Board of Directors" means either the board of directors of the
Company or any duly authorized committee of that board, and, with respect to
any Subsidiary Guarantor, either the board of directors of such Subsidiary
Guarantor or any duly authorized committee of that board.
<PAGE>
4
"Board Resolution" means a copy of a resolution 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, and delivered to the Trustee, and, with respect to a
Subsidiary Guarantor, a copy of a resolution certified by the Secretary or an
Assistant Secretary of the Subsidiary Guarantor to have been duly adopted by
its Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Borrowing Base Amount" means, as to the Company, 90% of Net
Property and Equipment, determined on a consolidated basis in accordance with
GAAP.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in The City of New
York are authorized or obligated by law or executive order to close.
"Capital Lease Obligation" of any Person means any obligation of
such Person and its Subsidiaries on a Consolidated basis under any capital
lease of real or personal property which, in accordance with GAAP, has been
recorded as a capitalized lease obligation.
"Capital Stock" of any Person means any and all shares, interest,
partnership interests, participations or other equivalents (however
designated) of such Person's capital stock whether now outstanding or issued
after the date of the Indentures, including, without limitation, all common
stock and preferred stock.
"Change of Control" means the occurrence of any of the following
events: (i) any "person" or "group" (as such terms are used in Sections 13(d)
and 14(d) of the Exchange Act) is or becomes the "beneficial owner" (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a Person
shall be deemed to have beneficial ownership of all shares that such Person
has the right to acquire, whether such right is exercisable immediately or
only after the passage of time), directly or indirectly, of more than 50% of
the total outstanding Voting Stock of the Company; (ii) during any period of
two consecutive years, individuals who at the beginning of such period
constituted the Board of Directors of the Company (together with any new
directors whose election to such Board of Directors, or whose nomination for
election by the stockholders of the Company, was approved by a vote of 66-2/3%
of the directors then still in office who were either directors at the
beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of such
Board of Directors then in office; (iii) the Company consolidates with or
merges with or into any Person or conveys, transfers, leases or otherwise
disposes of all or substantially all of its assets to any Person, or any
Person consolidates with or merges into or with the Company, in any such
event pursuant to a transaction in which the outstanding Voting Stock of the
Company is changed into or
<PAGE>
5
exchanged for cash, securities or other property, other than any such
transaction where the outstanding Voting Stock of the Company is not changed
or exchanged at all (except to the extent necessary to reflect a change in
the jurisdiction of incorporation of the Company) or where (A) the
outstanding Voting Stock of the Company is changed into or exchanged for (x)
Voting Stock of the surviving corporation which is not Redeemable Capital
Stock or (y) cash, securities or other property (other than Capital Stock of
the surviving corporation) in an amount which could be paid by the Company as
a Restricted Payment as described under Section 1011, and (B) immediately
after such transaction, no "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Exchange Act) is the "beneficial owner" (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a Person
shall be deemed to have beneficial ownership of all shares that such Person
has the right to acquire, whether such right is exercisable immediately or
only after the passage of time), directly or indirectly, of more than 50% of
the total outstanding Voting Stock of the surviving corporation; or (iv) the
Company is liquidated or dissolved or adopts a plan of liquidation or
dissolution other than in a transaction which complies with the provisions of
Article Eight.
"Change of Control Purchase Date" has the meaning specified in
Section 1009.
"Change of Control Purchase Offer" has the meaning specified in
Section 1009.
"Change of Control Purchase Price" has the meaning specified in
Section 1009.
"Change of Control Triggering Event" means the occurrence of both a
Change of Control and a Rating Decline.
"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 Indenture 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.
"Common Stock" means, with respect to any Person, any and all
shares, interests, participations and other equivalents (however designated,
whether voting or non-voting) of such Person's common stock, whether now
outstanding or issued after the date of this Indenture, including, without
limitation, all series and classes of such common stock.
"Company" means the Person named as the "Company" in the first
paragraph of this Indenture, until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
<PAGE>
6
"Company Request" or "Company Order" means a written request or
order signed in the name of the Company by its Chairman, any Vice Chairman,
its President, any Vice President, its Treasurer or an Assistant Treasurer,
and delivered to the Trustee.
"Consolidated" means, with respect to any Person, the consolidation
of the accounts of such Person and each of its subsidiaries if and to the
extent the accounts of such Person and each of its subsidiaries would
normally be consolidated with those of such Person, all in accordance with
GAAP consistently applied.
"Consolidated Fixed Charge Coverage Ratio" of the Company means,
for any period, the ratio of (a) Consolidated Net Income, plus, without
duplication, Consolidated Interest Expense, Consolidated Income Tax Expense,
Consolidated Non-Cash Charges and Excluded Non-Cash Charges (less the amount
of all cash payments made by the Company or any of its Restricted
Subsidiaries during such period to the extent such payments relate to
Excluded Non-Cash Charges that were added back in determining the sum
contemplated by this clause (a) for such period or any prior period) deducted
in computing Consolidated Net Income, in each case, for such period, of the
Company and its Restricted Subsidiaries on a Consolidated basis, all
determined in accordance with GAAP to (b) Consolidated Interest Expense for
such period; PROVIDED that (i) in making such computation, the Consolidated
Interest Expense attributable to interest on any Indebtedness computed on a
PRO FORMA basis and (A) bearing a floating interest rate shall be computed as
if the rate in effect on the date of computation had been the applicable rate
for the entire period and (B) which was not outstanding during the period for
which the computation is being made but which bears, at the option of the
Company, a fixed or floating rate of interest, shall be computed by applying,
at the option of the Company, either the fixed or floating rate and (ii) in
making such computation, Consolidated Interest Expense attributable to
interest on any Indebtedness under a revolving credit facility computed on a
PRO FORMA basis shall be computed based upon the average daily balance of
such Indebtedness during the applicable period.
"Consolidated Income Tax Expense" means for any period the
provision for federal, state, local and foreign income taxes of the Company
and its Restricted Subsidiaries for such period as determined on a
Consolidated basis in accordance with GAAP.
"Consolidated Interest Expense" means, without duplication, for any
period, the sum of (A) the interest expense of the Company and its Restricted
Subsidiaries for such period, as determined on a Consolidated basis in
accordance with GAAP including, without limitation, (i) amortization of debt
discount, (ii) the net cost under Interest Rate Agreements (including
amortization of discount), (iii) the interest portion of any deferred payment
obligation and (iv) accrued interest, plus (B) the aggregate amount for such
period of dividends on any Redeemable Capital Stock or Preferred Stock of the
Company and its Restricted Subsidiaries, (C) the interest component of the
Capital Lease Obligations paid, accrued and/or scheduled to be paid, or
accrued by such Person during such period and
<PAGE>
7
(D) all capitalized interest of the Company and its Restricted Subsidiaries
in each case under each of (A) through (D) determined on a Consolidated basis
in accordance with GAAP.
"Consolidated Net Income" means, for any period, the Consolidated
net income (or loss) of the Company and its Restricted Subsidiaries for such
period as determined on a Consolidated basis in accordance with GAAP,
adjusted, to the extent included in calculating such net income (loss), by
excluding, without duplication, (i) any net after-tax extraordinary gains or
losses (less all fees and expenses relating thereto), (ii) up to $20 million
of any charges taken with respect to the "Premium Sales" litigation matters,
which are described under (4) in Item 3 (Legal Proceedings) of the Company's
Annual Report on Form 10-K for fiscal year 1996 plus up to an additional
$2,500,000 with respect to fees and expenses of the Company's counsel in
connection with such litigation matters, (iii) Excluded Non-Cash Charges
(less the amount of all cash payments made by the Company or any of its
Restricted Subsidiaries during such period to the extent such payments relate
to Excluded Non-Cash Charges that were added back in determining the sum
contemplated by clause (a) of the definition of "Consolidated Fixed Charge
Coverage Ratio"), (iv) the portion of net income (or loss) of the Company and
its Restricted Subsidiaries determined on a Consolidated basis allocable to
minority interests in unconsolidated Persons to the extent that cash
dividends or distributions have not actually been received by the Company or
any Restricted Subsidiary; (v) net income (or loss) of any Person combined
with the Company or any Restricted Subsidiary on a "pooling of interests"
basis attributable to any period prior to the date of combination, (vi) net
gains or losses (less all fees and expenses relating thereto) in respect of
dispositions of assets other than in the ordinary course of business and
(vii) the net income of any Restricted Subsidiary to the extent that the
declaration of dividends or similar distributions by that Restricted
Subsidiary of that income is not at the time permitted, directly or
indirectly, by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to that Restricted Subsidiary or its shareholders.
"Consolidated Net Sales" means, for any period, the consolidated
net sales of the Company and its Restricted Subsidiaries for such period, as
determined in accordance with GAAP.
"Consolidated Net Worth" means, with respect to any Person as of
any date, the sum of (i) the consolidated equity of the common equity holders
of such Person and its Restricted Subsidiaries as of such date plus (ii) the
respective amounts reported on such Person's balance sheet as of such date
with respect to any series of preferred stock (other than Redeemable Capital
Stock) that by its terms is not entitled to the payment of dividends unless
such dividends may be declared and paid only out of net earnings in respect
of the year of such declaration and payment, but only to the extent of any
cash received by such Person upon issuance of such preferred stock, less (a)
all write-ups (other than write-ups resulting from foreign currency
translations and write-ups of tangible assets of a going
<PAGE>
8
concern business made within 12 months after the acquisition of such
business) subsequent to the date of the Indentures in the book value of any
asset owned by such Person or a consolidated Restricted Subsidiary of such
Person, (b) all investments as of such date in unconsolidated Restricted
Subsidiaries and in Persons that are not Subsidiaries (except, in each case,
Permitted Investments), and (c) all unamortized debt discount and expense and
unamortized deferred charges as of such date, all of the foregoing determined
in accordance with GAAP.
"Consolidated Non-Cash Charges" means, for any period, the
aggregate depreciation, amortization and other non-cash charges of the
Company and its Restricted Subsidiaries for such period, as determined on a
Consolidated basis in accordance with GAAP (excluding any non-cash charges
which require an accrual or reserve for any future period and any Excluded
Non-Cash Charges).
"Consolidated Tangible Assets" means the total of all the assets
appearing on the Consolidated balance sheet of the Company and its
majority-owned or Wholly Owned Restricted Subsidiaries less (i) intangible
assets including, without limitation, items such as goodwill, trademarks,
trade names, patents and unamortized debt discount and (ii) appropriate
adjustments on account of minority interests of other persons holding stock
in any majority-owned Restricted Subsidiary of the Company.
"Consolidated Total Assets" means, with respect to the Company, the
total of all assets appearing on the Consolidated balance sheet of the
Company and its Subsidiaries, as determined on a Consolidated basis in
accordance with GAAP.
"Corporate Trust Office" means a corporate trust office of the
Trustee, at which at any particular time its corporate trust business shall
be administered, which office at the date of execution of this Indenture is
located at 50 Broadway - 7th Floor, New York, New York 10004.
"Currency Agreements" means any spot or forward foreign exchange
agreements and currency swap, currency option or other similar financial
agreements or arrangements entered into by the Company or any of its
Restricted Subsidiaries in the ordinary course of business and designed to
protect against or manage exposure to fluctuations in foreign currency
exchange rates.
"Custodian" has the meaning specified in Section 201.
"Default" means any event which is, or after notice or passage of
time or both would be, an Event of Default.
"Defaulted Interest" has the meaning specified in Section 307.
<PAGE>
9
"Depositary" means The Depository Trust Company, its nominees and
their respective successors.
"Designated Senior Indebtedness" means (i) any Senior Indebtedness
outstanding under the New Credit Agreement; (ii) any Senior Indebtedness in
respect of the Fixed Rate Senior Notes, the Floating Rate Senior Notes, the
9-1/2% Debentures and the Medium-Term Notes; and (iii) any other Senior
Indebtedness, the principal amount of which is $50 million or more and that
has been designated by the Company as "Designated Senior Indebtedness."
"Disinterested Director" means, with respect to any transaction or
series of transactions in respect of which the Board of Directors is required
to deliver a resolution of the Board of Directors under the Indenture, a
member of the Board of Directors who does not have any material direct or
indirect financial interest in or with respect to such transaction or series
of transactions.
"Equity Interest" of any Person means any shares, interests,
participations or other equivalents (however designated) in such Person's
equity, and shall in any event include any Capital Stock issued by, or
partnership or membership interests in, such Person.
"Event of Default" has the meaning specified in Section 501.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchange Notes" has the meaning stated in the first recital of
this Indenture and refers to any Exchange Notes containing terms
substantially identical to the Initial Notes (except that (i) such Exchange
Notes shall not contain terms with respect to transfer restrictions and shall
be registered under the Securities Act, and (ii) certain provisions relating
to an increase in the stated rate of interest thereon shall be eliminated)
that are issued and exchanged for the Initial Notes in accordance with the
Exchange Offer, as provided for in the Registration Rights Agreement and this
Indenture.
"Exchange Offer" means the offer by the Company to the Holders of
the Initial Notes to exchange all of the Initial Notes for Exchange Notes, as
provided for in the Registration Rights Agreement.
"Exchange Offer Registration Statement" means the Exchange Offer
Registration Statement as defined in the Registration Rights Agreement.
"Excluded Non-Cash Charges" means all non-cash charges with respect
to (A) write-downs of the carrying value in the Company's financial
statements of certain retail and distribution facilities and related assets
in connection with the proposed or actual disposition
<PAGE>
10
of such facilities or discontinuance of operations at such facilities or (B)
other consolidation and restructuring of facilities and operations.
"Fair Market Value" means, with respect to any asset or property, a
price which could be negotiated in an arm's length transaction, for cash,
between a willing seller and a willing buyer, neither of whom is under undue
pressure to complete the transaction. Fair Market Value shall be determined
by the Board of Directors of the Company acting in good faith and shall be
evidenced by a Board Resolution.
"Fixed Rate Senior Note Indenture" means the Indenture dated as of
December 15, 1994 among the Company, as issuer, each of the subsidiary
guarantors named therein as guarantors, and Texas Commerce Bank, National
Association, as trustee.
"Fixed Rate Senior Notes" means the 10-5/8% Senior Notes due 2001 of
the Company.
"Floating Rate Senior Note Indenture" means the Indenture dated as
of December 15, 1994 among the Company, as issuer, each of the subsidiary
guarantors named therein as guarantors, and Texas Commerce Bank, National
Association, as trustee.
"Floating Rate Senior Notes" means the Floating Rate Senior Notes
due 2001 of the Company.
"Generally Accepted Accounting Principles" or "GAAP" means
generally accepted accounting principles in the United States, as in effect
on the date of this Indenture.
"Guaranteed Debt" means, with respect to any Person, without
duplication, all Indebtedness of any other Person referred to in the
definition of Indebtedness contained herein guaranteed directly or indirectly
in any manner by such Person, or in effect guaranteed directly or indirectly
by such Person through an agreement (i) to pay or purchase such Indebtedness
or to advance or supply funds for the payment or purchase of such
Indebtedness, (ii) to purchase, sell or lease (as lessee or lessor) property,
or to purchase or sell services, primarily for the purpose of enabling the
debtor to make payment of such Indebtedness or to assure the holder of such
Indebtedness against loss, (iii) to supply funds to, or in any other manner
invest in, the debtor (including any agreement to pay for property or
services without requiring that such property be received or such services be
rendered), (iv) to maintain working capital or equity capital of the debtor,
or otherwise to maintain the net worth, solvency or other financial condition
of the debtor or (v) otherwise to assure a creditor against loss, PROVIDED
that the term "guarantee" shall not include endorsements for collection or
deposit, in either case in the ordinary course of business.
"Guaranteed Obligations" has the meaning specified in Section 1201.
<PAGE>
11
"Holder" means a Person in whose name a Note is registered in the
Security Register.
"Indebtedness" means, with respect to any Person, without
duplication, (i) all liabilities of such Person for borrowed money (including
overdrafts) or for the deferred purchase price of property or services,
excluding any trade payables and other accrued current liabilities arising in
the ordinary course of business, but including, without limitation, all
obligations, contingent or otherwise, of such Person in connection with any
letters of credit and acceptances issued under letter of credit facilities,
acceptance facilities or other similar facilities, (ii) all obligations of
such Person evidenced by bonds, notes, debentures or other similar
instruments, (iii) all indebtedness of such Person created or arising under
any conditional sale or other title retention agreement with respect to
property acquired by such Person (even if the rights and remedies of the
seller or lender under such agreement in the event of default are limited to
repossession or sale of such property), but excluding trade payables arising
in the ordinary course of business, (iv) all Capital Lease Obligations of
such Person, (v) all obligations under Interest Rate Agreements or Currency
Agreements of such Person, (vi) Indebtedness referred to in clauses (i)
through (v) above of other Persons, and all dividends of other Persons the
payment of which is secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien,
upon or with respect to property (including, without limitation, accounts and
contract rights) owned by such Person, even though such Person has not
assumed or become liable for the payment of such Indebtedness, (vii) all
Guaranteed Debt of such Person (other than guarantees of preferred trust
securities or similar securities issued by a Qualified Finance Subsidiary),
(viii) all Redeemable Capital Stock valued at the greater of its voluntary or
involuntary maximum fixed repurchase price plus accrued and unpaid dividends,
(ix) Qualified Subordinated Indebtedness and (x) any amendment, supplement,
modification, deferral, renewal, extension, refunding or refinancing of any
liability of the types referred to in clauses (i) through (ix) above. For
purposes hereof, the "maximum fixed repurchase price" of any Redeemable
Capital Stock which does not have a fixed repurchase price shall be
calculated in accordance with terms of such Redeemable Capital Stock as if
such Redeemable Capital Stock were purchased on any date on which
Indebtedness shall be required to be determined pursuant to the Indentures,
and if such price is based upon, or measured by, the Fair Market Value of
such Redeemable Capital Stock, such Fair Market Value is to be determined in
good faith by the Board of Directors of the issuer of such Redeemable Capital
Stock.
"Indenture" means this instrument as originally executed and 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.
"Initial Notes" has the meaning specified in the recitals to this
Indenture.
<PAGE>
12
"Interest Payment Date" means the Stated Maturity of an installment
of interest on the Notes.
"Interest Rate Agreements" means any interest rate protection
agreements and other types of interest rate hedging agreements (including,
without limitation, interest rate swaps, caps, floors, collars and similar
agreements).
"Investee Store" means a Person in which the Company or any of its
Restricted Subsidiaries has invested equity capital, to which it has made
loans or for which it has guaranteed loans, in accordance with the business
practice of the Company and its Restricted Subsidiaries of making equity
investments in, making loans to or guaranteeing loans made to Persons, for
the purpose of assisting any such Person in acquiring, remodeling,
refurbishing, expanding or operating one or more retail grocery stores.
"Investment" means, with respect to any Person, directly or
indirectly, any advance (other than advances to customers in the ordinary
course of business, which are recorded as accounts receivable on the balance
sheet of the Company and its Restricted Subsidiaries), loan or other
extension of credit (including by way of guarantee) or capital contribution
to (by means of any transfer of cash or other property to others or any
payment for property or services for the account or use of others), or any
purchase, acquisitions or ownership by such Person of any Capital Stock,
bonds, notes, debentures or other securities or assets issued or owned by any
other Person. The Company shall be deemed to make an Investment in an amount
equal to the greater of the book value (as determined in accordance with
GAAP) and Fair Market Value of the net assets of any Restricted Subsidiary
(or, if neither the Company nor any of its Restricted Subsidiaries has
theretofore made an Investment in such Restricted Subsidiary, in an amount
equal to the Investments being made) at the time such Restricted Subsidiary
is designated an Unrestricted Subsidiary, and any property transferred to an
Unrestricted Subsidiary from the Company or any Restricted Subsidiary shall
be deemed an Investment valued at the greater of its book value (as
determined in accordance with GAAP) and its Fair Market Value at the time of
such transfer.
"Investment Grade" means BBB -- or higher by S&P or Baa3 or higher
by Moody's or the equivalent of such ratings by S&P or Moody's or in the
event S&P or Moody's shall cease rating the Notes and the Company shall
select any other Rating Agency, the equivalent of such ratings by such other
Rating Agency.
"Joint Venture" means any Person in which the Company or any of its
Restricted Subsidiaries owns 30% or more of the Voting Stock (other than as a
result of a Public Equity Offering).
<PAGE>
13
"Lien" means any mortgage, charge, pledge, lien (statutory or
otherwise), privilege, security interest, hypothecation or other encumbrance
upon or with respect to any property of any kind, real or personal, movable
or immovable, now owned or hereafter acquired.
"Liquidated Damages" means all liquidated damages then owing
pursuant to Section 5 of the Registration Rights Agreement.
"Maturity" when used with respect to the Notes means the date on
which the principal of the Notes becomes due and payable as therein provided
or as provided in this Indenture, whether at Stated Maturity or on a
redemption date or pursuant to a Change of Control Purchase Offer or an Asset
Sale Offer, and whether by declaration of acceleration, call for redemption,
purchase or otherwise.
"Medium-Term Notes" means the Medium-Term Notes, due 1997 to 2003,
of the Company.
"Medium-Term Notes Indenture" means the Indenture dated as of
December 1, 1989 between the Company and First Trust of New York National
Association, as trustee.
"Moody's" means Moody's Investors Service, Inc. or any successor
rating agency.
"Net Proceeds" means the aggregate cash proceeds received by the
Company or any of its Restricted Subsidiaries in respect of any Asset Sale
(including, without limitation, any cash received upon the sale or other
disposition of any non-cash consideration received in any Asset Sale), net of
the direct costs relating to such Asset Sale (including, without limitation,
legal, accounting and investment banking fees, and sales commissions), any
relocation expenses incurred as a result thereof, any taxes paid or payable
by the Company or any of its Restricted Subsidiaries as a result thereof
(after taking into account any available tax credits or deductions and any
tax sharing arrangements), amounts required to be applied to the repayment of
Indebtedness secured by a Lien on the assets or assets that were the subject
of such Asset Sale and any reserve for adjustment or indemnity in respect of
the sale price of such asset or assets in each case established in accordance
with GAAP.
"Net Property and Equipment" means, with respect to the Company,
the Consolidated property and equipment of the Company, net of accumulated
depreciation, determined in accordance with GAAP.
"New Credit Agreement" means the credit agreement to be entered
into among the Company, the Banks, the agents listed therein and The Chase
Manhattan Bank, as administrative agent, as such agreement may be amended,
renewed, extended, substituted,
<PAGE>
14
refinanced, restructured, replaced, supplemented or otherwise modified from
time to time (including, without limitation, any successive renewals,
extensions, substitutions, refinancings, restructurings, replacements,
supplementations or other modifications of the foregoing).
"9 1/2% Debentures" means the 9 1/2% Debentures due 2016 of the
Company.
"9 1/2% Debentures Indenture" means the Indenture dated March 15,
1986 between the Company and First Trust National Association, as trustee.
"Non-Payment Default" has the meaning specified in Section 1403.
"Non-Recourse Debt" means Indebtedness (i) as to which neither the
Company nor any of its Restricted Subsidiaries (a) provides credit support of
any kind (including any undertaking, agreement or instrument that would
constitute Indebtedness), (b) is directly or indirectly liable (as a
guarantor or otherwise), or (c) constitutes the lender, (ii) no default with
respect to which (including any rights that the holders thereof may have to
take enforcement action against an Unrestricted Subsidiary) would permit
(upon notice, lapse of time or both) any holder of any other Indebtedness
(other than the Notes being offered hereby) of the Company or any of its
Restricted Subsidiaries to declare a default on such other Indebtedness or
cause the payment thereof to be accelerated or payable prior to its stated
maturity and (iii) as to which the lenders have been notified in writing that
they will not have any recourse to the stock or assets of the Company or any
of its Restricted Subsidiaries.
"Note Guarantee" means any guarantee by a Subsidiary Guarantor of
the Company's obligations under the Notes due 2004 Indenture or this
Indenture, as applicable.
"Notes" has the meaning stated in the first recital of this
Indenture and, more particularly, means any Notes authenticated and delivered
under this Indenture.
"Notes due 2004" mean the 10 1/2% Senior Subordinated Notes due
2004 of the Company.
"Notes due 2004 Indenture" means the Indenture, dated as of July
25, 1997, among the Company, the Subsidiary Guarantors and Manufacturers and
Traders Trust Company, relating to the Notes due 2004.
"Obligations" means any principal, premium, interest (including
post-petition interest), penalties, fees, indemnifications, reimbursements,
damages and other liabilities payable under the documentation governing any
Indebtedness.
<PAGE>
15
"Offering" means the sale of the Notes and the Notes due 2004 by
the Company to Bear, Stearns & Co. Inc., Chase Securities Inc., BancAmerica
Securities, Inc. and Societe Generale Securities Corporation as initial
purchasers.
"Officers' Certificate" means a certificate signed by the Chairman,
any Vice Chairman, 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.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company, including an officer or employee of the Company, and
who shall be reasonably acceptable to the Trustee.
"Outstanding", when used with respect to the Notes, means, as of
the date of determination, all Notes theretofore authenticated and delivered
under this Indenture, except:
(i) Notes theretofore cancelled by the Trustee or delivered to the
Trustee for cancellation;
(ii) Notes, or portions thereof, for whose payment or redemption 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 Notes; PROVIDED that, if such Notes
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;
(iii) Notes, except to the extent provided in Sections 1302 and
1303, with respect to which the Company has effected defeasance and/or
covenant defeasance as provided in Article Thirteen; and
(iv) Notes which have been paid pursuant to Section 306 or in exchange
for or in lieu of which other Notes have been authenticated and delivered
pursuant to this Indenture, other than any such Notes in respect of which
there shall have been presented to the Trustee proof satisfactory to it
that such Notes are held by a bona fide purchaser in whose hands the Notes
are valid obligations of the Company;
PROVIDED, HOWEVER, that in determining whether the Holders of the requisite
principal amount of Outstanding Notes have given any request, demand,
authorization, direction, consent, notice or waiver hereunder, and for the
purpose of making the calculations required by TIA Section 313, Notes owned
by the Company or any other obligor upon the Notes or any Affiliate of the
Company or such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be
protected in making
<PAGE>
16
such calculation or in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Notes which the Trustee actually
knows to be so owned shall be so disregarded. Notes 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 Notes and that the pledgee is not the Company or any
other obligor upon the Notes or any Affiliate of the Company or such other
obligor.
"PARI PASSU Indebtedness" means (a) with respect to the Notes,
Indebtedness which ranks PARI PASSU in right of payment to the Notes, and (b)
with respect to any Note Guarantee, Indebtedness which ranks PARI PASSU in
right of payment to such Note Guarantee.
"Paying Agent" means any Person (including the Company acting as
Paying Agent) authorized by the Company to pay the principal of (and premium,
if any, on) or interest on any Notes on behalf of the Company.
"Payment Blockage Notice" has the meaning specified in Section 1403.
"Payment Default" has the meaning specified in Section 1403.
"Permitted Consideration" means consideration consisting of any
combination of the following: (i) cash or Temporary Cash Investments, (ii)
assets used or intended for use in the Company's business as conducted on the
date of the Indentures, (iii) any liabilities (as shown on the Company's or
such Restricted Subsidiary's most recent balance sheet), of the Company or
any Restricted Subsidiary (other than contingent liabilities and liabilities
that are by their terms subordinated to the Notes or any guarantee thereof)
that are assumed by the transferee of any such assets pursuant to a customary
novation agreement that releases the Company or such Restricted Subsidiary
from further liability and (iv) any securities, notes or other obligations
received by the Company or any such Restricted Subsidiary from such
transferee that are immediately converted by the Company or such Restricted
Subsidiary into cash (to the extent of the cash received); PROVIDED that the
aggregate amount of such notes or other obligations received by the Company
and its Restricted Subsidiaries pursuant to (ii) through (iv) above after the
date of the Indenture and held or carried at any date of determination shall
not exceed $75 million.
"Permitted Indebtedness" means any of the following Indebtedness of
the Company or any Restricted Subsidiary, as the case may be:
(i) Indebtedness of the Company and guarantees of the Subsidiary
Guarantors under the New Credit Agreement in an aggregate principal amount
at any one time outstanding not to exceed the greater of (x) $850 million
(after giving PRO FORMA effect to the use of proceeds of the Offering) less
mandatory repayments actually made in respect of any term Indebtedness
thereunder (other than amounts
<PAGE>
17
refinanced as permitted under the definition of the New Credit
Agreement) or (y) the Borrowing Base Amount less mandatory repayments
(other than amounts refinanced as permitted under the definition of the
New Credit Agreement) actually made in respect of any term Indebtedness
thereunder;
(ii) Indebtedness of the Company under uncommitted bank lines of
credit; PROVIDED, HOWEVER, that the aggregate principal amount of
Indebtedness incurred pursuant to clauses (i), (ii) and (xv) of this
definition of "Permitted Indebtedness" does not exceed the greater of
(x) $850 million (after giving PRO FORMA effect to the use of proceeds
of the Offering) less mandatory repayments actually made in respect of
any term Indebtedness under the New Credit Agreement (other than amounts
refinanced as permitted under clause (xviii) hereof) or (y) the
Borrowing Base Amount less mandatory repayments actually made in respect
of any term Indebtedness under the New Credit Agreement (other than
amounts refinanced as permitted under clause (xviii) hereof);
(iii) Indebtedness of the Company evidenced by the Fixed Rate Senior
Notes and the Senior Note Guarantees with respect thereto under the Fixed
Rate Senior Note Indenture;
(iv) Indebtedness of the Company evidenced by the Floating Rate
Senior Notes and the Senior Note Guarantees with respect thereto under
the Floating Rate Senior Note Indenture;
(v) Indebtedness of the Company evidenced by the Medium-Term Notes
under the Medium-Term Notes Indenture;
(vi) Indebtedness of the Company evidenced by the 9 1/2% Debentures
under the 9 1/2% Debentures Indenture;
(vii) Indebtedness of the Company evidenced by the Notes due
2004 and the Note Guarantees with respect thereto under the Notes due
2004 Indenture;
(viii) Indebtedness of the Company evidenced by the Notes and the
Note Guarantees with respect thereto under this Indenture;
(ix) Indebtedness of the Company or any Restricted Subsidiary
outstanding on the date of the Indenture and listed on Schedule A
attached hereto;
(x) obligations of the Company or any Restricted Subsidiary entered
into in the ordinary course of business (a) pursuant to Interest Rate
Agreements designed to protect against or manage exposure to fluctuations
in interest rates in respect of
<PAGE>
18
Indebtedness or retailer notes receivables, which, if related to
Indebtedness or such retailer notes receivables, do not exceed the
aggregate notional principal amount of such Indebtedness to which such
Interest Rate Agreements relate, or (b) under any Currency Agreements in
the ordinary course of business and designed to protect against or
manage exposure to fluctuations in foreign currency exchange rates
which, if related to Indebtedness, do not increase the amount of such
Indebtedness other than as a result of foreign exchange fluctuations;
(xi) Indebtedness of the Company owing to a Wholly Owned Restricted
Subsidiary or of any Restricted Subsidiary owing to the Company or any
Wholly Owned Restricted Subsidiary; PROVIDED that any disposition,
pledge or transfer of any such Indebtedness to a Person (other than the
Company or another Wholly Owned Restricted Subsidiary) shall be deemed
to be an incurrence of such Indebtedness by the Company or Restricted
Subsidiary, as the case may be, not permitted by this clause (xi);
(xii) Indebtedness in respect of letters of credit, surety
bonds and performance bonds provided in the ordinary course of business;
(xiii) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument
inadvertently drawn against insufficient funds in the ordinary course of
business; PROVIDED that such Indebtedness is extinguished within ten
business days of its incurrence;
(xiv) Indebtedness of the Company or any Restricted Subsidiary
consisting of guarantees, indemnities or obligations in respect of
purchase price adjustments in connection with the acquisition or
disposition of assets;
(xv) Indebtedness of the Company evidenced by commercial paper
issued by the Company; PROVIDED, HOWEVER, that the aggregate principal
amount of Indebtedness incurred pursuant to clauses (i), (ii) and (xv)
of this definition of "Permitted Indebtedness" does not exceed the
greater of (x) $850 million (after giving PRO FORMA effect to the use of
proceeds of the Offering) less mandatory repayments actually made in
respect of any term Indebtedness under the New Credit Agreement (other
than amounts refinanced as permitted under clause (xviii) hereof) or (y)
the Borrowing Base Amount less mandatory repayments actually made in
respect of any term Indebtedness under the New Credit Agreement (other
than amounts refinanced as permitted under clause (xviii) hereof);
(xvi) Indebtedness of the Company pursuant to guarantees by the
Company or any Subsidiary Guarantor in connection with any Permitted
Receivables Financing; PROVIDED, HOWEVER, that such Indebtedness shall
not exceed 20% of the book value of
<PAGE>
19
the Transferred Receivables or in the case of receivables arising from
direct financing leases, 30% of the book value thereof;
(xvii) Indebtedness of the Company and its Subsidiaries in
addition to that described in clauses (i) through (xvi) of this
definition of "Permitted Indebtedness," together with any other
outstanding Indebtedness incurred pursuant to this clause (xvii), not to
exceed $100 million at any time outstanding in the aggregate; and
(xviii) any renewals, extensions, substitutions, refunding,
refinancings or replacements (each, a "refinancing") of any Indebtedness
described in clauses (ii), (iii), (v), (vi), (vii), (viii), (ix) and
(xv) of this definition of "Permitted Indebtedness," including any
successive refinancings, so long as (A) the aggregate principal amount
of Indebtedness represented thereby is not increased by such refinancing
to an amount greater than such principal amount plus the lesser of (x)
the stated amount of any premium or other payment required to be paid in
connection with such a refinancing pursuant to the terms of the
Indebtedness being refinanced or (y) the amount of premium or other
payment actually paid at such time to refinance the Indebtedness, plus,
in either case, the amount of reasonable expenses of the Company or any
Subsidiary, as the case may be, incurred in connection with such
refinancing, (B) in the case of any refinancing of PARI PASSU
Indebtedness or Subordinated Indebtedness, such new Indebtedness is made
PARI PASSU with or subordinated to the Notes to the same extent as the
Indebtedness being refinanced and (C) such refinancing does not reduce
the Average Life to Stated Maturity or the Stated Maturity of such
Indebtedness; PROVIDED that with respect to the Medium-Term Notes, a
refinancing shall be deemed to include a repayment of any such
Medium-Term Notes and subsequent incurrence of Indebtedness so long as
(I) after giving effect to such repayment and subsequent incurrence of
new Indebtedness, the aggregate principal amount of Medium-Term Notes
and such new Indebtedness does not exceed the principal amount of
Medium-Term Notes outstanding on the date of the Indenture and (II)
clauses (A) through (C) of this subsection (xviii) are complied with.
"Permitted Investment" means (i) Investment in any Wholly Owned
Restricted Subsidiary or any Investment in any Person by the Company or any
Wholly Owned Restricted Subsidiary as a result of which such Person becomes a
Wholly Owned Restricted Subsidiary or any Investment in the Company by a
Wholly Owned Restricted Subsidiary; (ii) intercompany Indebtedness to the
extent permitted under clause (xi) of the definition of "Permitted
Indebtedness"; (iii) Temporary Cash Investments; (iv) sales of goods and
services on trade credit terms consistent with the Company's past practices
or otherwise consistent with trade credit terms in common use in the
industry; (v) Investments in direct financing leases for equipment and real
estate owned or leased by the Company and leased to its customers in the
ordinary course of business consistent with past practice; (vi) Investments
in Joint Ventures related to the Company's expansion of its retail
operations, not to exceed $50
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20
million at any one time outstanding; (vii) Investments in Investee Stores
either in the form of equity, loans or other extensions of credit; PROVIDED
that any such Investment may only be made if the amount thereof, when added
to the aggregate outstanding amount of Permitted Investments in Investee
Stores (excluding for purposes of this clause (vii) any Investments made
pursuant to clause (vi)) after giving effect to any loan repayments or
returns of capital in respect of any Permitted Investment in Investee Stores,
does not exceed 12.5% of Consolidated Total Assets at the time of
determination; (viii) Investments in a Qualified Finance Subsidiary in
connection with a Qualified TIPS Transaction; (ix) other Investments, in
addition to those permitted under (i) through (viii) above, in an aggregate
amount not to exceed $10 million and (x) any substitutions or replacements of
any Investment so long as the aggregate amount of such Investment is not
increased by such substitution or replacement.
"Permitted Junior Securities" means Equity Interests in the
Company or debt securities that are subordinated to all Senior Indebtedness
(and any debt securities issued in exchange for Senior Indebtedness) to
substantially the same extent as, or to a greater extent than, the Notes are
subordinated to Senior Indebtedness.
"Permitted Liens" means, with respect to any Person:
(a) any Lien existing as of the date of the Indenture;
(b) any Lien arising by reason of (1) any judgment, decree or
order of any court, so long as such Lien is adequately bonded and any
appropriate legal proceedings which may have been duly initiated for the
review of such judgment, decree or order shall not have been finally
terminated or the period within which such proceedings may be initiated
shall not have expired; (2) taxes, assessments, governmental charges or
levies not yet delinquent or which are being contested in good faith;
(3) security for payment of workers' compensation or other insurance;
(4) security for the performance of tenders, leases (including, without
limitation, statutory and common law landlord's liens) and contracts
(other than contracts for the payment of money); (5) zoning
restrictions, easements, licenses, reservations, title defects, rights
of others for rights of way, utilities, sewers, electric lines,
telephone or telegraph lines, and other similar purposes, provisions,
covenants, conditions, waivers and restrictions on the use of property
or minor irregularities of title (and, with respect to leasehold
interests, mortgages, obligations, liens and other encumbrances
incurred, created, assumed or permitted to exist and arising by, through
or under a landlord or owner of the leased property, with or without
consent of the lessee), none of which materially impairs the use of any
parcel of property material to the operation of the business of the
Company or any Restricted Subsidiary or the value of such property for
the purpose of such business; (6) deposits to secure public or statutory
obligations; (7) operation of law in favor of growers, dealers and
suppliers of fresh fruits and vegetables, carriers, mechanics,
materialmen, laborers, employees or
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21
suppliers, incurred in the ordinary course of business for sums which
are not yet delinquent or are being contested in good faith by
negotiations or by appropriate proceedings which suspend the collection
thereof; (8) the grant by the Company to licensees, pursuant to security
agreements, of security interests in trademarks and goodwill, patents
and trade secrets of the Company to secure the damages, if any, of such
licensees, resulting from the rejection of the license of such licensees
in a bankruptcy, reorganization or similar proceeding with respect to
the Company; or (9) security for surety or appeal bonds;
(c) any Lien on any property or assets of a Restricted Subsidiary
in favor of the Company or any Wholly Owned Restricted Subsidiary;
(d) any Lien securing Acquired Indebtedness created prior to (and
not created in connection with, or in contemplation of) the incurrence
of such Indebtedness by the Company or any Restricted Subsidiary;
PROVIDED that such Lien does not extend to any assets of the Company or
any Restricted Subsidiary other than the assets acquired in the
transaction resulting in such Acquired Indebtedness being incurred by
the Company or Restricted Subsidiary, as the case may be;
(e) any Lien to secure the performance of bids, trade contracts,
letters of credit and other obligations of a like nature and incurred in
the ordinary course of business of the Company or any Restricted
Subsidiary;
(f) any Lien securing any Interest Rate Agreements or Currency
Agreements permitted to be incurred pursuant to clause (x) of the
definition of "Permitted Indebtedness" or any collateral for the
Indebtedness to which such Interest Rate Agreements or Currency
Agreements relate;
(g) any Lien securing the Notes;
(h) any Lien on an asset securing Indebtedness (including Capital
Lease Obligations) incurred or assumed for the purpose of financing all
or any part of the cost of acquiring or constructing such asset;
PROVIDED that such Lien covers only such asset and attaches concurrently
or within 180 days after the acquisition or completion of construction
thereof;
(i) any Lien on real or personal property securing Capital Lease
Obligations of the Company or any Restricted Subsidiary as lessee with
respect to such real or personal property to the extent such
Indebtedness can be incurred pursuant to Section 1010 of this Indenture
other than as Permitted Indebtedness;
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22
(j) any Lien on a Financing Receivable or other receivable that is
transferred in a Permitted Receivables Financing;
(k) any Lien consisting of any pledge to any Person of
Indebtedness owed by any Restricted Subsidiary to the Company or to any
Wholly Owned Restricted Subsidiary; PROVIDED that (i) such Restricted
Subsidiary is a Subsidiary Guarantor and (ii) the principal amount
pledged does not exceed the Indebtedness secured by such pledge;
(l) any extension, renewal, refinancing or replacement, in whole
or in part, of any Lien described in the foregoing clause (a) so long as
no additional collateral is granted as security thereby.
"Permitted Receivables Financing" means any transaction involving
the transfer (by way of sale, pledge or otherwise) by the Company or any of
its Restricted Subsidiaries of receivables to any other Person, PROVIDED that
after giving effect to such transaction the sum of (i) the aggregate
uncollected balances of the receivables so transferred ("Transferred
Receivables") PLUS (ii) the aggregate amount of all collections on
Transferred Receivables theretofore received by the seller but not yet
remitted to the purchaser, in each case at the date of determination, would
not exceed $600 million.
"Person" means any individual, corporation, limited liability
Company, partnership, joint venture, association, joint-stock Company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
"Predecessor Note" of any particular Note means every previous Note
evidencing all or a portion of the same debt as that evidenced by such
particular Note; and, for the purposes of this definition, any Note
authenticated and delivered under Section 306 in exchange for a mutilated
security or in lieu of a lost, destroyed or stolen Note shall be deemed to
evidence the same debt as the mutilated, lost, destroyed or stolen Note.
"Preferred Stock" means, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated)
of such Person's preferred stock whether now outstanding or issued after the
date of this Indenture, including, without limitation, all classes and series
of preferred or preference stock of such Person.
"Prior Indentures" means the 9 1/2% Debentures Indenture, the
Medium-Term Notes Indenture, the Fixed Rate Senior Note Indenture and the
Floating Rate Senior Note Indenture.
"Public Equity Offering" means (i) with respect to the provisions
of the Indenture permitting redemption of up to 35% of the Notes at the
option of the Company
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23
within 180 days of a Public Equity Offering, a primary public offering of
equity securities of the Company, and (ii) with respect to the last sentence
of Section 1017, a primary or secondary public offering of equity securities
of any Restricted Subsidiary of the Company, in each case pursuant to an
effective registration statement under the Securities Act with net cash
proceeds of at least $50 million.
"Qualified Capital Stock" of any Person means any and all Capital
Stock of such Person other than Redeemable Capital Stock.
"Qualified Finance Subsidiary" means a Subsidiary of the Company
constituting a "finance subsidiary," within the meaning of Rule 3a-5 under
the Investment Company Act of 1940, as amended, formed for the purpose of
engaging in a Qualified TIPS Transaction.
"Qualified TIPS Transaction" means an issuance by a Qualified
Finance Subsidiary of preferred trust securities or similar securities in
respect of which any dividends, liquidation preference or other obligations
under such securities are guaranteed by the Company to the extent required by
the Investment Company Act of 1940, as amended, or customary transactions of
such type.
"Qualified Subordinated Indebtedness" means Subordinated
Indebtedness of the Company to a Qualified Finance Subsidiary incurred in
connection with a Qualified TIPS Transaction.
"Rating Agency" means any of (i) S&P, (ii) Moody's or (iii) if S&P
or Moody's or both shall not make a rating of the Notes publicly available, a
security rating agency or agencies, as the case may be, nationally recognized
in the United States, selected by the Company, which shall be substituted for
S&P or Moody's or both, as the case may be.
"Rating Category" means (i) with respect to S&P, any of the
following categories: AAA, AA, A, BBB, BB, B, CCC, CC, C and D (or
equivalent successor categories); (ii) with respect to Moody's, any of the
following categories: Aaa, Aa, A, Baa, Ba, B, Caa, Ca, C and D (or equivalent
successor categories); and (iii) the equivalent of any such category of S&P
or Moody's used by another Rating Agency. In determining whether the rating
of the Notes has decreased by one or more gradation, gradations within Rating
Categories (+ and - for S&P; 1, 2 and 3 for Moody's; or the equivalent
gradations for another Rating Agency) shall be taken into account (E.G., with
respect to S&P, a decline in rating from BB+ to BB, as well as from BB- to
B+, will constitute a decrease of one gradation).
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24
"Rating Decline" means the occurrence on, or within 90 days after, the
date of public notice of the occurrence of a Change of Control or of the
intention of the Company or Persons controlling the Company to effect a Change
of Control (which period shall be extended so long as the rating of the Notes is
under publicly announced consideration for possible downgrade by any of the
Rating Agencies) of the following: (i) if the Notes are rated by either Rating
Agency as Investment Grade immediately prior to the beginning of such period,
the rating of the Notes by both Rating Agencies shall be below Investment Grade;
or (ii) if the Notes are rated below Investment Grade by both Rating Agencies
immediately prior to the beginning of such period, the rating of the Notes by
either Rating Agency shall be decreased by one or more gradations (including
gradations within Rating Categories as well as between Rating Categories).
"Redeemable Capital Stock" means any Capital Stock that, either by its
terms or by the terms of any security into which it is convertible or
exchangeable or otherwise, is, or upon the happening of an event or passage of
time would be, required to be redeemed prior to any Stated Maturity of the
principal of the Notes or is redeemable at the option of the holder thereof at
any time prior to any such Stated Maturity, or is convertible into or
exchangeable for debt securities at any time prior to any such Stated Maturity
at the option of the holder thereof.
"Redemption Date", when used with respect to any Note to be redeemed,
in whole or in part, means the date fixed for such redemption by or pursuant to
this Indenture.
"Redemption Price", when used with respect to any Note to be redeemed,
means the price at which it is to be redeemed pursuant to this Indenture.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of the date of this Indenture, by and among the Company and
the other parties named on the signature pages thereof, as such agreement may be
amended, modified or supplemented from time to time.
"Regular Record Date" for the interest payable on any Interest Payment
Date means the January 15 or July 15 (whether or not a Business Day), as the
case may be, next preceding such Interest Payment Date.
"Regulation S" has the meaning set forth in Section 201 of this
Indenture.
"Regulation S Global Note" has the meaning set forth in Section 201 of
this Indenture.
"Responsible Officer", when used with respect to the Trustee, means
the chairman or any vice-chairman of the board of directors, the chairman or any
vice-chairman
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25
of the executive committee of the board of directors, the chairman of the
trust committee, the president, any vice president, the secretary, any
assistant secretary, the treasurer, any assistant treasurer, the cashier, any
assistant cashier, any trust officer or assistant trust officer, the
controller or any assistant controller or any other officer of the Trustee
customarily performing functions similar to those performed by any of the
above-designated officers, and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of his knowledge of and familiarity with the particular subject.
"Restricted Global Note" has the meaning set forth in Section 201 of
this Indenture.
"Restricted Subsidiary" means any Subsidiary of the Company that is
not (x) an Unrestricted Subsidiary or (y) a Qualified Finance Subsidiary.
"Rule 144A" has the meaning set forth in Section 201 of this
Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.
"Senior Indebtedness" of the Company or any Subsidiary Guarantor means
(i) all Indebtedness of the Company or such Subsidiary Guarantor under the New
Credit Agreement or any related loan documentation, including, without
limitation, obligations to pay principal and interest (including any interest
accruing subsequent to the filing of a petition of bankruptcy at the rate
provided for in the documentation with respect thereto, whether or not such
interest is an allowed claim under applicable law), premium, if any,
reimbursement obligations under letters of credit, fees, expenses and
indemnities, and all obligations under Interest Rate Agreements or Currency
Agreements with respect thereto, whether outstanding on the date of this
Indenture or thereafter incurred, (ii) the principal of, premium, if any, and
interest (including any interest accruing subsequent to the filing of a petition
of bankruptcy at the rate provided for in the documentation with respect
thereto, whether or not such interest is an allowed claim under applicable law)
on, and all other Obligations with respect to, any other Indebtedness of the
Company or such Subsidiary Guarantor permitted to be incurred by the Company or
such Subsidiary Guarantor under the terms of the Indenture, whether outstanding
on the date of this Indenture or thereafter incurred, unless the instrument
under which such Indebtedness is incurred expressly provides that it is on a
parity with or subordinated in right of payment to the Notes and (iii) all
Obligations of the Company or such Subsidiary Guarantor with respect to the
foregoing. Notwithstanding anything to the contrary in the foregoing, Senior
Indebtedness will not include (w) any liability for federal, state, local or
other taxes owed or owing by the
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26
Company or any Subsidiary Guarantor, (x) any Indebtedness of the Company or
any Subsidiary Guarantor to any of its Restricted Subsidiaries or other
Affiliates, (y) any trade payables or (z) any Indebtedness that is incurred
in violation of this Indenture.
"Senior Note Guarantees" means any guarantee by a Subsidiary Guarantor
as defined in the Fixed Rate Senior Note Indenture and the Floating Rate Senior
Note Indenture of the Company's obligations under such indentures.
"Significant Subsidiary" of the Company means any Subsidiary of the
Company that is a "significant subsidiary" as defined in Rule 1.02(w) of
Regulation S-X under the Securities Act.
"S&P" means Standard & Poor's Ratings Group, a division of McGraw Hill
Inc., a New York corporation, or any successor rating agency.
"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 Indebtedness or any
installment of interest thereon means the dates specified in such Indebtedness
as the fixed date on which the principal of or premiums on such Indebtedness or
such installment of interest is due and payable.
"Subordinated Indebtedness" means Indebtedness of the Company
subordinated in right of payment to the Notes.
"Subsidiary" means any Person a majority of the equity ownership or
the Voting Stock of which is at the time owned, directly or indirectly, by the
Company or by one or more other Restricted Subsidiaries, or by the Company and
one or more other Restricted Subsidiaries.
"Subsidiary Guarantor" means, in each case as applicable, each Wholly
Owned Restricted Subsidiary of the Company and each such subsidiary's Wholly
Owned Restricted Subsidiaries as of the date of the Indenture and any Wholly
Owned Restricted Subsidiary that is required pursuant to Section 1018, on or
after the date of this Indenture, to execute a Note Guarantee until a successor
replaces any such party pursuant to the applicable provisions of this Indenture
and, thereafter, shall mean such successor.
"Tangible Assets" means the total of all the assets appearing on the
Consolidated balance sheet of a majority-owned or Wholly Owned Restricted
Subsidiary of the Company less the following: (1) intangible assets including,
without limitation, items such as goodwill, trademarks, trade names, patents and
unamortized debt discount and
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27
expense; and (2) appropriate adjustments on account of minority interests of
other Persons holding stock in any such majority-owned Restricted Subsidiary
of the Company.
"Temporary Cash Investments" means (i) any evidence of Indebtedness
issued by the United States, or an instrumentality or agency thereof, and
guaranteed fully as to principal, premium, if any, and interest by the United
States; (ii) any certificate of deposit issued by, or time deposit of, a
financial institution that is a member of the Federal Reserve System having
combined capital and surplus and undivided profits of not less than $500
million, whose debt has a rating, at the time of which any investment therein is
made, of "A" (or higher) according to Moody's or "A" (or higher) according to
S&P; (iii) commercial paper issued by a corporation (other than an Affiliate or
Restricted Subsidiary of the Company) organized and existing under the laws of
the United States with a rating, at the time as of which any investment therein
is made, of "P-1" (or higher) according to Moody's or "A-1" (or higher)
according to S&P; (iv) any money market deposit accounts issued or offered by a
financial institution that is a member of the Federal Reserve System having
capital and surplus in excess of $500 million; (v) short term tax-exempt bonds
with a rating, at the time as of which any investment is made therein, of "Aa3"
(or higher) according to Moody's or "AA-" (or higher) according to S&P,
(vi) shares in a mutual fund, the investment objectives and policies of which
require it to invest substantially in the investments of the type described in
clause (i) through (v); and (vii) repurchase and reverse repurchase obligations
with the term of not more than seven days for underlying securities of the types
described in clauses (i) and (ii) entered into with any financial institution
meeting the qualifications specified in clause (ii); PROVIDED that in the case
of clauses (i), (ii), (iii) and (v), such investment matures within one year
from the date of acquisition thereof.
"Transferred Receivables" has the meaning specified in the definition
of "Permitted Receivables Financing" set forth herein.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939,
as amended.
"Trustee" means the Person named as the Trustee in the first paragraph
of this Indenture until a successor Trustee shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Trustee" shall mean
such successor Trustee.
"Unrestricted Subsidiary" means any Subsidiary that is designated by
the Board of Directors as an Unrestricted Subsidiary pursuant to a Board
Resolution, but only to the extent that such Subsidiary (i) has no Indebtedness
other than Non-Recourse Debt; (ii) is not party to any agreement, contract,
arrangement or understanding with the Company or any of its Restricted
Subsidiaries unless the terms of any such agreement, contract, arrangement or
understanding are no less favorable to the Company or such Restricted Subsidiary
than those that might be obtained at the time from Persons who are not
Affiliates of the Company;
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28
(iii) is a Person with respect to which neither the Company nor any of its
Restricted Subsidiaries has any direct or indirect obligation (a) to
subscribe for additional Equity Interests or (b) to maintain or preserve such
Person's financial condition or to cause such Person to achieve any specified
levels of operating results; (iv) has not guaranteed or otherwise directly or
indirectly provided credit support for any Indebtedness of the Company or any
of its Restricted Subsidiaries; (v) has at least one member of its board of
directors who is not a director or executive officer of the Company or any of
its Restricted Subsidiaries and has at least one executive officer who is not
a director or executive officer of the Company or any of its Restricted
Subsidiaries; and (vi) does not directly or through any of its Subsidiaries
own any Capital Stock of, or own or hold any Lien on any property of, the
Company or any of its Restricted Subsidiaries. Any such designation by the
Board of Directors shall be evidenced to the Trustee by filing with the
Trustee a certified copy of the Board Resolution giving effect to such
designation and an Officers' Certificate certifying that such designation
complied with the foregoing conditions and was permitted by Section 1011.
If, at any time, any Unrestricted Subsidiary would fail to meet the foregoing
requirements as an Unrestricted Subsidiary, it shall thereafter cease to be
an Unrestricted Subsidiary for purposes of the Indentures and any
Indebtedness of such Subsidiary shall be deemed to be incurred by a
Restricted Subsidiary of the Company as of such date (and, if such
Indebtedness is not permitted to be incurred as of such date under Section
1010 the Company shall be in default of such covenant). The Board of
Directors may at any time designate any Unrestricted Subsidiary to be a
Restricted Subsidiary, PROVIDED that such designation shall be deemed to be
an incurrence of Indebtedness by a Restricted Subsidiary of the Company of
any outstanding Indebtedness of such Unrestricted Subsidiary and such
designation shall only be permitted if (i) such Indebtedness is permitted
under Section 1010 and (ii) no Default or Event of Default would be in
existence following such designation.
"U.S. Government Obligations" means securities that are (i) direct
obligations of the United States for the timely payment of which its full faith
and credit is pledged or (ii) obligations of a Person controlled or supervised
by and acting as an agency or instrumentality of the United States, the timely
payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States, which, in either case, are not callable or
redeemable at the option of the issuer thereof, and shall also include a
depository receipt issued by a bank (as defined in Section 3(a)(2) of the
Securities Act) as custodian with respect to any such U.S. Government Obligation
or a specific payment of principal of or interest on any such U.S. Government
Obligation held by such custodian for the account of the holder of such
depository receipt; PROVIDED that (except as required by law) such custodian is
not authorized to make any deduction from the amount payable to the holder of
such depository receipt from any amount received by the custodian in respect of
the U.S. Government Obligation or the specific payment of principal of or
interest on the U.S. Government Obligation evidenced by such depository receipt.
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29
"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".
"Voting Stock" means stock of the class or classes having general
voting power under ordinary circumstances to elect at least a majority of the
board of directors, managers or trustees of a corporation (irrespective of
whether or not at the time stock of any other class or classes shall have or
might have voting power by reason of the happening of any contingency).
"Wholly Owned Restricted Subsidiary" means a Restricted Subsidiary all
the Capital Stock (other than directors' qualifying shares) of which is owned by
the Company or another Wholly Owned Restricted Subsidiary.
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 (including any covenant compliance with
which constitutes a condition precedent) relating to the proposed action have
been complied with and an Opinion of Counsel stating that in the opinion of 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 or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than pursuant to
Section 1008) shall include:
(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 of each 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
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30
(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 his certificate or opinion is based are
erroneous. In giving such opinion, such counsel may rely upon opinions of local
counsel reasonably satisfactory to the Trustee. 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, 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.
(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 agents 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 conclusive in favor of the Trustee and the Company, if made in the
manner provided in this Section 104.
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31
(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 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 principal amount and serial numbers of Notes held by any
Person, and the date of holding the same, shall be proved by the Security
Register.
(d) If the Company shall solicit from the Holders of Notes any
request, demand, authorization, direction, notice, consent, waiver or other Act,
the Company may, at its option, by or pursuant to Board Resolution, fix in
advance a record date for the determination of Holders entitled to give such
request, demand, authorization, direction, notice, consent, waiver or other Act,
but the Company shall have no obligation to do so. Notwithstanding TIA
Section 316(c), such record date shall be the record date specified in or
pursuant to such Board Resolution, which shall be a date not earlier than the
date 30 days prior to the first solicitation of Holders generally in connection
therewith and not later than the date such solicitation is completed. If such a
record date is fixed, such request, demand, authorization, direction, notice,
consent, waiver or other Act may be given before or after such record date, but
only the Holders of record at the close of business on such record date shall be
deemed to be Holders for the purposes of determining whether Holders of the
requisite proportion of Outstanding Notes have authorized or agreed or consented
to such request, demand, authorization, direction, notice, consent, waiver or
other Act, and for that purpose the Outstanding Notes shall be computed as of
such record date; PROVIDED that no such authorization, agreement or consent by
the Holders on such record date shall be deemed effective unless it shall become
effective pursuant to the provisions of this Indenture not later than 330 days
after the record date.
(e) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Note shall bind every future Holder of
the same Note and the Holder of every Note 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 Note.
<PAGE>
32
SECTION 105. NOTICES, ETC., TO TRUSTEE, COMPANY AND SUBSIDIARY
GUARANTORS.
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 made, given, furnished or filed in writing
to or with the Trustee at its Corporate Trust Office, to the attention of
its Corporate Trust Department.
(2) the Company or any Subsidiary Guarantor 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 addressed to it at the address of its principal
office specified in the first paragraph of this Indenture, 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 notice of any event to Holders by the
Company, any Subsidiary Guarantor or the Trustee, 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 its address as it appears in the Security Register, not later than the latest
date, and not earlier than the earliest date, 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. Any notice mailed to a Holder in the manner herein prescribed
shall be conclusively deemed to have been received by such Holder when so
mailed, whether or not such Holder actually receives such notice. 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 or irregularities in regular
mail service or by reason of any other cause, it shall be impracticable to mail
notice of any event to Holders when such notice is required to be given pursuant
to any provision of this Indenture, then any manner of giving such notice as
shall be satisfactory to the Trustee shall be deemed to be a sufficient giving
of such notice for every purpose hereunder.
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33
SECTION 107. 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 108. SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture by the Company and the
Subsidiary Guarantors shall bind their respective successors and assigns,
whether so expressed or not.
SECTION 109. SEPARABILITY CLAUSE.
In case any provision in this Indenture or in the Notes or the Note
Guarantees 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 110. BENEFITS OF INDENTURE.
Nothing in this Indenture, in the Notes or the Note Guarantees,
express or implied, shall give to any Person, other than the parties hereto, any
Paying Agent, any Security Registrar and their successors hereunder and the
Holders, any benefit or any legal or equitable right, remedy or claim under this
Indenture.
SECTION 111. GOVERNING LAW.
This Indenture, the Notes and the Note Guarantees shall be governed by
the law of the State of New York. Upon the issuance of the Exchange Notes, if
any, or the effectiveness of the Shelf Registration Statement, this Indenture
shall be subject to and governed by the provisions of the Trust Indenture Act of
1939, as amended.
SECTION 112. LEGAL HOLIDAYS.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity or Maturity of any Note shall not be a Business Day, then
(notwithstanding any other provision of this Indenture or of the Notes) payment
of interest or principal (and premium, if any) need not be made on such date,
but may be made on the next succeeding Business Day with the same force and
effect as if made on the Interest Payment Date, Redemption Date, or at the
Stated Maturity or Maturity; PROVIDED that no interest shall accrue for the
period from and after such Interest Payment Date, Redemption Date, Stated
Maturity or Maturity, as the case may be, and PROVIDED FURTHER that with respect
to any such payment due on January 31, such payment may be made on the preceding
Business Day.
<PAGE>
34
ARTICLE TWO
NOTE FORMS
SECTION 201. FORMS GENERALLY.
The Initial Notes shall be known as the "10 5/8% Senior Subordinated
Notes due 2007" and the Exchange Notes shall be known as the "10 5/8% Series B
Senior Subordinated Notes Due 2007", in each case of the Company. The Initial
Notes and the Exchange Notes shall be treated as a single class for all purposes
under this Indenture. The Notes 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
or as may, consistently herewith, be determined by the officers executing such
Notes, as evidenced by their execution of the Notes. Any portion of the text of
any Note may be set forth on the reverse thereof, with an appropriate reference
thereto on the face of the Note.
The definitive Notes shall be printed, lithographed or engraved on
steel-engraved borders or may be produced in any other manner, all as determined
by the officers of the Company executing such Notes, as evidenced by their
execution of such Notes; PROVIDED, HOWEVER, that if the Notes are listed on any
securities exchange such manner is permitted by the rules of such securities
exchange.
Initial Notes offered and sold to "QIBs" (Qualified Institutional
Buyers, as defined in Rule 144A under the Securities Act) in reliance on
Rule 144A under the Securities Act ("Rule 144A") may be issued in the form of
one or more permanent global Notes ("Global Notes") substantially in the form
set forth in Section 203 and 204 (each, a "Restricted Global Note") deposited
with the Trustee, as custodian for the Depositary or its nominee (in such
capacity, the "Custodian"), and registered in the name of the Depositary or its
nominee, duly executed by the Company and authenticated by the Trustee as
hereinafter provided. The aggregate principal amount of the Restricted Global
Note may from time to time be increased or decreased by adjustments made on the
records of the Trustee, as custodian for the Depositary or its nominee, as
hereinafter provided.
Initial Notes offered and sold in offshore transactions in reliance on
Regulation S under the Securities Act ("Regulation S") shall be issued in the
form of a single permanent Global Note substantially in the form set forth in
Sections 203 and 204 (the "Regulation S Global Note") deposited with the
Custodian, and registered in the name of the Depositary or its nominee for the
accounts of the Euroclear System ("Euroclear") and Cedel Bank, SOCIETE
<PAGE>
35
ANONYME ("Cedel"), duly executed by the Company and authenticated by the
Trustee as hereinafter provided. On or prior to the end of the "40-day
restricted period" within the meaning of Rule 903(c) of Regulation S,
beneficial interests in the Regulation S Global Note may only be held through
the Restricted Global Note. Any resale or transfer of beneficial interests in
the Regulation S Global Note shall be made only pursuant to Rule 144A or
Regulation S, after delivery to the Company by the transferor, if required by
the Company, of the opinions, certification or other information described in
Section 312. The aggregate principal amount at maturity of the Regulation S
Global Note may from time to time be increased or decreased by adjustments
made in the records of the Trustee, as custodian for the Depositary or its
nominee, as herein provided.
Initial Notes transferred subsequent to the consummation of the
Offering to Institutional Accredited Investors (as defined in Rule 501(a)(1),
(2), (3) and (7) under the Securities Act) which are not QIBs (excluding Non-
U.S. Persons, as defined in Rule 902 under the Securities Act) shall be in the
form of permanent certificated Notes in substantially the form set forth in
Sections 203 and 204 (the "Certificated Notes"); PROVIDED, HOWEVER, that upon
transfer of such Certificated Notes to a QIB or in accordance with Regulation S,
such Certificated Notes will, unless the relevant Global Note has previously
been exchanged, be exchanged for an interest in a Global Note pursuant to the
provisions of Section 312.
SECTION 202. RESTRICTIVE LEGENDS.
Unless and until (i) an Initial Note is sold pursuant to an effective
Shelf Registration Statement or (ii) an Initial Note is exchanged for an
Exchange Note in an Exchange Offer pursuant to an effective Exchange Offer
Registration Statement, in each case pursuant to the Registration Rights
Agreement, (A) each Restricted Global Note and Certificated Note shall bear the
following legend set forth below (the "Private Placement Legend") on the face
thereof and (B) the Regulation S Global Note shall bear the Private Placement
Legend on the face thereof until at least 41 days after the date hereof (the
"40-day restricted period"):
THE NOTE (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE NOTE
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE NOTE EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE
<PAGE>
36
HOLDER OF THE NOTE EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE ISSUER
THAT (A) SUCH NOTE MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY
(1)(a) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN
A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (c) OUTSIDE
THE UNITED STATES TO A PERSON THAT IS NOT A U.S. PERSON (AS DEFINED IN RULE
902 UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 904 UNDER THE SECURITIES ACT, OR (d) IN ACCORDANCE WITH ANOTHER
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (IN THE
CASE OF (b), (c) OR (d), UPON AN OPINION OF COUNSEL IF THE ISSUER OR
TRUSTEE, REGISTRAR OR TRANSFER AGENT FOR THE NOTES SO REQUESTS), (2) TO THE
ISSUER OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH
CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL,
AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF
THE NOTE EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A)
ABOVE.
Each Global Note, whether or not an Initial Note, shall also bear the
following legend on the face thereof:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC") TO THE ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
<PAGE>
37
SECTION 203. FORM OF FACE OF NOTE.
FLEMING COMPANIES, INC.
10 5/8% Senior Subordinated Note due 2007 CUSIP ________
No. __________ $________
Fleming Companies, Inc., an Oklahoma corporation (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 July 31, 2007, at the office or agency of the
Company referred to below, and to pay interest thereon from July 25, 1997, or
from the most recent Interest Payment Date to which interest has been paid or
duly provided for, semiannually on January 31 and July 31 of each year,
commencing January 30, 1998, at the rate of 10 5/8% per annum, until the
principal hereof is paid or duly provided for, and (to the extent lawful) to pay
on demand interest on any overdue interest at the rate borne by the Notes from
the date on which such overdue interest becomes payable to the date payment of
such interest has been made or duly provided for. The Company shall pay all
Liquidated Damages, if any, in the same manner on the dates and in the amounts
set forth in the Registration Rights Agreement. The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in such Indenture, be paid to the Person in whose name this Note (or
one or more Predecessor Notes) is registered at the close of business on the
Regular Record Date for such interest, which shall be the January 15 or July 15
(whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date. Any such interest not so punctually paid or duly
provided for shall forthwith cease to be payable to the Holder on such Regular
Record Date, and such Defaulted Interest, and (to the extent lawful) interest
on such Defaulted Interest at the rate borne by the Notes, may be paid to the
Person in whose name this Note (or one or more Predecessor Notes) is registered
at the close of business on a Special Record Date for the payment of such
Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to
Holders of Notes not less than 10 days prior to such Special Record Date, or may
be paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Notes may be listed, and
upon such notice as may be required by such exchange, all as more fully provided
in said Indenture. Payment of the principal of (and premium, if any, on),
interest on, and Liquidated Damages on, if any, this Note will be made at the
office or agency of the Company maintained for that purpose in The City of New
York (which initially will be the office of the Trustee maintained at 50
Broadway - 7th Floor, New York, New York 10004), or at such other office or
agency of the Company as may be maintained for such purpose, in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts; PROVIDED, HOWEVER, that payment
of interest may be made at the option of the
<PAGE>
38
Company by check mailed to the address of the Person entitled thereto as such
address shall appear on the Security Register. Notwithstanding the
foregoing, payment of interest in respect of Notes represented by Global
Notes shall be made in accordance with procedures required by the Depositary.
Reference is hereby made to the further provisions of this Note 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 duly executed
by the Trustee referred to on the reverse hereof by manual signature, this Note
shall not be entitled to any benefit under the Indenture, or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: FLEMING COMPANIES, INC.
By
----------------------------------
Attest:
- --------------------------------
Secretary
SECTION 204. FORM OF REVERSE OF NOTE.
This Note is one of a duly authorized issue of securities of the
Company designated as its 10 5/8% Senior Subordinated Notes due 2007 (herein
called the "Notes"), limited (except as otherwise provided in the Indenture
referred to below) in aggregate principal amount to $250,000,000, which may
be issued under an indenture (herein called the "Indenture") dated as of July
25, 1997, among the Company, the Subsidiary Guarantors named therein and
Manufacturers and Traders Trust Company, 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, obligations
and immunities thereunder of the Company, the Subsidiary Guarantors, the Trustee
and the Holders of the Notes and the Note Guarantees, and of the terms upon
which the Notes and the Note Guarantees are, and are to be, authenticated and
delivered.
<PAGE>
39
The Notes are subject to redemption at the option of the Company, upon
not less than 30 nor more than 60 days' notice at any time on or after July 31,
2002, as a whole or in part, at the election of the Company, at a Redemption
Price equal to the percentage of the principal amount of the Notes set forth
below, plus accrued and unpaid interest and Liquidated Damages, if any, thereon,
to the applicable Redemption Date, if redeemed during the 12-month period
beginning on July 31 of the years indicated below (subject to the right of
Holders of record on relevant Record Dates to receive interest due on an
Interest Payment Date):
Year Redemption Price
---- ----------------
2002.................. 105.313%
2003.................. 103.542%
2004.................. 101.771%
2005 and thereafter... 100.000%
In addition, up to 35% of the initial aggregate principal amount of
the Notes may be redeemed on or prior to July 31, 2000, at the option of the
Company, within 180 days of a Public Equity Offering with the net proceeds of
such offering at a redemption price equal to 110 5/8% of the principal amount
thereof, together with accrued and unpaid interest, if any, and Liquidated
Damages, if any, to the date of redemption (subject to the right of Holders of
record on relevant Record Dates to receive interest due on relevant Interest
Payment Dates); PROVIDED that after giving effect to such redemption at least
$162.5 million aggregate principal amount of the Notes remains outstanding.
Upon the occurrence of a Change of Control Triggering Event, the
Holder of this Note may require the Company, subject to certain limitations
provided in the Indenture and to the extent not inconsistent with the Company's
Bylaws as in effect on the date of the Indenture, to repurchase this Note at a
purchase price in cash in an amount equal to 101% of the principal amount
thereof plus accrued and unpaid interest, if any, and Liquidated Damages, if
any, to the date of purchase.
In the case of any redemption of Notes, interest installments whose
Stated Maturity is on or prior to the Redemption Date will be payable to the
Holders of such Notes, or one or more Predecessor Notes, of record at the close
of business on the relevant Record Date referred to on the face hereof. Notes
(or portions thereof) for whose redemption and payment provision is made in
accordance with the Indenture shall cease to bear interest from and after the
Redemption Date.
In the event of redemption of this Note in part only, a new Note or
Notes for the unredeemed portion hereof shall be issued in the name of the
Holder hereof upon the cancellation hereof.
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40
If an Event of Default shall occur and be continuing, the principal of
all the Notes may be declared due and payable in the manner and with the effect
provided in the Indenture.
The Indenture contains provisions for defeasance at any time of
(a) the entire indebtedness of the Company and any Subsidiary Guarantor on this
Note and (b) certain restrictive covenants and the related Defaults and Events
of Default, upon compliance by the Company and the Subsidiary Guarantors with
certain conditions set forth therein, which provisions apply to this Note.
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 Subsidiary Guarantors and the rights of the Holders under the
Indenture at any time by the Company, the Subsidiary Guarantors and the Trustee
with the consent of the Holders of a majority in aggregate principal amount of
the Notes at the time Outstanding. The Indenture also contains provisions
permitting the Holders of specified percentages in aggregate principal amount of
the Notes at the time Outstanding, on behalf of the Holders of all the Notes, to
waive compliance by the Company and the Subsidiary Guarantors with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by or on behalf of the Holder of
this Note shall be conclusive and binding upon such Holder and upon all future
Holders of this Note and of any Note 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 Note.
No reference herein to the Indenture and no provision of this Note 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, on)
and interest on this Note at the times, place, and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Note is registerable on the Security
Register of the Company, upon surrender of this Note for registration of
transfer at the office or agency of the Company, maintained for such purpose,
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 Notes, of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or transferees.
The Notes are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, the Notes are
exchangeable for a like aggregate
<PAGE>
41
principal amount of Notes of a different authorized denomination, as requested
by the Holder surrendering the same.
No service charge shall be made for any registration of transfer or
exchange of Notes, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Prior to the time of due presentment of this Note for registration of
transfer, the Company, the Subsidiary Guarantors, the Trustee and any agent of
the Company, the Subsidiary Guarantors or the Trustee may treat the Person in
whose name this Note is registered as the owner hereof for all purposes, whether
or not this Note be overdue, and neither the Company, the Subsidiary Guarantors,
the Trustee nor any such agent shall be affected by notice to the contrary.
Interest on this Note shall be computed on the basis of a 360-day year
of twelve 30-day months.
In addition to the rights provided to Holders of Notes under the
Indenture, Holders shall have all the rights set forth in the Registration
Rights Agreement dated as of July 25, 1997 among the Company, the Subsidiary
Guarantors and the other parties named on the signature pages thereof.
All terms used in this Note which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
FORM OF ASSIGNMENT
FOR VALUE RECEIVED _____________________________________________hereby
sell(s), assign(s) and transfer(s) unto ________________________________ (please
insert name and social security or other identifying number of assignee) the
within Note and hereby irrevocably constitutes and appoints ___________________
as agent to transfer the said Note on the books of the Company with the full
power of substitution in the premises.
Dated:
- ----------------------------------
Signature(s)
Signature must be guaranteed by
<PAGE>
42
a bank or trust company
or a member firm of a major stock
exchange
- ----------------------------------
Signature Guarantee
NOTICE: The signature on the assignment
must correspond with the name as
written upon the face of the Note in every
particular without alteration or enlargement or any
change whatever.
SECTION 205. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
The Trustee's certificate of authentication shall be in substantially
the following form:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
This is one of the Notes referred to in the within-mentioned
Indenture.
MANUFACTURERS AND TRADERS TRUST COMPANY
as Trustee
By
-------------------------------------------
Authorized Signatory
ARTICLE THREE
THE NOTES
SECTION 301. TITLE AND TERMS.
The aggregate principal amount of Notes which may be authenticated and
delivered under this Indenture is limited to $250,000,000, except for Notes
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of, other Notes pursuant to Section 303, 304, 305, 306, 801,
906, 1009, 1016 or 1108.
<PAGE>
43
The Initial Notes shall be known and designated as the "10 5/8%
Senior Subordinated Notes due 2007" and the Exchange Notes shall be known as
the "10 5/8% Series B Senior Subordinated Notes due 2007", in each case, of
the Company. Their Stated Maturity shall be July 31, 2007, and they shall
bear interest at the rate of 10 5/8% per annum from July 25, 1997, or from
the most recent Interest Payment Date to which interest has been paid or duly
provided for, payable semi-annually on January 31 and July 31 of each year,
commencing January 30, 1998 and at said Stated Maturity, until the principal
thereof is paid or duly provided for.
The principal of (and premium, if any, on), interest and Liquidated
Damages, if any, on the Notes shall be payable at the office or agency of the
Company maintained for such purpose in The City of New York, or at such other
office or agency of the Company as may be maintained for such purpose; PROVIDED,
HOWEVER, that, at the option of the Company, interest may be paid by mailing a
check for such interest, payable to or upon the written order of the Person
entitled thereto pursuant to Section 308, to the address of such Person as it
appears in the Security Register. Notwithstanding the foregoing, payment of the
principal of (and premium, if any, on), interest and Liquidated Damages, if any,
on Notes represented by Global Notes shall be made in accordance with procedures
required by the Depositary.
The Notes shall be redeemable as provided in Article Eleven.
SECTION 302. DENOMINATIONS.
The Notes 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 Notes shall be executed on behalf of the Company by its Chairman,
any Vice Chairman, its President or a Vice President, under its corporate seal
reproduced thereon and attested by its Secretary or an Assistant Secretary. The
signature of any of these officers on the Notes may be manual or facsimile
signatures of the present or any future such authorized officer and may be
imprinted or otherwise reproduced on the Notes.
Notes 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 Notes or did not hold
such offices at the date of such Notes.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Notes executed by the Company to the
Trustee for authentication, together with a Company Order for the authentication
and delivery of such
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44
Notes, and the Trustee in accordance with such Company Order shall authenticate
and deliver such Notes.
Each Note shall be dated the date of its authentication.
No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Note a
certificate of authentication substantially in the form provided for herein duly
executed by the Trustee by manual signature of a Responsible Officer, and such
certificate upon any Note shall be conclusive evidence, and the only evidence,
that such Note has been duly authenticated and delivered hereunder and is
entitled to the benefits of this Indenture.
In case the Company, pursuant to Article Eight, shall be consolidated
or merged with or into any other Person or shall convey, transfer, lease or
otherwise dispose of its properties and assets substantially as an entirety to
any Person, and the successor Person resulting from such consolidation, or
surviving such merger, or into which the Company shall have been merged, or the
Person which shall have received a conveyance, transfer, lease or other
disposition as aforesaid, shall have executed an indenture supplemental hereto
with the Trustee pursuant to Article Eight, any of the Notes authenticated or
delivered prior to such consolidation, merger, conveyance, transfer, lease or
other disposition may, from time to time, at the request of the successor
Person, be exchanged for other Notes executed in the name of the successor
Person with such changes in phraseology and form as may be appropriate, but
otherwise in substance of like tenor as the Notes surrendered for such exchange
and of like principal amount; and the Trustee, upon Company Request of the
successor Person, shall authenticate and deliver Notes as specified in such
request for the purpose of such exchange. If Notes shall at any time be
authenticated and delivered in any new name of a successor Person pursuant to
this Section in exchange or substitution for or upon registration of transfer of
any Notes, such successor Person, at the option of the Holders but without
expense to them, shall provide for the exchange of all Notes at the time
Outstanding for Notes authenticated and delivered in such new name.
SECTION 304. TEMPORARY NOTES.
Pending the preparation of definitive Notes, the Company may execute
and upon Company Order the Trustee shall authenticate and deliver, temporary
Notes which are printed, lithographed, typewritten or otherwise produced, in any
authorized denomination, substantially of the tenor of the definitive Notes in
lieu of which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Notes may
determine, as conclusively evidenced by their execution of such Notes.
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45
If temporary Notes are issued, the Company shall cause definitive
Notes to be prepared without unreasonable delay. After the preparation of
definitive Notes, the temporary Notes shall be exchangeable for definitive Notes
upon surrender of the temporary Notes at the office or agency of the Company
designated for such purpose pursuant to Section 1002, without charge to the
Holder. Upon surrender for cancellation of any one or more temporary Notes, the
Company shall execute and upon Company Order the Trustee shall authenticate and
deliver in exchange therefor a like principal amount of definitive Notes of
authorized denominations. Until so exchanged, the temporary Notes shall in all
respects be entitled to the same benefits under this Indenture as definitive
Notes.
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
referred to as the "Security Register") in which, subject to such reasonable
regulations as it may prescribe, the Company shall provide for the registration
of Notes and of transfers of Notes. The Security Register shall be in written
form or any other form capable of being converted into written form within a
reasonable time. At all reasonable times, the Security Register shall be open
to inspection by the Trustee. The Trustee is hereby initially appointed as
security registrar (the "Security Registrar") for the purpose of registering
Notes and transfers of Notes as herein provided.
Upon surrender for registration of transfer of any Note at the office
or agency of the Company designated pursuant to Section 1002, the Company shall
execute and the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Notes of any authorized
denomination or denominations of a like aggregate principal amount.
Furthermore, any Holder of the Restricted Global Note shall, by
acceptance of such Global Note, agree that transfers of beneficial interests in
such Global Note may be effected only through a book-entry system maintained by
the Holder of such Global Note (or its agent), and that ownership of a
beneficial interest in the Note shall be required to be reflected in a book
entry.
All Notes issued upon any registration of transfer or exchange of
Notes shall be the valid obligations of the Company and, pursuant to the Note
Guarantees, the Subsidiary Guarantors, evidencing the same debt, and entitled to
the same benefits under this Indenture, as the Notes surrendered upon such
registration of transfer or exchange.
Every Note presented or surrendered for registration of transfer or
for exchange shall be duly endorsed, or be accompanied by a written instrument
of transfer, in
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46
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 or redemption of Notes, 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 Notes, other than
exchanges pursuant to Section 303, 304, 801, 906, 1009 or 1108 not involving any
transfer.
The Company shall not be required (i) to issue, register the transfer
of or exchange any Note during a period beginning at the opening of business 15
days before the selection of Notes to be redeemed under Section 1104 and ending
at the close of business on the day of such mailing of the relevant notice of
redemption, or (ii) to register the transfer of or exchange any Note so selected
for redemption in whole or in part, except the unredeemed portion of any Note
being redeemed in part.
SECTION 306. MUTILATED, DESTROYED, LOST AND STOLEN NOTES.
If (i) any mutilated Note is surrendered to the Trustee, or (ii) the
Company and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Note, and there is delivered to the Company
and the Trustee such security or indemnity as may be required by them to save
each of them harmless, then, in the absence of actual notice to the Company or
the Trustee that such Note has been acquired by a bona fide purchaser, the
Company shall execute and the Trustee shall authenticate and deliver, in
exchange for any such mutilated Note or in lieu of any such destroyed, lost or
stolen Note, a new Note of like tenor and principal amount, bearing a number not
contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Note has become
or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Note, pay such Note.
Upon the issuance of any new Note 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 Note issued pursuant to this Section in lieu of any
destroyed, lost or stolen Note shall constitute an original additional
contractual obligation of the Company and, pursuant to the Note Guarantees, the
Subsidiary Guarantors, whether or not the destroyed, lost or stolen Note shall
be at any time enforceable by anyone, and shall be entitled to all benefits of
this Indenture equally and proportionately with any and all other Notes duly
issued hereunder.
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47
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 Notes.
SECTION 307. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.
Interest on any Note 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 such Note (or one or more Predecessor Notes) is registered at the close of
business on the Regular Record Date for such interest at the office or agency of
the Company maintained for such purpose pursuant to Section 1002; PROVIDED,
HOWEVER, that each installment of interest may at the Company's option be paid
by mailing a check for such interest, payable to or upon the written order of
the Person entitled thereto pursuant to Section 308, to the address of such
Person as it appears in the Security Register. Notwithstanding the foregoing,
payment of (and premium, if any, on), interest and Liquidated Damages, if any,
on Notes represented by Global Notes shall be made in accordance with procedures
required by the Depositary.
Any interest on any Note which is payable, but is not punctually paid
or duly provided for, on any Interest Payment Date shall forthwith cease to be
payable to the Holder on the Regular Record Date by virtue of having been such
Holder, and such defaulted interest and (to the extent lawful) interest on such
defaulted interest at the rate borne by the Notes (such defaulted interest and
interest thereon herein collectively called "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 Notes (or their respective Predecessor
Notes) 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 Note 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
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48
Record Date therefor to be given in the manner provided for in Section 106,
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 given, such Defaulted Interest shall be paid to the
Persons in whose names the Notes (or their respective Predecessor Notes)
are registered at the close of business on such Special Record Date.
(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 Notes may be listed, and upon such notice
as may be required by such exchange, if, after notice given by the Company
to the Trustee of the proposed payment pursuant to this clause, such manner
of payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Note
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Note shall carry the rights to interest accrued and
unpaid, and to accrue, which were carried by such other Note.
SECTION 308. PERSONS DEEMED OWNERS.
Prior to the due presentment of a Note for registration of transfer,
the Company, the Subsidiary Guarantors, the Trustee and any agent of the
Company, the Subsidiary Guarantors or the Trustee may treat the Person in whose
name such Note is registered as the owner of such Note for the purpose of
receiving payment of principal of (and premium, if any, on) and (subject to
Sections 305 and 307) interest on such Note and for all other purposes
whatsoever, whether or not such Note be overdue, and none of the Company, any
Subsidiary Guarantor, the Trustee or any agent of the Company, any Subsidiary
Guarantor or the Trustee shall be affected by notice to the contrary.
SECTION 309. CANCELLATION.
All Notes surrendered for payment, redemption, registration of
transfer or exchange 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 Notes previously
authenticated and delivered hereunder which the Company may have acquired in any
manner whatsoever, and may deliver to the Trustee (or to any other Person for
delivery to the Trustee) for cancellation any Notes previously authenticated
hereunder which the Company has not issued and sold, and all Notes so delivered
shall be promptly cancelled by the Trustee. If the Company shall so acquire any
of the Notes, however, such acquisition shall not operate as a redemption or
satisfaction of the indebtedness represented by such Notes unless and until the
same are surrendered to the
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49
Trustee for cancellation. No Notes shall be authenticated in lieu of or in
exchange for any Notes cancelled as provided in this Section, except as
expressly permitted by this Indenture. All cancelled Notes held by the
Trustee shall be disposed of by the Trustee in accordance with its customary
procedures and certification of their disposal delivered to the Company
unless by Company Order the Company shall direct that cancelled Notes be
returned to it.
SECTION 310. COMPUTATION OF INTEREST.
Interest on the Notes shall be computed on the basis of a 360-day year
of twelve 30-day months.
SECTION 311. BOOK-ENTRY PROVISIONS FOR GLOBAL NOTES.
(a) The Company shall execute and the Trustee shall, in accordance
with this Section 311, authenticate and deliver initially one or more Global
Notes that (a) shall be registered in the name of the Depositary for such Global
Note or Global Notes or the nominee of such Depositary, (b) shall be delivered
by the Trustee to such Depositary or pursuant to such Depositary's instructions
or held by the Custodian and (c) bear legends as set forth in Section 202.
Members of, or participants in the Depositary ("AGENT MEMBERS") shall
have no rights under this Indenture with respect to any Global Note held on
their behalf by the Depositary or by the Custodian or under such Global Note,
and the Depositary may be treated by the Company, the Trustee and any agent of
the Company or the Trustee as the absolute owner of such Global Note for all
purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent
the Company, the Trustee or any agent of the Company or the Trustee from giving
effect to any written certification, proxy or other authorization furnished by
the Depositary or impair, as between the Depositary and its Agent Members, the
operation of customary practices of such Depositary governing the exercise of
the rights of a holder of a beneficial interest in any Global Note.
(b) Interests of beneficial owners in a Global Note may be
transferred in accordance with the applicable rules and procedures of the
Depositary and the provisions of Section 312. Transfers of a Global Note shall
be limited to transfers of such Global Note in whole, but not in part, to the
Depositary, its successors or their respective nominees except that Certificated
Notes shall be transferred to all beneficial owners in exchange for their
beneficial interests in the Global Note in the following circumstances: (x) the
Depositary notifies the Company that it is unwilling or unable to continue as
Depositary for the applicable Global Note or the Depositary ceases to be a
"Clearing Agency" registered under the Exchange Act and a successor depositary
is not appointed by the Company within 90 days or (y) the Company, at its sole
discretion, notifies the Trustee in writing that it elects to cause the issuance
of Certificated Notes under this Indenture in exchange for all or
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50
any part of the Notes represented by a Global Note or Global Notes. In
connection with a transfer of an entire Global Note to beneficial owners
pursuant to this paragraph, the applicable Global Note shall be deemed to be
surrendered to the Trustee for cancellation, and the Company shall execute,
and the Trustee shall authenticate and deliver, to each beneficial owner
identified by the Depositary in exchange for its beneficial interest in the
applicable Global Note, an equal aggregate principal amount at maturity of
Certificated Notes of authorized denominations.
(c) Any beneficial interest in a Global Note that is transferred to a
person who takes delivery in the form of an interest in another Global Note
will, upon transfer, cease to be an interest in such Global Note and become an
interest in the other Global Note and, accordingly, will thereafter be subject
to all transfer restrictions, if any, and other procedures applicable to
beneficial interests in such other Global Note for as long as it remains such an
interest.
(d) Any Certificated Note delivered in exchange for an interest in
the Restricted Global or Regulation S Global Note pursuant to paragraph (b) of
this Section shall bear the Private Placement Legend if required by Section 202.
SECTION 312. TRANSFER AND EXCHANGE.
(a) TRANSFER AND EXCHANGE OF CERTIFICATED NOTES. If Certificated
Notes are presented by a Holder to the Registrar with a request:
(x) to register the transfer of the Certificated Notes; or
(y) to exchange such Certificated Notes for an equal principal amount
of Certificated Notes of other authorized denominations,
the Registrar shall register the transfer or make the exchange as requested if
its requirements for such transactions are met; PROVIDED, HOWEVER, that the
Certificated Notes presented or surrendered for register of transfer or
exchange:
(i) shall be duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by
such Holder or by such Holder's attorney, duly authorized in
writing; and
(ii) are being delivered to the Registrar by a Holder for registration
in the name of such Holder, without transfer or are being
transferred or exchanged pursuant to an effective registration
statement under the Securities Act, pursuant to Section 312(b) or
pursuant to clause (A) or
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51
(B) below, and are accompanied by the following additional
information and documents, as applicable:
(A) if such Certificated Notes are being transferred to the
Company, a certification to that effect from such Holder (in
substantially the form of Exhibit A hereto); or
(B) if such Certificated Notes are being transferred (x)
pursuant to an exemption from registration in accordance
with Rule 144, (y) in reliance on another exemption from the
registration requirements of the Securities Act, or (z) to
an Institutional Accredited Investor that is acquiring the
Note for its own account or for the account of one or more
other Institutional Accredited Investors, in each case for
investment purposes and not with a view to, or for offer or
sale in connection with, any distribution in violation of
the Securities Act: (i) a certification to that effect (in
substantially the form of Exhibit A hereto) and such other
certifications as the Trustee may reasonably request,
(ii) if applicable, a letter with respect to the transfer
(in substantially the form of Exhibit C hereto) and (iii) in
each case, an Opinion of Counsel if requested by the Company
or the Trustee, Registrar or Transfer Agent as to the
compliance with the restrictions set forth in the Private
Placement Legend.
(b) RESTRICTIONS ON TRANSFER OF A CERTIFICATED NOTE FOR A BENEFICIAL
INTEREST IN A GLOBAL NOTE. A Certificated Note may not be exchanged for a
beneficial interest in a Global Note except upon satisfaction of the
requirements set forth below. Upon receipt by the Trustee of a Certificated
Note, duly endorsed or accompanied by appropriate instruments of transfer, in
form satisfactory to the Trustee, together with:
(i) certification from the Holder thereof (in substantially the form
of Exhibit A hereto) that such Certificated Note is being
transferred to (A) a QIB in accordance with Rule 144A or
(B) outside the United States in an offshore transaction within
the meaning of Regulation S and in compliance with Rule 904 under
the Securities Act and, in the case of clause A, certification
from the purchaser thereof in substantially the form of Exhibit A
hereto; and
(ii) written instructions from the Holder thereof directing the
Trustee to make, or to direct the Custodian to make, an
adjustment on its books and records with respect to the
Regulation S Global Note or the Restricted Global Note, as the
case may be, to reflect an increase in the
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52
aggregate principal amount of the Notes represented by such
Global Note, such instructions to contain information regarding
the Depositary account (or in the case of the Regulation S Global
Note only, the Euroclear or Cedel account) to be credited with
such increase;
then the Trustee shall cancel such Certificated Note and cause, or direct the
Custodian to cause, in accordance with the standing instructions and procedures
existing between the Depositary and the Custodian (including the rules of
Euroclear and Cedel, if applicable), the aggregate principal amount of Notes
represented by the Regulation S Global Note or the Restricted Global Note, as
the case may be, to be increased by the aggregate principal amount of the
Certificated Note to be exchanged and shall credit or cause to be credited to
the account of the Person specified in such instructions a beneficial interest
in such Global Note equal to the principal amount of the Certificated Note so
cancelled. If no applicable Global Notes are then outstanding, the Company shall
issue and the Trustee shall authenticate, upon written order of the Company in
the form of an Officers' Certificate, a new Regulation S Global Note or
Restricted Global Note, as the case may be, in the appropriate principal amount.
(c) TRANSFER AND EXCHANGE OF GLOBAL NOTES. (i) The transfer and
exchange of Global Notes or beneficial interests in Global Notes will be
effected through the Depositary, in accordance with this Indenture (including
applicable restrictions on transfer set forth herein, if any) and the procedures
of the Depositary therefor, including the rules and procedures of Euroclear and
Cedel, if applicable. A transferor of a beneficial interest in a Global Note to
another Global Note shall deliver to the Registrar:
(A) if applicable, instructions given in accordance with the
Depositary's procedures directing the Trustee to credit or cause
to be credited a beneficial interest in the applicable Global
Note in an amount equal to the beneficial interest in the Global
Note to be exchanged; and
(B) a written order given in accordance with the Depositary's
procedures containing information regarding the Euroclear, Cedel
or other participant account of the Depositary to be credited
with such increase.
The Registrar shall, in accordance with such instructions, instruct
the Depositary to increase and reduce, as applicable, the principal amount of
each applicable Global Note to the extent required and to credit to the account
of the Person specified in such instructions a beneficial interest in the
applicable Global Note and to debit the account of the Person making the
transfer the beneficial interest in the Global Note being transferred.
(ii) Notwithstanding any other provisions of this Indenture, prior to
the expiration of the "40-day restricted period", transfers of interests in the
Regulation S Global
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53
Note to "U.S. persons" (as defined in Regulation S) shall be limited to
transfers to QIBs pursuant to Rule 144A which Persons shall thereby acquire a
beneficial interest in the Restricted Global Note and in connection therewith
the transferors shall provide a certification (in substantially the form of
Exhibit A hereto) confirming the character of the transferee in connection
with any transfers prior to the expiration of such period. The Company shall
advise the Trustee as to the expiration of the "40-day restricted period" and
the Trustee may rely conclusively thereon.
(iii) in the event that a Global Note is exchanged for Notes in
definitive registered form pursuant to Section 311 prior to the consummation
of an Exchange Offer or the effectiveness of a Shelf Registration Statement
with respect to such Notes, such Notes may be exchanged only in accordance
with procedures as are substantially consistent with the provisions of this
Section 312 (including the certification requirements set forth on Exhibit A
intended to ensure that such transfers comply with Rule 144A or Regulation S,
as the case may be) and such other procedures as may from time to time be
adopted by the Company.
(d) TRANSFER OF A BENEFICIAL INTEREST IN A GLOBAL NOTE FOR A
CERTIFICATED NOTE. (i) Subject to Section 312(c)(iii), any person having a
beneficial interest in a Global Note may transfer such beneficial interest to an
Institutional Accredited Investor that is acquiring the Note for its own account
or for the account of one or more other Institutional Accredited Investors, in
each case for investment purposes and not with a view to, or for offer or sale
in connection with, any distribution in violation of the Securities Act;
PROVIDED, HOWEVER, that any written order or such other form of instructions as
is customary for the Depositary, from the Depositary or its nominee on behalf of
any Person having a beneficial interest in such Global Note shall be accompanied
by (i) a certification from the transferee or transferor with respect to the
transfer (in substantially the form of Exhibit A) and such other certifications
as the Trustee may reasonably request, (ii) if applicable, a letter with respect
to the transfer (in substantially the form of Exhibit C hereto) and (iii) an
Opinion of Counsel if requested by the Company or the Trustee, Registrar or
Transfer Agent as to the compliance with the Private Placement Legend.
Upon receipt by the Trustee of such information and documents, the Trustee
or the Custodian, at the direction of the Trustee, shall cause, in accordance
with the standing instructions and procedures existing between the Depositary
and the Custodian, including the rules and procedures of Euroclear or Cedel, if
applicable, the aggregate principal amount of the Global Note to be reduced on
its books and records and, following such reduction, the Company shall execute
and the Trustee shall authenticate and deliver to the transferee a Certificated
Note.
(ii) Certificated Notes issued in exchange for a beneficial interest in a
Global Note pursuant to this Section 312(d) shall be registered in such names
and in such authorized denominations as Euroclear or Cedel, if applicable, and
the Depositary, pursuant to
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54
instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee. The Trustee shall deliver such Certificated Notes to
the persons in whose names such Notes are so registered in accordance with
the instructions of the Depositary.
(e) CERTAIN TRANSFERS IN CONNECTION WITH AND AFTER THE EXCHANGE
OFFER. Notwithstanding any other provision of this Indenture: (i) no Exchange
Note may be exchanged by the Holder thereof for an Initial Note; (ii) accrued
and unpaid interest on the Initial Notes being exchanged in the Exchange Offer
will be due and payable on the next Interest Payment Date for the Exchange Notes
following the Exchange Offer; and (iii) interest on the Exchange Notes to be
issued in the Exchange Offer will accrue from the date of the Exchange Offer.
SECTION 313. CUSIP NUMBERS.
The Company may use "CUSIP" numbers in issuing the Notes (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption as a convenience to Holders; PROVIDED, HOWEVER, that any such
notice may state that no representation is made as to the correctness of such
"CUSIP" numbers either as printed on the Notes or as contained in any notice of
a redemption and that reliance may be placed only on the other identification
numbers printed on the Notes, and any such redemption shall not be affected by
any defect in or omission of such "CUSIP" numbers.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. SATISFACTION AND DISCHARGE OF INDENTURE.
This Indenture shall upon Company Request cease to be of further
effect (except as to surviving rights of registration of transfer or exchange of
Notes issued under this Indenture) and the Trustee, at the expense of the
Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture when
(1) either
(A) all Notes theretofore authenticated and delivered (except
(i) lost, stolen or destroyed Notes which have been replaced or paid
as provided in Section 306 and (ii) Notes for whose payment funds have
theretofore been deposited in trust by the Company with the Trustee or
any Paying Agent or segregated and held in trust by the Company and
thereafter repaid to the
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55
Company or discharged from such trust, as provided in Section 1003)
have been delivered to the Trustee for cancellation; or
(B) all such Notes 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, and
either the Company or any Subsidiary Guarantor has irrevocably
deposited or caused to be deposited with the Trustee funds in an
amount sufficient to pay and discharge the entire indebtedness on such
Notes not theretofore delivered to the Trustee for cancellation, for
principal of, premium and Liquidated Damages, if any, and interest to
the date of such deposit;
(2) the Company or any Subsidiary Guarantor has paid all other sums
payable hereunder by the Company and any Subsidiary Guarantors; 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 and that such satisfaction and discharge
will not result in a breach or violation of, or constitute a default under,
this Indenture or any other material agreement or instrument to which the
Company or any Subsidiary Guarantor is a party or by which it is bound.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 606 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.
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 Notes and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium and
Liquidated Damages, if any) and interest for whose payment such money has
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56
been deposited with the Trustee; but such money need not be segregated from
other funds except to the extent required by law.
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 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 any interest on the Notes issued under
this Indenture when such interest becomes due and payable, and continuance
of such default for a period of 30 days; or
(2) default in the payment of the principal of (or premium, if any,
on) any Notes at its Maturity; or
(3) (A) default in the performance, or breach, of any covenant or
agreement of the Company or any Subsidiary Guarantor under this Indenture
(other than a default in the performance, or breach, of a covenant or
agreement which is specifically dealt with in the immediately preceding
clauses (1) and (2) or clauses (B) and (C) of this clause (3), and such
default or breach shall continue for a period of 60 days after written
notice has been given, by certified mail, (x) to the Company by the Trustee
or (y) to the Company and the Trustee by the Holders of at least 25% in
principal amount of the Outstanding Notes specifying such default or breach
and requiring it to be remedied and stating that such notice is a "Notice
of Default" hereunder; (B) default in the performance or breach of the
provisions in Article Eight or Section 1016; or (C) the Company shall have
failed to comply with the provisions of Section 1009 for any reason,
including the inconsistency of such covenant with the Company's Bylaws as
in effect on the date of this Indenture; or
(4) (A) there shall have occurred any default in the payment of
principal of any Indebtedness under any agreements, indentures (including
any such default under the Notes due 2004 Indenture) or instruments under
which the Company or any Restricted Subsidiary of the Company then has
outstanding Indebtedness in excess of $50 million when the same shall
become due and payable in full and such default shall have continued after
any applicable grace period and shall not have been cured
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57
or waived or (B) an event of default as defined in any of the agreements,
indentures or instruments described in clause (A) of this clause (4) shall
have occurred and the Indebtedness thereunder, if not already matured at
its final maturity in accordance with its terms, shall have been
accelerated or otherwise declared due and payable, or required to be
prepaid or repurchased (other than by regularly scheduled required
prepayment), prior to the stated maturity thereof; or
(5) any Person entitled to take the actions described in this
clause (5), after the occurrence of any event of default on Indebtedness in
excess of $50 million in the aggregate of the Company or any Restricted
Subsidiary, shall notify the Trustee of the intended sale or disposition of
any assets of the Company or any Restricted Subsidiary that have been
pledged to or for the benefit of such Person to secure such Indebtedness or
shall commence proceedings, or take any action (including by way of
set-off) to retain in satisfaction of any Indebtedness, or to collect on,
seize, dispose of or apply, any such assets of the Company or any
Restricted Subsidiary (including funds on deposit or held pursuant to
lock-box and other similar arrangements), pursuant to the terms of any
agreement or instrument evidencing any such Indebtedness or in accordance
with applicable law; or
(6) any Note Guarantee of any Significant Subsidiary individually or
any other Subsidiaries if such Restricted Subsidiaries in the aggregate
represent at least 15% of the assets of the Company and its Restricted
Subsidiaries on a Consolidated basis with respect to such Notes shall for
any reason cease to be, or be asserted in writing by the Company, any
Subsidiary Guarantor or any other Restricted Subsidiary of the Company, as
applicable, not to be, in full force and effect, enforceable in accordance
with its terms, except pursuant to the release of any such Note Guarantee
in accordance with this Indenture; or
(7) one or more judgments, orders or decrees for the payment of money
in excess of $50 million (net of amounts covered by insurance, bond or
similar instrument), either individually or in an aggregate amount, entered
against the Company or any Restricted Subsidiary or any of their respective
properties which is not discharged and either (A) any creditor shall have
commenced an enforcement proceeding upon such judgment, order or decree or
(B) there shall have been a period of 60 consecutive days during which a
stay of enforcement of such judgment or order, by reason of pending appeal
or otherwise, shall not be in effect; or
(8) the entry by a court of competent jurisdiction of (A) a decree or
order for relief in respect of the Company or any Significant Subsidiary in
an involuntary case or proceeding under any applicable Bankruptcy Law or
(B) a decree or order adjudging the Company or any Significant Subsidiary
bankrupt or insolvent, or seeking reorganization, arrangement, adjustment
or composition of or in respect of the
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Company or any Significant Subsidiary under any applicable federal or state
law, or appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or any Significant
Subsidiary or of any substantial part of its property, or ordering the
winding up or liquidation of its affairs, and any such decree or order
for relief shall continue to be in effect, or any such other decree or
order shall be unstayed and in effect, for a period of 60 consecutive days;
or
(9) (A) the commencement by the Company or any Significant
Subsidiary of a voluntary case or proceeding under any applicable
Bankruptcy Law or any other case or proceeding to be adjudicated bankrupt
or insolvent, (B) the Company or any Significant Subsidiary consents to the
entry of a decree or order for relief in respect of the Company or such
Significant Subsidiary in an involuntary case or proceeding under any
applicable Bankruptcy Law or to the commencement of any bankruptcy or
insolvency case or proceeding against it, (C) the Company or any
Significant Subsidiary files a petition or answer or consent seeking
reorganization or relief under any applicable federal or state law, (D)
the Company or any Significant Subsidiary (x) consents to the filing of
such petition or the appointment of, or taking possession by, a custodian,
receiver, liquidator, assignee, trustee, sequestrator or similar official
of the Company or such Significant Subsidiary or of any substantial part of
its property, (y) makes an assignment for the benefit of creditors or (z)
admits in writing its inability to pay its debts generally as they become
due or (E) the Company or any Significant Subsidiary takes any corporate
action in furtherance of any such actions in this clause (9).
SECTION 502. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default (other than an Event of Default specified in
Section 501(8) or 501(9)) shall occur and be continuing, then and in every such
case the Trustee, by notice to the Company, or the Holders of at least 25% in
aggregate principal amount of the Notes Outstanding by a notice in writing to
the Company and to the Trustee may declare all amounts payable in respect of
such Notes to be due and payable immediately, and upon any such declaration such
amounts shall become immediately due and payable. If an Event of Default
specified in Section 501(8) or 501(9) occurs and is continuing, then all amounts
payable in respect of such Notes shall IPSO FACTO become and be immediately due
and payable without any declaration or other act on the part of the Trustee or
any Holder.
At any time after 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 provided, the Holders of a majority
in aggregate principal amount of the Notes Outstanding, by written notice to the
Company and the Trustee, may rescind or annul such declaration if
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(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel,
(B) all overdue interest on all Outstanding Notes, and
(C) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate borne by the Notes; and
(2) all Events of Default, other than the non-payment of principal of
such Notes 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 shall affect any subsequent default or impair
any right consequent thereon.
SECTION 503. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
TRUSTEE.
The Company covenants that if
(a) default is made in the payment of any installment of interest on
any Note when such interest becomes due and payable and such default
continues for a period of 30 days, or
(b) default is made in the payment of the principal of (or premium,
if any, on) any Note at the Maturity thereof,
the Company shall, upon demand of the Trustee, pay to the Trustee for the
benefit of the Holders of such Notes, the whole amount then due and payable on
such Notes for principal (and premium, if any) and interest, and interest on any
overdue principal (and premium, if any) and, to the extent that payment of such
interest shall be legally enforceable, upon any overdue installment of interest,
at the rate borne by the Notes, 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 as trustee of an express trust, may institute a
judicial proceeding for
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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 Notes 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 Notes, 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 Notes
or the property of the Company or of such other obligor or their creditors, the
Trustee (irrespective of whether the principal of the Notes 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, premium, if any, or interest) shall be entitled and
empowered, by intervention in such proceeding or otherwise,
(i) to file and prove a claim for the whole amount of principal (and
premium, if any) and interest owing and unpaid in respect of the Notes and
to file such other papers or documents as may be necessary or advisable in
order to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel) and of the Holders allowed in such
judicial proceeding, and
(ii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
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 the
Trustee any amount due 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 606.
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Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder thereof, or to authorize the Trustee to vote in respect
of the claim of any Holder in any such proceeding.
SECTION 505. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF NOTES.
All rights of action and claims under this Indenture or the Notes may
be prosecuted and enforced by the Trustee without the possession of any of the
Notes or the production thereof in any proceeding relating thereto, and any such
proceeding instituted by the Trustee shall be brought in its own name and 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 Notes in respect of which such judgment has been recovered.
SECTION 506. APPLICATION OF MONEY COLLECTED.
Any money collected by the Trustee pursuant to this Article 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 Notes and the notation thereon of
the payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under
Section 606;
SECOND: To the payment of the amounts then due and unpaid for
principal of (and premium, if any, on,) and interest on the Notes 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 Notes for principal (and premium, if any)
and interest, respectively; and
THIRD: The balance, if any, to the Person or Persons entitled
thereto.
SECTION 507. LIMITATION ON SUITS.
No Holder of any Notes 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
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(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 Notes 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
reasonably satisfactory to the Trustee 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 reasonably satisfactory 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
or more in principal amount of the Outstanding Notes;
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 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.
Notwithstanding any other provision in this Indenture, the Holder of
any Note shall have the right, which is absolute and unconditional, to receive
payment, as provided herein (including, if applicable, Article Thirteen) and in
such Note, of the principal of (and premium, if any, on) and (subject to
Section 307) interest on, such Note on the respective Stated Maturities
expressed in such Note (or, in the case of redemption, on the Redemption Date)
and to institute suit for the enforcement of any such payment, 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
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every such case, subject to any determination in such proceeding, the
Company, the Subsidiary Guarantors, the Trustee and the Holders shall be
restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall
continue as though no such proceeding had been instituted.
SECTION 510. RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Notes 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,
subject to the provisions of Section 507, every right and remedy shall, to the
extent permitted by law, be cumulative and in addition to every other right and
remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
SECTION 511. DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Trustee or of any Holder of any Note 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 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 not less than a majority in principal amount of the
Outstanding Notes 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,
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction, and
(3) the Trustee need not take any action which might involve it in
personal liability or be unjustly prejudicial to the Holders not
consenting.
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SECTION 513. WAIVER OF PAST DEFAULTS.
The Holders of not less than a majority in principal amount of the
Outstanding Notes may on behalf of the Holders of all the Notes waive any past
default hereunder and its consequences, except a default
(1) in respect of the payment of the principal of (or premium, if
any, on) or interest on any Note, 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 Note 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 Event of Default or impair any right consequent thereon.
SECTION 514. WAIVER OF STAY OR EXTENSION LAWS.
Each of the Company and the Subsidiary Guarantors covenants (to the
extent that it may lawfully do so) that it shall not at any time insist upon, or
plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay 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
each of the Company and the Subsidiary Guarantors (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it shall not hinder, delay or impede the execution of any
power herein granted to the Trustee, but shall suffer and permit the execution
of every such power as though no such law had been enacted.
SECTION 515. NOTICE OF DEFAULTS.
Within ten days after the occurrence of any Default hereunder, the
Company shall transmit in the manner and to the extent provided in TIA Section
313(c), notice to the Trustee of such Default hereunder known to the Company or
any Subsidiary Guarantor, unless such Default shall have been cured or waived.
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ARTICLE SIX
THE TRUSTEE
SECTION 601. NOTICE OF DEFAULTS.
Within 90 days after the occurrence of any Default hereunder, the
Trustee shall transmit in the manner and to the extent provided in TIA
Section 313(c), notice of such Default hereunder known to the Trustee, unless
such Default shall have been cured or waived; PROVIDED, HOWEVER, that, except in
the case of a Default in the payment of the principal of (or premium, if any,
on) or interest on any Note, the Trustee shall be protected in withholding such
notice if and so long as the board of directors, the executive committee or a
trust committee of directors and/or Responsible Officers of the Trustee in good
faith determines that the withholding of such notice is in the interest of the
Holders; and PROVIDED FURTHER that in the case of any Default of the character
specified in Section 501(3) no such notice to Holders shall be given until at
least 30 days after the occurrence thereof.
SECTION 602. CERTAIN RIGHTS OF TRUSTEE.
Subject to the provisions of TIA Sections 315(a) through 315(d):
(1) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, 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;
(2) 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;
(3) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, rely upon an Officers' Certificate;
(4) the Trustee may consult with counsel and the written 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;
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(5) 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 Holders pursuant to this Indenture, unless such Holders shall
have offered to the Trustee security or indemnity reasonably satisfactory
to the Trustee against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;
(6) 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 at all reasonable times to examine the books, records and
premises of the Company and the Subsidiary Guarantors, personally or by
agent or attorney;
(7) 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; and
(8) the Trustee shall not be liable for any action taken, suffered or
omitted by it in good faith and believed by it to be authorized or within
the discretion or rights or powers conferred upon it by this Indenture.
The Trustee shall not be required 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 adequate
indemnity against such risk or liability is not reasonably assured to it.
SECTION 603. TRUSTEE NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF
NOTES.
The recitals contained herein and in the Notes, except for the
Trustee's certificates of authentication, shall be taken as the statements of
the Company or the Subsidiary Guarantors, 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 Notes, except that
the Trustee represents that it is duly authorized to execute and deliver this
Indenture, authenticate the Notes and perform its obligations hereunder and that
the statements made by it in any Statement of Eligibility of Form T-1 supplied
to the Company are true and accurate, subject to the qualifications set forth
therein. The Trustee shall not be accountable for the use or application by the
Company of Notes or the proceeds thereof.
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SECTION 604. MAY HOLD NOTES.
The Trustee, any Paying Agent, any Security Registrar or any other
agent of the Company or of the Trustee, in its individual or any other capacity,
may become the owner or pledgee of Notes and, subject to TIA Sections 310(b) and
311, may otherwise deal with the Company and any Subsidiary Guarantor with the
same rights it would have if it were not Trustee, Paying Agent, Security
Registrar or such other agent.
SECTION 605. MONEY HELD IN TRUST.
Cash in United States dollars or U.S. Government Obligations 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 such cash or U.S. Government Obligations received by it
hereunder except as otherwise agreed in writing with the Company or any
Subsidiary Guarantor.
SECTION 606. 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 for, and to hold it harmless against,
any loss, liability or expense incurred without negligence or bad faith on
its part, arising out of or in connection with the acceptance,
administration or enforcement 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.
The obligations of the Company under this Section to compensate the
Trustee, to pay or reimburse the Trustee for expenses, disbursements and
advances and to indemnify and hold harmless the Trustee shall constitute
indebtedness and shall survive the satisfaction and discharge of this Indenture.
As security for the performance of such obligations of the Company, the Trustee
shall have a claim prior to the Notes upon all property and funds held
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68
or collected by the Trustee as such, except funds held in trust for the
payment of principal of (and premium, if any, on) or interest on particular
Notes.
SECTION 607. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.
There shall at all times be a Trustee hereunder which shall be
eligible to act as Trustee under TIA Section 310(a)(1) and shall have a combined
capital and surplus of at least $50 million. If such corporation publishes
reports of condition at least annually, pursuant to law or to the requirements
of federal, state, territorial or District of Columbia supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such corporation 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, it shall resign immediately in the manner and with
the effect hereinafter specified in this Article.
SECTION 608. 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 in accordance with the
applicable requirements of Section 609.
(b) The Trustee may resign at any time by giving written notice
thereof to the Company addressed to the Company and the Subsidiary Guarantors.
If the instrument of acceptance by a successor Trustee required by Section 609
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.
(c) The Trustee may be removed at any time by Act of the Holders of
not less than a majority in principal amount of the Outstanding Notes, delivered
to the Trustee and to the Company addressed to the Company and the Subsidiary
Guarantors.
(d) If at any time:
(1) the Trustee shall fail to comply with the provisions of TIA
Section 310(b) after written request therefor by the Company, any
Subsidiary Guarantor or by any Holder who has been a bona fide Holder of a
Note for at least six months, or
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(2) the Trustee shall cease to be eligible under Section 607 and
shall fail to resign after written request therefor by the Company, any
Subsidiary Guarantor or by any Holder who has been a bona fide Holder of a
Note for at least six months, 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 TIA Section 315(e), any Holder who has been a bona
fide Holder of a Note for at least six months may, on behalf of itself 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 Notes delivered to
the Company, the Subsidiary Guarantors 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 Note for at least six
months may, on behalf of itself 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 Trustee to the
Holders of Notes in the manner provided for in Section 106. Each notice shall
include the name of the successor Trustee and the address of its Corporate Trust
Office.
SECTION 609. 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
successor Trustee, such retiring Trustee shall, upon payment of its charges,
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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 610. 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 of the corporate trust
business of the Trustee, 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 Notes shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Notes so authenticated with the same effect
as if such successor Trustee had itself authenticated such Notes; and in case at
that time any of the Notes shall not have been authenticated, any successor
Trustee may authenticate such Notes either in the name of any predecessor
hereunder or in the name of the successor Trustee; and in all such cases such
certificates shall have the full force which it is anywhere in the Notes or in
this Indenture provided that the certificate of the Trustee shall have;
PROVIDED, HOWEVER, that the right to adopt the certificate of authentication of
any predecessor Trustee or to authenticate Notes in the name of any predecessor
Trustee shall apply only to its successor or successors by merger, conversion or
consolidation.
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE, COMPANY AND SUBSIDIARY GUARANTORS
SECTION 701. DISCLOSURE OF NAMES AND ADDRESSES OF HOLDERS.
Every Holder of Notes, by receiving and holding the same, agrees with
the Company and the Trustee that none of the Company or the Trustee or any agent
of either of them shall be held accountable by reason of the disclosure of any
such information as to the names and addresses of the Holders in accordance with
TIA Section 312, regardless of the
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source from which such information was derived, and that the Trustee shall
not be held accountable by reason of mailing any material pursuant to a
request made under TIA Section 312(b).
SECTION 702. REPORTS BY TRUSTEE.
Within 60 days after May 15 of each year commencing with the first
May 15 after the first issuance of Notes, the Trustee shall transmit to the
Holders, in the manner and to the extent provided in TIA Section 313(c), a brief
report dated as of such May 15 if required by TIA Section 313(a).
SECTION 703. REPORTS BY COMPANY AND SUBSIDIARY GUARANTORS.
The Company and each of the Subsidiary Guarantors shall:
(1) file with the Trustee, within 15 days after the Company or such
Subsidiary Guarantor is required to file the same with the Commission,
copies of the annual reports and of the information, documents and other
reports (or copies of such portions of any of the foregoing as the
Commission may from time to time by rules and regulations prescribe) which
the Company or such Subsidiary Guarantor may be required to file with the
Commission pursuant to Section 13 or Section 15(d) of the Exchange Act; or,
if the Company or any of the Subsidiary Guarantors is not required to file
information, documents or reports pursuant to either of said Sections, then
they shall file with the Trustee and the Commission, in accordance with
rules and regulations prescribed from time to time by the Commission, such
of the supplementary and periodic information, documents and reports which
may be required pursuant to Section 13 of the Exchange Act in respect of a
security listed and registered on a national securities exchange as may be
prescribed from time to time in such rules and regulations;
(2) file with the Trustee and the Commission, in accordance with
rules and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance by
the Company with the conditions and covenants of this Indenture as may be
required from time to time by such rules and regulations; and
(3) transmit by mail to all Holders, in the manner and to the extent
provided in TIA Section 313(c), within 30 days after the filing thereof
with the Trustee, such summaries of any information, documents and reports
required to be filed by the Company pursuant to paragraphs (1) and (2) of
this Section as may be required by rules and regulations prescribed from
time to time by the Commission;
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PROVIDED, HOWEVER, that any Subsidiary Guarantor shall be relieved of its
obligations under clauses (1) and (2) of this Section to the extent that it is
relieved of its obligations under Section 13 or Section 15(d) of the Exchange
Act by the Commission pursuant to the terms of any no-action letter addressed to
the Company or such Subsidiary Guarantor from the staff of the Commission.
ARTICLE EIGHT
CONSOLIDATION, MERGER, SALE OF ASSETS
SECTION 801. COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.
The Company shall not, in a single transaction or a series of related
transactions, consolidate with or merge with or into any other Person or sell,
assign, convey, transfer, lease or otherwise dispose of all or substantially all
of its properties and assets to any Person or group of affiliated Persons, or
permit any of its Restricted Subsidiaries to enter into any such transaction or
transactions if such transaction or transactions, in the aggregate, would result
in a sale, assignment, transfer, lease or disposal of all or substantially all
of the properties and assets of the Company and its Subsidiaries on a
Consolidated basis to any other Person or group of affiliated Persons, unless at
the time and after giving effect thereto:
(1) either
(A) the Company shall be the surviving or continuing corporation
or
(B) the Person (if other than the Company) formed by such
consolidation or into which the Company is merged or the Person which
acquires by sale, assignment, conveyance, transfer, lease or
disposition, the properties and assets of the Company substantially as
an entirety (the "Surviving Entity")
(i) shall be a corporation duly organized and validly
existing under the laws of the United States, any state thereof
or the District of Columbia and
(ii) shall, in any case, expressly assume, by a supplemental
indenture, executed and delivered to the Trustee, in form
satisfactory to the Trustee, all of the obligations of the
Company under the Notes and this Indenture, and this Indenture
shall remain in full force and effect;
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(2) immediately before and immediately after giving effect to such
transaction on a PRO FORMA basis (and treating any Indebtedness not
previously an obligation of the Company or any of its Restricted
Subsidiaries which becomes an obligation of the Company or any of its
Restricted Subsidiaries in connection with or as a result of such
transaction as having been incurred at the time of such transaction), no
Default or Event of Default shall have occurred and be continuing;
(3) immediately after giving effect to such transaction, except in
the case of a merger of the Company with or into a Wholly Owned Restricted
Subsidiary, the Company (or the Surviving Entity if the Company is not the
continuing obligor under this Indenture) will have a Consolidated Net Worth
equal to or greater than the Consolidated Net Worth of the Company
immediately preceding the transaction;
(4) immediately after giving effect to such transaction on a PRO
FORMA basis (on the assumption that the transaction occurred on the first
day of the four-quarter period immediately prior to the consummation of
such transaction with the appropriate adjustments with respect to the
transaction being included in such PRO FORMA calculation), the Company (or
the Surviving Entity if the Company is not the continuing obligor under
this Indenture) could incur $1.00 of additional Indebtedness (other than
Permitted Indebtedness) under the provisions of Section 1010;
(5) each Subsidiary Guarantor, unless it is the other party to the
transactions described above, shall have, by supplemental indenture to this
Indenture, confirmed that its respective Note Guarantees with respect to
the Notes shall apply to such Person's obligations under this Indenture and
the Notes;
(6) if any property or assets of the Company or any of its Restricted
Subsidiaries would thereupon become subject to any Lien, the provisions of
Section 1014 are complied with; and
(7) the Company shall have delivered, or caused to be delivered, to
the Trustee an Officers' Certificate and an Opinion of Counsel, each to the
effect that such consolidation, merger, sale, assignment, conveyance,
transfer, lease or other transaction and, if a supplemental indenture is
required in connection with such transaction, such supplemental indenture,
comply with this Article and that all conditions precedent herein provided
for relating to such transaction have been complied with.
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SECTION 802. SUCCESSOR SUBSTITUTED.
Upon any consolidation, merger, sale, assignment, conveyance,
transfer, lease or other transaction described in, and complying with the
provisions of, Section 801 in which the Company is not the continuing
corporation, the successor Person formed or remaining shall succeed to, and be
substituted for, and may exercise every right and power of, the Company, as the
case may be, and the Company shall be discharged from all obligations and
covenants under this Indenture and the Notes, PROVIDED that, in the case of a
transfer by lease, the predecessor shall not be released from its obligations
with respect to the payment of principal (premium, if any) and interest on the
Notes.
SECTION 803. NOTES TO BE SECURED IN CERTAIN EVENTS.
If, upon any such consolidation of the Company with or merger of the
Company into any other corporation, or upon any conveyance, lease or transfer of
the property of the Company substantially as an entirety to any other Person,
any property or assets of the Company would thereupon become subject to any
Lien, then unless such Lien could be created pursuant to Section 1014 without
equally and ratably securing the Notes, the Company, prior to or simultaneously
with such consolidation, merger, conveyance, lease or transfer, will as to such
property or assets, secure the Notes Outstanding (together with, if the Company
shall so determine any other Indebtedness of the Company now existing or
hereinafter created which is not subordinate in right of payment to the Notes)
equally and ratably with (or prior to) the Indebtedness which upon such
consolidation, merger, conveyance, lease or transfer is to become secured as to
such property or assets by such Lien, or will cause such Notes to be so secured.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holders, the Company, the Subsidiary
Guarantors, 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 of the Company
contained herein and in the Notes; or
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(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 add any additional Events of Default; or
(4) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee pursuant to the requirements of
Section 609; or
(5) to cure any ambiguity, to correct or supplement any provision
herein which may be inconsistent with any other provision herein, or to
make any other provisions with respect to matters or questions arising
under this Indenture; PROVIDED that such action shall not adversely affect
the interests of the Holders in any material respect;
(6) to add new Subsidiary Guarantors pursuant to Section 1018;
(7) to secure the Notes pursuant to the requirements of Section 803
or otherwise; or
(8) to comply with any requirements of the Commission in order to
effect and maintain the qualification of this Indenture under the Trust
Indenture Act.
SECTION 902. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.
With the consent of the Holders of not less than a majority in
principal amount of the Outstanding Notes, by Act of said Holders delivered to
the Company, the Subsidiary Guarantors and the Trustee, the Company, when
authorized by a Board Resolution, the Subsidiary Guarantors 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 Note
affected thereby:
(1) change the Stated Maturity of the principal of, or any
installment of interest on, any Note, or reduce the principal amount
thereof or the rate of interest thereon or any premium payable upon the
redemption or purchase thereof, or change the coin or currency in which any
Note or any premium or the interest thereon is payable, or impair the right
to institute suit for the enforcement of any such payment after the Stated
Maturity thereof (or, in the case of redemption, on or after the Redemption
Date), or
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(2) amend, change or modify the obligation of the Company to make and
consummate a Change of Control Purchase Offer in the event of a Change of
Control Triggering Event or modify any of the provisions or definitions
with respect thereto, or
(3) reduce the percentage in principal amount of the Outstanding
Notes, 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
(4) modify any of the provisions of this Section or Sections 513 and
1022, except to increase any such percentage or to provide that certain
other provisions of this Indenture cannot be modified or waived without the
consent of the Holder of each Outstanding Note affected thereby, or
(5) except as otherwise permitted under Article Eight, consent to the
assignment or transfer by the Company or any Subsidiary Guarantor of any of
its rights and obligations under this Indenture; or
(6) amend or modify any of the provisions of this Indenture in any
manner which subordinates the Notes issued thereunder in right of payment
to other Indebtedness of the Company or which subordinates any Note
Guarantee in right of payment to other Indebtedness of the Subsidiary
Guarantor issuing such Note Guarantee.
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.
(a) In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and shall be fully protected in relying upon, an Opinion of Counsel stating that
the execution of such supplemental indenture is authorized or permitted by this
Indenture. 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.
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(b) Each Subsidiary Guarantor hereby appoints the Company as its
attorney-in-fact to execute, on its behalf, any indenture supplemental hereto to
be entered into solely for the purpose specified in Section 901(6).
SECTION 904. EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture under this Article,
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 Notes theretofore or thereafter authenticated and delivered hereunder shall
be bound thereby.
SECTION 905. CONFORMITY WITH TRUST INDENTURE ACT.
Every supplemental indenture executed pursuant to the Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
SECTION 906. REFERENCE IN NOTES TO SUPPLEMENTAL INDENTURES.
Notes authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article 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 and the Subsidiary
Guarantors shall so determine, new Notes so modified as to conform, in the
opinion of the Trustee and the Company and the Subsidiary Guarantors, to any
such supplemental indenture may be prepared and executed by the Company and the
Subsidiary Guarantors and authenticated and delivered by the Trustee in exchange
for Outstanding Notes.
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 Sections 901 and 902, the
Company shall give notice thereof to the Holders of each Outstanding Note
affected, in the manner provided for in Section 106, setting forth in general
terms the substance of such supplemental indenture; PROVIDED, HOWEVER, that the
Company shall not be required to give notice of any indenture supplemental
hereto entered into solely for the purpose specified in Section 901(5), (6) or
(8), notice with respect to which shall be given by the Company when it is next
required to give notice pursuant to this Section.
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ARTICLE TEN
COVENANTS
SECTION 1001. PAYMENT OF PRINCIPAL, PREMIUM, IF ANY, AND INTEREST.
The Company covenants and agrees for the benefit of the Holders that
it shall duly and punctually pay the principal of (and premium, if any, on) and
interest on the Notes in accordance with the terms of the Notes and this
Indenture.
SECTION 1002. MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain in The City of New York an office or agency
where Notes may be presented or surrendered for payment, where Notes may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Company or any Subsidiary Guarantor in respect of the
Notes and this Indenture may be served. The Corporate Trust Office of the
Trustee shall be such office or agency of the Company, unless the Company shall
designate and maintain some other office or agency for one or more of such
purposes. The Company shall give prompt written notice to the Trustee of 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, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee, and the Company and each of the Subsidiary Guarantors hereby appoints
the Trustee as its agent to receive all such presentations, surrenders, notices
and demands. Unless otherwise specified with respect to the Notes as
contemplated by Section 301, the Company hereby designates as a Place of Payment
for the Notes the office or agency of the Trustee in the Borough of Manhattan,
The City of New York, and initially appoints Manufacturers and Traders Trust
Company, 50 Broadway - 7th Floor, New York, New York 10004, as Paying Agent to
receive all such presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other
offices or agencies (in or outside of The City of New York) where the Notes may
be presented or surrendered for any or all such purposes and may from time to
time rescind any such designation; PROVIDED, HOWEVER, that no such designation
or rescission shall in any manner relieve the Company of its obligation to
maintain an office or agency in The City of New York for such purposes. The
Company shall give prompt written notice to the Trustee of any such designation
or rescission and any change in the location of any such other office or agency.
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SECTION 1003. MONEY FOR NOTE PAYMENTS TO BE HELD IN TRUST.
If the Company shall at any time act as its own Paying Agent, it
shall, on or before each due date of the principal of (and premium, if any, on)
or interest on any of the Notes, segregate and hold in trust for the benefit of
the Persons entitled thereto a sum sufficient to pay the principal (and premium,
if any) or interest so becoming due until such sums shall be paid to such
Persons or otherwise disposed of as herein provided and shall promptly notify
the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents for the
Notes, it shall, on or before each due date of the principal of (and premium, if
any, on), or interest on, any Notes, deposit with a Paying Agent a sum
sufficient to pay the principal (and premium, if any) or interest so becoming
due, such sum to be held in trust for the benefit of the Persons entitled to
such principal, premium or interest, and (unless such Paying Agent is the
Trustee) the Company shall promptly notify the Trustee of such action or any
failure so to act.
The Company shall 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) hold all sums held by it for the payment of the principal of (and
premium, if any, on) or interest on Notes in trust for the benefit of the
Persons entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or any
other obligor upon the Notes) in the making of any payment of principal
(and 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 in trust 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 sums.
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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 (and premium, if
any, on) or interest on any Note and remaining unclaimed for two years after
such principal (and 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 Note 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; 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 published 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. CORPORATE 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 the corporate
existence, rights (charter and statutory) and franchises of the Company and each
Restricted Subsidiary; PROVIDED, HOWEVER, that the Company shall not be required
to preserve any such right or franchise if the Board of Directors shall
determine that the preservation thereof is no longer desirable in the conduct of
the business of the Company and its Restricted Subsidiaries as a whole and that
the loss thereof is not disadvantageous in any material respect to the Holders.
Notwithstanding anything to the contrary in this Section 1004, the Company shall
be permitted to consolidate or merge any of its Restricted Subsidiaries with or
into the Company or any Wholly Owned Subsidiary of the Company.
SECTION 1005. PAYMENT OF TAXES AND OTHER CLAIMS.
The Company shall pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (a) all taxes, assessments and
governmental charges levied or imposed upon the Company or any Restricted
Subsidiary or upon the income, profits or property of the Company or any
Subsidiary and (b) 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
Restricted 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.
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SECTION 1006. MAINTENANCE OF PROPERTIES.
The Company shall cause all properties owned by the Company or any
Restricted Subsidiary or used or held for use in the conduct of its business or
the business of any Restricted Subsidiary to be maintained and kept in good
condition, repair and working order and supplied with all necessary equipment
and shall cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in 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
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
Restricted Subsidiary and not disadvantageous in any material respect to the
Holders.
SECTION 1007. INSURANCE.
The Company shall at all times keep all of its and its Restricted
Subsidiaries' properties which are of an insurable nature insured with insurers,
believed by the Company to be responsible, against loss or damage to the extent
that property of similar character is usually so insured by corporations
similarly situated and owning like properties.
SECTION 1008. STATEMENT BY OFFICERS AS TO DEFAULT.
The Company shall deliver to the Trustee, within 120 days after the
end of each fiscal year, a brief certificate from the principal executive
officer, principal financial officer or principal accounting officer as to his
or her knowledge of the Company's compliance with all conditions and covenants
under this Indenture. For purposes of this Section 1008, such compliance shall
be determined without regard to any period of grace or requirement of notice
under this Indenture.
SECTION 1009. PURCHASE OF NOTES UPON A CHANGE OF CONTROL TRIGGERING
EVENT.
(a) Upon the occurrence of a Change of Control Triggering Event, each
Holder shall have the right, to the extent not inconsistent with the Company's
Bylaws in effect on the date hereof, to require that the Company purchase such
Holder's Notes in whole or in part in integral multiples of $1,000 (the "Change
of Control Purchase Offer"), at a purchase price (the "Change of Control
Purchase Price") in cash in an amount equal to 101% of the principal amount
thereof, together with accrued and unpaid interest, if any, and Liquidated
Damages, if any, to the date of purchase (the "Change of Control Purchase
Date"), in accordance with the procedures set forth in paragraphs (c) and (d) of
this Section.
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(b) Upon the occurrence of a Change of Control Triggering Event and
prior to the mailing of the notice to Holders provided for in paragraph (c)
below, the Company covenants to either (x) repay in full all Indebtedness under
the New Credit Agreement or offer to repay in full all such Indebtedness and
repay the Indebtedness of each of the Banks that has accepted such offer or (y)
obtain any requisite consent under the New Credit Agreement to permit the
purchase of the Notes as provided for in paragraph (c) below or take any other
action as may be required under the New Credit Agreement to permit such
purchase.
(c) Within 30 days following any Change of Control Triggering Event,
the Company shall notify the Trustee and give to each Holder of the Notes in the
manner provided in Section 106 a notice stating:
(1) that a Change of Control Triggering Event has occurred and that
such Holder has the right to require the Company to purchase in whole or in
part such Holder's Notes at the Change of Control Purchase Price;
(2) the circumstances and relevant facts regarding such Change of
Control Triggering Event (including but not limited to information with
respect to PRO FORMA historical income, cash flow and capitalization after
giving effect to the Change of Control);
(3) the Change of Control Purchase Date which shall be a Business Day
no earlier than 30 days nor later than 60 days from the date such notice is
mailed or such later date as is necessary to comply with the Exchange Act;
(4) that any Note, or portion thereof, not tendered will continue to
accrue interest;
(5) that, unless the Company defaults in the payment of the Change of
Control Purchase Price, any Notes accepted for payment of the Change of
Control Purchase Price pursuant to the Change of Control Purchase Offer
shall cease to accrue interest after the Change of Control Purchase Date;
and
(6) the instructions a Holder must follow in order to have its Notes
purchased in accordance with paragraph (d) of this Section.
(d) Holders electing to have Notes purchased will be required to
surrender such Notes to the Company at the address specified in the notice at
least five Business Days prior to the Change of Control Purchase Date. Holders
will be entitled to withdraw their election if the Company receives, not later
than five Business Days prior to the Change of Control Purchase Date, a
telegram, telex, facsimile transmission or letter setting forth the
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name of the Holder, the principal amount of the Notes delivered for purchase
by the Holder as to which his election is to be withdrawn and a statement
that such Holder is withdrawing his election to have such Notes purchased.
Holders whose Notes are purchased only in part will be issued new Notes equal
in principal amount to the unpurchased portion of the Notes surrendered.
(e) The Company shall comply with the applicable tender offer rules,
including Rule 14e-1 under the Exchange Act, and other applicable securities
laws and regulations in connection with a Change of Control Purchase Offer.
SECTION 1010. LIMITATION ON INDEBTEDNESS.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, create, assume, or directly or indirectly guarantee or in any
other manner become directly or indirectly liable for the payment of, or
otherwise incur (collectively, "incur"), any Indebtedness (including any
Acquired Indebtedness) other than Permitted Indebtedness. Notwithstanding the
foregoing, the Company and the Subsidiary Guarantors may incur Indebtedness if,
at the time of such event (and after giving effect on a PRO FORMA basis to
(i) the incurrence of such Indebtedness and (if applicable) the application of
the proceeds therefrom, including to refinance other Indebtedness; (ii) the
incurrence, repayment or retirement of any other Indebtedness by the Company or
its Restricted Subsidiaries since the first day of such four-quarter period as
if such Indebtedness was incurred, repaid or retired at the beginning of such
four-quarter period; and (iii) the acquisition (whether by purchase, merger or
otherwise) or disposition (whether by sale, merger or otherwise) of any Company,
entity or business acquired or disposed of by the Company or its Restricted
Subsidiaries, as the case may be, since the first day of such four-quarter
period as if such acquisition or disposition had occurred at the beginning of
such four-quarter period), the Consolidated Fixed Charge Coverage Ratio of the
Company for the four full fiscal quarters immediately preceding such event,
taken as one period and calculated on the assumption that such Indebtedness had
been incurred on the first day of such four-quarter period and, in the case of
Acquired Indebtedness, on the assumption that the related acquisition (whether
by means of purchase, merger or otherwise) also had occurred on such date, with
such PRO FORMA adjustments as may be determined in accordance with GAAP and the
rules, regulations and guidelines of the Commission (including without
limitation Article 11 of Regulation S-X), would have been at least equal to 2.0
to 1 through July 31, 1999 and 2.25 to 1 thereafter.
SECTION 1011. LIMITATION ON RESTRICTED PAYMENTS.
(a) The Company shall not, and shall not permit any Restricted
Subsidiary of the Company to, directly or indirectly:
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(i) declare or pay any dividend on, or make any distribution to, the
holders of, any Capital Stock of the Company or of any Restricted
Subsidiary (other than dividends or distributions payable (x) solely in
shares of Qualified Capital Stock of the Company or such Restricted
Subsidiary or in options, warrants or other rights to purchase such
Qualified Capital Stock or (y) by a Restricted Subsidiary to the Company or
any Wholly Owned Restricted Subsidiary);
(ii) purchase, redeem or otherwise acquire or retire for value,
directly or indirectly, any Capital Stock of the Company or any Restricted
Subsidiary or any options, warrants or other rights to acquire such Capital
Stock held by any Person (other than the Company or any Wholly Owned
Restricted Subsidiary of the Company);
(iii) make any principal payment on, or redeem, repurchase,
defease or otherwise acquire or retire for value, prior to any scheduled
repayment, sinking fund payment or maturity, any Subordinated Indebtedness
or PARI PASSU Indebtedness of the Company or any Subsidiary Guarantor; or
(iv) make any Investment (other than any Permitted Investment) in any
Person
(such payments described in clauses (i) through (iv) and not excepted therefrom
are collectively referred to herein as "Restricted Payments") unless at the time
of and immediately after giving effect to the proposed Restricted Payment (the
amount of any such Restricted Payment, if other than cash, as determined by the
Board of Directors of the Company, whose determination shall be conclusive and
evidenced by a Board Resolution), (1) no Default or Event of Default shall have
occurred and be continuing, (2) the Company could incur $1.00 of additional
Indebtedness (other than Permitted Indebtedness) in accordance with Section 1010
and (3) such Restricted Payment, together with the aggregate of all other
Restricted Payments made by the Company and its Restricted Subsidiaries on or
after the date of this Indenture, is less than the sum of (w) 50% of the
aggregate cumulative Consolidated Net Income of the Company for the period
(taken as one accounting period) from the first day of the quarter beginning
after the date of this Indenture to the end of the Company's most recently ended
fiscal quarter for which financial statements are available at the time of such
Restricted Payment (or, if such Consolidated Net Income for such period is a
deficit, less 100% of such deficit), plus (x) 100% of the aggregate net cash
proceeds received by the Company as capital contributions or from the issue or
sale since the date of this Indenture of Equity Interests of the Company or of
debt securities of the Company that have been converted into such Equity
Interests (other than Equity Interests (or convertible debt securities) sold to
a Restricted Subsidiary of the Company and other than Redeemable Capital Stock
or debt securities that have been converted into Redeemable Capital Stock), plus
(y) any cash received by the Company after the date of initial issuance of the
Notes as a
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dividend or distribution from any of its Unrestricted Subsidiaries less the
cost of disposition and taxes, if any (but in each case excluding any such
amounts included in Consolidated Net Income); plus (z) $50 million.
(b) Notwithstanding paragraph (a) above, the Company and its
Restricted Subsidiaries may take the following actions so long as (with respect
to clauses (ii), (iii), (iv) and (vi) below) at the time of and immediately
after giving effect thereto no Default or Event of Default shall have occurred
and be continuing:
(i) the payment of any dividend within 60 days after the date of
declaration thereof, if at such declaration date such declaration complied
with the provisions of paragraph (a) above;
(ii) the purchase, redemption or other acquisition or retirement for
value of any shares of Capital Stock of the Company, in exchange for, or
out of the net cash proceeds of, a substantially concurrent issuance and
sale (other than to a Restricted Subsidiary) of shares of Capital Stock of
the Company (other than Redeemable Capital Stock, unless the redemption
provisions of such Redeemable Capital Stock prohibit the redemption thereof
prior to the date on which the Capital Stock to be acquired or retired was,
by its terms, required to be redeemed);
(iii) the purchase, redemption, defeasance or other acquisition or
retirement for value of any PARI PASSU Indebtedness or Subordinated
Indebtedness (other than Redeemable Capital Stock) in exchange for or out
of the net cash proceeds of a substantially concurrent issuance and sale
(other than to a Restricted Subsidiary) of shares of Capital Stock of the
Company (other than Redeemable Capital Stock, unless the redemption
provisions of such Redeemable Capital Stock prohibit the redemption thereof
prior to the Stated Maturity of the Subordinated Indebtedness to be
acquired or retired);
(iv) the purchase, redemption, defeasance or other acquisition or
retirement for value of any PARI PASSU Indebtedness or Subordinated
Indebtedness (other than Redeemable Capital Stock) in exchange for, or out
of the net cash proceeds of a substantially concurrent incurrence or sale
(other than to a Restricted Subsidiary) of, new PARI PASSU Indebtedness or
Subordinated Indebtedness of the Company so long as (A) the principal
amount of such new PARI PASSU Indebtedness or Subordinated Indebtedness
does not exceed the principal amount (or, if such PARI PASSU Indebtedness
or Subordinated Indebtedness being refinanced provides for an amount less
than the principal amount thereof to be due and payable upon a declaration
of acceleration thereof, such lesser amount as of the date of
determination) of the PARI PASSU Indebtedness or Subordinated Indebtedness
being so purchased, redeemed, defeased, acquired or retired, PLUS the
amount of any premium required to be paid in
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86
connection with such refinancing pursuant to the terms of the PARI PASSU
Indebtedness or Subordinated Indebtedness refinanced or the amount of any
premium reasonably determined by the Company as necessary to accomplish
such refinancing, PLUS the amount of reasonable expenses of the Company
incurred in connection with such refinancing, (B) such new PARI PASSU
Indebtedness or Subordinated Indebtedness is PARI PASSU or subordinated to
the Notes to the same extent as such PARI PASSU Indebtedness or
Subordinated Indebtedness so purchased, redeemed, defeased, acquired or
retired and (C) such new PARI PASSU Indebtedness or Subordinated
Indebtedness has an Average Life longer than the Average Life of the Notes
and a final Stated Maturity of principal later than the final Stated
Maturity of principal of the Notes;
(v) the payment of a dividend on the Company's Capital Stock (other
than Redeemable Capital Stock) of up to $0.08 per quarter per share (or up
to $0.32 per annum per share, PROVIDED that dividend payments may not be
cumulated for more than four consecutive quarters); and
(vi) the purchase, redemption or other acquisition or retirement for
value of shares of Common Stock of the Company issued pursuant to
non-qualified options granted under stock option plans of the Company, in
order to pay withholding taxes due as a result of income recognized upon
the exercise of such options; PROVIDED that (1) the Company is permitted,
by the terms of such plans, to effect such purchase, redemption or other
acquisition or retirement for value of such shares and (2) the aggregate
consideration paid by the Company for such shares so purchased, redeemed or
otherwise acquired or retired for value does not exceed $2 million during
any fiscal year of the Company.
The actions described in clauses (ii), (iii), (v) and (vi) of this
paragraph (b) shall be Restricted Payments that shall be permitted to be taken
in accordance with this paragraph (b) but shall reduce the amount that would
otherwise be available for Restricted Payments under clause (3) of paragraph
(a).
SECTION 1012. LIMITATION ON LAYERING INDEBTEDNESS.
Neither the Company nor any of Restricted Subsidiaries shall incur,
create, issue, assume, guarantee or otherwise become liable for any Indebtedness
that is subordinate or junior in right of payment to any Senior Indebtedness of
the Company or such Restricted Subsidiary, as the case may be, and senior in any
respect in right of payment to the Notes or such Restricted Subsidiary's Note
Guarantee.
SECTION 1013. LIMITATION ON TRANSACTIONS WITH AFFILIATES. The
Company shall not, and shall not permit any of its Restricted Subsidiaries to,
directly or indirectly,
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87
make any payment to, or sell, lease transfer or otherwise dispose of any of
its properties or assets to, or purchase any property or assets from, or
enter into or make or amend any contract, agreement, understanding, loan,
advance or guarantee with, or for the benefit of, any Affiliate (other than
the Company, a Wholly Owned Restricted Subsidiary or (in connection with a
Qualified TIPS Transaction) a Qualified Finance Subsidiary) (each of the
foregoing, an "Affiliate Transaction"), unless (i) such Affiliate Transaction
is on terms that are no less favorable to the Company or the relevant
Restricted Subsidiary than those that could have been obtained in a
comparable transaction with an unrelated Person and (ii) the Company delivers
to the Trustee (a) with respect to any Affiliate Transaction or series of
related Affiliate Transactions involving aggregate consideration in excess of
$5 million, an Officers' Certificate certifying that such Affiliate
Transaction complies with clause (i) above and that such Affiliate
Transaction has been approved by a majority of the Disinterested Directors
and (b) with respect to any Affiliate Transaction or series of related
Affiliate Transactions involving aggregate consideration in excess of $10
million, both an Officers' Certificate referred to in clause (a) and an
opinion as to the fairness of such Affiliate Transaction to the Company or
the relevant Restricted Subsidiary from a financial point of view issued by
an investment banking firm of national standing with total assets in excess
of $1.0 billion; PROVIDED, HOWEVER, that this covenant shall not apply to (i)
fees, compensation and employee benefits, including bonuses, retirement plans
and stock options, paid to or established for directors and officers of the
Company or any Restricted Subsidiary in the ordinary course of business and
approved by a majority of the Disinterested Directors and (ii) the
performance by the Company or any Restricted Subsidiary of its obligations
under certain leases of real property outstanding on the date of the
Indenture from PDM, Inc. covering 10 supermarket sites and a storage facility
in Omaha, Nebraska as set forth on Schedule B attached hereto.
SECTION 1014. LIMITATION ON LIENS SECURING PARI PASSU INDEBTEDNESS OR
SUBORDINATED INDEBTEDNESS.
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, create, incur, assume or suffer to exist
any Lien (other than Permitted Liens) securing PARI PASSU Indebtedness or
Subordinated Indebtedness of the Company on or with respect to any of its
property or assets, including any shares of stock or indebtedness of any
Restricted Subsidiary, whether owned at the date of this Indenture or thereafter
acquired, or any income, profits or proceeds therefrom, or assign or otherwise
convey any right to receive income thereon, unless (i) in the case of any Lien
securing PARI PASSU Indebtedness of the Company, the Notes are secured by a Lien
on such property, assets or proceeds that is senior in priority to or PARI PASSU
with such Lien and (ii) in the case of any Lien securing Subordinated
Indebtedness of the Company, the Notes are secured by a Lien on such property,
assets or proceeds that is senior in priority to such Lien.
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(b) The Company shall not permit any Restricted Subsidiary to,
directly or indirectly, create, incur, assume or suffer to exist any Lien (other
than Permitted Liens) securing Indebtedness of such Restricted Subsidiary that
is PARI PASSU or subordinate in right of payment to the Note Guarantee of such
Restricted Subsidiary, on or with respect to any such Restricted Subsidiary's
properties or assets, including any shares of stock or Indebtedness of any
Subsidiary of such Restricted Subsidiary, whether owned at the date of this
Indenture or thereafter acquired, or any income, profits or proceeds therefrom,
or assign or otherwise convey any right to receive income thereon, unless (i) in
the case of any Lien securing Indebtedness of the Restricted Subsidiary that is
PARI PASSU in right of payment to the Note Guarantee of such Restricted
Subsidiary, such Note Guarantee is secured by a Lien on such property, assets or
proceeds that is senior in priority to or PARI PASSU with such Lien and (ii) in
the case of any Lien securing Indebtedness of the Restricted Subsidiary that is
subordinate in right of payment to the Note Guarantee of such Restricted
Subsidiary, such Note Guarantee is secured by a Lien on such property, assets or
proceeds that is senior in priority to such Lien.
SECTION 1015. LIMITATION ON DIVIDEND AND OTHER PAYMENT RESTRICTIONS
AFFECTING SUBSIDIARIES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of any
Restricted Subsidiary to (i)(a) pay dividends or make any other distributions to
the Company or any of its Restricted Subsidiaries (1) on its Capital Stock or
(2) with respect to any other interest or participation in, or measured by, its
profits, or (b) pay any indebtedness owed to the Company or any of its
Restricted Subsidiaries, (ii) make loans or advances to the Company or any of
its Restricted Subsidiaries, (iii) transfer any of its properties or assets to
the Company or any of its Restricted Subsidiaries, (iv) grant Liens in favor of
Holders of Notes or (v) guarantee the Notes, except in each case for such
encumbrances or restrictions existing under or by reason of (a) Indebtedness of
the Company or any Restricted Subsidiary outstanding on the date of the
Indenture and listed on Schedule C attached thereto, (b) the New Credit
Agreement as in effect as of the date of the Indenture, and any amendments,
modifications, restatements, renewals, increase, supplements, refunding,
replacements or refinancings thereof, PROVIDED that such amendments,
modifications, restatements, renewals, increase, supplements, refundings,
replacements or refinancings are no more restrictive with respect to such
dividend and other payment restrictions than those contained in the New Credit
Agreement in effect on the date of the Indenture, (c) the Indenture and the
Notes, (d) applicable law, (e) any instrument governing Indebtedness or Capital
Stock of a Person acquired by the Company or any of its Restricted Subsidiaries
as in effect at the time of such acquisition (except to the extent such
Indebtedness was incurred in connection with or in contemplation of such
acquisition), which encumbrance or restriction is not applicable to any Person,
or the property or assets of any Person, other than the Person, or the property
or assets of the
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Person, so acquired, (f) by reason of customary non-assignment provisions in
existing and future leases entered into in the ordinary course of business
and consistent with past practices, (g) purchase money obligations for
property acquired in the ordinary course of business that impose restrictions
of the nature described in clause (iii) above on the property so acquired and
(h) restrictions incurred by the Company or any Restricted Subsidiary in
connection with any Permitted Receivables Financing.
SECTION 1016. LIMITATION ON SALE OF ASSETS.
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, engage in an Asset Sale unless the Company or such Restricted
Subsidiary, as the case may be, receives Permitted Consideration at the time of
such Asset Sale at least equal to the Fair Market Value (as evidenced by a
resolution of the Board of Directors set forth in an Officers' Certificate
delivered to the Trustee) of the assets or Equity Interests issued or sold or
otherwise disposed of.
(b) If the Company or any Restricted Subsidiary engages in an Asset
Sale, the Company or such Restricted Subsidiary must within 370 days after the
receipt of such Asset Sale, apply the Net Proceeds (i) to permanently reduce
Senior Indebtedness of the Company or one or more Restricted Subsidiaries (and
to correspondingly reduce commitments with respect thereto) or (ii) to make
capital expenditures or acquire long-term assets used or useful in its
businesses or in businesses similar or related to the businesses of the Company
immediately prior to the date of this Indenture. Pending the final application
of any such Net Proceeds, the Company may temporarily reduce Senior Indebtedness
or otherwise invest such Net Proceeds in any manner that is not prohibited by
this Indenture. Any Net Proceeds from Asset Sales that are not applied or
invested as provided in the first sentence of this paragraph will be deemed to
constitute "Excess Proceeds."
(c) When the aggregate amount of Excess Proceeds exceeds $15 million,
the Company will be required to make an offer to all Holders of Notes (an "Asset
Sale Offer"), on a PRO RATA basis between the Notes and the Notes due 2004, to
purchase the maximum principal amount of Notes that may be purchased out of the
Excess Proceeds, at an offer price in cash in an amount equal to 100% of the
principal amount thereof, plus accrued and unpaid interest and Liquidated
Damages, if any, thereon to the date of purchase (the "Offered Price"). Within
30 Business Days after the date on which the aggregate amount of Excess Proceeds
exceeds $15,000,000, the Company shall give to each Holder of the Notes, with a
copy to the Trustee, in the manner provided in Section 106 a notice stating:
(i) that the Holder has the right to require the Company to
repurchase such Holder's Notes at the Offered Price, subject to proration
in the event the Excess Proceeds are less than the aggregate Offered Price
of all Notes and Notes due 2004 tendered;
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(ii) the date of purchase of Notes pursuant to the Asset Sale Offer
(the "Asset Sale Purchase Date"), which shall be no earlier than 30 days
nor later than 60 days from the date such notice is mailed;
(iii) that the Offered Price shall be paid to Holders electing to
have Notes purchased on the Asset Sale Purchase Date, PROVIDED that a
Holder must surrender its Note to the Paying Agent at the address
specified in the notice prior to the close of business at least five
Business Days prior to the Asset Sale Purchase Date;
(iv) any Note not tendered shall continue to accrue interest pursuant
to its terms;
(v) that unless the Company defaults in the payment of the Offered
Price, any Note accepted for payment pursuant to the Asset Sale Offer shall
cease to accrue interest on and after the Asset Sale Purchase Date;
(vi) that Holders shall be entitled to withdraw their tendered Notes
and their election to require the Company to purchase such Notes, PROVIDED
that the Company receives, not later than the close of business on the
third Business Day preceding the Asset Sale Purchase Date, a telegram,
telex, facsimile transmission or letter setting forth the name of the
Holder, the principal amount and serial numbers of the Notes tendered for
purchase, and a statement that such Holder is withdrawing its election to
have such Notes purchased;
(vii) that the Holders whose Notes are being purchased only in
part shall be issued new Notes equal in principal amount to the unpurchased
portion of the Notes surrendered; which unpurchased portion must be equal
to $1,000 in principal amount or an integral multiple thereof; and
(viii) the instructions a Holder must follow in order to have his
Notes purchased in accordance with this Section 1016.
To the extent that the aggregate amount of Notes tendered pursuant to
an Asset Sale Offer is less than the Excess Proceeds, the Company may use any
remaining Excess Proceeds for general corporate purposes (subject to the
restrictions of the Indenture). If the aggregate principal amount of Notes and
Notes due 2004 surrendered by Holders thereof exceeds the amount of Excess
Proceeds, the Trustee shall select the Notes and Notes due 2004 to be purchased
on a PRO RATA basis. Upon completion of such offer to purchase, the amount of
Excess Proceeds shall be reset at zero.
Notwithstanding the foregoing provisions of this Section 1016, the
Company and its Restricted Subsidiaries may sell or dispose of property, whether
in the form of assets
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or capital stock of a Restricted Subsidiary, in the aggregate amount not
exceeding $15 million in any year. Any notes received by the Company or its
Restricted Subsidiaries as consideration in any disposition made pursuant to
such $15 million exclusion from this Section 1016 shall not be taken into
account in determining whether the $75 million limitation set forth in the
definition of "Permitted Consideration" has been met.
SECTION 1017. LIMITATION ON ISSUANCES AND SALES OF CAPITAL STOCK OF
SUBSIDIARIES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, transfer, convey, sell or otherwise dispose of any Capital
Stock of any Restricted Subsidiary of the Company to any Person (other than the
Company or a Wholly Owned Restricted Subsidiary of the Company), unless (a) such
transfer, conveyance, sale or other disposition is of all of the Capital Stock
of such Restricted Subsidiary owned by the Company and its Restricted
Subsidiaries and (b) such transaction is made in accordance with Section 1016,
PROVIDED that 85% of the proceeds from such a sale of Capital Stock of any
Restricted Subsidiary that is a Significant Subsidiary shall consist of cash or
Temporary Cash Investments. Notwithstanding the foregoing or the provisions of
any other covenant, the Company or any Restricted Subsidiary may sell Qualified
Capital Stock of any Restricted Subsidiary in a Public Equity Offering, PROVIDED
that (i) 100% of the Net Proceeds from such Public Equity Offering shall be in
cash and shall be applied as provided in the provisions of Section 1016 and
(ii) the Tangible Assets of such Restricted Subsidiary do not exceed 10% of the
Consolidated Tangible Assets of the Company, determined as of the last day of
the quarter ending immediately before the commencement of such Public Equity
Offering.
SECTION 1018. ADDITIONAL GUARANTEES.
If (x) the Company or any of its Restricted Subsidiaries shall acquire
or form a Restricted Subsidiary or (y) any existing majority-owned Restricted
Subsidiary shall, after the date of the Indenture, guarantee any PARI PASSU
Indebtedness or Subordinated Indebtedness of the Company or any Subsidiary
Guarantor, the Company will cause any such Restricted Subsidiary (other than an
Investee Store or Joint Venture, PROVIDED that such Investee Store or Joint
Venture does not guarantee the PARI PASSU Indebtedness of any other Person) that
is or becomes a Wholly Owned Restricted Subsidiary or that guarantees any PARI
PASSU Indebtedness or Subordinated Indebtedness of the Company or any Subsidiary
Guarantor to (i) execute and deliver to the Trustee a supplemental indenture in
form and substance reasonably satisfactory to the Trustee pursuant to which such
Restricted Subsidiary shall guarantee all of the obligations of the Company with
respect to the Notes on a senior subordinated basis and (ii) deliver to the
Trustee an Opinion of Counsel reasonably satisfactory to the Trustee to the
effect that a supplemental indenture has been duly executed
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and delivered by such Restricted Subsidiary and is in compliance with the
terms of this Indenture.
SECTION 1019. PROVISION OF FINANCIAL STATEMENTS; RULE 144A
INFORMATION.
Whether or not required by the rules and regulations of the
Commission, including the reporting requirements of Section 13 or 15(d) of the
Exchange Act, so long as any Notes are outstanding, the Company shall furnish to
the Holders of Notes (i) all quarterly and annual financial information that
would be required to be contained in a filing with the Commission on Forms 10-Q
and 10-K if the Company were required to file such Forms, including a
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" that describes the financial condition and results of operations of
the Company and its Subsidiaries and, with respect to the annual information
only, a report on the consolidated financial statements required by Form 10-K by
the Company's independent certified public accountants and (ii) all reports that
would be required to be filed with the Commission on Form 8-K if the Company
were required to file such reports. In addition, whether or not required by the
rules and regulations of the Commission, the Company shall file a copy of all
such information with the Commission for public availability (unless the
Commission shall not accept such a filing) and make such information available
to investors or prospective investors who request it in writing.
The Company shall furnish to the Holders or beneficial Holders of
Notes and prospective purchasers of Notes designated by the Holders of Notes,
upon their request, the information required to be delivered pursuant to Rule
144A(d)(4) under the Securities Act until such time as the Company either
exchanges all of the Initial Notes for the Exchange Notes or has registered
all of the Initial Notes for resale under the Securities Act.
SECTION 1020. PAYMENT FOR CONSENT.
The Company and each of its Restricted Subsidiaries are prohibited
from, directly or indirectly, paying or causing to be paid any consideration,
whether by way of interest, fee or otherwise, to any Holder for or as an
inducement to any consent, waiver or amendment of any terms or provisions of the
Notes unless such consideration is offered to be paid or agreed to be paid to
all Holders of the Notes which so consent, waive or agree to amend in the time
frame set forth in solicitation documents relating to such consent, waiver or
agreement.
SECTION 1021. TERMINATION OF CERTAIN COVENANTS IN EVENT OF INVESTMENT
GRADE RATING.
In the event that each of the Rating Categories assigned to the Notes
of the Company by the Rating Agencies is Investment Grade, the provisions of
Sections 1010,
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1011, 1013, 1016, 1017 and 801(3) shall cease to apply to the Company and its
Restricted Subsidiaries from and after the date on which the second of the
Rating Agencies notifies the Company of the assignment of such Rating
Category. Notwithstanding the foregoing, if the Rating Category assigned by
either Rating Agency to the Notes should subsequently decline below
Investment Grade, the foregoing covenants shall be reinstituted as and from
the date of such rating decline.
SECTION 1022. WAIVER OF CERTAIN COVENANTS.
The Company may omit in any particular instance to comply with any
term, provision or condition set forth in Section 803 or Sections 1007 and 1008,
1010 through 1015, inclusive and 1017 through 1020, inclusive, if before or
after the time for such compliance the Holders of at least a majority in
principal amount of the Outstanding Notes, by Act of such Holders, waive such
compliance in such instance with such term, provision or condition, but no such
waiver shall extend to or affect such term, provision 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
term, provision or condition shall remain in full force and effect.
ARTICLE ELEVEN
REDEMPTION OF NOTES
SECTION 1101. RIGHT OF REDEMPTION.
The Notes may be redeemed, at the option of the Company, as a whole or
from time to time in part, at any time on or after July 31, 2002, subject to the
conditions and at the Redemption Prices specified in the form of Note, together
with accrued interest to the Redemption Date.
Up to 35% of the initial aggregate principal amount of the Notes may
be redeemed on or prior to July 31, 2000, at the option of the Company, within
180 days of a Public Equity Offering with the net proceeds of such offering at a
redemption price equal to 110 5/8% of the principal amount thereof, together
with accrued and unpaid interest, if any, to the date of redemption (subject
to the right of holders of record on relevant record dates to receive interest
due on relevant Interest Payment Dates); PROVIDED that after giving effect to
such redemption at least $162.5 million aggregate principal amount of the Notes
remains outstanding.
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SECTION 1102. APPLICABILITY OF ARTICLE.
Redemption of Notes at the election of the Company or otherwise, as
permitted or required by any provision of this Indenture, shall be made in
accordance with such provision and this Article.
SECTION 1103. ELECTION TO REDEEM; NOTICE TO TRUSTEE.
The election of the Company to redeem any Notes 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 60 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 Notes to be redeemed and shall deliver to the Trustee
such documentation and records as shall enable the Trustee to select the Notes
to be redeemed pursuant to Section 1104.
SECTION 1104. SELECTION BY TRUSTEE OF NOTES TO BE REDEEMED.
If less than all the Notes are to be redeemed at any time, the
particular Notes to be redeemed shall be selected on a PRO RATA basis by lot or
by such other method as the Trustee shall deem fair and appropriate and which
may provide for the selection for redemption of portions of the principal of
Notes; PROVIDED, HOWEVER, that no such partial redemption shall reduce the
portion of the principal amount of a Note not redeemed to less than $1,000.
The Trustee shall promptly notify the Company in writing of the Notes
selected for redemption and, in the case of any Notes 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 redemption of Notes shall relate, in the
case of any Note redeemed or to be redeemed only in part, to the portion of the
principal amount of such Note which has been or is to be redeemed.
SECTION 1105. NOTICE OF REDEMPTION.
Notice of redemption shall be given in the manner provided for in
Section 106 not less than 30 nor more than 60 days prior to the Redemption Date,
to each Holder of Notes to be redeemed.
All notices of redemption shall state:
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(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all Outstanding Notes are to be redeemed, the
identification by CUSIP Numbers, if any (and, in the case of a partial
redemption, the principal amounts), of the particular Notes to be redeemed,
(4) if any Note is to be redeemed in part only, the portion of the
principal amount thereof to be redeemed,
(5) that on the Redemption Date the Redemption Price (together with
accrued interest, if any, to the Redemption Date payable as provided in
Section 1107) will become due and payable upon each such Note, or the
portion thereof, to be redeemed, and that interest thereon will cease to
accrue on and after said date, and
(6) the place or places where such Notes are to be surrendered for
payment of the Redemption Price.
Notice of redemption of Notes to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
SECTION 1106. DEPOSIT OF REDEMPTION PRICE.
On or 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 sufficient to pay the Redemption Price of, and accrued interest on, any
Notes, or any portions thereof, to be redeemed on that date.
SECTION 1107. NOTES PAYABLE ON REDEMPTION DATE.
Notice of redemption having been given as aforesaid, the Notes so to
be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified (together with accrued interest and
Liquidated Damages, if any, to the Redemption Date), and from and after such
date (unless the Company shall default in the payment of the Redemption Price
and accrued interest and Liquidated Damages, if any,) such Notes, or portions
thereof, shall cease to bear interest. Upon surrender of any such Note for
redemption in accordance with said notice, such Note shall be paid by the
Company at the Redemption Price, together with accrued interest and Liquidated
Damages, if any, to the Redemption Date; PROVIDED, HOWEVER, that installments of
interest whose Stated Maturity is
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on or prior to the Redemption Date shall be payable to the Holders of such
Notes, or one or more Predecessor Notes, 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 Note called for redemption shall not be so paid upon surrender
thereof for redemption, the principal (and premium and Liquidated Damages, if
any) shall, until paid, bear interest from the Redemption Date at the rate borne
by the Notes.
SECTION 1108. NOTES REDEEMED IN PART.
Any Note which is to be redeemed only in part (pursuant to the
provisions of this Article shall be surrendered at the office or agency of the
Company maintained for such 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 such Holder's attorney duly authorized in writing),
and the Company shall execute, and the Trustee shall authenticate and deliver to
the Holder of such Note without service charge, a new Note or Notes, of any
authorized denomination as requested by such Holder, in an aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of
the Note so surrendered.
ARTICLE TWELVE
NOTE GUARANTEES
SECTION 1201. NOTE GUARANTEES.
Subject to the provisions of this Article Twelve, each Subsidiary
Guarantor hereby irrevocably and unconditionally guarantees, jointly and
severally, on a senior basis to each Holder and to the Trustee, on behalf of the
Holders, (i) the due and punctual payment of the principal of, premium, if any,
and interest and Liquidated Damages, if any, on each Note, when and as the same
shall become due and payable, whether at Stated Maturity or purchase upon a
Change of Control Triggering Event or Asset Sale Offer, and whether by
declaration of acceleration, a Change of Control Triggering Event, Asset Sale
Offer, call for redemption or otherwise, the due and punctual payment of
interest on the overdue principal of, premium, if any, and interest and
Liquidated Damages, if any, on the Notes, to the extent lawful, and the due and
punctual performance of all other obligations of the Company to the Holders or
the Trustee all in accordance with the terms of such Note and this Indenture and
(ii) in the case of any extension of time of payment or renewal of any Notes or
any of such other obligations, that the same will be promptly paid in full when
due or performed in accordance with the terms of the extension or renewal, at
Stated Maturity or purchase upon a Change of Control Triggering Event or Asset
Sale Offer, and whether by declaration of
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acceleration, a Change of Control Triggering Event, Asset Sale Offer, call
for redemption or otherwise (the obligations in clauses (i) and (ii) hereof
being the "Guaranteed Obligations").
Without limiting the generality of the foregoing, each Subsidiary
Guarantor's liability shall extend to all amounts that constitute part of the
Guaranteed Obligations and would be owed by the Company to the Holders or the
Trustee under the Notes and the Indenture but for the fact that they are
unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving the Company. The Subsidiary
Guarantors hereby agree that their obligations hereunder shall be absolute and
unconditional, irrespective of, and shall be unaffected by, any invalidity,
irregularity or unenforceability of any such Note or this Indenture, any failure
to enforce the provisions of any such Note or this Indenture, any waiver,
modification or indulgence granted to the Company with respect thereto, by any
Holder or any other circumstances which may otherwise constitute a legal or
equitable discharge or defense of the Company or a surety or guarantor.
The Subsidiary Guarantors hereby waive diligence, presentment, filing
of claims with a court in the event of merger or bankruptcy of the Company, any
right to require a proceeding first against the Company, the benefit of
discussion, protest or notice with respect to any such Note or the Indebtedness
evidenced thereby and all demands whatsoever (except as specified above), and
covenant that the Guaranteed Obligations will not be discharged as to any such
Note except by payment in full of such Guaranteed Obligations and as provided in
Sections 401, 1102, 1205 and 1206.
Each Subsidiary Guarantor further agrees that, as between such
Subsidiary Guarantor and the Holders, (i) the maturity of the Guaranteed
Obligations may be accelerated as provided in Article Five, notwithstanding any
stay, injunction or other prohibition preventing such acceleration in respect of
the Company or any other Subsidiary Guarantor in respect of the Guaranteed
Obligations, and (ii) in the event of any declaration of acceleration of such
Guaranteed Obligations as provided in Article Five, such Guaranteed Obligations
(whether or not due and payable) shall forthwith become due and payable by each
Subsidiary Guarantor. In addition, without limiting the foregoing provisions,
upon the effectiveness of an acceleration under Article Five, the Trustee shall
promptly make a demand for payment on any Notes in respect of which the
Guaranteed Obligations provided for in this Article Twelve are not discharged.
Each Subsidiary Guarantor hereby irrevocably waives any claim or other
rights that it may now or hereafter acquire against the Company that arise from
the existence, payment, performance or enforcement of such Subsidiary
Guarantor's obligations under this Indenture, or any other document or
instrument including, without limitation, any right of reimbursement,
exoneration, contribution, indemnification, any right to participate in any
claim or remedy of the Holders against the Company, whether or not such claim,
remedy or right arises in equity, or under contract, statute or common law,
including, without
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limitation, the right to take or receive from the Company, directly or
indirectly, in cash or other property or in any other manner, payment or
security on account of such claim or other rights. Each Subsidiary Guarantor
shall be subrogated to all rights of the Holders of the Notes pursuant to any
Note Guarantee against the Company in respect of any amounts paid by such
Subsidiary Guarantor on account of such Note pursuant to the provisions of
this Indenture; PROVIDED, HOWEVER, that no Subsidiary Guarantor shall be
entitled to enforce or to receive any payment arising out of, or based upon
such right of subrogation until the principal of (and premium, if any) and
interest on all Notes issued hereunder shall have been paid in full to the
Holders entitled thereto. If any amount shall be paid to any Subsidiary
Guarantor in violation of this paragraph and the Guaranteed Obligations shall
not have been paid in full, such amount shall be deemed to have been paid to
such Subsidiary Guarantor for the benefit of, and held in trust for the
benefit of, the Holders, and shall forthwith be paid to the Trustee. Each
Subsidiary Guarantor acknowledges that it shall receive direct and indirect
benefits from the issuance of the Notes and that the waiver set forth in this
Section 1201 is knowingly made in contemplation of such benefits.
SECTION 1202. EXECUTION AND DELIVERY OF NOTE GUARANTEE.
To further evidence the Note Guarantee set forth in Section 1201, each
Subsidiary Guarantor hereby agrees that a notation of such Note Guarantee,
substantially in the form included in Exhibit B of this Indenture, shall be
endorsed on each Note authenticated and delivered by the Trustee. Such Note
Guarantee shall be executed on behalf of each Subsidiary Guarantor by its
Chairman, any Vice Chairman, its President or a Vice President and attested by
its Secretary or Assistant Secretary, and shall have been duly authorized by all
requisite corporate action. The validity and enforceability of any Note
Guarantee shall not be affected by the fact that it is not affixed to any
particular Note.
Each Subsidiary Guarantor hereby agrees that its respective Note
Guarantee set forth in Section 1201 shall remain in full force and effect
notwithstanding any failure to endorse on each Note a notation of such Note
Guarantee.
The delivery of any Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of any Note Guarantee set forth
in this Indenture on behalf of the Subsidiary Guarantors.
SECTION 1203. OBLIGATIONS OF THE SUBSIDIARY GUARANTORS UNCONDITIONAL.
Nothing contained in this Article Twelve, elsewhere in this Indenture
or in any Note is intended to or shall impair, as between the Subsidiary
Guarantors and the Holders, the obligation of the Subsidiary Guarantors, which
obligations are independent of the obligations of the Company under the Notes
and this Indenture and are absolute and unconditional, to pay to the Holders the
Guaranteed Obligations as and when the same shall
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become due and payable in accordance with the provisions of this Indenture,
or is intended to or shall affect the relative rights of the Holders and
creditors of the Subsidiary Guarantors, nor shall anything herein or therein
prevent the Trustee or any Holder from exercising all remedies otherwise
permitted by applicable law upon Default under this Indenture. Each payment
to be made by any Subsidiary Guarantor hereunder in respect of the Guaranteed
Obligations shall be payable in the currency or currencies in which such
Guaranteed Obligations are denominated.
SECTION 1204. RANKING OF NOTE GUARANTEES.
Each Subsidiary Guarantor covenants and agrees, and each Holder by its
acceptance thereof, likewise covenants and agrees, that each Note Guarantee will
be an unsecured senior subordinated obligation of the Subsidiary Guarantor
issuing such Note Guarantee, subordinated in right of payment to all existing
and future Senior Indebtedness of the Subsidiary Guarantors, and ranking senior
to or PARI PASSU in right of payment with all other existing and future
Indebtedness of such Subsidiary Guarantor that is expressly subordinated to any
Senior Subordinated Indebtedness of such Subsidiary Guarantor.
SECTION 1205. LIMITATION OF NOTE GUARANTEES.
The Company and each Subsidiary Guarantor, and each Holder of a Note
by his acceptance thereof, hereby confirm that it is the intention of all such
parties that each Subsidiary Guarantor shall be liable under this Indenture only
for amounts aggregating up to the largest amount that would not render its
obligations hereunder subject to avoidance under Section 548 of the United
States Bankruptcy Code or any comparable provisions of any applicable state law.
To effectuate the foregoing intention, the Holders hereby irrevocably agree that
in the event that any such Note Guarantee would constitute or result in a
violation of any applicable fraudulent conveyance or similar law of any relevant
jurisdiction, the liability of the Subsidiary Guarantor under such Note
Guarantee shall be reduced to the maximum amount, after giving effect to all
other contingent and fixed liabilities of such Subsidiary Guarantor, permissible
under the applicable fraudulent conveyance or similar law.
SECTION 1206. RELEASE OF SUBSIDIARY GUARANTORS.
(a) Any Subsidiary Guarantor shall be released from and relieved of
its obligations under this Article Twelve (1) upon defeasance in accordance with
Section 1302, (2) upon the payment in full of the Guaranteed Obligations, or (3)
upon the sale by the Company or any Subsidiary of such Subsidiary Guarantor to
any Person other than a Subsidiary of the Company, PROVIDED that such sale does
not result in a sale, assignment, transfer, lease or disposal of all or
substantially all of the properties and assets of the Company and its
Subsidiaries on a Consolidated basis. Upon the delivery by the Company to the
Trustee of an Officers' Certificate and, if requested by the Trustee, an Opinion
of
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Counsel to the effect that the transaction giving rise to the release of such
obligations was made by the Company in accordance with the provisions of this
Indenture and the Notes, the Trustee shall execute any documents reasonably
required in order to evidence the release of the Subsidiary Guarantors from
their obligations. If any of the Guaranteed Obligations are revived and
reinstated after the termination of such Note Guarantee, then all of the
obligations of the Subsidiary Guarantors under such Note Guarantee shall be
revived and reinstated as if such Note Guarantee had not been terminated until
such time as the Guaranteed Obligations are paid in full, and the Subsidiary
Guarantors shall execute any documents reasonably satisfactory to the Trustee
evidencing such revival and reinstatement.
(b) Upon the sale or disposition (whether by merger, stock purchase,
asset sale or otherwise) of a Subsidiary Guarantor or all or substantially all
of its assets to an entity which is not a Subsidiary Guarantor (and a Restricted
Subsidiary) or the designation of a Restricted Subsidiary to become an
Unrestricted Subsidiary, which transaction is otherwise in compliance with this
Indenture (including, without limitation, the provisions of Sections 1016 and
1017), such Subsidiary Guarantor will be deemed released from its obligations
under its Note Guarantee; PROVIDED, HOWEVER, that any such termination shall
occur only to the extent that all obligations of such Subsidiary Guarantor under
all of its guarantees of, and under all of its pledges of assets or other
security interests which secure, any Indebtedness of the Company or any other
Restricted Subsidiary shall also terminate upon such release, sale or transfer.
In addition, upon the delivery by the Company to the Trustee of an Officers'
Certificate and, if requested by the Trustee, an Opinion of Counsel to the
effect that the transaction giving rise to the release of such obligations was
made in accordance with the provisions of this Indenture and the Notes, the
Trustee shall execute any documents reasonably required in order to evidence the
release of such Subsidiary Guarantor from its obligations. Any Subsidiary
Guarantor not so released remains liable for the full amount of principal of
(and premium, if any) and interest on the Notes as provided in this Article
Twelve.
(c) Any Subsidiary Guarantor shall automatically be released from and
relieved of its obligations under its Note Guarantee upon the sale or transfer
of the Capital Stock of such Subsidiary Guarantor pursuant to or in lieu of
foreclosure of any lien on the Capital Stock of such Subsidiary Guarantor
existing in favor of any holder of Senior Indebtedness and, upon the request of
any holder of Senior Indebtedness (or of any purchaser or transferee pursuant to
or in lieu of such foreclosure), the Trustee shall execute any documents
reasonably required to evidence the release of such Subsidiary Guarantor.
SECTION 1207. SUBSIDIARY GUARANTORS MAY CONSOLIDATE, ETC., ON CERTAIN
TERMS.
Except as set forth in Section 1206 and in Articles Eight and Ten
hereof, nothing contained in this Indenture or in any of the Notes shall
prevent any consolidation or
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merger of a Subsidiary Guarantor with or into the Company or a Subsidiary
Guarantor or shall prevent any sale or conveyance of the property of a
Subsidiary Guarantor as an entirety or substantially as an entirety to the
Company or a Subsidiary Guarantor.
ARTICLE THIRTEEN
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1301. COMPANY'S OPTION TO EFFECT DEFEASANCE OR COVENANT
DEFEASANCE.
The Company may, at its option and at any time, with respect to the
Notes, elect to have either Section 1302 or Section 1303 be applied to all
Outstanding Notes upon compliance with the conditions set forth below in this
Article Thirteen.
SECTION 1302. DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under Section 1301 of the option
applicable to this Section 1302, the Company shall be deemed to have paid and
discharged all obligations with respect to all Outstanding Notes on the date the
conditions set forth in Section 1304 are satisfied (hereinafter, "defeasance").
For this purpose, such defeasance means that the Company shall be deemed to have
paid and discharged the entire indebtedness represented by the Outstanding
Notes, which shall thereafter be deemed to be "Outstanding" only for the
purposes of Section 1305 and the other Sections of this Indenture referred to in
(A) and (B) below, and to have satisfied all its other obligations under such
Notes and this Indenture insofar as such Notes are concerned (and the Trustee,
at the expense of the Company, shall execute proper instruments acknowledging
the same), except for the following which shall survive until otherwise
terminated or discharged hereunder: (A) the rights of Holders of Outstanding
Notes to receive payments in respect of the principal of, premium, if any, and
interest on such Notes when such payments are due or on the Redemption Date with
respect to such Notes, as the case may be, (B) the Company's obligations with
respect to such Notes under Sections 304, 305, 306, 1002 and 1003, (C) the
rights, powers, trusts, duties and immunities of the Trustee hereunder and
(D) this Article Thirteen. Subject to compliance with this Article Thirteen,
the Company may exercise its option under this Section 1302 notwithstanding the
prior exercise of its option under Section 1303 with respect to the Notes.
SECTION 1303. COVENANT DEFEASANCE.
Upon the Company's exercise under Section 1301 of the option
applicable to this Section 1303, the Company shall be released from its
obligations under any covenant contained in Section 801(3) and Section 803 and
in Sections 1004 through 1020 with respect
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to the Outstanding Notes on and after the date the conditions set forth below
are satisfied (hereinafter, "covenant defeasance"), and the Notes shall
thereafter be deemed not to be "Outstanding" for the purposes of any
direction, waiver, consent or declaration or Act of Holders (and the
consequences of any thereof) in connection with such covenants, but shall
continue to be deemed "Outstanding" for all other purposes hereunder. For
this purpose, such covenant defeasance means that, with respect to the
Outstanding Notes, the Company may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any
such covenant, whether directly or indirectly, by reason of any reference
elsewhere herein to any such covenant or by reason of any reference in any
such covenant to any other provision herein or in any other document and such
omission to comply shall not constitute a Default or an Event of Default
under Sections 501(3), 4, 5 and 7 but, except as specified above, the
remainder of this Indenture and such Notes shall be unaffected thereby.
SECTION 1304. CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE.
The following shall be the conditions to application of either
Section 1302 or Section 1303 to the Outstanding Notes:
(1) the Company must irrevocably have deposited with the Trustee (or
another trustee satisfying the requirements of Section 607 who shall agree
to comply with the provisions of this Article Thirteen applicable to it),
in trust, for the benefit of the Holders, cash in United States dollars,
U.S. Government Obligations or a combination thereof, in such amounts as
will be sufficient, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, to pay and discharge the principal of, and
premium, if any, and interest on the Outstanding Notes on the Stated
Maturity or on an optional redemption date (such date being referred to as
the "Defeasance Redemption Date"), as the case may be, if in the case of a
Defeasance Redemption Date prior to electing to exercise either defeasance
or covenant defeasance, the Company has delivered to the Trustee an
irrevocable notice to redeem all of the Outstanding Notes on such
Defeasance Redemption Date;
(2) in the case of an election under Section 1302, the Company shall
have delivered to the Trustee an opinion of independent counsel in the
United States stating that (x) the Company has received from, or there has
been published by, the Internal Revenue Service a ruling, or (y) since the
date of this Indenture, there has been a change in the applicable federal
income tax law, in either case to the effect that, and based thereon such
opinion of counsel in the United States shall confirm that, the Holders of
the Outstanding Notes will not recognize income, gain or loss for federal
income tax purposes as a result of such defeasance and will be subject to
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federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such defeasance had not occurred;
(3) in the case of an election under Section 1303, the Company shall
have delivered to the Trustee an opinion of independent counsel in the
United States to the effect that the Holders of the Outstanding Notes will
not recognize income, gain or loss for federal income tax purposes as a
result of such covenant defeasance and will be subject to federal income
tax on the same amounts, in the same manner and at the same times as would
have been the case if such covenant defeasance had not occurred;
(4) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit or, insofar as paragraphs (8) and
(9) of Section 501 hereof are concerned, at any time during the period
ending on the 91st day after the date of such deposit (it being understood
that this condition shall not be deemed satisfied until the expiration of
such period);
(5) such defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a Default under, this Indenture or
any other material agreement or instrument to which the Company or any
Subsidiary Guarantor is a party or by which it is bound;
(6) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the
intent of preferring the Holders of the Notes or any Subsidiary Guarantor
over the other creditors of the Company or any Subsidiary Guarantor or with
the intent of defeating, hindering, delaying or defrauding creditors of the
Company, any Subsidiary Guarantor or others; and
(7) the Company shall have delivered to the Trustee an Officers'
Certificate stating that all conditions precedent provided for relating to
either the defeasance under Section 1302 or the covenant defeasance under
Section 1303 (as the case may be) have been complied with.
SECTION 1305. DEPOSITED MONEY AND U.S. GOVERNMENT OBLIGATIONS TO BE
HELD IN TRUST; OTHER MISCELLANEOUS PROVISIONS.
Subject to the provisions of the last paragraph of Section 1003, all
money and U.S. Government Obligations (including the proceeds thereof) deposited
with the Trustee (or other qualifying trustee -- collectively for purposes of
this Section 1305, the "Trustee") pursuant to Section 1304 in respect of the
Outstanding Notes shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Notes and this Indenture,
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to the payment, either directly or through any Paying Agent (including the
Company acting as its own Paying Agent) as the Trustee may determine, to the
Holders of such Notes of all sums due and to become due thereon in respect of
principal (and premium, if any) and interest, but such money need not be
segregated from other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the U.S. Governmental Obligations
deposited pursuant to Section 1304 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is for
the account of the Holders of the Outstanding Notes.
Anything in this Article Thirteen to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon Company
Request any money or U.S. Government Obligations held by it as provided in
Section 1304 which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, are in excess of the amount thereof which would then
be required to be deposited to effect an equivalent defeasance or covenant
defeasance, as applicable, in accordance with this Article.
SECTION 1306. REINSTATEMENT.
If the Trustee or any Paying Agent is unable to apply any money in
accordance with Section 1305 by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 1302 or 1303, as the case may be, until such time as the Trustee or
Paying Agent is permitted to apply all such money in accordance with
Section 1305, and the Company shall execute all documents reasonably
satisfactory to the Trustee evidencing such revival and reinstatement; PROVIDED,
HOWEVER, that if the Company makes any payment of principal of (or premium, if
any, on) or interest on any Note following the reinstatement of its obligations,
the Company shall be subrogated to the rights of the Holders of such Notes to
receive such payment from the money held by the Trustee or Paying Agent.
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ARTICLE FOURTEEN
SUBORDINATION OF NOTES
SECTION 1401. NOTES SUBORDINATE TO SENIOR INDEBTEDNESS.
The Company covenants and agrees, and each Holder, by its acceptance
thereof, likewise covenants and agrees, that, to the extent and in the manner
hereinafter set forth in this Article Fourteen, the indebtedness represented by
the Notes and the payment (by set-off or otherwise) of principal of, premium, if
any, interest and Liquidated Damages, if any, on the Notes (including with
respect to any repurchases of the Notes) will be subordinated in right of
payment to the prior payment in full in cash, or at the option of the holders of
Senior Indebtedness, in Temporary Cash Investments, of all Obligations in
respect of Senior Indebtedness, whether outstanding on the date of this
Indenture or thereafter incurred; PROVIDED, HOWEVER, that the Notes, the
indebtedness represented thereby and the payment of the principal of (and
premium, if any), interest on and Liquidated Damages, if any, on the Notes, in
all respects shall rank equally with, or prior to, all existing and future
Indebtedness of the Company that is expressly subordinated to any Senior
Indebtedness.
SECTION 1402. PAYMENT OVER OF PROCEEDS UPON DISSOLUTION, ETC.
Upon any distribution to creditors of the Company or any Subsidiary
Guarantor upon any total or partial liquidation, dissolution or winding up of
the Company or such Subsidiary Guarantor or in a bankruptcy, reorganization,
insolvency, receivership or similar proceeding relating to the Company or such
Subsidiary Guarantor or its property, whether voluntary or involuntary, an
assignment for the benefit of creditors or any marshalling of the Company's or
such Subsidiary Guarantor's assets and liabilities,
(1) the holders of Senior Indebtedness of the Company or such
Subsidiary Guarantor will be entitled to receive payment in full in cash,
or at the option of the holders of such Senior Indebtedness, in Temporary
Cash Investments, of all Obligations due or to become due in respect of
such Senior Indebtedness (including interest after the commencement of any
such proceeding at the rate specified in the applicable Senior
Indebtedness) before the Holders will be entitled to receive any payment of
any kind or character with respect to the Notes; and
(2) until all Obligations with respect to such Senior Indebtedness
are paid in full in cash, or at the option of the holders of such Senior
Indebtedness, in Temporary Cash Investments, any distribution of any kind
or character to which the Holders of Notes would be entitled shall be made
to the holders of such Senior Indebtedness (except that Holders of Notes
may receive Permitted Junior Securities and payments made from the trust
described under Article Thirteen).
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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, transfer or lease 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 this Section if the Person
formed by such consolidation or into which the Company is merged or the Person
which acquires by conveyance, transfer or lease such properties and assets
substantially as an entirety, as the case may be, shall, as a part of such
consolidation, merger, conveyance, transfer or lease, comply with the conditions
set forth in Article Eight.
SECTION 1403. SUSPENSION OF PAYMENT WHEN SENIOR INDEBTEDNESS IN
DEFAULT.
Unless Section 1402 shall be applicable, neither the Company nor any
Subsidiary Guarantor shall make, directly or indirectly, (x) any payment upon or
in respect of the Notes (except in Permitted Junior Securities or from the trust
described under Article Thirteen) or (y) acquire any of the Notes for cash or
property or otherwise or make any other distribution with respect to the Notes
if (i) any default occurs and is continuing in the payment when due, whether at
maturity, upon any redemption, by declaration or otherwise, of any amount of any
Designated Senior Indebtedness (a "Payment Default") or (ii) any other default
occurs and is continuing with respect to Designated Senior Indebtedness (a
"Non-Payment Default") that permits holders of, or the trustee or agent on
behalf of the holders of, the Designated Senior Indebtedness as to which such
default relates to accelerate its maturity and the Trustee receives a notice of
such default (a "Payment Blockage Notice") from the trustee or agent on behalf
of holders of any Designated Senior Indebtedness. Payments on the Notes may and
shall be resumed (a) in the case of a Payment Default, upon the date on which
such default is cured or waived and (b) in case of a Non-Payment Default, the
earlier of the date on which such Non-Payment Default is cured or waived or 179
days after the date on which the applicable Payment Blockage Notice is received,
unless a Payment Default has occurred and is continuing, including as a result
of the acceleration of the maturity of any Designated Senior Indebtedness. After
a Payment Blockage Notice is given for a Non-Payment Default, no new period of
payment blockage for a Non-Payment Default may be commenced unless and until
(i) 360 days have elapsed since the effectiveness of the immediately prior
Payment Blockage Notice and (ii) all scheduled payments of principal, premium,
if any, and interest and Liquidated Damages, if any, on the Notes that have come
due have been paid in full in cash. No Non-Payment Default that existed or was
continuing on the date of delivery of any Payment Blockage Notice to the Trustee
shall be, or be made, the basis for a subsequent Payment Blockage Notice unless
such Non-Payment Default shall have been cured or waived for a period of not
less than 90 days (it being acknowledged that any subsequent action, or any
breach of any financial covenants for a period commencing after the date of
delivery of any Payment Blockage Notice which, in
<PAGE>
107
either case, would give rise to a default pursuant to any provision under
which a default previously existed or was continuing shall constitute a new
default for this purpose). Each Holder by its acceptance of a Note
irrevocably agrees that if any payment or payments shall be made pursuant to
this Indenture by the Company or a Subsidiary Guarantor and the amount or
total amount of such payment or payments exceeds the amount, if any, that
such Holder would be entitled to receive upon the proper application of the
subordination provisions of this Indenture, the payment of such excess amount
shall be deemed null and void, and the Holder agrees that it will be
obligated to return the amount of the excess payment to the Trustee, as
instructed in a written notice of such excess payment, within ten days of
receiving such notice.
SECTION 1404. PAYMENT PERMITTED IF NO DEFAULT.
Nothing contained in this Article or elsewhere in this Indenture or in
any of the Notes shall prevent 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 1402 or under the conditions
described in Section 1403, from making payments at any time of principal of (and
premium, if any) or interest or Liquidated Damages, if any, on the Notes.
SECTION 1405. SUBROGATION TO RIGHTS OF HOLDERS OF SENIOR
INDEBTEDNESS.
Subject to the prior payment in full in cash of all Senior
Indebtedness, the Holders shall be subrogated 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 Notes shall be paid in full. For purposes
of such subrogation, no payments or distributions to the holders of Senior
Indebtedness of any cash, property or securities to which the Holders of the
Notes or 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 Notes or the Trustee, shall, as
among the Company, its creditors other than holders of Senior Indebtedness, and
the Holders of the Notes, be deemed to be a payment or distribution by the
Company to or on account of the Senior Indebtedness.
SECTION 1406. 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 Notes 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 Notes is
intended to or shall (a) impair, as between the Company and the Holders of the
Notes, the obligation of the Company, which is absolute and unconditional, to
<PAGE>
108
pay to the Holders of the Notes the principal of (and premium, if any) and
interest on the Notes 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 Notes and creditors of the Company other than the
holders of Senior Indebtedness; or (c) prevent the Trustee or the Holder of any
Note from exercising all remedies otherwise permitted by applicable law upon
default under this Indenture, subject to the rights, if any, under this Article
Fourteen of the holders of Senior Indebtedness in respect of cash, property or
securities of the Company received upon the exercise of any such remedy.
SECTION 1407. TRUSTEE TO EFFECTUATE SUBORDINATION.
Each Holder of a Note 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. If upon any
dissolution, winding up or reorganization of the Company, whether in bankruptcy,
insolvency, receivership proceedings or otherwise, the Trustee does not file a
claim in such proceedings prior to 30 days before the expiration of the time to
file such claim, the holders of Senior Indebtedness or the Agents may file such
a claim on behalf of the holders of the Notes.
SECTION 1408. NO WAIVER OF SUBORDINATION PROVISIONS.
(a) No right of any present or future holder of any Senior
Indebtedness to enforce subordination as herein provided shall at any time in
any way be prejudiced or impaired by any act or failure to act on the part of
the Company or by any act or failure to act, in good faith, by any such holder,
or by any non-compliance by the Company with the terms, provisions and covenants
of this Indenture, regardless of any knowledge thereof any such holder may have
or be otherwise charged with.
(b) Without in any way limiting the generality of Subsection (a) of
this Section, 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
Notes, without incurring responsibility to the Holders of the Notes and without
impairing or releasing the subordination provided in this Article or the
obligations hereunder of the Holders of the Notes to the holders of Senior
Indebtedness, do any one or more of the following: (1) change the manner, place
or terms of payment or extend the time of payment of, or renew or alter, Senior
Indebtedness or any instrument evidencing the same or any agreement under which
Senior Indebtedness is outstanding; (2) sell, exchange, release or otherwise
deal with any property pledged, mortgaged or otherwise securing Senior
Indebtedness; (3) release any Person liable in any manner for the collection or
payment of Senior Indebtedness; and (4) exercise or refrain from exercising any
rights against the Company or any other Person.
<PAGE>
109
SECTION 1409. NOTICE TO TRUSTEE.
(a) 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 Notes. 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 Notes, unless and
until the Trustee shall have received written notice thereof from the Company,
the Agent or a holder of Senior Indebtedness or from any trustee, fiduciary or
agent 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
three 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 Note), 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 three Business Days
prior to such date.
(b) Subject to the provisions of Section 601, the Trustee shall be
entitled to 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,
fiduciary or agent therefor) to establish that such notice has been given by a
holder of Senior Indebtedness (or a trustee, fiduciary or agent 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 1410. 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 Notes shall be entitled to 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
<PAGE>
110
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 Notes, for the
purpose of ascertaining the Persons entitled to participate in such payment
or distribution, the holders of Senior Indebtedness and other indebtedness of
the Company, the amount thereof or payable thereon, the amount or amounts
paid or distributed thereon and all other facts pertinent thereto or to this
Article.
SECTION 1411. RIGHTS OF TRUSTEE AS A 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 606.
SECTION 1412. 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 1411 shall not apply to the Company or any Affiliate of
the Company if it or such Affiliate acts as Paying Agent.
SECTION 1413. NO SUSPENSION OF REMEDIES.
Nothing contained in this Article shall limit the right of the Trustee
or the Holders of Notes to take any action to accelerate the maturity of the
Notes pursuant to Article Five or to pursue any rights or remedies hereunder or
under applicable law.
This 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 Indenture.
SECTION 1414. 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
the Trustee shall mistakenly, in the absence of gross negligence or willful
misconduct, pay over or distribute to Holders of Notes 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. With
respect
<PAGE>
111
to the holders of Senior Indebtedness, the Trustee undertakes to perform or
to observe only such of its covenants or obligations as are specifically set
forth in this Article and no implied covenants or obligations with respect to
holders of Senior Indebtedness shall be read into this Indenture against the
Trustee.
This Indenture may be signed 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 Indenture.
<PAGE>
112
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and the Company has caused its corporate seal to be hereunto
affixed and attested, all as of the day and year first above written.
FLEMING COMPANIES, INC.
By /s/ John M. Thompson
------------------------------------
Name: John M. Thompson
Title: Vice President
Attest: /s/ David R. Almond
---------------------------
Name: David R. Almond
Title: Secretary
MANUFACTURERS AND TRADERS
TRUST COMPANY
By /s/ Russell T. Whitley
------------------------------------
Name: Russell T. Whitley
Title: Assistant Vice President
ABCO MARKETS INC.
ABCO REALTY CORP.
FLEMING FOREIGN SALES CORPORATION
FLEMING INTERNATIONAL LTD.
FLEMING SUPERMARKETS OF FLORIDA, INC.
FLEMING TRANSPORTATION SERVICE, INC.
FLEMING WHOLESALE, INC.
GATEWAY INSURANCE AGENCY, INC.
LAS, INC.
PIGGLY WIGGLY COMPANY
PROGRESSIVE REALTY, INC.
RETAIL SUPERMARKETS, INC.
RFS MARKETING SERVICES, INC.
SCRIVNER TRANSPORTATION, INC.
SMARTRANS, INC.
UNIVERSITY FOODS, INC.
<PAGE>
113
Each, a Subsidiary Guarantor
By /s/ John M. Thompson
----------------------------------
Name: John M. Thompson
Title: Vice President
Attest:
/s/ David R. Almond
- ----------------------------------
Secretary
David R. Almond
<PAGE>
EXHIBIT A
CERTIFICATE TO BE DELIVERED UPON REGISTRATION OF
EXCHANGE OR TRANSFER OF NOTES
Re: 10 5/8% Senior Subordinated Notes due 2007 of Fleming Companies, Inc.
This Certificate relates to $______ principal amount of Notes held in
*/ / global or */ / definitive form by ___________ (the "Transferor").
The Transferor*:
/ / has requested the Trustee by written order to deliver, in exchange for
its beneficial interest in the Global Note held by the Depositary, a Note or
Notes in definitive, registered form, in the authorized denominations in an
aggregate principal amount equal to its beneficial interest in such Global Note
(or the portion thereof indicated above); or
/ / has requested the Trustee by written order to exchange or register the
transfer of a Note or Notes.
In connection with any transfer of any of the Notes occurring prior to the
expiration of the period referred to in Rule 144(k) under the Securities Act of
1933, as amended (the "Securities Act"), after the later of the date of original
issuance of such Notes and the last date, if any, on which such Notes were owned
by the Company or any Affiliate of the Company, the undersigned confirms that
such Notes are being transferred in accordance with its terms:
CHECK ONE BOX BELOW:
(1) / / to the Company; or
(2) / / pursuant to an effective registration statement under the
Securities Act; or
(3) / / inside the United States to a "qualified institutional
buyer" (as defined in Rule 144A under the Securities Act)
that purchases for its own account or for the account of a
qualified institutional buyer to whom notice is given that
such transfer is being made in reliance on Rule 144A, in
each case pursuant to and in compliance with Rule 144A under
the Securities Act; or
- -------------------
*Check applicable box.
<PAGE>
A-2
(4) / / outside the United states in an offshore transaction within
the meaning of Regulation S under the Securities Act in
compliance with Rule 904 under the Securities Act; or
(5) / / inside the United States to an institutional "accredited
investor" (as defined in Rule 501(a)(1), (2), (3) or (7) of
Regulation D under the Securities Act) that, prior to such
transfer, furnishes to the Trustee a signed letter
containing certain representations and agreements (the form
of which letter can be obtained from the Trustee) and an
opinion of counsel acceptable to the Company that such
transfer is in compliance with the restrictions set forth in
the legend on the Notes; or
(6) / / pursuant to another available exemption from registration
provided by Rule 144 under the Securities Act.
Unless one of the boxes is checked, the Trustee will refuse to register any of
the Notes in the name of any person other than the registered holder thereof,
provided, however, that if box (4), (5) or (6) is checked, the Trustee may
require, prior to registering any such transfer of the Notes, such legal
opinions, certifications and other information as the Company has reasonably
requested to confirm that such transfer is being made pursuant to an exemption
from, or in a transaction not subject to, the registration requirements of the
Securities Act, such as the exemption provided by Rule 144 under such Act.
Date: Your Name:
------------------------- ----------------------------------
(Print your name exactly as it appears
on the face of the Note)
Your Signature:
-----------------------------------
(Sign exactly as your name appears
on the Note)
Social Security or Tax Identification No.:
--------
Signature Guarantee**:
----------------------------
- -------------------
** Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
<PAGE>
A-3
TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing the Notes
for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act,
and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Dated:
-------------------------- -------------------------------
NOTICE: To be executed by an
executive officer
<PAGE>
EXHIBIT B
FORM OF NOTE GUARANTEE
For value received, the undersigned hereby irrevocably and
unconditionally guarantees, jointly and severally, on a senior subordinated
basis to each Holder and to the Trustee, on behalf of the Holders, (i) the due
and punctual payment of the principal of, premium, if any, interest and
Liquidated Damages, if any, on each Note, when and as the same shall become due
and payable, whether at Stated Maturity or on a redemption date or pursuant to a
Change of Control Purchase Offer or an Asset Sale Offer, and whether by
declaration of acceleration, call for redemption, purchase or otherwise, the due
and punctual payment of interest on the overdue principal of, premium, if any,
interest and Liquidated Damages, if any, on the Notes, to the extent lawful, and
the due and punctual performance of all other obligations of the Company to the
Holders or the Trustee all in accordance with the terms of such Note and the
Indenture and (ii) in the case of any extension of time of payment or renewal of
any Notes or any of such other obligations, that the same will be promptly paid
in full when due or performed in accordance with the terms of the extension or
renewal, at Stated Maturity or on a redemption date or pursuant to a Change of
Control Purchase Offer or an Asset Sale Offer, and whether by declaration of
acceleration, call for redemption, purchase or otherwise (the obligations in
clauses (i) and (ii) hereof being the "Guaranteed Obligations"). Capitalized
terms used but not defined shall have the meanings ascribed to them in the
Indenture dated as of July 25, 1997 among Fleming Companies, Inc., the
Subsidiary Guarantors named therein and Manufacturers and Traders Trust Company.
The Obligations of the Subsidiary Guarantors to the Holders of the
Notes and to the Trustee pursuant to this Note Guarantee and the Indenture are
expressly set forth in Article Twelve of the Indenture, and reference is hereby
made to such Indenture for the precise terms of this Note Guarantee. The terms
of Article Twelve of the Indenture are incorporated herein by reference.
In certain circumstances more fully described in the Indenture, any
Subsidiary Guarantor may be released from its liability under this Note
Guarantee, and any such release will be effective whether or not noted herein.
This Note Guarantee shall not be valid or obligatory for any purpose
until the certificate of authentication on the Note upon which this Note
Guarantee is noted shall have been executed by the Trustee under the Indenture
by the manual signature of one of its authorized officers.
THIS GUARANTEE SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
<PAGE>
B-2
IN WITNESS WHEREOF, each Subsidiary Guarantor has caused its Note
Guarantee to be duly executed.
Date:
ABCO MARKETS INC.
ABCO REALTY CORP.
FLEMING FOREIGN SALES CORPORATION
FLEMING INTERNATIONAL LTD.
FLEMING SUPERMARKETS OF FLORIDA, INC.
FLEMING TRANSPORTATION SERVICE, INC.
FLEMING WHOLESALE, INC.
GATEWAY INSURANCE AGENCY, INC.
LAS, INC.
PIGGLY WIGGLY COMPANY
PROGRESSIVE REALTY, INC.
RETAIL SUPERMARKETS, INC.
RFS MARKETING SERVICES, INC.
SCRIVNER TRANSPORTATION, INC.
SMARTRANS, INC.
UNIVERSITY FOODS, INC.
Attest: By:
--------------------------------
Name:
Title:
- ------------------------------
Secretary
<PAGE>
EXHIBIT C
FORM OF INSTITUTIONAL ACCREDITED INVESTOR LETTER
In connection with our proposed purchase of $_______ aggregate
principal amount of 10 1/2% Senior Subordinated Notes due 2004 and/or 10 5/8%
Senior Subordinated Notes due 2007 (the "Notes") of FLEMING COMPANIES, INC., an
Oklahoma corporation (the "Issuer"), we confirm that:
1. We understand that the Notes have not been registered under the
Securities Act of 1933, as amended (the "Securities Act"), and may not be sold
except as permitted in the following sentence. We agree on our own behalf and
on behalf of any investor account for which we are purchasing Notes to offer,
sell or otherwise transfer such Notes prior to the date which is two years after
the later of the date of original issue and the last date on which the Issuer or
any affiliate of the Issuer was the owner of such Notes (or any predecessor
thereto) (the "Resale Restriction Termination Date") only (a) to the Issuer, (b)
pursuant to a registration statement which has been declared effective under the
Securities Act, (c) for so long as the Notes are eligible for resale pursuant to
Rule 144A under the Securities Act, to a person we reasonably believe is a
qualified institutional buyer under Rule 144A (a "QIB") that purchases for its
own account or for the account of a QIB and to whom notice is given that the
transfer is being made in reliance on Rule 144A, (d) pursuant to offers and
sales to non-U.S. persons that occur outside the United States within the
meaning of Regulation S under the Securities Act, (e) to an institutional
"accredited investor" within the meaning of subparagraph (a)(1), (2), (3) or (7)
of Rule 501 under the Securities Act that is acquiring the Notes for investment
purposes and not with a view to, or for offer or sale in connection with, any
distribution in violation of the Securities Act, or (f) pursuant to any other
available exemption from the registration requirements of the Securities Act,
subject in each of the foregoing cases to any requirement of law that the
disposition of our property or the property of such investor account or accounts
be at all times within our or their control and to compliance with any
applicable state securities laws. The foregoing restrictions on resale will not
apply subsequent to the Resale Restriction Termination Date. If any resale or
other transfer of the Notes is proposed to be made pursuant to clause (e) above
prior to the Resale Restriction Termination Date, the transferor shall deliver a
letter from the transferee substantially in a form of this letter to the
Trustee, which shall provide, among other things, that the transferee is an
institutional "accredited investor" within the meaning of subparagraph (a)(1),
(2), (3) or (7) of Rule 501 under the Securities Act and that it is acquiring
such Notes for investment purposes and not for distribution in violation of the
Securities Act. Each purchaser acknowledges that the Issuer and the Trustee
reserve the right prior to any offer, sale or other transfer prior to the Resale
Restriction Termination Date of the Notes pursuant to clauses (d), (e) and (f)
above to require the delivery of an
<PAGE>
opinion of counsel, certifications and/or other information satisfactory to
the Issuer and the Trustee.
2. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) purchasing
for our own account or for the account of such an institutional "accredited
investor", and we are acquiring the Notes for investment purposes and not with a
view to, or for offer or sale in connection with, any distribution in violation
of the Securities Act and we have such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of our
investment in the Notes, and we and any accounts for which we are acting are
each able to bear the economic risk of our or its investment.
3. We are acquiring the Notes purchased by us for our own account or
for one or more accounts as to each of which we exercise sole investment
discretion.
4. You are entitled to rely upon this letter and you are irrevocably
authorized to produce this letter or a copy hereof to any interested party in
any administrative or legal proceeding or official inquiry with respect to the
matters covered hereby.
Very truly yours,
---------------------------------------
By: (Name of Purchaser)
Date:
Upon transfer the Notes would be registered in the name of the new
beneficial owner as follows:
Name:
-----------------------------
Address:
--------------------------
Taxpayer ID Number:
---------------
<PAGE>
EXECUTION COPY
================================================================================
FLEMING COMPANIES, INC.
ISSUER
TO
MANUFACTURERS AND TRADERS TRUST COMPANY
TRUSTEE
THE SUBSIDIARY GUARANTORS NAMED HEREIN
GUARANTORS
____________________
INDENTURE
Dated as of July 25, 1997
_____________________
$250,000,000
10 1/2% Senior Subordinated Notes due 2004
================================================================================
<PAGE>
FLEMING COMPANIES, INC.
RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT
OF 1939 AND INDENTURE, DATED AS OF JULY 25, 1997
TRUST INDENTURE
ACT SECTION INDENTURE SECTION
Section 310(a)(1)....................................... 607(a)
(a)(2)....................................... 607(a)
(b).......................................... 607(b), 608
Section 312(c).......................................... 701
Section 314(a).......................................... 703
(a)(4)....................................... 1008(a)
(c)(1)....................................... 102
(c)(2)....................................... 102
(e).......................................... 102
Section 315(b).......................................... 601
Section 316(a)(last
sentence).................................... 101 ("Outstanding")
(a)(1)(A).................................... 502, 512
(a)(1)(B).................................... 513
(b).......................................... 508
(c).......................................... 104(d)
Section 317(a)(1)....................................... 503
(a)(2)....................................... 504
(b).......................................... 1003
Section 318(a).......................................... 111
- -------------------
Note: This reconciliation and tie shall not, for any purpose, be deemed to
be a part of the Indenture.
<PAGE>
TABLE OF CONTENTS
SECTION PAGE
PARTIES....................................................................... 1
RECITALS OF THE COMPANY....................................................... 1
ARTICLE ONE
Definitions and Other Provisions
of General Application
SECTION 101. Definitions.................................................... 2
"Acquired Indebtedness"........................................ 2
"Act".......................................................... 2
"Affiliate".................................................... 3
"Asset Sale"................................................... 3
"Average Life to Stated Maturity".............................. 3
"Bankruptcy Law"............................................... 3
"Banks"........................................................ 3
"Board of Directors"........................................... 3
"Board Resolution"............................................. 4
"Borrowing Base Amount"........................................ 4
"Business Day"................................................. 4
"Capital Lease Obligation"..................................... 4
"Capital Stock"................................................ 4
"Change of Control"............................................ 4
"Change of Control Purchase Date".............................. 5
"Change of Control Purchase Offer"............................. 5
"Change of Control Purchase Price"............................. 5
"Change of Control Triggering Event"........................... 5
"Commission"................................................... 5
"Common Stock"................................................. 5
"Company"...................................................... 5
"Company Request" or "Company Order"........................... 6
"Consolidated"................................................. 6
"Consolidated Fixed Charge Coverage Ratio"..................... 6
"Consolidated Income Tax Expense".............................. 6
"Consolidated Interest Expense"................................ 6
"Consolidated Net Income"...................................... 7
- -------------------
NOTE: THIS TABLE OF CONTENTS SHALL NOT, FOR ANY PURPOSE, BE DEEMED TO BE A
PART OF THE INDENTURE.
<PAGE>
ii
SECTION PAGE
"Consolidated Net Sales"....................................... 7
"Consolidated Net Worth"....................................... 7
"Consolidated Non-Cash Charges"................................ 8
"Consolidated Tangible Assets"................................. 8
"Consolidated Total Assets".................................... 8
"Corporate Trust Office"....................................... 8
"Currency Agreements".......................................... 8
"Custodian".................................................... 8
"Default"...................................................... 8
"Defaulted Interest"........................................... 8
"Depositary"................................................... 9
"Designated Senior Indebtedness"............................... 9
"Disinterested Director"....................................... 9
"Equity Interest".............................................. 9
"Event of Default"............................................. 9
"Exchange Act"................................................. 9
"Exchange Notes"............................................... 9
"Exchange Offer"............................................... 9
"Exchange Offer Registration Statement"........................ 9
"Excluded Non-Cash Charges".................................... 9
"Fair Market Value"............................................10
"Fixed Rate Senior Note Indenture".............................10
"Fixed Rate Senior Notes"......................................10
"Floating Rate Senior Note Indenture"..........................10
"Floating Rate Senior Notes"...................................10
"Generally Accepted Accounting Principles" or "GAAP"...........10
"Guaranteed Debt"..............................................10
"Guaranteed Obligations".......................................10
"Holder".......................................................11
"Indebtedness".................................................11
"Indenture"....................................................11
"Initial Notes"................................................11
"Interest Payment Date"........................................12
"Interest Rate Agreements".....................................12
"Investee Store"...............................................12
"Investment"...................................................12
"Investment Grade".............................................12
"Joint Venture"................................................12
"Lien".........................................................13
"Liquidated Damages"...........................................13
"Maturity".....................................................13
"Medium-Term Notes"............................................13
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iii
SECTION PAGE
"Medium-Term Notes Indenture"..................................13
"Moody's"......................................................13
"Net Proceeds".................................................13
"Net Property and Equipment"...................................13
"New Credit Agreement".........................................13
"9 1/2% Debentures"............................................14
"9 1/2% Debentures Indenture"..................................14
"Non-Payment Default"..........................................14
"Non-Recourse Debt"............................................14
"Note Guarantee"...............................................14
"Notes"........................................................14
"Notes due 2007"...............................................14
"Notes due 2007 Indenture".....................................14
"Obligations"..................................................14
"Offering".....................................................15
"Officers' Certificate"........................................15
"Opinion of Counsel"...........................................15
"Outstanding"..................................................15
"PARI PASSU Indebtedness"......................................16
"Paying Agent".................................................16
"Payment Blockage Notice"......................................16
"Payment Default"..............................................16
"Permitted Consideration"......................................16
"Permitted Indebtedness".......................................16
"Permitted Investment".........................................19
"Permitted Junior Securities"..................................20
"Permitted Liens"..............................................20
"Permitted Receivables Financing"..............................22
"Person".......................................................22
"Predecessor Note".............................................22
"Preferred Stock"..............................................22
"Prior Indentures".............................................22
"Public Equity Offering".......................................22
"Qualified Capital Stock"......................................23
"Qualified Finance Subsidiary".................................23
"Qualified TIPS Transaction"...................................23
"Qualified Subordinated Indebtedness"..........................23
"Rating Agency"................................................23
"Rating Category"..............................................23
"Rating Decline"...............................................24
"Redeemable Capital Stock".....................................24
"Redemption Date"..............................................24
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SECTION PAGE
"Redemption Price".............................................24
"Registration Rights Agreement"................................24
"Regular Record Date"..........................................24
"Regulation S".................................................24
"Regulation S Global Note".....................................24
"Responsible Officer"..........................................24
"Restricted Global Note".......................................25
"Restricted Subsidiary"........................................25
"Rule 144A"....................................................25
"Securities Act"...............................................25
"Security Register" and "Security Registrar"...................25
"Senior Indebtedness"..........................................25
"Senior Note Guarantees".......................................26
"Significant Subsidiary".......................................26
"S&P"..........................................................26
"Special Record Date"..........................................26
"Stated Maturity"..............................................26
"Subordinated Indebtedness"....................................26
"Subsidiary"...................................................26
"Subsidiary Guarantor".........................................26
"Tangible Assets"..............................................26
"Temporary Cash Investments"...................................27
"Transferred Receivables"......................................27
"Trust Indenture Act" or "TIA".................................27
"Trustee"......................................................27
"Unrestricted Subsidiary"......................................27
"U.S. Government Obligations"..................................28
"Vice President"...............................................29
"Voting Stock".................................................29
"Wholly Owned Restricted Subsidiary"...........................29
102. Compliance Certificates and Opinions...........................29
103. Form of Documents Delivered to Trustee.........................30
104. Acts of Holders................................................30
105. Notices, Etc., to Trustee, Company and Subsidiary
Guarantors...................................................32
106. Notice to Holders; Waiver......................................32
107. Effect of Headings and Table of Contents.......................33
108. Successors and Assigns.........................................33
109. Separability Clause............................................33
110. Benefits of Indenture..........................................33
111. Governing Law..................................................33
112. Legal Holidays.................................................33
<PAGE>
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SECTION PAGE
ARTICLE TWO
Note Forms
201. Forms Generally.............................................. 34
202. Restrictive Legends.......................................... 35
203. Form of Face of Note......................................... 37
204. Form of Reverse of Note...................................... 38
205. Form of Trustee's Certificate of Authentication.............. 42
ARTICLE THREE
The Notes
301. Title and Terms.............................................. 42
302. Denominations................................................ 43
303. Execution, Authentication, Delivery and Dating............... 43
304. Temporary Notes.............................................. 44
305. Registration, Registration of Transfer and Exchange.......... 45
306. Mutilated, Destroyed, Lost and Stolen Notes.................. 46
307. Payment of Interest; Interest Rights Preserved............... 47
308. Persons Deemed Owners........................................ 48
309. Cancellation................................................. 48
310. Computation of Interest...................................... 49
311. Book-Entry Provisions for Global Notes....................... 49
312. Transfer and Exchange........................................ 50
313. CUSIP Numbers................................................ 54
ARTICLE FOUR
Satisfaction and Discharge
401. Satisfaction and Discharge of Indenture...................... 54
402. Application of Trust Money................................... 55
ARTICLE FIVE
Remedies
501. Events of Default............................................ 56
502. Acceleration of Maturity; Rescission and Annulment........... 58
503. Collection of Indebtedness and Suits for Enforcement by
Trustee.................................................... 59
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vi
SECTION PAGE
504. Trustee May File Proofs of Claim............................. 60
505. Trustee May Enforce Claims Without Possession of Notes....... 61
506. Application of Money Collected............................... 61
507. Limitation on Suits.......................................... 61
508. Unconditional Right of Holders to Receive Principal,
Premium and Interest....................................... 62
509. Restoration of Rights and Remedies........................... 62
510. Rights and Remedies Cumulative............................... 63
511. Delay or Omission Not Waiver................................. 63
512. Control by Holders........................................... 63
513. Waiver of Past Defaults...................................... 64
514. Waiver of Stay or Extension Laws............................. 64
515. Notice of Defaults........................................... 64
ARTICLE SIX
The Trustee
601. Notice of Defaults........................................... 65
602. Certain Rights of Trustee.................................... 65
603. Trustee Not Responsible for Recitals or Issuance of Notes.... 66
604. May Hold Notes............................................... 67
605. Money Held in Trust.......................................... 67
606. Compensation and Reimbursement............................... 67
607. Corporate Trustee Required; Eligibility...................... 68
608. Resignation and Removal; Appointment of Successor............ 68
609. Acceptance of Appointment by Successor....................... 69
610. Merger, Conversion, Consolidation or Succession to Business.. 70
ARTICLE SEVEN
Holders' Lists and Reports by Trustee, Company and Subsidiary Guarantors
701. Disclosure of Names and Addresses of Holders................. 70
702. Reports by Trustee........................................... 71
703. Reports by Company and Subsidiary Guarantors................. 71
<PAGE>
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SECTION PAGE
ARTICLE EIGHT
Consolidation, Merger, Sale of Assets
801. Company May Consolidate, Etc., Only on Certain Terms......... 72
802. Successor Substituted........................................ 74
803. Notes to Be Secured in Certain Events........................ 74
ARTICLE NINE
Supplemental Indentures
901. Supplemental Indentures Without Consent of Holders........... 74
902. Supplemental Indentures with Consent of Holders.............. 75
903. Execution of Supplemental Indentures......................... 76
904. Effect of Supplemental Indentures............................ 77
905. Conformity with Trust Indenture Act.......................... 77
906. Reference in Notes to Supplemental Indentures................ 77
907. Notice of Supplemental Indentures............................ 77
ARTICLE TEN
Covenants
1001. Payment of Principal, Premium, If Any, and Interest......... 78
1002. Maintenance of Office or Agency............................. 78
1003. Money for Note Payments to Be Held in Trust................. 79
1004. Corporate Existence......................................... 80
1005. Payment of Taxes and Other Claims........................... 80
1006. Maintenance of Properties................................... 81
1007. Insurance................................................... 81
1008. Statement by Officers as to Default......................... 81
1009. Purchase of Notes upon a Change of Control Triggering Event. 81
1010. Limitation on Indebtedness.................................. 83
1011. Limitation on Restricted Payments........................... 83
1012. Limitation on Layering Indebtedness......................... 86
1013. Limitation on Transactions with Affiliates.................. 86
1014. Limitation on Liens Securing PARI PASSU Indebtedness or
Subordinated Indebtedness................................. 87
1015. Limitation on Dividend and Other Payment Restrictions
Affecting Subsidiaries.................................... 88
1016. Limitation on Sale of Assets................................ 89
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SECTION PAGE
1017. Limitation on Issuances and Sales of Capital Stock of
Subsidiaries.............................................. 91
1018. Additional Guarantees....................................... 91
1019. Provision of Financial Statements; Rule 144A Information.... 92
1020. Payment for Consent......................................... 92
1021. Termination of Certain Covenants in Event of Investment
Grade Rating.............................................. 92
1022. Waiver of Certain Covenants................................. 93
ARTICLE ELEVEN
Redemption of Notes
1101. Right of Redemption......................................... 93
1102. Applicability of Article.................................... 94
1103. Election to Redeem; Notice to Trustee....................... 94
1104. Selection by Trustee of Notes to Be Redeemed................ 94
1105. Notice of Redemption........................................ 94
1106. Deposit of Redemption Price................................. 95
1107. Notes Payable on Redemption Date............................ 95
1108. Notes Redeemed in Part...................................... 96
ARTICLE TWELVE
Note Guarantees
1201. Note Guarantees............................................. 96
1202. Execution and Delivery of Note Guarantee.................... 98
1203. Obligations of the Subsidiary Guarantors Unconditional...... 98
1204. Ranking of Note Guarantees.................................. 99
1205. Limitation of Note Guarantees............................... 99
1206. Release of Subsidiary Guarantors............................ 99
1207. Subsidiary Guarantors May Consolidate, Etc. on Certain
Terms..................................................... 100
ARTICLE THIRTEEN
Defeasance and Covenant Defeasance
1301. Company's Option to Effect Defeasance or Covenant
Defeasance................................................ 101
1302. Defeasance and Discharge.................................... 101
1303. Covenant Defeasance......................................... 101
1304. Conditions to Defeasance or Covenant Defeasance............. 102
1305. Deposited Money and U.S. Government Obligations to Be
Held in Trust; Other Miscellaneous Provisions............. 103
1306. Reinstatement............................................... 104
<PAGE>
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SECTION PAGE
ARTICLE FOURTEEN
Subordination of Notes
1401. Notes Subordinate to Senior Indebtedness.................... 105
1402. Payment Over of Proceeds upon Dissolution, Etc. ............ 105
1403. Suspension of Payment When Senior Indebtedness in
Default................................................... 106
1404. Payment Permitted If No Default............................. 107
1405. Subrogation to Rights of Holders of Senior
Indebtedness.............................................. 107
1406. Provisions Solely to Define Relative Rights................. 107
1407. Trustee to Effectuate Subordination......................... 108
1408. No Waiver of Subordination Provisions....................... 108
1409. Notice to Trustee........................................... 109
1410. Reliance on Judicial Order or Certificate of Liquidating
Agent..................................................... 109
1411. Rights of Trustee As a Holder of Senior Indebtedness;
Preservation of Trustee's Rights.......................... 110
1412. Article Applicable to Paying Agents......................... 110
1413. No Suspension of Remedies................................... 110
1414. Trustee Not Fiduciary for Holders of Senior Indebtedness.... 110
EXHIBIT A Certificate to Be Delivered upon Registration of
Exchange or Transfer of Notes......................... A-1
EXHIBIT B Form of Note Guarantee................................ B-1
EXHIBIT C Form of Institutional Accredited Investor Letter...... C-1
Schedule A Indebtedness Outstanding on the Date of the Indenture
Schedule B Leases with PDM, Inc. Outstanding on the Date of
the Indenture
Schedule C Dividend and Other Payment Restrictions in Existence
on the Date of the Indenture
<PAGE>
INDENTURE, dated as of July 25, 1997 among FLEMING COMPANIES, INC., a
corporation duly organized and existing under the laws of the State of Oklahoma
(herein called, the "Company"), having its principal office at 6301 Waterford
Boulevard, P.O. Box 26647, Oklahoma City, Oklahoma 73126, each of the Subsidiary
Guarantors (as hereinafter defined), and Manufacturers and Traders Trust
Company, a New York banking corporation and trust company, trustee (herein
called, the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an issue of 10 1/2%
Senior Subordinated Notes due 2004 (the "Initial Notes") and 10 1/2% Series B
Senior Subordinated Notes due 2004 (the "Exchange Notes", and together with the
Initial Notes, the "Notes"), 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.
Upon the issuance of the Exchange Notes, if any, or the effectiveness
of the Shelf Registration Statement, this Indenture shall be subject to and
governed by the provisions of the Trust Indenture Act of 1939, as amended.
The Company, directly or indirectly, owns beneficially and of record
100% of the Capital Stock of the Subsidiary Guarantors; the Company and the
Subsidiary Guarantors are members of the same consolidated group of companies;
the Subsidiary Guarantors will derive direct and indirect economic benefit from
the issuance of the Notes; accordingly, the Subsidiary Guarantors have each duly
authorized the execution and delivery of this Indenture to provide for the
guarantee by each of them with respect to the Notes as set forth in this
Indenture.
All things necessary have been done to make the Notes, when executed
by the Company and authenticated and delivered hereunder and duly issued by the
Company, the valid obligations of the Company, to make the Note Guarantees of
each of the Subsidiary Guarantors, when executed by the respective Subsidiary
Guarantors and delivered hereunder, the valid obligations of the respective
Subsidiary Guarantors, and to make this Indenture a valid agreement of the
Company and each of the Subsidiary Guarantors, in accordance with their and its
terms.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Notes
by the Holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders of the Notes, as follows:
<PAGE>
2
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:
(a) the terms defined in this Article have the meanings assigned to
them in this Article, and include the plural as well as the singular;
(b) 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, and the terms "cash transaction" and
"self-liquidating paper", as used in TIA Section 311, shall have the
meanings assigned to them in the rules of the Commission adopted under the
Trust Indenture Act;
(c) 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; PROVIDED, HOWEVER,
that with respect to any computation required pursuant to Sections 1009,
1010, 1011 and 1014, such term shall mean such accounting principles as are
generally accepted as of the date of this Indenture; and
(d) 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.
"Acquired Indebtedness" means Indebtedness of a Person (i) existing at
the time such Person becomes a Restricted Subsidiary of the Company or
(ii) assumed in connection with the acquisition of assets from such Person, in
each case, other than Indebtedness incurred in connection with, or in
contemplation of, such Person becoming a Restricted Subsidiary of the Company or
such acquisition.
"Act", when used with respect to any Holder, has the meaning specified
in Section 104.
<PAGE>
3
"Affiliate" means, with respect to any specified Person, (i) any other
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person or (ii) any other Person that
owns, directly or indirectly, 5% or more of such Person's Capital Stock or any
executive officer or director of any 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 ownership of Voting Stock, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Asset Sale" means (i) the sale, lease, conveyance or other
disposition of any assets (including, without limitation, by way of a sale and
leaseback), other than sales of inventory in the ordinary course of business
consistent with past practices (PROVIDED that the sale, lease, conveyance or
other disposition of all or substantially all of the assets of the Company and
its Restricted Subsidiaries taken as a whole will be governed by Section 1009
and/or Article Eight and not by Section 1016) and (ii) the issue or sale by the
Company or any of its Restricted Subsidiaries of Equity Interests of any of the
Company's Restricted Subsidiaries, whether in a single transaction or a series
of related transactions, in either case, (a) that have a fair market value in
excess of $1.0 million or (b) for net proceeds in excess of $1.0 million.
Notwithstanding the foregoing, a transfer of assets by the Company to a Wholly
Owned Restricted Subsidiary or by a Wholly Owned Restricted Subsidiary to the
Company or to another Wholly Owned Restricted Subsidiary, or by a Restricted
Subsidiary to any other Restricted Subsidiary in which the Company holds a
larger proportionate Equity Interest, shall not be deemed to be an Asset Sale.
"Average Life to Stated Maturity" means, as of the date of
determination with respect to any Indebtedness, the quotient obtained by
dividing (i) the sum of the products of (A) the number of years from the date of
determination to the date or dates of each successive scheduled principal
payment of such Indebtedness multiplied by (B) the amount of each such principal
payment by (ii) the sum of all such principal payments.
"Bankruptcy Law" means Title 11, United States Bankruptcy Code of
1978, as amended, or any similar United States federal or state law relating to
bankruptcy, insolvency, receivership, winding-up, liquidation, reorganization or
relief of debtors or any amendment to, succession to or change in any such law.
"Banks" means the banks and other financial institutions from time to
time that are lenders under the New Credit Agreement.
"Board of Directors" means either the board of directors of the
Company or any duly authorized committee of that board, and, with respect to any
Subsidiary Guarantor, either the board of directors of such Subsidiary Guarantor
or any duly authorized committee of that board.
<PAGE>
4
"Board Resolution" means a copy of a resolution 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, and delivered to the Trustee, and, with respect to a Subsidiary
Guarantor, a copy of a resolution certified by the Secretary or an Assistant
Secretary of the Subsidiary Guarantor to have been duly adopted by its Board of
Directors and to be in full force and effect on the date of such certification,
and delivered to the Trustee.
"Borrowing Base Amount" means, as to the Company, 90% of Net Property
and Equipment, determined on a consolidated basis in accordance with GAAP.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in The City of New York
are authorized or obligated by law or executive order to close.
"Capital Lease Obligation" of any Person means any obligation of such
Person and its Subsidiaries on a Consolidated basis under any capital lease of
real or personal property which, in accordance with GAAP, has been recorded as a
capitalized lease obligation.
"Capital Stock" of any Person means any and all shares, interest,
partnership interests, participations or other equivalents (however designated)
of such Person's capital stock whether now outstanding or issued after the date
of the Indentures, including, without limitation, all common stock and preferred
stock.
"Change of Control" means the occurrence of any of the following
events: (i) any "person" or "group" (as such terms are used in Sections
13(d) and 14(d) of the Exchange Act) is or becomes the "beneficial owner" (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a Person
shall be deemed to have beneficial ownership of all shares that such Person has
the right to acquire, whether such right is exercisable immediately or only
after the passage of time), directly or indirectly, of more than 50% of the
total outstanding Voting Stock of the Company; (ii) during any period of two
consecutive years, individuals who at the beginning of such period constituted
the Board of Directors of the Company (together with any new directors whose
election to such Board of Directors, or whose nomination for election by the
stockholders of the Company, was approved by a vote of 66 2/3% of the directors
then still in office who were either directors at the beginning of such period
or whose election or nomination for election was previously so approved) cease
for any reason to constitute a majority of such Board of Directors then in
office; (iii) the Company consolidates with or merges with or into any Person or
conveys, transfers, leases or otherwise disposes of all or substantially all of
its assets to any Person, or any Person consolidates with or merges into or with
the Company, in any such event pursuant to a transaction in which the
outstanding Voting Stock of the Company is changed into or
<PAGE>
5
exchanged for cash, securities or other property, other than any such
transaction where the outstanding Voting Stock of the Company is not changed
or exchanged at all (except to the extent necessary to reflect a change in
the jurisdiction of incorporation of the Company) or where (A) the
outstanding Voting Stock of the Company is changed into or exchanged for (x)
Voting Stock of the surviving corporation which is not Redeemable Capital
Stock or (y) cash, securities or other property (other than Capital Stock of
the surviving corporation) in an amount which could be paid by the Company as
a Restricted Payment as described under Section 1011, and (B) immediately
after such transaction, no "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Exchange Act) is the "beneficial owner" (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a Person
shall be deemed to have beneficial ownership of all shares that such Person
has the right to acquire, whether such right is exercisable immediately or
only after the passage of time), directly or indirectly, of more than 50% of
the total outstanding Voting Stock of the surviving corporation; or (iv) the
Company is liquidated or dissolved or adopts a plan of liquidation or
dissolution other than in a transaction which complies with the provisions of
Article Eight.
"Change of Control Purchase Date" has the meaning specified in Section
1009.
"Change of Control Purchase Offer" has the meaning specified in
Section 1009.
"Change of Control Purchase Price" has the meaning specified in
Section 1009.
"Change of Control Triggering Event" means the occurrence of both a
Change of Control and a Rating Decline.
"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 Indenture 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.
"Common Stock" means, with respect to any Person, any and all shares,
interests, participations and other equivalents (however designated, whether
voting or non-voting) of such Person's common stock, whether now outstanding or
issued after the date of this Indenture, including, without limitation, all
series and classes of such common stock.
"Company" means the Person named as the "Company" in the first
paragraph of this Indenture, until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
<PAGE>
6
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman, any Vice Chairman, its
President, any Vice President, its Treasurer or an Assistant Treasurer, and
delivered to the Trustee.
"Consolidated" means, with respect to any Person, the consolidation of
the accounts of such Person and each of its subsidiaries if and to the extent
the accounts of such Person and each of its subsidiaries would normally be
consolidated with those of such Person, all in accordance with GAAP consistently
applied.
"Consolidated Fixed Charge Coverage Ratio" of the Company means, for
any period, the ratio of (a) Consolidated Net Income, plus, without duplication,
Consolidated Interest Expense, Consolidated Income Tax Expense, Consolidated
Non-Cash Charges and Excluded Non-Cash Charges (less the amount of all cash
payments made by the Company or any of its Restricted Subsidiaries during such
period to the extent such payments relate to Excluded Non-Cash Charges that were
added back in determining the sum contemplated by this clause (a) for such
period or any prior period) deducted in computing Consolidated Net Income, in
each case, for such period, of the Company and its Restricted Subsidiaries on a
Consolidated basis, all determined in accordance with GAAP to (b) Consolidated
Interest Expense for such period; PROVIDED that (i) in making such computation,
the Consolidated Interest Expense attributable to interest on any Indebtedness
computed on a PRO FORMA basis and (A) bearing a floating interest rate shall be
computed as if the rate in effect on the date of computation had been the
applicable rate for the entire period and (B) which was not outstanding during
the period for which the computation is being made but which bears, at the
option of the Company, a fixed or floating rate of interest, shall be computed
by applying, at the option of the Company, either the fixed or floating rate and
(ii) in making such computation, Consolidated Interest Expense attributable to
interest on any Indebtedness under a revolving credit facility computed on a PRO
FORMA basis shall be computed based upon the average daily balance of such
Indebtedness during the applicable period.
"Consolidated Income Tax Expense" means for any period the provision
for federal, state, local and foreign income taxes of the Company and its
Restricted Subsidiaries for such period as determined on a Consolidated basis in
accordance with GAAP.
"Consolidated Interest Expense" means, without duplication, for any
period, the sum of (A) the interest expense of the Company and its Restricted
Subsidiaries for such period, as determined on a Consolidated basis in
accordance with GAAP including, without limitation, (i) amortization of debt
discount, (ii) the net cost under Interest Rate Agreements (including
amortization of discount), (iii) the interest portion of any deferred payment
obligation and (iv) accrued interest, plus (B) the aggregate amount for such
period of dividends on any Redeemable Capital Stock or Preferred Stock of the
Company and its Restricted Subsidiaries, (C) the interest component of the
Capital Lease Obligations paid, accrued and/or scheduled to be paid, or accrued
by such Person during such period and
<PAGE>
7
(D) all capitalized interest of the Company and its Restricted Subsidiaries
in each case under each of (A) through (D) determined on a Consolidated basis
in accordance with GAAP.
"Consolidated Net Income" means, for any period, the Consolidated net
income (or loss) of the Company and its Restricted Subsidiaries for such period
as determined on a Consolidated basis in accordance with GAAP, adjusted, to the
extent included in calculating such net income (loss), by excluding, without
duplication, (i) any net after-tax extraordinary gains or losses (less all fees
and expenses relating thereto), (ii) up to $20 million of any charges taken with
respect to the "Premium Sales" litigation matters, which are described under (4)
in Item 3 (Legal Proceedings) of the Company's Annual Report on Form 10-K for
fiscal year 1996 plus up to an additional $2,500,000 with respect to fees and
expenses of the Company's counsel in connection with such litigation matters,
(iii) Excluded Non-Cash Charges (less the amount of all cash payments made by
the Company or any of its Restricted Subsidiaries during such period to the
extent such payments relate to Excluded Non-Cash Charges that were added back in
determining the sum contemplated by clause (a) of the definition of
"Consolidated Fixed Charge Coverage Ratio"), (iv) the portion of net income (or
loss) of the Company and its Restricted Subsidiaries determined on a
Consolidated basis allocable to minority interests in unconsolidated Persons to
the extent that cash dividends or distributions have not actually been received
by the Company or any Restricted Subsidiary; (v) net income (or loss) of any
Person combined with the Company or any Restricted Subsidiary on a "pooling of
interests" basis attributable to any period prior to the date of combination,
(vi) net gains or losses (less all fees and expenses relating thereto) in
respect of dispositions of assets other than in the ordinary course of business
and (vii) the net income of any Restricted Subsidiary to the extent that the
declaration of dividends or similar distributions by that Restricted Subsidiary
of that income is not at the time permitted, directly or indirectly, by
operation of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to that
Restricted Subsidiary or its shareholders.
"Consolidated Net Sales" means, for any period, the consolidated net
sales of the Company and its Restricted Subsidiaries for such period, as
determined in accordance with GAAP.
"Consolidated Net Worth" means, with respect to any Person as of any
date, the sum of (i) the consolidated equity of the common equity holders of
such Person and its Restricted Subsidiaries as of such date plus (ii) the
respective amounts reported on such Person's balance sheet as of such date with
respect to any series of preferred stock (other than Redeemable Capital Stock)
that by its terms is not entitled to the payment of dividends unless such
dividends may be declared and paid only out of net earnings in respect of the
year of such declaration and payment, but only to the extent of any cash
received by such Person upon issuance of such preferred stock, less (a) all
write-ups (other than write-ups resulting from foreign currency translations and
write-ups of tangible assets of a going
<PAGE>
8
concern business made within 12 months after the acquisition of such business)
subsequent to the date of the Indentures in the book value of any asset owned
by such Person or a consolidated Restricted Subsidiary of such Person, (b) all
investments as of such date in unconsolidated Restricted Subsidiaries and in
Persons that are not Subsidiaries (except, in each case, Permitted Investments),
and (c) all unamortized debt discount and expense and unamortized deferred
charges as of such date, all of the foregoing determined in accordance with
GAAP.
"Consolidated Non-Cash Charges" means, for any period, the aggregate
depreciation, amortization and other non-cash charges of the Company and its
Restricted Subsidiaries for such period, as determined on a Consolidated basis
in accordance with GAAP (excluding any non-cash charges which require an accrual
or reserve for any future period and any Excluded Non-Cash Charges).
"Consolidated Tangible Assets" means the total of all the assets
appearing on the Consolidated balance sheet of the Company and its
majority-owned or Wholly Owned Restricted Subsidiaries less (i) intangible
assets including, without limitation, items such as goodwill, trademarks, trade
names, patents and unamortized debt discount and (ii) appropriate adjustments on
account of minority interests of other persons holding stock in any
majority-owned Restricted Subsidiary of the Company.
"Consolidated Total Assets" means, with respect to the Company, the
total of all assets appearing on the Consolidated balance sheet of the Company
and its Subsidiaries, as determined on a Consolidated basis in accordance with
GAAP.
"Corporate Trust Office" means a corporate trust office of the
Trustee, at which at any particular time its corporate trust business shall be
administered, which office at the date of execution of this Indenture is located
at 50 Broadway - 7th Floor, New York, New York 10004.
"Currency Agreements" means any spot or forward foreign exchange
agreements and currency swap, currency option or other similar financial
agreements or arrangements entered into by the Company or any of its Restricted
Subsidiaries in the ordinary course of business and designed to protect against
or manage exposure to fluctuations in foreign currency exchange rates.
"Custodian" has the meaning specified in Section 201.
"Default" means any event which is, or after notice or passage of time
or both would be, an Event of Default.
"Defaulted Interest" has the meaning specified in Section 307.
<PAGE>
9
"Depositary" means The Depository Trust Company, its nominees and
their respective successors.
"Designated Senior Indebtedness" means (i) any Senior Indebtedness
outstanding under the New Credit Agreement; (ii) any Senior Indebtedness in
respect of the Fixed Rate Senior Notes, the Floating Rate Senior Notes, the
9 1/2% Debentures and the Medium-Term Notes; and (iii) any other Senior
Indebtedness, the principal amount of which is $50 million or more and that has
been designated by the Company as "Designated Senior Indebtedness."
"Disinterested Director" means, with respect to any transaction or
series of transactions in respect of which the Board of Directors is required to
deliver a resolution of the Board of Directors under the Indenture, a member of
the Board of Directors who does not have any material direct or indirect
financial interest in or with respect to such transaction or series of
transactions.
"Equity Interest" of any Person means any shares, interests,
participations or other equivalents (however designated) in such Person's
equity, and shall in any event include any Capital Stock issued by, or
partnership or membership interests in, such Person.
"Event of Default" has the meaning specified in Section 501.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Notes" has the meaning stated in the first recital of this
Indenture and refers to any Exchange Notes containing terms substantially
identical to the Initial Notes (except that (i) such Exchange Notes shall not
contain terms with respect to transfer restrictions and shall be registered
under the Securities Act, and (ii) certain provisions relating to an increase in
the stated rate of interest thereon shall be eliminated) that are issued and
exchanged for the Initial Notes in accordance with the Exchange Offer, as
provided for in the Registration Rights Agreement and this Indenture.
"Exchange Offer" means the offer by the Company to the Holders of the
Initial Notes to exchange all of the Initial Notes for Exchange Notes, as
provided for in the Registration Rights Agreement.
"Exchange Offer Registration Statement" means the Exchange Offer
Registration Statement as defined in the Registration Rights Agreement.
"Excluded Non-Cash Charges" means all non-cash charges with respect to
(A) write-downs of the carrying value in the Company's financial statements of
certain retail and distribution facilities and related assets in connection with
the proposed or actual disposition
<PAGE>
10
of such facilities or discontinuance of operations at such facilities or (B)
other consolidation and restructuring of facilities and operations.
"Fair Market Value" means, with respect to any asset or property, a
price which could be negotiated in an arm's length transaction, for cash,
between a willing seller and a willing buyer, neither of whom is under undue
pressure to complete the transaction. Fair Market Value shall be determined by
the Board of Directors of the Company acting in good faith and shall be
evidenced by a Board Resolution.
"Fixed Rate Senior Note Indenture" means the Indenture dated as of
December 15, 1994 among the Company, as issuer, each of the subsidiary
guarantors named therein as guarantors, and Texas Commerce Bank, National
Association, as trustee.
"Fixed Rate Senior Notes" means the 10 5/8% Senior Notes due 2001 of
the Company.
"Floating Rate Senior Note Indenture" means the Indenture dated as of
December 15, 1994 among the Company, as issuer, each of the subsidiary
guarantors named therein as guarantors, and Texas Commerce Bank, National
Association, as trustee.
"Floating Rate Senior Notes" means the Floating Rate Senior Notes due
2001 of the Company.
"Generally Accepted Accounting Principles" or "GAAP" means generally
accepted accounting principles in the United States, as in effect on the date of
this Indenture.
"Guaranteed Debt" means, with respect to any Person, without
duplication, all Indebtedness of any other Person referred to in the definition
of Indebtedness contained herein guaranteed directly or indirectly in any manner
by such Person, or in effect guaranteed directly or indirectly by such Person
through an agreement (i) to pay or purchase such Indebtedness or to advance or
supply funds for the payment or purchase of such Indebtedness, (ii) to purchase,
sell or lease (as lessee or lessor) property, or to purchase or sell services,
primarily for the purpose of enabling the debtor to make payment of such
Indebtedness or to assure the holder of such Indebtedness against loss, (iii) to
supply funds to, or in any other manner invest in, the debtor (including any
agreement to pay for property or services without requiring that such property
be received or such services be rendered), (iv) to maintain working capital or
equity capital of the debtor, or otherwise to maintain the net worth, solvency
or other financial condition of the debtor or (v) otherwise to assure a creditor
against loss, PROVIDED that the term "guarantee" shall not include endorsements
for collection or deposit, in either case in the ordinary course of business.
"Guaranteed Obligations" has the meaning specified in Section 1201.
<PAGE>
11
"Holder" means a Person in whose name a Note is registered in the
Security Register.
"Indebtedness" means, with respect to any Person, without duplication,
(i) all liabilities of such Person for borrowed money (including overdrafts) or
for the deferred purchase price of property or services, excluding any trade
payables and other accrued current liabilities arising in the ordinary course of
business, but including, without limitation, all obligations, contingent or
otherwise, of such Person in connection with any letters of credit and
acceptances issued under letter of credit facilities, acceptance facilities or
other similar facilities, (ii) all obligations of such Person evidenced by
bonds, notes, debentures or other similar instruments, (iii) all indebtedness of
such Person created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person (even if
the rights and remedies of the seller or lender under such agreement in the
event of default are limited to repossession or sale of such property), but
excluding trade payables arising in the ordinary course of business, (iv) all
Capital Lease Obligations of such Person, (v) all obligations under Interest
Rate Agreements or Currency Agreements of such Person, (vi) Indebtedness
referred to in clauses (i) through (v) above of other Persons, and all dividends
of other Persons the payment of which is secured by (or for which the holder of
such Indebtedness has an existing right, contingent or otherwise, to be secured
by) any Lien, upon or with respect to property (including, without limitation,
accounts and contract rights) owned by such Person, even though such Person has
not assumed or become liable for the payment of such Indebtedness, (vii) all
Guaranteed Debt of such Person (other than guarantees of preferred trust
securities or similar securities issued by a Qualified Finance Subsidiary),
(viii) all Redeemable Capital Stock valued at the greater of its voluntary or
involuntary maximum fixed repurchase price plus accrued and unpaid dividends,
(ix) Qualified Subordinated Indebtedness and (x) any amendment, supplement,
modification, deferral, renewal, extension, refunding or refinancing of any
liability of the types referred to in clauses (i) through (ix) above. For
purposes hereof, the "maximum fixed repurchase price" of any Redeemable Capital
Stock which does not have a fixed repurchase price shall be calculated in
accordance with terms of such Redeemable Capital Stock as if such Redeemable
Capital Stock were purchased on any date on which Indebtedness shall be required
to be determined pursuant to the Indentures, and if such price is based upon, or
measured by, the Fair Market Value of such Redeemable Capital Stock, such Fair
Market Value is to be determined in good faith by the Board of Directors of the
issuer of such Redeemable Capital Stock.
"Indenture" means this instrument as originally executed and 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.
"Initial Notes" has the meaning specified in the recitals to this
Indenture.
<PAGE>
12
"Interest Payment Date" means the Stated Maturity of an installment of
interest on the Notes.
"Interest Rate Agreements" means any interest rate protection
agreements and other types of interest rate hedging agreements (including,
without limitation, interest rate swaps, caps, floors, collars and similar
agreements).
"Investee Store" means a Person in which the Company or any of its
Restricted Subsidiaries has invested equity capital, to which it has made loans
or for which it has guaranteed loans, in accordance with the business practice
of the Company and its Restricted Subsidiaries of making equity investments in,
making loans to or guaranteeing loans made to Persons for the purpose of
assisting any such Person in acquiring, remodeling, refurbishing, expanding or
operating one or more retail grocery stores.
"Investment" means, with respect to any Person, directly or
indirectly, any advance (other than advances to customers in the ordinary course
of business, which are recorded as accounts receivable on the balance sheet of
the Company and its Restricted Subsidiaries), loan or other extension of credit
(including by way of guarantee) or capital contribution to (by means of any
transfer of cash or other property to others or any payment for property or
services for the account or use of others), or any purchase, acquisitions or
ownership by such Person of any Capital Stock, bonds, notes, debentures or other
securities or assets issued or owned by any other Person. The Company shall be
deemed to make an Investment in an amount equal to the greater of the book value
(as determined in accordance with GAAP) and Fair Market Value of the net assets
of any Restricted Subsidiary (or, if neither the Company nor any of its
Restricted Subsidiaries has theretofore made an Investment in such Restricted
Subsidiary, in an amount equal to the Investments being made) at the time such
Restricted Subsidiary is designated an Unrestricted Subsidiary, and any property
transferred to an Unrestricted Subsidiary from the Company or any Restricted
Subsidiary shall be deemed an Investment valued at the greater of its book value
(as determined in accordance with GAAP) and its Fair Market Value at the time of
such transfer.
"Investment Grade" means BBB- or higher by S&P or Baa3 or higher by
Moody's or the equivalent of such ratings by S&P or Moody's or in the event S&P
or Moody's shall cease rating the Notes and the Company shall select any other
Rating Agency, the equivalent of such ratings by such other Rating Agency.
"Joint Venture" means any Person in which the Company or any of its
Restricted Subsidiaries owns 30% or more of the Voting Stock (other than as a
result of a Public Equity Offering).
<PAGE>
13
"Lien" means any mortgage, charge, pledge, lien (statutory or
otherwise), privilege, security interest, hypothecation or other encumbrance
upon or with respect to any property of any kind, real or personal, movable or
immovable, now owned or hereafter acquired.
"Liquidated Damages" means all liquidated damages then owing pursuant
to Section 5 of the Registration Rights Agreement.
"Maturity" when used with respect to the Notes means the date on which
the principal of the Notes becomes due and payable as therein provided or as
provided in this Indenture, whether at Stated Maturity or on a redemption date
or pursuant to a Change of Control Purchase Offer or an Asset Sale Offer, and
whether by declaration of acceleration, call for redemption, purchase or
otherwise.
"Medium-Term Notes" means the Medium-Term Notes, due 1997 to 2003, of
the Company.
"Medium-Term Notes Indenture" means the Indenture dated as of
December 1, 1989 between the Company and First Trust of New York National
Association, as trustee.
"Moody's" means Moody's Investors Service, Inc. or any successor
rating agency.
"Net Proceeds" means the aggregate cash proceeds received by the
Company or any of its Restricted Subsidiaries in respect of any Asset Sale
(including, without limitation, any cash received upon the sale or other
disposition of any non-cash consideration received in any Asset Sale), net of
the direct costs relating to such Asset Sale (including, without limitation,
legal, accounting and investment banking fees, and sales commissions), any
relocation expenses incurred as a result thereof, any taxes paid or payable by
the Company or any of its Restricted Subsidiaries as a result thereof (after
taking into account any available tax credits or deductions and any tax sharing
arrangements), amounts required to be applied to the repayment of Indebtedness
secured by a Lien on the assets or assets that were the subject of such Asset
Sale and any reserve for adjustment or indemnity in respect of the sale price of
such asset or assets in each case established in accordance with GAAP.
"Net Property and Equipment" means, with respect to the Company, the
Consolidated property and equipment of the Company, net of accumulated
depreciation, determined in accordance with GAAP.
"New Credit Agreement" means the credit agreement to be entered into
among the Company, the Banks, the agents listed therein and The Chase Manhattan
Bank, as administrative agent, as such agreement may be amended, renewed,
extended, substituted,
<PAGE>
14
refinanced, restructured, replaced, supplemented or otherwise modified from
time to time (including, without limitation, any successive renewals,
extensions, substitutions, refinancings, restructurings, replacements,
supplementations or other modifications of the foregoing).
"9 1/2% Debentures" means the 9 1/2% Debentures due 2016 of the
Company.
"9 1/2% Debentures Indenture" means the Indenture dated March 15,
1986 between the Company and First Trust National Association, as trustee.
"Non-Payment Default" has the meaning specified in Section 1403.
"Non-Recourse Debt" means Indebtedness (i) as to which neither the
Company nor any of its Restricted Subsidiaries (a) provides credit support of
any kind (including any undertaking, agreement or instrument that would
constitute Indebtedness), (b) is directly or indirectly liable (as a guarantor
or otherwise), or (c) constitutes the lender, (ii) no default with respect to
which (including any rights that the holders thereof may have to take
enforcement action against an Unrestricted Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any other Indebtedness (other than
the Notes being offered hereby) of the Company or any of its Restricted
Subsidiaries to declare a default on such other Indebtedness or cause the
payment thereof to be accelerated or payable prior to its stated maturity and
(iii) as to which the lenders have been notified in writing that they will not
have any recourse to the stock or assets of the Company or any of its Restricted
Subsidiaries.
"Note Guarantee" means any guarantee by a Subsidiary Guarantor of the
Company's obligations under this Indenture or the Notes due 2007 Indenture, as
applicable.
"Notes" has the meaning stated in the first recital of this Indenture
and, more particularly, means any Notes authenticated and delivered under this
Indenture.
"Notes due 2007" mean the 10 5/8% Senior Subordinated Notes due 2007
of the Company.
"Notes due 2007 Indenture" means the Indenture, dated as of July 25,
1997, among the Company, the Subsidiary Guarantors and Manufacturers and Traders
Trust Company, relating to the Notes due 2007.
"Obligations" means any principal, premium, interest (including
post-petition interest), penalties, fees, indemnifications, reimbursements,
damages and other liabilities payable under the documentation governing any
Indebtedness.
<PAGE>
15
"Offering" means the sale of the Notes and the Notes due 2007 by the
Company to Bear, Stearns & Co. Inc., Chase Securities Inc., BancAmerica
Securities, Inc. and Societe Generale Securities Corporation as initial
purchasers.
"Officers' Certificate" means a certificate signed by the Chairman,
any Vice Chairman, 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.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company, including an officer or employee of the Company, and
who shall be reasonably acceptable to the Trustee.
"Outstanding", when used with respect to the Notes, means, as of the
date of determination, all Notes theretofore authenticated and delivered under
this Indenture, except:
(i) Notes theretofore cancelled by the Trustee or delivered to the
Trustee for cancellation;
(ii) Notes, or portions thereof, for whose payment or redemption 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 Notes; PROVIDED that, if such Notes
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;
(iii) Notes, except to the extent provided in Sections 1302 and
1303, with respect to which the Company has effected defeasance and/or
covenant defeasance as provided in Article Thirteen; and
(iv) Notes which have been paid pursuant to Section 306 or in exchange
for or in lieu of which other Notes have been authenticated and delivered
pursuant to this Indenture, other than any such Notes in respect of which
there shall have been presented to the Trustee proof satisfactory to it
that such Notes are held by a bona fide purchaser in whose hands the Notes
are valid obligations of the Company;
PROVIDED, HOWEVER, that in determining whether the Holders of the requisite
principal amount of Outstanding Notes have given any request, demand,
authorization, direction, consent, notice or waiver hereunder, and for the
purpose of making the calculations required by TIA Section 313, Notes owned by
the Company or any other obligor upon the Notes or any Affiliate of the Company
or such other obligor shall be disregarded and deemed not to be Outstanding,
except that, in determining whether the Trustee shall be protected in making
<PAGE>
16
such calculation or in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Notes which the Trustee actually
knows to be so owned shall be so disregarded. Notes 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 Notes and that the pledgee is not the Company or any other obligor upon the
Notes or any Affiliate of the Company or such other obligor.
"PARI PASSU Indebtedness" means (a) with respect to the Notes,
Indebtedness which ranks PARI PASSU in right of payment to the Notes, and (b)
with respect to any Note Guarantee, Indebtedness which ranks PARI PASSU in right
of payment to such Note Guarantee.
"Paying Agent" means any Person (including the Company acting as
Paying Agent) authorized by the Company to pay the principal of (and premium, if
any, on) or interest on any Notes on behalf of the Company.
"Payment Blockage Notice" has the meaning specified in Section 1403.
"Payment Default" has the meaning specified in Section 1403.
"Permitted Consideration" means consideration consisting of any
combination of the following: (i) cash or Temporary Cash Investments,
(ii) assets used or intended for use in the Company's business as conducted on
the date of the Indentures, (iii) any liabilities (as shown on the Company's or
such Restricted Subsidiary's most recent balance sheet), of the Company or any
Restricted Subsidiary (other than contingent liabilities and liabilities that
are by their terms subordinated to the Notes or any guarantee thereof) that are
assumed by the transferee of any such assets pursuant to a customary novation
agreement that releases the Company or such Restricted Subsidiary from further
liability and (iv) any securities, notes or other obligations received by the
Company or any such Restricted Subsidiary from such transferee that are
immediately converted by the Company or such Restricted Subsidiary into cash (to
the extent of the cash received); PROVIDED that the aggregate amount of such
notes or other obligations received by the Company and its Restricted
Subsidiaries pursuant to (ii) through (iv) above after the date of the Indenture
and held or carried at any date of determination shall not exceed $75 million.
"Permitted Indebtedness" means any of the following Indebtedness of
the Company or any Restricted Subsidiary, as the case may be:
(i) Indebtedness of the Company and guarantees of the Subsidiary
Guarantors under the New Credit Agreement in an aggregate principal amount
at any one time outstanding not to exceed the greater of (x) $850 million
(after giving PRO FORMA effect to the use of proceeds of the Offering) less
mandatory repayments actually made in respect of any term Indebtedness
thereunder (other than amounts
<PAGE>
17
refinanced as permitted under the definition of the New Credit Agreement)
or (y) the Borrowing Base Amount less mandatory repayments (other than
amounts refinanced as permitted under the definition of the New Credit
Agreement) actually made in respect of any term Indebtedness thereunder;
(ii) Indebtedness of the Company under uncommitted bank lines of
credit; provided, however, that the aggregate principal amount of
Indebtedness incurred pursuant to clauses (i), (ii) and (xv) of this
definition of "Permitted Indebtedness" does not exceed the greater of (x)
$850 million (after giving PRO FORMA effect to the use of proceeds of the
Offering) less mandatory repayments actually made in respect of any term
Indebtedness under the New Credit Agreement (other than amounts refinanced
as permitted under clause (xviii) hereof) or (y) the Borrowing Base Amount
less mandatory repayments actually made in respect of any term Indebtedness
under the New Credit Agreement (other than amounts refinanced as permitted
under clause (xviii) hereof);
(iii) Indebtedness of the Company evidenced by the Fixed Rate
Senior Notes and the Senior Note Guarantees with respect thereto under the
Fixed Rate Senior Note Indenture;
(iv) Indebtedness of the Company evidenced by the Floating Rate Senior
Notes and the Senior Note Guarantees with respect thereto under the
Floating Rate Senior Note Indenture;
(v) Indebtedness of the Company evidenced by the Medium-Term Notes
under the Medium-Term Notes Indenture;
(vi) Indebtedness of the Company evidenced by the 9 1/2% Debentures
under the 9 1/2% Debentures Indenture;
(vii) Indebtedness of the Company evidenced by the Notes and the
Note Guarantees with respect thereto under this Indenture;
(viii) Indebtedness of the Company evidenced by the Notes due 2007
and the Note Guarantees with respect thereto under the Notes due 2007
Indenture;
(ix) Indebtedness of the Company or any Restricted Subsidiary
outstanding on the date of the Indenture and listed on Schedule A attached
hereto;
(x) obligations of the Company or any Restricted Subsidiary entered
into in the ordinary course of business (a) pursuant to Interest Rate
Agreements designed to protect against or manage exposure to fluctuations
in interest rates in respect of
<PAGE>
18
Indebtedness or retailer notes receivables, which, if related to
Indebtedness or such retailer notes receivables, do not exceed the
aggregate notional principal amount of such Indebtedness to which such
Interest Rate Agreements relate, or (b) under any Currency Agreements in
the ordinary course of business and designed to protect against or
manage exposure to fluctuations in foreign currency exchange rates which,
if related to Indebtedness, do not increase the amount of such Indebtedness
other than as a result of foreign exchange fluctuations;
(xi) Indebtedness of the Company owing to a Wholly Owned Restricted
Subsidiary or of any Restricted Subsidiary owing to the Company or any
Wholly Owned Restricted Subsidiary; PROVIDED that any disposition, pledge
or transfer of any such Indebtedness to a Person (other than the Company or
another Wholly Owned Restricted Subsidiary) shall be deemed to be an
incurrence of such Indebtedness by the Company or Restricted Subsidiary, as
the case may be, not permitted by this clause (xi);
(xii) Indebtedness in respect of letters of credit, surety bonds
and performance bonds provided in the ordinary course of business;
(xiii) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument inadvertently
drawn against insufficient funds in the ordinary course of business;
PROVIDED that such Indebtedness is extinguished within ten business days of
its incurrence;
(xiv) Indebtedness of the Company or any Restricted Subsidiary
consisting of guarantees, indemnities or obligations in respect of purchase
price adjustments in connection with the acquisition or disposition of
assets;
(xv) Indebtedness of the Company evidenced by commercial paper issued
by the Company; PROVIDED, HOWEVER, that the aggregate principal amount of
Indebtedness incurred pursuant to clauses (i), (ii) and (xv) of this
definition of "Permitted Indebtedness" does not exceed the greater of (x)
$850 million (after giving PRO FORMA effect to the use of proceeds of the
Offering) less mandatory repayments actually made in respect of any term
Indebtedness under the New Credit Agreement (other than amounts refinanced
as permitted under clause (xviii) hereof) or (y) the Borrowing Base Amount
less mandatory repayments actually made in respect of any term Indebtedness
under the New Credit Agreement (other than amounts refinanced as permitted
under clause (xviii) hereof);
(xvi) Indebtedness of the Company pursuant to guarantees by the
Company or any Subsidiary Guarantor in connection with any Permitted
Receivables Financing; PROVIDED, HOWEVER, that such Indebtedness shall not
exceed 20% of the book value of
<PAGE>
19
the Transferred Receivables or in the case of receivables arising from
direct financing leases, 30% of the book value thereof;
(xvii) Indebtedness of the Company and its Subsidiaries in addition
to that described in clauses (i) through (xvi) of this definition of
"Permitted Indebtedness," together with any other outstanding Indebtedness
incurred pursuant to this clause (xvii), not to exceed $100 million at any
time outstanding in the aggregate; and
(xviii) any renewals, extensions, substitutions, refunding,
refinancings or replacements (each, a "refinancing") of any Indebtedness
described in clauses (ii), (iii), (v), (vi), (vii), (viii), (ix) and (xv)
of this definition of "Permitted Indebtedness," including any successive
refinancings, so long as (A) the aggregate principal amount of Indebtedness
represented thereby is not increased by such refinancing to an amount
greater than such principal amount plus the lesser of (x) the stated amount
of any premium or other payment required to be paid in connection with such
a refinancing pursuant to the terms of the Indebtedness being refinanced or
(y) the amount of premium or other payment actually paid at such time to
refinance the Indebtedness, plus, in either case, the amount of reasonable
expenses of the Company or any Subsidiary, as the case may be, incurred in
connection with such refinancing, (B) in the case of any refinancing of
PARI PASSU Indebtedness or Subordinated Indebtedness, such new Indebtedness
is made PARI PASSU with or subordinated to the Notes to the same extent as
the Indebtedness being refinanced and (C) such refinancing does not reduce
the Average Life to Stated Maturity or the Stated Maturity of such
Indebtedness; PROVIDED that with respect to the Medium-Term Notes, a
refinancing shall be deemed to include a repayment of any such Medium-Term
Notes and subsequent incurrence of Indebtedness so long as (I), after
giving effect to such repayment and subsequent incurrence of new
Indebtedness, the aggregate principal amount of Medium-Term Notes and such
new Indebtedness does not exceed the principal amount of Medium-Term Notes
outstanding on the date of the Indenture and (II) clauses (A) through (C)
of this subsection (xviii) are complied with.
"Permitted Investment" means (i) Investment in any Wholly Owned
Restricted Subsidiary or any Investment in any Person by the Company or any
Wholly Owned Restricted Subsidiary as a result of which such Person becomes a
Wholly Owned Restricted Subsidiary or any Investment in the Company by a Wholly
Owned Restricted Subsidiary; (ii) intercompany Indebtedness to the extent
permitted under clause (xi) of the definition of "Permitted Indebtedness";
(iii) Temporary Cash Investments; (iv) sales of goods and services on trade
credit terms consistent with the Company's past practices or otherwise
consistent with trade credit terms in common use in the industry;
(v) Investments in direct financing leases for equipment and real estate owned
or leased by the Company and leased to its customers in the ordinary course of
business consistent with past practice; (vi) Investments in Joint Ventures
related to the Company's expansion of its retail operations, not to exceed $50
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20
million at any one time outstanding; (vii) Investments in Investee Stores either
in the form of equity, loans or other extensions of credit; PROVIDED that any
such Investment may only be made if the amount thereof, when added to the
aggregate outstanding amount of Permitted Investments in Investee Stores
(excluding for purposes of this clause (vii) any Investments made pursuant to
clause (vi)) after giving effect to any loan repayments or returns of capital in
respect of any Permitted Investment in Investee Stores, does not exceed 12.5% of
Consolidated Total Assets at the time of determination; (viii) Investments in a
Qualified Finance Subsidiary in connection with a Qualified TIPS Transaction;
(ix) other Investments, in addition to those permitted under (i) through (viii)
above, in an aggregate amount not to exceed $10 million and (x) any
substitutions or replacements of any Investment so long as the aggregate amount
of such Investment is not increased by such substitution or replacement.
"Permitted Junior Securities" means Equity Interests in the Company
or debt securities that are subordinated to all Senior Indebtedness (and any
debt securities issued in exchange for Senior Indebtedness) to substantially the
same extent as, or to a greater extent than, the Notes are subordinated to
Senior Indebtedness.
"Permitted Liens" means, with respect to any Person:
(a) any Lien existing as of the date of the Indenture;
(b) any Lien arising by reason of (1) any judgment, decree or order
of any court, so long as such Lien is adequately bonded and any appropriate
legal proceedings which may have been duly initiated for the review of such
judgment, decree or order shall not have been finally terminated or the
period within which such proceedings may be initiated shall not have
expired; (2) taxes, assessments, governmental charges or levies not yet
delinquent or which are being contested in good faith; (3) security for
payment of workers' compensation or other insurance; (4) security for the
performance of tenders, leases (including, without limitation, statutory
and common law landlord's liens) and contracts (other than contracts for
the payment of money); (5) zoning restrictions, easements, licenses,
reservations, title defects, rights of others for rights of way, utilities,
sewers, electric lines, telephone or telegraph lines, and other similar
purposes, provisions, covenants, conditions, waivers and restrictions on
the use of property or minor irregularities of title (and, with respect to
leasehold interests, mortgages, obligations, liens and other encumbrances
incurred, created, assumed or permitted to exist and arising by, through or
under a landlord or owner of the leased property, with or without consent
of the lessee), none of which materially impairs the use of any parcel of
property material to the operation of the business of the Company or any
Restricted Subsidiary or the value of such property for the purpose of such
business; (6) deposits to secure public or statutory obligations;
(7) operation of law in favor of growers, dealers and suppliers of fresh
fruits and vegetables, carriers, mechanics, materialmen, laborers,
employees or
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21
suppliers, incurred in the ordinary course of business for sums which
are not yet delinquent or are being contested in good faith by
negotiations or by appropriate proceedings which suspend the collection
thereof; (8) the grant by the Company to licensees, pursuant to security
agreements, of security interests in trademarks and goodwill, patents and
trade secrets of the Company to secure the damages, if any, of such
licensees, resulting from the rejection of the license of such licensees in
a bankruptcy, reorganization or similar proceeding with respect to the
Company; or (9) security for surety or appeal bonds;
(c) any Lien on any property or assets of a Restricted Subsidiary in
favor of the Company or any Wholly Owned Restricted Subsidiary;
(d) any Lien securing Acquired Indebtedness created prior to (and not
created in connection with, or in contemplation of) the incurrence of such
Indebtedness by the Company or any Restricted Subsidiary; PROVIDED that
such Lien does not extend to any assets of the Company or any Restricted
Subsidiary other than the assets acquired in the transaction resulting in
such Acquired Indebtedness being incurred by the Company or Restricted
Subsidiary, as the case may be;
(e) any Lien to secure the performance of bids, trade contracts,
letters of credit and other obligations of a like nature and incurred in
the ordinary course of business of the Company or any Restricted
Subsidiary;
(f) any Lien securing any Interest Rate Agreements or Currency
Agreements permitted to be incurred pursuant to clause (x) of the
definition of "Permitted Indebtedness" or any collateral for the
Indebtedness to which such Interest Rate Agreements or Currency Agreements
relate;
(g) any Lien securing the Notes;
(h) any Lien on an asset securing Indebtedness (including Capital
Lease Obligations) incurred or assumed for the purpose of financing all or
any part of the cost of acquiring or constructing such asset; PROVIDED that
such Lien covers only such asset and attaches concurrently or within 180
days after the acquisition or completion of construction thereof;
(i) any Lien on real or personal property securing Capital Lease
Obligations of the Company or any Restricted Subsidiary as lessee with
respect to such real or personal property to the extent such Indebtedness
can be incurred pursuant to Section 1010 of this Indenture other than as
Permitted Indebtedness;
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22
(j) any Lien on a Financing Receivable or other receivable that is
transferred in a Permitted Receivables Financing;
(k) any Lien consisting of any pledge to any Person of Indebtedness
owed by any Restricted Subsidiary to the Company or to any Wholly Owned
Restricted Subsidiary; PROVIDED, that (i) such Restricted Subsidiary is a
Subsidiary Guarantor and (ii) the principal amount pledged does not exceed
the Indebtedness secured by such pledge;
(l) any extension, renewal, refinancing or replacement, in whole or
in part, of any Lien described in the foregoing clause (a) so long as no
additional collateral is granted as security thereby.
"Permitted Receivables Financing" means any transaction involving the
transfer (by way of sale, pledge or otherwise) by the Company or any of its
Restricted Subsidiaries of receivables to any other Person, PROVIDED that after
giving effect to such transaction the sum of (i) the aggregate uncollected
balances of the receivables so transferred ("Transferred Receivables") PLUS
(ii) the aggregate amount of all collections on Transferred Receivables
theretofore received by the seller but not yet remitted to the purchaser, in
each case at the date of determination, would not exceed $600 million.
"Person" means any individual, corporation, limited liability Company,
partnership, joint venture, association, joint-stock Company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Predecessor Note" of any particular Note means every previous Note
evidencing all or a portion of the same debt as that evidenced by such
particular Note; and, for the purposes of this definition, any Note
authenticated and delivered under Section 306 in exchange for a mutilated
security or in lieu of a lost, destroyed or stolen Note shall be deemed to
evidence the same debt as the mutilated, lost, destroyed or stolen Note.
"Preferred Stock" means, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated) of
such Person's preferred stock whether now outstanding or issued after the date
of this Indenture, including, without limitation, all classes and series of
preferred or preference stock of such Person.
"Prior Indentures" means the 9 1/2% Debentures Indenture, the
Medium-Term Notes Indenture, the Fixed Rate Senior Note Indenture and the
Floating Rate Senior Note Indenture.
"Public Equity Offering" means (i) with respect to the provisions of
the Indenture permitting redemption of up to 35% of the Notes at the option of
the Company
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23
within 180 days of a Public Equity Offering, a primary public offering of
equity securities of the Company, and (ii) with respect to the last sentence
of Section 1017, a primary or secondary public offering of equity securities
of any Restricted Subsidiary of the Company, in each case pursuant to an
effective registration statement under the Securities Act with net cash
proceeds of at least $50 million.
"Qualified Capital Stock" of any Person means any and all Capital
Stock of such Person other than Redeemable Capital Stock.
"Qualified Finance Subsidiary" means a Subsidiary of the Company
constituting a "finance subsidiary," within the meaning of Rule 3a-5 under the
Investment Company Act of 1940, as amended, formed for the purpose of engaging
in a Qualified TIPS Transaction.
"Qualified TIPS Transaction" means an issuance by a Qualified Finance
Subsidiary of preferred trust securities or similar securities in respect of
which any dividends, liquidation preference or other obligations under such
securities are guaranteed by the Company to the extent required by the
Investment Company Act of 1940, as amended, or customary transactions of such
type.
"Qualified Subordinated Indebtedness" means Subordinated Indebtedness
of the Company to a Qualified Finance Subsidiary incurred in connection with a
Qualified TIPS Transaction.
"Rating Agency" means any of (i) S&P, (ii) Moody's or (iii) if S&P or
Moody's or both shall not make a rating of the Notes publicly available, a
security rating agency or agencies, as the case may be, nationally recognized in
the United States, selected by the Company, which shall be substituted for S&P
or Moody's or both, as the case may be.
"Rating Category" means (i) with respect to S&P, any of the following
categories: AAA, AA, A, BBB, BB, B, CCC, CC, C and D (or equivalent successor
categories); (ii) with respect to Moody's, any of the following categories:
Aaa, Aa, A, Baa, Ba, B, Caa, Ca, C and D (or equivalent successor categories);
and (iii) the equivalent of any such category of S&P or Moody's used by another
Rating Agency. In determining whether the rating of the Notes has decreased by
one or more gradation, gradations within Rating Categories (+ and - for S&P; 1,
2 and 3 for Moody's; or the equivalent gradations for another Rating Agency)
shall be taken into account (E.G., with respect to S&P, a decline in rating from
BB+ to BB, as well as from BB- to B+, will constitute a decrease of one
gradation).
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24
"Rating Decline" means the occurrence on, or within 90 days after, the
date of public notice of the occurrence of a Change of Control or of the
intention of the Company or Persons controlling the Company to effect a Change
of Control (which period shall be extended so long as the rating of the Notes is
under publicly announced consideration for possible downgrade by any of the
Rating Agencies) of the following: (i) if the Notes are rated by either Rating
Agency as Investment Grade immediately prior to the beginning of such period,
the rating of the Notes by both Rating Agencies shall be below Investment Grade;
or (ii) if the Notes are rated below Investment Grade by both Rating Agencies
immediately prior to the beginning of such period, the rating of the Notes by
either Rating Agency shall be decreased by one or more gradations (including
gradations within Rating Categories as well as between Rating Categories).
"Redeemable Capital Stock" means any Capital Stock that, either by its
terms or by the terms of any security into which it is convertible or
exchangeable or otherwise, is, or upon the happening of an event or passage of
time would be, required to be redeemed prior to any Stated Maturity of the
principal of the Notes or is redeemable at the option of the holder thereof at
any time prior to any such Stated Maturity, or is convertible into or
exchangeable for debt securities at any time prior to any such Stated Maturity
at the option of the holder thereof.
"Redemption Date", when used with respect to any Note to be redeemed,
in whole or in part, means the date fixed for such redemption by or pursuant to
this Indenture.
"Redemption Price", when used with respect to any Note to be redeemed,
means the price at which it is to be redeemed pursuant to this Indenture.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of the date of this Indenture, by and among the Company and
the other parties named on the signature pages thereof, as such agreement may be
amended, modified or supplemented from time to time.
"Regular Record Date" for the interest payable on any Interest Payment
Date means the May 15 or November 15 (whether or not a Business Day), as the
case may be, next preceding such Interest Payment Date.
"Regulation S" has the meaning set forth in Section 201 of this
Indenture.
"Regulation S Global Note" has the meaning set forth in Section 201 of
this Indenture.
"Responsible Officer", when used with respect to the Trustee, means
the chairman or any vice-chairman of the board of directors, the chairman or any
vice-chairman
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25
of the executive committee of the board of directors, the chairman of the
trust committee, the president, any vice president, the secretary, any
assistant secretary, the treasurer, any assistant treasurer, the cashier, any
assistant cashier, any trust officer or assistant trust officer, the
controller or any assistant controller or any other officer of the Trustee
customarily performing functions similar to those performed by any of the
above-designated officers, and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of his knowledge of and familiarity with the particular subject.
"Restricted Global Note" has the meaning set forth in Section 201 of
this Indenture.
"Restricted Subsidiary" means any Subsidiary of the Company that is
not (x) an Unrestricted Subsidiary or (y) a Qualified Finance Subsidiary.
"Rule 144A" has the meaning set forth in Section 201 of this
Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.
"Senior Indebtedness" of the Company or any Subsidiary Guarantor
means (i) all Indebtedness of the Company or such Subsidiary Guarantor under the
New Credit Agreement or any related loan documentation, including, without
limitation, obligations to pay principal and interest (including any interest
accruing subsequent to the filing of a petition of bankruptcy at the rate
provided for in the documentation with respect thereto, whether or not such
interest is an allowed claim under applicable law), premium, if any,
reimbursement obligations under letters of credit, fees, expenses and
indemnities, and all obligations under Interest Rate Agreements or Currency
Agreements with respect thereto, whether outstanding on the date of this
Indenture or thereafter incurred, (ii) the principal of, premium, if any, and
interest (including any interest accruing subsequent to the filing of a petition
of bankruptcy at the rate provided for in the documentation with respect
thereto, whether or not such interest is an allowed claim under applicable law)
on, and all other Obligations with respect to, any other Indebtedness of the
Company or such Subsidiary Guarantor permitted to be incurred by the Company or
such Subsidiary Guarantor under the terms of the Indenture, whether outstanding
on the date of this Indenture or thereafter incurred, unless the instrument
under which such Indebtedness is incurred expressly provides that it is on a
parity with or subordinated in right of payment to the Notes and (iii) all
Obligations of the Company or such Subsidiary Guarantor with respect to the
foregoing. Notwithstanding anything to the contrary in the foregoing, Senior
Indebtedness will not include (w) any liability for federal, state, local or
other taxes owed or owing by the
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26
Company or any Subsidiary Guarantor, (x) any Indebtedness of the Company or
any Subsidiary Guarantor to any of its Restricted Subsidiaries or other
Affiliates, (y) any trade payables or (z) any Indebtedness that is incurred
in violation of this Indenture.
"Senior Note Guarantees" means any guarantee by a Subsidiary Guarantor
as defined in the Fixed Rate Senior Note Indenture and the Floating Rate Senior
Note Indenture of the Company's obligations under such indentures.
"Significant Subsidiary" of the Company means any Subsidiary of the
Company that is a "significant subsidiary" as defined in Rule 1.02(w) of
Regulation S-X under the Securities Act.
"S&P" means Standard & Poor's Ratings Group, a division of McGraw Hill
Inc., a New York corporation, or any successor rating agency.
"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 Indebtedness or any
installment of interest thereon means the dates specified in such Indebtedness
as the fixed date on which the principal of or premiums on such Indebtedness or
such installment of interest is due and payable.
"Subordinated Indebtedness" means Indebtedness of the Company
subordinated in right of payment to the Notes.
"Subsidiary" means any Person a majority of the equity ownership or
the Voting Stock of which is at the time owned, directly or indirectly, by the
Company or by one or more other Restricted Subsidiaries, or by the Company and
one or more other Restricted Subsidiaries.
"Subsidiary Guarantor" means, in each case as applicable, each Wholly
Owned Restricted Subsidiary of the Company and each such subsidiary's Wholly
Owned Restricted Subsidiaries as of the date of the Indenture and any Wholly
Owned Restricted Subsidiary that is required pursuant to Section 1018, on or
after the date of this Indenture, to execute a Note Guarantee until a successor
replaces any such party pursuant to the applicable provisions of this Indenture
and, thereafter, shall mean such successor.
"Tangible Assets" means the total of all the assets appearing on the
Consolidated balance sheet of a majority-owned or Wholly Owned Restricted
Subsidiary of the Company less the following: (1) intangible assets including,
without limitation, items such as goodwill, trademarks, trade names, patents and
unamortized debt discount and
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27
expense; and (2) appropriate adjustments on account of minority interests of
other Persons holding stock in any such majority-owned Restricted Subsidiary
of the Company.
"Temporary Cash Investments" means (i) any evidence of Indebtedness
issued by the United States, or an instrumentality or agency thereof, and
guaranteed fully as to principal, premium, if any, and interest by the United
States; (ii) any certificate of deposit issued by, or time deposit of, a
financial institution that is a member of the Federal Reserve System having
combined capital and surplus and undivided profits of not less than $500
million, whose debt has a rating, at the time of which any investment therein is
made, of "A" (or higher) according to Moody's or "A" (or higher) according to
S&P; (iii) commercial paper issued by a corporation (other than an Affiliate or
Restricted Subsidiary of the Company) organized and existing under the laws of
the United States with a rating, at the time as of which any investment therein
is made, of "P-1" (or higher) according to Moody's or "A-1" (or higher)
according to S&P; (iv) any money market deposit accounts issued or offered by a
financial institution that is a member of the Federal Reserve System having
capital and surplus in excess of $500 million; (v) short term tax-exempt bonds
with a rating, at the time as of which any investment is made therein, of "Aa3"
(or higher) according to Moody's or "AA-" (or higher) according to S&P,
(vi) shares in a mutual fund, the investment objectives and policies of which
require it to invest substantially in the investments of the type described in
clause (i) through (v); and (vii) repurchase and reverse repurchase obligations
with the term of not more than seven days for underlying securities of the types
described in clauses (i) and (ii) entered into with any financial institution
meeting the qualifications specified in clause (ii); PROVIDED that in the case
of clauses (i), (ii), (iii) and (v), such investment matures within one year
from the date of acquisition thereof.
"Transferred Receivables" has the meaning specified in the definition
of "Permitted Receivables Financing" set forth herein.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939,
as amended.
"Trustee" means the Person named as the Trustee in the first paragraph
of this Indenture until a successor Trustee shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Trustee" shall mean
such successor Trustee.
"Unrestricted Subsidiary" means any Subsidiary that is designated by
the Board of Directors as an Unrestricted Subsidiary pursuant to a Board
Resolution, but only to the extent that such Subsidiary (i) has no Indebtedness
other than Non-Recourse Debt; (ii) is not party to any agreement, contract,
arrangement or understanding with the Company or any of its Restricted
Subsidiaries unless the terms of any such agreement, contract, arrangement or
understanding are no less favorable to the Company or such Restricted Subsidiary
than those that might be obtained at the time from Persons who are not
Affiliates of the Company;
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28
(iii) is a Person with respect to which neither the Company nor any of its
Restricted Subsidiaries has any direct or indirect obligation (a) to
subscribe for additional Equity Interests or (b) to maintain or preserve such
Person's financial condition or to cause such Person to achieve any specified
levels of operating results; (iv) has not guaranteed or otherwise directly or
indirectly provided credit support for any Indebtedness of the Company or any
of its Restricted Subsidiaries; (v) has at least one member of its board of
directors who is not a director or executive officer of the Company or any of
its Restricted Subsidiaries and has at least one executive officer who is not
a director or executive officer of the Company or any of its Restricted
Subsidiaries; and (vi) does not directly or through any of its Subsidiaries
own any Capital Stock of, or own or hold any Lien on any property of, the
Company or any of its Restricted Subsidiaries. Any such designation by the
Board of Directors shall be evidenced to the Trustee by filing with the
Trustee a certified copy of the Board Resolution giving effect to such
designation and an Officers' Certificate certifying that such designation
complied with the foregoing conditions and was permitted by Section 1011.
If, at any time, any Unrestricted Subsidiary would fail to meet the foregoing
requirements as an Unrestricted Subsidiary, it shall thereafter cease to be
an Unrestricted Subsidiary for purposes of the Indentures and any
Indebtedness of such Subsidiary shall be deemed to be incurred by a
Restricted Subsidiary of the Company as of such date (and, if such
Indebtedness is not permitted to be incurred as of such date under Section
1010 the Company shall be in default of such covenant). The Board of
Directors may at any time designate any Unrestricted Subsidiary to be a
Restricted Subsidiary, PROVIDED that such designation shall be deemed to be
an incurrence of Indebtedness by a Restricted Subsidiary of the Company of
any outstanding Indebtedness of such Unrestricted Subsidiary and such
designation shall only be permitted if (i) such Indebtedness is permitted
under Section 1010 and (ii) no Default or Event of Default would be in
existence following such designation.
"U.S. Government Obligations" means securities that are (i) direct
obligations of the United States for the timely payment of which its full
faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United
States, the timely payment of which is unconditionally guaranteed as a full
faith and credit obligation by the United States, which, in either case, are
not callable or redeemable at the option of the issuer thereof, and shall
also include a depository receipt issued by a bank (as defined in Section
3(a)(2) of the Securities Act) as custodian with respect to any such U.S.
Government Obligation or a specific payment of principal of or interest on
any such U.S. Government Obligation held by such custodian for the account of
the holder of such depository receipt; PROVIDED that (except as required by
law) such custodian is not authorized to make any deduction from the amount
payable to the holder of such depository receipt from any amount received by
the custodian in respect of the U.S. Government Obligation or the specific
payment of principal of or interest on the U.S. Government Obligation
evidenced by such depository receipt.
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29
"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".
"Voting Stock" means stock of the class or classes having general
voting power under ordinary circumstances to elect at least a majority of the
board of directors, managers or trustees of a corporation (irrespective of
whether or not at the time stock of any other class or classes shall have or
might have voting power by reason of the happening of any contingency).
"Wholly Owned Restricted Subsidiary" means a Restricted Subsidiary all
the Capital Stock (other than directors' qualifying shares) of which is owned by
the Company or another Wholly Owned Restricted Subsidiary.
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 (including any covenant compliance with
which constitutes a condition precedent) relating to the proposed action have
been complied with and an Opinion of Counsel stating that in the opinion of 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 or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than pursuant to
Section 1008) shall include:
(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 of each 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
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30
(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 his certificate or opinion is based are
erroneous. In giving such opinion, such counsel may rely upon opinions of local
counsel reasonably satisfactory to the Trustee. 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, 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.
(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 agents 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 conclusive in favor of the Trustee and the Company, if made in the
manner provided in this Section 104.
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31
(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 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 principal amount and serial numbers of Notes held by any
Person, and the date of holding the same, shall be proved by the Security
Register.
(d) If the Company shall solicit from the Holders of Notes any
request, demand, authorization, direction, notice, consent, waiver or other Act,
the Company may, at its option, by or pursuant to Board Resolution, fix in
advance a record date for the determination of Holders entitled to give such
request, demand, authorization, direction, notice, consent, waiver or other Act,
but the Company shall have no obligation to do so. Notwithstanding TIA
Section 316(c), such record date shall be the record date specified in or
pursuant to such Board Resolution, which shall be a date not earlier than the
date 30 days prior to the first solicitation of Holders generally in connection
therewith and not later than the date such solicitation is completed. If such a
record date is fixed, such request, demand, authorization, direction, notice,
consent, waiver or other Act may be given before or after such record date, but
only the Holders of record at the close of business on such record date shall be
deemed to be Holders for the purposes of determining whether Holders of the
requisite proportion of Outstanding Notes have authorized or agreed or consented
to such request, demand, authorization, direction, notice, consent, waiver or
other Act, and for that purpose the Outstanding Notes shall be computed as of
such record date; PROVIDED that no such authorization, agreement or consent by
the Holders on such record date shall be deemed effective unless it shall become
effective pursuant to the provisions of this Indenture not later than 330 days
after the record date.
(e) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Note shall bind every future Holder of
the same Note and the Holder of every Note 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 Note.
<PAGE>
32
SECTION 105. NOTICES, ETC., TO TRUSTEE, COMPANY AND SUBSIDIARY
GUARANTORS.
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 made, given, furnished or filed in writing
to or with the Trustee at its Corporate Trust Office, to the attention of
its Corporate Trust Department.
(2) the Company or any Subsidiary Guarantor 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 addressed to it at the address of its principal
office specified in the first paragraph of this Indenture, 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 notice of any event to Holders by the
Company, any Subsidiary Guarantor or the Trustee, 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 its address as it appears in the Security Register, not later than the latest
date, and not earlier than the earliest date, 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. Any notice mailed to a Holder in the manner herein prescribed
shall be conclusively deemed to have been received by such Holder when so
mailed, whether or not such Holder actually receives such notice. 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 or irregularities in regular
mail service or by reason of any other cause, it shall be impracticable to mail
notice of any event to Holders when such notice is required to be given pursuant
to any provision of this Indenture, then any manner of giving such notice as
shall be satisfactory to the Trustee shall be deemed to be a sufficient giving
of such notice for every purpose hereunder.
<PAGE>
33
SECTION 107. 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 108. SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture by the Company and the
Subsidiary Guarantors shall bind their respective successors and assigns,
whether so expressed or not.
SECTION 109. SEPARABILITY CLAUSE.
In case any provision in this Indenture or in the Notes or the Note
Guarantees 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 110. BENEFITS OF INDENTURE.
Nothing in this Indenture, in the Notes or the Note Guarantees,
express or implied, shall give to any Person, other than the parties hereto, any
Paying Agent, any Security Registrar and their successors hereunder and the
Holders, any benefit or any legal or equitable right, remedy or claim under this
Indenture.
SECTION 111. GOVERNING LAW.
This Indenture, the Notes and the Note Guarantees shall be governed by
the law of the State of New York. Upon the issuance of the Exchange Notes, if
any, or the effectiveness of the Shelf Registration Statement, this Indenture
shall be subject to and governed by the provisions of the Trust Indenture Act of
1939, as amended.
SECTION 112. LEGAL HOLIDAYS.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity or Maturity of any Note shall not be a Business Day, then
(notwithstanding any other provision of this Indenture or of the Notes) payment
of interest or principal (and premium, if any) need not be made on such date,
but may be made on the next succeeding Business Day with the same force and
effect as if made on the Interest Payment Date, Redemption Date, or at the
Stated Maturity or Maturity; PROVIDED that no interest shall accrue for the
period from and after such Interest Payment Date, Redemption Date, Stated
Maturity or Maturity, as the case may be.
<PAGE>
34
ARTICLE TWO
NOTE FORMS
SECTION 201. FORMS GENERALLY.
The Initial Notes shall be known as the "10 1/2% Senior Subordinated
Notes due 2004" and the Exchange Notes shall be known as the "10 1/2% Series B
Senior Subordinated Notes Due 2004", in each case of the Company. The Initial
Notes and the Exchange Notes shall be treated as a single class for all purposes
under this Indenture. The Notes 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
or as may, consistently herewith, be determined by the officers executing such
Notes, as evidenced by their execution of the Notes. Any portion of the text of
any Note may be set forth on the reverse thereof, with an appropriate reference
thereto on the face of the Note.
The definitive Notes shall be printed, lithographed or engraved on
steel-engraved borders or may be produced in any other manner, all as determined
by the officers of the Company executing such Notes, as evidenced by their
execution of such Notes; PROVIDED, HOWEVER, that if the Notes are listed on any
securities exchange such manner is permitted by the rules of such securities
exchange.
Initial Notes offered and sold to "QIBs" (Qualified Institutional
Buyers, as defined in Rule 144A under the Securities Act) in reliance on
Rule 144A under the Securities Act ("Rule 144A") may be issued in the form of
one or more permanent global Notes ("Global Notes") substantially in the form
set forth in Section 203 and 204 (each, a "Restricted Global Note") deposited
with the Trustee, as custodian for the Depositary or its nominee (in such
capacity, the "Custodian"), and registered in the name of the Depositary or its
nominee, duly executed by the Company and authenticated by the Trustee as
hereinafter provided. The aggregate principal amount of the Restricted Global
Note may from time to time be increased or decreased by adjustments made on the
records of the Trustee, as custodian for the Depositary or its nominee, as
hereinafter provided.
Initial Notes offered and sold in offshore transactions in reliance on
Regulation S under the Securities Act ("Regulation S") shall be issued in the
form of a single permanent Global Note substantially in the form set forth in
Sections 203 and 204 (the "Regulation S Global Note") deposited with the
Custodian, and registered in the name of the Depositary or its nominee for the
accounts of the Euroclear System ("Euroclear") and Cedel Bank, SOCIETE ANONYME
("Cedel"), duly executed by the Company and authenticated by the
<PAGE>
35
Trustee as hereinafter provided. On or prior to the end of the "40-day
restricted period" within the meaning of Rule 903(c) of Regulation S,
beneficial interests in the Regulation S Global Note may only be held through
the Restricted Global Note. Any resale or transfer of beneficial interests in
the Regulation S Global Note shall be made only pursuant to Rule 144A or
Regulation S, after delivery to the Company by the transferor, if required by
the Company, of the opinions, certification or other information described in
Section 312. The aggregate principal amount at maturity of the Regulation S
Global Note may from time to time be increased or decreased by adjustments
made in the records of the Trustee, as custodian for the Depositary or its
nominee, as herein provided.
Initial Notes transferred subsequent to the consummation of the
Offering to Institutional Accredited Investors (as defined in Rule 501(a)(1),
(2), (3) and (7) under the Securities Act) which are not QIBs (excluding Non-
U.S. Persons, as defined in Rule 902 under the Securities Act) shall be in the
form of permanent certificated Notes in substantially the form set forth in
Sections 203 and 204 (the "Certificated Notes"); PROVIDED, HOWEVER, that upon
transfer of such Certificated Notes to a QIB or in accordance with Regulation S,
such Certificated Notes will, unless the relevant Global Note has previously
been exchanged, be exchanged for an interest in a Global Note pursuant to the
provisions of Section 312.
SECTION 202. RESTRICTIVE LEGENDS.
Unless and until (i) an Initial Note is sold pursuant to an effective
Shelf Registration Statement or (ii) an Initial Note is exchanged for an
Exchange Note in an Exchange Offer pursuant to an effective Exchange Offer
Registration Statement, in each case pursuant to the Registration Rights
Agreement, (A) each Restricted Global Note and Certificated Note shall bear the
following legend set forth below (the "Private Placement Legend") on the face
thereof and (B) the Regulation S Global Note shall bear the Private Placement
Legend on the face thereof until at least 41 days after the date hereof (the
"40-day restricted period"):
THE NOTE (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF
THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND THE NOTE EVIDENCED HEREBY MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER
OF THE NOTE EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY
BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE
NOTE EVIDENCED HEREBY AGREES FOR THE
<PAGE>
36
BENEFIT OF THE ISSUER THAT (A) SUCH NOTE MAY BE RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED, ONLY (1)(a) TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED
IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (c) OUTSIDE THE
UNITED STATES TO A PERSON THAT IS NOT A U.S. PERSON (AS DEFINED IN
RULE 902 UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT, OR (d) IN
ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (IN THE CASE OF (b), (c) OR (d),
UPON AN OPINION OF COUNSEL IF THE ISSUER OR TRUSTEE, REGISTRAR OR
TRANSFER AGENT FOR THE NOTES SO REQUESTS), (2) TO THE ISSUER OR (3)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE,
IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF
THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE
HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY
PURCHASER FROM IT OF THE NOTE EVIDENCED HEREBY OF THE RESALE
RESTRICTIONS SET FORTH IN (A) ABOVE.
Each Global Note, whether or not an Initial Note, shall also bear the
following legend on the face thereof:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC") TO THE ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
<PAGE>
37
SECTION 203. FORM OF FACE OF NOTE.
FLEMING COMPANIES, INC.
10 1/2% Senior Subordinated Note due 2004 CUSIP ________
No. __________ $________
Fleming Companies, Inc., an Oklahoma corporation (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 December 1, 2004, at the office or agency of the
Company referred to below, and to pay interest thereon from July 25, 1997, or
from the most recent Interest Payment Date to which interest has been paid or
duly provided for, semiannually on June 1 and December 1 of each year,
commencing December 1, 1997, at the rate of 10 1/2% per annum, until the
principal hereof is paid or duly provided for, and (to the extent lawful) to pay
on demand interest on any overdue interest at the rate borne by the Notes from
the date on which such overdue interest becomes payable to the date payment of
such interest has been made or duly provided for. The Company shall pay all
Liquidated Damages, if any, in the same manner on the dates and in the amounts
set forth in the Registration Rights Agreement. The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in such Indenture, be paid to the Person in whose name this Note (or
one or more Predecessor Notes) is registered at the close of business on the
Regular Record Date for such interest, which shall be the May 15 or November 15
(whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date. Any such interest not so punctually paid or duly
provided for shall forthwith cease to be payable to the Holder on such Regular
Record Date, and such Defaulted Interest, and (to the extent lawful) interest on
such Defaulted Interest at the rate borne by the Notes, may be paid to the
Person in whose name this Note (or one or more Predecessor Notes) is registered
at the close of business on a Special Record Date for the payment of such
Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to
Holders of Notes not less than 10 days prior to such Special Record Date, or may
be paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Notes may be listed, and
upon such notice as may be required by such exchange, all as more fully provided
in said Indenture. Payment of the principal of (and premium, if any, on),
interest on, and Liquidated Damages on, if any, this Note will be made at the
office or agency of the Company maintained for that purpose in The City of New
York (which initially will be the office of the Trustee maintained at
50 Broadway - 7th Floor, New York, New York 10004), or at such other office or
agency of the Company as may be maintained for such purpose, in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts; PROVIDED, HOWEVER, that payment
of interest may be
<PAGE>
38
made at the option of the Company by check mailed to the address of the
Person entitled thereto as such address shall appear on the Security
Register. Notwithstanding the foregoing, payment of interest in respect of
Notes represented by Global Notes shall be made in accordance with procedures
required by the Depositary.
Reference is hereby made to the further provisions of this Note 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 duly executed
by the Trustee referred to on the reverse hereof by manual signature, this Note
shall not be entitled to any benefit under the Indenture, or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: FLEMING COMPANIES, INC.
By
--------------------------------
Attest:
- ---------------------------------
Secretary
SECTION 204. FORM OF REVERSE OF NOTE.
This Note is one of a duly authorized issue of securities of the
Company designated as its 10 1/2% Senior Subordinated Notes due 2004 (herein
called the "Notes"), limited (except as otherwise provided in the Indenture
referred to below) in aggregate principal amount to $250,000,000, which may be
issued under an indenture (herein called the "Indenture") dated as of July 25,
1997, among the Company, the Subsidiary Guarantors named therein and
Manufacturers and Traders Trust Company, 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, obligations
and immunities thereunder of the Company, the Subsidiary Guarantors, the Trustee
and the Holders of the Notes and the Note Guarantees, and of the terms upon
which the Notes and the Note Guarantees are, and are to be, authenticated and
delivered.
<PAGE>
39
The Notes are subject to redemption at the option of the Company, upon
not less than 30 nor more than 60 days notice at any time on or after June 1,
2001, as a whole or in part, at the election of the Company, at a Redemption
Price equal to the percentage of the principal amount of the Notes set forth
below, plus accrued and unpaid interest and Liquidated Damages, if any, thereon,
to the applicable Redemption Date, if redeemed during the 12-month period
beginning on June 1 of the years indicated below (subject to the right of
Holders of record on relevant Record Dates to receive interest due on an
Interest Payment Date):
Year Redemption Price
---- ----------------
2001 . . . . . . . . . 105.250%
2002 . . . . . . . . . 102.625%
2003 and thereafter. . 100.000%
In addition, up to 35% of the initial aggregate principal amount of
the Notes may be redeemed on or prior to June 1, 2000, at the option of the
Company, within 180 days of a Public Equity Offering with the net proceeds of
such offering at a redemption price equal to 110 1/2% of the principal amount
thereof, together with accrued and unpaid interest, if any, and Liquidated
Damages, if any, to the date of redemption (subject to the right of Holders of
record on relevant Record Dates to receive interest due on relevant Interest
Payment Dates); PROVIDED that after giving effect to such redemption at least
$162.5 million aggregate principal amount of the Notes remains outstanding.
Upon the occurrence of a Change of Control Triggering Event, the
Holder of this Note may require the Company, subject to certain limitations
provided in the Indenture and to the extent not inconsistent with the Company's
Bylaws as in effect on the date of the Indenture, to repurchase this Note at a
purchase price in cash in an amount equal to 101% of the principal amount
thereof plus accrued and unpaid interest, if any, and Liquidated Damages, if
any, to the date of purchase.
In the case of any redemption of Notes, interest installments whose
Stated Maturity is on or prior to the Redemption Date will be payable to the
Holders of such Notes, or one or more Predecessor Notes, of record at the close
of business on the relevant Record Date referred to on the face hereof. Notes
(or portions thereof) for whose redemption and payment provision is made in
accordance with the Indenture shall cease to bear interest from and after the
Redemption Date.
In the event of redemption of this Note in part only, a new Note or
Notes for the unredeemed portion hereof shall be issued in the name of the
Holder hereof upon the cancellation hereof.
<PAGE>
40
If an Event of Default shall occur and be continuing, the principal of
all the Notes may be declared due and payable in the manner and with the effect
provided in the Indenture.
The Indenture contains provisions for defeasance at any time of
(a) the entire indebtedness of the Company and any Subsidiary Guarantor on this
Note and (b) certain restrictive covenants and the related Defaults and Events
of Default, upon compliance by the Company and the Subsidiary Guarantors with
certain conditions set forth therein, which provisions apply to this Note.
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 Subsidiary Guarantors and the rights of the Holders under the
Indenture at any time by the Company, the Subsidiary Guarantors and the Trustee
with the consent of the Holders of a majority in aggregate principal amount of
the Notes at the time Outstanding. The Indenture also contains provisions
permitting the Holders of specified percentages in aggregate principal amount of
the Notes at the time Outstanding, on behalf of the Holders of all the Notes, to
waive compliance by the Company and the Subsidiary Guarantors with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by or on behalf of the Holder of
this Note shall be conclusive and binding upon such Holder and upon all future
Holders of this Note and of any Note 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 Note.
No reference herein to the Indenture and no provision of this Note 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, on)
and interest on this Note at the times, place, and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Note is registerable on the Security
Register of the Company, upon surrender of this Note for registration of
transfer at the office or agency of the Company, maintained for such purpose,
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 Notes, of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or transferees.
The Notes are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, the Notes are
exchangeable for a like aggregate
<PAGE>
41
principal amount of Notes of a different authorized denomination, as
requested by the Holder surrendering the same.
No service charge shall be made for any registration of transfer or
exchange of Notes, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Prior to the time of due presentment of this Note for registration of
transfer, the Company, the Subsidiary Guarantors, the Trustee and any agent of
the Company, the Subsidiary Guarantors or the Trustee may treat the Person in
whose name this Note is registered as the owner hereof for all purposes, whether
or not this Note be overdue, and neither the Company, the Subsidiary Guarantors,
the Trustee nor any such agent shall be affected by notice to the contrary.
Interest on this Note shall be computed on the basis of a 360-day year
of twelve 30-day months.
In addition to the rights provided to Holders of Notes under the
Indenture, Holders shall have all the rights set forth in the Registration
Rights Agreement dated as of July 25, 1997 among the Company, the Subsidiary
Guarantors and the other parties named on the signature pages thereof.
All terms used in this Note which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
FORM OF ASSIGNMENT
FOR VALUE RECEIVED ___________________________________ hereby sell(s),
assign(s) and transfer(s) unto ________________________________________ (please
insert name and social security or other identifying number of assignee) the
within Note and hereby irrevocably constitutes and appoints ____________________
as agent to transfer the said Note on the books of the Company with the full
power of substitution in the premises.
Dated:
- ------------------------------------
Signature(s)
Signature must be guaranteed by
<PAGE>
42
a bank or trust company
or a member firm of a major stock
exchange
- ---------------------------------------------
Signature Guarantee
NOTICE: The signature on the assignment
must correspond with the name as
written upon the face of the Note in every
particular without alteration or enlargement or any
change whatever.
SECTION 205. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
The Trustee's certificate of authentication shall be in substantially
the following form:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
This is one of the Notes referred to in the within-mentioned
Indenture.
MANUFACTURERS AND TRADERS TRUST COMPANY
as Trustee
By
-----------------------------------------
Authorized Signatory
ARTICLE THREE
THE NOTES
SECTION 301. TITLE AND TERMS.
The aggregate principal amount of Notes which may be authenticated and
delivered under this Indenture is limited to $250,000,000, except for Notes
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of, other Notes pursuant to Section 303, 304, 305, 306, 801,
906, 1009, 1016 or 1108.
<PAGE>
43
The Initial Notes shall be known and designated as the "10 1/2%
Senior Subordinated Notes due 2004" and the Exchange Notes shall be known as
the "10 1/2% Series B Senior Subordinated Notes due 2004", in each case, of
the Company. Their Stated Maturity shall be December 1, 2004, and they shall
bear interest at the rate of 10 1/2% per annum from July 25, 1997, or from
the most recent Interest Payment Date to which interest has been paid or duly
provided for, payable semi-annually on June 1 and December 1 of each year,
commencing December 1, 1997 and at said Stated Maturity, until the principal
thereof is paid or duly provided for.
The principal of (and premium, if any, on), interest and Liquidated
Damages, if any, on the Notes shall be payable at the office or agency of the
Company maintained for such purpose in The City of New York, or at such other
office or agency of the Company as may be maintained for such purpose; PROVIDED,
HOWEVER, that, at the option of the Company, interest may be paid by mailing a
check for such interest, payable to or upon the written order of the Person
entitled thereto pursuant to Section 308, to the address of such Person as it
appears in the Security Register. Notwithstanding the foregoing, payment of the
principal of (and premium, if any, on), interest and Liquidated Damages, if any,
on Notes represented by Global Notes shall be made in accordance with procedures
required by the Depositary.
The Notes shall be redeemable as provided in Article Eleven.
SECTION 302. DENOMINATIONS.
The Notes 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 Notes shall be executed on behalf of the Company by its Chairman,
any Vice Chairman, its President or a Vice President, under its corporate seal
reproduced thereon and attested by its Secretary or an Assistant Secretary. The
signature of any of these officers on the Notes may be manual or facsimile
signatures of the present or any future such authorized officer and may be
imprinted or otherwise reproduced on the Notes.
Notes 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 Notes or did not hold
such offices at the date of such Notes.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Notes executed by the Company to the
Trustee for authentication, together with a Company Order for the authentication
and delivery of such
<PAGE>
44
Notes, and the Trustee in accordance with such Company Order shall authenticate
and deliver such Notes.
Each Note shall be dated the date of its authentication.
No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Note a
certificate of authentication substantially in the form provided for herein duly
executed by the Trustee by manual signature of a Responsible Officer, and such
certificate upon any Note shall be conclusive evidence, and the only evidence,
that such Note has been duly authenticated and delivered hereunder and is
entitled to the benefits of this Indenture.
In case the Company, pursuant to Article Eight, shall be consolidated
or merged with or into any other Person or shall convey, transfer, lease or
otherwise dispose of its properties and assets substantially as an entirety to
any Person, and the successor Person resulting from such consolidation, or
surviving such merger, or into which the Company shall have been merged, or the
Person which shall have received a conveyance, transfer, lease or other
disposition as aforesaid, shall have executed an indenture supplemental hereto
with the Trustee pursuant to Article Eight, any of the Notes authenticated or
delivered prior to such consolidation, merger, conveyance, transfer, lease or
other disposition may, from time to time, at the request of the successor
Person, be exchanged for other Notes executed in the name of the successor
Person with such changes in phraseology and form as may be appropriate, but
otherwise in substance of like tenor as the Notes surrendered for such exchange
and of like principal amount; and the Trustee, upon Company Request of the
successor Person, shall authenticate and deliver Notes as specified in such
request for the purpose of such exchange. If Notes shall at any time be
authenticated and delivered in any new name of a successor Person pursuant to
this Section in exchange or substitution for or upon registration of transfer of
any Notes, such successor Person, at the option of the Holders but without
expense to them, shall provide for the exchange of all Notes at the time
Outstanding for Notes authenticated and delivered in such new name.
SECTION 304. TEMPORARY NOTES.
Pending the preparation of definitive Notes, the Company may execute
and upon Company Order the Trustee shall authenticate and deliver, temporary
Notes which are printed, lithographed, typewritten or otherwise produced, in any
authorized denomination, substantially of the tenor of the definitive Notes in
lieu of which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Notes may
determine, as conclusively evidenced by their execution of such Notes.
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45
If temporary Notes are issued, the Company shall cause definitive
Notes to be prepared without unreasonable delay. After the preparation of
definitive Notes, the temporary Notes shall be exchangeable for definitive Notes
upon surrender of the temporary Notes at the office or agency of the Company
designated for such purpose pursuant to Section 1002, without charge to the
Holder. Upon surrender for cancellation of any one or more temporary Notes, the
Company shall execute and upon Company Order the Trustee shall authenticate and
deliver in exchange therefor a like principal amount of definitive Notes of
authorized denominations. Until so exchanged, the temporary Notes shall in all
respects be entitled to the same benefits under this Indenture as definitive
Notes.
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
referred to as the "Security Register") in which, subject to such reasonable
regulations as it may prescribe, the Company shall provide for the registration
of Notes and of transfers of Notes. The Security Register shall be in written
form or any other form capable of being converted into written form within a
reasonable time. At all reasonable times, the Security Register shall be open
to inspection by the Trustee. The Trustee is hereby initially appointed as
security registrar (the "Security Registrar") for the purpose of registering
Notes and transfers of Notes as herein provided.
Upon surrender for registration of transfer of any Note at the office
or agency of the Company designated pursuant to Section 1002, the Company shall
execute and the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Notes of any authorized
denomination or denominations of a like aggregate principal amount.
Furthermore, any Holder of the Restricted Global Note shall, by
acceptance of such Global Note, agree that transfers of beneficial interests in
such Global Note may be effected only through a book-entry system maintained by
the Holder of such Global Note (or its agent), and that ownership of a
beneficial interest in the Note shall be required to be reflected in a book
entry.
All Notes issued upon any registration of transfer or exchange of
Notes shall be the valid obligations of the Company and, pursuant to the Note
Guarantees, the Subsidiary Guarantors, evidencing the same debt, and entitled to
the same benefits under this Indenture, as the Notes surrendered upon such
registration of transfer or exchange.
Every Note presented or surrendered for registration of transfer or
for exchange shall be duly endorsed, or be accompanied by a written instrument
of transfer, in
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46
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 or redemption of Notes, 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 Notes, other than
exchanges pursuant to Section 303, 304, 801, 906, 1009 or 1108 not involving any
transfer.
The Company shall not be required (i) to issue, register the transfer
of or exchange any Note during a period beginning at the opening of business 15
days before the selection of Notes to be redeemed under Section 1104 and ending
at the close of business on the day of such mailing of the relevant notice of
redemption, or (ii) to register the transfer of or exchange any Note so selected
for redemption in whole or in part, except the unredeemed portion of any Note
being redeemed in part.
SECTION 306. MUTILATED, DESTROYED, LOST AND STOLEN NOTES.
If (i) any mutilated Note is surrendered to the Trustee, or (ii) the
Company and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Note, and there is delivered to the Company
and the Trustee such security or indemnity as may be required by them to save
each of them harmless, then, in the absence of actual notice to the Company or
the Trustee that such Note has been acquired by a bona fide purchaser, the
Company shall execute and the Trustee shall authenticate and deliver, in
exchange for any such mutilated Note or in lieu of any such destroyed, lost or
stolen Note, a new Note of like tenor and principal amount, bearing a number not
contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Note has become
or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Note, pay such Note.
Upon the issuance of any new Note 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 Note issued pursuant to this Section in lieu of any
destroyed, lost or stolen Note shall constitute an original additional
contractual obligation of the Company and, pursuant to the Note Guarantees, the
Subsidiary Guarantors, whether or not the destroyed, lost or stolen Note shall
be at any time enforceable by anyone, and shall be entitled to all benefits of
this Indenture equally and proportionately with any and all other Notes duly
issued hereunder.
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47
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 Notes.
SECTION 307. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.
Interest on any Note 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 such Note (or one or more Predecessor Notes) is registered at the close of
business on the Regular Record Date for such interest at the office or agency of
the Company maintained for such purpose pursuant to Section 1002; PROVIDED,
HOWEVER, that each installment of interest may at the Company's option be paid
by mailing a check for such interest, payable to or upon the written order of
the Person entitled thereto pursuant to Section 308, to the address of such
Person as it appears in the Security Register. Notwithstanding the foregoing,
payment of (and premium, if any, on), interest and Liquidated Damages, if any,
on Notes represented by Global Notes shall be made in accordance with procedures
required by the Depositary.
Any interest on any Note which is payable, but is not punctually paid
or duly provided for, on any Interest Payment Date shall forthwith cease to be
payable to the Holder on the Regular Record Date by virtue of having been such
Holder, and such defaulted interest and (to the extent lawful) interest on such
defaulted interest at the rate borne by the Notes (such defaulted interest and
interest thereon herein collectively called "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 Notes (or their respective Predecessor
Notes) 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 Note 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
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48
Record Date therefor to be given in the manner provided for in
Section 106, 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 given, such Defaulted Interest shall be
paid to the Persons in whose names the Notes (or their respective
Predecessor Notes) are registered at the close of business on such Special
Record Date.
(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 Notes may be listed, and upon such notice
as may be required by such exchange, if, after notice given by the Company
to the Trustee of the proposed payment pursuant to this clause, such manner
of payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Note
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Note shall carry the rights to interest accrued and
unpaid, and to accrue, which were carried by such other Note.
SECTION 308. PERSONS DEEMED OWNERS.
Prior to the due presentment of a Note for registration of transfer,
the Company, the Subsidiary Guarantors, the Trustee and any agent of the
Company, the Subsidiary Guarantors or the Trustee may treat the Person in whose
name such Note is registered as the owner of such Note for the purpose of
receiving payment of principal of (and premium, if any, on) and (subject to
Sections 305 and 307) interest on such Note and for all other purposes
whatsoever, whether or not such Note be overdue, and none of the Company, any
Subsidiary Guarantor, the Trustee or any agent of the Company, any Subsidiary
Guarantor or the Trustee shall be affected by notice to the contrary.
SECTION 309. CANCELLATION.
All Notes surrendered for payment, redemption, registration of
transfer or exchange 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 Notes previously
authenticated and delivered hereunder which the Company may have acquired in any
manner whatsoever, and may deliver to the Trustee (or to any other Person for
delivery to the Trustee) for cancellation any Notes previously authenticated
hereunder which the Company has not issued and sold, and all Notes so delivered
shall be promptly cancelled by the Trustee. If the Company shall so acquire any
of the Notes, however, such acquisition shall not operate as a redemption or
satisfaction of the indebtedness represented by such Notes unless and until the
same are surrendered to the
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49
Trustee for cancellation. No Notes shall be authenticated in lieu of or in
exchange for any Notes cancelled as provided in this Section, except as
expressly permitted by this Indenture. All cancelled Notes held by the
Trustee shall be disposed of by the Trustee in accordance with its customary
procedures and certification of their disposal delivered to the Company
unless by Company Order the Company shall direct that cancelled Notes be
returned to it.
SECTION 310. COMPUTATION OF INTEREST.
Interest on the Notes shall be computed on the basis of a 360-day year
of twelve 30-day months.
SECTION 311. BOOK-ENTRY PROVISIONS FOR GLOBAL NOTES.
(a) The Company shall execute and the Trustee shall, in accordance
with this Section 311, authenticate and deliver initially one or more Global
Notes that (a) shall be registered in the name of the Depositary for such Global
Note or Global Notes or the nominee of such Depositary, (b) shall be delivered
by the Trustee to such Depositary or pursuant to such Depositary's instructions
or held by the Custodian and (c) bear legends as set forth in Section 202.
Members of, or participants in the Depositary ("AGENT MEMBERS") shall
have no rights under this Indenture with respect to any Global Note held on
their behalf by the Depositary or by the Custodian or under such Global Note,
and the Depositary may be treated by the Company, the Trustee and any agent of
the Company or the Trustee as the absolute owner of such Global Note for all
purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent
the Company, the Trustee or any agent of the Company or the Trustee from giving
effect to any written certification, proxy or other authorization furnished by
the Depositary or impair, as between the Depositary and its Agent Members, the
operation of customary practices of such Depositary governing the exercise of
the rights of a holder of a beneficial interest in any Global Note.
(b) Interests of beneficial owners in a Global Note may be
transferred in accordance with the applicable rules and procedures of the
Depositary and the provisions of Section 312. Transfers of a Global Note shall
be limited to transfers of such Global Note in whole, but not in part, to the
Depositary, its successors or their respective nominees except that Certificated
Notes shall be transferred to all beneficial owners in exchange for their
beneficial interests in the Global Note in the following circumstances: (x) the
Depositary notifies the Company that it is unwilling or unable to continue as
Depositary for the applicable Global Note or the Depositary ceases to be a
"Clearing Agency" registered under the Exchange Act and a successor depositary
is not appointed by the Company within 90 days or (y) the Company, at its sole
discretion, notifies the Trustee in writing that it elects to cause the issuance
of Certificated Notes under this Indenture in exchange for all or
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50
any part of the Notes represented by a Global Note or Global Notes. In
connection with a transfer of an entire Global Note to beneficial owners
pursuant to this paragraph, the applicable Global Note shall be deemed to be
surrendered to the Trustee for cancellation, and the Company shall execute,
and the Trustee shall authenticate and deliver, to each beneficial owner
identified by the Depositary in exchange for its beneficial interest in the
applicable Global Note, an equal aggregate principal amount at maturity of
Certificated Notes of authorized denominations.
(c) Any beneficial interest in a Global Note that is transferred to a
person who takes delivery in the form of an interest in another Global Note
will, upon transfer, cease to be an interest in such Global Note and become an
interest in the other Global Note and, accordingly, will thereafter be subject
to all transfer restrictions, if any, and other procedures applicable to
beneficial interests in such other Global Note for as long as it remains such an
interest.
(d) Any Certificated Note delivered in exchange for an interest in
the Restricted Global or Regulation S Global Note pursuant to paragraph (b) of
this Section shall bear the Private Placement Legend if required by Section 202.
SECTION 312. TRANSFER AND EXCHANGE.
(a) TRANSFER AND EXCHANGE OF CERTIFICATED NOTES. If Certificated
Notes are presented by a Holder to the Registrar with a request:
(x) to register the transfer of the Certificated Notes; or
(y) to exchange such Certificated Notes for an equal principal amount
of Certificated Notes of other authorized denominations,
the Registrar shall register the transfer or make the exchange as requested if
its requirements for such transactions are met; PROVIDED, HOWEVER, that the
Certificated Notes presented or surrendered for register of transfer or
exchange:
(i) shall be duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by
such Holder or by such Holder's attorney, duly authorized in
writing; and
(ii) are being delivered to the Registrar by a Holder for registration
in the name of such Holder, without transfer or are being
transferred or exchanged pursuant to an effective registration
statement under the Securities Act, pursuant to Section 312(b) or
pursuant to clause (A) or
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51
(B) below, and are accompanied by the following additional
information and documents, as applicable:
(A) if such Certificated Notes are being transferred to the
Company, a certification to that effect from such Holder (in
substantially the form of Exhibit A hereto); or
(B) if such Certificated Notes are being transferred (x)
pursuant to an exemption from registration in accordance
with Rule 144, (y) in reliance on another exemption from the
registration requirements of the Securities Act, or (z) to
an Institutional Accredited Investor that is acquiring the
Note for its own account or for the account of one or more
other Institutional Accredited Investors, in each case for
investment purposes and not with a view to, or for offer or
sale in connection with, any distribution in violation of
the Securities Act: (i) a certification to that effect (in
substantially the form of Exhibit A hereto) and such other
certifications as the Trustee may reasonably request,
(ii) if applicable, a letter with respect to the transfer
(in substantially the form of Exhibit C hereto and (iii) in
each case, an Opinion of Counsel if requested by the Company
or the Trustee, Registrar or Transfer Agent as to the
compliance with the restrictions set forth in the Private
Placement Legend.
(b) RESTRICTIONS ON TRANSFER OF A CERTIFICATED NOTE FOR A BENEFICIAL
INTEREST IN A GLOBAL NOTE. A Certificated Note may not be exchanged for a
beneficial interest in a Global Note except upon satisfaction of the
requirements set forth below. Upon receipt by the Trustee of a Certificated
Note, duly endorsed or accompanied by appropriate instruments of transfer, in
form satisfactory to the Trustee, together with:
(i) certification from the Holder thereof (in substantially the form
of Exhibit A hereto) that such Certificated Note is being
transferred to (A) a QIB in accordance with Rule 144A or
(B) outside the United States in an offshore transaction within
the meaning of Regulation S and in compliance with Rule 904 under
the Securities Act and, in the case of clause A, certification
from the purchaser thereof in substantially the form of Exhibit A
hereto; and
(ii) written instructions from the Holder thereof directing the
Trustee to make, or to direct the Custodian to make, an
adjustment on its books and records with respect to the
Regulation S Global Note or the Restricted Global Note, as the
case may be, to reflect an increase in the
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52
aggregate principal amount of the Notes represented by such
Global Note, such instructions to contain information regarding
the Depositary account (or in the case of the Regulation S Global
Note only, the Euroclear or Cedel account) to be credited with
such increase;
then the Trustee shall cancel such Certificated Note and cause, or direct the
Custodian to cause, in accordance with the standing instructions and procedures
existing between the Depositary and the Custodian (including the rules of
Euroclear and Cedel, if applicable), the aggregate principal amount of Notes
represented by the Regulation S Global Note or the Restricted Global Note, as
the case may be, to be increased by the aggregate principal amount of the
Certificated Note to be exchanged and shall credit or cause to be credited to
the account of the Person specified in such instructions a beneficial interest
in such Global Note equal to the principal amount of the Certificated Note so
cancelled. If no applicable Global Notes are then outstanding, the Company shall
issue and the Trustee shall authenticate, upon written order of the Company in
the form of an Officers' Certificate, a new Regulation S Global Note or
Restricted Global Note, as the case may be, in the appropriate principal amount.
(c) TRANSFER AND EXCHANGE OF GLOBAL NOTES. (i) The transfer and
exchange of Global Notes or beneficial interests in Global Notes will be
effected through the Depositary, in accordance with this Indenture (including
applicable restrictions on transfer set forth herein, if any) and the procedures
of the Depositary therefor, including the rules and procedures of Euroclear and
Cedel, if applicable. A transferor of a beneficial interest in a Global Note to
another Global Note shall deliver to the Registrar:
(A) if applicable, instructions given in accordance with the
Depositary's procedures directing the Trustee to credit or cause
to be credited a beneficial interest in the applicable Global
Note in an amount equal to the beneficial interest in the Global
Note to be exchanged; and
(B) a written order given in accordance with the Depositary's
procedures containing information regarding the Euroclear, Cedel
or other participant account of the Depositary to be credited
with such increase.
The Registrar shall, in accordance with such instructions, instruct
the Depositary to increase and reduce, as applicable, the principal amount of
each applicable Global Note to the extent required and to credit to the account
of the Person specified in such instructions a beneficial interest in the
applicable Global Note and to debit the account of the Person making the
transfer the beneficial interest in the Global Note being transferred.
(ii) Notwithstanding any other provisions of this Indenture, prior to
the expiration of the "40-day restricted period", transfers of interests in the
Regulation S Global
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53
Note to "U.S. persons" (as defined in Regulation S) shall be limited to
transfers to QIBs pursuant to Rule 144A which Persons shall thereby acquire a
beneficial interest in the Restricted Global Note and in connection therewith
the transferors shall provide a certification (in substantially the form of
Exhibit A hereto) confirming the character of the transferee in connection
with any transfers prior to the expiration of such period. The Company shall
advise the Trustee as to the expiration of the "40-day restricted period" and
the Trustee may rely conclusively thereon.
(iii) In the event that a Global Note is exchanged for Notes in
definitive registered form pursuant to Section 311 prior to the consummation
of an Exchange Offer or the effectiveness of a Shelf Registration Statement
with respect to such Notes, such Notes may be exchanged only in accordance
with procedures as are substantially consistent with the provisions of this
Section 312 (including the certification requirements set forth on Exhibit A
intended to ensure that such transfers comply with Rule 144A or Regulation S,
as the case may be) and such other procedures as may from time to time be
adopted by the Company.
(d) TRANSFER OF A BENEFICIAL INTEREST IN A GLOBAL NOTE FOR A
CERTIFICATED NOTE. (i) Subject to Section 312(c)(iii), any person having a
beneficial interest in a Global Note may transfer such beneficial interest to
an Institutional Accredited Investor that is acquiring the Note for its own
account or for the account of one or more other Institutional Accredited
Investors, in each case for investment purposes and not with a view to, or
for offer or sale in connection with, any distribution in violation of the
Securities Act; PROVIDED, HOWEVER, that any written order or such other form
of instructions as is customary for the Depositary, from the Depositary or
its nominee on behalf of any Person having a beneficial interest in such
Global Note shall be accompanied by (i) a certification from the transferee
or transferor with respect to the transfer (in substantially the form of
Exhibit A) and such other certifications as the Trustee may reasonably
request, (ii) if applicable, a letter with respect to the transfer (in
substantially the form of Exhibit C hereto) and (iii) an Opinion of Counsel
if requested by the Company or the Trustee, Registrar or Transfer Agent as to
the compliance with the Private Placement Legend.
Upon receipt by the Trustee of such information and documents, the Trustee
or the Custodian, at the direction of the Trustee, shall cause, in accordance
with the standing instructions and procedures existing between the Depositary
and the Custodian, including the rules and procedures of Euroclear or Cedel, if
applicable, the aggregate principal amount of the Global Note to be reduced on
its books and records and, following such reduction, the Company shall execute
and the Trustee shall authenticate and deliver to the transferee a Certificated
Note.
(ii) Certificated Notes issued in exchange for a beneficial interest in a
Global Note pursuant to this Section 312(d) shall be registered in such names
and in such authorized denominations as Euroclear or Cedel, if applicable, and
the Depositary, pursuant to
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54
instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee. The Trustee shall deliver such Certificated Notes to
the persons in whose names such Notes are so registered in accordance with
the instructions of the Depositary.
(e) CERTAIN TRANSFERS IN CONNECTION WITH AND AFTER THE EXCHANGE
OFFER. Notwithstanding any other provision of this Indenture: (i) no Exchange
Note may be exchanged by the Holder thereof for an Initial Note; (ii) accrued
and unpaid interest on the Initial Notes being exchanged in the Exchange Offer
will be due and payable on the next Interest Payment Date for the Exchange Notes
following the Exchange Offer; and (iii) interest on the Exchange Notes to be
issued in the Exchange Offer will accrue from the date of the Exchange Offer.
SECTION 313. CUSIP NUMBERS.
The Company may use "CUSIP" numbers in issuing the Notes (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption as a convenience to Holders; PROVIDED, HOWEVER, that any such
notice may state that no representation is made as to the correctness of such
"CUSIP" numbers either as printed on the Notes or as contained in any notice of
a redemption and that reliance may be placed only on the other identification
numbers printed on the Notes, and any such redemption shall not be affected by
any defect in or omission of such "CUSIP" numbers.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. SATISFACTION AND DISCHARGE OF INDENTURE.
This Indenture shall upon Company Request cease to be of further
effect (except as to surviving rights of registration of transfer or exchange of
Notes issued under this Indenture) and the Trustee, at the expense of the
Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture when
(1) either
(A) all Notes theretofore authenticated and delivered (except
(i) lost, stolen or destroyed Notes which have been replaced or paid
as provided in Section 306 and (ii) Notes for whose payment funds have
theretofore been deposited in trust by the Company with the Trustee or
any Paying Agent or segregated and held in trust by the Company and
thereafter repaid to the
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55
Company or discharged from such trust, as provided in Section 1003)
have been delivered to the Trustee for cancellation; or
(B) all such Notes 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, and
either the Company or any Subsidiary Guarantor has irrevocably
deposited or caused to be deposited with the Trustee funds in an
amount sufficient to pay and discharge the entire indebtedness on such
Notes not theretofore delivered to the Trustee for cancellation, for
principal of, premium and Liquidated Damages, if any, and interest to
the date of such deposit;
(2) the Company or any Subsidiary Guarantor has paid all other sums
payable hereunder by the Company and any Subsidiary Guarantors; 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 and that such satisfaction and discharge
will not result in a breach or violation of, or constitute a default under,
this Indenture or any other material agreement or instrument to which the
Company or any Subsidiary Guarantor is a party or by which it is bound.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 606 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.
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 Notes and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium and
Liquidated Damages, if any) and interest for whose payment such money has
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56
been deposited with the Trustee; but such money need not be segregated from
other funds except to the extent required by law.
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 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 any interest on the Notes issued under
this Indenture when such interest becomes due and payable, and continuance
of such default for a period of 30 days; or
(2) default in the payment of the principal of (or premium, if any,
on) any Notes at its Maturity; or
(3) (A) default in the performance, or breach, of any covenant or
agreement of the Company or any Subsidiary Guarantor under this Indenture
(other than a default in the performance, or breach, of a covenant or
agreement which is specifically dealt with in the immediately preceding
clauses (1) and (2) or clauses (B) and (C) of this clause (3)), and such
default or breach shall continue for a period of 60 days after written
notice has been given, by certified mail, (x) to the Company by the Trustee
or (y) to the Company and the Trustee by the Holders of at least 25% in
principal amount of the Outstanding Notes specifying such default or breach
and requiring it to be remedied and stating that such notice is a "Notice
of Default" hereunder; (B) default in the performance or breach of the
provisions in Article Eight or Section 1016; or (C) the Company shall have
failed to comply with the provisions of Section 1009 for any reason,
including the inconsistency of such covenant with the Company's Bylaws as
in effect on the date of this Indenture; or
(4) (A) there shall have occurred any default in the payment of
principal of any Indebtedness under any agreements, indentures (including
any such default under the Notes due 2007 Indenture) or instruments under
which the Company or any Restricted Subsidiary of the Company then has
outstanding Indebtedness in excess of $50 million when the same shall
become due and payable in full and such default shall have continued after
any applicable grace period and shall not have been cured
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57
or waived or (B) an event of default as defined in any of the agreements,
indentures or instruments described in clause (A) of this clause (4) shall
have occurred and the Indebtedness thereunder, if not already matured at
its final maturity in accordance with its terms, shall have been
accelerated or otherwise declared due and payable, or required to be
prepaid or repurchased (other than by regularly scheduled required
prepayment), prior to the stated maturity thereof; or
(5) any Person entitled to take the actions described in this
clause (5), after the occurrence of any event of default on Indebtedness in
excess of $50 million in the aggregate of the Company or any Restricted
Subsidiary, shall notify the Trustee of the intended sale or disposition of
any assets of the Company or any Restricted Subsidiary that have been
pledged to or for the benefit of such Person to secure such Indebtedness or
shall commence proceedings, or take any action (including by way of
set-off) to retain in satisfaction of any Indebtedness, or to collect on,
seize, dispose of or apply, any such assets of the Company or any
Restricted Subsidiary (including funds on deposit or held pursuant to
lock-box and other similar arrangements), pursuant to the terms of any
agreement or instrument evidencing any such Indebtedness or in accordance
with applicable law; or
(6) any Note Guarantee of any Significant Subsidiary individually or
any other Subsidiaries if such Restricted Subsidiaries in the aggregate
represent at least 15% of the assets of the Company and its Restricted
Subsidiaries on a Consolidated basis with respect to such Notes shall for
any reason cease to be, or be asserted in writing by the Company, any
Subsidiary Guarantor or any other Restricted Subsidiary of the Company, as
applicable, not to be, in full force and effect, enforceable in accordance
with its terms, except pursuant to the release of any such Note Guarantee
in accordance with this Indenture; or
(7) one or more judgments, orders or decrees for the payment of money
in excess of $50 million (net of amounts covered by insurance, bond or
similar instrument), either individually or in an aggregate amount, entered
against the Company or any Restricted Subsidiary or any of their respective
properties which is not discharged and either (A) any creditor shall have
commenced an enforcement proceeding upon such judgment, order or decree or
(B) there shall have been a period of 60 consecutive days during which a
stay of enforcement of such judgment or order, by reason of pending appeal
or otherwise, shall not be in effect; or
(8) the entry by a court of competent jurisdiction of (A) a decree or
order for relief in respect of the Company or any Significant Subsidiary in
an involuntary case or proceeding under any applicable Bankruptcy Law or
(B) a decree or order adjudging the Company or any Significant Subsidiary
bankrupt or insolvent, or seeking reorganization, arrangement, adjustment
or composition of or in respect of the
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Company or any Significant Subsidiary under any applicable federal or state
law, or appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or any Significant
Subsidiary or of any substantial part of its property, or ordering the
winding up or liquidation of its affairs, and any such decree or order
for relief shall continue to be in effect, or any such other decree or
order shall be unstayed and in effect, for a period of 60 consecutive
days; or
(9) (A) the commencement by the Company or any Significant
Subsidiary of a voluntary case or proceeding under any applicable
Bankruptcy Law or any other case or proceeding to be adjudicated bankrupt
or insolvent, (B) the Company or any Significant Subsidiary consents to the
entry of a decree or order for relief in respect of the Company or such
Significant Subsidiary in an involuntary case or proceeding under any
applicable Bankruptcy Law or to the commencement of any bankruptcy or
insolvency case or proceeding against it, (C) the Company or any
Significant Subsidiary files a petition or answer or consent seeking
reorganization or relief under any applicable federal or state law, (D)
the Company or any Significant Subsidiary (x) consents to the filing of
such petition or the appointment of, or taking possession by, a custodian,
receiver, liquidator, assignee, trustee, sequestrator or similar official
of the Company or such Significant Subsidiary or of any substantial part of
its property, (y) makes an assignment for the benefit of creditors or (z)
admits in writing its inability to pay its debts generally as they become
due or (E) the Company or any Significant Subsidiary takes any corporate
action in furtherance of any such actions in this clause (9).
SECTION 502. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default (other than an Event of Default specified in
Section 501(8) or 501(9)) shall occur and be continuing, then and in every such
case the Trustee, by notice to the Company, or the Holders of at least 25% in
aggregate principal amount of the Notes Outstanding by a notice in writing to
the Company and to the Trustee, may declare all amounts payable in respect of
such Notes to be due and payable immediately, and upon any such declaration such
amounts shall become immediately due and payable. If an Event of Default
specified in Section 501(8) or 501(9) occurs and is continuing, then all amounts
payable in respect of such Notes shall IPSO FACTO become and be immediately due
and payable without any declaration or other act on the part of the Trustee or
any Holder.
At any time after 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 provided, the Holders of a majority
in aggregate principal amount of the Notes Outstanding, by written notice to the
Company and the Trustee, may rescind or annul such declaration if
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(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel,
(B) all overdue interest on all Outstanding Notes, and
(C) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate borne by the Notes; and
(2) all Events of Default, other than the non-payment of principal of
such Notes 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 shall affect any subsequent default or impair
any right consequent thereon.
SECTION 503. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
TRUSTEE.
The Company covenants that if
(a) default is made in the payment of any installment of interest on
any Note when such interest becomes due and payable and such default
continues for a period of 30 days, or
(b) default is made in the payment of the principal of (or premium,
if any, on) any Note at the Maturity thereof,
the Company shall, upon demand of the Trustee, pay to the Trustee for the
benefit of the Holders of such Notes, the whole amount then due and payable on
such Notes for principal (and premium, if any) and interest, and interest on any
overdue principal (and premium, if any) and, to the extent that payment of such
interest shall be legally enforceable, upon any overdue installment of interest,
at the rate borne by the Notes, 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 as trustee of an express trust, may institute a
judicial proceeding for
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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 Notes 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 Notes, 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 Notes
or the property of the Company or of such other obligor or their creditors, the
Trustee (irrespective of whether the principal of the Notes 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, premium, if any, or interest) shall be entitled and
empowered, by intervention in such proceeding or otherwise,
(i) to file and prove a claim for the whole amount of principal (and
premium, if any) and interest owing and unpaid in respect of the Notes and
to file such other papers or documents as may be necessary or advisable in
order to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel) and of the Holders allowed in such
judicial proceeding, and
(ii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
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 the
Trustee any amount due 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 606.
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Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder thereof, or to authorize the Trustee to vote in respect
of the claim of any Holder in any such proceeding.
SECTION 505. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF NOTES.
All rights of action and claims under this Indenture or the Notes may
be prosecuted and enforced by the Trustee without the possession of any of the
Notes or the production thereof in any proceeding relating thereto, and any such
proceeding instituted by the Trustee shall be brought in its own name and 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 Notes in respect of which such judgment has been recovered.
SECTION 506. APPLICATION OF MONEY COLLECTED.
Any money collected by the Trustee pursuant to this Article 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 Notes and the notation thereon of
the payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under
Section 606;
SECOND: To the payment of the amounts then due and unpaid for
principal of (and premium, if any, on,) and interest on the Notes 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 Notes for principal (and premium, if any)
and interest, respectively; and
THIRD: The balance, if any, to the Person or Persons entitled
thereto.
SECTION 507. LIMITATION ON SUITS.
No Holder of any Notes 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
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(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 Notes 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
reasonably satisfactory to the Trustee 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 reasonably satisfactory 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
or more in principal amount of the Outstanding Notes;
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 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.
Notwithstanding any other provision in this Indenture, the Holder of
any Note shall have the right, which is absolute and unconditional, to receive
payment, as provided herein (including, if applicable, Article Thirteen) and in
such Note, of the principal of (and premium, if any, on) and (subject to
Section 307) interest on, such Note on the respective Stated Maturities
expressed in such Note (or, in the case of redemption, on the Redemption Date)
and to institute suit for the enforcement of any such payment, 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
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every such case, subject to any determination in such proceeding, the
Company, the Subsidiary Guarantors, the Trustee and the Holders shall be
restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall
continue as though no such proceeding had been instituted.
SECTION 510. RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Notes 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,
subject to the provisions of Section 507, every right and remedy shall, to the
extent permitted by law, be cumulative and in addition to every other right and
remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
SECTION 511. DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Trustee or of any Holder of any Note 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 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 not less than a majority in principal amount of the
Outstanding Notes 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,
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction, and
(3) the Trustee need not take any action which might involve it in
personal liability or be unjustly prejudicial to the Holders not
consenting.
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SECTION 513. WAIVER OF PAST DEFAULTS.
The Holders of not less than a majority in principal amount of the
Outstanding Notes may on behalf of the Holders of all the Notes waive any past
default hereunder and its consequences, except a default
(1) in respect of the payment of the principal of (or premium, if
any, on) or interest on any Note, 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 Note 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 Event of Default or impair any right consequent thereon.
SECTION 514. WAIVER OF STAY OR EXTENSION LAWS.
Each of the Company and the Subsidiary Guarantors covenants (to the
extent that it may lawfully do so) that it shall not at any time insist upon, or
plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay 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
each of the Company and the Subsidiary Guarantors (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it shall not hinder, delay or impede the execution of any
power herein granted to the Trustee, but shall suffer and permit the execution
of every such power as though no such law had been enacted.
SECTION 515. NOTICE OF DEFAULTS.
Within ten days after the occurrence of any Default hereunder, the
Company shall transmit in the manner and to the extent provided in TIA
Section 313(c), notice to the Trustee of such Default hereunder known to the
Company or any Subsidiary Guarantor, unless such Default shall have been
cured or waived.
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ARTICLE SIX
THE TRUSTEE
SECTION 601. NOTICE OF DEFAULTS.
Within 90 days after the occurrence of any Default hereunder, the
Trustee shall transmit in the manner and to the extent provided in TIA
Section 313(c), notice of such Default hereunder known to the Trustee, unless
such Default shall have been cured or waived; PROVIDED, HOWEVER, that, except in
the case of a Default in the payment of the principal of (or premium, if any,
on) or interest on any Note, the Trustee shall be protected in withholding such
notice if and so long as the board of directors, the executive committee or a
trust committee of directors and/or Responsible Officers of the Trustee in good
faith determines that the withholding of such notice is in the interest of the
Holders; and PROVIDED FURTHER that in the case of any Default of the character
specified in Section 501(3) no such notice to Holders shall be given until at
least 30 days after the occurrence thereof.
SECTION 602. CERTAIN RIGHTS OF TRUSTEE.
Subject to the provisions of TIA Sections 315(a) through 315(d):
(1) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, 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;
(2) 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;
(3) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, rely upon an Officers' Certificate;
(4) the Trustee may consult with counsel and the written 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;
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(5) 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 Holders pursuant to this Indenture, unless such Holders shall
have offered to the Trustee security or indemnity reasonably satisfactory
to the Trustee against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;
(6) 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 at all reasonable times to examine the books, records and
premises of the Company and the Subsidiary Guarantors, personally or by
agent or attorney;
(7) 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; and
(8) the Trustee shall not be liable for any action taken, suffered or
omitted by it in good faith and believed by it to be authorized or within
the discretion or rights or powers conferred upon it by this Indenture.
The Trustee shall not be required 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 adequate
indemnity against such risk or liability is not reasonably assured to it.
SECTION 603. TRUSTEE NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF
NOTES.
The recitals contained herein and in the Notes, except for the
Trustee's certificates of authentication, shall be taken as the statements of
the Company or the Subsidiary Guarantors, 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 Notes, except that
the Trustee represents that it is duly authorized to execute and deliver this
Indenture, authenticate the Notes and perform its obligations hereunder and that
the statements made by it in any Statement of Eligibility of Form T-1 supplied
to the Company are true and accurate, subject to the qualifications set forth
therein. The Trustee shall not be accountable for the use or application by the
Company of Notes or the proceeds thereof.
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SECTION 604. MAY HOLD NOTES.
The Trustee, any Paying Agent, any Security Registrar or any other
agent of the Company or of the Trustee, in its individual or any other capacity,
may become the owner or pledgee of Notes and, subject to TIA Sections 310(b) and
311, may otherwise deal with the Company and any Subsidiary Guarantor with the
same rights it would have if it were not Trustee, Paying Agent, Security
Registrar or such other agent.
SECTION 605. MONEY HELD IN TRUST.
Cash in United States dollars or U.S. Government Obligations 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 such cash or U.S. Government Obligations received by it
hereunder except as otherwise agreed in writing with the Company or any
Subsidiary Guarantor.
SECTION 606. 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 for, and to hold it harmless against,
any loss, liability or expense incurred without negligence or bad faith on
its part, arising out of or in connection with the acceptance,
administration or enforcement 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.
The obligations of the Company under this Section to compensate the
Trustee, to pay or reimburse the Trustee for expenses, disbursements and
advances and to indemnify and hold harmless the Trustee shall constitute
indebtedness and shall survive the satisfaction and discharge of this
Indenture. As security for the performance of such obligations of the
Company, the Trustee shall have a claim prior to the Notes upon all property
and funds held
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or collected by the Trustee as such, except funds held in trust for the
payment of principal of (and premium, if any, on) or interest on particular
Notes.
SECTION 607. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.
There shall at all times be a Trustee hereunder which shall be
eligible to act as Trustee under TIA Section 310(a)(1) and shall have a combined
capital and surplus of at least $50 million. If such corporation publishes
reports of condition at least annually, pursuant to law or to the requirements
of federal, state, territorial or District of Columbia supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such corporation 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, it shall resign immediately in the manner and with
the effect hereinafter specified in this Article.
SECTION 608. 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 in accordance with the
applicable requirements of Section 609.
(b) The Trustee may resign at any time by giving written notice
thereof to the Company addressed to the Company and the Subsidiary Guarantors.
If the instrument of acceptance by a successor Trustee required by Section 609
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.
(c) The Trustee may be removed at any time by Act of the Holders of
not less than a majority in principal amount of the Outstanding Notes, delivered
to the Trustee and to the Company addressed to the Company and the Subsidiary
Guarantors.
(d) If at any time:
(1) the Trustee shall fail to comply with the provisions of TIA
Section 310(b) after written request therefor by the Company, any
Subsidiary Guarantor or by any Holder who has been a bona fide Holder of a
Note for at least six months, or
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(2) the Trustee shall cease to be eligible under Section 607 and
shall fail to resign after written request therefor by the Company, any
Subsidiary Guarantor or by any Holder who has been a bona fide Holder of a
Note for at least six months, 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 TIA Section 315(e), any Holder who has been a bona
fide Holder of a Note for at least six months may, on behalf of itself 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 Notes delivered to
the Company, the Subsidiary Guarantors 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 Note for at least six
months may, on behalf of itself 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 Trustee to the
Holders of Notes in the manner provided for in Section 106. Each notice shall
include the name of the successor Trustee and the address of its Corporate Trust
Office.
SECTION 609. 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
successor Trustee, such retiring Trustee shall, upon payment of its charges,
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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 610. 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 of the corporate trust
business of the Trustee, 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 Notes shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Notes so authenticated with the same effect
as if such successor Trustee had itself authenticated such Notes; and in case at
that time any of the Notes shall not have been authenticated, any successor
Trustee may authenticate such Notes either in the name of any predecessor
hereunder or in the name of the successor Trustee; and in all such cases such
certificates shall have the full force which it is anywhere in the Notes or in
this Indenture provided that the certificate of the Trustee shall have;
PROVIDED, HOWEVER, that the right to adopt the certificate of authentication of
any predecessor Trustee or to authenticate Notes in the name of any predecessor
Trustee shall apply only to its successor or successors by merger, conversion or
consolidation.
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE, COMPANY AND SUBSIDIARY GUARANTORS
SECTION 701. DISCLOSURE OF NAMES AND ADDRESSES OF HOLDERS.
Every Holder of Notes, by receiving and holding the same, agrees with
the Company and the Trustee that none of the Company or the Trustee or any agent
of either of them shall be held accountable by reason of the disclosure of any
such information as to the names and addresses of the Holders in accordance with
TIA Section 312, regardless of the
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source from which such information was derived, and that the Trustee shall
not be held accountable by reason of mailing any material pursuant to a
request made under TIA Section 312(b).
SECTION 702. REPORTS BY TRUSTEE.
Within 60 days after May 15 of each year commencing with the first
May 15 after the first issuance of Notes, the Trustee shall transmit to the
Holders, in the manner and to the extent provided in TIA Section 313(c), a brief
report dated as of such May 15 if required by TIA Section 313(a).
SECTION 703. REPORTS BY COMPANY AND SUBSIDIARY GUARANTORS.
The Company and each of the Subsidiary Guarantors shall:
(1) file with the Trustee, within 15 days after the Company or such
Subsidiary Guarantor is required to file the same with the Commission,
copies of the annual reports and of the information, documents and other
reports (or copies of such portions of any of the foregoing as the
Commission may from time to time by rules and regulations prescribe) which
the Company or such Subsidiary Guarantor may be required to file with the
Commission pursuant to Section 13 or Section 15(d) of the Exchange Act; or,
if the Company or any of the Subsidiary Guarantors is not required to file
information, documents or reports pursuant to either of said Sections, then
they shall file with the Trustee and the Commission, in accordance with
rules and regulations prescribed from time to time by the Commission, such
of the supplementary and periodic information, documents and reports which
may be required pursuant to Section 13 of the Exchange Act in respect of a
security listed and registered on a national securities exchange as may be
prescribed from time to time in such rules and regulations;
(2) file with the Trustee and the Commission, in accordance with
rules and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance by
the Company with the conditions and covenants of this Indenture as may be
required from time to time by such rules and regulations; and
(3) transmit by mail to all Holders, in the manner and to the extent
provided in TIA Section 313(c), within 30 days after the filing thereof
with the Trustee, such summaries of any information, documents and reports
required to be filed by the Company pursuant to paragraphs (1) and (2) of
this Section as may be required by rules and regulations prescribed from
time to time by the Commission;
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PROVIDED, HOWEVER, that any Subsidiary Guarantor shall be relieved of its
obligations under clauses (1) and (2) of this Section to the extent that it is
relieved of its obligations under Section 13 or Section 15(d) of the Exchange
Act by the Commission pursuant to the terms of any no-action letter addressed to
the Company or such Subsidiary Guarantor from the staff of the Commission.
ARTICLE EIGHT
CONSOLIDATION, MERGER, SALE OF ASSETS
SECTION 801. COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.
The Company shall not, in a single transaction or a series of related
transactions, consolidate with or merge with or into any other Person or sell,
assign, convey, transfer, lease or otherwise dispose of all or substantially all
of its properties and assets to any Person or group of affiliated Persons, or
permit any of its Restricted Subsidiaries to enter into any such transaction or
transactions if such transaction or transactions, in the aggregate, would result
in a sale, assignment, transfer, lease or disposal of all or substantially all
of the properties and assets of the Company and its Subsidiaries on a
Consolidated basis to any other Person or group of affiliated Persons, unless at
the time and after giving effect thereto:
(1) either
(A) the Company shall be the surviving or continuing corporation
or
(B) the Person (if other than the Company) formed by such
consolidation or into which the Company is merged or the Person which
acquires by sale, assignment, conveyance, transfer, lease or
disposition, the properties and assets of the Company substantially as
an entirety (the "Surviving Entity")
(i) shall be a corporation duly organized and validly
existing under the laws of the United States, any state thereof
or the District of Columbia and
(ii) shall, in any case, expressly assume, by a supplemental
indenture, executed and delivered to the Trustee, in form
satisfactory to the Trustee, all of the obligations of the
Company under the Notes and this Indenture, and this Indenture
shall remain in full force and effect;
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(2) immediately before and immediately after giving effect to such
transaction on a PRO FORMA basis (and treating any Indebtedness not
previously an obligation of the Company or any of its Restricted
Subsidiaries which becomes an obligation of the Company or any of its
Restricted Subsidiaries in connection with or as a result of such
transaction as having been incurred at the time of such transaction), no
Default or Event of Default shall have occurred and be continuing;
(3) immediately after giving effect to such transaction, except in
the case of a merger of the Company with or into a Wholly Owned Restricted
Subsidiary, the Company (or the Surviving Entity if the Company is not the
continuing obligor under this Indenture) will have a Consolidated Net Worth
equal to or greater than the Consolidated Net Worth of the Company
immediately preceding the transaction;
(4) immediately after giving effect to such transaction on a PRO
FORMA basis (on the assumption that the transaction occurred on the first
day of the four-quarter period immediately prior to the consummation of
such transaction with the appropriate adjustments with respect to the
transaction being included in such PRO FORMA calculation), the Company (or
the Surviving Entity if the Company is not the continuing obligor under
this Indenture) could incur $1.00 of additional Indebtedness (other than
Permitted Indebtedness) under the provisions of Section 1010;
(5) each Subsidiary Guarantor, unless it is the other party to the
transactions described above, shall have, by supplemental indenture to this
Indenture, confirmed that its respective Note Guarantees with respect to
the Notes shall apply to such Person's obligations under this Indenture and
the Notes;
(6) if any property or assets of the Company or any of its Restricted
Subsidiaries would thereupon become subject to any Lien, the provisions of
Section 1014 are complied with; and
(7) the Company shall have delivered, or caused to be delivered, to
the Trustee an Officers' Certificate and an Opinion of Counsel, each to the
effect that such consolidation, merger, sale, assignment, conveyance,
transfer, lease or other transaction and, if a supplemental indenture is
required in connection with such transaction, such supplemental indenture,
comply with this Article and that all conditions precedent herein provided
for relating to such transaction have been complied with.
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SECTION 802. SUCCESSOR SUBSTITUTED.
Upon any consolidation, merger, sale, assignment, conveyance,
transfer, lease or other transaction described in, and complying with the
provisions of, Section 801 in which the Company is not the continuing
corporation, the successor Person formed or remaining shall succeed to, and be
substituted for, and may exercise every right and power of, the Company, as the
case may be, and the Company shall be discharged from all obligations and
covenants under this Indenture and the Notes, PROVIDED that, in the case of a
transfer by lease, the predecessor shall not be released from its obligations
with respect to the payment of principal (premium, if any) and interest on the
Notes.
SECTION 803. NOTES TO BE SECURED IN CERTAIN EVENTS.
If, upon any such consolidation of the Company with or merger of the
Company into any other corporation, or upon any conveyance, lease or transfer of
the property of the Company substantially as an entirety to any other Person,
any property or assets of the Company would thereupon become subject to any
Lien, then unless such Lien could be created pursuant to Section 1014 without
equally and ratably securing the Notes, the Company, prior to or simultaneously
with such consolidation, merger, conveyance, lease or transfer, will as to such
property or assets, secure the Notes Outstanding (together with, if the Company
shall so determine any other Indebtedness of the Company now existing or
hereinafter created which is not subordinate in right of payment to the Notes)
equally and ratably with (or prior to) the Indebtedness which upon such
consolidation, merger, conveyance, lease or transfer is to become secured as to
such property or assets by such Lien, or will cause such Notes to be so secured.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holders, the Company, the Subsidiary
Guarantors, 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 of the Company
contained herein and in the Notes; or
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(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 add any additional Events of Default; or
(4) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee pursuant to the requirements of
Section 609; or
(5) to cure any ambiguity, to correct or supplement any provision
herein which may be inconsistent with any other provision herein, or to
make any other provisions with respect to matters or questions arising
under this Indenture; PROVIDED that such action shall not adversely affect
the interests of the Holders in any material respect;
(6) to add new Subsidiary Guarantors pursuant to Section 1018;
(7) to secure the Notes pursuant to the requirements of Section 803
or otherwise; or
(8) to comply with any requirements of the Commission in order to
effect and maintain the qualification of this Indenture under the Trust
Indenture Act.
SECTION 902. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.
With the consent of the Holders of not less than a majority in
principal amount of the Outstanding Notes, by Act of said Holders delivered to
the Company, the Subsidiary Guarantors and the Trustee, the Company, when
authorized by a Board Resolution, the Subsidiary Guarantors 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 Note
affected thereby:
(1) change the Stated Maturity of the principal of, or any
installment of interest on, any Note, or reduce the principal amount
thereof or the rate of interest thereon or any premium payable upon the
redemption or purchase thereof, or change the coin or currency in which any
Note or any premium or the interest thereon is payable, or impair the right
to institute suit for the enforcement of any such payment after the Stated
Maturity thereof (or, in the case of redemption, on or after the Redemption
Date), or
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(2) amend, change or modify the obligation of the Company to make and
consummate a Change of Control Purchase Offer in the event of a Change of
Control Triggering Event or modify any of the provisions or definitions
with respect thereto, or
(3) reduce the percentage in principal amount of the Outstanding
Notes, 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
(4) modify any of the provisions of this Section or Sections 513 and
1022, except to increase any such percentage or to provide that certain
other provisions of this Indenture cannot be modified or waived without the
consent of the Holder of each Outstanding Note affected thereby, or
(5) except as otherwise permitted under Article Eight, consent to the
assignment or transfer by the Company or any Subsidiary Guarantor of any of
its rights and obligations under this Indenture; or
(6) amend or modify any of the provisions of this Indenture in any
manner which subordinates the Notes issued thereunder in right of payment
to other Indebtedness of the Company or which subordinates any Note
Guarantee in right of payment to other Indebtedness of the Subsidiary
Guarantor issuing such Note Guarantee.
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.
(a) In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and shall be fully protected in relying upon, an Opinion of Counsel stating that
the execution of such supplemental indenture is authorized or permitted by this
Indenture. 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.
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(b) Each Subsidiary Guarantor hereby appoints the Company as its
attorney-in-fact to execute, on its behalf, any indenture supplemental hereto to
be entered into solely for the purpose specified in Section 901(6).
SECTION 904. EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture under this Article,
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 Notes theretofore or thereafter authenticated and delivered hereunder shall
be bound thereby.
SECTION 905. CONFORMITY WITH TRUST INDENTURE ACT.
Every supplemental indenture executed pursuant to the Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
SECTION 906. REFERENCE IN NOTES TO SUPPLEMENTAL INDENTURES.
Notes authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article 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 and the Subsidiary
Guarantors shall so determine, new Notes so modified as to conform, in the
opinion of the Trustee and the Company and the Subsidiary Guarantors, to any
such supplemental indenture may be prepared and executed by the Company and the
Subsidiary Guarantors and authenticated and delivered by the Trustee in exchange
for Outstanding Notes.
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 Sections 901 and 902, the
Company shall give notice thereof to the Holders of each Outstanding Note
affected, in the manner provided for in Section 106, setting forth in general
terms the substance of such supplemental indenture; PROVIDED, HOWEVER, that the
Company shall not be required to give notice of any indenture supplemental
hereto entered into solely for the purpose specified in Section 901(5), (6) or
(8), notice with respect to which shall be given by the Company when it is next
required to give notice pursuant to this Section.
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ARTICLE TEN
COVENANTS
SECTION 1001. PAYMENT OF PRINCIPAL, PREMIUM, IF ANY, AND INTEREST.
The Company covenants and agrees for the benefit of the Holders
that it shall duly and punctually pay the principal of (and premium, if any,
on) and interest on the Notes in accordance with the terms of the Notes and
this Indenture.
SECTION 1002. MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain in The City of New York an office or
agency where Notes may be presented or surrendered for payment, where Notes
may be surrendered for registration of transfer or exchange and where notices
and demands to or upon the Company or any Subsidiary Guarantor in respect of
the Notes and this Indenture may be served. The Corporate Trust Office of
the Trustee shall be such office or agency of the Company, unless the Company
shall designate and maintain some other office or agency for one or more of
such purposes. The Company shall give prompt written notice to the Trustee
of 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, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee, and the Company and each of the
Subsidiary Guarantors hereby appoints the Trustee as its agent to receive all
such presentations, surrenders, notices and demands. Unless otherwise
specified with respect to the Notes as contemplated by Section 301, the
Company hereby designates as a Place of Payment for the Notes the office or
agency of the Trustee in the Borough of Manhattan, The City of New York, and
initially appoints Manufacturers and Traders Trust Company, 50 Broadway - 7th
Floor, New York, New York 10004, as Paying Agent to receive all such
presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other
offices or agencies (in or outside of The City of New York) where the Notes
may be presented or surrendered for any or all such purposes and may from
time to time rescind any such designation; PROVIDED, HOWEVER, that no such
designation or rescission shall in any manner relieve the Company of its
obligation to maintain an office or agency in The City of New York for such
purposes. The Company shall give prompt written notice to the Trustee of any
such designation or rescission and any change in the location of any such
other office or agency.
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SECTION 1003. MONEY FOR NOTE PAYMENTS TO BE HELD IN TRUST.
If the Company shall at any time act as its own Paying Agent, it
shall, on or before each due date of the principal of (and premium, if any,
on) or interest on any of the Notes, segregate and hold in trust for the
benefit of the Persons entitled thereto a sum sufficient to pay the principal
(and premium, if any) or interest so becoming due until such sums shall be
paid to such Persons or otherwise disposed of as herein provided and shall
promptly notify the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents for the
Notes, it shall, on or before each due date of the principal of (and premium,
if any, on), or interest on, any Notes, deposit with a Paying Agent a sum
sufficient to pay the principal (and premium, if any) or interest so becoming
due, such sum to be held in trust for the benefit of the Persons entitled to
such principal, premium or interest, and (unless such Paying Agent is the
Trustee) the Company shall promptly notify the Trustee of such action or any
failure so to act.
The Company shall 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) hold all sums held by it for the payment of the principal of (and
premium, if any, on) or interest on Notes in trust for the benefit of the
Persons entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or any
other obligor upon the Notes) in the making of any payment of principal
(and 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 in trust 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 sums.
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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 (and
premium, if any, on) or interest on any Note and remaining unclaimed for two
years after such principal (and 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
Note 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; 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
published 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. CORPORATE 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 the
corporate existence, rights (charter and statutory) and franchises of the
Company and each Restricted Subsidiary; PROVIDED, HOWEVER, that the Company
shall not be required to preserve any such right or franchise if the Board of
Directors shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and its Restricted
Subsidiaries as a whole and that the loss thereof is not disadvantageous in
any material respect to the Holders. Notwithstanding anything to the contrary
in this Section 1004, the Company shall be permitted to consolidate or merge
any of its Restricted Subsidiaries with or into the Company or any Wholly
Owned Subsidiary of the Company.
SECTION 1005. PAYMENT OF TAXES AND OTHER CLAIMS.
The Company shall pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (a) all taxes,
assessments and governmental charges levied or imposed upon the Company or
any Restricted Subsidiary or upon the income, profits or property of the
Company or any Subsidiary and (b) 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 Restricted 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.
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SECTION 1006. MAINTENANCE OF PROPERTIES.
The Company shall cause all properties owned by the Company or any
Restricted Subsidiary or used or held for use in the conduct of its business
or the business of any Restricted Subsidiary to be maintained and kept in
good condition, repair and working order and supplied with all necessary
equipment and shall cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in 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 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 Restricted Subsidiary and not
disadvantageous in any material respect to the Holders.
SECTION 1007. INSURANCE.
The Company shall at all times keep all of its and its Restricted
Subsidiaries' properties which are of an insurable nature insured with
insurers, believed by the Company to be responsible, against loss or damage
to the extent that property of similar character is usually so insured by
corporations similarly situated and owning like properties.
SECTION 1008. STATEMENT BY OFFICERS AS TO DEFAULT.
The Company shall deliver to the Trustee, within 120 days after the
end of each fiscal year, a brief certificate from the principal executive
officer, principal financial officer or principal accounting officer as to
his or her knowledge of the Company's compliance with all conditions and
covenants under this Indenture. For purposes of this Section 1008, such
compliance shall be determined without regard to any period of grace or
requirement of notice under this Indenture.
SECTION 1009. PURCHASE OF NOTES UPON A CHANGE OF CONTROL
TRIGGERING EVENT.
(a) Upon the occurrence of a Change of Control Triggering Event,
each Holder shall have the right, to the extent not inconsistent with the
Company's Bylaws in effect on the date hereof, to require that the Company
purchase such Holder's Notes in whole or in part in integral multiples of
$1,000 (the "Change of Control Purchase Offer"), at a purchase price (the
"Change of Control Purchase Price") in cash in an amount equal to 101% of the
principal amount thereof, together with accrued and unpaid interest, if any,
and Liquidated Damages, if any, to the date of purchase (the "Change of
Control Purchase Date"), in accordance with the procedures set forth in
paragraphs (c) and (d) of this Section.
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(b) Upon the occurrence of a Change of Control Triggering Event
and prior to the mailing of the notice to Holders provided for in paragraph
(c) below, the Company covenants to either (x) repay in full all Indebtedness
under the New Credit Agreement or offer to repay in full all such
Indebtedness and repay the Indebtedness of each of the Banks that has
accepted such offer or (y) obtain any requisite consent under the New Credit
Agreement to permit the purchase of the Notes as provided for in paragraph
(c) below or take any other action as may be required under the New Credit
Agreement to permit such purchase.
(c) Within 30 days following any Change of Control Triggering
Event, the Company shall notify the Trustee and give to each Holder of the
Notes in the manner provided in Section 106 a notice stating:
(1) that a Change of Control Triggering Event has occurred and that
such Holder has the right to require the Company to purchase in whole or in
part such Holder's Notes at the Change of Control Purchase Price;
(2) the circumstances and relevant facts regarding such Change of
Control Triggering Event (including but not limited to information with
respect to PRO FORMA historical income, cash flow and capitalization after
giving effect to the Change of Control);
(3) the Change of Control Purchase Date, which shall be a Business
Day no earlier than 30 days nor later than 60 days from the date such
notice is mailed or such later date as is necessary to comply with the
Exchange Act;
(4) that any Note, or portion thereof, not tendered will continue to
accrue interest;
(5) that, unless the Company defaults in the payment of the Change of
Control Purchase Price, any Notes accepted for payment of the Change of
Control Purchase Price pursuant to the Change of Control Purchase Offer
shall cease to accrue interest after the Change of Control Purchase Date;
and
(6) the instructions a Holder must follow in order to have its Notes
purchased in accordance with paragraph (d) of this Section.
(d) Holders electing to have Notes purchased will be required to
surrender such Notes to the Company at the address specified in the notice at
least five Business Days prior to the Change of Control Purchase Date.
Holders will be entitled to withdraw their election if the Company receives,
not later than five Business Days prior to the Change of Control Purchase
Date, a telegram, telex, facsimile transmission or letter setting forth the
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name of the Holder, the principal amount of the Notes delivered for purchase
by the Holder as to which his election is to be withdrawn and a statement
that such Holder is withdrawing his election to have such Notes purchased.
Holders whose Notes are purchased only in part will be issued new Notes equal
in principal amount to the unpurchased portion of the Notes surrendered.
(e) The Company shall comply with the applicable tender offer
rules, including Rule 14e-1 under the Exchange Act, and other applicable
securities laws and regulations in connection with a Change of Control
Purchase Offer.
SECTION 1010. LIMITATION ON INDEBTEDNESS.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, create, assume, or directly or indirectly guarantee or in
any other manner become directly or indirectly liable for the payment of, or
otherwise incur (collectively, "incur"), any Indebtedness (including any
Acquired Indebtedness) other than Permitted Indebtedness. Notwithstanding the
foregoing, the Company and the Subsidiary Guarantors may incur Indebtedness
if, at the time of such event (and after giving effect on a PRO FORMA basis
to (i) the incurrence of such Indebtedness and (if applicable) the
application of the proceeds therefrom, including to refinance other
Indebtedness; (ii) the incurrence, repayment or retirement of any other
Indebtedness by the Company or its Restricted Subsidiaries since the first
day of such four-quarter period as if such Indebtedness was incurred, repaid
or retired at the beginning of such four-quarter period; and (iii) the
acquisition (whether by purchase, merger or otherwise) or disposition
(whether by sale, merger or otherwise) of any Company, entity or business
acquired or disposed of by the Company or its Restricted Subsidiaries, as the
case may be, since the first day of such four-quarter period as if such
acquisition or disposition had occurred at the beginning of such four-quarter
period), the Consolidated Fixed Charge Coverage Ratio of the Company for the
four full fiscal quarters immediately preceding such event, taken as one
period and calculated on the assumption that such Indebtedness had been
incurred on the first day of such four-quarter period and, in the case of
Acquired Indebtedness, on the assumption that the related acquisition
(whether by means of purchase, merger or otherwise) also had occurred on such
date, with such PRO FORMA adjustments as may be determined in accordance with
GAAP and the rules, regulations and guidelines of the Commission (including
without limitation Article 11 of Regulation S-X), would have been at least
equal to 2.0 to 1 through July 31, 1999 and 2.25 to 1 thereafter.
SECTION 1011. LIMITATION ON RESTRICTED PAYMENTS.
(a) The Company shall not, and shall not permit any Restricted
Subsidiary of the Company to, directly or indirectly:
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(i) declare or pay any dividend on, or make any distribution to,
the holders of, any Capital Stock of the Company or of any Restricted
Subsidiary (other than dividends or distributions payable (x) solely in
shares of Qualified Capital Stock of the Company or such Restricted
Subsidiary or in options, warrants or other rights to purchase such
Qualified Capital Stock or (y) by a Restricted Subsidiary to the Company or
any Wholly Owned Restricted Subsidiary);
(ii) purchase, redeem or otherwise acquire or retire for value,
directly or indirectly, any Capital Stock of the Company or any Restricted
Subsidiary or any options, warrants or other rights to acquire such Capital
Stock held by any Person (other than the Company or any Wholly Owned
Restricted Subsidiary of the Company);
(iii) make any principal payment on, or redeem, repurchase,
defease or otherwise acquire or retire for value, prior to any scheduled
repayment, sinking fund payment or maturity, any Subordinated Indebtedness
or PARI PASSU Indebtedness of the Company or any Subsidiary Guarantor; or
(iv) make any Investment (other than any Permitted Investment) in any
Person
(such payments described in clauses (i) through (iv) and not excepted
therefrom are collectively referred to herein as "Restricted Payments")
unless at the time of and immediately after giving effect to the proposed
Restricted Payment (the amount of any such Restricted Payment, if other than
cash, as determined by the Board of Directors of the Company, whose
determination shall be conclusive and evidenced by a Board Resolution), (1)
no Default or Event of Default shall have occurred and be continuing, (2) the
Company could incur $1.00 of additional Indebtedness (other than Permitted
Indebtedness) in accordance with Section 1010 and (3) such Restricted
Payment, together with the aggregate of all other Restricted Payments made by
the Company and its Restricted Subsidiaries on or after the date of this
Indenture, is less than the sum of (w) 50% of the aggregate cumulative
Consolidated Net Income of the Company for the period (taken as one
accounting period) from the first day of the quarter beginning after the date
of this Indenture to the end of the Company's most recently ended fiscal
quarter for which financial statements are available at the time of such
Restricted Payment (or, if such Consolidated Net Income for such period is a
deficit, less 100% of such deficit), plus (x) 100% of the aggregate net cash
proceeds received by the Company as capital contributions or from the issue
or sale since the date of this Indenture of Equity Interests of the Company
or of debt securities of the Company that have been converted into such
Equity Interests (other than Equity Interests (or convertible debt
securities) sold to a Restricted Subsidiary of the Company and other than
Redeemable Capital Stock or debt securities that have been converted into
Redeemable Capital Stock), plus (y) any cash received by the Company after
the date of initial issuance of the Notes as a
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dividend or distribution from any of its Unrestricted Subsidiaries less the
cost of disposition and taxes, if any (but in each case excluding any such
amounts included in Consolidated Net Income); plus (z) $50 million.
(b) Notwithstanding paragraph (a) above, the Company and its
Restricted Subsidiaries may take the following actions so long as (with
respect to clauses (ii), (iii), (iv) and (vi) below) at the time of and
immediately after giving effect thereto no Default or Event of Default shall
have occurred and be continuing:
(i) the payment of any dividend within 60 days after the date of
declaration thereof, if at such declaration date such declaration complied
with the provisions of paragraph (a) above;
(ii) the purchase, redemption or other acquisition or retirement for
value of any shares of Capital Stock of the Company, in exchange for, or
out of the net cash proceeds of, a substantially concurrent issuance and
sale (other than to a Restricted Subsidiary) of shares of Capital Stock of
the Company (other than Redeemable Capital Stock, unless the redemption
provisions of such Redeemable Capital Stock prohibit the redemption thereof
prior to the date on which the Capital Stock to be acquired or retired was,
by its terms, required to be redeemed);
(iii) the purchase, redemption, defeasance or other acquisition or
retirement for value of any PARI PASSU Indebtedness or Subordinated
Indebtedness (other than Redeemable Capital Stock) in exchange for or out
of the net cash proceeds of a substantially concurrent issuance and sale
(other than to a Restricted Subsidiary) of shares of Capital Stock of the
Company (other than Redeemable Capital Stock, unless the redemption
provisions of such Redeemable Capital Stock prohibit the redemption thereof
prior to the Stated Maturity of the Subordinated Indebtedness to be
acquired or retired);
(iv) the purchase, redemption, defeasance or other acquisition or
retirement for value of any PARI PASSU Indebtedness or Subordinated
Indebtedness (other than Redeemable Capital Stock) in exchange for, or out
of the net cash proceeds of a substantially concurrent incurrence or sale
(other than to a Restricted Subsidiary) of, new PARI PASSU Indebtedness or
Subordinated Indebtedness of the Company so long as (A) the principal
amount of such new PARI PASSU Indebtedness or Subordinated Indebtedness
does not exceed the principal amount (or, if such PARI PASSU Indebtedness
or Subordinated Indebtedness being refinanced provides for an amount less
than the principal amount thereof to be due and payable upon a declaration
of acceleration thereof, such lesser amount as of the date of
determination) of the PARI PASSU Indebtedness or Subordinated Indebtedness
being so purchased, redeemed, defeased, acquired or retired, PLUS the
amount of any premium required to be paid in
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connection with such refinancing pursuant to the terms of the PARI PASSU
Indebtedness or Subordinated Indebtedness refinanced or the amount of any
premium reasonably determined by the Company as necessary to accomplish
such refinancing, PLUS the amount of reasonable expenses of the Company
incurred in connection with such refinancing, (B) such new PARI PASSU
Indebtedness or Subordinated Indebtedness is PARI PASSU or subordinated
to the Notes to the same extent as such PARI PASSU Indebtedness or
Subordinated Indebtedness so purchased, redeemed, defeased, acquired or
retired and (C) such new PARI PASSU Indebtedness or Subordinated
Indebtedness has an Average Life longer than the Average Life of the Notes
and a final Stated Maturity of principal later than the final Stated
Maturity of principal of the Notes;
(v) the payment of a dividend on the Company's Capital Stock (other
than Redeemable Capital Stock) of up to $0.08 per quarter per share (or up
to $0.32 per annum per share, PROVIDED that dividend payments may not be
cumulated for more than four consecutive quarters); and
(vi) the purchase, redemption or other acquisition or retirement for
value of shares of Common Stock of the Company issued pursuant to
non-qualified options granted under stock option plans of the Company, in
order to pay withholding taxes due as a result of income recognized upon
the exercise of such options; PROVIDED that (1) the Company is permitted,
by the terms of such plans, to effect such purchase, redemption or other
acquisition or retirement for value of such shares and (2) the aggregate
consideration paid by the Company for such shares so purchased, redeemed or
otherwise acquired or retired for value does not exceed $2 million during
any fiscal year of the Company.
The actions described in clauses (ii), (iii), (v) and (vi) of this
paragraph (b) shall be Restricted Payments that shall be permitted to be
taken in accordance with this paragraph (b) but shall reduce the amount that
would otherwise be available for Restricted Payments under clause (3) of
paragraph (a).
SECTION 1012. LIMITATION ON LAYERING INDEBTEDNESS.
Neither the Company nor any of Restricted Subsidiaries shall incur,
create, issue, assume, guarantee or otherwise become liable for any
Indebtedness that is subordinate or junior in right of payment to any Senior
Indebtedness of the Company or such Restricted Subsidiary, as the case may
be, and senior in any respect in right of payment to the Notes or such
Restricted Subsidiary's Note Guarantee.
SECTION 1013. LIMITATION ON TRANSACTIONS WITH AFFILIATES. The
Company shall not, and shall not permit any of its Restricted Subsidiaries
to, directly or indirectly,
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87
make any payment to, or sell, lease transfer or otherwise dispose of any of
its properties or assets to, or purchase any property or assets from, or
enter into or make or amend any contract, agreement, understanding, loan,
advance or guarantee with, or for the benefit of, any Affiliate (other than
the Company, a Wholly Owned Restricted Subsidiary or (in connection with a
Qualified TIPS Transaction) a Qualified Finance Subsidiary) (each of the
foregoing, an "Affiliate Transaction"), unless (i) such Affiliate Transaction
is on terms that are no less favorable to the Company or the relevant
Restricted Subsidiary than those that could have been obtained in a
comparable transaction with an unrelated Person and (ii) the Company delivers
to the Trustee (a) with respect to any Affiliate Transaction or series of
related Affiliate Transactions involving aggregate consideration in excess of
$5 million, an Officers' Certificate certifying that such Affiliate
Transaction complies with clause (i) above and that such Affiliate
Transaction has been approved by a majority of the Disinterested Directors
and (b) with respect to any Affiliate Transaction or series of related
Affiliate Transactions involving aggregate consideration in excess of $10
million, both an Officers' Certificate referred to in clause (a) and an
opinion as to the fairness of such Affiliate Transaction to the Company or
the relevant Restricted Subsidiary from a financial point of view issued by
an investment banking firm of national standing with total assets in excess
of $1.0 billion; PROVIDED, HOWEVER, that this covenant shall not apply to (i)
fees, compensation and employee benefits, including bonuses, retirement plans
and stock options, paid to or established for directors and officers of the
Company or any Restricted Subsidiary in the ordinary course of business and
approved by a majority of the Disinterested Directors and (ii) the
performance by the Company or any Restricted Subsidiary of its obligations
under certain leases of real property outstanding on the date of the
Indenture from PDM, Inc. covering 10 supermarket sites and a storage facility
in Omaha, Nebraska as set forth on Schedule B attached hereto.
SECTION 1014. LIMITATION ON LIENS SECURING PARI PASSU INDEBTEDNESS
OR SUBORDINATED INDEBTEDNESS.
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, create, incur, assume or suffer to
exist any Lien (other than Permitted Liens) securing PARI PASSU Indebtedness
or Subordinated Indebtedness of the Company on or with respect to any of its
property or assets, including any shares of stock or indebtedness of any
Restricted Subsidiary, whether owned at the date of this Indenture or
thereafter acquired, or any income, profits or proceeds therefrom, or assign
or otherwise convey any right to receive income thereon, unless (i) in the
case of any Lien securing PARI PASSU Indebtedness of the Company, the Notes
are secured by a Lien on such property, assets or proceeds that is senior in
priority to or PARI PASSU with such Lien and (ii) in the case of any Lien
securing Subordinated Indebtedness of the Company, the Notes are secured by a
Lien on such property, assets or proceeds that is senior in priority to such
Lien.
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(b) The Company shall not permit any Restricted Subsidiary to,
directly or indirectly, create, incur, assume or suffer to exist any Lien
(other than Permitted Liens) securing Indebtedness of such Restricted
Subsidiary that is PARI PASSU or subordinate in right of payment to the Note
Guarantee of such Restricted Subsidiary, on or with respect to any such
Restricted Subsidiary's properties or assets, including any shares of stock
or Indebtedness of any Subsidiary of such Restricted Subsidiary, whether
owned at the date of this Indenture or thereafter acquired, or any income,
profits or proceeds therefrom, or assign or otherwise convey any right to
receive income thereon, unless (i) in the case of any Lien securing
Indebtedness of the Restricted Subsidiary that is PARI PASSU in right of
payment to the Note Guarantee of such Restricted Subsidiary, such Note
Guarantee is secured by a Lien on such property, assets or proceeds that is
senior in priority to or PARI PASSU with such Lien and (ii) in the case of
any Lien securing Indebtedness of the Restricted Subsidiary that is
subordinate in right of payment to the Note Guarantee of such Restricted
Subsidiary, such Note Guarantee is secured by a Lien on such property, assets
or proceeds that is senior in priority to such Lien.
SECTION 1015. LIMITATION ON DIVIDEND AND OTHER PAYMENT
RESTRICTIONS AFFECTING SUBSIDIARIES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer
to exist or become effective any encumbrance or restriction on the ability of
any Restricted Subsidiary to (i)(a) pay dividends or make any other
distributions to the Company or any of its Restricted Subsidiaries (1) on its
Capital Stock or (2) with respect to any other interest or participation in,
or measured by, its profits, or (b) pay any indebtedness owed to the Company
or any of its Restricted Subsidiaries, (ii) make loans or advances to the
Company or any of its Restricted Subsidiaries, (iii) transfer any of its
properties or assets to the Company or any of its Restricted Subsidiaries,
(iv) grant Liens in favor of Holders of Notes or (v) guarantee the Notes,
except in each case for such encumbrances or restrictions existing under or
by reason of (a) Indebtedness of the Company or any Restricted Subsidiary
outstanding on the date of the Indenture and listed on Schedule C attached
thereto, (b) the New Credit Agreement as in effect as of the date of the
Indenture, and any amendments, modifications, restatements, renewals,
increase, supplements, refunding, replacements or refinancings thereof,
PROVIDED that such amendments, modifications, restatements, renewals,
increase, supplements, refundings, replacements or refinancings are no more
restrictive with respect to such dividend and other payment restrictions than
those contained in the New Credit Agreement in effect on the date of the
Indenture, (c) the Indenture and the Notes, (d) applicable law, (e) any
instrument governing Indebtedness or Capital Stock of a Person acquired by
the Company or any of its Restricted Subsidiaries as in effect at the time of
such acquisition (except to the extent such Indebtedness was incurred in
connection with or in contemplation of such acquisition), which encumbrance
or restriction is not applicable to any Person, or the property or assets of
any Person, other than the Person, or the property or assets of the
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Person, so acquired, (f) by reason of customary non-assignment provisions in
existing and future leases entered into in the ordinary course of business
and consistent with past practices, (g) purchase money obligations for
property acquired in the ordinary course of business that impose restrictions
of the nature described in clause (iii) above on the property so acquired and
(h) restrictions incurred by the Company or any Restricted Subsidiary in
connection with any Permitted Receivables Financing.
SECTION 1016. LIMITATION ON SALE OF ASSETS.
(a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, engage in an Asset Sale unless the Company or
such Restricted Subsidiary, as the case may be, receives Permitted
Consideration at the time of such Asset Sale at least equal to the Fair
Market Value (as evidenced by a resolution of the Board of Directors set
forth in an Officers' Certificate delivered to the Trustee) of the assets or
Equity Interests issued or sold or otherwise disposed of.
(b) If the Company or any Restricted Subsidiary engages in an Asset
Sale, the Company or such Restricted Subsidiary must within 370 days after
the receipt of such Asset Sale, apply the Net Proceeds (i) to permanently
reduce Senior Indebtedness of the Company or one or more Restricted
Subsidiaries (and to correspondingly reduce commitments with respect thereto)
or (ii) to make capital expenditures or acquire long-term assets used or
useful in its businesses or in businesses similar or related to the
businesses of the Company immediately prior to the date of this Indenture.
Pending the final application of any such Net Proceeds, the Company may
temporarily reduce Senior Indebtedness or otherwise invest such Net Proceeds
in any manner that is not prohibited by this Indenture. Any Net Proceeds from
Asset Sales that are not applied or invested as provided in the first
sentence of this paragraph will be deemed to constitute "Excess Proceeds."
(c) When the aggregate amount of Excess Proceeds exceeds $15
million, the Company will be required to make an offer to all Holders of
Notes (an "Asset Sale Offer"), on a PRO RATA basis between the Notes and the
Notes due 2007, to purchase the maximum principal amount of Notes that may be
purchased out of the Excess Proceeds, at an offer price in cash in an amount
equal to 100% of the principal amount thereof, plus accrued and unpaid
interest and Liquidated Damages, if any, thereon to the date of purchase (the
"Offered Price"). Within 30 Business Days after the date on which the
aggregate amount of Excess Proceeds exceeds $15,000,000, the Company shall
give to each Holder of the Notes, with a copy to the Trustee, in the manner
provided in Section 106 a notice stating:
(i) that the Holder has the right to require the Company to
repurchase such Holder's Notes at the Offered Price, subject to proration
in the event the Excess Proceeds are less than the aggregate Offered Price
of all Notes and Notes due 2007 tendered;
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(ii) the date of purchase of Notes pursuant to the Asset Sale Offer
(the "Asset Sale Purchase Date"), which shall be no earlier than 30 days
nor later than 60 days from the date such notice is mailed;
(iii) that the Offered Price shall be paid to Holders electing to
have Notes purchased on the Asset Sale Purchase Date, PROVIDED that a
Holder must surrender its Note to the Paying Agent at the address
specified in the notice prior to the close of business at least five
Business Days prior to the Asset Sale Purchase Date;
(iv) any Note not tendered shall continue to accrue interest
pursuant to its terms;
(v) that unless the Company defaults in the payment of the Offered
Price, any Note accepted for payment pursuant to the Asset Sale Offer shall
cease to accrue interest on and after the Asset Sale Purchase Date;
(vi) that Holders shall be entitled to withdraw their tendered Notes
and their election to require the Company to purchase such Notes, PROVIDED
that the Company receives, not later than the close of business on the
third Business Day preceding the Asset Sale Purchase Date, a telegram,
telex, facsimile transmission or letter setting forth the name of the
Holder, the principal amount and serial numbers of the Notes tendered for
purchase, and a statement that such Holder is withdrawing its election to
have such Notes purchased;
(vii) that the Holders whose Notes are being purchased only in
part shall be issued new Notes equal in principal amount to the unpurchased
portion of the Notes surrendered; which unpurchased portion must be equal
to $1,000 in principal amount or an integral multiple thereof; and
(viii) the instructions a Holder must follow in order to have his
Notes purchased in accordance with this Section 1016.
To the extent that the aggregate amount of Notes tendered pursuant
to an Asset Sale Offer is less than the Excess Proceeds, the Company may use
any remaining Excess Proceeds for general corporate purposes (subject to the
restrictions of the Indenture). If the aggregate principal amount of Notes
and Notes due 2007 surrendered by Holders thereof exceeds the amount of
Excess Proceeds, the Trustee shall select the Notes and Notes due 2007 to be
purchased on a PRO RATA basis. Upon completion of such offer to purchase, the
amount of Excess Proceeds shall be reset at zero.
Notwithstanding the foregoing provisions of this Section 1016, the
Company and its Restricted Subsidiaries may sell or dispose of property,
whether in the form of assets
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or capital stock of a Restricted Subsidiary, in the aggregate amount not
exceeding $15 million in any year. Any notes received by the Company or its
Restricted Subsidiaries as consideration in any disposition made pursuant to
such $15 million exclusion from this Section 1016 shall not be taken into
account in determining whether the $75 million limitation set forth in the
definition of "Permitted Consideration" has been met.
SECTION 1017. LIMITATION ON ISSUANCES AND SALES OF CAPITAL STOCK
OF SUBSIDIARIES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, transfer, convey, sell or otherwise dispose of any Capital
Stock of any Restricted Subsidiary of the Company to any Person (other than
the Company or a Wholly Owned Restricted Subsidiary of the Company), unless
(a) such transfer, conveyance, sale or other disposition is of all of the
Capital Stock of such Restricted Subsidiary owned by the Company and its
Restricted Subsidiaries and (b) such transaction is made in accordance with
Section 1016, PROVIDED that 85% of the proceeds from such a sale of Capital
Stock of any Restricted Subsidiary that is a Significant Subsidiary shall
consist of cash or Temporary Cash Investments. Notwithstanding the foregoing
or the provisions of any other covenant, the Company or any Restricted
Subsidiary may sell Qualified Capital Stock of any Restricted Subsidiary in a
Public Equity Offering, PROVIDED that (i) 100% of the Net Proceeds from such
Public Equity Offering shall be in cash and shall be applied as provided in
the provisions of Section 1016 and (ii) the Tangible Assets of such
Restricted Subsidiary do not exceed 10% of the Consolidated Tangible Assets
of the Company, determined as of the last day of the quarter ending
immediately before the commencement of such Public Equity Offering.
SECTION 1018. ADDITIONAL GUARANTEES.
If (x) the Company or any of its Restricted Subsidiaries shall
acquire or form a Restricted Subsidiary or (y) any existing majority-owned
Restricted Subsidiary shall, after the date of the Indenture, guarantee any
PARI PASSU Indebtedness or Subordinated Indebtedness of the Company or any
Subsidiary Guarantor, the Company will cause any such Restricted Subsidiary
(other than an Investee Store or Joint Venture, PROVIDED that such Investee
Store or Joint Venture does not guarantee the PARI PASSU Indebtedness of any
other Person) that is or becomes a Wholly Owned Restricted Subsidiary or that
guarantees any PARI PASSU Indebtedness or Subordinated Indebtedness of the
Company or any Subsidiary Guarantor to (i) execute and deliver to the Trustee
a supplemental indenture in form and substance reasonably satisfactory to the
Trustee pursuant to which such Restricted Subsidiary shall guarantee all of
the obligations of the Company with respect to the Notes on a senior
subordinated basis and (ii) deliver to the Trustee an Opinion of Counsel
reasonably satisfactory to the Trustee to the effect that a supplemental
indenture has been duly executed
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and delivered by such Restricted Subsidiary and is in compliance with the
terms of this Indenture.
SECTION 1019. PROVISION OF FINANCIAL STATEMENTS; RULE 144A
INFORMATION
Whether or not required by the rules and regulations of the
Commission, including the reporting requirements of Section 13 or 15(d) of
the Exchange Act, so long as any Notes are outstanding, the Company shall
furnish to the Holders of Notes (i) all quarterly and annual financial
information that would be required to be contained in a filing with the
Commission on Forms 10-Q and 10-K if the Company were required to file such
Forms, including a "Management's Discussion and Analysis of Financial
Condition and Results of Operations" that describes the financial condition
and results of operations of the Company and its Subsidiaries and, with
respect to the annual information only, a report on the consolidated
financial statements required by Form 10-K by the Company's independent
certified public accountants and (ii) all reports that would be required to
be filed with the Commission on Form 8-K if the Company were required to file
such reports. In addition, whether or not required by the rules and
regulations of the Commission, the Company shall file a copy of all such
information with the Commission for public availability (unless the
Commission shall not accept such a filing) and make such information
available to investors or prospective investors who request it in writing.
The Company shall furnish to the Holders or beneficial Holders of
Notes and prospective purchasers of Notes designated by the Holders of Notes,
upon their request, the information required to be delivered pursuant to Rule
144A (d) (4) under the Securities Act until such time as the Company either
exchanges all of the Initial Notes for the Exchange Notes or has registered
all of the Initial Notes for resale under the Securities Act.
SECTION 1020. PAYMENT FOR CONSENT.
The Company and each of its Restricted Subsidiaries are prohibited
from, directly or indirectly, paying or causing to be paid any consideration,
whether by way of interest, fee or otherwise, to any Holder for or as an
inducement to any consent, waiver or amendment of any terms or provisions of
the Notes unless such consideration is offered to be paid or agreed to be
paid to all Holders of the Notes which so consent, waive or agree to amend in
the time frame set forth in solicitation documents relating to such consent,
waiver or agreement.
SECTION 1021. TERMINATION OF CERTAIN COVENANTS IN EVENT OF
INVESTMENT GRADE RATING.
In the event that each of the Rating Categories assigned to the
Notes of the Company by the Rating Agencies is Investment Grade, the
provisions of Sections 1010,
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1011, 1013, 1016, 1017 and 801(3) shall cease to apply to the Company and its
Restricted Subsidiaries from and after the date on which the second of the
Rating Agencies notifies the Company of the assignment of such Rating
Category. Notwithstanding the foregoing, if the Rating Category assigned by
either Rating Agency to the Notes should subsequently decline below
Investment Grade, the foregoing covenants shall be reinstituted as and from
the date of such rating decline.
SECTION 1022. WAIVER OF CERTAIN COVENANTS.
The Company may omit in any particular instance to comply with any
term, provision or condition set forth in Section 803 or Sections 1007 and
1008, 1010 through 1015, inclusive and 1017 through 1020, inclusive, if
before or after the time for such compliance the Holders of at least a
majority in principal amount of the Outstanding Notes, by Act of such
Holders, waive such compliance in such instance with such term, provision or
condition, but no such waiver shall extend to or affect such term, provision
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 term, provision or condition shall remain in
full force and effect.
ARTICLE ELEVEN
REDEMPTION OF NOTES
SECTION 1101. RIGHT OF REDEMPTION.
The Notes may be redeemed, at the option of the Company, as a whole
or from time to time in part, at any time on or after June 1, 2001, subject
to the conditions and at the Redemption Prices specified in the form of Note,
together with accrued interest to the Redemption Date.
Up to 35% of the initial aggregate principal amount of the Notes
may be redeemed on or prior to June 1, 2000, at the option of the Company,
within 180 days of a Public Equity Offering with the net proceeds of such
offering at a redemption price equal to 110 1/2% of the principal amount
thereof, together with accrued and unpaid interest, if any, to the date of
redemption (subject to the right of holders of record on relevant record
dates to receive interest due on relevant Interest Payment Dates); PROVIDED
that after giving effect to such redemption at least $162.5 million aggregate
principal amount of the Notes remains outstanding.
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SECTION 1102. APPLICABILITY OF ARTICLE.
Redemption of Notes at the election of the Company or otherwise, as
permitted or required by any provision of this Indenture, shall be made in
accordance with such provision and this Article.
SECTION 1103. ELECTION TO REDEEM; NOTICE TO TRUSTEE.
The election of the Company to redeem any Notes 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 60 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 Notes to be redeemed and shall deliver to the
Trustee such documentation and records as shall enable the Trustee to select
the Notes to be redeemed pursuant to Section 1104.
SECTION 1104. SELECTION BY TRUSTEE OF NOTES TO BE REDEEMED.
If less than all the Notes are to be redeemed at any time, the
particular Notes to be redeemed shall be selected on a PRO RATA basis, by lot
or by such other method as the Trustee shall deem fair and appropriate and
which may provide for the selection for redemption of portions of the
principal of Notes; PROVIDED, HOWEVER, that no such partial redemption shall
reduce the portion of the principal amount of a Note not redeemed to less
than $1,000.
The Trustee shall promptly notify the Company in writing of the
Notes selected for redemption and, in the case of any Notes 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 redemption of Notes shall relate, in the
case of any Note redeemed or to be redeemed only in part, to the portion of
the principal amount of such Note which has been or is to be redeemed.
SECTION 1105. NOTICE OF REDEMPTION.
Notice of redemption shall be given in the manner provided for in
Section 106 not less than 30 nor more than 60 days prior to the Redemption
Date, to each Holder of Notes to be redeemed.
All notices of redemption shall state:
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(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all Outstanding Notes are to be redeemed, the
identification by CUSIP Numbers, if any (and, in the case of a partial
redemption, the principal amounts), of the particular Notes to be redeemed,
(4) if any Note is to be redeemed in part only, the portion of the
principal amount thereof to be redeemed,
(5) that on the Redemption Date the Redemption Price (together with
accrued interest, if any, to the Redemption Date payable as provided in
Section 1107) will become due and payable upon each such Note, or the
portion thereof, to be redeemed, and that interest thereon will cease to
accrue on and after said date, and
(6) the place or places where such Notes are to be surrendered for
payment of the Redemption Price.
Notice of redemption of Notes to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
SECTION 1106. DEPOSIT OF REDEMPTION PRICE.
On or 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 sufficient to pay the Redemption Price of, and accrued
interest on, any Notes, or any portions thereof, to be redeemed on that date.
SECTION 1107. NOTES PAYABLE ON REDEMPTION DATE.
Notice of redemption having been given as aforesaid, the Notes so
to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified (together with accrued interest and
Liquidated Damages, if any, to the Redemption Date), and from and after such
date (unless the Company shall default in the payment of the Redemption Price
and accrued interest and Liquidated Damages, if any,) such Notes, or portions
thereof, shall cease to bear interest. Upon surrender of any such Note for
redemption in accordance with said notice, such Note shall be paid by the
Company at the Redemption Price, together with accrued interest and
Liquidated Damages, if any, to the Redemption Date; PROVIDED, HOWEVER, that
installments of interest whose Stated Maturity is
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on or prior to the Redemption Date shall be payable to the Holders of such
Notes, or one or more Predecessor Notes, 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 Note called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium and Liquidated
Damages, if any) shall, until paid, bear interest from the Redemption Date at
the rate borne by the Notes.
SECTION 1108. NOTES REDEEMED IN PART.
Any Note which is to be redeemed only in part (pursuant to the
provisions of this Article shall be surrendered at the office or agency of
the Company maintained for such 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 such Holder's attorney duly
authorized in writing), and the Company shall execute, and the Trustee shall
authenticate and deliver to the Holder of such Note without service charge, a
new Note or Notes, of any authorized denomination as requested by such
Holder, in an aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Note so surrendered.
ARTICLE TWELVE
NOTE GUARANTEES
SECTION 1201. NOTE GUARANTEES.
Subject to the provisions of this Article Twelve, each Subsidiary
Guarantor hereby irrevocably and unconditionally guarantees, jointly and
severally, on a senior basis to each Holder and to the Trustee, on behalf of
the Holders, (i) the due and punctual payment of the principal of, premium,
if any, and interest and Liquidated Damages, if any, on each Note, when and
as the same shall become due and payable, whether at Stated Maturity or
purchase upon a Change of Control Triggering Event or Asset Sale Offer, and
whether by declaration of acceleration, a Change of Control Triggering Event,
Asset Sale Offer, call for redemption or otherwise, the due and punctual
payment of interest on the overdue principal of, premium, if any, and
interest and Liquidated Damages, if any, on the Notes, to the extent lawful,
and the due and punctual performance of all other obligations of the Company
to the Holders or the Trustee all in accordance with the terms of such Note
and this Indenture and (ii) in the case of any extension of time of payment
or renewal of any Notes or any of such other obligations, that the same will
be promptly paid in full when due or performed in accordance with the terms
of the extension or renewal, at Stated Maturity or purchase upon a Change of
Control Triggering Event or Asset Sale Offer, and whether by declaration of
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acceleration, a Change of Control Triggering Event, Asset Sale Offer, call
for redemption or otherwise (the obligations in clauses (i) and (ii) hereof
being the "Guaranteed Obligations").
Without limiting the generality of the foregoing, each Subsidiary
Guarantor's liability shall extend to all amounts that constitute part of the
Guaranteed Obligations and would be owed by the Company to the Holders or the
Trustee under the Notes and the Indenture but for the fact that they are
unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving the Company. The Subsidiary
Guarantors hereby agree that their obligations hereunder shall be absolute
and unconditional, irrespective of, and shall be unaffected by, any
invalidity, irregularity or unenforceability of any such Note or this
Indenture, any failure to enforce the provisions of any such Note or this
Indenture, any waiver, modification or indulgence granted to the Company with
respect thereto, by any Holder or any other circumstances which may otherwise
constitute a legal or equitable discharge or defense of the Company or a
surety or guarantor.
The Subsidiary Guarantors hereby waive diligence, presentment,
filing of claims with a court in the event of merger or bankruptcy of the
Company, any right to require a proceeding first against the Company, the
benefit of discussion, protest or notice with respect to any such Note or the
Indebtedness evidenced thereby and all demands whatsoever (except as
specified above), and covenant that the Guaranteed Obligations will not be
discharged as to any such Note except by payment in full of such Guaranteed
Obligations and as provided in Sections 401, 1102, 1205 and 1206.
Each Subsidiary Guarantor further agrees that, as between such
Subsidiary Guarantor and the Holders, (i) the maturity of the Guaranteed
Obligations may be accelerated as provided in Article Five, notwithstanding
any stay, injunction or other prohibition preventing such acceleration in
respect of the Company or any other Subsidiary Guarantor in respect of the
Guaranteed Obligations, and (ii) in the event of any declaration of
acceleration of such Guaranteed Obligations as provided in Article Five, such
Guaranteed Obligations (whether or not due and payable) shall forthwith
become due and payable by each Subsidiary Guarantor. In addition, without
limiting the foregoing provisions, upon the effectiveness of an acceleration
under Article Five, the Trustee shall promptly make a demand for payment on
any Notes in respect of which the Guaranteed Obligations provided for in this
Article Twelve are not discharged.
Each Subsidiary Guarantor hereby irrevocably waives any claim or
other rights that it may now or hereafter acquire against the Company that
arise from the existence, payment, performance or enforcement of such
Subsidiary Guarantor's obligations under this Indenture, or any other
document or instrument including, without limitation, any right of
reimbursement, exoneration, contribution, indemnification, any right to
participate in any claim or remedy of the Holders against the Company,
whether or not such claim, remedy or right arises in equity, or under
contract, statute or common law, including, without
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limitation, the right to take or receive from the Company, directly or
indirectly, in cash or other property or in any other manner, payment or
security on account of such claim or other rights. Each Subsidiary Guarantor
shall be subrogated to all rights of the Holders of the Notes pursuant to any
Note Guarantee against the Company in respect of any amounts paid by such
Subsidiary Guarantor on account of such Note pursuant to the provisions of
this Indenture; PROVIDED, HOWEVER, that no Subsidiary Guarantor shall be
entitled to enforce or to receive any payment arising out of, or based upon
such right of subrogation until the principal of (and premium, if any) and
interest on all Notes issued hereunder shall have been paid in full to the
Holders entitled thereto. If any amount shall be paid to any Subsidiary
Guarantor in violation of this paragraph and the Guaranteed Obligations shall
not have been paid in full, such amount shall be deemed to have been paid to
such Subsidiary Guarantor for the benefit of, and held in trust for the
benefit of, the Holders, and shall forthwith be paid to the Trustee. Each
Subsidiary Guarantor acknowledges that it shall receive direct and indirect
benefits from the issuance of the Notes and that the waiver set forth in this
Section 1201 is knowingly made in contemplation of such benefits.
SECTION 1202. EXECUTION AND DELIVERY OF NOTE GUARANTEE.
To further evidence the Note Guarantee set forth in Section 1201,
each Subsidiary Guarantor hereby agrees that a notation of such Note
Guarantee, substantially in the form included in Exhibit B of this Indenture,
shall be endorsed on each Note authenticated and delivered by the Trustee.
Such Note Guarantee shall be executed on behalf of each Subsidiary Guarantor
by its Chairman, any Vice Chairman, its President or a Vice President and
attested by its Secretary or Assistant Secretary, and shall have been duly
authorized by all requisite corporate action. The validity and
enforceability of any Note Guarantee shall not be affected by the fact that
it is not affixed to any particular Note.
Each Subsidiary Guarantor hereby agrees that its respective Note
Guarantee set forth in Section 1201 shall remain in full force and effect
notwithstanding any failure to endorse on each Note a notation of such Note
Guarantee.
The delivery of any Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of any Note Guarantee set
forth in this Indenture on behalf of the Subsidiary Guarantors.
SECTION 1203. OBLIGATIONS OF THE SUBSIDIARY GUARANTORS
UNCONDITIONAL.
Nothing contained in this Article Twelve, elsewhere in this
Indenture or in any Note is intended to or shall impair, as between the
Subsidiary Guarantors and the Holders, the obligation of the Subsidiary
Guarantors, which obligations are independent of the obligations of the
Company under the Notes and this Indenture and are absolute and
unconditional, to pay to the Holders the Guaranteed Obligations as and when
the same shall
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become due and payable in accordance with the provisions of this Indenture,
or is intended to or shall affect the relative rights of the Holders and
creditors of the Subsidiary Guarantors, nor shall anything herein or therein
prevent the Trustee or any Holder from exercising all remedies otherwise
permitted by applicable law upon Default under this Indenture. Each payment
to be made by any Subsidiary Guarantor hereunder in respect of the Guaranteed
Obligations shall be payable in the currency or currencies in which such
Guaranteed Obligations are denominated.
SECTION 1204. RANKING OF NOTE GUARANTEES.
Each Subsidiary Guarantor covenants and agrees, and each Holder by
its acceptance thereof, likewise covenants and agrees, that each Note
Guarantee will be an unsecured senior subordinated obligation of the
Subsidiary Guarantor issuing such Note Guarantee, subordinated in right of
payment to all existing and future Senior Indebtedness of the Subsidiary
Guarantors, and ranking senior to or PARI PASSU in right of payment with all
other existing and future Indebtedness of such Subsidiary Guarantor that is
expressly subordinated to any Senior Subordinated Indebtedness of such
Subsidiary Guarantor.
SECTION 1205. LIMITATION OF NOTE GUARANTEES.
The Company and each Subsidiary Guarantor, and each Holder of a
Note by his acceptance thereof, hereby confirm that it is the intention of
all such parties that each Subsidiary Guarantor shall be liable under this
Indenture only for amounts aggregating up to the largest amount that would
not render its obligations hereunder subject to avoidance under Section 548
of the United States Bankruptcy Code or any comparable provisions of any
applicable state law. To effectuate the foregoing intention, the Holders
hereby irrevocably agree that in the event that any such Note Guarantee would
constitute or result in a violation of any applicable fraudulent conveyance
or similar law of any relevant jurisdiction, the liability of the Subsidiary
Guarantor under such Note Guarantee shall be reduced to the maximum amount,
after giving effect to all other contingent and fixed liabilities of such
Subsidiary Guarantor, permissible under the applicable fraudulent conveyance
or similar law.
SECTION 1206. RELEASE OF SUBSIDIARY GUARANTORS.
(a) Any Subsidiary Guarantor shall be released from and relieved
of its obligations under this Article Twelve (1) upon defeasance in
accordance with Section 1302, (2) upon the payment in full of the Guaranteed
Obligations, or (3) upon the sale by the Company or any Subsidiary of such
Subsidiary Guarantor to any Person other than a Subsidiary of the Company,
PROVIDED that such sale does not result in a sale, assignment, transfer,
lease or disposal of all or substantially all of the properties and assets of
the Company and its Subsidiaries on a Consolidated basis. Upon the delivery
by the Company to the Trustee of an Officers' Certificate and, if requested
by the Trustee, an Opinion of
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Counsel to the effect that the transaction giving rise to the release of such
obligations was made by the Company in accordance with the provisions of this
Indenture and the Notes, the Trustee shall execute any documents reasonably
required in order to evidence the release of the Subsidiary Guarantors from
their obligations. If any of the Guaranteed Obligations are revived and
reinstated after the termination of such Note Guarantee, then all of the
obligations of the Subsidiary Guarantors under such Note Guarantee shall be
revived and reinstated as if such Note Guarantee had not been terminated
until such time as the Guaranteed Obligations are paid in full, and the
Subsidiary Guarantors shall execute any documents reasonably satisfactory to
the Trustee evidencing such revival and reinstatement.
(b) Upon the sale or disposition (whether by merger, stock
purchase, asset sale or otherwise) of a Subsidiary Guarantor or all or
substantially all of its assets to an entity which is not a Subsidiary
Guarantor (and a Restricted Subsidiary) or the designation of a Restricted
Subsidiary to become an Unrestricted Subsidiary, which transaction is
otherwise in compliance with this Indenture (including, without limitation,
the provisions of Sections 1016 and 1017), such Subsidiary Guarantor will be
deemed released from its obligations under its Note Guarantee; PROVIDED,
HOWEVER, that any such termination shall occur only to the extent that all
obligations of such Subsidiary Guarantor under all of its guarantees of, and
under all of its pledges of assets or other security interests which secure,
any Indebtedness of the Company or any other Restricted Subsidiary shall also
terminate upon such release, sale or transfer. In addition, upon the delivery
by the Company to the Trustee of an Officers' Certificate and, if requested
by the Trustee, an Opinion of Counsel to the effect that the transaction
giving rise to the release of such obligations was made in accordance with
the provisions of this Indenture and the Notes, the Trustee shall execute any
documents reasonably required in order to evidence the release of such
Subsidiary Guarantor from its obligations. Any Subsidiary Guarantor not so
released remains liable for the full amount of principal of (and premium, if
any) and interest on the Notes as provided in this Article Twelve.
(c) Any Subsidiary Guarantor shall automatically be released from
and relieved of its obligations under its Note Guarantee upon the sale or
transfer of the Capital Stock of such Subsidiary Guarantor pursuant to or in
lieu of foreclosure of any lien on the Capital Stock of such Subsidiary
Guarantor existing in favor of any holder of Senior Indebtedness and, upon
the request of any holder of Senior Indebtedness (or of any purchaser or
transferee pursuant to or in lieu of such foreclosure), the Trustee shall
execute any documents reasonably required to evidence the release of such
Subsidiary Guarantor.
SECTION 1207. SUBSIDIARY GUARANTORS MAY CONSOLIDATE, ETC. ON
CERTAIN TERMS.
Except as set forth in Section 1206 and in Articles Eight and Ten
hereof, nothing contained in this Indenture or in any of the Notes shall
prevent any consolidation or
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merger of a Subsidiary Guarantor with or into the Company or a Subsidiary
Guarantor or shall prevent any sale or conveyance of the property of a
Subsidiary Guarantor as an entirety or substantially as an entirety to the
Company or a Subsidiary Guarantor.
ARTICLE THIRTEEN
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1301. COMPANY'S OPTION TO EFFECT DEFEASANCE OR COVENANT
DEFEASANCE.
The Company may, at its option and at any time, with respect to the
Notes, elect to have either Section 1302 or Section 1303 be applied to all
Outstanding Notes upon compliance with the conditions set forth below in this
Article Thirteen.
SECTION 1302. DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under Section 1301 of the option
applicable to this Section 1302, the Company shall be deemed to have paid and
discharged all obligations with respect to all Outstanding Notes on the date
the conditions set forth in Section 1304 are satisfied (hereinafter,
"defeasance"). For this purpose, such defeasance means that the Company shall
be deemed to have paid and discharged the entire indebtedness represented by
the Outstanding Notes, which shall thereafter be deemed to be "Outstanding"
only for the purposes of Section 1305 and the other Sections of this
Indenture referred to in (A) and (B) below, and to have satisfied all its
other obligations under such Notes and this Indenture insofar as such Notes
are concerned (and the Trustee, at the expense of the Company, shall execute
proper instruments acknowledging the same), except for the following which
shall survive until otherwise terminated or discharged hereunder: (A) the
rights of Holders of Outstanding Notes to receive payments in respect of the
principal of, premium, if any, and interest on such Notes when such payments
are due or on the Redemption Date with respect to such Notes, as the case may
be, (B) the Company's obligations with respect to such Notes under Sections
304, 305, 306, 1002 and 1003, (C) the rights, powers, trusts, duties and
immunities of the Trustee hereunder and (D) this Article Thirteen. Subject
to compliance with this Article Thirteen, the Company may exercise its option
under this Section 1302 notwithstanding the prior exercise of its option
under Section 1303 with respect to the Notes.
SECTION 1303. COVENANT DEFEASANCE.
Upon the Company's exercise under Section 1301 of the option
applicable to this Section 1303, the Company shall be released from its
obligations under any covenant contained in Section 801(3) and Section 803
and in Sections 1004 through 1020 with respect
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to the Outstanding Notes on and after the date the conditions set forth below
are satisfied (hereinafter, "covenant defeasance"), and the Notes shall
thereafter be deemed not to be "Outstanding" for the purposes of any
direction, waiver, consent or declaration or Act of Holders (and the
consequences of any thereof) in connection with such covenants, but shall
continue to be deemed "Outstanding" for all other purposes hereunder. For
this purpose, such covenant defeasance means that, with respect to the
Outstanding Notes, the Company may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any
such covenant, whether directly or indirectly, by reason of any reference
elsewhere herein to any such covenant or by reason of any reference in any
such covenant to any other provision herein or in any other document and such
omission to comply shall not constitute a Default or an Event of Default
under Sections 501(3), 4, 5 and 7 but, except as specified above, the
remainder of this Indenture and such Notes shall be unaffected thereby.
SECTION 1304. CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE.
The following shall be the conditions to application of either
Section 1302 or Section 1303 to the Outstanding Notes:
(1) the Company must irrevocably have deposited with the Trustee (or
another trustee satisfying the requirements of Section 607 who shall agree
to comply with the provisions of this Article Thirteen applicable to it),
in trust, for the benefit of the Holders, cash in United States dollars,
U.S. Government Obligations or a combination thereof, in such amounts as
will be sufficient, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, to pay and discharge the principal of, and
premium, if any, and interest on the Outstanding Notes on the Stated
Maturity or on an optional redemption date (such date being referred to as
the "Defeasance Redemption Date"), as the case may be, if in the case of a
Defeasance Redemption Date prior to electing to exercise either defeasance
or covenant defeasance, the Company has delivered to the Trustee an
irrevocable notice to redeem all of the Outstanding Notes on such
Defeasance Redemption Date;
(2) in the case of an election under Section 1302, the Company shall
have delivered to the Trustee an opinion of independent counsel in the
United States stating that (x) the Company has received from, or there has
been published by, the Internal Revenue Service a ruling, or (y) since the
date of this Indenture, there has been a change in the applicable federal
income tax law, in either case to the effect that, and based thereon such
opinion of counsel in the United States shall confirm that, the Holders of
the Outstanding Notes will not recognize income, gain or loss for federal
income tax purposes as a result of such defeasance and will be subject to
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federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such defeasance had not occurred;
(3) in the case of an election under Section 1303, the Company shall
have delivered to the Trustee an opinion of independent counsel in the
United States to the effect that the Holders of the Outstanding Notes will
not recognize income, gain or loss for federal income tax purposes as a
result of such covenant defeasance and will be subject to federal income
tax on the same amounts, in the same manner and at the same times as would
have been the case if such covenant defeasance had not occurred;
(4) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit or, insofar as paragraphs (8) and
(9) of Section 501 hereof are concerned, at any time during the period
ending on the 91st day after the date of such deposit (it being understood
that this condition shall not be deemed satisfied until the expiration of
such period);
(5) such defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a Default under, this Indenture or
any other material agreement or instrument to which the Company or any
Subsidiary Guarantor is a party or by which it is bound;
(6) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the
intent of preferring the Holders of the Notes or any Subsidiary Guarantor
over the other creditors of the Company or any Subsidiary Guarantor or with
the intent of defeating, hindering, delaying or defrauding creditors of the
Company, any Subsidiary Guarantor or others; and
(7) the Company shall have delivered to the Trustee an Officers'
Certificate stating that all conditions precedent provided for relating to
either the defeasance under Section 1302 or the covenant defeasance under
Section 1303 (as the case may be) have been complied with.
SECTION 1305. DEPOSITED MONEY AND U.S. GOVERNMENT OBLIGATIONS TO
BE HELD IN TRUST; OTHER MISCELLANEOUS PROVISIONS.
Subject to the provisions of the last paragraph of Section 1003,
all money and U.S. Government Obligations (including the proceeds thereof)
deposited with the Trustee (or other qualifying trustee -- collectively for
purposes of this Section 1305, the "Trustee") pursuant to Section 1304 in
respect of the Outstanding Notes shall be held in trust and applied by the
Trustee, in accordance with the provisions of such Notes and this Indenture,
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to the payment, either directly or through any Paying Agent (including the
Company acting as its own Paying Agent) as the Trustee may determine, to the
Holders of such Notes of all sums due and to become due thereon in respect of
principal (and premium, if any) and interest, but such money need not be
segregated from other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax,
fee or other charge imposed on or assessed against the U.S. Governmental
Obligations deposited pursuant to Section 1304 or the principal and interest
received in respect thereof other than any such tax, fee or other charge
which by law is for the account of the Holders of the Outstanding Notes.
Anything in this Article Thirteen to the contrary notwithstanding,
the Trustee shall deliver or pay to the Company from time to time upon
Company Request any money or U.S. Government Obligations held by it as
provided in Section 1304 which, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee, are in excess of the amount thereof which
would then be required to be deposited to effect an equivalent defeasance or
covenant defeasance, as applicable, in accordance with this Article.
SECTION 1306. REINSTATEMENT.
If the Trustee or any Paying Agent is unable to apply any money in
accordance with Section 1305 by reason of any order or judgment of any court
or governmental authority enjoining, restraining or otherwise prohibiting
such application, then the Company's obligations under this Indenture and the
Notes shall be revived and reinstated as though no deposit had occurred
pursuant to Section 1302 or 1303, as the case may be, until such time as the
Trustee or Paying Agent is permitted to apply all such money in accordance
with Section 1305, and the Company shall execute all documents reasonably
satisfactory to the Trustee evidencing such revival and reinstatement;
PROVIDED, HOWEVER, that if the Company makes any payment of principal of (or
premium, if any, on) or interest on any Note following the reinstatement of
its obligations, the Company shall be subrogated to the rights of the Holders
of such Notes to receive such payment from the money held by the Trustee or
Paying Agent.
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ARTICLE FOURTEEN
SUBORDINATION OF NOTES
SECTION 1401. NOTES SUBORDINATE TO SENIOR INDEBTEDNESS.
The Company covenants and agrees, and each Holder, by its
acceptance thereof, likewise covenants and agrees, that, to the extent and in
the manner hereinafter set forth in this Article Fourteen, the indebtedness
represented by the Notes and the payment (by set-off or otherwise) of
principal of, premium, if any, interest and Liquidated Damages, if any, on
the Notes (including with respect to any repurchases of the Notes) will be
subordinated in right of payment to the prior payment in full in cash, or at
the option of the holders of Senior Indebtedness, in Temporary Cash
Investments, of all Obligations in respect of Senior Indebtedness, whether
outstanding on the date of this Indenture or thereafter incurred; PROVIDED,
HOWEVER, that the Notes, the indebtedness represented thereby and the payment
of the principal of (and premium, if any), interest on and Liquidated
Damages, if any, on the Notes, in all respects shall rank equally with, or
prior to, all existing and future Indebtedness of the Company that is
expressly subordinated to any Senior Indebtedness.
SECTION 1402. PAYMENT OVER OF PROCEEDS UPON DISSOLUTION, ETC.
Upon any distribution to creditors of the Company or any Subsidiary
Guarantor upon any total or partial liquidation, dissolution or winding up of
the Company or such Subsidiary Guarantor or in a bankruptcy, reorganization,
insolvency, receivership or similar proceeding relating to the Company or
such Subsidiary Guarantor or its property, whether voluntary or involuntary,
an assignment for the benefit of creditors or any marshalling of the
Company's or such Subsidiary Guarantor's assets and liabilities,
(1) the holders of Senior Indebtedness of the Company or such
Subsidiary Guarantor will be entitled to receive payment in full in cash,
or at the option of the holders of such Senior Indebtedness, in Temporary
Cash Investments, of all Obligations due or to become due in respect of
such Senior Indebtedness (including interest after the commencement of any
such proceeding at the rate specified in the applicable Senior
Indebtedness) before the Holders will be entitled to receive any payment of
any kind or character with respect to the Notes; and
(2) until all Obligations with respect to such Senior Indebtedness
are paid in full in cash, or at the option of the holders of such Senior
Indebtedness, in Temporary Cash Investments, any distribution of any kind
or character to which the Holders of Notes would be entitled shall be made
to the holders of such Senior Indebtedness (except that Holders of Notes
may receive Permitted Junior Securities and payments made from the trust
described under Article Thirteen).
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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, transfer or lease 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 this Section if the Person formed by such consolidation or into
which the Company is merged or the Person which acquires by conveyance,
transfer or lease such properties and assets substantially as an entirety,
as the case may be, shall, as a part of such consolidation, merger,
conveyance, transfer or lease, comply with the conditions set forth in
Article Eight.
SECTION 1403. SUSPENSION OF PAYMENT WHEN SENIOR INDEBTEDNESS IN
DEFAULT.
Unless Section 1402 shall be applicable, neither the Company nor
any Subsidiary Guarantor shall make, directly or indirectly, (x) any payment
upon or in respect of the Notes (except in Permitted Junior Securities or
from the trust described under Article Thirteen) or (y) acquire any of the
Notes for cash or property or otherwise or make any other distribution with
respect to the Notes if (i) any default occurs and is continuing in the
payment when due, whether at maturity, upon any redemption, by declaration or
otherwise, of any amount of any Designated Senior Indebtedness (a "Payment
Default") or (ii) any other default occurs and is continuing with respect to
Designated Senior Indebtedness (a "Non-Payment Default") that permits holders
of, or the trustee or agent on behalf of the holders of, the Designated
Senior Indebtedness as to which such default relates to accelerate its
maturity and the Trustee receives a notice of such default (a "Payment
Blockage Notice") from the trustee or agent on behalf of holders of any
Designated Senior Indebtedness. Payments on the Notes may and shall be
resumed (a) in the case of a Payment Default, upon the date on which such
default is cured or waived and (b) in case of a Non-Payment Default, the
earlier of the date on which such Non-Payment Default is cured or waived or
179 days after the date on which the applicable Payment Blockage Notice is
received, unless a Payment Default has occurred and is continuing, including
as a result of the acceleration of the maturity of any Designated Senior
Indebtedness. After a Payment Blockage Notice is given for a Non-Payment
Default, no new period of payment blockage for a Non-Payment Default may be
commenced unless and until (i) 360 days have elapsed since the effectiveness
of the immediately prior Payment Blockage Notice and (ii) all scheduled
payments of principal, premium, if any, and interest and Liquidated Damages,
if any, on the Notes that have come due have been paid in full in cash. No
Non-Payment Default that existed or was continuing on the date of delivery of
any Payment Blockage Notice to the Trustee shall be, or be made, the basis
for a subsequent Payment Blockage Notice unless such Non-Payment Default
shall have been cured or waived for a period of not less than 90 days (it
being acknowledged that any subsequent action, or any breach of any financial
covenants for a
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period commencing after the date of delivery of any Payment Blockage Notice
which, in either case, would give rise to a default pursuant to any provision
under which a default previously existed or was continuing shall constitute a
new default for this purpose). Each Holder by its acceptance of a Note
irrevocably agrees that if any payment or payments shall be made pursuant to
this Indenture by the Company or a Subsidiary Guarantor and the amount or
total amount of such payment or payments exceeds the amount, if any, that
such Holder would be entitled to receive upon the proper application of the
subordination provisions of this Indenture, the payment of such excess amount
shall be deemed null and void, and the Holder agrees that it will be
obligated to return the amount of the excess payment to the Trustee, as
instructed in a written notice of such excess payment, within ten days of
receiving such notice.
SECTION 1404. PAYMENT PERMITTED IF NO DEFAULT.
Nothing contained in this Article or elsewhere in this Indenture or
in any of the Notes shall prevent 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 1402 or under the
conditions described in Section 1403, from making payments at any time of
principal of (and premium, if any) or interest or Liquidated Damages, if any,
on the Notes.
SECTION 1405. SUBROGATION TO RIGHTS OF HOLDERS OF SENIOR
INDEBTEDNESS.
Subject to the prior payment in full in cash of all Senior
Indebtedness, the Holders shall be subrogated 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 Notes shall be paid in
full. For purposes of such subrogation, no payments or distributions to the
holders of Senior Indebtedness of any cash, property or securities to which
the Holders of the Notes or 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 Notes
or the Trustee, shall, as among the Company, its creditors other than holders
of Senior Indebtedness, and the Holders of the Notes, be deemed to be a
payment or distribution by the Company to or on account of the Senior
Indebtedness.
SECTION 1406. 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 Notes 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 Notes is
intended to or shall (a) impair, as between the Company and the
<PAGE>
108
Holders of the Notes, the obligation of the Company, which is absolute and
unconditional, to pay to the Holders of the Notes the principal of (and
premium, if any) and interest on the Notes 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 Notes and creditors of the
Company other than the holders of Senior Indebtedness; or (c) prevent the
Trustee or the Holder of any Note from exercising all remedies otherwise
permitted by applicable law upon default under this Indenture, subject to the
rights, if any, under this Article Fourteen of the holders of Senior
Indebtedness in respect of cash, property or securities of the Company
received upon the exercise of any such remedy.
SECTION 1407. TRUSTEE TO EFFECTUATE SUBORDINATION.
Each Holder of a Note 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. If
upon any dissolution, winding up or reorganization of the Company, whether in
bankruptcy, insolvency, receivership proceedings or otherwise, the Trustee
does not file a claim in such proceedings prior to 30 days before the
expiration of the time to file such claim, the holders of Senior Indebtedness
or the Agents may file such a claim on behalf of the holders of the Notes.
SECTION 1408. NO WAIVER OF SUBORDINATION PROVISIONS.
(a) No right of any present or future holder of any Senior
Indebtedness to enforce subordination as herein provided shall at any time in
any way be prejudiced or impaired by any act or failure to act on the part of
the Company or by any act or failure to act, in good faith, by any such
holder, or by any non-compliance by the Company with the terms, provisions
and covenants of this Indenture, regardless of any knowledge thereof any such
holder may have or be otherwise charged with.
(b) Without in any way limiting the generality of Subsection (a)
of this Section, 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 Notes, without incurring responsibility to the Holders of the Notes
and without impairing or releasing the subordination provided in this Article
or the obligations hereunder of the Holders of the Notes to the holders of
Senior Indebtedness, do any one or more of the following: (1) change the
manner, place or terms of payment or extend the time of payment of, or renew
or alter, Senior Indebtedness or any instrument evidencing the same or any
agreement under which Senior Indebtedness is outstanding; (2) sell, exchange,
release or otherwise deal with any property pledged, mortgaged or otherwise
securing Senior Indebtedness; (3) release any Person liable in any manner for
the collection or payment of Senior Indebtedness; and (4) exercise or refrain
from exercising any rights against the Company or any other Person.
<PAGE>
109
SECTION 1409. NOTICE TO TRUSTEE.
(a) 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 Notes. 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
Notes, unless and until the Trustee shall have received written notice
thereof from the Company, the Agent or a holder of Senior Indebtedness or
from any trustee, fiduciary or agent 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 three 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 Note), 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 three Business Days prior to such date.
(b) Subject to the provisions of Section 601, the Trustee shall be
entitled to 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,
fiduciary or agent therefor) to establish that such notice has been given by
a holder of Senior Indebtedness (or a trustee, fiduciary or agent 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 1410. 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 Notes shall be entitled to 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
<PAGE>
110
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 Notes, for the
purpose of ascertaining the Persons entitled to participate in such payment
or distribution, the holders of Senior Indebtedness and other indebtedness of
the Company, the amount thereof or payable thereon, the amount or amounts
paid or distributed thereon and all other facts pertinent thereto or to this
Article.
SECTION 1411. RIGHTS OF TRUSTEE AS A 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
606.
SECTION 1412. 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 1411 shall not apply to the Company
or any Affiliate of the Company if it or such Affiliate acts as Paying Agent.
SECTION 1413. NO SUSPENSION OF REMEDIES.
Nothing contained in this Article shall limit the right of the
Trustee or the Holders of Notes to take any action to accelerate the maturity
of the Notes pursuant to Article Five or to pursue any rights or remedies
hereunder or under applicable law.
This 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 Indenture.
SECTION 1414. 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 the Trustee shall mistakenly, in the absence of gross negligence
or willful misconduct, pay over or distribute to Holders of Notes 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. With respect
<PAGE>
111
to the holders of Senior Indebtedness, the Trustee undertakes to perform or
to observe only such of its covenants or obligations as are specifically set
forth in this Article and no implied covenants or obligations with respect to
holders of Senior Indebtedness shall be read into this Indenture against the
Trustee.
This Indenture may be signed 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 Indenture.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture
to be duly executed, and the Company has caused its corporate seal to be
hereunto affixed and attested, all as of the day and year first above written.
FLEMING COMPANIES, INC.
[SEAL] By /s/ John M. Thompson
-------------------------------------
Name: John M. Thompson
Title: Vice President, Treasurer
Attest: /s/ David R. Almond
---------------------------------
Name: David R. Almond
Title: Secretary
MANUFACTURERS AND TRADERS TRUST COMPANY
By /s/ Russell T. Whitley
-------------------------------------
Name: Russell T. Whitley
Title: Assistant Vice President
ABCO MARKETS INC.
ABCO REALTY CORP.
FLEMING FOREIGN SALES CORPORATION
FLEMING INTERNATIONAL LTD.
FLEMING SUPERMARKETS OF FLORIDA, INC.
FLEMING TRANSPORTATION SERVICE, INC.
FLEMING WHOLESALE, INC.
GATEWAY INSURANCE AGENCY, INC.
LAS, INC.
PIGGLY WIGGLY COMPANY
PROGRESSIVE REALTY, INC.
RETAIL SUPERMARKETS, INC.
RFS MARKETING SERVICES, INC.
SCRIVNER TRANSPORTATION, INC.
SMARTRANS, INC.
UNIVERSITY FOODS, INC.
<PAGE>
Each, a Subsidiary Guarantor
By /s/ John M. Thompson
-------------------------------------
Name: John M. Thompson
Title: Vice President
Attest:
/s/ David R. Almond
- -------------------------------------
David R. Almond
Secretary
<PAGE>
EXHIBIT A
CERTIFICATE TO BE DELIVERED UPON REGISTRATION OF
EXCHANGE OR TRANSFER OF NOTES
Re: 10 1/2% Senior Subordinated Notes due 2004 of Fleming Companies, Inc.
This Certificate relates to $______ principal amount of Notes held in
*/ / global or */ / definitive form by ___________ (the "Transferor").
The Transferor*:
/ / has requested the Trustee by written order to deliver, in exchange for
its beneficial interest in the Global Note held by the Depositary, a Note or
Notes in definitive, registered form, in the authorized denominations in an
aggregate principal amount equal to its beneficial interest in such Global Note
(or the portion thereof indicated above); or
/ / has requested the Trustee by written order to exchange or register the
transfer of a Note or Notes.
In connection with any transfer of any of the Notes occurring prior to the
expiration of the period referred to in Rule 144(k) under the Securities Act of
1933, as amended (the "Securities Act"), after the later of the date of original
issuance of such Notes and the last date, if any, on which such Notes were owned
by the Company or any Affiliate of the Company, the undersigned confirms that
such Notes are being transferred in accordance with its terms:
CHECK ONE BOX BELOW:
(1) / / to the Company; or
(2) / / pursuant to an effective registration statement under the
Securities Act; or
(3) / / inside the United States to a "qualified institutional
buyer" (as defined in Rule 144A under the Securities Act)
that purchases for its own account or for the account of a
qualified institutional buyer to whom notice is given that
such transfer is being made in reliance on Rule 144A, in
each case pursuant to and in compliance with Rule 144A under
the Securities Act; or
- -----------------------
* Check applicable box.
<PAGE>
A-2
(4) / / outside the United states in an offshore transaction within
the meaning of Regulation S under the Securities Act in
compliance with Rule 904 under the Securities Act; or
(5) / / inside the United States to an institutional "accredited
investor" (as defined in Rule 501(a)(1), (2), (3) or (7) of
Regulation D under the Securities Act) that, prior to such
transfer, furnishes to the Trustee a signed letter
containing certain representations and agreements (the form
of which letter can be obtained from the Trustee) and an
opinion of counsel acceptable to the Company that such
transfer is in compliance with the restrictions set forth in
the legend on the Notes; or
(6) / / pursuant to another available exemption from registration
provided by Rule 144 under the Securities Act.
Unless one of the boxes is checked, the Trustee will refuse to register any of
the Notes in the name of any person other than the registered holder thereof;
provided, however, that if box (4), (5) or (6) is checked, the Trustee may
require, prior to registering any such transfer of the Notes, such legal
opinions, certifications and other information as the Company has reasonably
requested to confirm that such transfer is being made pursuant to an exemption
from, or in a transaction not subject to, the registration requirements of the
Securities Act, such as the exemption provided by Rule 144 under such Act.
Date: Your Name:
--------------------- --------------------------------------
(Print your name exactly as it
appears on the face of the Note)
Your Signature:
--------------------------------
(Sign exactly as your name
appears on the Note)
Social Security or Tax Identification No.:
------
Signature Guarantee**:
--------------------------
- -----------------------
** Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).
<PAGE>
A-3
TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing the Notes
for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act,
and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Dated:
------------------- -----------------------------------------------
NOTICE: To be executed by an executive officer
<PAGE>
EXHIBIT B
FORM OF NOTE GUARANTEE
For value received, the undersigned hereby irrevocably and
unconditionally guarantees, jointly and severally, on a senior subordinated
basis to each Holder and to the Trustee, on behalf of the Holders, (i) the due
and punctual payment of the principal of, premium, if any, interest and
Liquidated Damages, if any, on each Note, when and as the same shall become due
and payable, whether at Stated Maturity or on a redemption date or pursuant to a
Change of Control Purchase Offer or an Asset Sale Offer, and whether by
declaration of acceleration, call for redemption, purchase or otherwise, the due
and punctual payment of interest on the overdue principal of, premium, if any,
interest and Liquidated Damages, if any, on the Notes, to the extent lawful, and
the due and punctual performance of all other obligations of the Company to the
Holders or the Trustee all in accordance with the terms of such Note and the
Indenture and (ii) in the case of any extension of time of payment or renewal of
any Notes or any of such other obligations, that the same will be promptly paid
in full when due or performed in accordance with the terms of the extension or
renewal, at Stated Maturity or on a redemption date or pursuant to a Change of
Control Purchase Offer or an Asset Sale Offer, and whether by declaration of
acceleration, call for redemption, purchase or otherwise (the obligations in
clauses (i) and (ii) hereof being the "Guaranteed Obligations"). Capitalized
terms used but not defined shall have the meanings ascribed to them in the
Indenture dated as of July 25, 1997 among Fleming Companies, Inc., the
Subsidiary Guarantors named therein and Manufacturers and Traders Trust Company.
The Obligations of the Subsidiary Guarantors to the Holders of the
Notes and to the Trustee pursuant to this Note Guarantee and the Indenture are
expressly set forth in Article Twelve of the Indenture, and reference is hereby
made to such Indenture for the precise terms of this Note Guarantee. The terms
of Article Twelve of the Indenture are incorporated herein by reference.
In certain circumstances more fully described in the Indenture, any
Subsidiary Guarantor may be released from its liability under this Note
Guarantee, and any such release will be effective whether or not noted herein.
This Note Guarantee shall not be valid or obligatory for any purpose
until the certificate of authentication on the Note upon which this Note
Guarantee is noted shall have been executed by the Trustee under the Indenture
by the manual signature of one of its authorized officers.
THIS GUARANTEE SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
<PAGE>
IN WITNESS WHEREOF, each Subsidiary Guarantor has caused its Note
Guarantee to be duly executed.
Date:
ABCO MARKETS INC.
ABCO REALTY CORP.
FLEMING FOREIGN SALES CORPORATION
FLEMING INTERNATIONAL LTD.
FLEMING SUPERMARKETS OF FLORIDA, INC.
FLEMING TRANSPORTATION SERVICE, INC.
FLEMING WHOLESALE, INC.
GATEWAY INSURANCE AGENCY, INC.
LAS, INC.
PIGGLY WIGGLY COMPANY
PROGRESSIVE REALTY, INC.
RETAIL SUPERMARKETS, INC.
RFS MARKETING SERVICES, INC.
SCRIVNER TRANSPORTATION, INC.
SMARTRANS, INC.
UNIVERSITY FOODS, INC.
Attest: By:
----------------------------------
Name:
Title:
- ----------------------------
Secretary
<PAGE>
EXHIBIT C
FORM OF INSTITUTIONAL ACCREDITED INVESTOR LETTER
In connection with our proposed purchase of $_______ aggregate
principal amount of 10 1/2% Senior Subordinated Notes due 2004 and/or 10 5/8%
Senior Subordinated Notes due 2007 (the "Notes") of FLEMING COMPANIES, INC.,
an Oklahoma corporation (the "Issuer"), we confirm that:
1. We understand that the Notes have not been registered under the
Securities Act of 1933, as amended (the "Securities Act"), and may not be sold
except as permitted in the following sentence. We agree on our own behalf and
on behalf of any investor account for which we are purchasing Notes to offer,
sell or otherwise transfer such Notes prior to the date which is two years after
the later of the date of original issue and the last date on which the Issuer or
any affiliate of the Issuer was the owner of such Notes (or any predecessor
thereto) (the "Resale Restriction Termination Date") only (a) to the Issuer, (b)
pursuant to a registration statement which has been declared effective under the
Securities Act, (c) for so long as the Notes are eligible for resale pursuant to
Rule 144A under the Securities Act, to a person we reasonably believe is a
qualified institutional buyer under Rule 144A (a "QIB") that purchases for its
own account or for the account of a QIB and to whom notice is given that the
transfer is being made in reliance on Rule 144A, (d) pursuant to offers and
sales to non-U.S. persons that occur outside the United States within the
meaning of Regulation S under the Securities Act, (e) to an institutional
"accredited investor" within the meaning of subparagraph (a)(1), (2), (3) or (7)
of Rule 501 under the Securities Act that is acquiring the Notes for investment
purposes and not with a view to, or for offer or sale in connection with, any
distribution in violation of the Securities Act, or (f) pursuant to any other
available exemption from the registration requirements of the Securities Act,
subject in each of the foregoing cases to any requirement of law that the
disposition of our property or the property of such investor account or accounts
be at all times within our or their control and to compliance with any
applicable state securities laws. The foregoing restrictions on resale will not
apply subsequent to the Resale Restriction Termination Date. If any resale or
other transfer of the Notes is proposed to be made pursuant to clause (e) above
prior to the Resale Restriction Termination Date, the transferor shall deliver a
letter from the transferee substantially in a form of this letter to the
Trustee, which shall provide, among other things, that the transferee is an
institutional "accredited investor" within the meaning of subparagraph (a)(1),
(2), (3) or (7) of Rule 501 under the Securities Act and that it is acquiring
such Notes for investment purposes and not for distribution in violation of the
Securities Act. Each purchaser acknowledges that the Issuer and the Trustee
reserve the
<PAGE>
C-2
right prior to any offer, sale or other transfer prior to the Resale
Restriction Termination Date of the Notes pursuant to clauses (d), (e) and (f)
above to require the delivery of an opinion of counsel, certifications and/or
other information satisfactory to the Issuer and the Trustee.
2. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) purchasing
for our own account or for the account of such an institutional "accredited
investor", and we are acquiring the Notes for investment purposes and not with a
view to, or for offer or sale in connection with, any distribution in violation
of the Securities Act and we have such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of our
investment in the Notes, and we and any accounts for which we are acting are
each able to bear the economic risk of our or its investment.
3. We are acquiring the Notes purchased by us for our own account or
for one or more accounts as to each of which we exercise sole investment
discretion.
4. You are entitled to rely upon this letter and you are irrevocably
authorized to produce this letter or a copy hereof to any interested party in
any administrative or legal proceeding or official inquiry with respect to the
matters covered hereby.
Very truly yours,
---------------------------------
By: (Name of Purchaser)
Date:
Upon transfer the Notes would be registered in the name of the new
beneficial owner as follows:
Name:
---------------------------
Address:
------------------------
Taxpayer ID Number:
-------------
<PAGE>
EXECUTION COPY
===============================================================================
FLEMING COMPANIES, INC.
SENIOR SUBORDINATED NOTES
REGISTRATION RIGHTS AGREEMENT
JULY 25, 1997
BEAR, STEARNS & CO. INC.
CHASE SECURITIES INC.
BANCAMERICA SECURITIES, INC.
SOCIETE GENERALE SECURITIES CORPORATION
===============================================================================
<PAGE>
2
This Registration Rights Agreement (this "AGREEMENT") is made and
entered into as of July __, 1997, by and among Fleming Companies, Inc. (the
"COMPANY"), an Oklahoma corporation, the Subsidiary Guarantors (as defined
below), Bear, Stearns & Co. Inc., Chase Securities Inc., BancAmerica Securities,
Inc. and Societe Generale Securities Corporation (the "INITIAL PURCHASERS").
This Agreement is made pursuant to the Purchase Agreement, dated July
18, 1997 (the "PURCHASE AGREEMENT"), by and among the Company, the Subsidiary
Guarantors and the Initial Purchasers, which provides for the purchase by the
Initial Purchasers of the Company's 10 1/2% Senior Subordinated Notes due 2004
and 10 5/8% Senior Subordinated Notes due 2007 (collectively the "NOTES"). In
order to induce the Initial Purchasers to purchase the Notes, the Company has
agreed to provide the registration rights set forth in this Agreement. The
execution and delivery of this Agreement is a condition to the obligations of
the Initial Purchasers set forth in Section 5 of the Purchase Agreement.
The parties hereby agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall have
the following meanings:
ACT: The Securities Act of 1933, as amended.
ADVICE: As defined in Section 6(c) hereof.
BROKER-DEALER: Any broker or dealer registered under the Exchange
Act.
CERTIFICATED NOTES: As defined in the Indentures.
CLOSING DATE: The date of this Agreement.
COMMISSION: The Securities and Exchange Commission.
CONSUMMATE: A Registered Exchange Offer shall be deemed "Consummated"
for purposes of this Agreement upon the occurrence of (i) the filing and
effectiveness under the Act of the Exchange Offer Registration Statement
relating to the Series B Senior Subordinated Notes, and the Note Guarantees
thereof to be issued in the Exchange Offer, (ii) the maintenance of such
Registration Statement continuously effective and the keeping of the Exchange
Offer open for a period not less than the minimum period required pursuant to
Section 3(b) hereof, and (iii) the delivery by the Company to the Registrar
under the Indenture of Series B Senior Subordinated Notes, and the Note
Guarantees thereof in the same aggregate principal amount as the aggregate
<PAGE>
3
principal amount of Notes that were tendered by Holders thereof pursuant to the
Exchange Offer.
DAMAGES PAYMENT DATE: With respect to the Notes, each Interest
Payment Date.
EFFECTIVENESS TARGET DATE: As defined in Section 5.
EXCHANGE ACT: The Securities Exchange Act of 1934, as amended.
EXCHANGE OFFER: The registration by the Company under the Act of the
Series B Senior Subordinated Notes, and the Note Guarantees thereof, pursuant to
a Registration Statement in which the Company and the Subsidiary Guarantors
shall offer the Holders of all outstanding Transfer Restricted Securities the
opportunity to exchange all such outstanding Transfer Restricted Securities held
by such Holders for Series B Senior Subordinated Notes in an aggregate principal
amount equal to the aggregate principal amount of the Transfer Restricted
Securities tendered in such exchange offer by such Holders.
EXCHANGE OFFER REGISTRATION STATEMENT: The Registration Statement
relating to the Exchange Offer, including the related Prospectus.
EXEMPT RESALES: The transactions in which the Initial Purchasers
propose to sell the Notes to certain "qualified institutional buyers," as such
term is defined in Rule 144A under the Act, and to non-U.S. persons in offshore
transactions in reliance on Regulation S under the Act.
GLOBAL NOTE HOLDER: As defined in the Indentures.
HOLDERS: As defined in Section 2(b) hereof.
INDENTURES: The Indentures, dated as of July 25, 1997, among the
Company, the Subsidiary Guarantors and Manufacturers and Traders Trust Company,
as trustee (the "TRUSTEES"), pursuant to which the Senior Subordinated Notes are
to be issued, as such Indentures are amended or supplemented from time to time
in accordance with the terms thereof.
INITIAL PURCHASERS: As defined in the preamble hereto.
INTEREST PAYMENT DATE: As defined in the Indentures and the Senior
Subordinated Notes.
LIQUIDATED DAMAGES: As defined in Section 5 hereof.
NASD: National Association of Securities Dealers, Inc.
<PAGE>
4
NOTE GUARANTEES: The joint and several guarantee by each of the
Subsidiary Guarantors, of the obligations of the Company pursuant to the
Indentures.
NOTES: The Company's 10 1/2% Senior Subordinated Notes due 2004 and
the 10 5/8% Senior Subordinated Notes due 2007 to be sold to the Initial
Purchasers pursuant to the Purchase Agreement and under the Indentures.
PERSON: An individual, partnership, corporation, trust or
unincorporated organization, or a government or agency or political subdivision
thereof.
PROSPECTUS: The prospectus included in a Registration Statement, as
amended or supplemented by any prospectus supplement and by all other amendments
thereto, including post-effective amendments, and all material incorporated by
reference into such Prospectus.
RECORD HOLDER: With respect to any Damages Payment Date relating to
Senior Subordinated Notes, each Person who is a Holder of Senior Subordinated
Notes on the record date with respect to the Interest Payment Date on which such
Damages Payment Date shall occur.
REGISTRATION DEFAULT: As defined in Section 5 hereof.
REGISTRATION STATEMENT: Any registration statement of the Company
relating to (a) an offering of Series B Senior Subordinated Notes, and the Note
Guarantees thereof, pursuant to the Exchange Offer or (b) the registration for
resale of Transfer Restricted Securities pursuant to the Shelf Registration
Statement, which is filed pursuant to the provisions of this Agreement, in each
case, including the Prospectus included therein, all amendments and supplements
thereto (including post-effective amendments) and all exhibits and material
incorporated by reference therein.
SENIOR SUBORDINATED NOTES: The Notes and the Series B Senior
Subordinated Notes including the Note Guarantees thereof.
SERIES B SENIOR SUBORDINATED NOTES: The Company's 10 1/2% Series B
Senior Subordinated Notes due 2004 and 10 5/8% Series B Senior Subordinated
Notes due 2007 to be issued pursuant to the Indentures in the Exchange Offer.
SHELF FILING DEADLINE: As defined in Section 4 hereof.
SHELF REGISTRATION STATEMENT: As defined in Section 4 hereof.
SUBSIDIARY GUARANTOR: Each Wholly Owned Restricted Subsidiary of the
Company (as defined in the Indentures) required to execute a Note Guarantee on
the Notes under the
<PAGE>
5
Indentures. References in this Agreement to the Company shall include any
Subsidiary Guarantor, unless the context requires otherwise.
TIA: The Trust Indenture Act of 1939 (15 U.S.C. Section 77aaa-77bbbb)
as in effect on the date of the Indentures.
TRANSFER RESTRICTED SECURITIES: Each Senior Subordinated Note, until
the earliest to occur of (a) the date on which such Senior Subordinated Note is
exchanged in the Exchange Offer and entitled to be resold to the public by the
Holder thereof without complying with the prospectus delivery requirements of
the Act, (b) the date on which such Senior Subordinated Note has been
effectively registered under the Act and disposed of in accordance with a Shelf
Registration Statement and (c) the date on which such Senior Subordinated Note
is distributed to the public pursuant to Rule 144 under the Act or by a
Broker-Dealer pursuant to the "Plan of Distribution" contemplated by the
Exchange Offer Registration Statement (including delivery of the Prospectus
contained therein).
UNDERWRITTEN REGISTRATION or UNDERWRITTEN OFFERING: A registration in
which securities of the Company are sold to an underwriter for reoffering to the
public.
SECTION 2. SECURITIES SUBJECT TO THIS AGREEMENT
(a) TRANSFER RESTRICTED SECURITIES. The securities entitled to the
benefits of this Agreement are the Transfer Restricted Securities.
(b) HOLDERS OF TRANSFER RESTRICTED SECURITIES. A Person is deemed to
be a holder of Transfer Restricted Securities (each, a "HOLDER") whenever such
Person owns Transfer Restricted Securities.
SECTION 3. REGISTERED EXCHANGE OFFER
(a) Unless the Exchange Offer shall not be permissible under
applicable law or Commission policy (after the procedures set forth in Section
6(a) below have been complied with), the Company and the Subsidiary Guarantors
shall (i) cause to be filed with the Commission as soon as practicable after the
Closing Date, but in no event later than 60 days after the Closing Date, a
Registration Statement under the Act relating to the Series B Senior
Subordinated Notes and the Exchange Offer, (ii) use their best efforts to cause
such Registration Statement to become effective at the earliest possible time,
but in no event later than 150 days after the Closing Date, (iii) in connection
with the foregoing, file (A) all pre-effective amendments to such Registration
Statement as may be necessary in order to cause such Registration Statement to
become effective, (B) if applicable, a post-effective amendment to such
<PAGE>
6
Registration Statement and (C) cause all necessary filings, it any, in
connection with the registration and qualification of the Series B Senior
Subordinated Notes to be made under the Blue Sky laws of such jurisdictions as
are necessary to permit Consummation of the Exchange Offer, except as would
subject it to service of process in suits or taxation, in each case, other than
as to matters and transactions relating to the Registration Statement, Exchange
Offer or Exempt Resales, in any jurisdiction where it is not now so subject and
(iv) upon the effectiveness of such Registration Statement, commence the
Exchange Offer. The Exchange Offer Registration Statement shall be on the
appropriate form permitting registration of the Series B Senior Subordinated
Notes to be offered in exchange for the Transfer Restricted Securities and to
permit resales of Series B Senior Subordinated Notes held by Broker-Dealers as
contemplated by Section 3(c) below.
(b) The Company and the Subsidiary Guarantors shall cause the
Exchange Offer Registration Statement to be effective continuously and shall
keep the Exchange Offer open for a period of not less than the minimum period
required under applicable federal and state securities laws to Consummate the
Exchange Offer; PROVIDED, HOWEVER, that in no event shall such period be less
than 20 business days. The Company shall cause the Exchange Offer to comply
with all applicable federal and state securities laws. Without the consent of
the Initial Purchasers, no securities other than the Series B Senior
Subordinated Notes shall be included in the Exchange Offer Registration
Statement. The Company and the Subsidiary Guarantors shall use their best
efforts to cause the Exchange Offer to be Consummated on the earliest
practicable date after the Exchange Offer Registration Statement has become
effective, but in no event later than the earlier of 180 days after the Closing
Date or 45 days after the Exchange Offer Registration Statement has become
effective.
(c) The Company shall indicate in a "Plan of Distribution" section
contained in the Prospectus contained in the Exchange Offer Registration
Statement that any Broker-Dealer who holds Notes that are Transfer Restricted
Securities and that were acquired for its own account as a result of market-
making activities or other trading activities (other than Transfer Restricted
Securities acquired directly from the Company or an affiliate of the Company),
may exchange such Notes pursuant to the Exchange Offer; however, such Broker-
Dealer may be deemed to be an "underwriter" within the meaning of the Act and
must, therefore, deliver a prospectus meeting the requirements of the Act in
connection with any resales of the Series B Senior Subordinated Notes received
by such Broker-Dealer in the Exchange Offer, which prospectus delivery
requirement may be satisfied by the delivery by such Broker-Dealer of the
Prospectus contained in the Exchange Offer Registration Statement. Such "Plan
of Distribution" section shall also contain all other information with respect
to such resales by Broker-Dealers that the Commission may require in order to
permit such resales pursuant thereto, but such "Plan of Distribution" shall not
name any such Broker-Dealer or disclose the amount of Series B Senior
Subordinated Notes held by any such Broker-Dealer except to the extent required
by the Commission as a result of a change in policy after the date of this
Agreement.
<PAGE>
7
Any Broker-Dealer subject to a prospectus delivery requirement as
described in the immediately preceding paragraph must certify, on or before the
date the Exchange Offer is Consummated, to the Initial Purchasers and the
Company in writing that it is such a Broker-Dealer. In connection with any of
the Company's obligations herein to such Broker-Dealers, the Company shall be
obliged to deal with only one entity representing the Broker-Dealers, which
shall be Bear, Stearns & Co. Inc. The Company and the Subsidiary Guarantors
shall use their best efforts to keep the Exchange Offer Registration Statement
continuously effective, supplemented and amended as required by the provisions
of Section 6(c) below to the extent necessary to ensure that it is available for
resales of Series B Senior Subordinated Notes acquired by Broker-Dealers for
their own accounts as a result of market-making activities or other trading
activities, and to ensure that it conforms with the requirements of this
Agreement, the Act and the policies, rules and regulations of the Commission as
announced from time to time, for a period of 180 days from the date on which the
Exchange Offer is Consummated.
The Company shall provide sufficient copies of the latest version of
such Prospectus to Broker-Dealers promptly upon request at any time during such
180 day period in order to facilitate such resales. Any Holder who is a Broker-
Dealer using the Exchange Offer Prospectus for resales shall promptly notify the
Company when it has disposed of all its Series B Senior Subordinated Notes
subject to a prospectus delivery requirement.
SECTION 4. SHELF REGISTRATION
(a) SHELF REGISTRATION. If (i) the Company and the Subsidiary
Guarantors are not required to file an Exchange Offer Registration Statement or
to Consummate the Exchange Offer because the Exchange Offer is not permitted by
applicable law or Commission policy (after the procedures set forth in Section
6(a) below have been complied with) or (ii) if any Initial Purchaser holding
Transfer Restricted Securities shall notify the Company within 20 business days
after the Consummation of the Exchange Offer that such Initial Purchaser is
prohibited by applicable law or Commission policy from participating in the
Exchange Offer, or (iii) the Exchange Offer is not for any other reason
consummated within 180 days of the date of the Indentures, then the Company and
the Subsidiary Guarantors shall:
(x) cause to be filed a shelf registration statement pursuant to
Rule 415 under the Act, which may be an amendment to the Exchange Offer
Registration Statement (in either event, the "SHELF REGISTRATION
STATEMENT") on or prior to the earliest to occur of (1) the 60th day after
the date on which the Company and the Subsidiary Guarantors determine that
they are not required to file the Exchange Offer Registration Statement or
to Consummate the Exchange Offer, (2) the 60th day after the date on which
the Company receives notice from an Initial Purchaser as contemplated by
clause (ii) above, and (3) the 180th day after the Closing Date (such
earliest date being the "SHELF FILING DEADLINE"), which Shelf Registration
Statement shall provide for resales of
<PAGE>
8
all Transfer Restricted Securities the Holders of which shall have provided
the information required pursuant to Section 4(b) hereof; and
(y) use their best efforts to cause such Shelf Registration
Statement to be declared effective by the Commission on or before the 90th
day after the Shelf Filing Deadline.
The Company and the Subsidiary Guarantors shall use their best efforts to keep
such Shelf Registration Statement continuously effective, supplemented and
amended as required by the provisions of Sections 6(b) and (c) hereof to the
extent necessary to ensure that it is available for resales of Senior
Subordinated Notes by the Holders of Transfer Restricted Securities entitled to
the benefit of this Section 4(a), and to ensure that it conforms with the
requirements of this Agreement, the Act and the policies, rules and regulations
of the Commission as announced from time to time, for a period of two years
following the date of the Indentures or such shorter period that will terminate
when all securities covered by the Shelf Registration Statement have been sold
pursuant to the Shelf Registration Statement.
(b) PROVISION BY HOLDERS OF CERTAIN INFORMATION IN CONNECTION WITH
THE SHELF REGISTRATION STATEMENT. No Holder of Transfer Restricted Securities
may include any of its Transfer Restricted Securities in any Shelf Registration
Statement pursuant to this Agreement unless and until such Holder furnishes to
the Company in writing, within 20 business days after receipt of a request
therefor, such information as the Company may reasonably request for use in
connection with any Shelf Registration Statement or Prospectus or preliminary
Prospectus included therein. No Holder of Transfer Restricted Securities shall
be entitled to Liquidated Damages pursuant to Section 5 hereof unless such
Holder shall have timely provided all such reasonably requested information.
Each Holder as to which any Shelf Registration Statement is being effected
agrees to furnish promptly to the Company all information required to be
disclosed in order to make the information previously furnished to the Company
by such Holder not materially misleading. Any Holder using the Shelf
Registration Statement Prospectus for resales shall promptly notify the Company
when it has disposed of all its Transfer Restricted Securities subject to such
Registration Statement.
SECTION 5. LIQUIDATED DAMAGES
(a) If (i) any of the Registration Statements required by this
Agreement is not filed with the Commission on or prior to the date specified for
such filing in this Agreement, (ii) any of such Registration Statements has not
been declared effective by the Commission on or prior to the date specified for
such effectiveness in this Agreement (the "Effectiveness Target Date"), (iii)
the Exchange Offer has not been Consummated within the earlier of 180 days after
the Closing Date or 45 business days after the Effectiveness Target Date with
respect to the Exchange Offer Registration Statement or (iv) any Registration
Statement required by this
<PAGE>
9
Agreement is filed and declared effective but shall thereafter cease to be
effective or fail to be usable for its intended purpose without being
succeeded immediately by a post-effective amendment to such Registration
Statement that cures such failure and that is itself immediately declared
effective (each such event referred to in clauses (i) through (iv), a
"Registration Default"), liquidated damages payable by the Company
("Liquidated Damages") will accrue on the Notes from and including the day
after such Registration Default occurs but excluding the date such Registration
Default is cured. In each case, such Liquidated Damages will be payable in
cash semiannually in arrears, with the first semiannual payment due on the
Damages Payment Date following the date from which Liquidated Damages begin
to accrue, and will accrue, under each circumstance set forth above at a rate
per annum equal to an additional one-quarter of one percent (0.25%) of the
principal amount of the Notes (or the Series B Senior Subordinated Notes)
upon the occurrence of each such circumstance, which Liquidated Damages will
increase by one-quarter of one percent (0.25%) for each 90-day period that
such Liquidated Damages continue to accrue under any circumstance, up to an
aggregate maximum equal to one percent (1.00%) per annum.
(b) Upon the filing of the Exchange Offer Registration Statement, the
effectiveness of the Exchange Offer Registration Statement, or the Consummation
of the Exchange Offer, as the case may be, the accrual of Liquidated Damages
shall cease. Upon the effectiveness of a Shelf Registration Statement, the
accrual of Liquidated Damages shall cease, from and as of the date of such
effectiveness. Notwithstanding the foregoing, the Company (i) shall not be
required to amend or supplement the Shelf Registration Statement, any related
prospectus or any document incorporated therein by reference and (ii) may
suspend the effectiveness of any such Shelf Registration Statement in the event
that, and for a period not to exceed, for so long as this Agreement is in
effect, an aggregate of 90 days in any one calendar year if any event shall
occur as a result of which it shall be necessary, in the good faith
determination of the Company's board of directors, to amend the Shelf
Registration Statement or amend or supplement any prospectus or prospectus
supplement thereunder in order that each such document not include any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein not misleading in light of the circumstances under which
they were made; provided that any such suspension shall not relieve the Company
from its obligation to pay Liquidated Damages.
(c) The Company shall notify the Trustee within three business days
after each and every date on which an event occurs in respect of which
Liquidated Damages are required to be paid (an "EVENT DATE"). All Liquidated
Damages shall be paid by the Company on each Damages Payment Date to the Global
Note Holder by wire transfer of immediately available funds or by federal funds
check and to Holders of Certificated Securities by wire transfer to the accounts
specified by them or by mailing checks to their registered addresses if no such
accounts have been specified. Each obligation to pay Liquidated Damages shall
be deemed to accrue from and including the day following the applicable Event
Date.
<PAGE>
10
All obligations of the Company and the Subsidiary Guarantors set forth
in the preceding paragraph that are outstanding with respect to any Transfer
Restricted Security at the time it ceases to be a Transfer Restricted Security
shall survive until such time as all such obligations with respect to such
Transfer Restricted Security shall have been satisfied in full.
SECTION 6. REGISTRATION PROCEDURES
(a) EXCHANGE OFFER REGISTRATION STATEMENT. In connection with the
Exchange Offer, the Company and the Subsidiary Guarantors shall comply with all
of the provisions of Section 6(c) below, shall use their best efforts to effect
such exchange, and shall comply with all of the following provisions:
(i) If in the reasonable opinion of counsel to the Company there
is a question as to whether the Exchange Offer is permitted by applicable
law, the Company hereby agrees, to the extent reasonably practicable, to
seek a no-action letter or other favorable decision from the Commission
allowing the Company and the Subsidiary Guarantors to Consummate an
Exchange Offer for the Notes. The Company and the Subsidiary Guarantors
hereby agree to pursue the issuance of such a decision to the Commission
staff level but shall not be required to take commercially unreasonable
action to effect a change of Commission policy. The Company and the
Subsidiary Guarantors hereby agree, however, to (A) participate in
telephonic conferences with the Commission staff, (B) deliver to the
Commission staff an analysis prepared by counsel to the Company setting
forth the legal bases, if any, upon which such counsel has concluded that
such an Exchange Offer should be permitted and (C) diligently pursue a
resolution (which need not be favorable) by the Commission staff of such
submission.
(ii) As a condition to its participation in the Exchange Offer
pursuant to the terms of this Agreement, each Holder of Transfer Restricted
Securities shall furnish, upon the request of the Company, prior to the
Consummation thereof, a written representation to the Company (which may be
contained in the letter of transmittal contemplated by the Exchange Offer
Registration Statement) to the effect that (A) it is not an affiliate,
directly or indirectly, of the Company, (B) it is not engaged in, and does
not intend to engage in, and has no arrangement or understanding with any
person to participate in, a distribution of the Series B Senior
Subordinated Notes to be issued in the Exchange Offer, (C) it is acquiring
the Series B Senior Subordinated Notes in its ordinary course of business
and (D) it is not acting on behalf of any Person who could not make the
foregoing representations. In addition, all such Holders of Transfer
Restricted Securities shall otherwise cooperate in the Company's
preparations for the Exchange Offer. As a further condition to
participation in the Exchange Offer, each Holder shall also acknowledge and
agree that any Holder using the Exchange Offer to participate in a
distribution of the securities to be acquired in the Exchange Offer (1)
<PAGE>
11
could not under Commission policy as in effect on the date of this
Agreement rely on the position of the Commission enunciated in MORGAN
STANLEY AND CO., INC. (available June 5, 1991) and EXXON CAPITAL HOLDINGS
CORPORATION (available May 13, 1988), as interpreted in the Commission's
letter to SHEARMAN & STERLING (available July 2, 1993), and similar no-
action letters (including, if applicable, any no-action letter obtained
pursuant to clause (i) above), and (2) must comply with the registration
and prospectus delivery requirements of the Act in connection with a
secondary resale transaction and that such a secondary resale transaction
should be covered by an effective registration statement containing the
selling security holder information required by Item 507 or 508, as
applicable, of Regulation S-K if the resales are of Series B Senior
Subordinated Notes obtained by such Holder in exchange for Notes acquired
by such Holder directly from the Company.
(iii) Prior to effectiveness of the Exchange Offer
Registration Statement, the Company and the Subsidiary Guarantors shall
provide a supplemental letter to the Commission (A) stating that the
Company and the Subsidiary Guarantors are registering the Exchange Offer in
reliance on the position of the Commission enunciated in EXXON CAPITAL
HOLDINGS CORPORATION (available May 13, 1988), MORGAN STANLEY AND CO., INC.
(available June 5, 1991) and, if applicable, any no-action letter obtained
pursuant to clause (i) above and (B) including a representation that
neither the Company, any Subsidiary Guarantor, nor any of their respective
affiliates have entered into any arrangement or understanding with any
Person to distribute the Series B Senior Subordinated Notes to be received
in the Exchange Offer and that, to the best of the Company and Subsidiary
Guarantors' information and belief, each Holder participating in the
Exchange Offer is acquiring the Series B Senior Subordinated Notes in its
ordinary course of business and has no arrangement or understanding with
any Person to participate in the distribution of the Series B Senior
Subordinated Notes received in the Exchange Offer.
(b) SHELF REGISTRATION STATEMENT. In connection with the Shelf
Registration Statement, the Company and the Subsidiary Guarantors shall comply
with all the provisions of Section 6(c) below and shall use their best efforts
to effect such registration to permit the sale of the Transfer Restricted
Securities being sold in accordance with the intended method or methods of
distribution thereof (as indicated in the information furnished to the Company
pursuant to Section 4(b) hereof), and pursuant thereto the Company and the
Subsidiary Guarantors will prepare and file with the Commission a Shelf
Registration Statement relating to the Registration on any appropriate form
under the Act, which form shall be available for the sale of the Transfer
Restricted Securities in accordance with the intended method or methods of
distribution thereof.
(c) GENERAL PROVISIONS. In connection with any Registration
Statement and any related Prospectus required by this Agreement to permit the
sale or resale of Transfer Restricted
<PAGE>
12
Securities (including, without limitation, any Registration Statement and the
related Prospectus required to permit resales of Senior Subordinated Notes by
Broker-Dealers), the Company and the Subsidiary Guarantors shall:
(i) prepare and file with the Commission a Registration
Statement or Registration Statements as prescribed in Sections 3 and 4
within the relevant time periods specified in Sections 3 or 4, as the case
may be, on the appropriate form under the Act, which form (A) shall be
selected by the Company, (B) shall, in the case of a Shelf Registration, be
available for the sale of the Transfer Restricted Securities by the selling
Holders and (C) shall comply as to form in all material respects with the
requirements of the applicable form and include or incorporate by reference
all financial statements required by the Commission to be filed therewith;
(ii) use their best efforts to keep such Registration Statement
continuously effective and provide all requisite financial statements for
the period specified in Section 3 or 4 of this Agreement, as applicable;
upon the occurrence of any event that would cause any such Registration
Statement or the Prospectus contained therein (A) to contain a material
misstatement or omission or (B) not to be effective and usable for resale
of Transfer Restricted Securities during the period required by this
Agreement, the Company and the Subsidiary Guarantors shall promptly take
steps to correct any such misstatement or omission and cause such
Registration Statement and the related Prospectus to become usable for
their intended purpose(s) as soon as practicable thereafter;
(iii) prepare and file with the Commission such amendments
and post-effective amendments to the Registration Statement as may be
necessary to keep the Registration Statement effective for the applicable
period set forth in Section 3 or 4 hereof, as applicable, or such shorter
period as will terminate when all Transfer Restricted Securities covered by
such Registration Statement have been sold; cause the Prospectus to be
supplemented by any required Prospectus supplement, and to file such
Prospectus supplement pursuant to Rule 424 under the Act, and to comply
fully with the applicable provisions of Rules 424 under the Act in a timely
manner; and comply with the provisions of the Act with respect to the
disposition of all securities covered by such Registration Statement during
the applicable period in accordance with the intended method or methods of
distribution by the sellers thereof set forth in such Registration
Statement or supplement to the Prospectus;
(iv) in the case of a Shelf Registration Statement, advise the
underwriter(s), if any, and selling Holders promptly and, if requested by
such Persons, to confirm such advice in writing, (A) when the Prospectus or
any Prospectus supplement or post-effective amendment has been filed, and,
with respect to any Registration Statement or any post-effective amendment
thereto, when the same has become effective,
<PAGE>
13
(B) of any request by the Commission for amendments to the Registration
Statement or amendments or supplements to the Prospectus or for additional
information relating thereto, (C) of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration Statement
under the Act or of the suspension by any state securities commission or
other regulatory authority of the qualification of the Transfer Restricted
Securities for offering or sale in any jurisdiction, or the initiation of
any proceeding for any of the preceding purposes, and (D) of the existence
of any fact or the happening of any event that makes any statement of a
material fact made in the Registration Statement, the Prospectus, any
amendment or supplement thereto, or any document incorporated by reference
therein untrue, or that requires the making of any additions to or changes
in the Registration Statement or the Prospectus in order to make the
statements therein not misleading. If at any time the Commission shall
issue any stop order suspending the effectiveness of the Registration
Statement, or any state securities commission or other regulatory authority
shall issue an order suspending the qualification or exemption from
qualification of the Transfer Restricted Securities under state securities
or Blue Sky laws, each of the Company and the Subsidiary Guarantors shall
use its best efforts to obtain the withdrawal or lifting of such order at
the earliest possible time;
(v) in the case of a Shelf Registration Statement, furnish to each of
the selling Holders covered by any Registration Statement or Prospectus and
each of the underwriter(s) in connection with such sale, if any, before
filing with the Commission, copies of any Registration Statement or any
Prospectus included therein or any amendments or supplements to any such
Registration Statement or Prospectus, which documents will be subject to
the review of such Holders and underwriter(s) in connection with such sale,
if any, for a period of at least five business days, and the Company and
the Subsidiary Guarantors will not file any such Registration Statement or
Prospectus or any amendment or supplement to any such Registration
Statement or Prospectus to which a selling Holder of Transfer Restricted
Securities covered by such Registration Statement or the underwriter(s) in
connection with such sale, if any, shall reasonably object within five
business days after the receipt thereof. A selling Holder or underwriter,
if any, shall be deemed to have reasonably objected to such filing if such
Registration Statement, amendment, Prospectus or supplement, as applicable,
as proposed to be filed, contains a material misstatement or omission;
(vi) in the case of a Shelf Registration Statement, promptly prior to
the filing of any document that is to be incorporated by reference into a
Registration Statement or Prospectus, if practicable, provide copies of
such document to the selling Holders covered by such Registration Statement
and to the underwriter(s) in connection with such sale, if any, and make
the Company and the Subsidiary Guarantors' representatives available for
discussion of such document and other customary due diligence matters on
reasonable prior notice;
<PAGE>
14
(vii) make available at reasonable times, in connection with the
performance of customary business, legal, financial and accounting due
diligence, for inspection by the selling Holders, any underwriter
participating in any disposition pursuant to such Registration Statement,
and any attorney or accountant retained by such selling Holders or any of
the underwriter(s), financial and other records, pertinent corporate
documents and properties of the Company and the Subsidiary Guarantors and
cause the Company and the Subsidiary Guarantors' officers, directors and
employees, as applicable, to supply all information reasonably requested by
any such Holder, underwriter, attorney or accountant in connection with
such Registration Statement subsequent to the filing thereof and prior to
its effectiveness;
(viii) in the case of a Shelf Registration Statement, if requested
by any selling Holders covered by such Registration Statement or the
underwriter(s) in connection with such sale, if any, promptly incorporate
in any Registration Statement or Prospectus, pursuant to a supplement or
post-effective amendment if necessary, such information as such selling
Holders and underwriter(s), if any, may reasonably request to have included
therein, including, without limitation, information relating to the "Plan
of Distribution" of the Transfer Restricted Securities, information with
respect to the principal amount of Transfer Restricted Securities being
sold to such underwriter(s), the purchase price being paid therefor and any
other terms of the offering of the Transfer Restricted Securities to be
sold in such offering; and make all required filings of such Prospectus
supplement or post-effective amendment as soon as practicable after the
Company is notified of the matters to be incorporated in such Prospectus
supplement or post-effective amendment;
(ix) cause the Transfer Restricted Securities covered by the
Registration Statement to be rated with the appropriate rating agencies, if
so requested by the Holders of a majority in aggregate principal amount of
Senior Subordinated Notes covered thereby or the underwriters), if any,
unless the Transfer-Restricted Securities are already so rated:
(x) furnish, upon request, to each selling Holder covered by such
Registration Statement, without charge, at least one copy of the
Registration Statement, as first filed with the Commission, and of each
amendment thereto, including all documents incorporated by reference
therein and all exhibits (including exhibits incorporated therein by
reference);
(xi) deliver to each selling Holder and to each of the
underwriter(s), if any, without charge, as many copies of the Prospectus
(including each preliminary prospectus) and any amendment or supplement
thereto as such Persons reasonably may request; the Company and the
Subsidiary Guarantors hereby consent to the use of the Prospectus and
any amendment or supplement thereto by each of the selling Holders and
each of the
<PAGE>
15
underwriter(s), if any, in connection with the offering and the sale of
the Transfer Restricted Securities covered by the Prospectus or any
amendment or supplement thereto, PROVIDED that the Company has not advised
such Persons otherwise pursuant to Section 6(c)(iii);
(xii) in the case of a Shelf Registration Statement, enter into
such customary agreements (including an underwriting agreement), and make
such representations and warranties, and take all such other actions in
connection therewith in order to expedite or facilitate the disposition of
the Transfer Restricted Securities pursuant to any Shelf Registration
Statement contemplated by this Agreement, all to such extent as may be
requested by any Initial Purchaser or by any other Holders of a majority of
the Transfer Restricted Securities initially covered by the Shelf
Registration Statement or underwriter in connection with any sale or
resale, the Company shall:
(A) furnish to the Initial Purchasers, each selling Holder and
each underwriter, if any, in such substance and scope as they may
request and as are customarily made by issuers to underwriters in
primary underwritten offerings, upon the effectiveness of the Shelf
Registration Statement:
(1) a certificate, dated the date of effectiveness of the
Shelf Registration Statement, signed on behalf of the Company by
(y) the Chief Executive Officer, President or any Vice President
and (z) a principal financial or accounting officer of the
Company, in form and substance reasonably satisfactory to the
Initial Purchasers, confirming, as of the date thereof, the
matters set forth in paragraphs (e), (g) and (h) of Section 5 of
the Purchase Agreement and such other matters as such parties may
reasonably request;
(2) an opinion or opinions, dated the date of effectiveness
of the Shelf Registration Statement of counsel for the Company
covering the matters set forth in Exhibits B-1 and B-2 to the
Purchase Agreement and such other matters as such parties may
reasonably request, and, in any event, including a statement to
the effect that such counsel has participated in conferences with
officers and other representatives of the Company and the
Subsidiary Guarantors, representatives of the independent public
accountants for the Company and the Subsidiary Guarantors, and
the Initial Purchasers' representatives and their counsel, at
which the contents of the Registration Statement and related
matters were discussed, and although such counsel has not
undertaken to investigate or verify independently and does not
assume any responsibility for the accuracy, completeness or
fairness of statements contained in the Registration Statement,
and that such counsel advises that, on the basis of the
<PAGE>
16
foregoing (relying as to materiality to a large extent upon the
opinions of officers and other representatives of the Company and
the Subsidiary Guarantors), no facts came to such counsel's
attention that caused such counsel to believe that the applicable
Registration Statement, at the time such Registration Statement
or any post-effective amendment thereto became effective,
contained 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 light of the circumstances
under which they were made not misleading, or that the Prospectus
contained in such Registration Statement as of its date contained
an untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein,
in light of the circumstances under which they were made, not
misleading (in each case, except as to financial statements and
related notes, the financial statement schedules and other
financial and statistical data included therein, as to which
counsel need not express any opinion); and
(3) provided that the requesting Holders, underwriters, if
any, or other such financial intermediary furnish the undertaking
required in SAS 72, if required, a customary comfort letter,
dated as of the date of effectiveness of the Shelf Registration
Statement from the Company's independent accountants, in the
customary form and covering matters of the type customarily
covered in comfort letters to underwriters in connection with
primary underwritten offerings, and affirming the matters set
forth in the comfort letters delivered pursuant to Section 5(d)
of the Purchase Agreement, without exception:
(B) set forth in full or incorporate by reference in the
underwriting agreement, if any, the indemnification provisions and
procedures of Section 8 hereof with respect to all parties to be
indemnified pursuant to said Section; and
(C) deliver such other documents and certificates as may be
reasonably requested by such parties to evidence compliance with
clause (A) above and with any customary conditions contained in the
underwriting agreement or other agreement entered into by the Company
pursuant to this clause (xii), if any.
(xiii) prior to any public offering of Transfer Restricted
Securities, cooperate with the selling Holders, the underwriter(s), if any,
and their respective counsel in connection with the registration and
qualification of the Transfer Restricted Securities under the securities or
Blue Sky laws of such jurisdictions as the selling Holders or
underwriter(s), if any, may request and do any and all other acts or things
necessary or advisable to enable the disposition in such jurisdictions of
the Transfer Restricted
<PAGE>
17
Securities covered by the Shelf Registration Statement; PROVIDED, HOWEVER,
that the Company or any Subsidiary Guarantor shall not be required to
register or qualify as a foreign corporation where it is not now so
qualified or to take any action that would subject it to the service of
process in suits or to taxation, other than as to matters and transactions
relating to the Registration Statement, in any jurisdiction where it is
not now so subject;
(xiv) in connection with any sale of Transfer Restricted
Securities that will result in such securities no longer being Transfer
Restricted Securities, cooperate with the selling Holders and the
underwriter(s), if any, to facilitate the timely preparation and delivery
of certificates representing Transfer Restricted Securities to be sold and
not bearing any restrictive legends; and enable such Transfer Restricted
Securities to be in such denominations and registered in such names as the
Holders or the underwriter(s), if any, may request at least two business
days prior to any sale of Transfer Restricted Securities made by such
underwriters;
(xv) if any fact or event contemplated by clause 6(c)(iv)(D) hereof
shall exist or has occurred, prepare a supplement or post-effective
amendment to the Registration Statement or related Prospectus or any
document incorporated therein by reference or file any other required
document so that, as thereafter delivered to the purchasers of Transfer
Restricted Securities, the Prospectus will not contain an untrue statement
of a material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading;
(xvi) provide a CUSIP number for all Series B Senior Subordinated
Notes not later than the effective date of the Registration Statement and
provide the Trustee under the Indenture with printed certificates for the
Series B Senior Subordinated Notes which are in a form eligible for deposit
with The Depository Trust Company;
(xvii) cooperate and assist in any filings required to be made with
the NASD and in the performance of any due diligence investigation by any
underwriter (including any "qualified independent underwriter") that is
required to be retained in accordance with the rules and regulations of the
NASD;
(xviii) otherwise use their best efforts to comply with all
applicable rules and regulations of the Commission, and make generally
available to its security holders, as soon as they are able, a consolidated
earnings statement meeting the requirements of Rule 158 (which need not be
audited) for the twelve-month period (A) commencing with the first fiscal
quarter after the date on which Transfer Restricted Securities are sold to
underwriters in a firm or best efforts Underwritten Offering or (B) if not
sold to underwriters in such Underwritten Offering, beginning with the
first fiscal quarter commencing after the effective date of the
Registration Statement; and
<PAGE>
18
(xix) cause the Indentures to be qualified under the TIA not later
than the effective date of the first Registration Statement required by
this Agreement, and, in connection therewith, cooperate with the Trustee
and the Holders of Senior Subordinated Notes to effect such changes to the
Indentures as may be required for such Indenture to be so qualified in
accordance with the terms of the TIA; and execute and use its best efforts
to cause the Trustee to execute, all documents that may be required to
effect such changes and all other forms and documents required to be filed
with the Commission to enable such Indentures to be so qualified in a
timely manner.
Each Holder agrees by acquisition of a Transfer Restricted Security
that, upon receipt of any notice from the Company of the existence of any
fact of the kind described in Section 6(c)(iii)(D) hereof, such Holder will
forthwith discontinue disposition of Transfer Restricted Securities pursuant
to the applicable Registration Statement until such Holder's receipt of the
copies of the supplemented or amended Prospectus contemplated by Section
6(c)(xi) hereof, or until it is advised in writing (the "ADVICE)" by the
Company that the use of the Prospectus may be resumed, and has received
copies of any additional or supplemental filings that are incorporated by
reference in the Prospectus. If so directed by the Company, each Holder will
deliver to the Company (at the Company's expense) all copies, other than
permanent file copies then in such Holder's possession, of the Prospectus
covering such Transfer Restricted Securities that was current at the time of
receipt of such notice. In the event the Company shall give any such notice,
the time period regarding the effectiveness of such Registration Statement
set forth in Section 3 or 4 hereof, as applicable, shall be extended by the
number of days during the period from and including the date of the giving of
such notice pursuant to Section 6(c)(iv)(D) hereof to and including the date
when each selling Holder covered by such Registration Statement shall have
received the copies of the supplemented or amended Prospectus contemplated by
Section 6(c)(xi) hereof or shall have received the Advice.
SECTION 7. REGISTRATION EXPENSES
(a) All expenses incident to the Company and Subsidiary
Guarantors' performance of or compliance with this Agreement will be borne by
the Company and Subsidiary Guarantors regardless of whether a Registration
Statement becomes effective, including without limitation: (1) all
registration and filing fees and expenses (including filings made by any
Initial Purchaser or Holder with the NASD (and, if applicable, the fees and
expenses of any "qualified independent underwriter" and its counsel that may
be required by the rules and regulations of the NASD)); (ii) all fees and
expenses of compliance with federal securities and state Blue Sky or
securities laws; (iii) all expenses of printing (including printing
certificates for the Series B Senior Subordinated Notes to be issued in the
Exchange Offer and printing of Prospectuses), messenger and delivery services
and telephone; (iv) all fees and disbursements of counsel for the Company
and, subject to Section 7(b) below, the Holders of Transfer Restricted
Securities; and (v) all fees and disbursements of independent certified
public
<PAGE>
19
accountants of the Company (including the expenses of any special audit and
comfort letters required by or incident to such performance).
The Company and Subsidiary Guarantors will have no obligation
hereunder to pay any underwriting discounts, commissions and transfer taxes,
if any, relating to the sale or disposition of Transfer Restricted Securities
by a Holder. The Company and Subsidiary Guarantors will, in any event, bear
their internal expenses (including, without limitation, all salaries and
expenses of their officers and employees performing legal or accounting
duties), the expenses of any annual audit and the fees and expenses of any
Person, including special experts, retained by the Company.
(b) In connection with any Shelf Registration Statement required
by this Agreement, the Company will reimburse the Initial Purchasers and the
Holders of Transfer Restricted Securities being registered pursuant to the
Shelf Registration Statement for one-half of the reasonable fees and
disbursements of not more than one counsel as may be chosen by the Holders of
a majority in principal amount of the Transfer Restricted Securities for
whose benefit such Registration Statement is being prepared.
SECTION 8. INDEMNIFICATION
(a) The Company and the Subsidiary Guarantors agree to indemnify
and hold harmless (i) each Holder, (ii) each Person, if any, who controls any
Holder within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act and (iii) the respective officers, directors, partners,
employees, representatives and agents of any Holder or any controlling Person
to the fullest extent lawful, from and against any and all losses,
liabilities, claims, damages and expenses whatsoever (including but not
limited to attorneys' fees and any and all expenses whatsoever incurred in
investigating, preparing or defending against any investigation or
litigation, commenced or threatened, or any claim whatsoever, and any and all
amounts paid in settlement of any claim or litigation), joint or several, to
which they or any of them may become subject under the Act, the Exchange Act
or otherwise, insofar as such losses, liabilities, claims, damages or
expenses (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained in
any Registration Statement, 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, in the light of the
circumstances under which they were made, not misleading, and will reimburse,
as incurred, each Holder and each controlling person for any legal or other
expenses reasonably incurred by such Holder or such controlling person or the
respective officers, directors, partners, employees, representatives and
agents of each Initial Purchaser or any controlling person to the fullest
extent lawful in connection with investigating, defending against or
appearing as a third-party witness in connection with any such loss, claim,
liability or action; PROVIDED, HOWEVER, that the Company will not be liable
in any such case to the extent, but only to the extent, that any
<PAGE>
20
such loss, liability, claim, damage or expense (i) arises out of or is based
upon any such untrue statement or alleged untrue statement or omission or
alleged omission made therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of the Holders or
underwriters expressly for use therein or (ii) is caused by any untrue
statement or omission, or any alleged untrue statement or omission, made in a
Prospectus but eliminated or remedied in a subsequent Prospectus, if (A) the
Company shall have previously furnished copies thereof to the Holders in
accordance with this Agreement, (B) a copy of the Prospectus was not sent or
given by such Holders or on their behalf to the Person asserting such losses,
liabilities, claims or damages at or prior to the written confirmation of the
sale of the Senior Subordinated Notes to such Person, (C) such subsequent
Prospectus would have completely corrected such untrue statement or omission,
and (D) the matters set forth in clauses (A), (B) and (C) are found to have
occurred pursuant to a final judgment of a court of competent jurisdiction.
This indemnity agreement will be in addition to any liability which the
Company and the Subsidiary Guarantors may otherwise have, including under
this Agreement.
(b) Each Holder, including the Initial Purchasers, severally and
not jointly, agrees to indemnify and hold harmless (i) each of the Company or
any Subsidiary Guarantors, (ii) each Person, if any, who controls the Company
and the Subsidiary Guarantors within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act and (iii) their respective officers,
directors, partners, members, employees, representatives and agents or any
controlling Person to the fullest extent lawful from and against any losses,
liabilities, claims, damages and expenses whatsoever (including but not
limited to attorneys' fees and any and all expenses whatsoever incurred in
investigating, preparing or defending against any investigation or
litigation, commenced or threatened, or any claim whatsoever and any and all
amounts paid in settlement of any claim or litigation), joint or several, to
which they or any of them may become subject under the Act, the Exchange Act
or otherwise, insofar as such losses, liabilities, claims, damages or
expenses (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained in
the Prospectus, 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, in the light of the circumstances
under which they were made, not misleading, in each case to the extent, but
only to the extent, that any such loss, liability, claim, damage or expense
arises out of or is based upon any untrue statement or alleged untrue
statement or omission or alleged omission made therein in reliance upon and
in conformity with written information furnished to the Company by or on
behalf of that Holder expressly for use therein; PROVIDED, HOWEVER, that in
no case shall any Holder be liable or responsible for any amount in excess of
the dollar amount of the proceeds received by such Holder upon the sale of
the Transfer Restricted Securities giving rise to such indemnification
obligation. This indemnity will be in addition to any liability which any
Holder may otherwise have, including under this Agreement.
(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
<PAGE>
21
respect thereof is to be made against the indemnifying party under such
subsection, notify each party against whom indemnification is to be sought in
writing of the commencement thereof (but the failure so to notify an
indemnifying party shall not relieve it from any liability which it may have
under this Section 8 except to the extent that it has been prejudiced in any
material respect by such failure or from any liability which it may otherwise
have). In case any such action is brought against any indemnified party, and
it notifies an indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein, and to the extent
it may elect by written notice delivered to the indemnified party promptly
after receiving the aforesaid notice from such indemnified party, to assume
the defense thereof with counsel reasonably satisfactory to such indemnified
party. Notwithstanding the foregoing, the indemnified party or parties shall
have the right to employ its or their own counsel in any such case, but the
fees and expenses of such counsel shall be at the expense of such indemnified
party or parties unless (i) the employment of such counsel shall have been
authorized in writing by the indemnifying parties in connection with the
defense of such action, (ii) the indemnifying parties shall not have employed
counsel to take charge of the defense of such action within a reasonable time
after notice of commencement of the action, or (iii) such indemnified party
or parties shall have reasonably concluded that there may be defenses
available to it or them which are different from or additional to those
available to one or all of the indemnifying parties (in which case the
indemnifying party or parties shall not have the right to direct the defense
of such action on behalf of the indemnified party or parties), in any of
which events such fees and expenses of counsel shall be borne by the
indemnifying parties; PROVIDED, HOWEVER, that the indemnifying party under
subsection (a) or (b) above shall only be liable for the legal expenses of
one counsel (in addition to any local counsel) for all indemnified parties in
each jurisdiction in which any claim or action is brought. Anything in this
subsection to the contrary notwithstanding, an indemnifying party shall not
be liable for any settlement of any claim or action effected without its
prior written consent; PROVIDED, HOWEVER, that such consent was not
unreasonably withheld.
(d) In order to provide for contribution in circumstances in which
the indemnification provided for in this Section 8 is for any reason held to
be unavailable from the Company and Subsidiary Guarantors or is insufficient
to hold harmless a party indemnified thereunder, the Company and the
Subsidiary Guarantors, on the one hand, and the Holders, on the other hand,
shall contribute to the aggregate losses, claims, damages, liabilities and
expenses of the nature contemplated by such indemnification provision
(including any investigation, legal and other expenses incurred in connection
with, and any amount paid in settlement of, any action, suit or proceeding or
any claims asserted, but after deducting in the case of losses, claims,
damages, liabilities and expenses suffered by the Company and the Subsidiary
Guarantors, any contribution received by the Company and the Subsidiary
Guarantors from Persons, other than the Holders, who may also be liable for
contribution, including Persons who control the Company within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act) to which the
Company, the Subsidiary Guarantors and any Holder may be subject, in such
proportion as is appropriate to reflect the relative benefits received by the
<PAGE>
22
Company and the Subsidiary Guarantors, on one hand, and the Holders, on the
other hand, from their sale of Transfer Restricted Securities or, if such
allocation is not permitted by applicable law or indemnification is not
available as a result of the indemnifying party not having received notice as
provided in this Section 8, in such proportion as is appropriate to reflect
the relative fault of the Company and the Subsidiary Guarantors, on one hand,
and the Holders, on the other hand, in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The
relative fault of the Company and the Subsidiary Guarantors, on one hand, and
of the Holders, on the other hand, 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 and the Subsidiary Guarantors or the
Holders and the parties' relative intent, knowledge and access to information
and opportunity to correct or prevent such statement or omission. The
Company, the Subsidiary Guarantors and the Holders agree that it would not be
just and equitable if contribution pursuant to this Section 8 were determined
by PRO RATA allocation or by any other method of allocation which does not
take into account the equitable considerations referred to above.
Notwithstanding the provisions of this Section 8, (i) in no case shall any
Holder be required to contribute any amount in excess of the amount by which
the total value of the Senior Subordinated Notes held by such Holder exceeds
the amount of any damages which such Holder has otherwise been required to
pay by reason of such untrue or alleged untrue statement or omission or
alleged omission and (ii) 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. For purposes of this Section 8, (A) each Person, if any,
who controls any Holder within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act, and (B) the respective officers,
directors, partners, employees, representatives and agents of any Holder or
any controlling Person shall have the same rights to contribution as such
Holder, and each Person, if any, who controls the Company within the meaning
of Section 15 of the Act or Section 20(a) of the Exchange Act shall have the
same rights to contribution as the Company, subject in each case to clauses
(i) and (ii) of this Section 8(d). Any party entitled to contribution will,
promptly after receipt of notice of commencement of any action, suit or
proceeding against such party in respect of which a claim for contribution
may be made against another party or parties under this Section 8, notify
such party or parties from whom contribution may be sought, but the failure
to so notify such party or parties shall not relieve the party or parties
from whom contribution may be sought from any obligation it or they may have
under this Section 8 or otherwise. No party shall be liable for contribution
with respect to any action or claim settled without its prior written
consent; PROVIDED, HOWEVER, that such written consent was not unreasonably
withheld.
(e) The obligations of the Company and each and every Subsidiary
Guarantor hereunder shall be joint and several.
<PAGE>
23
SECTION 9. RULE 144A
The Company and the Subsidiary Guarantors hereby agree with each
Holder, for so long as any Transfer Restricted Securities remain outstanding,
to make available, upon request, to any Holder or beneficial owner of
Transfer Restricted Securities in connection with any sale thereof and any
prospective purchaser of such Transfer Restricted Securities from such Holder
or beneficial owner, the information required by Rule 144A(d)(4) under the
Act in order to permit resales of such Transfer Restricted Securities
pursuant to Rule 144A.
SECTION 10. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS
No Holder may participate in any Underwritten Registration
hereunder unless such Holder (a) agrees to sell such Holder's Transfer
Restricted Securities on the basis provided in any underwriting arrangements
requested by the Persons entitled hereunder to request such arrangements and
(b) completes and executes all reasonable questionnaires, powers of attorney,
indemnities, underwriting agreements, lock-up letters and other documents
required under the terms of such underwriting arrangements.
SECTION 11. SELECTION OF UNDERWRITERS
The Holders of Transfer Restricted Securities covered by the Shelf
Registration Statement who desire to do so may sell such Transfer Restricted
Securities in an Underwritten Offering. In any such Underwritten Offering,
the investment banker or investment bankers and manager or managers that will
administer the offering will be selected by the Holders of a majority in
aggregate principal amount of the Transfer Restricted Securities included in
such offering; PROVIDED, that such investment bankers and managers must be
reasonably satisfactory to the Company.
SECTION 12. MISCELLANEOUS
(a) REMEDIES. The Company and each Subsidiary Guarantor agree
that monetary damages (including the Liquidated Damages contemplated hereby)
would not be adequate compensation for any loss incurred by reason of their
breach of the provisions of this Agreement and hereby agree to waive the
defense in any action for specific performance that a remedy at law would be
adequate.
(b) NO INCONSISTENT AGREEMENTS. The Company and each Subsidiary
Guarantor will not, on or after the date of this Agreement, enter into any
agreement with respect to their securities that is inconsistent with the
rights granted to the Holders in this Agreement or
<PAGE>
24
otherwise conflicts with the provisions hereof. Neither the Company nor any
Subsidiary Guarantor has previously entered into any agreement granting any
registration rights with respect to the Transfer Restricted Securities to any
Person, except pursuant to this Agreement. The rights granted to the Holders
hereunder do not in any way conflict with and are not inconsistent with the
rights granted to the holders of the Company or Subsidiary Guarantors'
securities under any agreement in effect on the date hereof.
(c) ADJUSTMENTS AFFECTING THE SENIOR SUBORDINATED NOTES. The
Company and the Subsidiary Guarantors, will not take any action, or permit
any change to occur, with respect to the Senior Subordinated Notes that would
materially and adversely affect the ability of the Holders to participate in
the Exchange Offer.
(d) AMENDMENTS AND WAIVERS. The provisions of this Agreement may
not be amended, modified or supplemented, and waivers or consents to or
departures from the provisions hereof may not be given, unless the Company
has obtained the written consent of Holders of a majority of the outstanding
principal amount of Transfer Restricted Securities. Notwithstanding the
foregoing, a waiver or consent to departure from the provisions hereof that
relates exclusively to the rights of Holders whose securities are being
tendered pursuant to the Exchange Offer and that does not affect directly or
indirectly the rights of other Holders whose securities are not being
tendered pursuant to such Exchange Offer may be given by the Holders of a
majority of the outstanding principal amount of Transfer Restricted
Securities being tendered or registered.
(e) NOTICES. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class
mail (registered or certified, return receipt requested), telex, telecopier,
or air courier guaranteeing overnight delivery.
(i) if to a Holder, at the address set forth on the records of
the Registrar under the Indentures, with a copy to the Registrar under the
Indentures; and
(ii) if to the Company or any Subsidiary Guarantor:
Fleming Companies, Inc.
P.O. Box 26647
6301 Waterford Boulevard
Oklahoma City, Oklahoma 73216
Telecopier No.: (405) 840-7202
Attention: John M. Thompson
<PAGE>
25
With a copy to:
McAfee & Taft
Tenth Floor, Two Leadership Square
211 North Robinson
Oklahoma City, Oklahoma 73102-7101
Telecopier No.: (405) 235-0439
Attention: Brice E. Tarzwell
(iii) Notice to the Company shall be deemed notice to any and
every Subsidiary Guarantor.
All such notices and communications shall be deemed to have been
duly given: at the time delivered by hand, if personally delivered; five
business days after being deposited in the mail, postage prepaid, if mailed;
when answered back, if telexed; when receipt acknowledged, if telecopied; and
on the next business day, if timely delivered to an air courier guaranteeing
overnight delivery.
Copies of all such notices, demands or other communications shall
be concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indentures.
(f) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties, including without limitation and without the need for an express
assignment, subsequent Holders of Transfer Restricted Securities; PROVIDED,
HOWEVER, that this Agreement shall not inure to the benefit of or be binding
upon a successor or assign of a Holder unless and to the extent such
successor or assign acquired Transfer Restricted Securities from such Holder.
(g) COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
(h) HEADINGS. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.
(i) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS
OF THE STATE OF NEW YORK.
(j) SEVERABILITY. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance,
is held invalid, illegal or unenforceable,
<PAGE>
26
the validity, legality and enforceability of any such provision in every
other respect and of the remaining provisions contained herein shall not be
affected or impaired thereby.
(k) ENTIRE AGREEMENT. This Agreement together with the other
Operative Documents (as defined in the Purchase Agreement) is intended by the
parties as a final expression of their agreement and intended to be a
complete and exclusive statement of the agreement and understanding of the
parties hereto in respect of the subject matter contained herein. There are
no restrictions, promises, warranties or undertakings, other than those set
forth or referred to herein, with respect to the registration rights granted
by the Company and the Subsidiary Guarantors with respect to the Transfer
Restricted Securities. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
BEAR, STEARNS & CO. INC.
By: /s/ J. Andrew Bugas
-----------------------------------
Name: J. Andrew Bugas
Title: Senior Managing Director
CHASE SECURITIES INC.
By: /s/ James P. Casey
-----------------------------------
Name: James P. Casey
Title: Managing Director
BANCAMERICA SECURITIES, INC.
By: /s/ Thomas J. McGrath
-----------------------------------
Name: Thomas J. McGrath
Title: Managing Director
SOCIETE GENERALE SECURITIES CORPORATION
By: /s/ David M. Malcolm
-----------------------------------
Name: David M. Malcolm
Title: Managing Director
<PAGE>
FLEMING COMPANIES, INC.
By: /s/ John M. Thompson
-----------------------------------
Name: John M. Thompson
Title: Vice President
ABCO MARKETS INC.
ABCO REALTY CORP.
FLEMING FOREIGN SALES CORPORATION
FLEMING INTERNATIONAL LTD.
FLEMING SUPERMARKETS OF FLORIDA, INC.
FLEMING TRANSPORTATION SERVICE, INC.
FLEMING WHOLESALE, INC.
GATEWAY INSURANCE AGENCY, INC.
LAS, INC.
PIGGLY WIGGLY COMPANY
PROGRESSIVE REALTY, INC.
RETAIL SUPERMARKETS, INC.
RFS MARKETING SERVICES, INC.
SCRIVNER TRANSPORTATION, INC.
SMARTRANS, INC.
UNIVERSITY FOODS, INC.
Each, a Subsidiary Guarantor
By: /s/ John M. Thompson
-----------------------------------
Name: John M. Thompson
Title: Vice President
<PAGE>
Exhibit 12
FLEMING COMPANIES, INC.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
28 Weeks Ended
July 12, July 13,
(In thousands of dollars) 1997 1996
- ----------------------------------------------------------------------
Earnings:
Pretax income $ 38,467 $ 31,388
Fixed charges, net 105,720 114,268
- ----------------------------------------------------------------------
Total earnings $144,187 $145,656
Fixed charges:
Interest expense $ 85,045 $ 90,090
Portion of rental charges
deemed to be interest 20,477 23,983
Capitalized interest - 11
- ----------------------------------------------------------------------
Total fixed charges $105,522 $114,084
Ratio of earnings
to fixed charges 1.37 1.28
"Earnings" consists of income before income taxes and fixed charges excluding
capitalized interest. Capitalized interest amortized during the respective
periods is added back to earnings.
"Fixed charges, net" consists of interest expense, an estimated amount of
rental expense which is deemed to be representative of the interest factor
and amortization of capitalized interest.
The pro forma ratio of earnings to fixed charges is omitted as it is not
applicable.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-Q
FOR THE TWO FISCAL QUARTERS ENDED JULY 12, 1997 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-27-1997
<PERIOD-START> DEC-29-1996
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0
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