<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
September 13, 1994
BROADWAY STORES, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
DELAWARE 1-8765 94-0457907
(State or other jurisdiction of (Commission (I.R.S. employer
incorporation or organization) file number) identification no.)
</TABLE>
3880 NORTH MISSION ROAD
LOS ANGELES, CALIFORNIA 90031
(Address of principal executive offices, including zip code)
213-227-2000
(Registrant's telephone number, including area code)
The Exhibit Index is located on page 12.
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ITEM 5. OTHER EVENTS
On September 13, 1994, the registrant finalized a two-part program to
enhance its working capital financing involving the private placement of $64
million of Subordinated Credit Card Notes Due 1999 (the "Notes") issued by
Broadway Receivables, Inc. (formerly CHH Receivables, Inc.), the registrant's
wholly-owned special purpose accounts receivable financing subsidiary
("Broadway Receivables"), and the extension of the maturity of the registrant's
$225 revolving credit facility (the "Credit Facility") and $575 million credit
card receivables securitization facility (the "Receivables Facility") from
October 1995 until October 1996. In connection with the issuance of the Notes,
Broadway Receivables also entered into interest rate cap agreements with
certain financial institutions having ratings by Standard & Poor's Corporation
of at least "BBB" in notional amounts aggregating $575 million (the "Interest
Rate Cap Agreements"). The issuance of the Notes and the amendment of the
Receivables Facility documentation described below effectively increases the
maximum advance rate permitted against eligible accounts receivable of the
registrant sold to Broadway Receivables from 88% to approximately 91%.
THE NOTES
The Notes were issued in two classes consisting of $38 million of
7.55% Subordinated Credit Card Notes, Class A, Due 1999 (the "Class A Notes"),
and $26 million of 11% Subordinated Credit Card Notes, Class B, Due 1999 (the
"Class B Notes"). In the event that Broadway Receivables fails to redeem the
Notes in full on or prior to October 8, 1996, the interest rate on the
outstanding Notes will increase by 200 basis points (the amount of such
increase in respect of any Note is hereafter referred to as the "Step-Up
Interest Amount"). Step-Up Interest Amounts will accrue on the Notes monthly
but are not payable until all of Broadway Receivables' obligations in respect
of the Receivables Facility have been paid in full.
The Notes are subordinated in right of payment to certain obligations
of Broadway Receivables under the Receivables Facility, and the Class B Notes
are subordinated in right of payment to the Class A Notes. The Notes are
secured, on a basis subordinate to the Receivables Facility lenders, by the
Receivables, certain related assets, the Interest Rate Cap Agreements and all
proceeds from the foregoing (collectively, the "Collateral"). The Notes are
limited recourse obligations of Broadway Receivables payable solely out of the
Collateral and the proceeds thereof. To the extent that the Collateral and the
proceeds thereof allocable to the holders of the Notes is for any reason
insufficient to provide for the payment of amounts owing
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to such holders, no holder of Notes shall have any recourse against Broadway
Receivables, the registrant or any other person for the amount of such
insufficiency.
The Notes are redeemable at the option of Broadway Receivables, in
whole or in part, on each interest payment date on or after October 15, 1994
and on October 8, 1996, at a redemption price (the "Redemption Price") equal to
the sum of 100% of the principal amount thereof, together with accrued and
unpaid interest thereon and, in the case of any redemption occurring prior to
October 8, 1996, a make-whole premium determined by reference to a discount
rate equal to the sum of (i) the bond equivalent yield to maturity on the 6.25%
U.S. Treasury Note maturing in August 1996, plus (ii) in the case of the Class
A Notes, 110 basis points, and in the case of the Class B Notes, 325 basis
points. Upon the occurrence of certain events ("Early Amortization Events"),
including, among others, the failure of Broadway Receivables to redeem the
Notes in full on or prior to October 8, 1996 or the occurrence of an event of
default with respect to the Notes, all amounts received by the collateral agent
for the Collateral in respect of the Receivables, to the extent not required to
meet current interest on the Notes and the Receivables Facility and certain
other fees and expenses, will be applied to repay principal in respect of
Broadway Receivables' obligations under the Receivables Facility and, upon
payment in full of the obligations of Broadway Receivables under the
Receivables Facility that are senior to the Notes, to make mandatory
redemptions on each interest payment date of principal of the Class A Notes
and, following retirement thereof, the Class B Notes, in each case at the
Redemption Price.
CHANGES IN THE RECEIVABLES FACILITY
In connection with the issuance of the Notes, the Receivables Facility
documentation was amended to extend the maturity of the Receivables Facility
until October 8, 1996, to create subordinated security interests in the
Collateral in favor of the holders of the Notes and to otherwise accommodate
the issuance of the Notes.
Pursuant to the indenture under which the Notes were issued (the
"Indenture") and the Receivables Facility, as amended, the maximum aggregate
principal amount of Broadway Receivables' obligations under the Notes and the
Receivables Facility at any time is limited to an amount (the "Maximum
Permitted Debt") equal to the product of (x) the Maximum Permitted Debt Ratio
at such time and (y) the Outstanding Balance of the Receivables meeting
specified eligibility criteria ("Eligible Receivables") owned by Broadway
Receivables at such time. In addition, pursuant to the Indenture and the
Receivables
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Facility, as amended, (i) the maximum aggregate principal amount of Broadway
Receivables' obligations under the Class A Notes and the Receivables Facility
at any time is limited to an amount (the "Maximum Class A Debt Amount") equal
to the product of (x) the Maximum Class A Debt Ratio at such time and (y) the
Outstanding Balance of the Eligible Receivables owned by Broadway Receivables
at such time and (ii) the maximum aggregate principal amount of Broadway
Receivables' obligations under the Receivables Facility at any time is limited
to an amount equal to the product of (x) 82% and (y) the Outstanding Balance of
the Eligible Receivables owned by Broadway Receivables at such time.
The Maximum Permitted Debt Ratio equals (a)(i) on any day from and
including December 1 to but excluding February 1, 90%, or (ii) on any day from
and including February 1 to but excluding December 1, 91%, minus (b) the sum of
the Yield Discount Factor and the Payment Rate Factor. The Maximum Class A
Debt Ratio equals (a)(i) on any day from and including December 1 to but
excluding February 1, 86%, or (ii) on any day from and including February 1 to
but excluding December 1, 87%, minus (b) the sum of the Yield Discount Factor
and the Payment Rate Factor.
The Receivables Facility was also amended to reduce the program fee,
expressed as a percentage per annum of the average daily aggregate outstanding
amount under the Receivables Facility, from 1.10% to 1.08%. In addition, the
Receivables Facility was amended to provide that (i) any "Event of Default"
under (and as defined in) the Indenture, (ii) any Early Amortization Event or
(iii) any determination or assertion of invalidity or unenforceability of the
Notes would constitute an event of default under the Receivables Facility.
For purposes of the discussion above, the following terms shall have
the indicated meanings.
The term "Calculation Period" means, with respect to any Settlement
Period, the one-month period commencing on the 10th day following the end of
such Settlement Period and ending on the 9th day following the end of the next
succeeding Settlement Period.
The "Net Portfolio Yield" for any Settlement Period is equal to twelve
times the percentage equivalent of a fraction the numerator of which is equal
to (i) the Normalized Finance Charges for such Settlement Period minus (ii) the
Normalized Net Write-Offs during such Settlement Period, and the denominator of
which is equal to the Outstanding Balance of the Receivables on the first day
of such Settlement Period.
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The term "Normalized Collections" means, with respect to any
Settlement Period, the amount obtained by dividing the aggregate collections
received in respect of the Receivables during such Settlement Period by the
number of billing cycles in such Settlement Period and multiplying the quotient
by 36.
The term "Normalized Finance Charges" means, with respect to any
Settlement Period, the amount obtained by dividing the aggregate amount of
collections on the Receivables received in such Settlement Period that are
allocable to finance charges by the number of billing cycles that occurred in
such Settlement Period and multiplying the quotient by 36.
The term "Normalized Net Write-Offs" means, with respect to any
Settlement Period, the amount obtained by dividing the aggregate amount of
Receivables written-off as uncollectible during such Settlement Period net of
the aggregate recoveries received in such Settlement Period by the number of
billing cycles that occurred in such Settlement Period and multiplying the
quotient by 36.
The term "Outstanding Balance" of a Receivable on any day means the
aggregate amount owed by the obligor thereunder on such day.
The term "Payment Rate" shall mean, for any Settlement Period, a
fraction the numerator of which is equal to the Normalized Collections for such
Settlement Period and the denominator of which is the aggregate Outstanding
Balance of the Receivables on the first day of such Settlement Period.
The "Payment Rate Factor" for each day during a Calculation Period
equals (i) if the average Payment Rate for the immediately preceding three
Settlement Periods ending with the related Settlement Period equals or exceeds
13%, 0% and (ii) if the average Payment Rate for the immediately preceding
three Settlement Periods ending with the related Settlement Period is less than
13%, 1.0%.
The term "Receivable" means any receivable purchased by Broadway
Receivables from the registrant pursuant to the terms of the receivables
purchase agreement, which forms a part of the Receivables Facility.
The term "Settlement Period" shall mean, with respect to any
Settlement Date, the preceding fiscal month of the registrant.
The "Yield Discount Factor" means, for each day during a Calculation
Period, the amount, if any, by which (x) an amount
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equal to (i) the weighted average interest rate per annum on the Notes and the
Receivables Facility for the related Settlement Period plus (ii) 2% minus (iii)
twelve times the percentage equivalent of a fraction the numerator of which is
equal to the aggregate amount of any payments received under the Interest Rate
Cap Agreements during such related Settlement Period and the denominator of
which is equal to the average outstanding principal amount of Broadway
Receivables' obligations under the Notes and the Receivables Facility for such
related Settlement Period exceeds (y) the Net Portfolio Yield for such related
Settlement Period.
CHANGES IN THE CREDIT FACILITY
In connection with the issuance of the Notes and the amendment of the
Receivables Facility documentation, the Credit Facility was amended to extend
the maturity of the Credit Facility until October 8, 1996, to provide for
reduced pricing for interest payments payable after February 10, 1995, to alter
certain of the financial covenants, and to make certain other changes in
connection with the issuance of the Notes.
Prior to the issuance of the Notes, amounts outstanding under the
Credit Facility bear interest at a floating rate equal to the "Index Rate"
(determined by reference to certain prime rates or the annualized yield on
directly-placed 90-day commercial paper) plus 1.50% per annum. Under the
Credit Facility as amended, the additional margin over the Index Rate (the
"Applicable Margin") may be reduced with respect to interest payments payable
after February 1995 in the event that the registrant's Fixed Charge Coverage is
greater than 1.25. If the registrant's Fixed Charge Coverage is greater than
1.25 and less than or equal to 1.50, then the Applicable Margin is reduced to
1.25%, and if the registrant's Fixed Charge Coverage is greater than 1.50, then
the Applicable Margin is reduced to 1.00%.
The Credit Facility was also amended to increase the maximum aggregate
face amount of letters of credit available under the Credit Facility from $65
million to $75 million (or, if less, the amount of the Borrowing Base (as
defined in the Credit Facility) less outstanding advances). In addition, the
Credit Facility was amended to provide that (i) any "Event of Default" under
(and as defined in) the Indenture, or (ii) any Early Amortization Event would
constitute an event of default under the Credit Facility.
In connection with the extension of the maturity of the Credit
Facility, the Consolidated EBITDA covenant contained in the Credit Facility was
amended to provide that the registrant
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will not permit aggregated Consolidated EBITDA for the Fiscal Months which
are substantially coextensive with any period set forth below to be less
than the amount set forth below opposite such period:
<TABLE>
<CAPTION>
Fiscal Months Amount
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<S> <C>
November 1994 to October 1995 $107,300,000
December 1994 to November 1995 $111,400,000
January 1995 to December 1995 $117,300,000
February 1995 to January 1996
and each twelve-Fiscal-Month
period thereafter $120,600,000
</TABLE>
In addition, the Credit Facility's Consolidated Net Cash Flow covenant
was amended to provide that the registrant will not permit Consolidated Net Cash
Flow for the Fiscal Months which are substantially coextensive with any period
set forth below to be less than the amount set forth below opposite such period
(except that any amount set forth below in parentheses shall be the maximum
amount of permitted Consolidated Net Cash Flow deficit for the period of Fiscal
Months set forth opposite such amount):
<TABLE>
<CAPTION>
Fiscal Months Amount
- ------------- ------
<S> <C>
February 1994 to February 1995 ($29,600,000)
February 1994 to March 1995 ($28,300,000)
February 1994 to April 1995 ($26,500,000)
February 1994 to May 1995 ($21,000,000)
February 1994 to June 1995 ($13,000,000)
February 1994 to July 1995 ($13,200,000)
February 1994 to August 1995 ($12,000,000)
February 1994 to September 1995 ($ 9,700,000)
February 1994 to October 1995 ($10,400,000)
February 1994 to November 1995 ($ 5,200,000)
February 1994 to December 1995 $47,700,000
February 1994 to January 1996 $38,300,000
February 1994 to February 1996 $28,300,000
February 1994 to March 1996 $35,100,000
February 1994 to April 1996 $52,400,000
February 1994 to May 1996 $68,400,000
February 1994 to June 1996 $106,900,000
February 1994 to July 1996 $132,200,000
February 1994 to August 1996 $143,900,000
February 1994 to September 1996 $144,200,000
</TABLE>
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Covenant levels for Consolidated EBITDA and Consolidated Net Cash Flow for
periods ending prior to those set forth above were not changed.
The Credit Facility's Capital Expenditure covenant was also amended to
provide that the registrant will not permit the aggregate amount of all Capital
Expenditures of the registrant and its subsidiaries to exceed, during any
period set forth below, the amount set forth below opposite such period:
<TABLE>
<CAPTION>
Period (Fiscal Months)
- ------------------------------------------
Through
From (and Including) Amount
---- --------------- ------
<S> <C> <C>
February 1994 January 1995 $110,000,000
February 1995 January 1996 $106,000,000
February 1996 September 1996 $ 62,000,000
</TABLE>
provided, however, that the aggregate amount of Capital Expenditures otherwise
permitted pursuant to the Capital Expenditures covenant in the Credit Facility
during the period from the February 1996 through and including the September
1996 Fiscal Months shall be increased (i) by an amount equal to the lesser of
$20,000,000 or the unused portion of the allowance for Capital Expenditures for
the period from February 1994 through January 1996 and (ii) by an amount equal
to the lesser of $16,000,000 or 75% of the excess, if any, of Consolidated
EBITDA as of the end of any Fiscal Month after February 1994 through January
1996 over the Consolidated EBITDA required to be achieved by the registrant
pursuant to the Consolidated EBITDA covenant in the Credit Facility as of the
end of such Fiscal Month. Notwithstanding anything to the contrary set forth
above, in no event shall the aggregate amount of Capital Expenditures of the
registrant and its subsidiaries exceed $25,000,000 during any Fiscal Month.
In addition to the changes in the financial covenants described above,
in connection with the extension of the maturity of the Credit Facility,
additional percentage limits for the registrant's net inventory ratio were
prescribed for the final year of the Credit Facility's term. The minimum and
maximum levels for the registrant's consolidated inventory balance were also
amended.
For purposes of the discussion above, the following terms shall have
the indicated meanings.
"Accounts" means all accounts, accounts receivable, other receivables,
contract rights, chattel paper, instruments,
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documents and notes, whether now owned or hereafter acquired by the registrant
and whether or not earned by performance.
"Consolidated EBITDA" means for any period the sum of consolidated net
income of the registrant and its subsidiaries for such period plus consolidated
interest charges (including any capitalized interest payable to certain
lenders) plus consolidated taxes deducted in arriving at consolidated net
income plus consolidated non-cash charges (including depreciation, amortization
and LIFO reserve charges) plus extraordinary losses less extraordinary gains.
"Capital Expenditures" means all payments for any fixed assets or
improvements or for replacements, substitutions or addition, thereto, that have
a useful life of more than one year and which are required to be capitalized
under generally accepted accounting principles ("GAAP"), other than capital
lease obligations.
"Consolidated Interest Expense" means for any period total interest
expense of the registrant and its subsidiaries, whether paid or accrued, for
the period, including without limitation (to the extent included in interest
expense) (i) the interest component of payments under Capital Leases (as
defined in the Credit Facility), (ii) all commissions, discounts and other fees
and charges owed with respect to letters of credit and bankers acceptance
financing, (iii) the fees payable under the Credit Facility and the Receivables
Facility (other than capitalized fees the amortization of which is included in
clause (iv) hereof), (iv) amortization of financing fees and expenses which
have been capitalized, (v) amortization of discount premium (if any), (vi) the
interest component of any deferred payment obligation, (vii) net costs (less
net benefits) under interest rate protection agreements and (viii) all other
cash or non-cash interest expenses, in each case as determined in conformity
with GAAP.
"Consolidated Net Cash Flow" means for any period the sum of
consolidated earnings before taxes of the registrant and its subsidiaries for
such period plus consolidated non-cash charges (including depreciation,
amortization and LIFO reserve charges) less principal payments in respect of
capital lease obligations less reductions in the restructuring reserve
liability account less consolidated taxes actually paid less extraordinary
losses plus extraordinary gains, plus all net cash proceeds (after deducting
all fees and expenses, including, without limitation, underwriting and
brokerage commissions, fees and discounts) received by the registrant from the
sale of Common Stock, the registrant's preferred stock or, subject to the prior
written approval of General Electric Capital Corporation,
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unsecured subordinated obligations of the registrant having terms and
conditions satisfactory to General Electric Capital Corporation plus, subject
to the prior written approval of General Electric Capital Corporation, all net
cash proceeds (after deducting all fees and expenses (including, without
limitation, underwriting and brokerage commissions, fees and discounts) from
any sale by the registrant of all or a substantial portion of the registrant's
Accounts on terms and conditions satisfactory to General Electric Capital
Corporation (other than sales of the registrant's Accounts to Broadway
Receivables in accordance with the terms of the Receivables Facility).
"Fixed Charge Coverage" means for the period of twelve consecutive
Fiscal Months ending on the date of determination the ratio of (a) the sum of
(i) Consolidated EBITDA for that period less (ii) consolidated Capital
Expenditures of the registrant and its subsidiaries for that period over (b)
the sum of (i) Consolidated Interest Expense for the registrant and its
subsidiaries for that period, plus (ii) principal payments paid or payable
during that period on all indebtedness (as defined in the Credit Facility and
determined on a consolidated basis) of the registrant and its subsidiaries,
including without limitation Capital Lease Obligations (as defined in the
Credit Facility) and mortgage payments, but excluding payments with respect to
current liabilities arising in the ordinary course of business for the deferred
purchase price of property or services plus (iii) cash payments actually paid
during that period with respect to consolidated tax liabilities of the
registrant and its subsidiaries.
"Fiscal Month" means each of the three four-week or five-week
accounting period comprising a quarterly accounting period with a Fiscal Year.
"Fiscal Year" means a fiscal year of the registrant ending on the
Saturday closest to January 31, unless subsequently changed by the registrant
with the lender's consent.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits
See Exhibit Index on Page 12.
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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.
Broadway Stores, Inc.
/s/ MARC E. BERCOON
--------------------------------------
Marc E. Bercoon, Senior Vice President,
General Counsel and Secretary
September 23, 1994
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
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<S> <C>
4.1 Amendment No. 1 to Receivables-Backed Credit Agreement,
dated as of September 28, 1993, among CHH RECEIVABLES, INC.,
BLUE HAWK FUNDING CORPORATION and GENERAL ELECTRIC CAPITAL
CORPORATION, as Agent............................................
4.2 Amendment No. 2 to Receivables-Backed Credit Agreement, dated
as of September 13, 1994, among BROADWAY RECEIVABLES, INC.,
BLUE HAWK FUNDING CORPORATION and GENERAL ELECTRIC CAPITAL
CORPORATION......................................................
4.3 Amended and Restated Assignment and Security Agreement dated
as of September 13, 1994 among BROADWAY RECEIVABLES, INC.,
BLUE HAWK FUNDING CORPORATION, BANKERS TRUST COMPANY, as Trustee
and Cash Collateral Bank, and GENERAL ELECTRIC CAPITAL
CORPORATION......................................................
4.4 Amendment No. 1 to Receivables Purchase Agreement, dated
as of September 13, 1994 by and between BROADWAY RECEIVABLES,
INC. and BROADWAY STORES, INC....................................
4.5 First Amendment, dated as of September 13, 1994, to the
Liquidity Agreement dated as of October 8, 1992 among Blue
Hawk Funding Corporation, the lenders party thereto and
General Electric Capital Corporation, as agent for the
Liquidity Lenders................................................
4.6 First Amendment, dated as of September 13, 1994, to the
Letter of Credit Reimbursement Agreement dated as of
October 8, 1992 among Broadway Receivables, Inc., Blue
Hawk Funding Corporation, the financial institutions
party thereto and General Electric Capital Corporation...........
4.7 Amendment No. 1 to Irrevocable Letter of Credit
No. 1992RFS1.....................................................
</TABLE>
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<TABLE>
<S> <C>
4.8 Indenture dated as of September 1, 1994 between BROADWAY RECEIVABLES,
INC., a Delaware corporation, and BANKERS TRUST COMPANY, a New York
banking corporation, as trustee relating to the Subordinated Credit
Card Notes due 1999..................................................
4.9 Broadway Receivables, Inc. 7.55% Subordinated Credit Card Note,
Class A, Due 1999....................................................
4.10 Broadway Receivables, Inc. 11% Subordinated Credit Card Note,
Class B, Due 1999....................................................
4.11 Seventh Amendment to Credit Agreement, dated as of September 13, 1994
among BROADWAY STORES, INC., a Delaware corporation previously known
as Carter Hawley Hale Stores, Inc., the financial institutions
parties thereto and GENERAL ELECTRIC CAPITAL CORPORATION, a New York
corporation, as agent for the Lenders................................
20.1 Press Release dated September 13, 1994...............................
</TABLE>
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EXHIBIT 4.1
AMENDMENT NO. 1 TO RECEIVABLES-BACKED CREDIT AGREEMENT
Amendment No. 1 to Receivables-Backed Credit Agreement (this
"Amendment"), dated as of September 28, 1993, among CHH RECEIVABLES, INC. (the
"Borrower"), BLUE HAWK FUNDING CORPORATION (the "Lender") and GENERAL ELECTRIC
CAPITAL CORPORATION, as Agent (in such capacity, the "Agent"). All capitalized
terms used herein not otherwise defined shall have the respective meanings
assigned to such terms in the Credit Agreement hereinafter described.
W I T N E S S E T H :
WHEREAS, the parties hereto have entered into a
Receivables-Backed Credit Agreement, dated as of October 8, 1992 (the "Credit
Agreement"); and
WHEREAS, the parties hereto wish to amend the Credit Agreement
as hereinafter provided;
NOW, THEREFORE, in consideration of the premises and of the
commitments made hereunder by the Borrower, the Lender and the Agent, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto, intending to be legally bound, hereby
agree as follows:
1. The definition of the term "Advance Rate" contained in Section
1.01 of the Credit Agreement is hereby amended and restated in its entirety as
follows:
"'Advance Rate' means, at any date of calculation thereof,
84.5% subject to any reduction or increase pursuant to clauses (i)
through (vi) below:
(i)(1) If, as of the end of any fiscal month of the
Borrower ending on or prior to January 1, 1994, the Loss-to-
Receivables Ratio exceeds 8.65%, the Advance Rate shall be
reduced, from and after the date the Lender Report for such
fiscal month is delivered, by an amount (ex-
<PAGE> 2
pressed as a percentage) equal to 2.2 times the amount by
which the Loss-to-Receivables Ratio exceeds 8.65%;
(2) If, as of the end of any fiscal month of the
Borrower ending after January 1, 1994, the Loss-to-Receivables
Ratio exceeds 7.98%, the Advance Rate shall be reduced, from
and after the date the Lender Report for such fiscal month is
delivered, by an amount (expressed as a percentage) equal to
2.6 times the amount by which the Loss-to-Receivables Ratio
exceeds 7.98%;
(ii)(1) If, as of the end of any fiscal month of the
Borrower ending on or prior to January 1, 1994, 8.65% exceeds
the Loss-to-Receivables Ratio, the Advance Rate will be
increased, from and after the date the Lender Report for such
fiscal month is delivered, by an amount (expressed as a
percentage) equal to 2.2 times the amount by which 8.65%
exceeds the Loss-to-Receivables Ratio;
(2) If, as of the end of any fiscal month of the
Borrower ending after January 1, 1994, 7.98% exceeds the
Loss-to-Receivables Ratio, the Advance Rate will be
increased, from and after the date the Lender Report for such
fiscal month is delivered, by an amount (expressed as a
percentage) equal to 2.6 times the amount by which 7.98%
exceeds the Loss-to-Receivables Ratio;
(iii)(1) If, as of the end of any fiscal month of
the Borrower ending on or prior to January 1, 1994, the
Dilution Ratio exceeds the Dilution Percentage, the Advance
Rate shall be reduced from and after the date the Lender
Report for such fiscal month is delivered, by an amount
(expressed as a percentage) equal to the amount by which the
Dilution Ratio exceeds the Dilution Percentage. As used in
this clause (iii)(1), "Dilution Percentage" means, for any
Measurement Period, the percentage set forth below opposite
the name of the fiscal month in which such Measurement Period
ends:
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<TABLE>
<CAPTION>
MONTH PERCENTAGE
----- ----------
<S> <C>
January 3.29%
February 3.21%
March 2.08%
April 2.02%
May 2.11%
June 2.34%
July 2.33%
August 2.27%
September 2.30%
October 2.46%
November 2.69%
December 3.47%
</TABLE>
(2) If, as of the end of any fiscal month of the
Borrower ending after January 1, 1994, the Dilution Ratio
exceeds the Dilution Percentage, the Advance Rate shall be
reduced from and after the date the Lender Report for such
fiscal month is delivered, by an amount (expressed as a
percentage) equal to the amount by which the Dilution Ratio
exceeds the Dilution Percentage. As used in this clause
(iii)(2), "Dilution Percentage" means, for any Measurement
Period, the percentage set forth below opposite the name of
the fiscal month in which such Measurement Period ends:
<TABLE>
<CAPTION>
MONTH PERCENTAGE
----- ----------
<S> <C>
January 3.03%
February 2.95%
March 1.82%
April 1.76%
May 1.85%
June 2.08%
July 2.07%
August 2.01%
September 2.04%
October 2.20%
November 2.43%
December 3.21%
</TABLE>
(iv)(1) If, as of the end of any fiscal month of the
Borrower ending on or prior to April 2, 1994, the Effective
Yield is less than 16%, the Advance Rate shall be reduced,
from and after
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the date the Lender Report for such fiscal month is delivered,
by an amount (expressed as a percentage) equal to the amount
by which 16% exceeds the Effective Yield;
(2) If, as of the end of any fiscal month of the
Borrower ending after April 2, 1994, the Effective Yield is
less than 17.6%, the Advance Rate shall be reduced, from and
after the date the Lender Report for such fiscal month is
delivered, by an amount (expressed as a percentage) equal to
the amount by which 17.6% exceeds the Effective Yield;
(v) If any state or federal law or regulation
applicable to Carter Hawley or the Receivables, or any
amendment to any such law or regulation, is enacted which in
any such case provides for a reduction in the maximum
allowable per annum rate of finance charges or other fees
which may be imposed in respect of any Receivables, the
Advance Rate shall be reduced to reflect the anticipated
decrease in the finance charge or fee income generated by the
Receivables as a result of such legislation, such reduction to
be determined by the Agent, in its reasonable discretion after
consultation with the Borrower, and promptly notified to the
Borrower; and
(vi) If a cumulative total of more than 20 retail
stores (1) are closed and/or sold by Carter Hawley, (2) are
announced to be closed and/or sold by Carter Hawley and/or (3)
cease to permit customers to make payment for goods and
services under a Charge Account Agreement, subsequent to April
1, 1992, the Agent shall determine, after consultation with
the Borrower, the rate to which the Advance Rate with respect
to Eligible Receivables should be adjusted by reason of such
store closings, such adjustment to be based upon the
historical experience relating to previous store closings and
taking into account the extent to which, if at all, the effect
of such store closings (or announced closings) has resulted
(as determined by the Agent) in reductions of the Advance Rate
pursuant to clauses (i), (iii) and (iv) above;
-4-
<PAGE> 5
provided, however, that if the Lender Report for the most recent
fiscal month after the effective date of any such reduction or
increase shows that the circumstances that triggered such reduction or
increase pursuant to clauses (i) through (v) above no longer exist,
the Advance Rate shall be modified, from and after the date such
Lender Report for such fiscal month is delivered, to an amount equal
to 84.5%, subject to any reductions or increase computed as set forth
above after giving effect to such changed circumstances; provided,
further, that at no time shall the Advance Rate exceed 88%."
2. The definition of the term "Effective Yield" contained in
Section 1.01 of the Credit Agreement is hereby amended and restated in its
entirety as follows:
"Effective Yield" means the ratio (expressed as a percentage)
computed as of the last day of each Measurement Period by dividing (i)
the aggregate accrued finance charge income (exclusive of late and
other similar charges) on all Receivables (net of adjustments
consistent with current accounting and credit practice) during the
period of twelve consecutive Measurement Periods ending on such day by
(ii) the average Outstanding Balance of all Receivables as of the
first day of each Measurement Period occurring during such twelve
month period; provided, however, that with respect to each Measurement
Period ending during the period from April 3, 1994 through December
31, 1994 (the "Special 1994 Period"), "Effective Yield" shall mean the
ratio (expressed as a percentage) computed as of the last day of each
such Measurement Period by dividing (i) the product of (x) the
aggregate accrued finance charge income (exclusive of late and other
similar charges) on all Receivables (net of adjustments consistent
with current accounting and credit practice) during the period
beginning on January 30, 1994 and ending on the last day of such
Measurement Period multiplied by (y) a fraction the numerator of which
is 12 and the denominator of which is the number of Measurement
Periods ending during the period from January 30, 1994 through the
date of such calculation by (ii) the average Outstanding Balance of
all Receivables as of the first day of each Measurement Period
occurring during the period beginning on
-5-
<PAGE> 6
January 30, 1994 and ending on the last day of such Measurement Period;
3. In order to induce the Lender to enter into this Amendment,
the Borrower hereby represents and warrants as of the date hereof that no
Default or Event or Default has occurred and is continuing.
4. This Amendment is limited as specified and shall not
constitute a modification or waiver of any other provision of the Credit
Agreement. Any references to the Credit Agreement in any of the Facility
Documents or in any of the documents executed or delivered in connection
therewith or in contemplation thereof shall be deemed after the date hereof to
be references to the Credit Agreement as amended by this Amendment.
5. The Borrower shall deliver to the Agent such resolutions
approving and authorizing this Amendment and such corporate certificates as the
Agent may reasonably request, which resolutions and certificates shall be in
form and substance satisfactory to the Agent.
6. This Amendment shall be effective on the later of (i) the date
on which each of the parties hereto shall have executed and delivered a copy or
counterpart of this Amendment to each other party hereto and (ii) the date upon
which each Rating Agency shall have confirmed that the execution of this
Amendment shall not result in the downgrading of the Commercial Paper.
7. This Amendment may be executed in any number of counterparts
and by the different parties hereto on separate counterparts each of which when
so executed and delivered shall be an original, but all of which together shall
constitute one and the same instrument.
8. This Amendment and the rights and obligations of the parties
hereunder shall be construed in accordance with and governed by the laws of the
State of New York.
-6-
<PAGE> 7
IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Amendment to be duly executed and delivered as of the date
first above written.
CHH RECEIVABLES, INC.
By:___________________________
Name:
Title:
BLUE HAWK FUNDING CORPORATION
By:___________________________
Name:
Title:
GENERAL ELECTRIC CAPITAL CORPORATION, as Agent
By:___________________________
Name:
Title:
-7-
<PAGE> 1
EXHIBIT 4.2
AMENDMENT NO. 2 TO RECEIVABLES-BACKED CREDIT AGREEMENT
Amendment No. 2 to Receivables-Backed Credit Agreement (this
"Amendment"), dated as of September 13, 1994, among BROADWAY RECEIVABLES, INC.
(formerly, CHH Receivables, Inc.) (the "Borrower"), BLUE HAWK FUNDING
CORPORATION (the "Lender") and GENERAL ELECTRIC CAPITAL CORPORATION, as Agent
(in such capacity, the "Agent"). All capitalized terms used herein not
otherwise defined shall have the respective meanings assigned to such terms in
the Credit Agreement hereinafter described.
W I T N E S S E T H :
WHEREAS, the parties hereto have entered into a
Receivables-Backed Credit Agreement, dated as of October 8, 1992, as amended by
an Amendment No. 1 to Receivables-Backed Credit Agreement, dated as of
September 28, 1993 (as amended, the "Credit Agreement"); and
WHEREAS, the parties hereto wish to amend the Credit Agreement
as hereinafter provided;
NOW, THEREFORE, in consideration of the premises and of the
commitments made hereunder by the Borrower, the Lender and the Agent, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto, intending to be legally bound, hereby
agree as follows:
1. The definition of the term "Borrowing Base" set forth in
Section 1.01 of the Credit Agreement is hereby amended and restated in its
entirety to read as follows:
""Borrowing Base" means, as of any day, the lowest of (a) the
Sub-Borrowing Base on such day, (b) an amount equal to (i) the product
of (x) the Outstanding Balance of Eligible Receivables on such
day multiplied by (y) the Maximum Permitted Debt Ratio on such day
minus (ii) the principal amount of the Non-Affiliate Subordinated
Notes outstanding on such day, (c) an amount equal to (i) the product
of (x) the Outstanding Balance of Eligible Receivables on such
day multiplied by (y) the Maximum Class A Debt Ratio on such day minus
(ii) the principal amount of the Class A Notes outstanding on such day
or (d) an amount
<PAGE> 2
equal to the product of (x) the Outstanding Balance of Eligible
Receivables on such day multiplied by (y) 82%.".
2. The definition of the term "Carter Hawley" set forth in
Section 1.01 of the Credit Agreement is hereby amended and restated in its
entirety to read as follows:
""Carter Hawley" or "Broadway" means Broadway Stores, Inc.
(formerly Carter Hawley Hale Stores, Inc.), a Delaware corporation,
together with its successors and assigns.".
3. The definition of "Commitment Termination Date" set forth in
Section 1.01 of the Credit Agreement is hereby amended and restated in its
entirety to read as follows:
""Commitment Termination Date" means the earlier of (i)
October 8, 1996, as such date may be extended in accordance with
Section 2.15 and (ii) the date of the termination of the Commitment
pursuant to Section 2.03 or Section 6.01.".
4. The definition of the term "Effective Advance Rate" set forth
in Section 1.01 of the Credit Agreement is hereby amended and restated in its
entirety as follows:
""Effective Advance Rate" means, at any time, the ratio
(expressed as a percentage) determined by dividing (x) the sum of (i)
the Sub-Borrowing Base plus (ii) $25,348,570 by (y) the aggregate
Outstanding Balance of the Purchased Receivables.".
5. The definition of the term "Purchased Receivable" in Section
1.01 of the Credit Agreement is hereby amended and restated in its entirety to
read as follows:
""Purchased Receivable" means, at any date of determination,
any Receivable purchased by the Borrower from Broadway pursuant to the
terms of the Purchase Agreement and which has not been repurchased by
Broadway in accordance with the terms of the Purchase Agreement.".
6. The definition of "Security Agreement" in Section 1.01 of the
Credit Agreement is hereby amended by inserting the following language after
the words "Collateral Agent" and before the "." at the end thereof: ", as such
agreement may be amended from time to time".
-2-
<PAGE> 3
7. Section 1.01 of the Credit Agreement is hereby amended by
inserting the following new definitions in the appropriate alphabetical order:
"Borrower Interest Rate Cap" means, collectively, those
certain Interest Rate Cap Agreements between the Borrower and each of
Citicorp, N.A., Nationsbank, N.A. and Bank of America National Trust
and Savings Association, each substantially in the form of Exhibit D
to the Security Agreement.
"Calculation Period" means, with respect to any Settlement
Period, the period from and including the tenth day following the end
of such Settlement Period to, but excluding, the tenth day following
the end of the next succeeding Settlement Period.
"Class A Note Rate" means 7.55%.
"Class A Notes" means the 7.55% Subordinated Credit Card
Notes, Class A, Due 1999, in the initial aggregate principal amount of
$38,000,000, issued by the Borrower pursuant to the terms of the
Sub-Debt Indenture.
"Class B Note Rate" means 11%.
"Class B Notes" means the 11% Subordinated Credit Card Notes,
Class B, Due 1999, in the initial aggregate principal amount of
$26,000,000, issued by the Borrower pursuant to the terms of the
Sub-Debt Indenture.
""Interest Expense" means, for any Settlement Period, the
percentage equivalent of a fraction (x) the numerator of which is
equal to the sum of (1) the Class A Note Rate multiplied by the
average daily outstanding principal amount of the Class A Notes during
such Settlement Period, plus (2) the Class B Note Rate multiplied by
the average daily outstanding principal amount of the Class B Notes
during such Settlement Period, plus (3) Interest for such Settlement
Period multiplied by the quotient obtained by dividing 360 by the
number of days in such Settlement Period, and (y) the denominator of
which is equal to the sum of (1) the average daily outstanding
principal amount of the Class A Notes during such Settlement Period,
plus (2) the average daily outstanding principal amount of the Class B
Notes during such Settlement Period, plus (3) the average
-3-
<PAGE> 4
daily outstanding principal amount of the Advances during such
Settlement Period.
"Maximum Class A Debt Ratio" means, as of any day, an amount
equal to (i) either (a) on any day from and including December 1 to,
but excluding, February 1, 86%, or (b) on any day from and including
February 1 to, but excluding, December 1, 87%, minus (ii) the sum of
the Yield Discount Factor for such day and the Payment Rate Factor for
such day.
"Maximum Permitted Debt Ratio" means, as of any day, an amount
equal to (i) either (a) on any day from and including December 1 to,
but excluding, February 1, 90%, or (b) on any day from and including
February 1 to, but excluding, December 1, 91%, minus (ii) the sum of
the Yield Discount Factor for such day and the Payment Rate Factor for
such day.
"Net Portfolio Yield" means, for any Settlement Period, twelve
times the percentage equivalent of a fraction (x) the numerator of
which is equal to (i) the Normalized Finance Charges for such
Settlement Period minus (ii) the Normalized Net Write-Offs for such
Settlement Period and (y) the denominator of which is equal to the
Outstanding Balance of the Purchased Receivables on the first day of
such Settlement Period.
"Non-Affiliate Subordinated Notes" means, collectively, the
Class A Notes and the Class B Notes.
"Normalized Collections" means, with respect to any Settlement
Period, the amount obtained by dividing (x) the aggregate Collections
received in such Settlement Period by (y) the number of Billing Cycles
in such Settlement Period, and multiplying the quotient by 36.
"Normalized Finance Charges" means, with respect to any
Settlement Period, the amount obtained by dividing (x) the aggregate
Collections received in such Settlement Period that are allocable to
finance charges by (y) the number of Billing Cycles that occurred in
such Settlement Period, and multiplying the quotient by 36.
"Normalized Net Write-Offs" means, with respect to any
Settlement Period, the amount obtained by dividing (x) an amount equal
to (i) the aggregate
-4-
<PAGE> 5
amount of Purchased Receivables written-off as uncollectible during
such Settlement Period minus (ii) the aggregate Recoveries received in
such Settlement Period by (y) the number of Billing Cycles that
occurred in such Settlement Period, and multiplying the quotient by
36.
"Payment Rate" shall mean, for any Settlement Period, a
fraction the numerator of which is equal to the Normalized Collections
for such Settlement Period and the denominator of which is the
aggregate Outstanding Balance of the Receivables on the first day of
such Settlement Period.
"Payment Rate Factor" means, with respect to each day during
any Calculation Period, an amount equal to (i) if the average Payment
Rate for the three Settlement Periods ending with the related
Settlement Period equals or exceeds 13%, 0% and (ii) if the average
Payment Rate for the three Settlement Periods ending with the related
Settlement Period is less than 13%, 1.0%.
"Settlement Period" has the meaning set forth in the Purchase
Agreement.
"Sub-Borrowing Base" means, as of any day, an amount equal to
(i) the product of (x) the Borrowing Availability for such day
multiplied by (y) the Advance Rate in effect as of such day minus (ii)
$25,348,570.
"Sub-Debt Indenture" means the Indenture dated as of September
1, 1994 between the Borrower and Bankers Trust Company, as Trustee,
the form of which shall have been approved by the Agent, as such
Indenture may be amended from time to time.
"Trustee" mean Bankers Trust Company, as trustee under the
Sub-Debt Indenture, and its successors and assigns.
"Yield Discount Factor" means, with respect to each day during
any Calculation Period, the amount, if any, by which (x) an amount
equal to (i) the Interest Expense for the related Settlement
Period plus (ii) 2% minus (iii) twelve times the percentage equivalent
of a fraction the numerator of which is equal to the aggregate amount
of any payments received under the Interest Rate Cap during such
related Settlement
-5-
<PAGE> 6
Period and the denominator of which is equal to the average
outstanding principal amount of the Issuer's obligations under the
Class A Notes, the Class B Notes and the Note for such related
Settlement Period exceeds (y) the Net Portfolio Yield for such related
Settlement Period.".
8. Section 2.04 of the Credit Agreement is hereby amended by (i)
deleting clause (b) thereof and substituting in place thereof the following
clauses (b) and (c) and (ii) redesignating clause (c) thereof as clause (d):
"(b) Mandatory. On any date, the Borrower shall forthwith
prepay to the Agent, for the account of the Lender, the outstanding
Principal of Advances, if any, as may be necessary so that after such
prepayment the aggregate outstanding Principal of Advances does not
exceed the Sub-Borrowing Base on such date, together with in the case
of a prepayment in full of all outstanding Advances, Interest accrued
to the date of such prepayment and all accrued and unpaid fees, costs
and expenses at the time due and payable by the Borrower under the
Facility Documents.
(c) Mandatory - Non-Affiliate Subordinated Notes. On any
date on which the Sub-Borrowing Base exceeds the Borrowing Base, the
Borrower shall forthwith prepay to the Agent, for the account of the
Lender, the outstanding Principal of Advances, if any, as may be
necessary so that after such prepayment and any prepayment made
pursuant to clause (b) above on such date the aggregate outstanding
Principal of Advances does not exceed the Borrowing Base on such date,
together with in the case of a prepayment in full of all outstanding
Advances, Interest accrued to the date of such prepayment and all
accrued and unpaid fees, costs and expenses at the time due and
payable by the Borrower under the Facility Documents."
9. Section 2.07(b) of the Credit Agreement is hereby amended by
deleting the figure "1.10%" in line 3 thereof and inserting in lieu thereof the
figure "1.08%".
10. Section 2.13 of the Credit Agreement is hereby amended by
inserting the following language after the words "Cash Collateral Account" and
before the "." at the end thereof:
"and (iv) to pay interest in respect of the Non-Affiliate Subordinated
Notes".
-6-
<PAGE> 7
11. Section 2.15 of the Credit Agreement is hereby amended by
deleting the clause "to which the Liquidity Termination Date has been extended"
in lines 10 and 11 thereof and inserting in lieu thereof the following
language:
"which is the 16th day prior to the date to which the Liquidity
Termination Date has been extended".
12. Section 5.01(h) of the Credit Agreement is hereby amended by
deleting the word "and" in the last line of sub-clause (xiii) thereof, by
inserting the following new sub-clause immediately after sub-clause (xiii)
thereof:
"(xiv) promptly and in any event within one Business Day
after the Borrower becomes aware of the existence thereof, telephonic,
telex or telecopied notice (confirmed in writing within 5 days)
identifying, and specifying the nature of, any Early Amortization
Event, any "Event of Default" (as defined in the Sub-Debt Indenture),
any "Default" (as defined in the Sub-Debt Indenture) or any
development or other information which could materially and adversely
affect the ability of the Borrower to perform its obligations under
the Sub-Debt Indenture; and".
and by deleting the numeral "(xiv)" in the first line of sub-clause (xiv)
thereof and inserting in lieu thereof the numeral "(xv)".
13. Section 5.02(b) of the Credit Agreement is hereby amended and
restated in its entirety as follows:
"(b) Debt. Create or suffer to exist any Debt except the
Obligations of the Borrower pursuant to the Facility Documents, the
Subordinated Promissory Notes and the Non-Affiliate Subordinated
Notes.".
14. Section 5.02(c) of the Credit Agreement is hereby amended by
deleting clause (A) set forth therein and substituting in place thereof the
following:
"(A) the Equity of the Borrower is not less than an amount
equal to (i) the aggregate Outstanding Balance of the Eligible
Receivables minus (ii) the sum of the outstanding Principal of the
Advances, the outstanding principal amount of the Non-Affiliate
Subordinated Notes and the amount of any loss reserve existing on the
balance sheet of the Borrower with respect to the Purchased
Receivables, and"
-7-
<PAGE> 8
15. Section 5.03(c) of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
"(c) Capitalization. The Borrower shall not at any time
permit the sum of (i) the Non-Affiliate Subordinated Notes and (ii)
its Equity, to be less than $88,500,000."
16. Section 6.01(n) of the Credit Agreement is hereby amended by
inserting the following language after the phrase "Purchase Agreement);" in
line 5 thereof:
"or
(o) Any "Event of Default" under (and as defined in)
the Sub-Debt Indenture shall have occurred; or
(p) Any Early Amortization Event (as defined in the
Security Agreement) shall have occurred; or
(q) Any of the Non-Affiliated Subordinated Notes
shall for any reason cease to be valid and binding on or
enforceable against the Borrower, or the Borrower shall so
state in writing;".
17. Section 6.02 of the Credit Agreement is hereby amended by
inserting the following language after the word "Agent" in line 4 thereof:
", the Trustee under the Sub-Debt Indenture".
18. Section 9.10 of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
"Section 9.10. No Proceedings. The Borrower hereby covenants
and agrees that, prior to the date which is one year and one day after
the payment in full of all outstanding Commercial Paper and
Non-Affiliate Subordinated Notes, it will not institute against, or
join any other Person in instituting against, the Lender any
bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings or other similar proceeding under the laws of the United
States or any state of the United States.
19. The Credit Agreement is hereby amended by deleting the form of
Borrowing Base Certificate set forth
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<PAGE> 9
as Exhibit E to the Credit Agreement and inserting in place thereof Exhibit E
attached to this Amendment.
20. The Credit Agreement is hereby amended by deleting the form of
Lender Report set forth as Exhibit G to the Credit Agreement and inserting in
place thereof Exhibit G attached to this Amendment.
21. In order to induce the Lender to enter into this Amendment,
the Borrower hereby represents and warrants as of the date hereof that no
Default or Event or Default has occurred and is continuing.
22. This Amendment is limited as specified and shall not
constitute a modification or waiver of any other provision of the Credit
Agreement. Any references to the Credit Agreement in any of the Facility
Documents or in any of the documents executed or delivered in connection
therewith or in contemplation thereof shall be deemed after the date hereof to
be references to the Credit Agreement as amended by this Amendment.
23. The Borrower shall deliver to the Agent such resolutions
approving and authorizing this Amendment and such opinions of counsel and
corporate certificates as the Agent may reasonably request, which resolutions,
opinions and certificates shall be in form and substance satisfactory to the
Agent.
24. This Amendment shall be effective on the latest of (i) the
date on which each of the parties hereto shall have executed and delivered a
copy or counterpart of this Amendment to each other party hereto, (ii) the date
upon which each Rating Agency shall have confirmed that the execution of this
Amendment and the issuance of the Non-Affiliate Subordinated Notes by the
Borrower shall not result in a withdrawal or downgrading of such Rating
Agency's current credit rating of the Commercial Paper, (iii) the date on which
the Borrower issues and sells the Non-Affiliate Subordinated Notes, in a form
which has been approved by the Agent and with credit ratings of not less than,
with respect to the Class A Notes, "BBB" from S&P and "BBB" from Fitch and,
with respect to the Class B Notes, "BB" from S&P and "BB" from Fitch, and (iv)
the effective date of an amendment to the Retailer Credit Agreement, in a form
which has been approved by the Agent, that extends the commitment termination
date thereunder to October 8, 1996".
25. This Amendment may be executed in any number of counterparts
and by the different parties hereto on
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<PAGE> 10
separate counterparts each of which when so executed and delivered shall be an
original, but all of which together shall constitute one and the same
instrument.
26. This Amendment and the rights and obligations of the parties
hereunder shall be construed in accordance with and governed by the laws of the
State of New York.
-10-
<PAGE> 11
IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Amendment to be duly executed and delivered as of the date
first above written.
BROADWAY RECEIVABLES, INC.
By:___________________________
Name:
Title:
BLUE HAWK FUNDING CORPORATION
By:___________________________
Name:
Title:
GENERAL ELECTRIC CAPITAL
CORPORATION, as Agent
By:___________________________
Name:
Title:
Consented to:
GENERAL ELECTRIC CAPITAL
CORPORATION, as LOC Agent and Collateral Agent
By:_______________________________
Name:
Title:
-11-
<PAGE> 1
EXHIBIT 4.3
AMENDED AND RESTATED
ASSIGNMENT AND SECURITY AGREEMENT
Dated as of September 13, 1994
Among
BROADWAY RECEIVABLES, INC.,
BLUE HAWK FUNDING CORPORATION,
BANKERS TRUST COMPANY,
as Trustee,
BANKERS TRUST COMPANY,
as Cash Collateral Bank,
and
GENERAL ELECTRIC CAPITAL CORPORATION
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
SECTION 1. Grant of Security . . . . . . . . . . . . . . . . . . . . .. 3
SECTION 2. Security for Obligations . . . . . . . . . . . . . . . . .. 7
SECTION 3. Delivery of Collateral . . . . . . . . . . . . . . . . . .. 8
SECTION 4. Investing of Amounts in the
Cash Collateral Account and
the Reserve Account . . . . . . . . . . . . . . . . . . .. 8
SECTION 5. The Blocked Deposit Accounts . . . . . . . . . . . . . . .. 9
SECTION 6. Cash Collateral Account . . . . . . . . . . . . . . . . . .. 11
SECTION 7. Release of Amounts . . . . . . . . . . . . . . . . . . . .. 12
SECTION 8. Borrower Remains Liable . . . . . . . . . . . . . . . . . .. 17
SECTION 9. Representations and Warranties . . . . . . . . . . . . . .. 17
SECTION 10. Further Assurances; Supplements . . . . . . . . . . . . .. 19
SECTION 11. Additional Covenants . . . . . . . . . . . . . . . . . . .. 20
SECTION 12. Collateral Agent Appointed
Attorney-in-Fact . . . . . . . . . . . . . . . . . . . .. 25
SECTION 13. Collateral Agent May Perform . . . . . . . . . . . . . . .. 26
SECTION 14. The Collateral Agent . . . . . . . . . . . . . . . . . . .. 26
SECTION 15. Remedies Upon Default;
Application of Collateral . . . . . . . . . . . . . . .. 28
SECTION 16. Drawings Under the LOC . . . . . . . . . . . . . . . . . .. 33
SECTION 17. Amendments, Etc. . . . . . . . . . . . . . . . . . . . . .. 34
</TABLE>
(i)
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 18. Indemnity and Expenses . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 19. Successor Collateral Agent . . . . . . . . . . . . . . . . . . . . . 35
SECTION 20. Addresses for Notices . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 21. No Waiver; Cumulative Remedies . . . . . . . . . . . . . . . . . . . 36
SECTION 22. Continuing Security Interest . . . . . . . . . . . . . . . . . . . . 37
SECTION 23. Further Indemnification . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 24. Governing Law; Terms . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 25. No Petition in Bankruptcy . . . . . . . . . . . . . . . . . . . . . 38
SECTION 26. Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 27. Jurisdiction; Consent to
Service of Process . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 28. Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 29. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 30. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SCHEDULE I - Blocked Deposit Accounts
SCHEDULE II - Post Office Boxes
SCHEDULE III - Equipment Locations
SCHEDULE IV - Offices Where Related Contracts and Books,
Records, Etc. Evidencing Receivables Are
Kept
EXHIBIT A-1 Form of Blocked Deposit Agreement
(Deposit Accounts)
EXHIBIT A-2 Form of Blocked Deposit Agreement
(Concentration Account)
EXHIBIT B Form of Instruction to Post Office
EXHIBIT C Form of Blue Hawk Interest Rate Cap
Agreement
EXHIBIT D Form of Borrower Interest Rate
Cap Agreement
</TABLE>
(ii)
<PAGE> 4
AMENDED AND RESTATED
ASSIGNMENT AND SECURITY AGREEMENT
AMENDED AND RESTATED ASSIGNMENT AND SECURITY AGREEMENT dated
as of September 13, 1994, among BROADWAY RECEIVABLES, INC. (formerly CHH
Receivables, Inc.), a Delaware corporation (the "Borrower"); BLUE HAWK FUNDING
CORPORATION, a Delaware corporation (the "Lender"); BANKERS TRUST COMPANY, a
New York banking corporation, as trustee under the below referenced Indenture
(in such capacity, the "Trustee"); BANKERS TRUST COMPANY, a New York banking
corporation, as cash collateral bank (in such capacity, the "Cash Collateral
Bank"); GENERAL ELECTRIC CAPITAL CORPORATION, a New York corporation, as agent
for the Lender under the below referenced Credit Agreement (in such capacity,
the "Agent"), as agent for the letter of credit providers (the "LOC Providers")
under the below referenced Reimbursement Agreement (in such capacity, the "LOC
Agent") and as agent for the below referenced Liquidity Lenders (the "Liquidity
Agent"); and GENERAL ELECTRIC CAPITAL CORPORATION, a New York corporation, as
collateral agent (in such capacity, the "Collateral Agent") for the benefit of
(a) itself as Agent, and Collateral Agent, (b) the Liquidity Agent on behalf of
the Liquidity Lenders, (c) the LOC Agent on behalf of the LOC Providers, (d)
the Lender, (e) the Trustee on behalf of the holders of the below referenced
Indenture Notes (the "Noteholders"), (f) BANKERS TRUST COMPANY, in its capacity
as depositary (the "Depositary") and (g) the holders of Commercial Paper (the
"CP Holders").
W I T N E S S E T H :
WHEREAS, the Lender and the Agent have entered into a
Receivables-Backed Credit Agreement dated as of October 8, 1992 (as such
agreement has been amended through the date hereof and may hereafter be amended
or otherwise modified from time to time, being the "Credit Agreement"; the
capitalized terms defined therein and not otherwise defined herein being used
herein shall have the meanings set forth therein) with the Borrower; and
WHEREAS, the Borrower has entered into a Letter of Credit
Reimbursement Agreement (as such agreement may hereafter be amended or
otherwise modified from time to
<PAGE> 5
time, being the "Reimbursement Agreement") with the LOC Agent, the LOC
Providers and the Lender; and
WHEREAS, the Lender has entered into a Liquidity Agreement
dated as of October 8, 1992 (as such agreement has been amended to the date
hereof and may hereafter be amended or otherwise modified from time to time,
being the "Liquidity Agreement") with a group of lenders (the "Liquidity
Lenders") on whose behalf the Liquidity Agent is acting; and
WHEREAS, the Lender has issued and intends to continue to
issue its Commercial Paper and has entered into a Depositary Agreement (as such
agreement may hereafter be amended or otherwise modified from time to time,
being the "Depositary Agreement") with the Depositary in connection therewith;
and
WHEREAS, the Borrower has entered into an Indenture dated as
of September 1, 1994 (as such agreement may hereafter be amended or otherwise
modified from time to time, being the "Indenture", the capitalized terms
defined therein and not otherwise defined herein or in the Credit Agreement
being used herein shall have the meanings set forth therein) with the Trustee
pursuant to which the Borrower intends to issue $38,000,000 aggregate principal
amount of 7.55% Subordinated Credit Card Notes, Class A, Due 1999 (the "Class A
Notes") and $26,000,000 aggregate principal amount of 11% Subordinated Credit
Card Notes, Class B, Due 1999 (the "Class B Notes," and, together with the
Class A Notes, the "Indenture Notes"); and
WHEREAS, it is a condition precedent to (a) the making of
Advances by the Lender under the Credit Agreement, (b) the issuance of the
letter of credit (the "LOC") by the LOC Providers under the Reimbursement
Agreement, (c) the execution and delivery by the Liquidity Lenders of the
Liquidity Agreement and (d) the issuance of the Indenture Notes, that the
Borrower and the Lender shall have executed and delivered this Agreement and
assigned and pledged the accounts receivable, agreements, bank accounts and
other rights and interests contemplated by this Agreement, and that the Cash
Collateral Bank, the Agent, the LOC Agent, the Collateral Agent, the Trustee
and the Liquidity Agent shall have executed and delivered this Agreement;
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<PAGE> 6
NOW, THEREFORE, in consideration of the premises and in order
to induce (a) the Lender to make Advances under the Credit Agreement, (b) the
LOC Providers to issue the LOC, (c) the Liquidity Lenders to execute and
deliver the Liquidity Agreement and (d) the Trustee to authenticate and deliver
the Indenture Notes, the Borrower and the Lender hereby agree with the
Collateral Agent, the Agent, the Lender, the LOC Agent for its benefit and the
benefit of the LOC Providers, the Liquidity Agent for its benefit and the
benefit of the Liquidity Lenders, the Depositary for its benefit and the
benefit of the CP Holders and the Trustee for its benefit and the benefit of
the Indenture Noteholders (collectively, the "Secured Parties") as follows:
SECTION 1. Grant of Security. (a) The Borrower hereby
assigns and pledges to the Collateral Agent for its benefit and for the benefit
of the Lender, the LOC Agent, the LOC Providers, the Agent and the Trustee on
its behalf and on behalf of the Noteholders and the Note Owners (collectively,
the "Borrower Secured Parties") and grants to the Collateral Agent for its
benefit and for the benefit of the Borrower Secured Parties a security interest
in and lien upon, all of the Borrower's right, title and interest in and to the
following, in each case whether now or hereafter existing or in which Borrower
now has or hereafter acquires an interest and wherever the same may be located
(collectively, the "Borrower Collateral"):
(i) All accounts, contract rights, chattel paper,
instruments, general intangibles and other obligations of any kind,
now or hereafter existing (including, without limitation, all
Purchased Receivables), whether or not arising out of or in connection
with the sale or lease of goods or the rendering of services by any
Person, including the right to payment of any interest or finance
charges, attorneys' fees and other obligations with respect thereto,
and all rights in and to all security agreements, and other contracts
securing or otherwise relating to any such accounts, contract rights,
chattel paper, instruments, general intangibles or obligations
(collectively, the "Pledged Receivables," and any and all such
security agreements and other contracts being the "Related
Contracts");
(ii) All guarantees, insurance and other agreements or
arrangements of whatever character from
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<PAGE> 7
time to time supporting or securing payment of any Purchased
Receivables;
(iii) All equipment in all of its forms, wherever located,
now or hereafter existing (including, but not limited to, all
software, data bases, materials, books, records, computer programs,
magnetic tapes, disks and cassettes relating to Receivables, and all
other equipment in which information concerning Receivables is stored
or which are necessary or helpful in the collection thereof), and all
parts thereof and accessions thereto (any and all such equipment,
parts and accessions being the "Equipment");
(iv) The Purchase Agreement, all Blocked Deposit
Agreements, all Post Office Boxes, all agreements now or hereafter in
effect relating to the servicing or processing of the Pledged
Receivables, the Subordinated Retailer Security Agreement, those
certain Interest Rate Cap Agreements between the Borrower and each of
Citicorp, N.A., Nationsbank, N.A. and Bank of America National Trust
and Savings Association, each substantially in the form of Exhibit D
hereto (collectively, the "Borrower Cap Agreement") and all other
Interest Rate Contracts to which the Borrower is a party, as the same
may be amended or otherwise modified from time to time (as so amended
or modified, the "Assigned Agreements"), including, without
limitation, (A) all rights of the Borrower to receive moneys due and
to become due under or pursuant to the Assigned Agreements, (B) all
rights of the Borrower to receive proceeds of any insurance,
indemnity, warranty or guaranty with respect to the Assigned
Agreements, (C) claims of the Borrower for damages arising out of or
for breach of or default under the Assigned Agreements and (D) the
right of the Borrower to amend, waive or terminate the Assigned
Agreements, to perform thereunder and to compel performance and
otherwise exercise all remedies thereunder (the Collateral described
in this paragraph (a)(iv) of Section 1 being sometimes described
herein as the "Assigned Collateral");
(v) All of the following (the "Account Collateral"):
(A) The Cash Collateral Account (as hereinafter
defined), all funds held therein, and all
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<PAGE> 8
certificates and instruments, if any, from time to time representing
or evidencing the Cash Collateral Account;
(B) The Reserve Account (as defined in the
Reimbursement Agreement), all funds held therein, and all
certificates and instruments, if any, from time to time
representing or evidencing the Reserve Account;
(C) The Operating Account (as hereinafter
defined), all funds therein and all certificates and
instruments, if any, from time to time representing or
evidencing the Operating Account;
(D) All Blocked Deposit Accounts (as hereinafter
defined), all funds held therein, and all certificates and
instruments, if any, from time to time representing or
evidencing such funds or the Blocked Deposit Accounts;
(E) All Investments (as hereinafter defined) from
time to time and all certificates and instruments, if any,
from time to time representing or evidencing the Investments;
(F) All notes, certificates of deposit and other
instruments from time to time hereafter delivered to or
otherwise possessed by the Collateral Agent for and on behalf
of the Borrower in substitution for or in addition to any of
the then existing Account Collateral; and
(G) All interest, dividends, cash, instruments
and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any and
all of the then existing Account Collateral;
(vi) All proceeds (including, without limitation, In-Store
Payments), accessions, substitutions, rents and profits of any and all
of the foregoing Borrower Collateral (including, without limitation,
proceeds that constitute property of the types described in clauses
(i) through (v) above) and, to the extent not otherwise included, all
payments under insurance (whether or not the Collateral Agent is the
loss payee thereof), or any indemnity, warranty or guaranty, payable
by reason of loss or damage to or otherwise
-5-
<PAGE> 9
with respect to any of the foregoing Borrower Collateral. For
purposes of this Agreement, the term "proceeds" includes whatever is
receivable or received when Collateral or proceeds are sold,
collected, exchanged or otherwise disposed of, whether such
disposition is voluntary or involuntary, and includes, without
limitation, all rights to payment, including returned premiums, with
respect to any insurance relating thereto.
(b) The Lender hereby assigns and pledges to the
Collateral Agent for its benefit and for the benefit of the Liquidity Lenders,
the Liquidity Agent, the Cash Collateral Bank and the Depositary, on its behalf
and on behalf of the Holders (collectively, the "Lender Secured Parties") and
grants to the Collateral Agent for its benefit and for the benefit of the
Lender Secured Parties a security interest in all of the Lender's right, title
and interest in and to the following, whether now owned or hereafter acquired
(collectively, the "Lender Collateral"):
(i) the Borrower Collateral;
(ii) the Credit Agreement, the Note, the LOC, the
Reimbursement Agreement and the Liquidity Agreement, as the same may
be amended or otherwise modified from time to time (as so amended or
modified, the "Lender Assigned Agreements"), including, without
limitation, (A) all rights of the Lender to receive moneys due and to
become due under or pursuant to the Lender Assigned Agreements, (B)
all rights of the Lender to receive proceeds of any insurance,
indemnity, warranty or guaranty with respect to the Lender Assigned
Agreements, (C) claims of the Lender for damages arising out of or for
breach of or default under the Lender Assigned Agreements and (D) the
right of the Lender to amend, waive or terminate the Lender Assigned
Agreements, to perform thereunder and to compel performance and
otherwise exercise all remedies thereunder;
(iii) the Lender's Account and all funds held therein and
all certificates and instruments, if any, from time to time
representing or evidencing such funds or the Lender's Account;
(iv) the Interest Rate Cap Agreement, dated as of
October 8, 1992 between the Lender and General Electric Capital
Corporation, in the form of Exhibit C hereto (the "Blue Hawk Cap
Agreement"); and
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<PAGE> 10
(v) all proceeds of any and all of the foregoing Lender
Collateral (including, without limitation, proceeds that constitute
property of the types described in clauses (i), (ii) and (iii) above),
and, to the extent not otherwise included, all payments under
insurance (whether or not the Collateral Agent is the loss payee
thereof), or any indemnity, warranty, or guaranty, payable by reason
of loss or damage to or otherwise with respect to any of the foregoing
Lender Collateral. For purposes hereof, the term "proceeds" includes
whatever is receivable or received when Collateral or proceeds are
sold, collected, exchanged or otherwise disposed of, whether such
disposition is voluntary or involuntary, and includes, without
limitation, all rights to payment, including returned premiums, with
respect to any insurance relating thereto.
(c) The Borrower Collateral pledged by the Borrower in
clause (a) above and the Lender Collateral pledged by the Lender in clause (b)
above shall collectively be referred to herein as the "Collateral."
SECTION 2. Security for Obligations. (a) This Agreement
secures and the Collateral is collateral security for the prompt payment or
performance in full when due, whether at stated maturity, by acceleration or
otherwise of all obligations of every nature of the Borrower or the Lender, as
the case may be, now or hereafter existing under the Credit Agreement, the
Reimbursement Agreement, the Indenture, the Indenture Notes, the Liquidity
Agreement, the Depositary Agreement, the Commercial Paper, and any promissory
note or other document or instrument delivered pursuant thereto and all
amendments, extensions or renewals thereof or hereof, whether for principal,
interest, fees, expenses or otherwise, whether now existing or hereafter
arising, voluntary or involuntary, whether or not jointly owed with others,
direct or indirect, absolute or contingent, liquidated or unliquidated, and
whether or not from time to time decreased or extinguished and later increased,
created or incurred and all or any portion of such obligations that are paid,
to the extent all or any part of such payment is avoided or recovered directly
or indirectly from any Borrower Secured Party or Lender Secured Party, as the
case may be, as a preference, fraudulent transfer or otherwise, and all
obligations of every nature of the Borrower or the Lender, as the case may be,
now or hereafter existing under this Agreement (all such obligations being the
"Secured Obligations").
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<PAGE> 11
(b) The grant by the Borrower to the Collateral Agent
pursuant to Section 1(a) above and the grant by the Lender to the Collateral
Agent pursuant to Section 1(b) above are not for the equal and ratable benefit
of the Borrower Secured Parties and the Lender Secured Parties, respectively.
The relative rights, benefits and priorities of each of the Borrower Secured
Parties and each of the Lender Secured Parties are as specifically set forth in
the provisions of this Agreement, including but not limited to Sections 7 and
15 hereof.
SECTION 3. Delivery of Collateral. All certificates or
instruments, if any, representing or evidencing the Collateral shall be
delivered to and held by or on behalf of the Collateral Agent pursuant hereto
and shall be in suitable form for transfer by delivery, or shall be accompanied
by duly executed instruments of transfer or assignment in blank, all in form
and substance satisfactory to the Collateral Agent. The Collateral Agent shall
have the right, at any time in its discretion and without notice to the
Borrower or the Lender, to transfer to or to register in the name of the
Collateral Agent or any of its nominees any or all of the Collateral. In
addition, the Collateral Agent shall have the right at any time to exchange
certificates or instruments representing or evidencing Collateral for
certificates or instruments of smaller or larger denominations.
SECTION 4. Investing of Amounts in the Cash Collateral
Account and the Reserve Account. (a) The Cash Collateral Bank shall, subject
to the provisions of Section 6, Section 7 and Section 15, from time to time for
the account and at the risk of the Borrower, upon the instructions of the
Collateral Agent (which instructions may be general or specific and may be
given in writing or by telephone confirmed promptly thereafter in writing) (i)
invest amounts on deposit in the Cash Collateral Account in Cash Equivalents
and (ii) invest and reinvest interest on and proceeds of such investments in
Cash Equivalents (the investments referred to in clauses (i) and (ii) above
being collectively "Investments"). Interest and proceeds which are not
invested or reinvested in Investments as provided above shall be deposited and
held in the Cash Collateral Account.
(b) The Cash Collateral Bank shall, from time to time,
upon the instructions of the Collateral Agent (which instructions may be
general or specific and may be given in writing or by telephone confirmed
promptly thereafter in
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<PAGE> 12
writing), (i) invest amounts on deposit in the Reserve Account in Cash
Equivalents and (ii) release all interest on and proceeds of such investments
to the Operating Account on the fifth Business Day following the end of each
calendar month unless an Event of Default or an L/C Event of Default (as
defined in the Reimbursement Agreement) has occurred and is continuing. If an
Event of Default or an L/C Event of Default has occurred and is continuing,
such interest shall be released to the LOC Agent on the fifth Business Day
following the end of each calendar month for application by the LOC Agent to
any amounts then due and owing by the Borrower under the Reimbursement
Agreement. All amounts remaining on deposit in the Reserve Account shall be
released to the LOC Agent at the earlier of (A) the Business Day following the
day the Agent notifies the Collateral Agent that the Principal of and Interest
on all Advances have been paid in full, the Commitment has been irrevocably
terminated and all Required Payments payable or to be payable by the Borrower
under any Facility Documents have been paid in full and (B) the Business Day
following the Liquidity Termination Date or such later date on which all
Commercial Paper and all amounts due and owing to the Liquidity Lenders under
the Liquidity Agreement and the Loan Notes shall have been paid in full.
(c) The Cash Collateral Bank shall be entitled to rely
on any instructions given by the Collateral Agent in accordance with
paragraphs (a) and (b) of this Section 4 or otherwise in accordance with the
terms of this Agreement. Funds received in the Cash Collateral Account or the
Reserve Account after 2:00 P.M. (New York City time) on any Business Day are
not required to be invested by the Cash Collateral Bank until the following
Business Day.
SECTION 5. The Blocked Deposit Accounts. (a) The Borrower
has established with certain banks (the "Blocked Deposit Banks") certain
lockboxes and certain blocked deposit accounts (including, without limitation,
blocked deposit accounts into which the Servicer deposits from time to time
monies, instruments and other property received by it directly or through the
Post Office Boxes listed on Schedule II) into which monies, instruments and
other property are deposited from time to time (all such lockboxes and blocked
deposit accounts and any replacements thereof and all monies, instruments and
other property deposited therein being collectively the "Blocked Deposit
Accounts") for the deposit of cash and other proceeds of Collateral. The
Borrower hereby transfers to the Collateral Agent the exclusive dominion and
control of the
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<PAGE> 13
Blocked Deposit Accounts and all monies, instruments and other property from
time to time therein. The Borrower will not make or cause to be made, or have
any ability to make or cause, any withdrawals from the Blocked Deposit
Accounts, except as provided in Section 6(b).
(b) The Borrower hereby (i) represents and warrants that
it has no bank or deposit accounts of any kind other than the Operating Account
and the Blocked Deposit Accounts listed on Schedule I and (ii) agrees and
covenants that (A) it has delivered to the Collateral Agent fully executed
Blocked Deposit Agreements substantially in the form of Exhibit A-1 or Exhibit
A-2 hereto, from each and every Blocked Deposit Bank, and (B) all cash and
other proceeds of Collateral shall be deposited either in a Blocked Deposit
Account or in the Cash Collateral Account. The Borrower further agrees and
covenants to maintain each of the Blocked Deposit Accounts in accordance with
the related Blocked Deposit Agreement.
(c) The Borrower or the Servicer has instructed all
Obligors to make payments in respect of Purchased Receivables only (i) by check
or money order mailed to one or more post office boxes under the control of
employees of the Borrower or the Servicer (each such box being a "Post Office
Box"), (ii) by cash, check or money order at Broadway stores ("In-Store
Payments") or (iii) in the case of certain delinquent accounts, by wire or
moneygram directly to a service center of the Servicer ("Wire Payments"). The
Borrower hereby represents and warrants that all of the Post Office Boxes to
which mail payments are made as of the date hereof are listed on Schedule II.
The Borrower further agrees (A) to deliver to the Collateral Agent on the
Closing Date an executed instruction letter to the United States Postal Service
with respect to each Post Office Box listed on Schedule II, such standing
instruction letter to be in substantially the form of Exhibit B hereto; and (B)
to use its best efforts, in accordance with its current practice, to cause all
cash and other proceeds of Collateral received in any such Post Office Box, all
In-Store Payments and all Wire Payments to be deposited, in the same form so
received (with all necessary endorsements), on the Business Day on which such
cash, other proceeds, In-Store Payments and Wire Payments are received, and
agrees that in any event all such cash, other proceeds, In-Store Payments and
Wire Payments shall be deposited in the form so received (with all necessary
endorsements) not later than the close of business on the Business Day
following the date of such receipt, either in a Blocked
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<PAGE> 14
Deposit Account or in the Cash Collateral Account and until so deposited shall
be held in trust for the Collateral Agent. The Borrower shall not establish
any Post Office Box not listed on Schedule II hereto unless it shall have (i)
obtained the written consent of the Collateral Agent, (ii) delivered to the
Collateral Agent an executed instruction letter with respect to such Post
Office Box in substantially the form of Exhibit B hereto and (iii) pledged such
Post Office Box to the Collateral Agent hereunder. The Borrower may not close
any Post Office Box during the term of this Agreement.
(d) In the event any Blocked Deposit Bank shall, after
the date hereof, terminate an agreement with respect to the maintenance of a
Blocked Deposit Account for any reason, or if the Collateral Agent shall demand
such termination after the occurrence of an Event of Default, the Borrower
agrees to promptly notify all Persons that were making payments to such
terminated Blocked Deposit Account to make all future payments to another
Blocked Deposit Bank with which the Borrower has an agreement with respect to
the maintenance of a Blocked Deposit Account that has not been terminated. The
Borrower shall not close any Blocked Deposit Account or establish a new Blocked
Deposit Account unless it shall have (i) notified the Collateral Agent thereof
in writing at least 30 days prior thereto or otherwise obtained the consent of
the Collateral Agent, and (ii) in the case of a new Blocked Deposit Account,
entered into a Blocked Deposit Agreement substantially in the form of Exhibit
A-1 or Exhibit A-2 hereto, the material terms of which are reasonably
satisfactory to the Collateral Agent, each with a Blocked Deposit Bank, and
pledged such Blocked Deposit Account to the Collateral Agent hereunder.
SECTION 6. Cash Collateral Account. (a) The Borrower has
established with the Corporate Trust Department of Bankers Trust Company, as
Cash Collateral Bank, at its office at Four Albany Street, New York, New York
10006, in the name of the Collateral Agent on behalf of the Secured Parties, a
deposit account (the "Cash Collateral Account"). The Cash Collateral Account
shall be subject to the exclusive dominion and control of the Collateral Agent.
By its execution of this Agreement, Bankers Trust Company acknowledges and
agrees to undertake its responsibilities as Cash Collateral Bank in accordance
with the terms hereof. The Cash Collateral Bank may resign 30 days following
delivery of notice of such resignation to the Collateral Agent, such
resignation to be effective only upon establishment of a new cash collateral
account at a depositary
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<PAGE> 15
institution by the Collateral Agent and execution of a writing by such
depositary institution by which it agrees to act as Cash Collateral Bank
hereunder.
(b) The Borrower shall instruct each Blocked Deposit Bank
to transfer, and, if the Borrower fails to so instruct each Blocked Deposit
Bank, the Borrower hereby grants the Collateral Agent the authority to instruct
each Blocked Deposit Bank to transfer, on each Business Day, in same day funds,
all available funds on deposit in the Blocked Deposit Accounts in such Blocked
Deposit Bank on such day to the Cash Collateral Account or to the single
Blocked Deposit Account that is subject to a Blocked Deposit Agreement in the
form of Exhibit A-2 hereto (the "Concentration Account"). All available funds
on deposit in the Concentration Account on each Business Day shall be
transferred by the close of business on such Business Day to the Cash
Collateral Account as provided in the Blocked Deposit Agreement with respect to
the Concentration Account.
(c) The Borrower shall instruct each counterparty to a
Borrower Cap Agreement to make payment of, and, if the Borrower fails to so
instruct each counterparty, the Borrower hereby grants the Collateral Agent the
authority to instruct each counterparty to make payment of, all amounts payable
by such counterparty thereunder directly to the Cash Collateral Account.
(d) The Borrower may maintain the Operating Account as
its operating and/or payroll account, provided that the Borrower shall, in
addition to the deposits and transfers set forth above, deposit in the Cash
Collateral Account, at the end of each day, all cash and Cash Equivalents of
the Borrower in excess of $100,000 in the aggregate on deposit in the Operating
Account, to be held by the Cash Collateral Bank on behalf of the Collateral
Agent as collateral for the Secured Obligations in accordance with the terms of
this Agreement.
(e) The Borrower agrees that it shall not make or
maintain any deposits in any deposit account with any financial institution
other than as provided herein.
SECTION 7. Release of Amounts. (a) Prior to the Commitment
Termination Date, so long as (x) no Event of Default shall have occurred and be
continuing or would result from the application of funds in accordance with
this Section 7(a) and (y) no Early Amortization Event (as
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<PAGE> 16
hereinafter defined) shall have occurred or would result from the application
of funds in accordance with this Section 7(a), on each Business Day the
Collateral Agent shall instruct the Cash Collateral Bank (which instruction may
be in writing or by telephone confirmed promptly thereafter in writing) to (1)
release funds on deposit in the Cash Collateral Account in the following order
of priority (i) to make payment of any amount required to be paid on such
Business Day to the Collateral Agent pursuant to Section 18(b) hereof, (ii) to
make payment of any amounts required to be paid on such Business Day to the
Servicer pursuant to Section 6.2 of the Purchase Agreement, (iii) to make
payment of any amounts required to be paid on such Business Day to the Lender
pursuant to Sections 2.04(b), 2.05 or 2.07(b) of the Credit Agreement (all such
payments specified in clauses (ii) and (iii), the "Required Payments"), (iv) to
make payment of any amounts required to be paid on such Business Day to the
Lender pursuant to Section 2.04(c) of the Credit Agreement, (v) to make payment
of any amounts required to be paid to the Lender on October 8, 1996 (or such
later date as the Commitment Termination Date may be extended to in accordance
with Section 2.15 of the Credit Agreement) pursuant to Section 2.06 of the
Credit Agreement, (vi) to make payment to the Trustee of any interest due and
owing on such Business Day in respect of the Class A Notes, (vii) to make
payment to the Trustee of any interest due and owing on such Business Day in
respect of the Class B Notes, and (viii) to make payment of any other amount
required to be paid on such Business Day under the Credit Agreement (including,
without limitation, Section 2.06 thereof), the Liquidity Agreement, the
Reimbursement Agreement (including, without limitation, pursuant to Section
2.03 thereof), the Depositary Agreement or this Agreement (including, without
limitation, Section 18(a) hereof) and (2) after making the Required Payments
and such other payments on such Business Day, release from the Cash Collateral
Account to the Borrower pursuant to the same instructions (i) any amounts that
are in excess of the Required Payments and such other payments for such
Business Day (which amounts shall be used by the Borrower solely for the
purposes permitted under the Credit Agreement) and (ii) any income generated
from the investment of amounts on deposit in the Cash Collateral Account. For
the purposes of this Agreement, "Early Amortization Event" shall mean any of
the following events:
(A) any "event of default" under (and as defined in) the
Indenture shall occur;
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<PAGE> 17
(B) the failure of the Borrower to redeem all of the
Indenture Notes on or prior to October 8, 1996;
(C) failure on the part of the Servicer to timely make any
payment or deposit of collections in respect of the Purchased
Receivables required under this Agreement or the Purchase Agreement
which failure continues unremedied for a period of five Business Days;
(D) failure on the part of the Borrower or the Servicer to
make any payment or deposit required pursuant to the Indenture, this
Agreement or the Purchase Agreement (other than a failure by the
Borrower to pay principal or interest in respect of the Indenture
Notes or any failure by the Servicer specified in (C) above) which
failure continues unremedied for a period of five business days after
written notice thereof shall have been delivered to the Borrower;
(E) failure on the part of the Borrower or the Servicer to
observe or perform in any material respect any covenants or agreements
set forth in the Indenture, this Agreement or the Purchase Agreement
(other than a failure by the Borrower to pay principal or interest in
respect of the Indenture Notes or any failure by the Borrower or the
Servicer specified in (C) or (D) above) which failure continues
unremedied for a period of 30 days after written notice thereof shall
have been delivered to the Borrower;
(F) any representation or warranty made by the Borrower, the
Servicer or Broadway contained in the Indenture, this Agreement or the
Purchase Agreement proves to have been incorrect in any material
respect when made and which continues to be incorrect in any material
respect for a period of 30 days after written notice thereof shall
have been delivered to the Borrower; provided that a repurchase of a
Purchased Receivable about which there has been a breach of a
representation or warranty pursuant to Section 2.4(a) of the Purchase
Agreement shall constitute a cure of such breach;
(G) the Borrower or Broadway shall generally not pay its
debts as such debts become due, or shall admit in writing its
inability to pay its debts generally, or shall make a general
assignment for the benefit of
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creditors; or any proceeding shall be instituted by or against the
Borrower or Broadway seeking to adjudicate it a bankrupt or insolvent,
or seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief, or composition of it or its debts
under any law relating to bankruptcy, insolvency or reorganization or
relief of debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee, custodian or other similar
official for it or for any substantial part of its property and, in
the case of any such proceeding instituted against it (but not
instituted by it), either such proceeding shall remain undismissed or
unstayed for a period of 30 days, or any of the actions sought in such
proceeding (including, without limitation, the entry of an order for
relief against, or the appointment of a receiver, trustee, custodian
or other similar official for, it or for any substantial part of its
property) shall occur; or the Borrower or Broadway shall take any
corporate action to authorize any of the actions set forth above in
this subsection (G); or
(H) the Borrower becomes subject to regulation as an
"investment company" within the meaning of the Investment Company Act
of 1940, as amended; or
(I) Broadway shall fail to convey Receivables as required
pursuant to Section 2.1 of the Purchase Agreement for a period in
excess of five Business Days; or
(J) the sum of the aggregate outstanding principal amount of
the Indenture Notes and the aggregate outstanding principal amount of
the Advances shall exceed the Maximum Permitted Debt for two
consecutive Business Days; or
(K) the sum of the aggregate outstanding principal amount of
the Class A Notes and the outstanding principal amount of the Advances
shall exceed the Maximum Class A Debt Amount for two consecutive
Business Days; or
(L) the outstanding principal amount of the Advances shall
exceed 82% of the Outstanding Balance of the Eligible Receivables for
two consecutive Business Days; or
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(M) the average Payment Rate for any three consecutive
Settlement Periods shall be less than 11%; or
(N) the average Write-Off Rate for any three consecutive
Settlement Periods shall exceed 11%; or
(O) the Indenture, this Agreement or the Purchase Agreement
shall fail to be a valid and enforceable obligation of the Borrower
and such failure shall have a material adverse effect on the rights or
interests of the holders of the Indenture Notes; or
(P) a Purchase Termination Event shall have occurred and be
continuing under the Purchase Agreement; or
(Q) any unpaid judgment or order for the payment of money in
excess of $50,000 (after deducting the portion of any such judgment
which is fully covered by insurance issued by a reputable insurer)
shall be rendered against the Borrower and either (i) enforcement
proceedings shall have been commenced and shall be continuing by any
Person upon such judgment or order or (ii) there shall be any period
of 20 consecutive days during which a stay of enforcement of such
judgment or order, by reason of a pending appeal or otherwise, shall
not be in effect;
provided, however, that none of the events specified in clauses (D), (E), (F),
(O) and (Q) will constitute an Early Amortization Event unless and until the
holders of not less than 66-2/3% in principal amount of the outstanding
Indenture Notes vote to declare an Early Amortization Event based thereon. The
Collateral Agent may conclusively rely upon a written notification from the
Trustee with respect to (i) the occurrence of any event constituting an Early
Amortization Event and (ii) any vote of the holders of the Indenture Notes with
respect to an event specified in clauses (D), (E), (F), (O) or (Q) above.
For purposes of this Section 7(a), the following terms shall
have the following meanings:
"Maximum Class A Debt Amount" means, as of any day, an amount
equal to the product of (x) the Maximum Class A Debt Ratio and (y) the
Outstanding Balance of the Eligible Receivables on such day.
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<PAGE> 20
"Maximum Permitted Debt" means, as of any day, an amount equal
to the product of (x) the Maximum Permitted Debt Ratio multiplied by
(y) the Outstanding Balance of the Eligible Receivables on such day.
"Write-Off Rate" shall mean, for any Settlement Period, a
fraction (a) the numerator of which is an amount equal to the product
of (x) 12, multiplied by (y) the Normalized Net Write-Offs for such
Settlement Period and (b) the denominator of which is the aggregate
Outstanding Balance of the Purchased Receivables on the first day of
such Settlement Period.
(b) Commencing on the Commitment Termination Date and during
any period while (x) an Event of Default has occurred and is continuing or
would result from the application of funds on any Business Day in accordance
with Section 7(a), or (y) an Early Amortization Event has occurred or would
result from the application of funds on any Business Day in accordance with
Section 7(a), the Collateral Agent shall instruct the Cash Collateral Bank to
apply all amounts when received in the Cash Collateral Account to pay the
Secured Obligations in accordance with the order of priority set forth in
Section 15(b) hereof.
SECTION 8. Borrower Remains Liable. Anything herein to the
contrary notwithstanding, (a) the Borrower shall remain liable under the
contracts and agreements included in the Collateral to the extent set forth
therein to perform all of its duties and obligations thereunder to the same
extent as if this Agreement had not been executed, (b) the exercise by the
Collateral Agent of any of the rights hereunder shall not release the Borrower
from any of its duties or obligations under the contracts and agreements
included in the Collateral, and (c) neither the Collateral Agent nor any of the
Secured Parties shall have any obligation or liability under the contracts and
agreements included in the Collateral by reason of this Agreement, nor shall
the Collateral Agent or any of the Secured Parties be obligated to perform any
of the obligations or duties of the Borrower thereunder or to take any action
to collect or enforce any claim for payment assigned hereunder.
SECTION 9. Representations and Warranties. The Borrower
hereby represents and warrants as follows:
(a) The chief place of business and chief executive
office of the Borrower are located and have been
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located for the four months prior to the date hereof at 1600 North
Kraemer Boulevard, Anaheim, California 92806. The offices where the
Borrower keeps its records concerning the Pledged Receivables and the
original copies of the Assigned Collateral are located and have been
located for the four months prior to the date hereof at the places
listed on Schedule IV. Schedule III contains a complete and accurate
list of the locations, by state, county and street address, of all the
Equipment of the Borrower. The original copies of Related Contracts
are located at the offices of the Servicer listed on Schedule IV.
(b) The Borrower is the legal and beneficial owner of the
Borrower Collateral free and clear of any liens, security interest,
option or other charge or encumbrance except for the security interest
created by this Agreement. No effective financing statement or other
instrument similar in effect covering all or any part of the Borrower
Collateral is on file in any recording office, except such as may have
been filed (i) in favor of the Collateral Agent relating to this
Agreement or (ii) with respect to the Receivables, in favor of the
Borrower relating to the Purchase Agreement. The Borrower has no
trade names and does not do business under any fictitious business
name.
(c) The pledge and assignment of the Borrower Collateral
pursuant to this Agreement creates a valid and perfected first
priority security interest in the Borrower Collateral, and all filings
and other actions necessary or desirable to perfect and protect such
security interest have been duly taken.
(d) No authorization, consent, approval or other action
by, and no notice to or filing with, any governmental authority or
regulatory body is required (i) for the grant by the Borrower of the
assignment or security interest granted hereby or for the execution,
delivery or performance of this Agreement by the Borrower, (ii) for
the perfection of or the exercise by the Collateral Agent of its
rights and remedies provided for in this Agreement or (iii) to ensure
the legality, validity, enforceability or admissibility in evidence of
this Agreement in any jurisdiction in which any of the Collateral is
located.
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(e) None of the Account Collateral or Pledged Receivables
is evidenced by a promissory note or other instrument or constitutes
chattel paper.
(f) The Borrower has exclusive possession and control of
the Equipment, subject to the rights of any owners or lessors of
Equipment that is leased by the Borrower, and exclusive control of
each Blocked Deposit Account.
(g) Each of the Assigned Agreements to which Broadway, the
Servicer or the Borrower is a party constitutes the legal, valid and
binding obligation of such Person, enforceable against such Person, in
accordance with its terms. Each Pledged Receivable constitutes the
legally valid and binding obligation of the party obligated to pay the
same.
SECTION 10. Further Assurances; Supplements. (a) Each of
the Borrower and the Lender severally agrees that at any time and from time to
time, at the expense of the Borrower, each of the Borrower and the Lender will
promptly execute and deliver all further instruments and documents, and take
all further action that may be necessary or desirable, or that the Collateral
Agent may request, to perfect and protect the assignments and security
interests granted or purported to be granted hereby or to enable the Collateral
Agent to exercise and enforce its rights and remedies hereunder with respect to
any Collateral. Without limiting the generality of the foregoing, each of the
Borrower and the Lender will (i) if any Collateral shall be evidenced by a
promissory note or other instrument, or if any of the Collateral shall
constitute chattel paper, deliver and pledge to the Collateral Agent such note,
instrument and all original counterparts of chattel paper duly endorsed and
accompanied by duly executed instruments of transfer or assignment, all in form
satisfactory to the Collateral Agent and (ii) execute and file such financing
or continuation statements, or amendments thereto, and such other instruments
or notices, as may be necessary or desirable, or that the Collateral Agent may
request, to protect and preserve the assignments and security interests granted
or purported to be granted hereby.
(b) The Borrower and the Lender hereby severally
authorize the Collateral Agent to file one or more financing or continuation
statements, and amendments thereto, relative to all or any part of the
Collateral without the
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<PAGE> 23
signature of the Borrower or the Lender where permitted by law. A carbon,
photographic or other reproduction of this Agreement or any financing statement
covering the Collateral or any part thereof shall be sufficient as a financing
statement where permitted by law. The Collateral Agent will promptly send the
Borrower any financing or continuation statements thereto which it files
without the signature of the Borrower and will promptly send the Lender any
financing or continuation statements thereto which it files without the
signature of the Lender except, in the case of filings of copies of this
Agreement as financing statements, the Collateral Agent will promptly send the
Borrower or the Lender, as the case may be, the filing or recordation
information with respect thereto.
(c) Each of the Borrower and the Lender will furnish to
the Collateral Agent from time to time statements and schedules further
identifying and describing the Collateral and such other reports in connection
with the Collateral as the Collateral Agent may reasonably request, all in
reasonable detail.
(d) Each of the Borrower and the Lender severally agrees
that it will not (i) except as permitted or required pursuant to the Purchase
Agreement and the Indenture, sell, assign (by operation of law or otherwise) or
otherwise dispose of, or grant any option with respect to, any of the
Collateral or (ii) create or permit to exist any lien, security interest or
other charge or encumbrance upon or with respect to any of the Collateral,
except for Permitted Liens and the security interests under this Agreement.
SECTION 11. Additional Covenants. (a) The Borrower shall
keep its chief place of business and chief executive offices and the office
where it keeps its respective records concerning the Collateral at the location
therefor specified in Section 9(a) or, upon 30 days' prior written notice to
the Collateral Agent, at such other location in a jurisdiction where all action
required by Section 10 shall have been taken with respect to the Collateral.
The Borrower shall, for not less than three years or for such longer period as
may be required by law, from the date on which such Pledged Receivable arose,
maintain (i) complete records of each Pledged Receivable, including records of
all payments received, credits granted and merchandise returned and (ii) all
documentation relating thereto. The Borrower will permit representatives of
the Collateral Agent at any time and from time to time
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<PAGE> 24
during normal business hours, and at such times outside of normal business
hours as the Collateral Agent shall reasonably request, to inspect and make
copies of and abstracts from such records and visit the properties of the
Borrower or the Servicer utilized in connection with the collection, processing
or servicing of the Pledged Receivables. In connection therewith, the
Collateral Agent may institute procedures to permit it to confirm the obligor
balances in respect of any Pledged Receivables. The Borrower agrees to render
to Collateral Agent such clerical and other assistance as may be reasonably
requested with regard to the foregoing. If an Event of Default shall have
occurred and be continuing, promptly upon request therefor, the Borrower shall
deliver to the Collateral Agent (i) complete and correct copies of each Related
Contract and (ii) a File Tape reflecting activity through the close of business
on the immediately preceding Business Day.
(b) The Borrower shall duly fulfill in all material respects
all obligations on its part to be fulfilled under or in connection with the
Pledged Receivables and the Related Contracts and shall do nothing to impair
the rights of the Collateral Agent therein.
(c) Except as otherwise provided in this subsection (c),
and subject to the provisions of Sections 5 and 6 hereof, the Borrower shall
continue to collect or cause to be collected, at its own expense, all amounts
due or to become due to the Borrower under the Pledged Receivables, the
Assigned Agreements and any other Borrower Collateral. In connection with such
collections, the Borrower may take (and at the Collateral Agent's direction
after an Event of Default has occurred and is continuing, shall take) such
action as the Borrower or the Collateral Agent may deem necessary or advisable
to enforce collection of the Pledged Receivables and the Assigned Agreements;
provided, however, that the Collateral Agent may, at any time an Event of
Default has occurred and is continuing, notify Obligors with respect to any
Pledged Receivables or obligors under the Assigned Agreements of the assignment
of such Pledged Receivables or Assigned Agreements, as the case may be, to the
Collateral Agent and to direct that payments of all amounts due or to become
due to the Borrower thereunder be made directly to the Collateral Agent or any
servicer, collection agent or lockbox or other account designated by the
Collateral Agent and, upon such notification, and at the expense of the
Borrower, the Collateral Agent may enforce collection of any such Pledged
Receivables or the
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Assigned Agreements and adjust, settle or compromise the amount or payment
thereof.
(d) Any proceeds of Collateral, including In-Store
Payments and checks or money orders received in a Post Office Box, when first
received by or on behalf of the Borrower shall be deposited by or on behalf of
the Borrower in the form so received in a Blocked Deposit Account or the Cash
Collateral Account, and until so deposited shall be held in trust for and as
the Collateral Agent's property and shall not be commingled with the Borrower's
or any other Person's other funds or properties.
(e) Neither the Lender nor the Borrower will, without the
Collateral Agent's prior written consent, grant any extension of the time of
payment of any of the Collateral, compromise, compound or settle the same for
less than the full amount thereof or release, wholly or partly, any Person
liable for the payment thereof, except in accordance with the applicable Credit
and Collection Policy.
(f) The Borrower will, at its own cost and expense,
maintain satisfactory and complete records of the Collateral, including,
without limitation, a record of all payments received and all credits granted
with respect to the Collateral and all other dealings with the Collateral.
Each of the Borrower and the Servicer will mark conspicuously with a legend, in
form and substance satisfactory to the Collateral Agent, (A) its books,
records, computer tapes or disks, and credit files pertaining to the Collateral
and the Related Contracts and (B) its file cabinets or other storage facilities
where it maintains information pertaining to the Collateral and the Related
Contracts, to evidence this Agreement and the assignment and security interest
granted hereby. Upon the occurrence and during the continuation of an Event of
Default, the Borrower will (i) deliver and turn over to the Collateral Agent or
to its representatives, or at the option of the Collateral Agent shall provide
the Collateral Agent or its representatives with access to, at any time on
demand of the Collateral Agent, all the Borrower's books and records pertaining
to the Collateral and the Related Contracts including, without limitation, all
original sales slips, invoices, credit files and computer software, programs,
tapes or disks (including but not limited to all File Tapes) relating to
Receivables or otherwise necessary to the servicing thereof and/or (ii) allow
the Collateral Agent to occupy the premises of the Borrower and/or the Servicer
where such
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books, records, Related Contracts, credit files, computer tapes and File Tapes
are maintained and utilize such premises, the equipment thereon and any
personnel of the Borrower or the Servicer that the Collateral Agent may wish to
employ, to administer, service and collect the Pledged Receivables. The amount
represented by the Borrower to the Collateral Agent from time to time as owing
by Obligors in respect of the Pledged Receivables will at such time be, in all
material respects, the correct amount actually and unconditionally owing by
such Obligors thereunder.
(g) Each of the Lender, the Borrower and the Servicer
will comply in all material respects with all applicable statutes, rules, and
regulations with respect to the Collateral or any part thereof.
(h) The Borrower will pay promptly when due all taxes,
assessments and governmental charges or levies imposed upon the Collateral or
in respect of its income or profits therefrom and all claims of any kind
(including, without limitation, claims for labor, materials and supplies),
except that no such amount need be paid if (i) such non-payment does not
involve any danger of the sale, forfeiture or loss of any of the Collateral or
any interest therein, (ii) the charge or levy is being contested in good faith
and by proper proceedings, and (iii) the obligation to pay such amount is
adequately reserved against in accordance with and to the extent required by
U.S. GAAP.
(i) The Borrower will (i) perform and observe all the
terms and provisions of the Assigned Agreements to be performed or observed by
it, maintain the Assigned Agreements in full force and effect, enforce the
Assigned Agreements in accordance with their terms and take all such action to
such end as may be from time to time requested by the Collateral Agent, and
(ii) furnish to the Collateral Agent promptly upon receipt thereof copies of
all notices, requests and other documents received by the Borrower under or
pursuant to the Assigned Agreements, and from time to time (A) furnish to the
Collateral Agent such information and reports regarding the Assigned Collateral
as the Collateral Agent may reasonably request and (B) upon request of the
Collateral Agent, make to any counterparty to the Assigned Agreements such
demands and requests for information and reports or for action as the Borrower
is entitled to make under the Assigned Agreements.
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(j) Without the prior written approval of the Collateral
Agent, the Borrower will not (i) cancel or terminate any of the Assigned
Agreements or consent to or accept any cancellation or termination thereof,
(ii) amend or otherwise modify any of the Assigned Agreements or give any
material consent, waiver or approval thereunder, (iii) waive any default under
or breach of any of the Assigned Agreements or (iv) take any other action not
required by the terms of any of the Assigned Agreements that would affect the
value of the interest or rights of the Borrower thereunder or that would affect
the interests or rights of the Collateral Agent.
(k) The Lender will (i) perform and observe all the terms
and provisions of the Lender Assigned Agreements to be performed or observed by
it, maintain the Lender Assigned Agreements in full force and effect, enforce
the Lender Assigned Agreements in accordance with their terms and take all such
action to such end as may be from time to time requested by the Collateral
Agent, and (ii) furnish to the Collateral Agent promptly upon receipt thereof
copies of all notices, requests and other documents received by the Lender
under or pursuant to the Lender Assigned Agreements, and from time to time (A)
furnish to the Collateral Agent such information and reports regarding the
Lender Assigned Agreements as the Collateral Agent may reasonably request and
(B) upon request of the Collateral Agent, make to any counterparty to the
Lender Assigned Agreements such demands and requests for information and
reports or for action as the Lender is entitled to make under the Lender
Assigned Agreements.
(l) Without the prior written approval of the Collateral
Agent, the Lender will not (i) cancel or terminate any of the Lender Assigned
Agreements or consent to or accept any cancellation or termination thereof,
(ii) amend or otherwise modify any of the Lender Assigned Agreements or give
any material consent, waiver or approval thereunder, (iii) waive any default
under or breach of any of the Lender Assigned Agreements or (iv) take any other
action not required by the terms of any of the Lender Assigned Agreements that
would impair the value of the interest or rights of the Lender thereunder or
that would impair the interest of rights of the Collateral Agent.
(m) Each of the Lender and the Borrower will advise the
Collateral Agent promptly, in reasonable detail, (i) of any lien, security
interest, encumbrance or claim made or asserted against any of the Collateral
and (ii) of
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the occurrence of any event which would have a material adverse effect on the
aggregate value of the Collateral or on the assignments and security interests
granted hereby.
(n) Neither the Borrower nor the Lender will sell, assign (by
operation of law or otherwise), or otherwise dispose of, or grant any option
with respect to, any of the Collateral, except for sales of Equipment or sales
permitted or required pursuant to the terms of the Purchase Agreement.
SECTION 12. Collateral Agent Appointed Attorney-in-Fact. The
Borrower and the Lender each appoints the Collateral Agent its respective
attorney-in-fact with full authority in the place and stead of the Borrower or
the Lender, as the case may be, and in the name of the Borrower or the Lender,
as the case may be, or otherwise, from time to time in the Collateral Agent's
discretion, after an Event of Default has occurred and is continuing, to take
any action and to execute any instrument that the Collateral Agent may deem
necessary or advisable to accomplish the purposes of this Agreement, including,
without limitation, to (i) ask, demand, collect, sue for, recover, compromise,
receive and give acquittances and receipts for moneys due and to become due
under or in connection with the Collateral, (ii) receive, endorse and collect
all drafts or other instruments and documents made payable to the Borrower or
the Lender, as the case may be, in connection therewith or representing any
payment, dividend or other distribution in respect of the Collateral or any
part thereof and to give full discharge for the same, (iii) file any claims or
take any action or institute any proceedings which the Collateral Agent may
deem to be necessary or desirable for the collection of any of the Collateral,
(iv) enforce the rights of the Collateral Agent with respect to any of the
Collateral and compliance with the terms and conditions of the Assigned
Agreements and the Lender Assigned Agreements, (v) pay or discharge taxes or
Liens levied or placed upon or threatened against the Collateral, the legality
or validity thereof and the amounts necessary to discharge the same to be
determined by the Collateral Agent in its sole discretion, and such payments
made by the Collateral Agent to become obligations of the Borrower to the
Collateral Agent, due and payable in accordance with Section 9.06 of the Credit
Agreement, (vi) generally sell, transfer, pledge, make any agreement with
respect to or otherwise deal with any of the Collateral as fully and completely
as though the Collateral Agent were the absolute owner thereof for all
purposes, and (vii) do,
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at the Collateral Agent's option and the Borrower's expense, at any time, or
from time to time, all acts and things that the Collateral Agent deems
necessary to protect, preserve or realize upon the Collateral and the
Collateral Agent's security interest therein, in order to effect the intent of
this Agreement, all as fully and effectively as the Borrower or the Lender
might do, including but not limited to, occupying any premises of the Borrower
or the Servicer where the books, records, Related Contracts, credit files,
computer tapes and/or File Tapes relating to the Pledged Receivables are
maintained and utilize such premises, the equipment located thereon and the
personnel of the Borrower or the Servicer employed thereat (who may be employed
by the Collateral Agent if such personnel so agree) to administer, service and
collect the Pledged Receivables. The Collateral Agent agrees that, if
Broadway's appointment to act as the Servicer of the Receivables pursuant to
the Purchase Agreement is terminated for any reason and a successor Servicer
has not been appointed in accordance with the terms of the Purchase Agreement,
the Collateral Agent will accept such appointment and act as the Servicer of
the Receivables in accordance with the terms of the Purchase Agreement.
SECTION 13. Collateral Agent May Perform. If the Borrower or
the Lender fails to perform any agreement contained herein or if a Default or
an Event of Default shall have occurred and be continuing, the Collateral Agent
may at any time itself perform, or cause performance of, such agreement.
Without limiting the foregoing, the Collateral Agent shall at all times have
the right to perform the Lender's obligations under the Lender Assigned
Agreements, to compel performance by the other parties thereto, and to
otherwise exercise all remedies available to the Lender thereunder and to
terminate, amend, supplement or modify the Lender Assigned Agreements on the
Lender's behalf. In such case, the expenses of the Collateral Agent incurred
in connection therewith shall be payable by the Borrower under Section 18.
SECTION 14. The Collateral Agent. (a) Each of the Agent, the
Lender, the Trustee, the LOC Agent, the Depositary and the Liquidity Agent
hereby appoints and authorizes the Collateral Agent to take such action as
agent on its behalf and to exercise such powers and discretion under this
Agreement as are delegated to the Collateral Agent by the terms hereof,
together with such powers as are reasonably incidental thereto. The Collateral
Agent hereby agrees to act as the Collateral Agent on the terms and con-
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ditions provided in this Agreement. As to any action not expressly provided
for by this Agreement, the Collateral Agent shall not be required to exercise
any discretion or to take any action, but shall be required to act or to
refrain from acting (and shall be fully protected in so acting or refraining
from acting) upon the instructions of the Controlling Party, and such
instructions shall be binding upon the Secured Parties; provided, however, that
the Collateral Agent shall not be required to take any action which exposes the
Collateral Agent to personal liability or which is contrary to any of the
Facility Documents or applicable law. The Collateral Agent shall be entitled
to rely on any communication, instrument, paper or other document believed by
it to be genuine and correct and to have been signed or sent by the proper
Person or Persons. The Collateral Agent shall provide the LOC Agent, the
Depositary, the Liquidity Agent, the Trustee and the Agent with copies of all
notices received by it in accordance with this Agreement. For the purposes of
this Agreement, "Controlling Party" shall mean the LOC Agent; provided that, at
any time at which the LOC Providers shall be in default in respect of their
obligations under the LOC, the Liquidity Agent shall be the "Controlling
Party"; provided further, that, from and after the date on which all of the
Secured Obligations other than the obligations of the Borrower in respect of
the Indenture Notes and the Indenture have been paid in full, the Trustee shall
be the "Controlling Party."
(b) Neither the Collateral Agent nor the Controlling Party
nor any of their respective affiliates, directors, officers, agents or
employees shall be liable for any action taken or omitted to be taken by it or
them under or in connection with this Agreement or for errors in judgment,
except for its or their own gross negligence, willful misconduct or bad faith
as determined by a final judgment of a court of competent jurisdiction.
(c) The powers conferred on the Collateral Agent hereunder
are solely to protect its interest in the Collateral and shall not impose any
duty upon the Collateral Agent to exercise any such powers, except as otherwise
provided in subsection (a) above. Except for the exercise of reasonable care
in the custody and preservation of any Collateral in its possession and
accounting for moneys actually received by it hereunder, the Collateral Agent
shall have no duty as to any Collateral or as to any rights pertaining thereto.
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(d) The Collateral Agent shall be deemed to have exercised
reasonable care in the custody and preservation of the Collateral in its
possession if the Collateral is accorded treatment substantially equal to that
which the Collateral Agent accords its own property, it being understood that
(i) neither the Collateral Agent nor any of the Secured Parties shall have
responsibility for (A) taking any necessary steps to preserve rights against
any parties hereto or the parties for whom they are acting as agents or (B) the
collection of any proceeds of any Collateral or by reason of any invalidity,
lack of value or uncollectibility of any of the payments received by it from
Obligors or otherwise and (ii) neither the Collateral Agent nor the Cash
Collateral Bank shall have any responsibility for evaluating, selecting or in
any way rendering any advice with respect to any Investments.
(e) GE Capital and its Affiliates may generally engage in any
kind of business with the Lender, the Borrower, the Cash Collateral Bank, the
LOC Providers, the Trustee and the Liquidity Lenders, any of their respective
Affiliates and any person who may do business with or own securities of the
Lender, the Borrower, the Cash Collateral Bank, the LOC Providers, the Trustee,
the Noteholders and the Liquidity Lenders or any of their respective
Affiliates, all as if GE Capital were not Collateral Agent and without any duty
to account therefor to any party to this Agreement or any other Secured Party.
Each Secured Party expressly acknowledges that GE Capital is the lender under
that certain Credit Agreement dated as of October 8, 1992 between GE Capital
and Broadway Stores, Inc. (formerly Carter Hawley Hale Stores, Inc.).
SECTION 15. Remedies Upon Default; Application of Collateral.
(a) If either (x) any Event of Default shall have occurred and be continuing or
(y) any "event of default" under (and as defined in) the Indenture shall have
occurred and be continuing following the payment in full of the Secured
Obligations under the Credit Agreement, the Reimbursement Agreement, the
Liquidity Agreement, the Depositary Agreement and the Commercial Paper, then:
(i) The Cash Collateral Bank may, at the instruction of the
Collateral Agent, without notice to the Borrower except as required by law
and at any time or from time to time, charge, set off and otherwise apply
all or any part of the Secured Obligations against the Cash Collateral
Account or the Blocked
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Deposit Accounts, or any part thereof in accordance with the priorities
set forth in Section 15(b).
(ii) The Collateral Agent, acting pursuant to instructions
as provided below, may exercise in respect of the Collateral, in
addition to any and all other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of a secured party
on default under the UCC as in effect in the State of New York (such
rights and remedies of the Collateral Agent to be cumulative and
nonexclusive), and the Collateral Agent may also, without notice except as
specified below solicit and accept bids for and sell the Collateral or any
part thereof in one or more parcels at public or private sale, at any
exchange, broker's board or at any of the Collateral Agent's offices or
elsewhere, for cash, on credit or for future delivery, and upon such other
terms as the Collateral Agent may deem commercially reasonable; provided,
however, that the Collateral Agent may not effect any sale of the
Purchased Receivables unless (1) the proceeds of such sale are sufficient
to pay in full all of the Secured Obligations specified in clauses First
through and including Twelfth of Section 15(b) below or (2) the holders of
66-2/3% in principal amount of the outstanding Indenture Notes consent to
such sale. The Borrower agrees that, to the extent notice of sale shall
be required by law, at least ten Business Days' notice to the Borrower of
the time and place of any public sale or the time after which any private
sale is to be made shall constitute reasonable notification. The
Collateral Agent shall not be obligated to make any sale of Collateral
regardless of notice of sale having been given. The Collateral Agent may
adjourn any public or private sale from time to time by announcement at
the time and place fixed therefor, and such sale may, without further
notice, be made at the time and place to which it was so adjourned.
(iii) If a sale of the Collateral or any part or parcel
thereof is being made, the Collateral Agent shall follow the instructions
of the Controlling Party. The Controlling Party may instruct the
Collateral Agent to exercise any other right or power of the Collateral
Agent under the Facility Documents and, subject to Section 14, the
Collateral Agent shall follow the instructions of the Controlling Party.
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<PAGE> 33
(iv) The Collateral Agent may exercise at the Borrower's
expense any and all rights and remedies of the Borrower under or in
connection with the Assigned Agreements or the other Borrower Collateral
or of the Lender under or in connection with the Lender Assigned
Agreements or the other Lender Collateral, or both in respect of the
Collateral, including, without limitation, any and all rights of the
Borrower or the Lender to demand or otherwise require payment of any
amount under, or performance of any provision of, the Assigned Agreements
or the Lender Assigned Agreements, as the case may be.
(v) All payments received by the Borrower or the Lender under or
in connection with the Borrower Collateral or Lender Collateral shall be
received in trust for the benefit of the Collateral Agent, shall be
segregated from other funds of the Borrower and the Lender and shall be
forthwith paid over to the Collateral Agent in the same form as so
received (with any necessary endorsement).
(b) If an Event of Default shall have occurred and be
continuing or an Early Amortization Event shall have occurred, or any such
event would occur as a result of the application of amounts in the Cash
Collateral Account in accordance with the priorities set forth in Section 7(a)
hereof, then any cash held by the Cash Collateral Bank or the Collateral Agent
as Account Collateral, whether from Purchased Receivables or otherwise, and all
cash proceeds received by the Cash Collateral Bank or the Collateral Agent in
respect of any sale of, collection from, or other realization upon all or any
part of the Collateral shall be applied as follows:
First, to the payment of any costs or expenses payable to the
Collateral Agent pursuant to Section 18(b) of this Agreement;
Second, to the payment of any amounts owing to the Servicer or
any successor thereto (including GE Capital if it is acting as the
Successor Servicer);
Third, ratably to the daily pro rata portion of amounts payable
under Sections 2.07(b) and (c) of the Credit Agreement, which amounts
shall be segregated within the Cash Collateral Account for payment to the
appropriate party on its fee payment date;
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<PAGE> 34
Fourth, to amounts due as interest on any Commercial Paper;
Fifth, to amounts due as interest or overdue interest on any
Loans; provided that the maximum amount payable pursuant to this clause
Fifth with respect to any period, when added to the amount distributed in
respect of such period pursuant to clause Fourth above, shall not exceed
an amount equal to interest on the Note for such period at a rate per
annum equal to the higher of (i) 10.92% and (ii) the H.15 Commercial Paper
Rate in effect from time to time;
Sixth, to amounts due as interest on the Class A Notes at a rate
per annum not in excess of 7.55%;
Seventh, to amounts due as interest on the Class B Notes at a
rate per annum not in excess of 11%;
Eighth, to amounts due as principal of any Loans (but not in
excess of the principal amount then due and owing under the Note);
Ninth, to amounts due as principal of Commercial Paper (but not
in excess of the principal amount then due and owing under the Note);
Tenth, after all Commercial Paper has been retired and the Loans
have been reduced to zero, to amounts owing to the LOC Providers under
Sections 2.03 and 2.05 of the Reimbursement Agreement; provided, that the
maximum amount payable pursuant to this clause Tenth with respect to any
period for interest on drawings under the Letter of Credit pursuant to
Section 2.03 of the Reimbursement Agreement and the LOC Commitment Fee
pursuant to Section 2.05 of the Reimbursement Agreement, when added to the
amounts distributed in respect of such period pursuant to clauses Fourth
and Fifth above, shall not exceed an amount equal to interest on the
principal amount of Blue Hawk Note for such period at a rate per annum
equal to the higher of (i) 10.92% and (ii) the H.15 Commercial Paper Rate
in effect from time to time;
Eleventh, to the outstanding principal of the Class A Notes until
the principal of the Class A Notes is reduced to zero;
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<PAGE> 35
Twelfth, to the outstanding principal of the Class B Notes until
the principal of the Class B Notes is reduced to zero;
Thirteenth, to amounts due as interest or overdue interest on any
Loans, to the extent not paid in accordance with clause Fifth above;
Fourteenth, to amounts due and owing to the LOC Providers under
Sections 2.03 and 2.05 of the Reimbursement Agreement, to the extent not
paid in accordance with clause Tenth above;
Fifteenth, to the payment of any amounts payable to the
Collateral Agent pursuant to Section 18(a) of this Agreement;
Sixteenth, ratably to any other amounts owing under the Facility
Documents;
Seventeenth, to the payment of any Make-Whole Premium due and
owing in respect of the Class A Notes;
Eighteenth, to the payment of any Make-Whole Premium due and
owing in respect of the Class B Notes;
Nineteenth, to amounts due as interest or overdue interest on the
Class A Notes, to the extent not paid in accordance with clause Sixth
above; and
Twentieth, to amounts due as interest or overdue interest on the
Class B Notes, to the extent not paid in accordance with clause Seventh
above.
Any surplus of such cash or cash proceeds held by the Cash Collateral Bank or
the Collateral Agent and remaining after the payment in full of all the Secured
Obligations and all outstanding Commercial Paper has been paid in full shall be
paid over to the Borrower or to whomsoever may be lawfully entitled thereto
(including, but not limited to, the lender(s) under the Retailer Credit
Agreement). For the purposes of this Section 15(b), "H.15 Commercial Paper
Rate" means the rate for commercial paper having a maturity of one month as
published from time to time by the Board of Governors of the Federal Reserve
System in "Statistical Release H.15 (519), Selected Interest Rates," or in any
successor publication, under the heading "Commercial Paper."
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<PAGE> 36
(c) The Borrower hereby waives any and all rights it may have
to contest any exercise by the Collateral Agent of any of its rights or
remedies under this Section 15.
SECTION 16. Drawings Under the LOC. (a) During the period
commencing on the second Business Day preceding the L/C Expiration Date (as
defined in the Reimbursement Agreement) then in effect and ending on such L/C
Expiration Date, the Collateral Agent shall execute and deliver to the Letter
of Credit Agent a Certificate for Drawing in the amount of the entire Letter of
Credit Amount (as defined in the Reimbursement Agreement) determined as of the
L/C Expiration Date.
(b) At or prior to 2:30 p.m. (New York City time) on any
date, the Collateral Agent shall determine whether the Cash Collateral Account
and the Lender's Account have sufficient funds in the amount of the Required
Payments due on such date. In the event that there are insufficient funds to
make such Required Payments the Collateral Agent shall provide notice
(telephonic or written) to the Borrower, the Trustee and the Agent of such
insufficiency and, if such insufficiency continues to exist as of the earlier
of (i) 1:00 p.m. (New York City time) on the second Business Day following the
date such Required Payments were due or (ii) 2:45 p.m. (New York City time) on
the Liquidity Termination Date, the Collateral Agent shall immediately execute
and deliver to the Letter of Credit Agent a Certificate for Drawing
(substantially in the form of Annex 1 to the Letter of Credit) on the Letter of
Credit in an amount equal to the lesser of (x) the amount of such insufficiency
and (y) the Letter of Credit Amount then in effect; provided, however, that if
the Letter of Credit has been drawn to fund the Reserve Account, pursuant to
Section 2.12 of the Reimbursement Agreement, the Collateral Agent shall instead
withdraw funds from the Reserve Account, in accordance with this Agreement, and
shall promptly execute and deliver to the LOC Agent, the Agent, the Trustee and
the Borrower a Notice of Reserve Account Draw (substantially in the form of
Exhibit II to the Reimbursement Agreement); provided further, that if such an
insufficiency exists at 12:30 p.m. (New York City time) on any date on which
the CP Matured Value of the Commercial Paper maturing on such date exceeds an
amount equal to the sum of (1) the aggregate proceeds of the Commercial Paper
issued on such date plus (2) the funds available in the Lender's Account and
the Cash Collateral Account to pay such maturing Commercial Paper plus (3) the
aggregate amount of the
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<PAGE> 37
Refunding Loans that the Lender is permitted to borrow on such date in
accordance with the terms of the Liquidity Agreement, then the Collateral Agent
shall execute and deliver such Certificate of Drawing or such Notice of Reserve
Account Draw, as the case may be, not later than 1:00 p.m. (New York City time)
on such date.
SECTION 17. Amendments, Etc. No amendment of any provision of
this Agreement shall in any event be effective unless the same shall be in
writing and signed by the Borrower, the LOC Agent, the Liquidity Agent, the
Cash Collateral Bank, the Lender, the Trustee, the Agent and the Collateral
Agent, no waiver of any provision of this Agreement, nor consent to any
departure by the Borrower therefrom, shall in any event be effective unless the
same shall be in writing and signed by, the LOC Agent, the Liquidity Agent, the
Cash Collateral Bank, the Agent, the Trustee and the Collateral Agent, and then
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given. No failure to exercise nor any delay in
exercising on the part of the Collateral Agent or any Secured Party any right,
power or privilege under this Agreement, shall operate as a waiver thereof;
further, no single or partial exercise of any right, power or privilege under
this Agreement shall preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The Borrower shall promptly
provide each Rating Agency with copies of all amendments to this Agreement.
SECTION 18. Indemnity and Expenses. (a) The Borrower agrees to
indemnify the Collateral Agent, the Cash Collateral Bank and each of their
respective directors, officers, employees and agents (each an "Indemnified
Person") from and against any and all claims, damages, losses, liabilities and
expenses arising out of or in connection with or resulting from this Agreement
(including, without limitation, enforcement of this Agreement), unless and to
the extent such claim, damage, loss, liability or expense was attributable to
the gross negligence, willful misconduct or bad faith of the Lender or any
Indemnified Person as determined by a final judgment of a court of competent
jurisdiction.
(b) The Borrower agrees to pay to the Collateral Agent from
time to time, upon demand, the amount of any and all costs and expenses,
including the reasonable fees and expenses of its counsel and of any experts
and agents, that the Collateral Agent may incur in connection with (i) the
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<PAGE> 38
administration of this Agreement, (ii) the custody or preservation of, or the
sale of, collection from, or other realization upon, any of the Collateral
(including, but not limited to, any and all costs and expenses incurred by the
Collateral Agent in collecting the Pledged Receivables or otherwise acting as a
Successor Servicer in respect thereof pursuant to the Purchase Agreement),
(iii) the exercise or enforcement of any of the rights of the Collateral Agent
or any of the Secured Parties, the Agent, the Lender, the LOC Providers, the
Depositary, the Trustee or the Liquidity Lenders hereunder, (iv) the failure by
the Borrower to perform or observe any of the provisions hereof or (v) any
action taken by the Collateral Agent pursuant to Section 10 or 13 hereof.
(c) The foregoing provisions of this Section 18 are in
furtherance and not in limitation of the Borrower's obligations under Sections
8.01 and 9.06 of the Credit Agreement.
(d) The Collateral Agent agrees that the obligations of the
Lender and the Borrower hereunder shall be non-recourse to the Lender and the
Borrower, and shall be payable solely out of the Collateral and the Collateral
Agent shall not look to any other property or assets of the Lender or the
Borrower in respect of such obligations. In the event that there is any
insufficiency with respect to any amount owing to the Collateral Agent, such
insufficiency shall not constitute a claim against the Lender or the Borrower
and such indebtedness shall be subordinated to the Commercial Paper and the
Non-Affiliate Subordinated Notes as provided in Section 15(b) hereof.
SECTION 19. Successor Collateral Agent. The Collateral Agent
may resign at any time by giving written notice thereof to the Depositary, the
LOC Agent, the Liquidity Agent, the Agent, the Lender, the Trustee, the Cash
Collateral Bank and the Borrower, such resignation to be effective upon the
acceptance by a successor Collateral Agent of its appointment as such. Upon
any such resignation, the Agent, with the consent of the Controlling Party,
shall have the right to appoint a successor Collateral Agent. If no successor
Collateral Agent shall have been so appointed by the Agent and shall have
accepted such appointment, within 30 days after the retiring Collateral Agent's
giving of notice of resignation, the retiring Collateral Agent may, on behalf
of the Agent, appoint a successor Collateral Agent, which shall be a commercial
bank organized under the laws of the United
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<PAGE> 39
States of America or of any State thereof and having a combined capital and
surplus of at least $100,000,000. Upon the acceptance of any appointment as
Collateral Agent hereunder by a successor Collateral Agent, such successor
Collateral Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Collateral Agent, and the
retiring Collateral Agent shall be discharged from its duties and obligations
under this Agreement.
SECTION 20. Addresses for Notices. All notices and other
communications provided for hereunder shall be in writing (including
telecopier) and, if to the Agent, the Lender or the Borrower, mailed,
telecopied, delivered by nationally recognized overnight courier or hand
delivered to it, addressed to it at the address of such party specified in the
Credit Agreement, if to the Collateral Agent, mailed, telecopied, delivered by
nationally recognized overnight courier or hand delivered to it at 2323 N.
Central Expressway, Suite 101, Richardson, Texas 75080, Attention: Harold
Goehl, Telephone No. (214) 907-4971, Telecopier No. (214) 907-4912, if to the
LOC Agent, mailed, telecopied, delivered by nationally recognized overnight
courier or hand delivered to it at the address specified in the Reimbursement
Agreement, if to the Liquidity Agent, mailed, telecopied, delivered by
nationally recognized overnight courier or hand delivered to it at the address
specified in the Liquidity Agreement, if to the Cash Collateral Bank mailed,
telecopied, delivered by nationally recognized overnight courier or hand
delivered to it at Four Albany Street, New York, New York 10006, if to the
Trustee, mailed, telecopied, delivered by nationally recognized overnight
courier or hand delivered to it at the address specified in the Indenture, or
as to any party, at such other address as shall be designated by such party in
a written notice to each other party complying as to delivery with the terms of
this Section. All such notices and other communications shall be effective
when mailed, telecopied (with telephone confirmation of receipt received), or
delivered to the courier service, addressed as aforesaid.
SECTION 21. No Waiver; Cumulative Remedies. Neither the
Collateral Agent nor any of the Secured Parties shall by any act, delay,
omission or otherwise be deemed to have waived any of its rights or remedies
hereunder, and no waiver shall be valid unless in writing and signed by the
Collateral Agent. A waiver by the Collateral Agent of any right or remedy
hereunder on any one occasion shall not be
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<PAGE> 40
construed as a bar to any right or remedy which the Collateral Agent would
otherwise have on any future occasion.
SECTION 22. Continuing Security Interest. This Agreement shall
create a continuing security interest in the Collateral and shall (i) remain in
full force and effect until the payment in full (after the Commitment
Termination Date) of the Secured Obligations, (ii) be binding upon the Borrower
and the Lender and their successors and assigns, including but not limited to
any trustee or examiner for the Borrower under the Bankruptcy Code, and (iii)
inure, together with the rights and remedies of the Collateral Agent hereunder,
to the benefit of the Collateral Agent and the Secured Parties and their
respective successors, transferees and assigns. Upon the payment in full
(after the Commitment Termination Date) of the Secured Obligations, the
Borrower shall be entitled to the return, upon its request and at its expense,
of such of the Collateral as shall not have been sold or otherwise applied
pursuant to the terms hereof, at which time the Collateral Agent shall, at the
expense and request of the Borrower, reassign and deliver to the Borrower, or
to such Person or Persons as may be lawfully entitled thereto, against receipt,
such of the Collateral (if any) as shall not have been sold or otherwise
applied by the Collateral Agent pursuant to the terms hereof, together with
appropriate instruments of reassignment and release.
SECTION 23. Further Indemnification. Without limiting the
obligations of the Borrower under Section 18 above, the Borrower agrees to pay,
and to save the Collateral Agent and the Secured Parties harmless from, any and
all liabilities with respect to, or resulting from any delay in paying, any and
all excise, sales or other similar taxes which may be payable or determined to
be payable with respect to any of the Collateral or in connection with any of
the transactions contemplated by this Agreement.
SECTION 24. Governing Law; Terms. This Agreement shall be
governed by, and construed in accordance with, the law of the State of New
York, except to the extent that the validity or perfection of the security
interest hereunder, or remedies hereunder, in respect of any particular
Collateral are governed by the law of a jurisdiction other than the State of
New York. Unless otherwise defined herein or in the Credit Agreement, terms
used in Article 9 of the Uniform Commercial Code in the State of New York are
used herein as therein defined.
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SECTION 25. No Petition in Bankruptcy. Each of the parties to
this Agreement severally and not jointly, hereby covenants and agrees that,
prior to the date which is one year and one day after the payment in full of
all outstanding Commercial Paper, Loans and Indenture Notes, it will not
institute against, or join any other Person in instituting against, the Lender
or the Borrower any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings or other similar proceeding under the laws of the
United States or any state of the United States.
SECTION 26. Waiver of Jury Trial. EACH OF THE PARTIES HERETO
AGREES TO WAIVE ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF THIS AGREEMENT. The scope of this waiver is
intended to be all-encompassing of any and all disputes that may be filed in
any court and that relate to the subject matter of this transaction, including
without limitation, contract claims, tort claims, breach of other common law
and statutory claims. Each of the parties hereto acknowledges that this waiver
is a material inducement for each other party to enter into a business
relationship, that each other party has already relied on the waiver in
entering into this Agreement and that each will continue to rely on the waiver
in their related future dealings. Each of the parties hereto further warrants
and represents that each has reviewed this waiver with its legal counsel, and
that each knowingly and voluntarily waives its jury trial rights following
consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT
MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO
ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
AGREEMENT. In the event of litigation, this Agreement may be filed as a
written consent to a trial by the court.
SECTION 27. Jurisdiction; Consent to Service of Process. (a)
The Borrower hereby irrevocably and unconditionally submits, for itself and its
property, to the non-exclusive 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, the other Facility Documents or any of the Basic
Documents (as defined in the Indenture), or for recognition of 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
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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 shall affect any right that the
Collateral Agent may otherwise have to bring any action or proceeding relating
to this Agreement, the other Facility Documents or the Basic Documents against
the Borrower or its properties in the courts of any jurisdiction.
(b) The Borrower hereby irrevocably and unconditionally waives,
to the fullest extent it may legally and effectively do so, any objection 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, the other Facility
Documents or the Basic 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) The Borrower irrevocably consents to service of process in
the manner provided for notices in Section 20. 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 28. Headings. Section and subsection headings in this
Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement or be given any substantive effect.
SECTION 29. Severability. In case any provision in or
obligation under this Agreement shall be invalid, illegal or unenforceable in
any jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
SECTION 30. Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall be deemed an original and all of
which together shall constitute one and the same Agreement.
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<PAGE> 43
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and delivered by their respective officers thereunto duly
authorized, as of the date first above written.
BROADWAY RECEIVABLES, INC.
(formerly CHH Receivables, Inc.),
as the Borrower
By_________________________________
Title:
GENERAL ELECTRIC CAPITAL CORPORATION,
as the Agent, the Liquidity Agent
and the LOC Agent
By_________________________________
Title:
BLUE HAWK FUNDING CORPORATION,
as the Lender
By_________________________________
Title:
BANKERS TRUST COMPANY,
as Trustee
By_________________________________
Title:
BANKERS TRUST COMPANY,
as the Cash Collateral Bank
By_________________________________
Title:
GENERAL ELECTRIC CAPITAL CORPORATION,
as the Collateral Agent
By_________________________________
Title:
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<PAGE> 44
SCHEDULE I
BLOCKED DEPOSIT ACCOUNTS
<TABLE>
<CAPTION>
Name and Address Mailing Address of
of Bank Blocked Deposit Account Number
- ----------------------- ------------------ --------------
<S> <C> <C>
</TABLE>
<PAGE> 45
SCHEDULE II
POST OFFICE BOXES
1. Post Office Box 52094
Phoenix General Mail Facility
4949 East Van Buren Street
Phoenix, Arizona 85026
<PAGE> 46
SCHEDULE III
EQUIPMENT LOCATIONS
1. Broadway Stores, Inc.
Phoenix Administrative Center (PAC)
1345 South 52nd Street
Tempe, Arizona 85281
2. Broadway Stores, Inc.
Information Services
1600 North Kraemer Boulevard
Anaheim, California 92806
<PAGE> 47
SCHEDULE IV
Offices Where Related Contracts and Books,
Records, Etc. Evidencing Receivables Are Kept
Broadway Southern California
3880 N. Mission Road
Los Angeles, CA 90031
Broadway Southwest
1524 W. 14th Street
Tempe, AZ 85281
Phoenix Administrative Center (PAC)
1345 So. 52nd Street
Tempe, AZ 85281
Information Services
1600 N. Kraemer Blvd.
Anaheim, CA 92806
Arcus Data Security, Inc.
288 Navajo
San Marcos, CA 92069
<PAGE> 1
EXHIBIT 4.4
AMENDMENT NO. 1 TO RECEIVABLES PURCHASE AGREEMENT
Amendment No. 1 to Receivables Purchase Agreement (this
"Amendment"), dated as of September 13, 1994 by and between BROADWAY
RECEIVABLES, INC. (formerly, CHH Receivables, Inc.) (the "Purchaser") and
BROADWAY STORES, INC. (formerly, Carter Hawley Hale Stores, Inc.) (the "Seller"
and "Servicer"). All capitalized terms used herein not otherwise defined shall
have the respective meanings assigned to such terms in the Receivables Purchase
Agreement hereinafter described.
W I T N E S S E T H :
WHEREAS, the parties hereto have entered into a Receivables
Purchase Agreement, dated as of October 8, 1992 (the "Receivables Purchase
Agreement"); and
WHEREAS, the parties hereto wish to amend the Receivables
Purchase Agreement as hereinafter provided;
NOW, THEREFORE, in consideration of the premises and of the
commitments made hereunder by the Seller and the Purchaser, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound, hereby agree
as follows:
1. Section 6.3(a) of the Receivables Purchase Agreement is hereby
amended by deleting the clause "the fiscal quarter of the Seller ending in
October of each year commencing in 1992" in lines 7 and 8 thereof and inserting
in lieu thereof the following language:
"each fiscal year of the Seller,".
2. Section 6.3(b) of the Receivables Purchase Agreement is hereby
amended by deleting the clause "45 days after the end of the fiscal quarter of
the Seller ending in July or August of each year commencing in 1993" in lines
4, 5 and 6 thereof and inserting in lieu thereof the following language:
"60 days after the end of the second fiscal quarter of each fiscal
year of the Seller".
<PAGE> 2
3. Section 6.17 of the Receivables Purchase Agreement is hereby
amended by deleting clauses (iii) and (iv) thereof and substituting in place
therefor the following:
"(iii) a written confirmation will have been obtained from each Rating
Agency rating the Commercial paper or the Non-Affiliate Subordinated
Notes that the rating of the Commercial Paper or the Non-Affiliate
Subordinated Notes, as applicable, will not be affected as the result
of the contemplated transfer of the Accounts, the Receivables and the
credit card operations to the Arizona Bank, (iv) each of the
Collateral Agent, the Agent, the LOC Providers, the Trustee and the
Liquidity Lenders will have received an opinion of counsel acceptable
to each party with respect to clause (ii) above and as to certain
other matters, including appropriate federal and Arizona state tax
opinions and"
4. Section 10.6 of the Receivables Purchase Agreement is hereby
amended and restated in its entirety to read as follows:
"Section 10.6. No Bankruptcy Petition. The Servicer
covenants and agrees and any Successor Servicer shall covenant and
agree that prior to the date which is one year and one day after the
payment in full of all Advances and Non-Affiliate Subordinated Notes,
it will not institute against, or join any other Person in instituting
against, the Purchaser any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings or other similar proceeding
under the laws of the United States or any state of the United States.
This Section 10.6 shall survive the termination of this Agreement."
5. The Receivables Purchase Agreement is hereby amended by
deleting the form of Purchase Report set forth as Exhibit A to the Receivables
Purchase Agreement and inserting in place thereof Exhibit A attached to this
Amendment.
6. The Receivables Purchase Agreement is hereby amended by
deleting the form of Lender Report set forth as Exhibit B to the Receivables
Purchase Agreement and inserting in place thereof Exhibit B attached to this
Amendment.
-2-
<PAGE> 3
7. In order to induce the Purchaser to enter into this Amendment,
the Seller hereby represents and warrants as of the date hereof that no
Purchase Termination Event has occurred and is continuing.
8. This Amendment is limited as specified and shall not
constitute a modification or waiver of any other provision of the Receivables
Purchase Agreement.
9. The Seller and the Purchaser shall deliver to the Agent and to
the Collateral Agent such resolutions approving and authorizing this Amendment
and such opinions of counsel and corporate certificates as the Agent or the
Collateral Agent may reasonably request, which resolutions, opinions and
certificates shall be in form and substance satisfactory to the Agent and to
the Collateral Agent.
10. This Amendment shall be effective on the later of (i) the date
on which each of the parties hereto shall have executed and delivered a copy or
counterpart of this Amendment to each other party hereto, (ii) the date on
which the Agent and the Collateral Agent shall have consented in writing to
this Amendment and (iii) the date upon which each Rating Agency shall have
confirmed that the execution of this Amendment shall not result in the
downgrading of the Commercial Paper.
11. This Amendment may be executed in any number of counterparts
and by the different parties hereto on separate counterparts each of which when
so executed and delivered shall be an original, but all of which together shall
constitute one and the same instrument.
12. This Amendment and the rights and obligations of the parties
hereunder shall be construed in accordance with and governed by the laws of the
State of New York.
-3-
<PAGE> 4
IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Amendment to be duly executed and delivered as of the date
first above written.
BROADWAY RECEIVABLES, INC.
By:___________________________
Name:
Title:
BROADWAY STORES, INC.
By:___________________________
Name:
Title:
consented:
GENERAL ELECTRIC CAPITAL
CORPORATION, as Agent
By:___________________________
Name:
Title:
GENERAL ELECTRIC CAPITAL
CORPORATION, as Collateral Agent
By:___________________________
Name:
Title:
-4-
<PAGE> 1
EXHIBIT 4.5
FIRST AMENDMENT
FIRST AMENDMENT (the "First Amendment"), dated as of September
13, 1994, to the Liquidity Agreement dated as of October 8, 1992 (the
"Liquidity Agreement") among Blue Hawk Funding Corporation (the "Company"), the
lenders party thereto (the "Liquidity Lenders") and General Electric Capital
Corporation, as agent for the Liquidity Lenders (the "Liquidity Agent").
Except as otherwise defined herein, terms used herein and defined in the
Liquidity Agreement shall be used herein as so defined.
W I T N E S S E T H :
WHEREAS, the Company, the Liquidity Lenders and the Liquidity
Agent have entered into the Liquidity Agreement and now desire to amend certain
of the provisions thereof;
NOW, THEREFORE, it is agreed:
1. The definition of "Available Commitment" set forth in
Section 1.02 of the Liquidity Agreement is hereby amended and restated in its
entirety as follows:
""Available Commitment" means, as of any day, the aggregate
Outstanding Balance of all Receivables transferred to the Borrower on
or prior to such day that are not Defaulted Receivables; it being
understood that no Receivable shall be considered a Defaulted
Receivable for purposes of calculating the Available Commitment by
reason of any bankruptcy or insolvency proceeding in respect of
Broadway Receivables, Inc. (or by reason of any action or position
taken by Broadway Receivables, Inc. as a debtor in possession, or by a
bankruptcy trustee therefor, in any such bankruptcy or insolvency
proceeding)."
2. The definition of "Liquidity Termination Date" set
forth in Section 1.02 of the Liquidity Agreement is hereby amended by deleting
the date "October 30, 1995" set forth in clause (i) thereof and substituting in
place therefor the date "October 30, 1996".
<PAGE> 2
3. Section 2.01(a) of the Liquidity Agreement is hereby
amended by deleting the first sentence thereof and substituting in place
therefor the following:
"Subject to the provisions of this Section 2.01 and Article
VII hereof, so long as the Company and the Depositary are not in
receipt of instructions then in effect from the Liquidity Agent, given
in accordance with this Section 2.01(a), not to issue or deliver
Commercial Paper because (i) the Company shall have terminated the
Liquidity Commitment hereunder pursuant to Section 5.02 hereof, or
(ii) the condition specified in clause (c) of Section 7.02 hereof has
not been satisfied, or (iii) the Liquidity Commitment is otherwise
terminated in whole for any reason in accordance herewith or the
issuance of Commercial Paper is prohibited by the provisions of
Section 6.03 hereof, or (iv) any proceeding shall be instituted
against Broadway Receivables, Inc. by any holder of, or trustee for,
the Non-Affiliated Subordinated Notes seeking to adjudicate it a
bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief, or
composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking the
entry of an order for relief or the appointment of a receiver,
trustee, custodian or other similar official for it or for any
substantial part of its property, and either such proceeding shall
remain undismissed or unstayed for a period of 30 days, or any of the
actions sought in such proceeding (including, without limitation, the
entry of an order for relief against, or the appointment of a
receiver, trustee, custodian or other similar official for, it or for
any substantial part of its property) shall occur, or (v) the rating
by any Rating Agency on the Commercial Paper shall be withdrawn or
reduced below the highest short-term rating category of such Rating
Agency (provided that if such reduction or withdrawal occurs after the
withdrawal or downgrading of a Liquidity Lender's rating by any Rating
Agency, the Company shall not be prohibited from issuing Commercial
Paper unless the Company shall not have replaced such downgraded
Liquidity Lender or reduced such downgraded Liquidity Lender's
Percentage of the Liquidity Commitment pursuant to Section 4.12
hereof, resulting in the Commercial Paper being rated in the highest
short-term rating category of each Rating Agency by the 90th day
-2-
<PAGE> 3
after the first date on which such rating of a Liquidity Lender was
withdrawn or downgraded) or (vi) any of the conditions set forth in
clauses (a), (b) or (d) of Section 7.02 hereof has not been satisfied,
the Company shall have the right from time to time prior to the
Liquidity Termination Date, and from time to time on and after the
Commercial Paper Effective Date, to issue and sell Commercial Paper
pursuant to this Agreement and the Depositary Agreement.".
4. Section 4.03(a) of the Liquidity Agreement is hereby
amended deleting the words "Section 4.01(c)" in line 13 thereof and
substituting in place therefor the words "Section 4.01(b)."
5. Section 4.10(b) of the Liquidity Agreement is hereby
amended and restated in its entirety to read as follows:
"SECTION 4.01 Subordination. The Liquidity Agent and the
Liquidity Lenders agree that the obligations of the Company set forth
in Sections 4.07, 4.08, 4.09 and 11.04 hereof shall be subordinate to
the obligation of the Company to make payments of (i) principal of and
interest on the Loans and the Commercial Paper and (ii) principal of,
and interest (up to the Class A Note Rate and Class B Note Rate
respectively) on, the Non-Affiliated Subordinated Notes, and shall
constitute claims against the Company only to the extent (if any) that
the assets of the Company are sufficient for the payment thereof."
6. This First Amendment is limited as specified and
shall not constitute a modification, acceptance or waiver of any other
provision of the Liquidity Agreement.
7. This First Amendment shall become effective (the
"Amendment Effective Date") on the date on which the Company, the Liquidity
Lenders and the Liquidity Agent shall have each executed and delivered to the
other a counterpart of this First Amendment.
8. From and after the Amendment Effective Date, all
references to the Liquidity Agreement in the Liquidity Agreement and each of
the other Facility Documents shall be deemed to be references to the Liquidity
Agreement as amended hereby.
-3-
<PAGE> 4
9. This First Amendment may be executed on separate
counterparts by the parties hereto, each of which when so executed and
delivered shall be an original, but all of which shall constitute one and the
same instrument.
10. This First Amendment and the rights and obligations
hereunder shall be construed in accordance with and governed by the laws of the
State of New York.
-4-
<PAGE> 5
IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this First Amendment to be duly executed and delivered as of the
date first above written.
BLUE HAWK FUNDING CORPORATION
By__________________________________
Name:
Title:
GENERAL ELECTRIC CAPITAL
CORPORATION, as Liquidity Agent
By__________________________________
Name:
Title:
GENERAL ELECTRIC CAPITAL
CORPORATION, as Liquidity
Lender
By__________________________________
Name:
Title:
-5-
<PAGE> 1
EXHIBIT 4.6
FIRST AMENDMENT
FIRST AMENDMENT (the "First Amendment"), dated as of September
13, 1994, to the Letter of Credit Reimbursement Agreement dated as of October
8, 1992 (the "Reimbursement Agreement") among Broadway Receivables, Inc.
(formerly CHH Receivables, Inc.) (the "Borrower"), Blue Hawk Funding
Corporation (the "Lender"), the financial institutions party thereto (the
"Letter of Credit Providers") and General Electric Capital Corporation (the
"Letter of Credit"). Except as otherwise defined herein, terms used herein and
defined in the Reimbursement Agreement shall be used herein as so defined.
W I T N E S S E T H :
WHEREAS, the Borrower, the Lender, the Letter of Credit
Providers and the Letter of Credit Agent have entered into the Reimbursement
Agreement and now desire to amend certain of the provisions thereof;
NOW, THEREFORE, it is agreed:
1. Section 1.01 of the Reimbursement Agreement is hereby
amended by inserting the following language immediately following the words
"the Credit Agreement" in the fifth line thereof: ", as such Credit Agreement
may be amended from time to time, ".
2. Section 1.02 of the Reimbursement Agreement is hereby
amended by deleting the dollar amount "$86,250,000" from the definition of
"Letter of Credit Commitment" set forth therein and substituting in place
therefor the dollar figure "$69,000,000."
3. Section 2.02(c) of the Reimbursement Agreement is
hereby amended by deleting the first sentence thereof and substituting in place
therefor the following:
"As of any Business Day prior to the Commitment Termination Date, the
amount available under the Letter of Credit (the "Letter of Credit
Amount") shall equal the higher of (x) $17,250,000 and (y) 12% of the
outstanding Principal amount of Advances."
<PAGE> 2
4. Section 6.10 of the Reimbursement Agreement is hereby
amended by inserting the following language immediately following the words
"Commercial Paper" in the fifth line thereof: "or Non-Affiliate Subordinated
Notes".
5. This First Amendment is limited as specified and
shall not constitute a modification, acceptance or waiver of any other
provision of the Reimbursement Agreement.
6. This First Amendment shall become effective (the
"Amendment Effective Date") on the date on which the Borrower, the Lender, the
Letter of Credit Providers and the Letter of Credit Agent shall have each
executed and delivered to the other a counterpart of this First Amendment.
7. From and after the Amendment Effective Date, all
references to the Reimbursement Agreement in the Reimbursement Agreement and
each of the other Facility Documents shall be deemed to be references to the
Reimbursement Agreement as amended hereby.
8. This First Amendment may be executed on separate
counterparts by the parties hereto, each of which when so executed and
delivered shall be an original, but all of which shall constitute one and the
same instrument.
9. This First Amendment and the rights and obligations
hereunder shall be construed in accordance with and governed by the laws of the
State of New York.
-2-
<PAGE> 3
IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this First Amendment to be duly executed and delivered as of the
date first above written.
BROADWAY RECEIVABLES, INC.
(formerly CHH Receivables, Inc.)
By__________________________________
Name:
Title:
BLUE HAWK FUNDING CORPORATION
By__________________________________
Name:
Title:
GENERAL ELECTRIC CAPITAL
CORPORATION, as Letter of
Credit Agent and Letter of
Credit Provider
By__________________________________
Name:
Title:
GENERAL ELECTRIC CAPITAL
CORPORATION, as Agent and
Collateral Agent
By__________________________________
Name:
Title:
-3-
<PAGE> 1
EXHIBIT 4.7
AMENDMENT NO. 1 TO
IRREVOCABLE LETTER OF CREDIT NO. 1992RFS1
Date: September 13, 1994
Letter of Credit No.
1992RFS1 issued on
October 8, 1992
General Electric Capital Corporation,
as Collateral Agent
and as Assignee of
Blue Hawk Funding Corporation
2323 N. Central Expressway, Suite 101
Richardson, Texas 75080
Attention: Harold Goehl
Ladies and Gentlemen:
General Electric Capital Corporation Irrevocable Letter of Credit No.
1992RFS1 issued on October 8, 1992 (the "Letter of Credit") is hereby amended,
effective immediately, as follows:
1. The dollar figure "$86,250,000" in line 14 of the
first paragraph on page 1 of the Letter of Credit is hereby deleted
and replaced with the dollar figure "$69,000,000".
2. The date "October 30, 1995" in lines 1 and 2 of the
first full paragraph on page 4 of the Letter of Credit is hereby
deleted and replaced with the date "October 30, 1996".
All other terms and conditions of the Letter of Credit remain
unchanged.
This Amendment may be executed simultaneously in two or more
counterparts, each of which shall be deemed to be an original, and it shall not
be necessary in making proof of this Amendment to produce or account for more
than one such counterpart.
Very truly yours,
GENERAL ELECTRIC CAPITAL
CORPORATION
By______________________
Authorized Signatory
<PAGE> 2
Agreed to and accepted
by, as of September 13, 1994:
GENERAL ELECTRIC CAPITAL CORPORATION,
as Collateral Agent and as
Assignee of Blue Hawk Funding
Corporation
By______________________
Name:
Title:
BLUE HAWK FUNDING CORPORATION
By______________________
Name:
Title:
-2-
<PAGE> 1
EXHIBIT 4.8
_____________________________
BROADWAY RECEIVABLES, INC.,
Issuer
AND
BANKERS TRUST COMPANY,
Trustee
_____________________________
INDENTURE
Dated as of September 1, 1994
_____________________________
$64,000,000
$38,000,000 7.55% Subordinated Credit Card Notes,
Class A, Due 1999
$26,000,000 11% Subordinated Credit Card Notes,
Class B, Due 1999
_____________________________
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C> ----
ARTICLE ONE Definitions and Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE TWO The Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 2.01. Forms Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 2.02. Forms of Class A Notes and
Certificate of Authentication . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 2.03. Forms of Class B Notes and
Certificate of Authentication . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 2.04. Denominations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 2.05. Execution, Authentication, and
Delivery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 2.06. Temporary Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 2.07. Registration; Registration of
Transfer and Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 2.08. Mutilated, Destroyed, Lost, or
Stolen Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 2.09. Persons Deemed Owner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 2.10. Payment of Principal and
Interest; Interest on Overdue
Principal; Principal and Interest
Rights Preserved . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 2.11. Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 2.12. Authentication and Delivery of
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 2.13. Book-Entry Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 2.14. Notices to Clearing Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 2.15. Definitive Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
ARTICLE THREE Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 3.01. Corporate Status and Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 3.02. No Violation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 3.03. Single-Purpose Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 3.04. No Conflicts; No Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 3.05. No Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 3.06. Investment Company Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 3.07. ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
</TABLE>
(i)
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 3.08. Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 3.09. No Violation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
ARTICLE FOUR Affirmative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 4.01. Payment of Principal and
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 4.02. Maintenance of Office or Agency . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 4.03. Money for Note Payments To Be
Held in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 4.04. Preservation of Corporate
Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 4.05. Compliance with Laws, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 4.06. Keeping of Books . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 4.07. Payment of Taxes, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 4.08. Reporting Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 4.09. Annual Independent Public
Accountants' Servicing Report . . . . . . . . . . . . . . . . . . . . 58
SECTION 4.10. Rule 144A Information
Requirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
ARTICLE FIVE Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 5.01. Liens, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 5.02. Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 5.03. Restricted Junior Payments . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 5.04. Mergers, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 5.05. Change in Nature of Business . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 5.06. Corporate Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 5.07. No Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 5.08. Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 5.09. Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 5.10. Maintenance of Separate
Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 5.11. Maximum Permitted Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
ARTICLE SIX Satisfaction and Discharge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 6.01. Satisfaction and Discharge of
Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 6.02. Application of Trust Money . . . . . . . . . . . . . . . . . . . . . . . . . . 65
ARTICLE SEVEN Events of Default and Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 7.01. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 7.02. Acceleration of Maturity;
</TABLE>
(ii)
<PAGE> 4
<TABLE>
<CAPTION>
Page
----
<S> <C>
Rescission and Annulment . . . . . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 7.03. Collection of Indebtedness and
Suits for Enforcement by
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 7.04. Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 7.05. Application of Money Collected . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 7.06. Limitation of Suits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 7.07. Restoration of Rights and
Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
SECTION 7.08. Rights and Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
SECTION 7.09. Delay or Omission Not Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
SECTION 7.10. Control by Noteholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
SECTION 7.11. Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
SECTION 7.12. Undertaking for Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
SECTION 7.13. Waiver of Stay or Extension Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
ARTICLE EIGHT The Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 8.01. Certain Duties and Responsibili-
ties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 8.02. Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
SECTION 8.03. Certain Rights of the Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
SECTION 8.04. Not Responsible for Recitals or
Issuance of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
SECTION 8.05. May Hold Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
SECTION 8.06. Interest on Money Held in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
SECTION 8.07. Compensation and Reimbursement . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
SECTION 8.08. Corporate Trustee Required;
Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
SECTION 8.09. Resignation and Removal; Appoint-
ment of Successor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
SECTION 8.10. Acceptance of Appointment by
Successor Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
SECTION 8.11. Merger, Conversion, Consolidation
or Succession to Business of
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
SECTION 8.12. Co-Trustee and Separate Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
ARTICLE NINE Noteholders' Lists and Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
SECTION 9.01. Issuer To Furnish Trustee Names
and Addresses to Noteholders . . . . . . . . . . . . . . . . . . . . . . . . 85
SECTION 9.02. Preservation of Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
SECTION 9.03. Reports by Issuer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
SECTION 9.04. Reports to Noteholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
</TABLE>
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ARTICLE TEN Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
SECTION 10.01. Supplemental Indentures Without
Consent of Noteholders . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
SECTION 10.02. Supplemental Indentures with
Consent of Noteholders . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
SECTION 10.03. Execution of Supplemental
Indentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
SECTION 10.04. Effect of Supplemental Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
SECTION 10.05. Reference in Notes to Supple-
mental Indentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
ARTICLE ELEVEN Redemption of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
SECTION 11.01. Optional Redemption by Issuer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
SECTION 11.02. Form of Optional Redemption
Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
SECTION 11.03. Notes Payable on Redemption Date
or Payment Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
SECTION 11.04. Mandatory Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
SECTION 11.05. Form of Mandatory Redemption
Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
SECTION 11.06. Notes Subject to Mandatory
Redemption Payable on Specified
Payment Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
SECTION 11.07. Selection of Notes for Optional
or Mandatory Redemption;
Surrender of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
ARTICLE TWELVE Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
SECTION 12.01. Compliance Certificates and
Opinions, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
SECTION 12.02. Form of Documents Delivered to
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
SECTION 12.03. Acts of Noteholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
SECTION 12.04. Notices, etc., to Trustee, Issuer
and Rating Agencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
SECTION 12.05. Notices to Noteholders; Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
SECTION 12.06. Alternate Payment and Notice
Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
SECTION 12.07. Limited Recourse Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
SECTION 12.08. Non-Petition Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
SECTION 12.09. Effect of Headings and Table of
Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
SECTION 12.10. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
</TABLE>
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SECTION 12.11. Separability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
SECTION 12.12. Benefits of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
SECTION 12.13. Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
SECTION 12.14. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
SECTION 12.15. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
SECTION 12.16. Recording of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
SECTION 12.17. Corporate Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
SECTION 12.18. Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
Acknowledgments
Exhibit A Amended and Restated Assignment and
Security Agreement
Exhibit B DTC Agreement
Exhibit C-1 Form of Transferor's Certificate
Exhibit C-2 Form of Transferee's Certificate
Exhibit C-3 Form of Accredited Investor's Certificate
</TABLE>
(v)
<PAGE> 7
INDENTURE dated as of September 1, 1994 between BROADWAY
RECEIVABLES, INC., a Delaware corporation (the "Issuer"), and BANKERS TRUST
COMPANY, a New York banking corporation, as trustee (the "Trustee").
PRELIMINARY STATEMENT
The Issuer has duly authorized the execution and delivery of
this Indenture to provide for the creation of a series of Notes to be known as
the "Broadway Receivables, Inc. Subordinated Credit Card Notes" as provided in
this Indenture. The Notes shall be issued in two Classes, the first of which
shall be known as the "7.55% Subordinated Credit Card Notes, Class A, Due
1999" (the Notes of such Class to be in substantially the form specified in
Section 2.02 hereof, the "Class A Notes"), and the second of which shall be
known as the "11% Subordinated Credit Card Notes, Class B, Due 1999" (the Notes
of such Class to be in substantially the form specified in Section 2.03 hereof,
the "Class B Notes" and, together with the Class A Notes, collectively, the
"Notes"). All representations, covenants, and agreements made by the Issuer
herein are for the benefit and security of the Noteholders. The Issuer is
entering into this Indenture, and the Trustee is accepting the trusts created
hereby, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged.
ARTICLE ONE
Definitions and Assumptions
SECTION 1.01. Definitions. (a) Except as otherwise
specified herein or as the context may otherwise require, the following terms
have the respective meanings set forth below for all purposes of this
Indenture, and the definitions of such terms are equally applicable both to the
singular and plural forms of such terms.
"Act" has the meaning specified in Section 12.03(a).
"Advance" shall have the meaning set forth in Section 2.01 of
the Blue Hawk Credit Agreement.
<PAGE> 8
"Affiliate" means, as to any Person, any other Person that,
directly or indirectly, is in control of, is controlled by or is under common
control with such person or is a director or officer of such Person or of an
Affiliate of such Person. For purposes of this definition, control of a Person
shall mean the power, direct or indirect, (i) to vote 50% or more of the
securities having ordinary voting power for the election of directors of such
Person, or (ii) to direct or cause the direction of the management and policies
of such person whether by contract or otherwise.
"Agent" means GE Capital, as agent for the Lender under the
Blue Hawk Credit Agreement.
"Aggregate Outstanding Amount" means with respect to the
Notes, the principal amount of all Notes Outstanding at the date of
determination.
"Authorized Officer" means any officer of the Issuer who is
authorized to act for the Issuer in matters relating to this Indenture.
"Bankruptcy Code" means Title 11 of the United States Code as
in effect from time to time and any successor statute.
"Basic Documents" means the Security Agreement, the Purchase
Agreement, the Indenture, the DTC Agreement, the Note Purchase Agreement, the
Interest Rate Cap Agreement and the other documents and certificates delivered
in connection therewith.
"Billing Cycle" means, with respect to any Account, the
monthly billing cycle for such Account as determined in accordance with the
Credit and Collection Policy, as in effect at the date of determination.
"Blocked Deposit Account" means each of the accounts in the
name of Issuer listed on Schedule I to the Blue Hawk Credit Agreement.
"Blocked Deposit Agreement" means an agreement by and among
the Issuer, the Servicer, the Collateral Agent and a Blocked Deposit Bank,
establishing a Blocked Deposit Account and specifying the rights of the
Collateral Agent in such Blocked Deposit Account, as amended from time to time.
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<PAGE> 9
"Blue Hawk Credit Agreement" means the Receivables-Backed
Credit Agreement dated as of October 8, 1992 among the Issuer, the Lender and
the Agent, as amended by an Amendment No. 1 to Receivables-Backed Credit
Agreement dated as of September 28, 1993 and by an Amendment No. 2 to
Receivables-Backed Credit Agreement dated as of September 13, 1994, and as
amended from time to time hereafter in accordance with the terms thereof.
"Blue Hawk Credit Facility" means the credit facilities
extended to the Issuer pursuant to the Blue Hawk Credit Agreement and the Blue
Hawk Reimbursement Agreement.
"Blue Hawk Note" means the note evidencing the advances made
to the Issuer pursuant to the Blue Hawk Credit Agreement.
"Blue Hawk Reimbursement Agreement" means the Letter of Credit
and Reimbursement Agreement dated as of October 8, 1992 among the Issuer, the
LOC Providers and the LOC Agent, as amended by an Amendment No. 1 dated as of
September 13, 1994, and as the same may be amended from time to time hereafter
in accordance with the terms thereof.
"Book-Entry Notes" means beneficial interests in the Notes,
ownership of which shall be evidenced, and transfers of which shall be made,
through book entries by a Clearing Agency as described in Section 2.13.
"Broadway" means Broadway Stores, Inc. (formerly Carter Hawley
Hale Stores, Inc.), a Delaware corporation, together with its successors and
assigns.
"Business Day" means any day other than a Saturday, a Sunday
or a day on which banking institutions in California or New York, New York are
authorized or required to be closed.
"Calculation Period" means, with respect to any Settlement
Period, the one month period from and including the tenth day following the end
of such Settlement Period to, but excluding, the tenth day following the end of
the next succeeding Settlement Period.
"Cash Collateral Account" means the account established by the
Issuer pursuant to the Security Agreement in the name of the Collateral Agent
on behalf of the Secured Parties under the Security Agreement.
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<PAGE> 10
"Cash Collateral Bank" means Bankers Trust Company, as cash
collateral bank under the Security Agreement.
"Cash Equivalents" means (i) securities with maturities of
sixty days or less (but in no event shall the maturity of such securities
prevent the proceeds thereof from being available to pay maturing Commercial
Paper (as defined in the Blue Hawk Credit Agreement) and the Notes) from the
date of acquisition issued or fully guaranteed or insured by the United States
Government or any agency thereof, (ii) certificates of deposit, eurodollar time
deposits, overnight bank deposits, bankers' acceptances and re-purchase
agreements of any commercial bank whose short-term obligations are rated "A-1+"
by S&P and "P-1" by Moody's Investors Service, Inc. having maturities of sixty
days or less from the date of acquisition, (iii) commercial paper having
maturities of sixty days or less from the date of acquisition, rated at least
"A-1+" by S&P or "P-1" by Moody's Investors Service, Inc. and, if rated by
Fitch, "F-1" and (iv) money market funds rated at least "AAAm" or "AAAm-G" by
S&P or "P-1" by Moody's Investors Service, Inc.
"Charge Account Agreement" means the agreement, which may
consist of more than one document, between an individual and Broadway pursuant
to which such individual is obligated to pay for merchandise or services
purchased from Broadway under a credit plan that permits such individual to
purchase merchandise and services on credit, together with any finance charges
and other charges related thereto.
"Claim" shall have the meaning provided in Section 101(5) of
the Bankruptcy Code.
"Class" means either the 7.55% Subordinated Credit Card Notes,
Class A, Due 1999 or the 11% Subordinated Credit Card Notes, Class B, Due 1999
designated in the Preliminary Statement of this Indenture, as the context
requires.
"Class A Global Note" has the meaning specified in Section
2.13 of this Indenture.
"Class A Notes" has the meaning specified in the Preliminary
Statement of this Indenture.
"Class B Global Note" has the meaning specified in Section
2.13 of this Indenture.
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<PAGE> 11
"Class B Notes" has the meaning specified in the Preliminary
Statement of this Indenture.
"Clearing Agency" means an organization registered as a
"clearing agency" pursuant to Section 17A of the Securities Exchange Act of
1934, as amended.
"Clearing Agency Participant" means a broker, dealer, bank,
other financial institution or other Person for whom from time to time a
Clearing Agency effects book-entry transfers and pledges of securities
deposited with the Clearing Agency.
"Closing Date" means the day on which Notes are first
executed, authenticated and delivered.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time, and the regulations promulgated and rulings issued
thereunder. Section references to the Code are to the Code, as in effect at
the date of this Agreement and any subsequent provisions of the Code,
amendatory thereof, supplemental thereto or substituted therefor.
"Collateral" has the meaning specified in Section 1(c) of
the Security Agreement.
"Collateral Agent" means GE Capital, as collateral agent under
the Security Agreement.
"Collections" means, with respect to any Receivable, all
payments in respect of such Receivable in the form of cash, checks, wire
transfers or other forms of payment in accordance with the related Charge
Account Agreement and all proceeds of such Receivable, including any
Recoveries.
"Commission" means the Securities and Exchange Commission, as
from time to time constituted, created under the Securities Exchange Act of
1934, or, if at any time after the execution and delivery of this Indenture
such Commission is not existing and performing the duties now assigned to it
under the Trust Indenture Act, then the body then performing such duties.
"Controlling Party" has the meaning specified in Section 14 of
the Security Agreement.
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<PAGE> 12
"Corporate Trust Office" means the principal corporate trust
office of the Trustee located at Four Albany Street, New York, New York 10006,
Attention: Structured Finance Team; or such other addresses as the Trustee may
designate from time to time by notice to the Noteholders and the Issuer, or the
principal corporate trust office of any successor Trustee (or such other
addresses as a successor Trustee may designate from time to time by notice to
the Noteholders and the Issuer).
"CP Documents" has the meaning specified in the Blue Hawk
Credit Agreement.
"Credit and Collection Policy" means the credit, collection,
customer relations and service policies of Broadway in effect on the date
hereof, as such policies may hereafter be amended, modified or supplemented
from time to time in accordance with the Blue Hawk Credit Agreement.
"Cycle Date" means, with respect to any Billing Cycle, the
last day of such Billing Cycle.
"Debt" of any Person means, without duplication, (i) all
indebtedness of such Person for borrowed money, (ii) all indebtedness of such
Person for the deferred purchase price of property or services (other than
property and services purchased, and expense accruals and deferred compensation
items arising, in the ordinary course of business), (iii) all obligations of
such Person evidenced by notes, bonds, debentures or other similar instruments
(other than performance, surety and appeal bonds arising in the ordinary course
of business), (iv) 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 though 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), (v) all obligations of such Person under leases
which have been or should be, in accordance with U.S. GAAP, recorded as
capital leases, to the extent required to be so recorded, (vi) all
reimbursement, payment or similar obligations of such Person, contingent or
otherwise, under acceptance, letter of credit or similar facilities (other than
letters of credit in support of trade obligations or in connection with
workers' compensation, unemployment insurance, old-age pensions and other
social security benefits in the ordinary course of business), (vii) all Debt
referred to in clauses (i) through (vi) above guaranteed directly or indirectly
by such
-6-
<PAGE> 13
Person, or in effect guaranteed directly or indirectly by such person through
an agreement (A) to pay or purchase such Debt or to advance or supply funds for
the payment or purchase of such Debt, (B) 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 Debt or to assure the holder of
such Debt against loss in respect of such Debt, (C) to supply funds to or in
any other manner invest in the debtor (including any agreement to pay for
property or services irrespective of whether such property is received or such
services are rendered) or (D) otherwise to assure a creditor against loss in
respect of such Debt, and (viii) all Debt referred to in clauses (i) through
(vi) above secured by (or for which the holder of such Debt has an existing
right, contingent or otherwise, to be secured by) any lien, security interest
or other charge or encumbrance upon or in 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 Debt.
"Default" means any occurrence that is, or with notice or the
lapse of time or both would become, an Event of Default.
"Definitive Notes" shall have the meaning specified in Section
2.13.
"Discount Rate" means, with respect to a Class of Notes and a
redemption date, the sum of (i) the bond equivalent yield to maturity on the
6.25% U.S. Treasury Note maturing in August 1996 (or, the event that the
applicable redemption date is subsequent to August 1, 1996, the 6.875% U.S.
Treasury Note maturing in October 1996), plus (ii) in the case of the Class A
Notes, 110 basis points, and in the case of the Class B Notes, 325 basis
points.
"DTC Agreement" means the agreement among the Issuer, the
Trustee and The Depository Trust Company, as the initial Clearing Agency, dated
as of September 13, 1994, substantially in the form attached hereto as Exhibit
B.
"Early Amortization Event" has the meaning specified in
Section 7(a) of the Security Agreement.
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<PAGE> 14
"Eligible Receivable" means a Receivable that satisfies each
of the following criteria:
(a) it constitutes an "account" within the meaning of
Section 9106 of the UCC;
(b) it is the legal, valid and binding obligation of an
Obligor that, as of the end of the most recent Billing Cycle for the
related Account, (i) is not deceased, (ii) is not a minor under the
laws of his/her state of residence, (iii) is competent to enter into a
contract and incur debt and (iv) is not the subject of any proceedings
under the Bankruptcy Code or any other law for the relief of debtors
or for the custody of the property of incompetents;
(c) it and the underlying Charge Account Agreement were
created in compliance with, and do not contravene in any respect, any
laws, rules or regulations applicable thereto (including, without
limitation, rules and regulations relating to truth in lending, retail
installment sales, fair credit billing, fair credit reporting, equal
credit opportunity, fair debt collection practices and privacy), and
neither Broadway nor the Servicer is in violation of any such laws,
rules or regulations in any respect material to such Charge Account
Agreement;
(d) it is not a Defaulted Receivable (as defined in the
Blue Hawk Credit Agreement);
(e) it arises under a Charge Account Agreement that has
been duly authorized and which, together with such Receivable, is in
full force and effect and constitutes the legal, valid and binding
obligation of the Obligor on such Receivable enforceable against such
Obligor in accordance with its terms and is not subject to any offset,
counterclaim or defense whatsoever (except the discharge in bankruptcy
of such Obligor);
(f) it is not subject to any Lien in favor of any Person
except Liens created pursuant to the Security Agreement;
(g) the Obligor thereunder is not a known "fraud";
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<PAGE> 15
(h) it is denominated and payable only in United States
Dollars in the United States;
(i) the Obligor resided in the United States at the time
the related Account was established, and is not the United States, a
State or any instrumentality thereof;
(j) it is serviced in a credit service center of the
Servicer or any successor servicer that is located in the United
States; and
(k) it satisfies all requirements of the applicable
Credit and Collection Policy and the requirements of the underlying
Charge Account Agreement.
"Equity" means, at any date, without duplication, the sum of
(i) the net worth of the Issuer (determined in accordance with U.S. GAAP) and
(ii) the outstanding principal amount of the Issuer's Subordinated Broadway
Notes.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and rulings
issued thereunder. Section references to ERISA are to ERISA, as in effect at
the date of this Agreement and any subsequent provisions of ERISA, amendatory
thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" means each person (as defined in Section
3(9) of ERISA) which together with the Issuer would be deemed to be a "single
employer" within the meaning of Section 414(b), (c), (m) or (o) of the Code.
"Event of Default" has the meaning specified in Section 7.01
of this Indenture.
"Executive Officer" means with respect to any corporation, the
Chief Executive Officer, Chief Operating Officer, Chief Financial Officer,
President, any Vice President, the Secretary or the Treasurer of such
corporation; with respect to any partnership, any general partner thereof.
"Facility Documents" means the Blue Hawk Credit Agreement, the
Security Agreement, the Purchase Agreement, the Blue Hawk Note, the
Reimbursement Agreement, the Letter of Credit and the CP Documents.
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<PAGE> 16
"Fitch" means Fitch Investors Service, Inc.
"GE Capital" means General Electric Capital Corporation, a New
York corporation, together with its successors and assigns.
"Global Notes" has the meaning specified in Section 2.13 of
this Indenture.
"Holder" has the meaning specified in the definition of
"Noteholder" in this Section 1.01(a).
"Indenture" or "this Indenture" means this instrument as
originally executed and, as from time to time supplemented or amended by one or
more indentures supplemental hereto entered into pursuant to the applicable
provisions hereof, as so supplemented or amended, or both, and shall include
the forms and terms of the Notes established hereunder. The words "herein,"
"hereof," "hereunder" and other words of similar import refer to this Indenture
as a whole and not to any particular Article, Section or other subdivision.
"Independent" when used with respect to any specified Person
means that the Person (1) is in fact independent of the Issuer and any other
Person with an ownership interest in the Collateral and of any Affiliate of any
of the foregoing Persons, (2) does not have any direct financial interest or
any material indirect financial interest in the Issuer or any such other Person
with such an ownership interest in the Collateral or in any Affiliate of any of
the foregoing Persons, and (3) is not connected with the Issuer or any such
other Person with such an ownership interest in the Collateral as an officer,
employee, promoter, underwriter, trustee, partner, director, or person
performing similar functions.
"Interest Rate Cap" means those certain Interest Rate Cap
Agreements between the Issuer and each of Citicorp, N.A., Nationsbank, N.A. and
Bank of America National Trust and Savings Association, each in substantially
the form of Exhibit D to the Security Agreement.
"Issuer" means Broadway Receivables, Inc., a corporation
organized under the laws of the State of Delaware, until a successor Person
shall have become the Issuer pursuant to the applicable provisions of this
Indenture, and thereafter "Issuer" shall mean such successor Person.
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<PAGE> 17
"Issuer Order" and "Issuer Request" means a written order or
request signed in the name of the Issuer by any one of its Authorized Officers
and delivered to the Trustee.
"Lender" means Blue Hawk Funding Corporation.
"Lender Report" means a report, in substantially the form of
Exhibit G to the Blue Hawk Credit Agreement, furnished by the Issuer to the
Lender pursuant to Section 5.01(h)(iii) of the Blue Hawk Credit Agreement.
"Lien" means any lien, charge, security interest, encumbrance
or any other type of preferential arrangement.
"Liquidity Agent" means GE Capital, as agent for the Liquidity
Lenders under the Security Agreement.
"Liquidity Lenders" has the meaning specified in the recitals
of the Security Agreement.
"LOC Agent" means GE Capital, as letter of credit agent under
the Reimbursement Agreement, and its successors and assigns.
"LOC Providers" means those banks and financial institutions
that are parties to the Reimbursement Agreement.
"Make-Whole Premium" means, with respect to any redemption of
Notes of a Class occurring prior to October 8, 1996, an amount equal to the
remainder obtained by subtracting (x) the outstanding principal balance of such
Notes, as of the date of such redemption (before giving effect to such
redemption and assuming that the principal of the Notes is payable in full on
October 8, 1996) from (y) the present value as of the date of such redemption
of the remaining scheduled payments of principal and interest on such Notes
(before giving effect to such redemption and assuming that the principal of the
Notes is payable in full on October 8, 1996), determined by discounting such
payments at the Discount Rate applicable to such Class.
"Maturity" means with respect to any Note, the date on which
the unpaid principal of such Note becomes due and payable as therein or herein
provided, whether at the Stated Maturity Date or by declaration of
acceleration, call for redemption, or otherwise.
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<PAGE> 18
"Maximum Class A Debt Amount" means, as of any day, an amount
equal to the product of (x) the Maximum Class A Debt Ratio and (y) the
Outstanding Balance of the Eligible Receivables on such day.
"Maximum Class A Debt Ratio" means, as of any day, an amount
equal to (a) either (i) on any day from and including December 1 to but
excluding February 1, 86% or (ii) on any day from and including February 1 to
but excluding December 1, 87% minus (b) the sum of the Yield Discount Factor
and the Payment Rate Factor for such day.
"Maximum Permitted Debt" means, as of any day, an amount equal
to the product of (x) the Maximum Permitted Debt Ratio multiplied by (y) the
Outstanding Balance of the Eligible Receivables on such day.
"Maximum Permitted Debt Ratio" means, as of any day, an amount
equal to (i) either (a) on any day from and including December 1 to but
excluding February 1, 90%, or (b) on any day from and including February 1 to
but excluding December 1, 91%, minus (ii) the sum of the Yield Discount Factor
for such day and the Payment Rate Factor for such day.
"Minimum Denomination" means $1,000,000.
"Net Portfolio Yield" means, for any Settlement Period, twelve
times the percentage equivalent of a fraction the numerator of which is equal
to (i) the Normalized Finance Charges for such Settlement Period minus (ii) the
Normalized Net Write-Offs during such Settlement Period, and the denominator of
which is equal to the Outstanding Balance of the Receivables on the first day
of such Settlement Period.
"New York Office" means with respect to the Trustee, at any
time, its principal office in the City of New York, the State of New York, at
which at such time its corporate trust business is administered; initially such
office is located at Four Albany Street, New York, New York 10006.
"1933 Act" has the meaning specified in Section 2.07 of this
Indenture.
"Normalized Collections" means, with respect to any Settlement
Period, the amount obtained by dividing (x) the aggregate Collections received
in such Settlement
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Period by (y) the number of Billing Cycles in such Settlement Period, and
multiplying the quotient by 36.
"Normalized Finance Charges" means, with respect to any
Settlement Period, the amount obtained by dividing (x) the aggregate
Collections received in such Settlement Period that are allocable to finance
charges by (y) the number of Billing Cycles that occurred in such Settlement
Period, and multiplying the quotient by 36.
"Normalized Net Write-Offs" means, with respect to any
Settlement Period, the amount obtained by dividing (x) an amount equal to (i)
the aggregate amount of Receivables written-off as uncollectible during such
Settlement Period minus (ii) the aggregate Recoveries received in such
Settlement Period by (y) the number of Billing Cycles that occurred in such
Settlement Period, and multiplying the quotient by 36.
"Note Interest Rate" means 7.55% per annum with respect to the
Class A Notes, and 11% per annum with respect to the Class B Notes, in each
case calculated on the basis of a 360 day year of twelve 30 day months.
"Note Owner" means, with respect to a Book-Entry Note, the
Person who is the owner of such Book-Entry Note, as reflected on the books of
the Clearing Agency, or on the books of a Person maintaining an account with
such Clearing Agency (directly or as an indirect participant, in accordance
with the rules of such Clearing Agency).
"Note Purchase Agreement" means the Note Purchase Agreement
dated September 1, 1994 among the Issuer, Broadway and Kidder, Peabody & Co.
Incorporated, as the same may be amended from time to time in accordance with
the terms thereof.
"Noteholder" or "Holder" means the Person in whose name a Note
is registered in the Note Register.
"Note Register" and "Note Registrar" have the respective
meanings specified in Section 2.07.
"Notes" has the meaning specified in the Preliminary Statement
of this Indenture.
"Obligor" means a Person obligated to make payments with
respect to a Receivable pursuant to a Charge Account Agreement.
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"Officer's Certificate" means a certificate signed by any one
Authorized Officer of the Issuer, under the circumstances described in, and
otherwise complying with, the applicable requirements of Section 12.01 hereof,
and delivered to the Trustee. Unless otherwise specified, any reference in
this Indenture to an Officer's Certificate shall be to an Officer's Certificate
of the Issuer.
"Opinion of Counsel" means one or more written opinions of
counsel who may, except as otherwise expressly provided in this Indenture, be
counsel for the Issuer and who shall be satisfactory to the Trustee, and which
opinion shall be addressed to the Trustee as Trustee, shall comply with any
applicable requirements of Section 12.01 hereof, and shall be in form and
substance satisfactory to the Trustee.
"Outstanding" means as of the date of determination, all such
Notes theretofore authenticated and delivered under the Indenture except:
(i) Notes theretofore canceled by the Note Registrar or
delivered to the Note Registrar for cancellation;
(ii) Notes or portions thereof for whose payment money in
the necessary amount has been theretofore deposited with the Trustee
in trust for the Holders of such Notes (provided, however, 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); and
(iii) Notes in exchange for or in lieu of which other Notes
have been authenticated and delivered pursuant to this Indenture
unless proof satisfactory to the Trustee is presented that any such
Notes are held by a bona fide purchaser;
provided that in determining whether the Holders of the requisite Aggregate
Outstanding Amount of the Notes have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, Notes owned by the Issuer, any
other Person with an ownership interest in the Collateral or any Affiliate of
any of the foregoing Persons shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, author-
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ization, direction, notice, consent or waiver, only Notes for which a
Responsible Officer of the Trustee has received written notice that such Notes
are so owned shall be so disregarded. Notes so owned that 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 Issuer, any other Person with an
ownership interest in the Collateral or any Affiliate of any of the foregoing
Persons.
"Outstanding Balance" of a Receivable on any day means the
aggregate amount owed by the Obligor thereunder on such day.
"Overdue Note" has the meaning specified in Section 2.10(c).
"Payment Date" means October 15, 1994, and the fifteenth day
of each calendar month thereafter or, if such fifteenth day is not a Business
Day, the next succeeding Business Day.
"Payment Rate" means, for any Settlement Period, the
percentage equivalent of a fraction the numerator of which is equal to the
Normalized Collections for such Settlement Period and the denominator of which
is the aggregate Outstanding Balance of the Receivables on the first day of
such Settlement Period.
"Payment Rate Factor" means, for each day during a Calculation
Period, (i) if the average Payment Rate for the three Settlement Periods ending
with the related Settlement Period equals or exceeds 13%, 0% and (ii) if the
average Payment Rate for the three Settlement Periods ending with the related
Settlement Period is less than 13%, 1%.
"PBGC" means the Pension Benefit Guaranty Corporation
established pursuant to Section 4002 of ERISA, or any successor thereto.
"Permitted Liens" means (i) Liens incurred and pledges and
deposits made in the ordinary course of business in connection with workers'
compensation, unemployment insurance, old-age pensions and other social
security benefits other than in respect of employee benefit plans subject to
ERISA; (ii) Liens on property other than Receivables imposed by law, such as
carriers', warehousemen's,
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<PAGE> 22
mechanics', materialmen's and vendors' Liens, incurred in the ordinary course
of business and securing obligations which are not yet due or which are being
contested in good faith by appropriate proceedings for which adequate reserves
have been established but only so long as there is no material risk of loss,
sale or forfeiture of any of the property subject to such Lien; (iii) Liens on
property other than Receivables existing at the time such property is acquired;
(iv) purchase money Liens upon or in any property other than Receivables
acquired or held in the ordinary course of business to secure the purchase
price of such property or to secure Debt solely for the purpose of financing
the acquisition of such property; (v) Liens securing the payment of taxes, in
an aggregate amount not exceeding $50,000, either (a) not yet due or (b) being
contested in good faith by appropriate legal or administrative proceedings and
as to which adequate reserves shall have been established (in accordance with
U.S. GAAP), but only so long as such proceedings could not subject the Lender,
the Agent or the Collateral Agent to any civil or criminal penalty or liability
or involve any risk of the loss, sale or forfeiture of any of the property,
rights or interests covered by the Security Agreement and (vi) extensions,
renewals and replacements of Liens referred to in clauses (i) through (v)
above, provided that any such extension, renewal or replacement Lien is limited
to the property or assets covered by the Lien extended, renewed or replaced and
does not secure any obligation in addition to that secured immediately prior to
such extension, renewal or replacement.
"Person" means an individual, partnership, corporation
(including a business trust), joint stock company, trust, unincorporated
association, joint venture or other entity, or a government or any political
subdivision or agency thereof.
"Plan" means any multiemployer or single-employer plan as
defined in Section 4001 of ERISA, in either case which is subject to Section
412 of the Code and/or Title IV of ERISA, which is maintained or contributed to
by (or to which there is an obligation to contribute of), or at any time during
the five calendar years preceding the date hereof was maintained or contributed
to by (or to which there was an obligation to contribute of), the Issuer or an
ERISA Affiliate.
"Predecessor Note" means with respect to any particular Note,
every previous Note evidencing all or a
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portion of the same debt as that evidenced by such particular Note; and, for
the purpose of this definition, any Note authenticated and delivered under
Section 2.08 in lieu of a mutilated, lost, destroyed, or stolen Note shall be
deemed to evidence the same debt as the mutilated, lost, destroyed, or stolen
Note.
"Proceeding" means any suit in equity, action at law, or other
judicial or administrative proceeding.
"Purchase Agreement" means the Receivables Purchase Agreement
dated as of October 8, 1992 between Broadway and the Issuer, as the same may be
amended from time to time in accordance with the terms thereof.
"Rating Agencies" means Fitch or any successor thereto and S&P
or any successor thereto.
"Receivable" means, with respect to any Obligor, the
indebtedness of such Obligor under a Charge Account Agreement arising from a
sale of merchandise or services by Broadway, and includes the right to payment
of any interest, finance, returned check or late charges and other obligations
of such Obligor with respect thereto. Each Receivable includes, without
limitation, all obligations of the Obligor thereof under any Charge Account
Agreement. Each increase in the Outstanding Balance of any Receivable (other
than any such increase resulting from the accrual of interest or finance
charges or the assessment of late or other similar charges with respect to such
Receivable) shall constitute a separate Receivable.
"Recoveries" means any amounts received by the Issuer,
Broadway, the Servicer or any of their respective Affiliates or predecessors in
interest in respect of any Receivables previously written off as uncollectible,
whether or not any such Receivable has been reacquired by Broadway including
any sales tax rebates received in cash.
"Redemption Date" means the Payment Date specified by the
Issuer for any redemption of Notes pursuant to Section 11.01.
"Redemption Price" has the meaning specified in Section 11.01.
"Registered Holder" means the Person in whose name a Note is
registered on the Note Register on the
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applicable Regular Record Date or Special Record Date, as the case may be.
"Regular Record Date" means, with respect to a Payment Date,
the close of business on the last day of the calendar month preceding such
Payment Date.
"Reportable Event" means an event described in Section 4043(b)
of ERISA with respect to a Plan as to which the 30-day notice requirement has
not been waived by the PBGC.
"Responsible Officer," when used with respect to the Trustee,
means any officer within the Corporate Trust Office (or any successor group of
the Trustee) including any vice president, assistant vice president, assistant
secretary, assistant treasurer or any other officer of the Trustee customarily
performing functions similar to those performed by the persons who at the time
shall be such officers, respectively, or to whom any corporate trust matter is
referred because of his knowledge of and familiarity with the particular
subject.
"Restricted Payment" means (i) any dividend payment or other
distribution of assets, properties, cash, rights, obligations or securities on
account of any shares of any class of capital stock of the Issuer, or the
return of any capital to its shareholder as such, or the purchase, retirement,
defeasance, redemption or other acquisition for value or payment in respect of
any shares of any class of capital stock of the Issuer or any warrants, rights
or options to acquire any such shares, now or hereafter outstanding or (ii) any
order, payment or setting apart of any sum for any payment or prepayment of
principal of, premium, if any, or interest on, or any redemption, purchase,
retirement, defeasance, sinking fund or similar payment with respect to, the
Subordinated Broadway Notes.
"S&P" means Standard & Poor's Ratings Group.
"Secured Obligations" has the meaning specified in Section
2(a) of the Security Agreement.
"Security Agreement" means the Amended and Restated Assignment
and Security Agreement dated as of the Closing Date among the Issuer, the
Lender, the Trustee, the Agent, the Cash Collateral Bank, the LOC Agent, the
Liquidity Agent and the Collateral Agent, substantially in the form of Exhibit
A hereto.
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<PAGE> 25
"Senior Blue Hawk Obligations" means each of the Secured
Obligations specified in clauses First, Second, Third, Fourth, Fifth, Eighth,
Ninth and Tenth of Section 15(b) of the Security Agreement.
"Servicer" means Broadway or any successor or replacement
servicer designated in accordance with the terms of the Purchase Agreement and
approved in writing by the Collateral Agent.
"Servicing Contract" shall mean any contract, agreement or
arrangement between the Issuer and Broadway, the Servicer or any other Person
relating to the servicing, processing and collection of the Receivables.
"Settlement Date" means the tenth calendar day following the
last day of a Settlement Period, or, if such day is not a Business Day, the
next succeeding Business Day.
"Settlement Period" means, with respect to any Settlement
Date, the preceding fiscal month of Broadway.
"Special Payment Date" has the meaning specified in Section
2.10 of this Indenture.
"Special Record Date" means, with respect to any Special
Payment Date, the date which is [15] days prior to such Special Payment Date.
"State" means any one of the 50 States of the United States of
America, or the District of Columbia.
"Stated Maturity Date" means October 15, 1999.
"Step-Up Interest Amount" has the meaning specified in Section
2.10(a) of this Indenture.
"Subordinated Broadway Notes" means, collectively, (i) the
subordinated promissory notes dated as of October 8, 1992 issued by the Issuer
to Broadway and (ii) any other subordinated promissory notes subsequently
issued by the Issuer to Broadway as permitted under the Blue Hawk Credit
Agreement, which notes in each case shall be in the form of Exhibit K thereto.
"Subsidiary" of any Person means any corporation of which more
than 50% of the issued and outstanding capital stock having ordinary voting
power to elect a majority
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<PAGE> 26
of the Board of Directors of such corporation (irrespective whether at the time
capital stock of any other class or classes of such corporation shall or might
have voting power upon the occurrence of any contingency) is at the time
directly or indirectly owned or controlled by such Person, by such Person and
one or more of its other Subsidiaries or by one or more of such Person's other
Subsidiaries.
"Taxes" has the meaning specified in Section 2.12(a) of the
Blue Hawk Credit Agreement.
"Trustee" means Bankers Trust Company, a New York banking
corporation, until a successor Person shall have become the Trustee pursuant to
the applicable provisions of this Indenture, and thereafter "Trustee" shall
mean such successor Person.
"Unfunded Current Liability" of any Plan means the amount, if
any, by which the actuarial present value of the accumulated plan benefits
under the Plan as of the close of its most recent plan year, determined in
accordance with Statement of Financial Accounting Standards No. 35, based upon
the actuarial assumptions used by the Plan's actuary in the most recent annual
valuation of the Plan, exceeds the fair market value of the assets allocable
thereto, determined in accordance with Section 412 of the Code.
"Uniform Commercial Code" means the Uniform Commercial Code as
in effect in the relevant jurisdiction.
"U.S. GAAP" means generally accepted accounting principles in
the United States consistently applied.
"Vice President" means, with respect to the Trustee, any vice
president, whether or not designated by a number or word or words added before
or after the title "vice president."
"Yield Discount Factor" means for each day during a
Calculation Period, the amount, if any, by which (x) an amount equal to (i) the
weighted average interest rate per annum on the Notes and the Blue Hawk Note
for the related Settlement Period plus (ii) 2% minus (iii) twelve times the
percentage equivalent of a fraction the numerator of which is equal to the
aggregate amount of any payments received under the Interest Rate Cap during
such related Settlement Period and the denominator of which is equal to the
average
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outstanding principal amount of the Issuer's obligations under the Class A
Notes, the Class B Notes and the Blue Hawk Note for such related Settlement
Period exceeds (y) the Net Portfolio Yield for such related Settlement Period.
ARTICLE TWO
The Notes
SECTION 2.01. Forms Generally. The Notes and the Trustee's
certificate of authentication shall be in substantially the forms set forth in
this Article Two 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 on which the Notes may be listed, or as may, consistent
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,
typewritten, engraved or produced by any combination of these methods (with or
without steel engraved borders), all as determined by the officers executing
such Notes, as evidenced by their execution of such Notes.
SECTION 2.02. Forms of Class A Notes and Certificate of
Authentication. (a) The form of the face of the Class A Notes shall be
substantially as follows:
THIS SECURITY (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 (THE "SECURITIES
ACT"), AND THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY
EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON
THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY
EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE ISSUER THAT (A) SUCH
SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)
INSIDE THE
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<PAGE> 28
UNITED STATES 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
OR IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF
COUNSEL IF THE ISSUER SO REQUESTS), (2) TO THE ISSUER, (3) PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT OR (4) OUTSIDE THE UNITED STATES
TO A FOREIGN PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
904 UNDER THE SECURITIES ACT, AND IN EACH CASE, IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY
OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE
SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A)
ABOVE.
EACH HOLDER OF THIS NOTE, AS A RESULT OF PURCHASING SUCH NOTE,
AGREES THAT, PRIOR TO THE DATE WHICH IS ONE YEAR AND ONE DAY AFTER THE
PAYMENT IN FULL OF ALL OF BROADWAY RECEIVABLES, INC.'S OBLIGATIONS IN
RESPECT OF THE BLUE HAWK CREDIT FACILITY, THE 7.55% SUBORDINATED
CREDIT CARD NOTES, CLASS A, DUE 1999 AND THE 11% SUBORDINATED CREDIT
CARD NOTES, CLASS B, DUE 1999, SUCH HOLDER WILL NOT INSTITUTE AGAINST,
OR JOIN ANY OTHER PERSON IN INSTITUTING AGAINST, BROADWAY RECEIVABLES,
INC. ANY BANKRUPTCY, REORGANIZATION, ARRANGEMENT, INSOLVENCY OR
LIQUIDATION PROCEEDINGS OR OTHER SIMILAR PROCEEDING UNDER THE LAWS OF
THE UNITED STATES, OR ANY STATE OF THE UNITED STATES.
BROADWAY RECEIVABLES, INC.
7.55% SUBORDINATED CREDIT CARD NOTE,
CLASS A, DUE 1999
No. ______
$____________
CUSIP________
Broadway Receivables, Inc., a corporation duly organized and
existing under the laws of the State of Delaware (the "Issuer"), for value
received, hereby promises to pay to ________________, or registered assigns,
the principal sum of _________________ DOLLARS on October 15, 1999 (the "Stated
Maturity Date"), and to pay interest on the outstanding principal amount of
this Note on October 15, 1994, and the fifteenth day of each calendar month
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<PAGE> 29
thereafter or, if such fifteenth day is not a business day, the next succeeding
business day, until the principal hereof is paid or made available for payment
(each a "Payment Date"). Interest on this Note will accrue from the most
recent date to which interest has been paid or, if no interest has been paid,
from the date of issuance of this Note, at the rate of 7.55% per annum
(computed on the basis of a 360-day year of twelve 30-day months). In the
event that the Issuer fails to redeem this Note on or prior to October 8, 1996,
the interest rate on this Note will increase by 200 basis points to the rate of
9.55% per annum (the amount of such increase, the "Step-Up Interest Amount").
Step-Up Interest Amounts will accrue monthly and will be payable on a
subordinated basis as provided in the Security Agreement. Such principal of
and interest on this Note shall be paid in the manner specified on the reverse
hereof.
The principal of and interest on this Note are payable 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. All payments made by the
Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of this
Note.
Reference is made to the further provisions of this Note set
forth on the reverse hereof, which shall have the same effect as though fully
set forth on the face of this Note.
Unless the certificate of authentication hereon has been
executed by an authorized officer of the Trustee, by manual signature, this
Note shall not be entitled to any benefit under the Indenture referred to on
the reverse hereof, or be valid or obligatory for any purpose.
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<PAGE> 30
IN WITNESS WHEREOF, the Issuer has caused this instrument to
be signed, manually or in facsimile, by its duly authorized officer.
Dated: BROADWAY RECEIVABLES, INC.
By___________________________
Name:
Title:
(b) The form of the reverse of a Class A Note shall be
substantially as follows:
This Note is one of a duly authorized issue of Notes of the
Issuer, designated as its 7.55% Subordinated Credit Card Notes, Class A, Due
1999 (the "Class A Notes"), issued under an Indenture dated as of September 1,
1994 (the "Indenture") between the Issuer and Bankers Trust Company, as trustee
(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 thereunder of the Issuer, the
Trustee and the Holders of the Notes. All terms used in this Note that are
defined in the Indenture, as supplemented or amended, shall have the meanings
assigned to them in the Indenture, as so supplemented or amended.
The principal of this Note shall be payable on the Stated
Maturity Date hereof unless payable earlier because (x) an Event of Default
shall have occurred and be continuing, the Senior Blue Hawk Obligations shall
have been paid in full and the Trustee or the Holders of Notes representing not
less than 66-2/3% of the Aggregate Outstanding Amount of the Notes shall have
declared the Notes to be immediately due and payable in accordance with Section
7.02 of the Indenture, (y) the Issuer shall have called for the redemption of
the Notes pursuant to Section 11.01 of the Indenture or (z) the Notes shall
have become subject to mandatory redemption as provided in Section 11.04 of the
Indenture. All principal payments on the Class A Notes shall be made pro rata
to the Noteholders of such Class entitled thereto except as otherwise provided
in the Indenture.
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<PAGE> 31
As provided in the Indenture, the Class A Notes are equally
and ratably secured by the Collateral pledged as security therefor. The Class
A Notes are subordinated in right of payment to certain obligations of the
Issuer under the Blue Hawk Credit Facility and certain other indebtedness of
the Issuer to the extent and in the manner provided in the Security Agreement.
Payments of interest on this Note due and payable on each
Payment Date shall be made by check mailed to the Person whose name appears as
the registered Holder of this Note (or one or more Predecessor Notes) on the
Note Register as of the close of business on the last day of the month
preceding the Payment Date (the "Regular Record Date"), except that with
respect to Notes registered on the Regular Record Date in the name of the
nominee of the Clearing Agency (initially, such nominee to be Cede & Co.),
payments will be made by wire transfer in immediately available funds to the
account designated by such nominee. Such checks shall be mailed to the Person
entitled thereto at the address of such Person as it appears on the Note
Register as of the applicable Regular Record Date without requiring that this
Note be submitted for notation of payment, and the mailing of such check shall
constitute payment of the amount thereof regardless of whether such check is
returned undelivered. Any reduction in the principal amount of this Note (or
any one or more Predecessor Notes) effected by any payments made on any Payment
Date shall be binding upon all future Holders of this Note and of any Note
issued upon the registration of transfer hereof or in exchange hereof or in
lieu hereof, whether or not noted hereon. If funds are expected to be
available, as provided in the Indenture, for payment in full of the then
remaining unpaid principal amount of this Note on a Payment Date, then the
Issuer will notify the Person who was the registered Holder hereof as of the
Regular Record Date preceding such Payment Date by notice mailed no later than
five days prior to such Payment Date and the amount then due and payable shall
be payable only upon presentation and surrender of this Note at the Trustee's
principal corporate trust office or at the office of the Trustee's agent
appointed for such purposes located in The City of New York.
Any portion of any payment of principal or interest which was
due but was not paid or duly provided for on a Payment Date shall forthwith
cease to be payable to the Person who was the registered Holder of this Note on
the applicable Regular Record Date and shall be paid in
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<PAGE> 32
whole or in part, when and to the extent funds are available for such payment,
in accordance with the terms of the Indenture, to the Person in whose name this
Note (or one or more Predecessor Notes) is then registered.
As provided in the Indenture, the Notes may be redeemed, in
whole or in part, at the option of the Issuer on any Payment Date on or after
October 15, 1994 and on October 8, 1996, at a redemption price equal to the sum
of (i) 100% of the principal amount thereof, (ii) accrued and unpaid interest
thereon, and (iii) in the case of any redemption occurring prior to October 8,
1996, the Make-Whole Premium.
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Note may be registered on
the Note Register of the Issuer, upon surrender of this Note for registration
of transfer at the office or agency designated by the Issuer pursuant to the
Indenture, duly endorsed by, or accompanied by a written instrument of transfer
in form satisfactory to the Trustee duly executed by, the Holder hereof or his
attorney duly authorized in writing, with such signature guaranteed by an
"eligible guarantor institution" meeting the requirements of the Trustee which
requirements include membership or participation in the Securities Transfer
Agent's Medallion Program ("Stamp") or such other "signature guarantee program"
as may be determined by the Trustee in addition to, or in substitution for,
Stamp, and such other documents as the Trustee may require, and thereupon one
or more new Notes of authorized denomination and in the same aggregate
principal amount will be issued to the designated transferee or transferees.
No service charge will be charged for any registration of transfer or exchange
of this Note, but the transferor may be required to pay a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any such registration of transfer or exchange.
Prior to the due presentment for registration of transfer of
this Note, the Issuer, the Trustee and any agent of the Issuer or the Trustee
may treat the Person in whose name this Note (as of the day of determination or
as of such other date as may be specified in the Indenture) is registered as
the owner hereof for all purposes, whether or not this Note be overdue, and
neither the Issuer, the Trustee, nor any such agent shall be affected by notice
to the contrary.
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The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the rights of the Holders of the Notes under the
Indenture at any time by the Issuer with the consent of the Holders of Notes
representing a majority of the Aggregate Outstanding Amount of all Notes at the
time Outstanding. The Indenture also contains provisions permitting the
Holders of Notes representing 66-2/3% of the Aggregate Outstanding Amount of
the Notes, on behalf of the Holders of all the Notes, to waive compliance by
the Issuer with certain provisions of the Indenture and certain existing
defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Note (or any one or more Predecessor Notes) 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 hereof or in lieu hereof whether or not notation of such consent or
waiver is made upon this Note. The Indenture also permits the Trustee to amend
or waive certain terms and conditions set forth in the Indenture without the
consent of Holders of the Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor
to the Issuer under the Indenture.
The Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.
This Note and the Indenture shall be construed in accordance
with, and governed by, the substantive laws of the State of New York applicable
to agreements made and to be performed therein.
No reference herein to the Indenture and no provision of this
Note or of the Indenture shall alter or impair the obligation of the Issuer,
which is absolute and unconditional, to pay the principal of and interest on
this Note at the times, place, and rate, and in the coin or currency herein
prescribed.
This Note is a limited recourse obligation of the Issuer
payable solely out of the Collateral and the proceeds thereof. To the extent
that the Collateral allocable to the holders of the Notes under the Security
Agreement is for any reason insufficient to provide for the payment of amounts
owing to the holders of the Notes, no holder of this Note shall have any
recourse to the Issuer or to any
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<PAGE> 34
other Person for the amount of such insufficiency nor shall any such holder
have a Claim against the Issuer for the amount of any such insufficiency.
(c) The form of the Trustee's certificate of
authentication is as follows:
This is one of the Notes designated above and referred to in
the within-mentioned Indenture.
BANKERS TRUST COMPANY,
as Trustee
By:_________________________
Authorized Signatory
(d) The form of assignment is as follows:
FOR VALUE RECEIVED,___________________________ hereby sells,
assigns, and transfers unto ___________________________________
Please insert Social Security or
other identifying number of
assignee:_______________
the within Note of Broadway Receivables, Inc. standing in the name(s) of the
undersigned in the Note Register of the Issuer and does hereby irrevocably
constitute and appoint _______________ Attorney to transfer such Note in such
Note Register, with full power of substitution in the premises.
Dated:_______________________ __________________________________
[Signature]
__________________________________
[Signature]
Notice: The signature(s) to this
assignment must correspond with the
name(s) as written upon the face of
this Note in every particular without
alteration or any change whatsoever.
The signa-
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<PAGE> 35
ture(s) must be guaranteed by an
"eligible guarantor institution"
meeting the requirements of the Trustee
which requirements include membership
or participation in the Securities
Transfer Agent's Medallion Program
("Stamp") or such other "signature
guarantee program" as may be determined
by the Trustee in addition to, or in
substitution for, Stamp. Notarized or
witnessed signatures are not acceptable
as guaranteed signatures.
Signature Guarantee:
_________________________
Name of Institution
_________________________
Authorized Officer
(e) The terms of the Class A Note contained in this
Section are part of the terms of this Indenture.
SECTION 2.03. Forms of Class B Notes and Certificate of
Authentication. (a) The form of the face of the Class B Notes shall be
substantially as follows:
THIS SECURITY (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 (THE "SECURITIES
ACT"), AND THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY
EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING
ON THE EXEMP-
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<PAGE> 36
TION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY
EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE ISSUER THAT (A) SUCH
SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)
INSIDE THE UNITED STATES 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 OR IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN
OPINION OF COUNSEL IF THE ISSUER SO REQUESTS), (2) TO THE ISSUER, (3)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR (4) OUTSIDE THE
UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT, AND IN EACH CASE,
IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER
WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER
FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS
SET FORTH IN (A) ABOVE.
EACH HOLDER OF THIS NOTE, AS A RESULT OF PURCHASING SUCH NOTE,
AGREES THAT, PRIOR TO THE DATE WHICH IS ONE YEAR AND ONE DAY AFTER THE
PAYMENT IN FULL OF ALL OF BROADWAY RECEIVABLES, INC.'S OBLIGATIONS IN
RESPECT OF THE BLUE HAWK CREDIT FACILITY, THE 7.55% SUBORDINATED
CREDIT CARD NOTES, CLASS A, DUE 1999 AND THE 11% SUBORDINATED CREDIT
CARD NOTES, CLASS B, DUE 1999, SUCH HOLDER WILL NOT INSTITUTE AGAINST,
OR JOIN ANY OTHER PERSON IN INSTITUTING AGAINST, BROADWAY RECEIVABLES,
INC. ANY BANKRUPTCY, REORGANIZATION, ARRANGEMENT, INSOLVENCY OR
LIQUIDATION PROCEEDINGS OR OTHER SIMILAR PROCEEDING UNDER THE LAWS OF
THE UNITED STATES, OR ANY STATE OF THE UNITED STATES.
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<PAGE> 37
BROADWAY RECEIVABLES, INC.
11% SUBORDINATED CREDIT CARD NOTE,
CLASS B, DUE 1999
No. ______
$____________
CUSIP________
Broadway Receivables, Inc., a corporation duly organized and
existing under the laws of the State of Delaware (the "Issuer"), for value
received, hereby promises to pay to __________, or registered assigns, the
principal sum of _____________ DOLLARS on October 15, 1999 (the "Stated
Maturity Date"), and to pay interest on the outstanding principal amount of
this Note on October 15, 1994, and the fifteenth day of each calendar month
thereafter or, if such fifteenth day is not a business day, the next succeeding
business day, until the principal hereof is paid or made available for payment
(each a "Payment Date"). Interest on this Note will accrue from the most
recent date to which interest has been paid or, if no interest has been paid,
from the date of issuance of this Note, at the rate of 11% per annum (computed
on the basis of a 360-day year of twelve 30-day months). In the event that the
Issuer fails to redeem this Note on or prior to October 8, 1996, the interest
rate on this Note will increase by 200 basis points to the rate of 13% per
annum (the amount of such increase, the "Step-Up Interest Amount"). Step-Up
Interest Amounts will accrue monthly and will be payable on a subordinated
basis as provided in the Security Agreement. Such principal of and interest on
this Note shall be paid in the manner specified on the reverse hereof.
The principal of and interest on this Note are payable 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. All payments made by the
Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of this
Note.
Reference is made to the further provisions of this Note set
forth on the reverse hereof, which shall have the same effect as though fully
set forth on the face of this Note.
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<PAGE> 38
Unless the certificate of authentication hereon has been
executed by an authorized officer of the Trustee, by manual signature, this
Note shall not be entitled to any benefit under the Indenture referred to on
the reverse hereof, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to
be signed, manually or in facsimile, by its duly authorized officer.
Dated: BROADWAY RECEIVABLES, INC.
By_________________________
Name:
Title:
(b) The form of the reverse of a Class B Note shall be
substantially as follows:
This Note is one of a duly authorized issue of Notes of the
Issuer, designated as its 11% Subordinated Credit Card Notes, Class B, Due 1999
(the "Class B Notes"), issued under an Indenture dated as of September 1, 1994
(the "Indenture") between the Issuer and Bankers Trust Company, as trustee (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 thereunder of the Issuer, the
Trustee and the Holders of the Notes. All terms used in this Note that are
defined in the Indenture, as supplemented or amended, shall have the meanings
assigned to them in the Indenture, as so supplemented or amended.
The principal of this Note shall be payable on the Stated
Maturity Date hereof unless payable earlier either because (x) an Event of
Default shall have occurred and be continuing, the Senior Blue Hawk Obligations
shall have been paid in full and the Trustee or the Holders of Notes
representing not less than 66-2/3% of the Aggregate Outstanding Amount of the
Notes shall have declared the Notes to be immediately due and payable in
accordance with Section 7.02 of the Indenture, (y) the Issuer shall have called
for the redemption of the Notes pursuant to Section 11.01 of the Indenture or
(z) the Notes shall have become subject to mandatory redemption as provided in
Section
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<PAGE> 39
11.04 of the Indenture. All principal payments on the Class B Notes shall be
made pro rata to the Noteholders of such Class entitled thereto except as
otherwise provided in the Indenture.
As provided in the Indenture, the Class B Notes are equally
and ratably secured by the Collateral pledged as security therefor. The Class
B Notes are subordinated in right of payment to certain obligations of the
Issuer under the Blue Hawk Credit Facility, the Class A Notes and certain other
indebtedness of the Issuer to the extent and in the manner provided in the
Security Agreement.
Payments of interest on this Note due and payable on each
Payment Date shall be made by check mailed to the Person whose name appears as
the registered Holder of this Note (or one or more Predecessor Notes) on the
Note Register as of the close of business on the last day of the month
preceding the Payment Date (the "Regular Record Date"), except that with
respect to Notes registered on the Regular Record Date in the name of the
nominee of the Clearing Agency (initially, such nominee to be Cede & Co.),
payments will be made by wire transfer in immediately available funds to the
account designated by such nominee. Such checks shall be mailed to the Person
entitled thereto at the address of such Person as it appears on the Note
Register as of the applicable Regular Record Date without requiring that this
Note be submitted for notation of payment, and the mailing of such check shall
constitute payment of the amount thereof regardless of whether such check is
returned undelivered. Any reduction in the principal amount of this Note (or
any one or more Predecessor Notes) effected by any payments made on any Payment
Date shall be binding upon all future Holders of this Note and of any Note
issued upon the registration of transfer hereof or in exchange hereof or in
lieu hereof, whether or not noted hereon. If funds are expected to be
available, as provided in the Indenture, for payment in full of the then
remaining unpaid principal amount of this Note on a Payment Date, then the
Issuer will notify the Person who was the registered Holder hereof as of the
Regular Record Date preceding such Payment Date by notice mailed no later than
five days prior to such Payment Date and the amount then due and payable shall
be payable only upon presentation and surrender of this Note at the Trustee's
principal corporate trust office or at the office of the Trustee's agent
appointed for such purposes located in The City of New York.
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<PAGE> 40
Any portion of any payment of principal or interest which was
due but was not paid or duly provided for on a Payment Date shall forthwith
cease to be payable to the Person who was the registered Holder of this Note on
the applicable Regular Record Date and shall be paid in whole or in part, when
and to the extent funds are available for such payment in accordance with the
terms of the Indenture, to the Person in whose name this Note (or one or more
Predecessor Notes) is then registered.
As provided in the Indenture, the Notes may be redeemed, in
whole or in part, at the option of the Issuer on any Payment Date on or after
October 15, 1994 and on October 8, 1996, at a redemption price equal to the sum
of (i) 100% of the principal amount thereof, (ii) accrued and unpaid interest
thereon, and (iii) in the case of any redemption occurring prior to October 8,
1996, the Make-Whole Premium.
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Note may be registered on
the Note Register of the Issuer, upon surrender of this Note for registration
of transfer at the office or agency designated by the Issuer pursuant to the
Indenture, duly endorsed by, or accompanied by a written instrument of transfer
in form satisfactory to the Trustee duly executed by, the Holder hereof or his
attorney duly authorized in writing, with such signature guaranteed by an
"eligible guarantor institution" meeting the requirements of the Trustee which
requirements include membership or participation in the Securities Transfer
Agent's Medallion Program ("Stamp") or such other "signature guarantee program"
as may be determined by the Trustee in addition to, or in substitution for,
Stamp, and such other documents as the Trustee may require, and thereupon one
or more new Notes of authorized denomination and in the same aggregate
principal amount will be issued to the designated transferee or transferees.
No service charge will be charged for any registration of transfer or exchange
of this Note, but the transferor may be required to pay a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any such registration of transfer or exchange.
Prior to the due presentment for registration of transfer of
this Note, the Issuer, the Trustee and any agent of the Issuer or the Trustee
may treat the Person in whose name this Note (as of the day of determination or
as of such other date as may be specified in the Indenture) is
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<PAGE> 41
registered as the owner hereof for all purposes, whether or not this Note be
overdue, and neither the Issuer, the Trustee, nor any such agent shall be
affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the rights of the Holders of the Notes under the
Indenture at any time by the Issuer with the consent of the Holders of Notes
representing a majority of the Aggregate Outstanding Amount of all Notes at the
time Outstanding. The Indenture also contains provisions permitting the
Holders of Notes representing 66-2/3% of the Aggregate Outstanding Amount of
the Notes, on behalf of the Holders of all the Notes, to waive compliance by
the Issuer with certain provisions of the Indenture and certain existing
defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Note (or any one or more Predecessor Notes) 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 hereof or in lieu hereof whether or not notation of such consent or
waiver is made upon this Note. The Indenture also permits the Trustee to amend
or waive certain terms and conditions set forth in the Indenture without the
consent of Holders of the Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor
to the Issuer under the Indenture.
The Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.
This Note and the Indenture shall be construed in accordance
with, and governed by, the substantive laws of the State of New York applicable
to agreements made and to be performed therein.
No reference herein to the Indenture and no provision of this
Note or of the Indenture shall alter or impair the obligation of the Issuer,
which is absolute and unconditional, to pay the principal of and interest on
this Note at the times, place, and rate, and in the coin or currency herein
prescribed.
This Note is a limited recourse obligation of the Issuer
payable solely out of the Collateral and the pro-
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<PAGE> 42
ceeds thereof. To the extent that the Collateral allocable to the holders of
the Notes under the Security Agreement is for any reason insufficient to
provide for the payment of amounts owing to the holders of the Notes, no holder
of this Note shall have any recourse to the Issuer or to any other Person for
the amount of such insufficiency nor shall any such holder have a Claim against
the Issuer for the amount of any such insufficiency.
(c) The form of the Trustee's certificate of
authentication is as follows:
This is one of the Notes designated above and referred to in
the within-mentioned Indenture.
BANKERS TRUST COMPANY,
as Trustee
By:_________________________
Authorized Signatory
(d) The form of assignment is as follows:
FOR VALUE RECEIVED,___________________________ hereby sells,
assigns, and transfers unto ___________________________________
Please insert Social Security or
other identifying number of
assignee:_______________
the within Note of Broadway Receivables, Inc. standing in the name(s) of the
undersigned in the Note Register of the Issuer and does hereby irrevocably
constitute and appoint _______________ Attorney to transfer such Note in such
Note Register, with full power of substitution in the premises.
Dated:_______________________ _____________________________
[Signature]
_____________________________
[Signature]
Notice: The signature(s) to this
assignment must correspond with the
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<PAGE> 43
name(s) as written upon the face of
this Note in every particular without
alteration or any change whatsoever.
The signature(s) must be guaranteed by
an "eligible guarantor institution"
meeting the requirements of the Trustee
which requirements include membership or
participation in the Securities
Transfer Agent's Medallion Program
("Stamp") or such other "signature
guarantee program" as may be determined
by the Trustee in addition to, or in
substitution for, Stamp. Notarized or
witnessed signatures are not acceptable
as guaranteed signatures.
Signature Guarantee:
_________________________
Name of Institution
_________________________
Authorized Officer
(e) The terms of the Class B Note contained in this
Section are part of the terms of this Indenture.
SECTION 2.04. Denominations. The Notes shall be issuable
as registered Notes, without coupons, in the Minimum Denomination and integral
multiples of $1,000 in excess thereof; provided, however, that, subject to
Section 11.07 hereof, Notes subject to redemption in part shall be issuable in
such lesser denominations as shall result from any such redemption.
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<PAGE> 44
SECTION 2.05. Execution, Authentication, and Delivery. The
Notes shall be executed on behalf of the Issuer by any one of its Authorized
Officers under the corporate seal of the Issuer, which may be in facsimile form
and be imprinted or otherwise reproduced thereon, and shall be attested by an
Authorized Officer of the Issuer. The signature of any of these officers on the
Notes may be manual or facsimile.
Notes bearing the manual or facsimile signature of individuals
who were at any time the proper officers of the Issuer shall bind the Issuer,
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 Issuer may deliver Notes executed by the Issuer
to the Trustee pursuant to an Issuer Order for authentication; and the Trustee
shall authenticate and deliver such Notes as in this Indenture provided and not
otherwise.
Each Note shall be dated as of 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
executed by the Trustee by the manual signature of one of its authorized
signatories, and such certificate upon any Note shall be conclusive evidence,
and the only evidence, that such Note has been duly authenticated and delivered
hereunder.
SECTION 2.06. Temporary Notes. Pending the preparation of
Definitive Notes, the Issuer may execute, and upon receipt of an Issuer Order
the Trustee shall authenticate and deliver, temporary Notes which are printed,
lithographed, typewritten, mimeographed, or otherwise produced, in any
denomination, substantially of the tenor of the Definitive Notes in lieu of
which they are issued and with such variations not inconsistent with terms of
this Indenture as the officers executing such Notes may determine, as evidenced
by their execution of such Notes.
If temporary Notes are issued, the Issuer will cause
Definitive Notes to be prepared without unreasonable
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<PAGE> 45
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 Issuer to be maintained as provided in Section 4.02
hereof, without charge to the Holder. Upon surrender for cancellation of any
one or more temporary Notes, the Issuer shall execute and 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 2.07. Registration; Registration of Transfer and
Exchange. The Issuer shall cause to be kept a register (the "Note Register")
in which, subject to such reasonable regulations as it may prescribe, the
Issuer shall provide for the registration of Notes and the registration of
transfers of Notes. The Trustee is hereby initially appointed "Note Registrar"
for the purpose of registering Notes and transfers of Notes as herein provided.
Upon any resignation of any Note Registrar, the Issuer shall promptly appoint a
successor or, in the absence of such appointment, assume the duties of Note
Registrar.
If a Person other than the Trustee is appointed by the Issuer
as Note Registrar, the Issuer will give the Trustee prompt written notice of
the appointment of a Note Registrar and of the location, and any change in the
location, of the Note Register, and the Trustee shall have the right to inspect
the Note Register at all reasonable times and to obtain copies thereof, and the
Trustee shall have the right to rely upon a certificate executed on behalf of
the Note Registrar by an officer thereof as to the names and addresses of the
Holders of the Notes and the principal amounts and number of such Notes.
No transfer of a Note may be made unless such transfer is made
pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "1933 Act"), or is exempt from the registration
requirements under the 1933 Act and meets the requirements of, or is exempt
from, any applicable state securities laws. In the event that a transfer is to
be made in reliance upon an exemption from the 1933 Act (other than the
exemption contained in Rule 144A thereunder), the Issuer and the Note Registrar
may require, in order to assure compliance with the 1933 Act, (i) that the
Noteholder desiring to effect
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<PAGE> 46
such transfer and the Noteholder's prospective transferee each verify to the
Issuer and the Note Registrar in writing the facts surrounding such transfer,
and/or (ii) an opinion of counsel satisfactory to each of them that such
transfer may be made pursuant to an exemption from the 1933 Act, which opinion
of counsel may in the case of the initial Holder be an opinion of internal
counsel of such Holder and in any event shall not be an expense of the Issuer.
In the event that registration of transfer of a Note is to be made in reliance
upon the exemption from registration under the 1933 Act contained in rule 144A
under the 1933 Act, the Note Registrar shall register such transfer upon the
receipt by the Note Registrar and the Issuer of a certificate in the form of
Exhibit C-1, Exhibit C-2 or Exhibit C-3 hereto. The Note Registrar shall not
register any transfer if in the written opinion of counsel to the Issuer (which
opinion of counsel shall be delivered to any Noteholder upon request therefor),
the transfer would violate the 1933 Act. Neither the Issuer, the Trustee nor
the Note Registrar shall be obligated to register the certificates under the
1933 Act or any other securities law.
Subject to the preceding paragraph, upon surrender for
registration of transfer of any Note at the office or agency of the Issuer to
be maintained as provided in Section 4.02 hereof, the Issuer shall execute, and
the Trustee shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Notes in any authorized
denominations, of a like Class and aggregate principal amount.
At the option of the Holder, Notes may be exchanged for other
Notes in any authorized denominations, of a like Class and aggregate principal
amount, upon surrender of the Notes to be exchanged at such office or agency.
Whenever any Notes are so surrendered for exchange, the Issuer shall execute,
and the Trustee shall authenticate and deliver, the Notes which the Noteholder
making the exchange is entitled to receive. The Trustee and any Note Registrar
shall not be required to exchange or register a transfer of (a) any Note
selected, called or being called for redemption in whole or in part or (b) any
Note during the 15-day period next preceding the selection of Notes to be
redeemed and thereafter until the date of the mailing of a notice of redemption
of Notes selected for redemption.
All Notes issued upon any registration of transfer or exchange
of Notes shall be the valid obligations of the Issuer, evidencing the same
debt, and entitled to the
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<PAGE> 47
same benefits under this Indenture, as the Notes of such Class surrendered upon
such registration of transfer or exchange.
Every Note presented or surrendered for registration of
transfer or exchange shall (if so required by the Issuer or the Trustee) be
duly endorsed by, or be accompanied by a written instrument of transfer in form
satisfactory to the Trustee duly executed by, the Holder thereof or such
Holder's attorney duly authorized in writing, with such signature guaranteed by
a bank or trust company located, or having a correspondent located, in the City
of New York or the city in which the Corporate Trust Office is located, or by a
member firm of an "eligible guarantor institution" meeting the requirements of
the Trustee which requirements include membership or participation in the
Securities Transfer Agent's Medallion Program ("Stamp") or such other
"signature guarantee program" as may be determined by the Trustee in addition
to, or in substitution for, Stamp, and such other documents as the Trustee may
require.
No service charge shall be made to a Holder for any
registration of transfer or exchange of Notes, but the Issuer 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 2.06 or 10.05 hereof not
involving any transfer.
SECTION 2.08. Mutilated, Destroyed, Lost, or Stolen Notes.
If (i) any mutilated Note is surrendered to the Trustee, or the Trustee
receives evidence to its satisfaction of the destruction, loss or theft of any
Note, and (ii) there is delivered to the Trustee such security or indemnity as
may be required by it to hold the Issuer and the Trustee harmless, then, in the
absence of notice to the Issuer, the Trustee or the Note Registrar that such
Note has been acquired by a bona fide purchaser, the Issuer shall execute and
upon its request the Trustee shall authenticate and deliver, in exchange for or
in lieu of any such mutilated, destroyed, lost or stolen Note, a new Note of
like Class, tenor and principal amount, bearing a number not contemporaneously
outstanding; provided, however, that if any such destroyed, lost or stolen
Note, but not a mutilated Note, shall have become or within seven days shall be
due and payable, or shall have been selected or called for redemption, instead
of issuing a new Note, the Issuer may pay such destroyed, lost or stolen Note
when so due or pay-
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<PAGE> 48
able or upon the Redemption Date without surrender thereof. If, after the
delivery of such new Note or payment of a destroyed, lost or stolen Note
pursuant to the proviso to the preceding sentence, a bona fide purchaser of the
original Note in lieu of which such new Note was issued (or with respect to
which such payment was made) presents for payment such original Note, the
Issuer and the Trustee shall be entitled to recover such new Note (or such
payment) from the Person to whom it was delivered or any Person taking such new
Note from such Person to whom such new Note was delivered or any assignee of
such Person, except a bona fide purchaser, and shall be entitled to recover
upon the security or indemnity provided therefor to the extent of any loss,
damage, cost or expense incurred by the Issuer or the Trustee in connection
therewith.
Upon the issuance of any new Note under this Section 2.08, the
Issuer may require the payment by the Holder of such Note of a sum sufficient
to cover any tax or other governmental charge that may be imposed in relation
thereto and any other reasonable expenses (including the fees and expenses of
the Trustee) connected therewith.
Every new Note issued pursuant to this Section 2.08 in
replacement of any mutilated, destroyed, lost or stolen Note shall constitute
an original additional contractual obligation of the Issuer, whether or not the
mutilated, destroyed, lost or stolen Note shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes of such Class duly issued
hereunder.
The provisions of this Section 2.08 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 2.09. Persons Deemed Owner. Prior to due
presentment for registration of transfer of any Note, the Issuer, the Trustee
and any agent of the Issuer or the Trustee may treat the Person in whose name
any Note is registered (as of the day of determination) as the owner of such
Note for the purpose of receiving payments of principal of and interest, if
any, on such Note and for all other purposes whatsoever, whether or not such
Note be overdue, and neither the Issuer, the Trustee nor any agent of the
Issuer or the Trustee shall be affected by notice to the contrary.
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SECTION 2.10. Payment of Principal and Interest; Interest
on Overdue Principal; Principal and Interest Rights Preserved. (a) The Notes
shall accrue interest as provided in the forms of the Notes set forth in
Sections 2.02 and 2.03 hereof at the Note Interest Rates specified therein, and
such interest shall be payable on each Payment Date as specified therein. In
the event that the Issuer fails to redeem the Notes in full on or prior to
October 8, 1996, the interest rate on the outstanding Class A Notes shall
increase by 200 basis points to 9.55% per annum and the interest rate on the
outstanding Class B Notes shall increase by 200 basis points to 13% per annum
(the amount of such increase in respect of any Note, the "Step-Up Interest
Amount"). Step-Up Interest Amounts shall accrue on the Notes monthly but shall
be payable on a subordinated basis solely in accordance with the priorities
established in Section 15(b) of the Security Agreement. Any installment of
interest payable on any Note which is punctually paid or duly provided for by
the Issuer on the applicable Payment Date shall be paid to the Person in whose
name such Note (or one or more Predecessor Notes) is registered on the Regular
Record Date for such Payment Date, by check mailed first-class, postage prepaid
to such Person's address as it appears on the Note Register on such Regular
Record Date, except that with respect to Notes registered on the Regular Record
Date in the name of the nominee of the Clearing Agency (initially, such nominee
to be Cede & Co.), payments will be made by wire transfer in immediately
available funds to the account designated by such nominee. Any payment of
principal payable with respect to a Note on the Stated Maturity Date (or the
Redemption Price for any Note called for redemption) which shall be payable as
provided below. The funds represented by any such checks returned undelivered
shall be held in accordance with Section 4.03 hereof. Any instalment of
interest or principal not punctually paid or duly provided for shall be payable
in the manner and to the Persons specified in Section 2.10(c) hereof.
(b) The principal of each Note shall be payable on the
Stated Maturity Date thereof unless payable earlier because (x) an Event of
Default shall have occurred and be continuing, the Senior Blue Hawk Obligations
shall have been paid in full and the Trustee or the Holders of Notes
representing not less than 66-2/3% of the Aggregate Outstanding Amount of the
Notes have declared the Notes to be immediately due and payable in accordance
with Section 7.02 hereof, (y) an Early Amortization Event shall have occurred
and the Notes shall have become subject to manda-
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tory redemption as provided in Section 11.04 hereof, or (z) the Issuer shall
have called for the optional redemption of the Notes pursuant to Section 11.01.
The Trustee shall notify the Person in whose name a Note is registered at the
close of business on the Regular Record Date preceding the Payment Date on
which the Issuer expects that the final installment of principal of and
interest on such Note will be paid. Such notice shall be mailed no later than
five days prior to such final Payment Date and shall specify that such final
installment will be payable only upon presentation and surrender of such Note
and shall specify the place where such Note may be presented and surrendered
for payment of such installment. Notices in connection with redemptions of
Notes shall be mailed to Noteholders as provided in Section 11.02 hereof.
(c) If the entire amount due and payable with respect to
principal of any Note or the entire amount of an installment of principal of
any Note due on any Payment Date shall not have been punctually paid or duly
provided for when and as due and payable (any Note on which such an amount due
and payable has not been punctually paid or duly provided for being hereinafter
referred to as an "Overdue Note"), then the Holder of such Overdue Note shall
be entitled to payment of principal and interest as provided in Section 15(b)
of the Security Agreement and interest on the principal amount not so
punctually paid or duly provided for shall accrue from the date such amount was
due to but not including the date paid, at the Note Interest Rate for such Note
until October 8, 1996 and thereafter at a rate equal to the Note Interest Rate
for such Note plus the Step-Up Interest Amount in respect of such Note. All
such payment of principal and interest in respect of any Overdue Note shall be
made by the Trustee on such dates (each, a "Special Payment Date") and in such
amounts as funds are made available to it pursuant to the Security Agreement.
Any reduction of the principal amount of any Note (or one or
more Predecessor Notes) effected by any payments made on a Special Payment Date
shall be binding upon all future Holders of such Note and of any Note issued
upon the registration of transfer thereof or in exchange therefor or in lieu
thereof, whether or not such payment is noted on such Note. Payments of
interest on overdue payments and of overdue interest shall be made to the
Person entitled thereto as provided below by check mailed first-class, postage
prepaid, to such Person's address as it appears in the Note Register, except
that with respect to Notes registered on the Special Record Date in the name of
the nominee
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of the Clearing Agency (initially, such nominee to be Cede & Co.), payments
will be made by wire transfer in immediately available funds to the account
designated by such nominee. Any such checks returned undelivered shall be held
in accordance with Section 4.03 hereof. Upon the giving of the notice,
described below, that the entire amount remaining due on an Overdue Note will
be paid on such Special Payment Date, such amount shall be payable only upon
presentation and surrender of such Overdue Note to the Trustee at its Corporate
Trust Office or the office or agency of the Issuer maintained for that purpose.
Amounts payable with respect to any Overdue Note as provided above on any
Special Payment Date shall be payable to the Person in whose name that Note (or
one or more Predecessor Notes) is registered at the close of business on the
applicable Special Record Date. The Trustee shall mail or cause to be mailed
notice of the Special Payment Date, first-class, postage prepaid, to each
Holder as of the Special Record Date at such Holder's address as it appears in
the Note Register, not less than 10 days prior to such Special Payment Date.
With respect to Overdue Notes on which the entire amount remaining due is to be
paid on such Special Payment Date, such notice shall state that the entire
remaining amount will be paid on such Special Payment Date, and shall specify
that such amount will be payable only upon presentation and surrender of the
Notes as provided above.
(d) Subject to the foregoing provisions of this Section,
each Note delivered under this Indenture upon registration or transfer of or in
exchange for or in lieu of any other Note shall carry the rights to unpaid
principal and interest, if any, that were carried by such other Note.
SECTION 2.11. Cancellation. All Notes surrendered for
payment, registration of transfer, exchange or redemption shall, if surrendered
to any Person other than the Trustee, be delivered to the Trustee and shall be
promptly cancelled by it. The Issuer may at any time deliver to the Trustee
for cancellation any Notes previously authenticated and delivered hereunder
which the Issuer may have acquired in any manner whatsoever, and all Notes so
delivered shall be promptly cancelled by the Trustee. 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 may be held or disposed of by the Trustee in accordance with its standard
retention or disposal policy as in effect
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at the time unless the Issuer shall direct by an Issuer Order that they be
destroyed or returned to it.
SECTION 2.12. Authentication and Delivery of Notes. The
aggregate principal amount of Class A Notes that may be authenticated and
delivered under this Indenture is limited to $38,000,000 and the aggregate
principal amount of Class B Notes that may be authenticated and delivered under
this Indenture is limited to $26,000,000 except in each case for Notes
authenticated and delivered upon registration and transfer of, or in exchange
for, or in lieu of, other Notes pursuant to Sections 2.06, 2.07, 2.08 or 2.15.
Notes may be executed by the Issuer and delivered to the Trustee for
authentication and thereupon the same shall be authenticated and delivered by
the Trustee upon Issuer Request and upon delivery by the Issuer to the Trustee,
and receipt by the Trustee, of the following; provided, however, that
compliance with such conditions and delivery of such documents shall only be
required in connection with the original issuance of the Notes:
(1) Corporate Action. An Issuer Order authorizing the
execution, authentication and delivery of the Notes and specifying the
principal amount of Notes to be authenticated.
(2) Authorizations. Either (i) a certificate or other
official document evidencing the due authorization, approval or
consent of any governmental body or bodies at the time having
jurisdiction in the premises, together with an Opinion of Counsel that
the Trustee is entitled to rely thereon and that the authorization,
approval, or consent of no other governmental body is required for the
valid issuance and delivery of such Notes, or (ii) an Opinion of
Counsel that no such authorization, approval, or consent of any
governmental body is required.
(3) Certificates of the Issuer. (a) An Officer's
Certificate of the Issuer, dated as of the Closing Date, to the effect
that the Issuer is not in Default under this Indenture and that the
issuance of the Notes applied for will not result in any Default or
any Early Amortization Event or in any breach of any of the terms,
conditions or provisions of or constitute a default under this
Indenture or any indenture, mortgage, deed of trust or other agreement
or instrument to which the Issuer is a party or by which it or its
property is bound or any order of any court
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or administrative agency entered in any Proceeding to which the Issuer
is a party or by which it or its property may be bound or to which it
or its property may be subject; and that all conditions precedent
provided in this Indenture relating to the authentication and delivery
of the Notes applied for have been complied with.
(b) An Officer's Certificate from the Issuer, dated as of
the Closing Date, stating that all Uniform Commercial Code financing
statements with respect to the Collateral which are required to be
filed by the terms of the Security Agreement will be filed as
required.
(4) Opinion of Counsel. An Opinion of Counsel, portions
of which may be delivered by counsel to the Issuer and portions of
which may be delivered by counsel to the Servicer, dated the Closing
Date, to the collective effect that:
(a) all the documents required to be delivered hereunder
for the Trustee to authenticate and deliver the Notes have been
delivered, and all conditions precedent provided for in this Indenture
relating to the authentication and delivery of the Notes have been
complied with;
(b) the Issuer has been duly organized and is validly
existing as a corporation in good standing under the laws of the State
of Delaware with full power and authority to enter into this
Indenture;
(c) the Indenture has been duly authorized, executed and
delivered by the Issuer;
(d) the Notes have been duly authorized and, when
executed and authenticated in accordance with the provisions of the
Indenture and delivered, will constitute valid and binding obligations
of the Issuer entitled to the benefits of the Indenture;
(e) this Indenture is a valid and binding agreement of
the Issuer, enforceable in accordance with its terms except as such
enforceability may be subject to bankruptcy, insolvency,
reorganization and other similar laws affecting the rights of
creditors generally and general principles of equity (regardless of
whe-
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ther such enforceability is considered in a proceeding in equity or
at law); and
(f) such other matters as the Trustee may reasonably
require.
SECTION 2.13. Book-Entry Notes. The Notes, upon original
issuance, will be issued in the form of (i) a single typewritten Note
representing the Book-Entry Notes of Class A (the "Class A Global Note") , and
(ii) a single typewritten Note representing the Book-Entry Notes of Class B
(the "Class B Global Note" and, together with the Class A Global Note, the
"Global Notes"), to be delivered to The Depository Trust Company, the initial
Clearing Agency, by, or on behalf of, the Issuer. The Global Notes shall
initially be registered on the Note Register in the name of Cede & Co., the
nominee of the initial Clearing Agency, and no Note Owner will receive a
definitive Note representing such Note Owner's interest in the Note, except as
provided in Section 2.15. Unless and until definitive, fully registered Notes
(the "Definitive Notes") have been issued to Note Owners pursuant to Section
2.15:
(i) the provisions of this Section 2.13 shall be in full
force and effect;
(ii) the Issuer, the Note Registrar and the Trustee may
deal with the Clearing Agency for all purposes (including the payment
of principal of and interest on the Notes) as the authorized
representative of the Note Owners;
(iii) to the extent that the provisions of this Section
2.13 conflict with any other provisions of this Agreement, the
provisions of this Section 2.13 shall control;
(iv) the rights of Note Owners shall be exercised only
through the Clearing Agency and shall be limited to those established
by law and agreements between such Note Owners and the Clearing Agency
and/or the Clearing Agency Participants. Pursuant to the DTC
Agreement, unless and until Definitive Notes are issued pursuant to
Section 2.15, the initial Clearing Agency will make book-entry
transfers among the Clearing Agency Participants and receive and
transmit payments of principal of and interest on the Notes to such
Clearing Agency Participants; and
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(v) whenever this Indenture requires or permits actions
to be taken based upon instructions or directions of Holders of Notes
evidencing a specified percentage of the Aggregate Outstanding Amount
of the Notes, the Clearing Agency shall be deemed to represent such
percentage only to the extent that it has received instructions to
such effect from Note Owners and/or Clearing Agency Participants
owning or representing, respectively, such required percentage of the
beneficial interest in the Notes and has delivered such instructions
to the Trustee.
SECTION 2.14. Notices to Clearing Agency. Whenever a
notice or other communication to the Noteholders is required under this
Indenture, unless and until Definitive Notes shall have been issued to Note
Owners pursuant to Section 2.15, the Trustee shall give all such notices and
communications specified herein to be given to Holders of the Notes to the
Clearing Agency.
SECTION 2.15. Definitive Notes. If (i)(A) the Issuer
advises the Trustee in writing that the Clearing Agency is no longer willing or
able to properly discharge its responsibilities under the DTC Agreement, and
(B) the Issuer is unable to locate a qualified successor within 90 days, or
(ii) the Issuer at its option advises the Trustee in writing that it elects to
terminate the book-entry system through the Clearing Agency, then the Trustee
shall notify all Note Owners, through the Clearing Agency, of the occurrence of
any such event and of the availability of Definitive Notes to Note Owners
requesting the same. Upon surrender to the Trustee of the Global Notes
representing the Book-Entry Notes by the Clearing Agency, accompanied by
registration instructions, the Trustee shall issue the Definitive Notes in
accordance with the instructions of the Clearing Agency. None of the Issuer,
the Note Registrar or the Trustee shall be liable for any delay in delivery of
such instructions and may conclusively rely on, and shall be protected in
relying on, such instructions. Upon the issuance of Definitive Notes, the
Trustee shall recognize the Holders of the Definitive Notes as Noteholders
hereunder. The Issuer shall have no liability hereunder if it is unable to
locate a qualified successor Clearing Agency.
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ARTICLE THREE
Representations and Warranties
In order to induce the Trustee to enter into this Indenture,
the Issuer makes the following representations, warranties and agreements as of
the Closing Date, which shall survive the execution and delivery of this
Indenture.
SECTION 3.01. Corporate Status and Power. The Issuer (i)
is a corporation duly organized, validly existing and in good standing under
the laws of the State of Delaware and is duly qualified as a foreign
corporation and is in good standing in each jurisdiction in which the failure
to so qualify would have a material adverse effect on the condition (financial
or otherwise), business, operations or properties of the Issuer; (ii) is a
wholly-owned Subsidiary of Broadway; (iii) has the requisite corporate power
and authority to effect the transactions contemplated hereby and (iv) has all
requisite corporate power and authority and the legal right to own, pledge,
mortgage and operate its properties, and to conduct its business as now or
currently proposed to be conducted.
SECTION 3.02. No Violation. The execution, delivery and
performance by the Issuer of this Indenture and the other Basic Documents (i)
are within the corporate powers of the Issuer, have been duly authorized by all
necessary corporate action, including the consent of shareholders where
required, and does not (A) contravene the charter or by-laws of the Issuer, (B)
violate any law (including, without limitation, the Securities Exchange Act of
1934, ERISA, environmental and labor laws) or regulation (including, without
limitation, Regulations G, T, U, or X of the Board of Governors of the Federal
Reserve System) or any order or decree of any court or governmental
instrumentality, (C) conflict with or result in the breach of, or constitute a
default under, any indenture, mortgage or deed of trust or any material lease,
agreement or other instrument binding on or affecting the Issuer or any of its
properties or, to the Issuer's knowledge after due inquiry, Broadway or any of
its properties, or (D) result in or require the creation or imposition of any
lien, charge, security interest, encumbrance or any other type of preferential
arrangement (any of the foregoing being referred to herein as a "Lien") upon
any of the property of the Issuer or, to the Issuer's knowledge after due
inquiry, Broadway, other than the Liens created by the Security Agreement and
the Purchase Agreement; and (ii) does not require the
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consent, authorization by or approval of or notice to or filing or registration
with any governmental body, agency, authority, regulatory body or any other
Person other than those which have been obtained or made, each of which is in
full force and effect. This Indenture has been duly executed and delivered by
the Issuer. This Indenture and the other Basic Documents are and will be, the
legal, valid and binding obligation of the Issuer enforceable against the
Issuer in accordance with its terms except as the enforceability thereof may be
limited by applicable bankruptcy, reorganization, insolvency, moratorium or
other laws affecting creditors rights generally, and by general principles of
equity (regardless of whether enforcement is sought in a proceeding in equity
or at law).
SECTION 3.03. Single-Purpose Corporation. The Issuer is
engaged in only the business of purchasing Eligible Receivables from Broadway
pursuant to the Purchase Agreement, administering, servicing and collecting
such Receivables, entering into the Facility Documents, the Basic Documents and
any transactions contemplated thereby and reasonably related transactions.
SECTION 3.04. No Conflicts; No Defaults. The Issuer (i) is
not a party to any indenture, loan or credit agreement or any lease or other
agreement or instrument or subject to any charter or corporate restriction that
could have, and no provision of applicable law or governmental regulation could
have, a material adverse effect on the condition (financial or otherwise),
business, operations or properties of the Issuer, or could have such an effect
on the ability of the Issuer to carry out its obligations under this Indenture
and the other Basic Documents and (ii) is not in default under or with respect
to any contract, agreement, lease or other instrument to which the Issuer is a
party and which is material to the Issuer's condition (financial or otherwise),
business, operations or properties, and the Issuer has not delivered or
received any notice of default thereunder.
SECTION 3.05. No Litigation. There is no pending or, to
the Issuer's knowledge after due inquiry, threatened action, suit or proceeding
affecting the Issuer or Broadway before any court, governmental agency or
arbitrator, that could materially and adversely affect the condition (financial
or otherwise), business, operations or properties of the Issuer or Broadway or
that purports to affect the legality, validity or enforceability of this
Indenture or the other Basic Documents and none of the
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transactions contemplated by this Indenture or the other Basic Documents is, or
to the Issuer's knowledge after due inquiry is threatened to be, restrained or
enjoined (temporarily, preliminarily or permanently).
SECTION 3.06. Investment Company Act. The Issuer is not an
"investment company" or an "affiliated person" of, or "promoter" or "principal
underwriter" for, an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended.
SECTION 3.07. ERISA. Each Plan is in substantial
compliance with ERISA and the Code; no Reportable Event has occurred with
respect to a Plan; no Plan is insolvent or in reorganization; no Plan which is
a single-employer plan (as defined in Section 4001(a)(13) of ERISA) has an
Unfunded Current Liability which has or could reasonably be expected to give
rise to a lien; no Plan has an accumulated or waived funding deficiency or has
applied for an extension of any amortization period within the meaning of
Section 412 of the Code; neither the Issuer nor any ERISA Affiliate has
incurred any material liability to or on account of a Plan pursuant to Section
409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201 or 4204 of ERISA or
Section 4971 of the Code or expects to incur any material liability under any
of the foregoing Sections with respect to any Plan; the Issuer has not incurred
any material liability to or on account of a Plan pursuant to Section 4975 of
the Code and does not expect to incur any material liability thereunder with
respect to any Plan; no proceedings have been instituted to terminate any Plan;
no condition exists which presents a material risk to the Issuer or any ERISA
Affiliate of incurring a material liability to or on account of a Plan pursuant
to the foregoing provisions of ERISA and the Code; no lien imposed under the
Code or ERISA on the assets of the Issuer or any ERISA Affiliate exists or is
likely to arise on account of any Plan; the aggregate liabilities of the Issuer
and its ERISA Affiliates to all Plans which are multiemployer plans (as defined
in Section 4001(a)(3) of ERISA) in the event of a complete withdrawal
therefrom, as of the close of the most recent fiscal year of each such Plan
ended prior to the date hereof, would not exceed $1,000,000; and the Issuer
does not maintain or contribute to any employee welfare benefit plan (as
defined in Section 3(1) of ERISA) which provides benefits to retired employees
(other than as required by Section 601 of ERISA) or any employee pension
benefit plan (as defined in Section 3(2) of ERISA) the obligations with respect
to which could reasonably be ex-
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pected to have a material adverse effect on the ability of the Issuer to
perform its obligations under this Indenture.
SECTION 3.08. Subsidiaries. The Issuer has no Subsidiaries.
SECTION 3.09. No Violation. The Issuer is in compliance in
all material respects with (i) all applicable consumer credit, retail
installment sale, truth-in-lending, credit reporting and other similar laws,
rules and regulations with respect to it, its business and properties, the
Receivables and Collections with respect thereto, the Charge Account Agreements
and the accounts under which the Receivables arise and (ii) all other
applicable laws, rules and regulations with respect to it, its business and
properties, the Receivables and Collections with respect thereto, the Charge
Account Agreements and the accounts under which the Receivables arise, except,
in the case of this clause (ii), to the extent that such noncompliance does not
have a material adverse effect on its condition (financial or otherwise),
business, operations or properties, the Receivables and Collections with
respect thereto, the Charge Account Agreements and the accounts under which the
Receivables arise.
ARTICLE FOUR
Affirmative Covenants
The Issuer covenants and agrees that until the Issuer's
obligations under the Notes and this Indenture are satisfied in full:
SECTION 4.01. Payment of Principal and Interest. The Issuer
will duly and punctually pay the principal of and interest, if any, on the
Notes in accordance with the terms of the Notes and this Indenture. Amounts
properly withheld under the Code by any Person from a payment to any Noteholder
of interest and/or principal shall be considered as having been paid by the
Issuer to such Noteholder for all purposes of this Indenture.
SECTION 4.02. Maintenance of Office or Agency. The Issuer
will maintain in the Borough of Manhattan, the City of New York, the State of
New York, an office or agency where Notes may be surrendered for registration
of transfer or exchange, and where notices and demands to or upon the Issuer in
respect of the Notes and this Indenture
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may be served. The Issuer will give prompt written notice to the Trustee of
the location, and of any change in the location, of any such office or agency.
If at any time the Issuer shall fail to maintain any such office or agency or
shall fail to furnish the Trustee with the address thereof, such surrenders,
notices, and demands may be made or served at the Trustee's New York Office,
and the Issuer hereby appoints the Trustee at its New York Office its agent to
receive all such surrenders, notices, and demands.
SECTION 4.03. Money for Note Payments To Be Held in Trust.
On or before 2:30 p.m. (New York City time) on the Business Day preceding each
Payment Date, Redemption Date and Special Payment Date, the Issuer shall
deposit or cause to be deposited with the Trustee an aggregate sum sufficient
to pay the amounts then becoming due, such sum to be held in trust for the
benefit of the Persons entitled thereto.
Subject to applicable laws with respect to escheat of funds,
any money held by the Trustee in trust for the payment of any amount due with
respect to any Note and remaining unclaimed for six years after such amount has
become due and payable shall be discharged from such trust and be paid to the
Issuer on Issuer Request; and the Holder of such Notes shall thereafter, as an
unsecured general creditor, look only to the Issuer for payment thereof but
only to the extent of the amounts so paid to the Issuer, and all liability of
the Trustee with respect to such trust money shall thereupon cease; provided,
however, that the Trustee, before being required to make any such repayment,
may at the expense of the Issuer 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 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 Issuer. The Trustee may also
adopt and employ, at the expense of the Issuer, any other reasonable means of
notification of such repayment (including, but not limited to, mailing notice
of such repayment to Holders whose Notes have been called but have not been
surrendered for redemption or whose right to or interest in moneys due and
payable but not claimed is determinable from the records of the Trustee, at the
last address of record for each such Holder).
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SECTION 4.04. Preservation of Corporate Existence. The
Issuer will preserve and maintain in all material respects its corporate
existence, corporate rights (charter and statutory), and corporate franchises,
separate and apart from any Affiliate of the Issuer, and will obtain and
preserve its qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Indenture and the Notes.
SECTION 4.05. Compliance with Laws, Etc. The Issuer will
comply in all material respects with (i) all applicable consumer credit, retail
installment sale, truth-in-lending, credit reporting and other similar laws,
rules and regulations with respect to it, its business and properties, the
Receivables and Collections with respect thereto, the Charge Account Agreements
and the accounts under which the Receivables arise, and (ii) all other
applicable laws, rules and regulations with respect to it, its business and
properties, the Receivables and Collections with respect thereto, the Charge
Account Agreements and the accounts under which the Receivables arise, except
to the extent that, in the case of this clause (ii), failure to so comply would
not have a material adverse effect on its condition (financial or otherwise),
business, operations or properties, the Receivables and Collections with
respect thereto, the Charge Account Agreements and the accounts under which the
Receivables arise.
SECTION 4.06. Keeping of Books. The Issuer will keep
proper books of record and account, which shall be maintained or caused to be
maintained by the Issuer and shall be separate and apart from those of any
Affiliate of the Issuer, in which full and correct entries shall be made of all
financial transactions and the assets and business of the Issuer in accordance
with U.S. GAAP consistently applied, and keep and maintain or cause to be kept
and maintained all documents, books, records, file tapes and other information
reasonably necessary or advisable for the collection of all Receivables
(including, without limitation, records adequate to permit the daily
identification of each new Receivable and all Collections of each existing
Receivable).
SECTION 4.07. Payment of Taxes, Etc. The Issuer will pay
and discharge before the same shall become delinquent, (A) all taxes,
assessments and governmental charges or levies imposed upon it or upon its
property and (B) all lawful claims that, if unpaid, might by law become a Lien
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upon its property, provided, however, that the Issuer shall not be required to
pay or discharge any such tax, assessment, charge, levy or claim that is being
contested in good faith and by proper proceedings and such nonpayment does not
involve any danger of sale, forfeiture, impairment or loss of any of the
Collateral or any interest therein; and maintain appropriate reserves in
respect of taxes, assessments, governmental charges and levies described in
clause (A) above and claims described in clause (B) above.
SECTION 4.08. Reporting Requirements. The Issuer will
furnish to the Trustee:
(i) as soon as available and in any event within 90 days
after the end of each fiscal year of the Issuer, a balance sheet of
the Issuer as of the end of such year and statements of income and
retained earnings and of source and application of funds of the Issuer
for the period commencing at the end of the previous fiscal year and
ending with the end of such year, in each case setting forth
comparative figures for the previous fiscal year, certified without
material qualification by Price Waterhouse or other nationally
recognized independent public accountants, together with a certificate
of such accounting firm stating that in the course of the regular
audit of the business of the Issuer, which audit was conducted in
accordance with generally accepted auditing standards in the United
States, such accounting firm has obtained no knowledge that an Event
of Default has occurred and is continuing, or if, in the opinion of
such accounting firm, such an Event of Default has occurred and is
continuing, a statement as to the nature thereof;
(ii) as soon as available and in any event within 30 days
after the end of each fiscal month, monthly balance sheets and monthly
statements of source and application of funds and statements of income
and retained earnings of the Issuer, certified by the chief financial
officer of the Issuer (which certification shall state that such
balance sheets and statements fairly present the financial condition
and results of operations for such fiscal month, subject to year-end
audit adjustments), delivery of which balance sheets and statements
shall be accompanied by a certificate of such chief financial officer
to the effect that no Event of Default or Early Amortization Event has
occurred and is continuing;
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(iii) promptly, and in any event within three Business
Days, upon receipt or delivery thereof, a copy of each material notice
received by the Issuer or delivered by the Issuer to Broadway or the
Servicer under the Purchase Agreement (other than notices routinely
given in connection with the purchase of Eligible Receivables
thereunder);
(iv) as soon as possible and, in any event, within 10
days after the Issuer or any ERISA Affiliate knows or has reason to
know of the occurrence of any of the following, the Issuer will
deliver to the Trustee a certificate of the chief financial officer of
the Issuer setting forth details as to such occurrence and the action,
if any, which the Issuer or such ERISA Affiliate is required or
proposes to take, together with any notices required or proposed to be
given to or filed with or by the Issuer, the ERISA Affiliate, the
PBGC, a Plan participant or the Plan administrator with respect
thereto: that a Reportable Event has occurred, that an accumulated
funding deficiency has been incurred or an application may be or has
been made to the Secretary of the Treasury for a waiver or
modification of the minimum funding standard (including any required
installment payments) or an extension of any amortization period under
Section 412 of the Code with respect to a Plan, that a Plan has been
or may be terminated, reorganized, partitioned or declared insolvent
under Title IV of ERISA, that a Plan has an Unfunded Current Liability
giving rise to a lien under ERISA or the Code, that proceedings may be
or have been instituted to terminate a Plan, that a proceeding has
been instituted pursuant to Section 515 of ERISA to collect a
delinquent contribution to a Plan, that the Issuer will or may incur
any material liability with respect to a Plan under Section 4975 of
the Code, or that the Issuer or any ERISA Affiliate will or may incur
any material liability (including any contingent or secondary
liability) to or on account of the termination of or withdrawal from a
Plan under Section 4062, 4063, 4064, 4069, 4201 or 4204 of ERISA or
with respect to a Plan under Section 4971 of the Code or Section 409
or 502(i) or 502(l) of ERISA. The Issuer will deliver to the Trustee
a complete copy of the annual report (Form 5500) of each Plan required
to be filed with the Internal Revenue Service. In addition to any
certificates or notices delivered to the Trustee pursuant to the first
sentence hereof, copies of annual reports and any notices
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received by the Issuer or any ERISA Affiliate with respect to any Plan
shall be delivered to the Trustee no later than 10 days after the
later of the date such report or notice has been filed with the
Internal Revenue Service or received by the Issuer or the ERISA
Affiliate; and
(v) promptly and in any event within five Business Days
after the Issuer becomes aware of the existence thereof, telephonic,
telex or telecopied notice (confirmed in writing within 5 days)
specifying the nature of any Event of Default or Early Amortization
Event, or any breach or nonperformance by the Issuer of any Basic
Document.
SECTION 4.09. Annual Independent Public Accountants'
Servicing Report. Within 60 days after the end of each fiscal year of the
Issuer (commencing with the fiscal year ending January 28, 1995), the Issuer
shall cause a firm of nationally recognized independent public accountants (who
may also render other services to the Issuer) to furnish a report to the
Trustee to the effect that such firm has made a study and evaluation, in
accordance with generally accepted auditing standards, of the Issuer's internal
accounting controls relative to the servicing of Receivables by the Issuer, the
Servicer and the parties to any Servicing Contract, and that, on the basis of
such examination, such firm is of the opinion that the system of internal
accounting controls in effect on the date set forth in such report relating to
servicing procedures performed by the Issuer, the Servicer and the parties to
any Servicing Contract was sufficient for the prevention and detection of
errors and irregularities in amounts that would be material and that such
servicing was conducted in compliance with the Purchase Agreement, except for
such exceptions as they believe to be immaterial and such other exceptions as
shall be set forth in such report. As of the end of the second fiscal quarter
of each fiscal year of the Issuer (commencing with the fiscal quarter ended
July 29, 1995), the Issuer shall cause the same firm of nationally recognized
independent public accountants to furnish a report to the Trustee (within 60
days after the end of each such fiscal quarter) to the effect that, based upon
representations of financial management of the Issuer responsible for such
matters and other agreed upon procedures, nothing has come to their attention
that causes them to believe there had been any change in the system of internal
accounting controls relative to the servicing of Receiv-
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ables under the Purchase Agreement, as of the end of such fiscal quarter
compared with the end of the preceding fiscal year, except as set forth in such
report to the Trustee.
SECTION 4.10. Rule 144A Information Requirement. The
Issuer will, for so long as any of the Notes which are outstanding are
"restricted securities" within the meaning of Rule 144(a)(3) under the
Securities Act, provide the Holders or beneficial owners of any Class of the
Notes and prospective purchasers of any Class of the Notes designated by the
Holders of the Notes of such Class, upon their request, any information
required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.
ARTICLE FIVE
Negative Covenants
The Issuer covenants and agrees that until the Issuer's
obligations under the Notes and this Indenture are satisfied in full:
SECTION 5.01. Liens, Etc. The Issuer will not create or
suffer to exist any Lien upon or with respect to any of its assets or
properties, whether now owned or hereafter acquired, or assign any right to
receive income, in each case to secure or provide for the payment of any Debt
of any Person, other than Liens created by the Security Agreement in favor of
the Collateral Agent and Permitted Liens.
SECTION 5.02. Debt. The Issuer will not create or suffer
to exist any Debt except (i) the obligations of the Issuer pursuant to the
Facility Documents, the Subordinated Broadway Notes and the Notes and (ii) any
other indebtedness, provided that each of S&P and Fitch shall have confirmed in
writing that the incurrence of such other indebtedness will not result in a
downgrading or withdrawal of the then current credit rating of either class of
Notes.
SECTION 5.03. Restricted Junior Payments. The Issuer will
not (i) declare or make, or set aside any sum for, any dividend payment or
other distribution of assets, properties, cash, rights, obligations or
securities on account of any shares of any class of capital stock of the
Issuer, or return any capital to its shareholder as such, or purchase, retire,
defease, redeem or otherwise acquire
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for value or make any payment in respect of any shares of any class of capital
stock of the Issuer or any warrants, rights or options to acquire any such
shares, now or hereafter outstanding or (ii) order, pay, make or set apart any
sum for any payment or prepayment of principal of, premium, if any, or interest
on, or any redemption, purchase, retirement, defeasance, sinking fund or
similar payment with respect to, the Subordinated Promissory Notes (any of the
foregoing, a "Restricted Payment"), except that the Issuer may make Restricted
Payments if at the time of, and after giving effect to, each such Restricted
Payment (A) the Equity of the Issuer is not less than $24,500,000 and (B) no
Default or Event of Default shall have occurred and be continuing.
SECTION 5.04. Mergers, Etc. The Issuer will not (i) merge
or consolidate with or into, or convey, transfer, lease or otherwise dispose of
(whether in one transaction or in a series of transactions) all or
substantially all of its assets (whether now owned or hereafter acquired) to
any Person or acquire all or substantially all of the capital stock of any
Person, or acquire all or substantially all of the assets of any Person or
enter into any joint venture or partnership with, any Person; or (ii) sell,
convey, transfer, lease or otherwise dispose of any assets other than in the
ordinary course of business or in accordance with the terms of the Purchase
Agreement; except, in each case, to the extent that each of S&P and Fitch shall
have confirmed in writing that such transaction or series of transactions will
not result in a downgrading or withdrawal of the then current credit rating of
either class of Notes.
SECTION 5.05. Change in Nature of Business. The Issuer
will not engage, directly or indirectly, in any business other than the
business of purchasing Receivables from Broadway or its Affiliates pursuant to
the Purchase Agreement, administering, servicing and collecting such
Receivables, entering into the Basic Documents, the Facility Documents or
related transactions, or make any material change in the nature of such
business as carried on at the date hereof.
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SECTION 5.06. Corporate Organization. The Issuer will not
amend its certificate of incorporation or by-laws without the prior written
consent of the Collateral Agent.
SECTION 5.07. No Amendments. Without the prior written
consent of the Controlling Party, the Issuer will not (i) amend, supplement or
otherwise modify the Purchase Agreement or any Servicing Contract, (ii) waive
any Purchase Termination Event under the Purchase Agreement or any condition to
purchase contained in a Purchase Agreement (iii) otherwise take or fail to take
any action under a Purchase Agreement or any Servicing Contract that could
adversely affect the Lender's interests under the Blue Hawk Credit Agreement or
under the other Facility Documents or the interests of the Noteholders or the
Note Owners under the Basic Documents, (iv) enter into, consent to, decline to
object to or permit Broadway or the Servicer to enter into any amendment,
supplement or modification of the Credit and Collection Policy or any Charge
Account Agreement or any amendment, supplement or modification in the
implementation of the Credit and Collection Policy other than (A) changes that
are required by applicable law, (B) changes of a kind that are not described in
Schedule IV to the Blue Hawk Credit Agreement and that could not reasonably be
expected to have a material adverse effect on the quality of the Receivables,
the amount of Collections or the timing and receipt of Collections, or (C) any
other changes of which the Controlling Party has received 30 days' prior
written notice and to which the Controlling Party has not objected within such
30 day period, (v) extend, amend or otherwise modify, or attempt to purport to
do so, the terms of any Receivables other than in accordance with the Credit
and Collection Policy, (vi) enter into or agree to any amendment, supplement or
modification of any Blocked Deposit Agreement, or (vii) waive any term or
condition of any Charge Account Agreement, other than as permitted by the
Credit and Collection Policy. The Issuer shall provide each Rating Agency with
prompt written notice (including copies of any amendments) of any of the
foregoing events. The Issuer will not amend, supplement or otherwise modify
the Purchase Agreement in any manner that could adversely affect the interests
of the Holders of the Notes of any Class without the prior written consent of
the Holders of Notes representing not less than a majority of the Aggregate
Outstanding Amount of the Notes of each such Class.
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SECTION 5.08. Transactions with Affiliates. The Issuer
will not sell or transfer property or assets or enter into any transaction with
any Affiliate of the Issuer other than (i) transactions with Broadway
contemplated by the Purchase Agreement, (ii) capital contributions by Broadway
to the Issuer, or (iii) subject to the provisions of this Article 5, other
transactions with Broadway or any of its Affiliates in the ordinary course of
business for fair consideration and on terms no less favorable to the Issuer
than would prevail if such transactions were with unrelated third parties.
SECTION 5.09. Capital Stock. The Issuer will not issue or
permit to be transferred to any Person (other than Broadway) any of the
Issuer's capital stock or other equity securities.
SECTION 5.10. Maintenance of Separate Existence. The
Issuer will not (i) fail to do all things necessary to maintain its corporate
existence separate and apart from Broadway, any division and any Affiliate of
Broadway, including, without limitation, holding regular meetings of its
shareholders and Board of Directors (or executing unanimous written consents in
lieu thereof) and maintaining appropriate corporate books and records
(including current minute books); (ii) except as required by applicable law,
suffer any limitation on the authority of its own directors and officers to
conduct its business and affairs in accordance with their independent business
judgment, or authorize or suffer any Person other than its own officers and
directors to act on its behalf with respect to matters (other than matters
customarily delegated to others under powers of attorney) for which a
corporation's own officers and directors would customarily be responsible; or
(iii) fail to (A) maintain or cause to be maintained by an agent of the Issuer
under the Issuer's control physical possession of all its books and records,
(B) maintain capitalization adequate for the conduct of its business, (C)
account for and manage all of its liabilities separately from those of any
other Person, including, without limitation, payment by it of all payroll and
other administrative expenses and taxes from its own assets, (D) segregate and
identify separately all of its assets from those of any other Person, (E)
maintain employees, or pay its employees, officers and agents for services
performed for the Issuer or (F) maintain separate offices with a separate
telephone number from those of Broadway or any Affiliate of Broadway or (iv)
commingle its funds with those of Broadway or any Affiliate of Broadway, or use
its funds for other than the
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uses permitted by the Facility Documents and the Basic Documents.
SECTION 5.11. Maximum Permitted Debt. (a) The Issuer will
not permit the aggregate principal amount of the Issuer's obligations
outstanding under the Class A Notes, the Class B Notes and the Blue Hawk Note
at any time to exceed the Maximum Permitted Debt.
(b) The Issuer will not permit the aggregate principal amount
of the Issuer's obligations outstanding under the Class A Notes and the Blue
Hawk Note at any time to exceed the Maximum Class A Debt Amount.
(c) The Issuer will not permit the aggregate principal amount
of the Issuer's obligations outstanding under the Blue Hawk Note at any time to
exceed an amount equal to the product of (x) 82% multiplied by (y) the
Outstanding Balance of the Eligible Receivables at such time.
ARTICLE SIX
Satisfaction and Discharge
SECTION 6.01. Satisfaction and Discharge of Indenture.
This Indenture shall cease to be of further effect with respect to the Notes
except as to (i) rights of registration of transfer and exchange, (ii)
substitution of mutilated, destroyed, lost or stolen Notes, (iii) rights of
Noteholders to receive payments of principal thereof and interest thereon, (iv)
Sections 4.03 and 4.04, (v) the rights, obligations, and immunities of the
Trustee hereunder (including the rights of the Trustee under Section 8.07 and
the obligations of the Trustee under Section 6.02) and (vi) the rights of
Noteholders as beneficiaries hereof with respect to the property so deposited
with the Trustee payable to all or any of them, and the Trustee, on demand of
and at the expense of the Issuer, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture, when:
(1) either
(A) all Notes theretofore authenticated and
delivered (other than (i) Notes that have been destroyed,
lost, mutilated, or stolen and that have been replaced or paid
as provided in Section
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2.08 hereof and (ii) Notes for whose payment money has
theretofore been deposited in trust or segregated and held in
trust by the Issuer and thereafter repaid to the Issuer or
discharged from such trust, as provided in Section 4.03
hereof) have been delivered to the Trustee for cancellation;
or
(B) all Notes not theretofore delivered to the
Trustee for cancellation
(i) have become due and payable, or
(ii) are to be called for redemption
within one year under arrangements satisfactory to
the Trustee for the giving of notice of redemption by
the Trustee in the name, and at the expense, of the
Issuer, and the Issuer, in the case of (i) or (ii)
above, has irrevocably deposited or caused to be
irrevocably deposited with the Trustee cash or direct
obligations of or obligations guaranteed by the
United States of America, in trust for such purpose,
an amount sufficient to pay and discharge the entire
indebtedness on such Notes not theretofore delivered
to the Trustee for cancellation, for principal and
interest that would be payable on the Redemption Date
(if Notes shall have been called for redemption
pursuant to Section 11.01 hereof), as the case may
be, and in the case of Notes that were not paid on
the Stated Maturity Date, for all overdue principal
and all interest on such Notes that would be payable
on the next succeeding Special Payment Date therefor;
(2) the Issuer has paid or caused to be paid all other
sums payable hereunder by the Issuer; and
(3) the Issuer has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each meeting the applicable
requirements of Section 12.01(a) hereof and each stating that all
conditions precedent herein provided for relating to the satisfaction
and discharge of this Indenture have been complied with.
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SECTION 6.02. Application of Trust Money. All moneys
deposited with the Trustee pursuant to Section 6.01 hereof shall be held in
trust and applied by it, in accordance with the provisions of the Notes and
this Indenture, to the payment, to the Holders of the particular Notes for the
payment or redemption of which such moneys have been deposited with the
Trustee, of all sums due and to become due thereon for principal and interest;
but such moneys need not be segregated from other funds except to the extent
required herein or required by law.
ARTICLE SEVEN
Events of Default and Remedies
SECTION 7.01. Events of Default. "Event of Default" with
respect to the Notes, 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 any Note
when the same becomes due and payable, and such default shall continue
for a period of three Business Days; or
(2) default in the payment of the principal of any Note
when the same becomes due and payable; or
(3) the institution of any proceeding by or against the
Issuer seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee, custodian or other similar
official for it or for any substantial part of its property and, in
the case of any such proceeding instituted against it (but not
instituted by it), either such proceeding shall remain undismissed or
unstayed for a period of 30 days, or any of the actions sought in such
proceeding (including, without limitation, the entry of an order for
relief against, or the appointment of a receiver,
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trustee, custodian or other similar official for, it or for any
substantial part of its property) shall occur; or
(4) the commencement by the Issuer of a voluntary case
under any applicable Federal or state bankruptcy, insolvency or other
similar law now or hereafter in effect, or the consent by the Issuer
to the entry of an order for relief in an involuntary case under any
such law, or consent to the appointment or taking possession by a
receiver, liquidator, assignee, custodian, trustee, sequestrator or
similar official of the Issuer, or make any general assignment for the
benefit of creditors, or the failure by the Issuer generally to pay
its debts as such debts become due, or the taking of action by the
Issuer in furtherance of any of the foregoing; or
(5) the occurrence of an event of default under the Blue
Hawk Credit Agreement and the acceleration of the Blue Hawk Note as a
result thereof.
SECTION 7.02. Acceleration of Maturity; Rescission and
Annulment. If an Event of Default should occur and be continuing, neither the
Trustee nor the Noteholders may declare the principal of the Notes to be
immediately due and payable prior to the payment in full of the Senior Blue
Hawk Obligations. If an Event of Default should occur and be continuing and
all of the Senior Blue Hawk Obligations have been paid in full, the Trustee or
the Holders of Notes representing not less than 66-2/3% of the Aggregate
Outstanding Amount the Notes may declare the principal of the Notes to be
immediately due and payable, by a notice in writing to the Issuer (and to the
Trustee if given by Noteholders), and upon any such declaration the unpaid
principal amount of the Notes, together with accrued and unpaid interest
thereon through the date of such declaration of acceleration, shall become
immediately due and payable.
At any time after such declaration of acceleration of maturity
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 Notes representing 66-2/3% of the Aggregate Outstanding Amount of
the Notes, by written notice to the Issuer and the Trustee, may rescind and
annul such declaration and its consequences if:
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(1) the Issuer has paid or deposited with the Trustee a
sum sufficient to pay
(A) all payments of principal of and interest on
the Notes and all other amounts that would then be due
hereunder or upon the Notes if the Event of Default giving
rise to such acceleration had not occurred; and
(B) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses,
disbursements, and advances of the Trustee and its agents and
counsel; and
(2) all Events of Default, other than the nonpayment of
the principal of the Notes that has become due solely by such
acceleration, have been cured or waived as provided in Section 7.11
hereof.
No such rescission shall affect any subsequent default or
impair any right consequent thereon.
SECTION 7.03. Collection of Indebtedness and Suits for
Enforcement by Trustee. (a) The Issuer covenants that (i) if default is made
in the payment of any interest on any Note, when the same becomes due and
payable, and such default continues for a period of 3 Business Days, or (ii)
default is made in the payment of the principal of any Note, when the same
becomes due and payable, the Issuer will, upon payment in full of the Senior
Blue Hawk Obligations and upon demand of the Trustee, pay to it, for the
benefit of the Holders of the Notes, the whole amount then due and payable on
such Notes for principal and interest, with interest upon the overdue principal
at the interest rate specified in Section 2.10 hereof, and in addition thereto,
such further amount as shall be sufficient to cover the reasonable costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee and its agents and counsel.
(b) In case the Issuer shall fail forthwith to pay such
amounts upon such demand, but in no event prior to such time, the Trustee, in
its own name and as trustee of an express trust, may, in addition to exercising
its rights as the Controlling Party, if any, under the Security Agreement,
institute a Proceeding for the collection of the sums so due and unpaid, and
may prosecute such Proceeding to judgment or final decree, and may enforce the
same
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against the Issuer and collect in the manner provided by law out of the
Collateral allocated to the Noteholders under the Security Agreement, wherever
situated, the moneys adjudged or decreed to be payable; provided, however, that
to the extent that the Collateral allocable to the Holders of the Notes under
the Security Agreement is for any reason insufficient to provide for the
payment of amounts owing to the Holders of the Notes, no Holder shall have any
recourse to the Issuer or to any other Person for the amount of such
insufficiency nor shall any Holder have a Claim against the Issuer for the
amount of any such insufficiency.
(c) If an Event of Default occurs and is continuing, the
Trustee may, to the extent consistent with the provisions of the Security
Agreement and subject in all respects to Sections 12.07 and 12.08 hereof, in
its discretion proceed to protect and enforce its rights and the rights of the
Noteholders, by such appropriate Proceedings as the Trustee shall deem most
effective 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 or
legal or equitable right vested in the Trustee by this Indenture or by law.
(d) All rights of action and of asserting claims under
this Indenture or under any of the Notes may be enforced by the Trustee without
the possession of any of the Notes or the production thereof in any trial or
other Proceedings relative thereto, and any such action or Proceedings
instituted by the Trustee shall be brought in its own name as trustee of an
express trust, and any recovery of judgment, subject to the payment of the
expenses, disbursements and compensation of the Trustee, each predecessor
Trustee and their respective agents and attorneys, shall be for the ratable
benefit of the Holders of the Notes.
(e) In any Proceedings brought by the Trustee (and also
any Proceedings involving the interpretation of any provision of this Indenture
to which the Trustee shall be a party), the Trustee shall be held to represent
all the Holders of the Notes, and it shall not be necessary to make any
Noteholder a party to any such Proceedings.
SECTION 7.04. Remedies. If an Event of Default shall have
occurred and be continuing and all of the Senior Blue Hawk Obligations shall
have been paid in full, the Trustee shall be the Controlling Party under the
Security Agreement and shall be entitled to exercise all the rights
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of the Controlling Party thereunder for the benefit of the Noteholders and the
Trustee. The Trustee shall have no other rights in respect of the Collateral
other than those given to the Controlling Party under the Security Agreement.
SECTION 7.05. Application of Money Collected. Any moneys
received by the Trustee with respect to the Notes, including the sums received
by the Trustee from the Collateral Agent pursuant to Section 15(b) of the
Security Agreement, shall be applied in the following order at the date or
dates fixed by the Trustee and, in case of the distribution of such moneys on
account of principal, upon presentation of Notes and stamping the notation
thereon of the payment (or the issuance of Notes in reduced principal amounts
in exchange for the presented Notes) if only partially paid, or upon surrender
thereof if fully paid:
FIRST: To the payment of amounts due as interest on the Class
A Notes at a rate per annum not in excess of 7.55%;
SECOND: To the payment of amounts due as interest on the
Class B Notes at a rate per annum not in excess of 11%;
THIRD: To the outstanding principal of the Class A Notes
until the principal of the Class A Notes is reduced to zero;
FOURTH: To the outstanding principal of the Class B Notes
until the principal of the Class B Notes is reduced to zero;
FIFTH: To Step-Up Interest Amounts due on the Class A Notes;
and
SIXTH: To Step-Up Interest Amounts due on the Class B Notes.
SECTION 7.06. Limitation of Suits. No Holder of any Note
shall have any right to institute any Proceeding, judicial or otherwise, with
respect to this Indenture, or for any other remedy hereunder, unless:
(1) such Holder has previously given written notice to
the Trustee of a continuing Event of Default;
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(2) the Holders of not less than 66-2/3% of the then
Aggregate Outstanding Amount of the Notes shall have made written
request to the Trustee to institute such Proceeding in respect of such
Event of Default in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in complying with such request;
(4) the Trustee for 60 days after its receipt of such
notice, request, and offer of indemnity has failed to institute such
Proceedings; 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 of the Aggregate Outstanding Amount of the Notes;
it being understood and intended that no one or more Holders of Notes 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 of Notes 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.
In the event the Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Holders of
Notes, each representing less than a majority of the Aggregate Outstanding
Amount of the Notes, the Trustee in its sole discretion may determine what
action, if any, shall be taken, notwithstanding any other provisions of this
Indenture.
SECTION 7.07. Restoration of Rights and Remedies. If the
Trustee or any Noteholder 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 Noteholder, then and in every such case the Issuer, the Trustee and the
Noteholders shall, subject to any determination in such Proceeding, be restored
severally and respectively to their former positions hereunder, and thereafter
all rights and remedies of the Trustee and the Noteholders shall continue as
though no such Proceeding had been instituted.
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SECTION 7.08. Rights and Remedies Cumulative. No right or
remedy herein conferred upon or reserved to the Trustee or to the Noteholders
is intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at
law or in equity or otherwise. The assertion or employment of any right or
remedy hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 7.09. Delay or Omission Not Waiver. No delay or
omission of the Trustee or any Holder of any Note to exercise any right or
remedy accruing upon any Default or Event of Default shall impair any such
right or remedy or constitute a waiver of any such Default or Event of Default
or an acquiescence therein. Every right and remedy given by this Article Seven
or by law to the Trustee or to the Noteholders may be exercised from time to
time, and as often as may be deemed expedient, by the Trustee or by the
Noteholders, as the case may be.
SECTION 7.10. Control by Noteholders. The Holders of
66-2/3% of the Aggregate Outstanding Amount of the Notes of each Class shall
have the right to direct the time, method, and place of conducting any
Proceeding for any remedy available to the Trustee with respect to the Notes or
exercising any trust or power conferred on the Trustee, including the right to
act as the Controlling Party under the Security Agreement; 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 that is not inconsistent with such direction;
provided, however, that, subject to Section 8.01 hereof, the Trustee need not
take any action that it determines might involve it in liability for which it
is not adequately indemnified hereby (considering the likelihood of repayment
or indemnity by or on behalf of the Issuer or pursuant to Section 8.07 hereof),
or might materially adversely affect the rights of any Noteholders not
consenting to such action.
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SECTION 7.11. Waiver of Past Defaults. Prior to the
declaration of the acceleration of the Maturity of the Notes as provided in
Section 7.02 hereof, the Holders of Notes of 66-2/3% of the then Aggregate
Outstanding Amount of the Notes of each Class may waive any past Default or
Event of Default and its consequences except a Default (a) in payment of
principal or premium, if any, or interest on any of the Notes or (b) in respect
of a covenant or provision hereof which cannot be modified or amended without
the consent of the Holder of each Note. In the case of any such waiver, the
Issuer, the Trustee and the Holders of the Notes shall be restored to their
former positions and rights hereunder, respectively; but no such waiver shall
extend to any subsequent or other Default or impair any right consequent
thereon.
Upon any such waiver, such Default shall cease to exist and be
deemed to have been cured and not to have occurred, and any Event of Default
arising therefrom shall be deemed to have been cured and not to have occurred,
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 7.12. Undertaking for Costs. All parties to this
Indenture agree, and each Holder of any Note by his acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any
suit for the enforcement of any right or remedy under this Indenture, or in any
suit against the Trustee for any action taken, suffered, or omitted by it as
Trustee, the filing by any party litigant in such suit of an undertaking to pay
the costs of such suit, and that such court may in its discretion assess
reasonable costs, including reasonable attorneys' fees against any party
litigant in such suit, having due regard to the merits and good faith of the
claims or defenses made by such party litigant; but the provisions of this
Section 7.12 shall not apply to any suit instituted by the Trustee, to any suit
instituted by any Noteholder, or group of Noteholders, holding in the aggregate
more than 66-2/3% of the Aggregate Outstanding Amount of the Notes, or to any
suit instituted by any Noteholder for the enforcement of the payment of
principal of or interest on any Note on or after the respective due dates
expressed in such Note and in this Indenture (or, in the case of an optional
redemption pursuant to Section 11.01, on or after the Redemption Date or, in
the case of a mandatory redemption pursuant to Section 11.04, on or after the
applicable Payment Date).
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SECTION 7.13. Waiver of Stay or Extension Laws. The Issuer
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law wherever enacted, now or at
any time hereafter in force, that may affect the covenants or the performance
of this Indenture; and the Issuer (to the extent that it may lawfully do so)
hereby expressly waives all benefit or advantage of any such law, and covenants
that it will not hinder, delay, or impede the execution of any power herein
granted to the Trustee, but will suffer and permit the execution of every such
power as though no such law had been enacted.
ARTICLE EIGHT
The Trustee
SECTION 8.01. Certain Duties and Responsibilities. (a)
Except during the continuance of an Event of Default:
(1) the Trustee undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture, and
no implied covenants or obligations shall be read into this Indenture
against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements
of this Indenture; but in the case of any such certificates or
opinions which by any provision hereof are specifically required to be
furnished to the Trustee, the Trustee shall be under a duty to examine
the same to determine whether or not they conform to the requirements
of this Indenture.
(b) In case an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and powers vested in
it by this Indenture, and use the same degree of care and skill in their
exercise, as a prudent person would exercise or use under the circumstances in
the conduct of such person's own affairs.
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(c) No provision of this Indenture shall be construed to
relieve the Trustee from liability for its own negligent action, its own
negligent failure to act, or its own wilful misconduct, except that:
(1) this subsection shall not be construed to limit the
effect of subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it shall
be proved that the Trustee was negligent in ascertaining the pertinent
facts; and
(3) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of a majority of the Aggregate
Outstanding Amount of the Notes (such majority shall not include those
Notes, if any, that are to be disregarded in accordance with the
proviso to the definition of the term "Outstanding" in Section 1.01
hereof), relating to the time, method and place of conducting any
Proceeding for any remedy available to the Trustee, or exercising any
trust or power conferred upon the Trustee, under this Indenture.
(d) Whether or not therein expressly so provided, every
provision of this Indenture relating to the conduct or affecting the
eligibility of or affording protection to the Trustee shall be subject to the
provisions of this Section.
(e) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree with the Issuer.
(f) No provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder, or in the exercise of any of
its rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it. In determining that such repayment or indemnity
is not reasonably assured to it, the Trustee must consider not only the
likelihood of repayment or indemnity by or on behalf of the Issuer but also the
likelihood of repayment or indemnity from amounts payable to it pursuant to
Section 8.07 hereof.
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(g) The permissive right of the Trustee to take actions
enumerated in this Indenture shall not be construed as a duty and the Trustee
shall not be answerable for other than its own negligence or wilful misconduct.
(h) The Trustee shall be under no obligation to institute any
suit, or to take any remedial proceeding under this Indenture, or to enter any
appearance or in any way defend in any suit in which it may be made defendant,
or in the enforcement of any rights and powers hereunder, including actions
taken in connection with any Proceeding described in Section 7.03(d), if the
Trustee reasonably believes that it will not be adequately indemnified against
any and all costs and expenses, outlays, and counsel fees and other reasonable
disbursements and against all liability, except liability that is adjudicated
to have resulted from its negligence or wilful misconduct, in connection with
any action so taken.
(i) Notwithstanding any extinguishment of all right, title
and interest of the Issuer, or any other Person having an ownership interest in
the Collateral following an Event of Default and a consequent declaration of
acceleration of the Maturity of the Notes, whether such extinguishment occurs
through a sale of such Collateral to another Person, the acquisition of the
Collateral by the Trustee or otherwise, the rights, powers, and duties of the
Trustee with respect to the Collateral (or the proceeds thereof) and the
Noteholders and the rights of the Noteholders shall continue to be governed by
the terms of this Indenture.
SECTION 8.02. Notice of Default. Within 90 days after the
occurrence of any Default known to the Trustee, the Trustee shall transmit by
mail to all Registered Holders of Notes, notice of such Default hereunder known
to the Trustee; provided, however, that, except in the case of a Default in the
payment of the principal of 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 determine that the withholding of such
notice is in the interests of the Noteholders.
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SECTION 8.03. Certain Rights of the Trustee. Except as
otherwise provided in Section 8.01 hereof:
(a) 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, note or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party or
parties;
(b) any request or direction of the Issuer mentioned
herein shall be sufficiently evidenced by an Issuer Request or Issuer
Order;
(c) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the
Trustee (unless other evidence be herein specifically prescribed) may,
in the absence of bad faith on its part, rely upon an Officer's
Certificate;
(d) the Trustee may consult with counsel, and the advice
of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Indenture at the
request or direction of any of the Noteholders pursuant to this
Indenture, unless such Noteholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred by it in complying with such
request or direction;
(f) the Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, note 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, on reasonable prior notice to the Issuer,
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to examine the books, records and premises of the Issuer, personally
or by agent or attorney, during the Issuer's normal business hours;
provided that the Trustee shall and shall cause its agents to hold in
confidence all such information except to the extent disclosure may be
required by law and except to the extent that the Trustee, in its sole
judgment, may determine that such disclosure is consistent with its
obligations hereunder;
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents, custodians, nominees or attorneys; and
(h) the Trustee shall not be liable for any action it
takes or omits to take in good faith which action or omission it
believes to be authorized or within its rights or powers.
SECTION 8.04. Not Responsible for Recitals or Issuance of
Notes. (a) The recitals contained herein and in the Notes, except the
certificates of authentication on the Notes, shall be taken as the statements
of the Issuer, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations with respect to any Receivable or the
Collateral or as to the validity or sufficiency of this Indenture or of the
Notes. The Trustee shall not be accountable for the use or application by the
Issuer of Notes or the proceeds thereof or any money paid to the Issuer or upon
Issuer Order pursuant to the provisions hereof.
(b) Except as otherwise expressly provided herein and
without limiting the generality of the foregoing, the Trustee shall have no
responsibility or liability for or with respect to the existence or validity of
any Receivable or whether such Receivable is an Eligible Receivable, the
perfection of any security interest (whether as of the date hereof or at any
future time), the maintenance of or the taking of any action to maintain such
perfection, the validity of the assignment of any portion of the Collateral to
the Collateral Agent or of any intervening assignment, the performance or
enforcement of any Receivable, the compliance by the Issuer or the Servicer
with any covenant or the breach by the Issuer or the Servicer of any warranty
or representation made hereunder or in any related document or the accuracy of
any such warranty or representation, any investment of money in
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either the Cash Collateral Account or Reserve Account or any loss resulting
therefrom, the acts or omissions of the Issuer, the Servicer or the Collateral
Agent, any action of the Collateral Agent taken in the name of the Trustee or
the validity of the Security Agreement.
(c) The Trustee shall not have any obligation or
liability under any Receivable by reason of or arising out of this Indenture or
the receipt by the Trustee of any payment relating to any Receivable pursuant
hereto, nor shall the Trustee be required or obligated in any manner to perform
or fulfill any of the obligations of the Issuer under or pursuant to any
Receivable, or to make any payment, or to make any inquiry as to the nature or
the sufficiency of any payment received by it, or the sufficiency of any
performance by any party, under any Receivable.
(d) Subject to Section 8.01, the Trustee shall have no
responsibility for reviewing any document delivered to it unless such document
is also a document required to be delivered to it under this Indenture.
(e) Until the complete satisfaction and discharge of this
Indenture, the Trustee shall retain all material reports, statements and other
documents delivered to it in accordance with provisions hereof.
SECTION 8.05. May Hold Notes. The Trustee, any Note
Registrar or any other agent of the Issuer in its individual or any other
capacity, may become the owner or pledgee of Notes and may otherwise deal with
the Issuer with the same rights it would have if it were not Trustee, Note
Registrar or such other agent.
SECTION 8.06. Interest on Money Held in Trust. The Trustee
shall be under no liability for interest on any money received by it hereunder
except as otherwise agreed with the Issuer and except to the extent of income
or other gain on investments that are deposits in or certificates of deposits
or other obligations of the Trustee in its commercial capacity.
SECTION 8.07. Compensation and Reimbursement. The Issuer
agrees:
(1) to pay the Trustee from time to time reasonable
compensation for all services rendered by it hereunder (which
compensation shall not be limited by
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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, 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, its officers, directors,
employees and agents for, and to hold them harmless against, any loss,
liability or expense incurred without negligence or bad faith on their
part, arising out of or in connection with the acceptance or
administration of this trust, including the reasonable costs and
expenses of defending themselves against any claim or liability in
connection with the exercise or performance of any of their powers or
duties hereunder.
SECTION 8.08. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be a corporation
organized and doing business under the laws of the United States of America or
of any State authorized under such laws to exercise corporate trust powers,
having a combined capital and surplus of at least $100,000,000 (except as
provided in Section 8.09 hereof) and subject to supervision or examination by
the United States of America. If such Trustee publishes reports of conditions
at least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then, for the purposes of this Section
8.08, 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 Eight.
SECTION 8.09. 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 Eight shall become effective until
the
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acceptance of appointment by the successor trustee under Section 8.10 hereof.
(b) The Trustee, or any trustee or trustees hereafter
appointed, may resign at any time by giving written notice of resignation to
the Issuer and by mailing notice of resignation by first-class mail, postage
prepaid, to Holders of the Notes at their addresses appearing on the Note
Register. Upon receiving notice of resignation, the Issuer shall promptly
appoint a successor trustee or trustees by written instrument, in duplicate,
executed by an Authorized Officer, one copy of which instrument shall be
delivered to the Trustee so resigning and one copy to the successor trustee or
trustees. If no successor trustee shall have been appointed and have accepted
appointment 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 or any Noteholder who has been a bona fide
Holder of a Note or Notes for at least six months may, subject to Section 7.12
hereof, on behalf of himself and all others similarly situated, petition any
such court for the appointment of a successor trustee. Such court may
thereupon, after such notice, if any, as it may deem proper and prescribe,
appoint a successor trustee.
(c) If at any time:
(1) the Trustee shall cease to be eligible under Section
8.08 hereof and shall fail to resign after written request therefor by
the Issuer or by any such Noteholder; or
(2) (i) the Trustee shall become incapable of acting,
(ii) there shall have been instituted any proceeding by or against the
Trustee seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee, custodian or other similar
official for it or for any substantial part of its property and, in
the case of any such proceeding instituted against it (but not
instituted by it), either such proceeding shall remain undismissed or
unstayed for a period of 30 days, or any of the actions sought in such
proceeding (including, without limitation, the
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entry of an order for relief against, or the appointment of a
receiver, trustee, custodian or other similar official for, it or for
any substantial part of its property) shall occur; or (iii) the
Trustee commences a voluntary case under the Federal bankruptcy laws,
as now or hereafter constituted, or any other applicable Federal or
state bankruptcy, insolvency or other similar law, or consents to the
appointment of or taking possession by a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar official
of the Trustee or of any substantial part of its property, or the
making by it of any assignment for the benefit of creditors or the
Trustee fails generally to pay its debts as such debts become due or
takes any corporate action in furtherance of any of the foregoing;
then, in any such case the Issuer by an Issuer Order may remove the Trustee and
appoint a successor trustee by written instrument, in duplicate, executed on
behalf of the Issuer by an Authorized Officer, one copy of which instrument
shall be delivered to the Trustee so removed and one copy to the successor
trustee, or, subject to Section 7.12 hereof, any Noteholder who has been a bona
fide Holder of a Note or Notes for at least six months may, on behalf of such
Holder and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
trustee. Such court may thereupon, after such notice, if any, as it may deem
proper and prescribe, remove the Trustee and appoint a successor trustee.
(d) The Holders of a majority of the then Aggregate
Outstanding Amount of the Notes may at any time remove the Trustee and appoint
a successor trustee by delivering to the Trustee to be removed and to the
Issuer, copies of the record of the Act taken by the Holders of the Notes, as
provided for in Section 12.04 hereof.
(e) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of the Trustee
for any cause, the Issuer, by an Issuer Order, 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 of the then Aggregate Outstanding
Amount of the Notes delivered to the Issuer and the retiring trustee, the
successor trustee so appointed shall forthwith upon its
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acceptance of such appointment become the successor trustee and supersede the
successor trustee appointed by the Issuer. If no successor trustee shall have
been so appointed by the Issuer or the Noteholders and shall have accepted
appointment in the manner hereinafter provided, any Noteholder who has been a
bona fide Noteholder for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
appointment of a successor trustee. Such court may thereupon, after such
notice, if any, as it may deem proper and prescribe, appoint a successor
trustee.
(f) The Issuer shall give notice of each removal of the
Trustee by mailing notice of such event by first-class mail, postage prepaid,
to the Holders of Notes as their names and addresses appear in the Note
Register. Each notice shall include the name of the successor trustee and the
address of its Corporate Trust Office.
SECTION 8.10. Acceptance of Appointment by Successor
Trustee. Every successor trustee appointed hereunder shall execute,
acknowledge and deliver to the Issuer and its predecessor trustee an instrument
accepting such appointment hereunder and thereupon the resignation or removal
of the predecessor trustee shall become effective and such successor trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts, duties and obligations of its predecessor hereunder;
but, on request of the Issuer or the successor trustee, such predecessor
trustee shall, upon payment of its charges then unpaid, execute and deliver an
instrument transferring to such successor trustee all the rights, powers, and
trusts of the Trustee so ceasing to act, and shall duly assign, transfer and
deliver to such successor trustee all property and money held by such Trustee
so ceasing to act hereunder. Upon request of any such successor trustee, the
Issuer shall execute any and all instruments for more fully and certainly
vesting in and conforming to such successor trustee all such rights, powers and
trusts.
Upon acceptance of appointment by a successor trustee as
provided in this Section 8.10, the Issuer shall mail notice thereof by
first-class mail, postage prepaid, to the Holders of the Notes at their last
addresses appearing upon the Note Register. If the Issuer fails to mail such
notice within 10 days after acceptance of appointment by the successor trustee,
the successor trustee shall cause such notice to be mailed at the expense of
the Issuer.
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No successor trustee shall accept its appointment unless at
the time of such acceptance such successor shall be qualified and eligible
under this Article Eight.
SECTION 8.11. Merger, Conversion, Consolidation or
Succession to Business of Trustee. Any corporation into which the Trustee may
be merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the Trustee
shall be a party, or any corporation succeeding to all or substantially all the
corporate trust business of the Trustee, shall be the successor of the Trustee
hereunder provided such corporation shall be otherwise qualified and eligible
under this Article Eight, 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 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.
SECTION 8.12. Co-Trustee and Separate Trustee. At any time or
times, for the purpose of meeting the legal requirements of any jurisdiction in
which any part of the Trust Estate may at the time be located, the Issuer and
the Trustee shall have power to appoint, and upon the written request of the
Trustee or of the Holders of Notes representing at least 25% of the then
Aggregate Outstanding Amount of the Notes, the Issuer shall for such purpose
join with the Trustee in the execution, delivery, and performance of all
instruments and agreements necessary or proper to appoint, one or more Persons
approved by the Trustee either to act as co-trustee with the Trustee under this
Indenture, or to act as separate trustee under this Indenture, in either case
with such powers as may be provided in the instrument of appointment, and to
vest in such Person or Persons in the capacity aforesaid, any property, title,
right or power deemed necessary or desirable, subject to the other provisions
of this Section. If the Issuer does not join in such appointment within 15
days after the receipt by it of a request so to do, or in case an Event of
Default has occurred and is continuing, the Trustee alone shall have power to
make such appointment. Any co-trustee or separate trustee appointed pursuant
to this Section 8.12 shall satisfy the requirements of Section 8.08 hereof.
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Should any written instrument from the Issuer be required by
any co-trustee or separate trustee so appointed for more fully confirming to
such co-trustee or separate trustee such property, title, right or power, any
and all such instruments shall, on request be executed, acknowledged and
delivered by the Issuer.
Every co-trustee or separate trustee shall, to the extent
permitted by law, but to such extent only, be appointed subject to the
following terms, namely:
(1) The Notes shall be authenticated and delivered and
all rights, powers, duties and obligations hereunder in respect of the
custody of securities, cash and other personal property held by, or
required to be deposited or pledged with, the Trustee hereunder, shall
be exercised, solely by the Trustee.
(2) The rights, powers, duties and obligations hereby
conferred or imposed upon the Trustee in respect of any property
covered by such appointment shall be conferred or imposed upon and
exercised or performed by the Trustee or by the Trustee and such
co-trustee or separate trustee jointly, as shall be provided in the
instrument appointing such co-trustee or separate trustee, except to
the extent that under any law of any jurisdiction in which any
particular act is to be performed, the Trustee shall be incompetent or
unqualified to perform such Act, in which event such rights, powers,
duties, and obligations shall be exercised and performed by such
co-trustee or separate trustee.
(3) The Trustee at any time by an instrument in writing
executed by it, with the concurrence of the Issuer evidenced by an
Officers' Certificate, may accept the resignation of or remove any
co-trustee or separate trustee appointed under this Section, and, in
case an Event of Default has occurred and is continuing, the Trustee
shall have power to accept the resignation of, or remove, any such
co-trustee or separate trustee without the concurrence of the Issuer.
Upon the written request of the Trustee, the Issuer shall join with
the Trustee in the execution, delivery, and performance of all
instruments and agreements necessary or proper to effectuate such
resignation or removal. A successor to any co-trustee or separate
trustee so resigned or removed may be appointed in the manner provided
in this Section.
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(4) No co-trustee or separate trustee hereunder shall be
personally liable by reason of any act or omission of the Trustee, or
any other such trustee hereunder.
(5) The Trustee shall not be liable by reason of any act
of a co-trustee or separate trustee.
(6) Any Act of Noteholders delivered to the Trustee shall
be deemed to have been delivered to each such co-trustee and separate
trustee.
ARTICLE NINE
Noteholders' Lists and Reports
SECTION 9.01. Issuer To Furnish Trustee Names and Addresses
to Noteholders. The Issuer will furnish or cause to be furnished to the
Trustee (a) not more than five days after each Regular Record Date, a list, in
such form as the Trustee may reasonably require, of the names and addresses of
the Holders of Notes as of such Regular Record Date, (b) at such other times as
the Trustee may request in writing, within 30 days after receipt by the Issuer
of any such request, a list of similar form and content as of a date not more
than 10 days prior to the time such list is furnished; provided, however, that
so long as the Trustee is the Note Registrar, no such list shall be required to
be furnished.
SECTION 9.02. Preservation of Information. The Trustee
shall preserve, in as current a form as is reasonably practicable, the names
and addresses of the Holders of Notes contained in the most recent list
furnished to the Trustee as provided in Section 9.01 hereof and the names and
addresses of Holders of Notes received by the Trustee in its capacity as Note
Registrar. The Trustee may destroy any list furnished to it as provided in
such Section 9.01 upon receipt of a new list so furnished.
SECTION 9.03. Reports by Issuer. The Issuer shall furnish
the Trustee, within 15 days after the Issuer is required to furnish the same to
the Lender, copies of the Lender Report furnished to the Lender pursuant to
Section 5.01(h)(iii) of the Blue Hawk Credit Agreement.
SECTION 9.04. Reports to Noteholders. The Trustee shall
send to each Noteholder, not later than 10
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Business Days after receipt thereof by the Trustee, copies of each of the
reports furnished to the Trustee by the Issuer pursuant to Sections 4.08(i),
4.08(v) and 9.03 hereof. Upon the written request of any Noteholder or Note
Owner, the Trustee shall promptly send such Noteholder or Note Owner any other
reports or notices received by the Trustee pursuant hereto, provided that, in
the case of such Note Owner, the Note Owner provides to the Trustee evidence
reasonably satisfactory to the Trustee establishing such Note Owner's
then-current ownership of a Book-Entry Note.
ARTICLE TEN
Supplemental Indentures
SECTION 10.01. Supplemental Indentures Without Consent of
Noteholders. Without the consent of the Holders of any Notes, the Issuer and
the Trustee, when authorized by an Issuer Order, 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, in compliance with the
applicable provisions hereof, of another person to the Issuer, and the
assumption by any such successor of the covenants of the Issuer herein
and in the Notes contained;
(2) to add to the covenants of the Issuer, for the
benefit of the Holders of the Notes, or to surrender any right or
power herein conferred upon the Issuer;
(3) to cure any ambiguity, to correct or supplement any
provision herein or in any supplemental indenture which may be
inconsistent with any other provision herein or in any supplemental
indenture or to make any other provisions with respect to matters or
questions arising under this Indenture or in any supplemental
indenture; provided that such action shall not adversely affect the
interests of the Holders of the Notes; or
(4) to evidence and provide for the acceptance of
appointment hereunder by a successor trustee with respect to the Notes
and to add to or change any of the provisions of this Indenture as
shall be necessary
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to facilitate the administration of the trusts hereunder by more than
one trustee, pursuant to the requirements of Section 8.12 hereof.
The Trustee is hereby authorized to join in the execution of
any such supplemental indenture and to make any further appropriate agreements
and stipulations that may be therein contained.
SECTION 10.02. Supplemental Indentures with Consent of
Noteholders. With the consent of the Holders of not less than a majority of
the then Aggregate Outstanding Amount of the Notes, by Act of such Holders
delivered to the Issuer and the Trustee, the Issuer and the Trustee, when
authorized by an Issuer Order, may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to, or changing in
any manner or waiving or eliminating any of the provisions of, this Indenture
or of modifying in any manner the rights of the Holders of the Notes 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 Date of, or any Payment
Date for the payment of any installment principal or interest on, any
Note, or reduce the principal amount thereof, the Note Interest Rate
thereon or the redemption provisions with respect thereto, or change
the coin or currency in which, any Note or the interest thereon is
payable;
(2) reduce the percentage of the Aggregate Outstanding
Amount of the Notes, the consent of the Holders of which is required
for any such supplemental indenture, or the consent of the Holders of
which 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, including waivers of past defaults or
the rights of Holders to receive payments of principal of or interest
on the Notes;
(3) waive a Default or Event of Default in the payment of
principal of or premium, if any, or interest on the Notes (except a
rescission of acceleration pursuant to Section 7.02 hereof);
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(4) modify any provision of this Section except to
increase any percentage required to effect a waiver specified herein
or therein or to provide that certain additional provisions of this
Indenture cannot be modified or waived without the consent of the
Holder of each Outstanding Note affected thereby;
(5) modify any of the provisions of this Indenture in
such manner as to affect the calculation of the amount of any payment
of interest or principal due on any Note on any Payment Date
(including the calculation of any of the individual components of such
calculation); and
(6) waive a redemption payment with respect to any Note.
The Trustee may in its discretion determine whether or not any
Notes would be affected by any supplemental indenture and any such
determination shall be conclusive upon the Holders of all Notes, whether
theretofore or thereafter authenticated and delivered hereunder. The Trustee
shall not be liable for any such determination made in good faith.
It shall not be necessary for any Act of Noteholders 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.
Promptly after the execution by the Issuer and the Trustee of
any supplemental indenture pursuant to this Section, the Trustee shall mail to
the Holders of the Notes to which such amendment or supplemental indenture
relates a notice setting forth in general terms the substance of such
supplemental indenture. Any failure of the Trustee to mail such notice, or any
defect therein, shall not, however, in any way impair or affect the validity of
any such supplemental indenture.
SECTION 10.03. Execution of Supplemental Indentures. In
executing, or permitting the additional trusts created by, any supplemental
indenture permitted by this Article Ten or the modifications thereby of the
trusts created by this Indenture, the Trustee shall be entitled to receive, and
subject to Sections 8.01 and 8.03 hereof, 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.
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The Trustee may, but shall not be obligated to, enter into any such
supplemental indenture that affects the Trustee's own rights, duties,
liabilities, or immunities under this Indenture or otherwise.
SECTION 10.04. Effect of Supplemental Indenture. Upon the
execution of any supplemental indenture pursuant to the provision hereof, this
Indenture shall be and be deemed to be modified and amended in accordance
therewith, and the respective rights, limitations of rights, obligations,
duties, liabilities and immunities under this Indenture of the Trustee, the
Issuer and the Holders of the Notes and other secured parties hereunder
affected thereby shall thereafter be determined, exercised and enforced
hereunder subject in all respects to such modifications and amendments, and all
the terms and conditions of any such supplemental indenture shall be and be
deemed to be part of the terms and conditions of this Indenture for any and all
purposes.
SECTION 10.05. Reference in Notes to Supplemental Indentures.
Notes authenticated and delivered after the execution of any supplemental
indenture pursuant to this Article Ten may, and if required by the Trustee
shall, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Issuer or the Trustee
shall so determine, new Notes so modified as to conform, in the opinion of the
Trustee and the Issuer, to any such supplemental indenture may be prepared and
executed by the Issuer and authenticated and delivered by the Trustee in
exchange for Outstanding Notes.
ARTICLE ELEVEN
Redemption of Notes
SECTION 11.01. Optional Redemption by Issuer. The Issuer may,
at its option, redeem the Notes in whole or in part on any Payment Date on or
after October 15, 1994 and on October 8, 1996, in each case at a redemption
price equal to the sum of (i) 100% of the principal amount of the Notes
redeemed, (ii) accrued and unpaid interest thereon to the Redemption Date, and
(iii) in the case of any redemption occurring prior to October 8, 1996, the
Make-Whole Premium applicable to the Notes of such Class (such amount, the
"Redemption Price"). If the Issuer shall elect to redeem Notes pursuant to
this Section 11.01 it shall furnish notice of such election to the Trustee not
later than 25
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days prior to the Redemption Date, whereupon such Notes shall be due and
payable on the Redemption Date upon the Trustee's furnishing of a notice
complying with Section 11.02 hereof to each Holder of the Notes pursuant to
this Section 11.01.
SECTION 11.02. Form of Optional Redemption Notice. Notice of
redemption under Section 11.01 hereof shall be given by the Trustee by
first-class mail, postage prepaid, mailed not less than 15 days nor more than
60 days prior to the applicable Redemption Date to each Holder of Notes to be
redeemed at such Holder's address appearing in the Note Register as of the
close of business on the fifth Business Day preceding the mailing of such
notice.
All notices of optional redemption shall state:
(1) the Redemption Date;
(2) the Redemption Price; and
(3) the place where the Notes are to be surrendered for
payment of the Redemption Price (which shall be the office or agency
of the Issuer to be maintained as provided in Section 4.02 hereof).
Notice of redemption of the Notes shall be given by the
Trustee in the name and at the expense of the Issuer. Failure to give notice of
redemption, or any defect therein, to any Holder of any Note shall not impair
or affect the validity of the redemption of any other Note.
SECTION 11.03. Notes Payable on Redemption Date or Payment
Date. Notice of redemption having been given as provided in Section 11.02
hereof, the Notes shall on the Redemption Date become due and payable at the
Redemption Price and (unless the Issuer shall default in the payment of the
Redemption Price) no interest shall accrue on the Redemption Price for any
period after the Redemption Date.
SECTION 11.04. Mandatory Redemption. If an Early
Amortization Event shall have occurred and be continuing and the Senior Blue
Hawk Obligations have been paid in full, any amounts received by the Trustee
from the Collateral Agent in respect of the Collateral pursuant to the Security
Agreement and not required to pay interest in respect of the Notes shall be
applied to make mandatory redemptions on each Payment Date of principal of the
Class A Notes and, following retirement thereof, the Class B
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Notes, in each case at the Redemption Price. Notes subject to mandatory
redemption on any Payment Date shall be due and payable on such Payment Date
upon the furnishing of a notice complying with Section 11.05 hereof to the
Holders of such Notes.
SECTION 11.05. Form of Mandatory Redemption Notice. Notice
of redemption under Section 11.04 hereof shall be given by the Trustee by
first-class mail, postage prepaid, mailed not less than 15 days nor more than
60 days prior to the applicable Payment Date to each Holder of Notes subject to
mandatory redemption, as of the close of business on the Regular Record Date
preceding the applicable Payment Date at such Holder's address appearing in the
Note Register.
All notices of mandatory redemption shall state:
(1) the Payment Date on which such redemption will occur;
(2) the Redemption Price; and
(3) the place where the Notes are to be surrendered for
payment of the Redemption Price (which shall be the office or agency
of the Issuer to be maintained as provided in Section 4.02 hereof).
Notice of redemption of the Notes shall be given by the
Trustee in the name and at the expense of the Issuer. Failure to give notice of
redemption, or any defect therein, to any Holder of any Note shall not impair
or affect the validity of the redemption of any other Note.
SECTION 11.06. Notes Subject to Mandatory Redemption Payable
on Specified Payment Date. Notice of mandatory redemption having been given as
provided in Section 11.05 hereof, the Notes shall on such Payment Date become
due and payable at the Redemption Price and (unless the Issuer shall default in
the payment of the Redemption Price) no interest shall accrue on the Redemption
Price for any period after such Payment Date.
SECTION 11.07. Selection of Notes for Optional or Mandatory
Redemption; Surrender of Notes. If less than all of the Notes of any Class are
to be redeemed at any time, selection of Notes of the applicable Class, or
portions thereof, shall be made by the Trustee on a pro rata basis, by lot or
by such method as the Trustee shall deem
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fair and appropriate. Notwithstanding any other provision of this Article
Eleven, the Trustee shall not redeem in part any Note if after giving effect to
such partial redemption the outstanding principal amount of such Note would
equal $100,000 or less. If any Note is to be redeemed in part (i) the notice
of redemption shall state the portion of the principal amount thereof to be
redeemed and (ii) a new Note in principal amount equal to the unredeemed
portion thereof shall be issued in the name of the Holder upon surrender and
cancellation of the original Note.
ARTICLE TWELVE
Miscellaneous
SECTION 12.01. Compliance Certificates and Opinions, etc.
(a) Upon any application or request by the Issuer to the Trustee to take any
action under any provision of this Indenture, the Issuer shall furnish to the
Trustee (i) an Officers' Certificate stating that all conditions precedent, if
any, provided for in this Indenture relating to the proposed action have been
complied with, and (ii) 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 shall include:
(1) a statement that each signatory of such certificate
or opinion has read or has caused to be 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
signatory, such signatory has made such examination or investigation
as is necessary to enable such
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signatory to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each
such signatory, such condition or covenant has been complied with.
SECTION 12.02. 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 Issuer 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. 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 Issuer,
stating that the information with respect to such factual matters is in the
possession of the Issuer, 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.
Whenever in this Indenture, in connection with any application
or certificate or report to the Trustee, it is provided that the Issuer shall
deliver any document as a condition of the granting of such application, or as
evidence of the Issuer's compliance with any term hereof, it is intended that
the truth and accuracy, at the time of the
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granting of such application or at the effective date of such certificate or
report (as the case may be), of the facts and opinions stated in such document
shall in such case be conditions precedent to the right of the Issuer to have
such application granted or to the sufficiency of such certificate or report.
The foregoing shall not, however, be construed to affect the Trustee's right to
rely upon the truth and accuracy of any statement or opinion contained in any
such document as provided in Article Eight hereof.
Whenever in this Indenture it is provided that the absence of
the occurrence and continuation of a Default or Event of Default is a condition
precedent to the taking of any action by the Trustee at the request or
direction of the Issuer, then, notwithstanding that the satisfaction of such
condition is a condition precedent to the Issuer's right to make such request
or direction, the Trustee shall be protected in acting in accordance with such
request or direction if it does not have knowledge of the occurrence and
continuance of such Default or Event of Default.
SECTION 12.03. Acts of Noteholders. (a) Any request,
demand, authorization, direction, notice, consent, waiver, or other action
provided by this Indenture to be given or taken by Noteholders may be embodied
in and evidenced by one or more substantially similar instruments signed by
such Noteholders 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 Issuer. Such instrument or instruments (and
the action embodied therein and evidenced thereby) are herein sometimes
referred to as the "Act" of the Noteholders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Indenture
and (subject to Section 8.01 hereof) conclusive in favor of the Trustee and the
Issuer, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of
any such instrument or writing may be proved in any manner that the Trustee
deems sufficient.
(c) The ownership of Notes shall be proved by the Note
Register.
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(d) Any request, demand, authorization, direction,
notice, consent, waiver or other action by the Holder of any Notes shall bind
the Holder of every Note issued upon the registration 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 Issuer in reliance thereon, whether or not
notation of such action is made upon such Note.
SECTION 12.04. Notices, etc., to Trustee, Issuer and Rating
Agencies. (a) Any request, demand, authorization, direction, notice, consent,
waiver or Act of Noteholders or other documents provided or permitted by this
Indenture to be made upon, given or furnished to or filed with:
(1) the Trustee by any Noteholder or by the Issuer 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,
or
(2) the Issuer by the Trustee or by any Noteholder shall
be sufficient for every purpose hereunder if in writing and mailed,
first-class, postage prepaid, to the Issuer addressed to: Broadway
Receivables, Inc., 1600 N. Kramer Boulevard, Anaheim, California
92806, or at any other address previously furnished in writing to the
Trustee by the Issuer. The Issuer shall promptly transmit any notice
received by it from the Noteholders to the Trustee.
(b) The Trustee shall give prompt, written notice to the
Rating Agencies at, in the case of S&P, 25 Broadway, New York, NY 10004, or, in
the case of Fitch, One State Street Plaza, New York, NY 10004, and if the
Trustee fails to give such notice the Issuer shall give such notice, of:
(1) any resignation, removal or replacement of the
Trustee,
(2) any Event of Default, of which notice must be given
to any Noteholders, and
(3) the final payment of all the Notes.
SECTION 12.05. Notices to Noteholders; Waivers. Where this
Indenture provides for notice to Noteholders of any event, such notice shall be
sufficiently given (unless
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otherwise herein expressly provided) if in writing and mailed, first-class,
postage prepaid, to each Noteholder affected by such event, at his address as
it appears on the Note 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 Noteholders is given by mail, neither the failure to
mail such notice nor any defect in any notice so mailed to any particular
Noteholder shall affect the sufficiency of such notice with respect to other
Noteholders, and any notice that is mailed in the manner herein provided shall
conclusively be presumed to have been duly given.
Where this Indenture provides for notice in any manner, such
notice may be waived in writing by any 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 Noteholders 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 a waiver.
In case, by reason of the suspension of regular mail service
as a result of a strike, work stoppage, or similar activity, it shall be
impractical to mail notice of any event of Noteholders 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.
Where this Indenture provides for notice to the Rating
Agencies, failure to give such notice shall not affect any other rights or
obligations created hereunder, and shall not under any circumstance constitute
a Default or Event of Default.
The Trustee agrees to give the Rating Agencies such notices as
provided hereunder as a matter of courtesy and accommodation, but the Trustee
shall have no liability or obligation to the Rating Agencies or any other
Person if it shall fail to give such notice.
SECTION 12.06. Alternate Payment and Notice Provisions.
Notwithstanding any provision of this Indenture or any of the Notes to the
contrary, the Issuer may enter into any agreement with any Holder of a Note
providing for a method of payment that is different from the methods provided
for in this Indenture for such pay-
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ments. The Issuer will furnish to the Trustee a copy of each such agreement
and the Trustee will cause payments to be made in accordance with such
agreements.
SECTION 12.07. Limited Recourse Obligations. The Notes are
limited recourse obligations of the Issuer payable solely out of the Collateral
and the proceeds thereof. To the extent that the Collateral allocable to the
holders of the Notes under the Security Agreement is for any reason
insufficient to provide for the payment of amounts owing to the holders of the
Notes, no holder of any Note shall have any recourse to the Issuer or to any
other Person for the amount of such insufficiency nor shall any holder have a
Claim against the Issuer for the amount of any such insufficiency.
SECTION 12.08. Non-Petition Agreement. The Trustee agrees,
and by its acceptance of a Note each Noteholder agrees, that prior to the date
which is one year and one day after the payment in full of all of the Issuer's
obligations in respect of the Blue Hawk Credit Facility and the Notes, it will
not institute against, or join any other person in instituting against, the
Issuer, any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings or other similar proceeding under the laws of the United States, or
any state of the United States.
SECTION 12.09. 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 12.10. Successors and Assigns. All covenants and
agreements in this Indenture by the Issuer shall bind its successors and
assigns, whether so expressed or not.
SECTION 12.11. Separability. In case any provision in this
Indenture or in the Notes shall be invalid, illegal or unenforceable, the
validity, legality, and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
SECTION 12.12. Benefits of Indenture. Nothing in this
Indenture or in the Notes, express or implied, shall give to any Person, other
than the parties hereto and their successors hereunder, the Noteholders and in
the case of Section 12.08 hereof, Blue Hawk Funding Corporation and the other
holders of the Issuer's obligations under the
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Blue Hawk Credit Facility, any benefit of any legal or equitable right, remedy,
or claim under this Indenture.
SECTION 12.13. Legal Holidays. In any case where the date on
which any payment is due shall not be a Business Day, then (notwithstanding any
other provision of the Notes or this Indenture) payment 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 date on which nominally due, and no interest
shall accrue for the period from and after any such nominal date.
SECTION 12.14. Governing Law. This Indenture and each Note
shall be construed in accordance with and governed by the substantive laws of
the State of New York applicable to agreements made and to be performed
therein.
SECTION 12.15. Counterparts. 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 instrument.
SECTION 12.16. Recording of Indenture. If this Indenture is
subject to recording in any appropriate public recording offices, such
recording is to be effected by the Issuer and at its expense on direction by
the Trustee accompanied by an Opinion of Counsel (which may be counsel to the
Trustee or any other counsel reasonably acceptable to the Trustee) to the
effect that such recording is necessary either for the protection of the
Noteholders or any other Person secured hereunder or for the enforcement of any
right or remedy granted to the Trustee under this Indenture.
SECTION 12.17. Corporate Obligation. No recourse may be
taken, directly or indirectly, with respect to the obligations of the Issuer on
the Notes or under this Indenture or any certificate or other writing delivered
in connection herewith or therewith, against any owner of an equity interest in
the Issuer except as any such Person may have expressly agreed and except that
any such owner shall be fully liable, to the extent provided by applicable law,
for any unpaid consideration for stock, unpaid capital contribution or failure
to pay any installment or call owing to such entity.
SECTION 12.18. Inspection. The Issuer agrees that, on
reasonable prior notice, it will permit any repre-
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sentative of the Trustee, during the Issuer's normal business hours, to examine
all the books of account, records, reports, and other papers of the Issuer, to
make copies and extracts therefrom, to cause such books to be audited by
Independent certified public accountants, and to discuss the Issuer's affairs,
finances, and accounts with the Issuer's officers, employees, and Independent
certified public accountants, all at such reasonable times and as often as may
be reasonably requested. The Trustee shall and shall cause its representatives
to hold in confidence all such information except to the extent disclosure may
be required by law (and all reasonable applications for confidential treatment
are unavailing) and except to the extent that the Trustee may reasonably
determine that such disclosure is consistent with its obligations hereunder.
Any expenses incident to the exercise by the Trustee of any right under this
Section 12.18 shall be borne by the Trustee; provided that if an audit is made
during the continuance of an Event of Default, the expense incident to such
audit shall be borne by the Issuer.
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IN WITNESS WHEREOF, the Issuer and the Trustee have caused
this Indenture to be duly executed by their respective officers, thereunto duly
authorized all as of the day and year first above written.
BROADWAY RECEIVABLES, INC.
By_______________________
Name:
Title:
BANKERS TRUST COMPANY,
as Trustee
By________________________
Name:
Title:
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EXHIBIT C-1
FORM OF TRANSFEROR'S CERTIFICATE
Broadway Receivables, Inc.
___ % Subordinated Credit Card Notes, Class __, Due 199_
The undersigned, a duly authorized representative of
_________________________ (the "Transferor"), pursuant to the Indenture dated
as of September __, 1994 (the "Indenture") between Broadway Receivables, Inc.
(the "Issuer") and Bankers Trust Company, as trustee (the "Trustee"), does
hereby certify to the Issuer and the Trustee that:
1. The undersigned is duly authorized to execute and
deliver this Certificate to the Trustee and to the
Issuer.
2. This Certificate is delivered pursuant to Section
2.07 of the Indenture.
3. In connection with the transfer (the "Transfer") of
a Note in the aggregate principal amount of
$____________ from the Transferor to
_____________________ (the "Transferee"),
(a) the Transferor reasonably believes that Transferee is
a Qualified Institutional Buyer as defined in Rule
144A ("Rule 144A") under the Securities Act of 1933,
as amended; and
(b) the Transfer is being made in reliance upon the
exemption from registration provided in rule 144A.
IN WITNESS WHEREOF, the undersigned has duly executed this
certificate this ____ day of __________, 199_.
By___________________________
Name:
Title:
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EXHIBIT C-2
<PAGE> 109
EXHIBIT C-3
FORM OF LETTER TO BE DELIVERED BY ACCREDITED INVESTORS
We are delivering this letter in connection with an offering of 7.55%
Subordinated Credit Card Notes, Class A, Due 1999 (the "Class A Notes") and the
11% Subordinated Credit Card Notes, Class B, Due 1999 (the "Class B Notes," and
together with the Class A Notes, collectively the "Notes") of Broadway
Receivables, Inc., a Delaware corporation (the "Issuer"), all as described in
the Offering Memorandum (the "Offering Memorandum") relating to the offering.
We hereby confirm that:
(i) we are an "accredited investor" within the meaning of
Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities
Act of 1933, as amended (the "Securities Act"), or an entity in which
all of the equity owners are accredited investors within the meaning
of Rule 501(a)(1), (2), (3) or (7) of Regulation D under the
Securities Act (an "Institutional Accredited Investor");
(ii) (A) any purchase of the Notes by us will be for our own
account or for the account of one or more other Institutional
Accredited Investors or as fiduciary for the account of one or more
trusts, each of which is an "accredited investor" within the meaning
of Rule 501(a)(7) of Regulation D under the Securities Act and for
each of which we exercise sole investment discretion or (B) we are a
"bank," within the meaning of Section 3(a)(2) of the Securities Act,
or a "savings and loan association" or other institution described in
Section 3(a)(5)(A) of the Securities Act that is acquiring the Notes
as fiduciary for the account of one or more institutions for which we
exercise sole investment discretion;
(iii) in the event that we purchase any of the Notes, we will
acquire Notes having a minimum purchase price of $1,000,000 for our
own account or for any separate account for which we are acting;
<PAGE> 110
EXHIBIT C-3
Page 2
(iv) we have such knowledge and experience in financial and
business matters that we are capable of evaluating the merits and
risks of purchasing the Notes;
(v) we are not acquiring the Notes with a view to any
distribution thereof or with any present intention of offering or
selling any of the Notes in a transaction that would violate the
Securities Act or the securities laws of any State of the United
States or any other applicable jurisdiction; provided that the
disposition of our property and the property of any accounts for which
we are acting as fiduciary shall remain at all times within our
control; and
(vi) we have received a copy of the Offering Memorandum and
acknowledge that we have had access to such financial and other
information, and have been afforded the opportunity to ask such
questions of representatives of the Issuer and receive answers
thereto, as we deem necessary in connection with our decision to
purchase the Notes.
We understand that the Notes are being offered in a transaction not
involving any public offering within the meaning of the Securities Act and that
the Notes have not been registered under the Securities Act, and we agree, on
our own behalf and on behalf of each account for which we acquire any Notes,
that such Notes may be offered, resold, pledged or otherwise transferred only
(i) inside the United States, to a person who we reasonably believe is a
qualified institutional buyer (as defined in Rule 144A under the Securities
Act) in a transaction meeting the requirements of Rule 144A, or in accordance
with another exemption from the registration requirements of the Securities Act
(and based upon an opinion of counsel if the Issuer so requests), or (ii)
outside the United States in a transaction meeting the requirements of Rule 904
under the Securities Act and (iii) in each case, in accordance with any
applicable securities laws of any State of the United States or any other
applicable jurisdiction. We understand that The Depository Trust Company (as
depository of the Notes) or the registrar and transfer agent, as the case may
be, will not be required to accept for registration of transfer any Notes,
except upon presentation of evidence
<PAGE> 111
EXHIBIT C-3
Page 3
satisfactory to the Issuer that the foregoing restrictions on transfer have
been complied with. We further understand that (a) we will, and each
subsequent holder is required to, notify any subsequent purchaser of the resale
restrictions set forth herein, and (b) the Notes will bear a legend reflecting
the substance of this paragraph.
We acknowledge that you, the Issuer and others will rely upon our
confirmations, acknowledgements and agreements set forth herein, and we agree
to notify you promptly in writing if any of our representations or warranties
herein ceases to be accurate and complete.
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK.
__________________________________
(Name of Purchaser)
By________________________________
Name:
Title:
Address:
<PAGE> 1
EXHIBIT 4.9
THIS SECURITY (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 (THE "SECURITIES
ACT"), AND THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY
EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON
THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY
EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE ISSUER THAT (A) SUCH
SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)
INSIDE THE UNITED STATES 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 OR IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN
OPINION OF COUNSEL IF THE ISSUER SO REQUESTS), (2) TO THE ISSUER, (3)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR (4) OUTSIDE THE
UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT, AND IN EACH CASE,
IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER
WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER
FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS
SET FORTH IN (A) ABOVE.
EACH HOLDER OF THIS NOTE, AS A RESULT OF PURCHASING SUCH NOTE,
AGREES THAT, PRIOR TO THE DATE WHICH IS ONE YEAR AND ONE DAY AFTER THE
PAYMENT IN FULL OF ALL OF BROADWAY RECEIVABLES, INC.'S OBLIGATIONS IN
RESPECT OF THE BLUE HAWK CREDIT FACILITY, THE 7.55% SUBORDINATED
CREDIT CARD NOTES, CLASS A, DUE 1999 AND THE 11% SUBORDINATED CREDIT
CARD NOTES, CLASS B, DUE 1999, SUCH HOLDER WILL NOT INSTITUTE AGAINST,
OR JOIN ANY OTHER PERSON IN INSTITUTING AGAINST, BROADWAY RECEIVABLES,
INC. ANY BANKRUPTCY, REORGANIZATION, ARRANGEMENT, INSOLVENCY OR
LIQUIDATION PROCEEDINGS OR OTHER SIMILAR PROCEEDING UNDER THE LAWS OF
THE UNITED STATES, OR ANY STATE OF THE UNITED STATES.
<PAGE> 2
BROADWAY RECEIVABLES, INC.
7.55% SUBORDINATED CREDIT CARD NOTE,
CLASS A, DUE 1999
No. A-1
$38,000,000
CUSIP 111568 AA 9
Broadway Receivables, Inc., a corporation duly organized and
existing under the laws of the State of Delaware (the "Issuer"), for value
received, hereby promises to pay to CEDE & CO., or registered assigns, the
principal sum of THIRTY EIGHT MILLION DOLLARS on October 15, 1999 (the "Stated
Maturity Date"), and to pay interest on the outstanding principal amount of
this Note on October 15, 1994, and the fifteenth day of each calendar month
thereafter or, if such fifteenth day is not a business day, the next succeeding
business day, until the principal hereof is paid or made available for payment
(each a "Payment Date"). Interest on this Note will accrue from the most
recent date to which interest has been paid or, if no interest has been paid,
from the date of issuance of this Note, at the rate of 7.55% per annum
(computed on the basis of a 360-day year of twelve 30-day months). In the
event that the Issuer fails to redeem this Note on or prior to October 8, 1996,
the interest rate on this Note will increase by 200 basis points to the rate of
9.55% per annum (the amount of such increase, the "Step-Up Interest Amount").
Step-Up Interest Amounts will accrue monthly and will be payable on a
subordinated basis as provided in the Security Agreement. Such principal of
and interest on this Note shall be paid in the manner specified herein.
The principal of and interest on this Note are payable 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. All payments made by the
Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of this
Note.
This Note is one of a duly authorized issue of Notes of the
Issuer, designated as its 7.55% Subordinated Credit Card Notes, Class A, Due
1999 (the "Class A Notes"), issued under an Indenture dated as of September 1,
1994 (the "Indenture") between the Issuer and Bankers Trust Company, as trustee
(the "Trustee", which term includes any successor Trustee under the Indenture),
to which Indenture and all indentures supplemental thereto reference is hereby
-2-
<PAGE> 3
made for a statement of the respective rights thereunder of the Issuer, the
Trustee and the Holders of the Notes. All terms used in this Note that are
defined in the Indenture, as supplemented or amended, shall have the meanings
assigned to them in the Indenture, as so supplemented or amended.
The principal of this Note shall be payable on the Stated
Maturity Date hereof unless payable earlier because (x) an Event of Default
shall have occurred and be continuing, the Senior Blue Hawk Obligations shall
have been paid in full and the Trustee or the Holders of Notes representing not
less than 66-2/3% of the Aggregate Outstanding Amount of the Notes shall have
declared the Notes to be immediately due and payable in accordance with Section
7.02 of the Indenture, (y) the Issuer shall have called for the redemption of
the Notes pursuant to Section 11.01 of the Indenture or (z) the Notes shall
have become subject to mandatory redemption as provided in Section 11.04 of the
Indenture. All principal payments on the Class A Notes shall be made pro rata
to the Noteholders of such Class entitled thereto except as otherwise provided
in the Indenture.
As provided in the Indenture, the Class A Notes are equally
and ratably secured by the Collateral pledged as security therefor. The Class
A Notes are subordinated in right of payment to certain obligations of the
Issuer under the Blue Hawk Credit Facility and certain other indebtedness of
the Issuer to the extent and in the manner provided in the Security Agreement.
Payments of interest on this Note due and payable on each
Payment Date shall be made by check mailed to the Person whose name appears as
the registered Holder of this Note (or one or more Predecessor Notes) on the
Note Register as of the close of business on the last day of the month
preceding the Payment Date (the "Regular Record Date"), except that with
respect to Notes registered on the Regular Record Date in the name of the
nominee of the Clearing Agency (initially, such nominee to be Cede & Co.),
payments will be made by wire transfer in immediately available funds to the
account designated by such nominee. Such checks shall be mailed to the Person
entitled thereto at the address of such Person as it appears on the Note
Register as of the applicable Regular Record Date without requiring that this
Note be submitted for notation of payment, and the mailing of such check shall
constitute payment of the amount thereof regardless of whether such check is
returned undelivered. Any reduction in the
-3-
<PAGE> 4
principal amount of this Note (or any one or more Predecessor Notes) effected
by any payments made on any Payment Date shall be binding upon all future
Holders of this Note and of any Note issued upon the registration of transfer
hereof or in exchange hereof or in lieu hereof, whether or not noted hereon.
If funds are expected to be available, as provided in the Indenture, for
payment in full of the then remaining unpaid principal amount of this Note on a
Payment Date, then the Issuer will notify the Person who was the registered
Holder hereof as of the Regular Record Date preceding such Payment Date by
notice mailed no later than five days prior to such Payment Date and the amount
then due and payable shall be payable only upon presentation and surrender of
this Note at the Trustee's principal corporate trust office or at the office of
the Trustee's agent appointed for such purposes located in The City of New
York.
Any portion of any payment of principal or interest which was
due but was not paid or duly provided for on a Payment Date shall forthwith
cease to be payable to the Person who was the registered Holder of this Note on
the applicable Regular Record Date and shall be paid in whole or in part, when
and to the extent funds are available for such payment, in accordance with the
terms of the Indenture, to the Person in whose name this Note (or one or more
Predecessor Notes) is then registered.
As provided in the Indenture, the Notes may be redeemed, in
whole or in part, at the option of the Issuer on any Payment Date on or after
October 15, 1994 and on October 8, 1996, at a redemption price equal to the sum
of (i) 100% of the principal amount thereof, (ii) accrued and unpaid interest
thereon, and (iii) in the case of any redemption occurring prior to October 8,
1996, the Make-Whole Premium.
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Note may be registered on
the Note Register of the Issuer, upon surrender of this Note for registration
of transfer at the office or agency designated by the Issuer pursuant to the
Indenture, duly endorsed by, or accompanied by a written instrument of transfer
in form satisfactory to the Trustee duly executed by, the Holder hereof or his
attorney duly authorized in writing, with such signature guaranteed by an
"eligible guarantor institution" meeting the requirements of the Trustee which
requirements include membership or participation in the Securities Transfer
Agent's Medallion Program ("Stamp") or such other "signature guar-
-4-
<PAGE> 5
antee program" as may be determined by the Trustee in addition to, or in
substitution for, Stamp, and such other documents as the Trustee may require,
and thereupon one or more new Notes of authorized denomination and in the same
aggregate principal amount will be issued to the designated transferee or
transferees. No service charge will be charged for any registration of
transfer or exchange of this Note, but the transferor may be required to pay a
sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any such registration of transfer or exchange.
Prior to the due presentment for registration of transfer of
this Note, the Issuer, the Trustee and any agent of the Issuer or the Trustee
may treat the Person in whose name this Note (as of the day of determination or
as of such other date as may be specified in the Indenture) is registered as
the owner hereof for all purposes, whether or not this Note be overdue, and
neither the Issuer, the Trustee, nor any such agent shall be affected by notice
to the contrary.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the rights of the Holders of the Notes under the
Indenture at any time by the Issuer with the consent of the Holders of Notes
representing a majority of the Aggregate Outstanding Amount of all Notes at the
time Outstanding. The Indenture also contains provisions permitting the
Holders of Notes representing 66-2/3% of the Aggregate Outstanding Amount of
the Notes, on behalf of the Holders of all the Notes, to waive compliance by
the Issuer with certain provisions of the Indenture and certain existing
defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Note (or any one or more Predecessor Notes) 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 hereof or in lieu hereof whether or not notation of such consent or
waiver is made upon this Note. The Indenture also permits the Trustee to amend
or waive certain terms and conditions set forth in the Indenture without the
consent of Holders of the Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor
to the Issuer under the Indenture.
-5-
<PAGE> 6
The Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.
This Note and the Indenture shall be construed in accordance
with, and governed by, the substantive laws of the State of New York applicable
to agreements made and to be performed therein.
No reference herein to the Indenture and no provision of this
Note or of the Indenture shall alter or impair the obligation of the Issuer,
which is absolute and unconditional, to pay the principal of and interest on
this Note at the times, place, and rate, and in the coin or currency herein
prescribed.
This Note is a limited recourse obligation of the Issuer
payable solely out of the Collateral and the proceeds thereof. To the extent
that the Collateral allocable to the holders of the Notes under the Security
Agreement is for any reason insufficient to provide for the payment of amounts
owing to the holders of the Notes, no holder of this Note shall have any
recourse to the Issuer or to any other Person for the amount of such
insufficiency nor shall any such holder have a Claim against the Issuer for the
amount of any such insufficiency.
Unless the certificate of authentication hereon has been
executed by an authorized officer of the Trustee, by manual signature, this
Note shall not be entitled to any benefit under the Indenture referred to
herein, or be valid or obligatory for any purpose.
-6-
<PAGE> 7
IN WITNESS WHEREOF, the Issuer has caused this instrument to
be signed, manually or in facsimile, by its duly authorized officer.
Dated: September 13, 1994 BROADWAY RECEIVABLES, INC.
By___________________________
Name:
Title:
This is one of the Notes designated above and referred to in
the within-mentioned Indenture.
BANKERS TRUST COMPANY,
as Trustee
By:_________________________
Authorized Signatory
-7-
<PAGE> 8
FOR VALUE RECEIVED, ____________________ hereby sells,
assigns, and transfers unto ____________________
Please insert Social Security or
other identifying number of
assignee:_______________
the within Note of Broadway Receivables, Inc. standing in the name(s) of the
undersigned in the Note Register of the Issuer and does hereby irrevocably
constitute and appoint _______________ Attorney to transfer such Note in such
Note Register, with full power of substitution in the premises.
Dated:_______________________ _______________________
[Signature]
_______________________
[Signature]
Notice: The signature(s) to this assignment must correspond with the
name(s) as written upon the face of this Note in every
particular without alteration or any change whatsoever. The
signature(s) must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Trustee which
requirements include membership or participation in the
Securities Transfer Agent's Medallion Program ("Stamp") or
such other "signature guarantee program" as may be determined
by the Trustee in addition to, or in substitution for, Stamp.
Notarized or witnessed signatures are not acceptable as
guaranteed signatures.
Signature Guarantee:
_________________________
Name of Institution
_________________________
Authorized Officer
-8-
<PAGE> 1
EXHIBIT 4.10
THIS SECURITY (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 (THE "SECURITIES
ACT"), AND THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY
EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON
THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY
EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE ISSUER THAT (A) SUCH
SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)
INSIDE THE UNITED STATES 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 OR IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN
OPINION OF COUNSEL IF THE ISSUER SO REQUESTS), (2) TO THE ISSUER, (3)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR (4) OUTSIDE THE
UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT, AND IN EACH CASE,
IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER
WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER
FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS
SET FORTH IN (A) ABOVE.
EACH HOLDER OF THIS NOTE, AS A RESULT OF PURCHASING SUCH NOTE,
AGREES THAT, PRIOR TO THE DATE WHICH IS ONE YEAR AND ONE DAY AFTER THE
PAYMENT IN FULL OF ALL OF BROADWAY RECEIVABLES, INC.'S OBLIGATIONS IN
RESPECT OF THE BLUE HAWK CREDIT FACILITY, THE 7.55% SUBORDINATED
CREDIT CARD NOTES, CLASS A, DUE 1999 AND THE 11% SUBORDINATED CREDIT
CARD NOTES, CLASS B, DUE 1999, SUCH HOLDER WILL NOT INSTITUTE AGAINST,
OR JOIN ANY OTHER PERSON IN INSTITUTING AGAINST, BROADWAY RECEIVABLES,
INC. ANY BANKRUPTCY, REORGANIZATION, ARRANGEMENT, INSOLVENCY OR
LIQUIDATION PROCEEDINGS OR OTHER SIMILAR PROCEEDING UNDER THE LAWS OF
THE UNITED STATES, OR ANY STATE OF THE UNITED STATES.
<PAGE> 2
BROADWAY RECEIVABLES, INC.
11% SUBORDINATED CREDIT CARD NOTE,
CLASS B, DUE 1999
No. B-1
$26,000,000
CUSIP 111568 AB 7
Broadway Receivables, Inc., a corporation duly organized and
existing under the laws of the State of Delaware (the "Issuer"), for value
received, hereby promises to pay to CEDE & CO., or registered assigns, the
principal sum of TWENTY SIX MILLION DOLLARS on October 15, 1999 (the "Stated
Maturity Date"), and to pay interest on the outstanding principal amount of
this Note on October 15, 1994, and the fifteenth day of each calendar month
thereafter or, if such fifteenth day is not a business day, the next succeeding
business day, until the principal hereof is paid or made available for payment
(each a "Payment Date"). Interest on this Note will accrue from the most
recent date to which interest has been paid or, if no interest has been paid,
from the date of issuance of this Note, at the rate of 11% per annum (computed
on the basis of a 360-day year of twelve 30-day months). In the event that the
Issuer fails to redeem this Note on or prior to October 8, 1996, the interest
rate on this Note will increase by 200 basis points to the rate of 13% per
annum (the amount of such increase, the "Step-Up Interest Amount"). Step-Up
Interest Amounts will accrue monthly and will be payable on a subordinated
basis as provided in the Security Agreement. Such principal of and interest on
this Note shall be paid in the manner specified herein.
The principal of and interest on this Note are payable 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. All payments made by the
Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of this
Note.
This Note is one of a duly authorized issue of Notes of the
Issuer, designated as its 11% Subordinated Credit Card Notes, Class B, Due 1999
(the "Class B Notes"), issued under an Indenture dated as of September 1, 1994
(the "Indenture") between the Issuer and Bankers Trust Company, as trustee (the
"Trustee", which term includes any successor Trustee under the Indenture), to
which Indenture
-2-
<PAGE> 3
and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights thereunder of the Issuer, the Trustee and
the Holders of the Notes. All terms used in this Note that are defined in the
Indenture, as supplemented or amended, shall have the meanings assigned to them
in the Indenture, as so supplemented or amended.
The principal of this Note shall be payable on the Stated
Maturity Date hereof unless payable earlier either because (x) an Event of
Default shall have occurred and be continuing, the Senior Blue Hawk Obligations
shall have been paid in full and the Trustee or the Holders of Notes
representing not less than 66-2/3% of the Aggregate Outstanding Amount of the
Notes shall have declared the Notes to be immediately due and payable in
accordance with Section 7.02 of the Indenture, (y) the Issuer shall have called
for the redemption of the Notes pursuant to Section 11.01 of the Indenture or
(z) the Notes shall have become subject to mandatory redemption as provided in
Section 11.04 of the Indenture. All principal payments on the Class B Notes
shall be made pro rata to the Noteholders of such Class entitled thereto except
as otherwise provided in the Indenture.
As provided in the Indenture, the Class B Notes are equally
and ratably secured by the Collateral pledged as security therefor. The Class
B Notes are subordinated in right of payment to certain obligations of the
Issuer under the Blue Hawk Credit Facility, the Class A Notes and certain other
indebtedness of the Issuer to the extent and in the manner provided in the
Security Agreement.
Payments of interest on this Note due and payable on each
Payment Date shall be made by check mailed to the Person whose name appears as
the registered Holder of this Note (or one or more Predecessor Notes) on the
Note Register as of the close of business on the last day of the month
preceding the Payment Date (the "Regular Record Date"), except that with
respect to Notes registered on the Regular Record Date in the name of the
nominee of the Clearing Agency (initially, such nominee to be Cede & Co.),
payments will be made by wire transfer in immediately available funds to the
account designated by such nominee. Such checks shall be mailed to the Person
entitled thereto at the address of such Person as it appears on the Note
Register as of the applicable Regular Record Date without requiring that this
Note be submitted for notation of payment, and the mailing of such check shall
constitute payment of the amount thereof regardless of whether such
-3-
<PAGE> 4
check is returned undelivered. Any reduction in the principal amount of this
Note (or any one or more Predecessor Notes) effected by any payments made on
any Payment Date shall be binding upon all future Holders of this Note and of
any Note issued upon the registration of transfer hereof or in exchange hereof
or in lieu hereof, whether or not noted hereon. If funds are expected to be
available, as provided in the Indenture, for payment in full of the then
remaining unpaid principal amount of this Note on a Payment Date, then the
Issuer will notify the Person who was the registered Holder hereof as of the
Regular Record Date preceding such Payment Date by notice mailed no later than
five days prior to such Payment Date and the amount then due and payable shall
be payable only upon presentation and surrender of this Note at the Trustee's
principal corporate trust office or at the office of the Trustee's agent
appointed for such purposes located in The City of New York.
Any portion of any payment of principal or interest which was
due but was not paid or duly provided for on a Payment Date shall forthwith
cease to be payable to the Person who was the registered Holder of this Note on
the applicable Regular Record Date and shall be paid in whole or in part, when
and to the extent funds are available for such payment in accordance with the
terms of the Indenture, to the Person in whose name this Note (or one or more
Predecessor Notes) is then registered.
As provided in the Indenture, the Notes may be redeemed, in
whole or in part, at the option of the Issuer on any Payment Date on or after
October 15, 1994 and on October 8, 1996, at a redemption price equal to the sum
of (i) 100% of the principal amount thereof, (ii) accrued and unpaid interest
thereon, and (iii) in the case of any redemption occurring prior to October 8,
1996, the Make-Whole Premium.
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Note may be registered on
the Note Register of the Issuer, upon surrender of this Note for registration
of transfer at the office or agency designated by the Issuer pursuant to the
Indenture, duly endorsed by, or accompanied by a written instrument of transfer
in form satisfactory to the Trustee duly executed by, the Holder hereof or his
attorney duly authorized in writing, with such signature guaranteed by an
"eligible guarantor institution" meeting the requirements of the Trustee which
requirements include membership or participation in the Securities Transfer
Agent's
-4-
<PAGE> 5
Medallion Program ("Stamp") or such other "signature guarantee program" as may
be determined by the Trustee in addition to, or in substitution for, Stamp, and
such other documents as the Trustee may require, and thereupon one or more new
Notes of authorized denomination and in the same aggregate principal amount
will be issued to the designated transferee or transferees. No service charge
will be charged for any registration of transfer or exchange of this Note, but
the transferor may be required to pay a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection with any such
registration of transfer or exchange.
Prior to the due presentment for registration of transfer of
this Note, the Issuer, the Trustee and any agent of the Issuer or the Trustee
may treat the Person in whose name this Note (as of the day of determination or
as of such other date as may be specified in the Indenture) is registered as
the owner hereof for all purposes, whether or not this Note be overdue, and
neither the Issuer, the Trustee, nor any such agent shall be affected by notice
to the contrary.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the rights of the Holders of the Notes under the
Indenture at any time by the Issuer with the consent of the Holders of Notes
representing a majority of the Aggregate Outstanding Amount of all Notes at the
time Outstanding. The Indenture also contains provisions permitting the
Holders of Notes representing 66-2/3% of the Aggregate Outstanding Amount of
the Notes, on behalf of the Holders of all the Notes, to waive compliance by
the Issuer with certain provisions of the Indenture and certain existing
defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Note (or any one or more Predecessor Notes) 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 hereof or in lieu hereof whether or not notation of such consent or
waiver is made upon this Note. The Indenture also permits the Trustee to amend
or waive certain terms and conditions set forth in the Indenture without the
consent of Holders of the Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor
to the Issuer under the Indenture.
-5-
<PAGE> 6
The Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.
This Note and the Indenture shall be construed in accordance
with, and governed by, the substantive laws of the State of New York applicable
to agreements made and to be performed therein.
No reference herein to the Indenture and no provision of this
Note or of the Indenture shall alter or impair the obligation of the Issuer,
which is absolute and unconditional, to pay the principal of and interest on
this Note at the times, place, and rate, and in the coin or currency herein
prescribed.
This Note is a limited recourse obligation of the Issuer
payable solely out of the Collateral and the proceeds thereof. To the extent
that the Collateral allocable to the holders of the Notes under the Security
Agreement is for any reason insufficient to provide for the payment of amounts
owing to the holders of the Notes, no holder of this Note shall have any
recourse to the Issuer or to any other Person for the amount of such
insufficiency nor shall any such holder have a Claim against the Issuer for the
amount of any such insufficiency.
Unless the certificate of authentication hereon has been
executed by an authorized officer of the Trustee, by manual signature, this
Note shall not be entitled to any benefit under the Indenture referred to
herein, or be valid or obligatory for any purpose.
-6-
<PAGE> 7
IN WITNESS WHEREOF, the Issuer has caused this instrument to
be signed, manually or in facsimile, by its duly authorized officer.
Dated: September 13, 1994 BROADWAY RECEIVABLES, INC.
By_________________________
Name:
Title:
This is one of the Notes designated above and referred to in
the within-mentioned Indenture.
BANKERS TRUST COMPANY,
as Trustee
By:_________________________
Authorized Signatory
-7-
<PAGE> 8
FOR VALUE RECEIVED, ____________________ hereby sells,
assigns, and transfers unto ____________________
Please insert Social Security or
other identifying number of
assignee:_______________
the within Note of Broadway Receivables, Inc. standing in the name(s) of the
undersigned in the Note Register of the Issuer and does hereby irrevocably
constitute and appoint _______________ Attorney to transfer such Note in such
Note Register, with full power of substitution in the premises.
Dated:_______________________ _______________________
[Signature]
_______________________
[Signature]
Notice: The signature(s) to this assignment must correspond with the
name(s) as written upon the face of this Note in every
particular without alteration or any change whatsoever. The
signature(s) must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Trustee which
requirements include membership or participation in the
Securities Transfer Agent's Medallion Program ("Stamp") or
such other "signature guarantee program" as may be determined
by the Trustee in addition to, or in substitution for, Stamp.
Notarized or witnessed signatures are not acceptable as
guaranteed signatures.
Signature Guarantee:
_________________________
Name of Institution
_________________________
Authorized Officer
-8-
<PAGE> 1
EXHIBIT 4.11
SEVENTH AMENDMENT TO CREDIT AGREEMENT
THIS SEVENTH AMENDMENT (the "Amendment"), dated as of
September 13, 1994, relates to that certain Credit Agreement dated as of
October 8, 1992 and amended by the letter agreement dated April 29, 1993, the
Amended and Restated Second Amendment dated as of August 20, 1993, the Third
Amendment dated as of September 30, 1993 (the "Third Amendment") , the Fourth
Amendment dated as of October 31, 1993 (the "Fourth Amendment"), the Fifth
Amendment dated as of December 10, 1993 and the Sixth Amendment dated as of
February 26, 1994 (as so amended, the "Credit Agreement"), among BROADWAY
STORES, INC., a Delaware corporation previously known as Carter Hawley Hale
Stores, Inc. (the "Borrower"), the financial institutions parties thereto (the
"Lenders") and GENERAL ELECTRIC CAPITAL CORPORATION, a New York corporation, as
agent (the "Agent") for the Lenders. Unless otherwise defined herein, terms
defined in the Credit Agreement are used herein with the same meanings ascribed
to them therein.
R E C I T A L S
WHEREAS, on June 17, 1994, the Borrower filed with the
Secretary of State of the State of Delaware an amendment to the Borrower's
Amended and Restated Certificate of Incorporation changing the Borrower's name
from Carter Hawley Hale Stores, Inc. to Broadway Stores, Inc.;
WHEREAS, the Receivables Borrower is proposing to issue at
least $64,000,000 in stated principal amount of subordinated credit card notes
and, in conjunction therewith, is entering into certain amendments to the
Accounts Receivable Facility; and
WHEREAS, in connection therewith and on the terms and
conditions set forth herein, GE Capital, as Agent and as the Lender, has agreed
to extend the date specified in clause (i) of the definition of Commitment
Termination Date to October 8, 1996 and to amend the Credit Agreement further,
as specified herein;
NOW, THEREFORE, in consideration of the foregoing premises
(each of which is incorporated herein), the parties hereto agree as follows:
1. Amendments to the Credit Agreement. Upon the
Effective Date (as defined herein), the Credit Agreement is hereby amended as
follows:
<PAGE> 2
1.1 Amendments to the Preamble. The preamble to
the Credit Agreement is hereby amended and restated in its entirety to
read as follows:
THIS CREDIT AGREEMENT, dated as of October 8, 1992,
among BROADWAY STORES, INC., a Delaware corporation whose name
(prior to June 17, 1994) was Carter Hawley Hale Stores, Inc.
(on and after the Plan Effective Date (as defined below), the
"Borrower"), the various financial institutions as are or may
become parties hereto (collectively, the "Lenders"), and
GENERAL ELECTRIC CAPITAL CORPORATION, a New York corporation
("GE Capital"), as agent (the "Agent") for the Lenders;
1.2 Amendments to Article 1. Article 1 of the
Credit Agreement is hereby amended to:
(a) add the following at the end of the
definition of "Accounts Receivable Facility":
After the Seventh Amendment Effective Date, the
documents establishing the Accounts Receivable
Facility shall also include the following documents
(each dated as of September 13, 1994, unless
otherwise indicated):
(i) Amendment No. 1 to Receivables
Purchase Agreement between the Borrower and
the Receivables Borrower;
(ii) Amendment No. 1 to
Receivables-Backed Credit Agreement dated as
of September 28, 1993 and Amendment No. 2 to
Receivables-Backed Credit Agreement, in each
case among the Receivables Borrower, the
Receivables Lender and GE Capital, as Agent;
(iii) First Amendment to the Liquidity
Agreement among the Receivables Lender,
certain other lenders parties thereto and GE
Capital, as Liquidity Agent;
(iv) Amended and Restated Assignment
and Security Agreement among the Receivables
Borrower, the Receivables Lender, Bankers
Trust Company, as Trustee and as Cash
Collateral Bank, and GE Capital; and
(v) First Amendment to Letter of
Credit Reimbursement Agreement among the
Receivables
-2-
<PAGE> 3
Borrower, the Receivables Lender, the
financial institutions parties thereto and
GE Capital.
(b) add the following definition of "Applicable
Margin":
"Applicable Margin" shall mean at any time
the per annum rate (expressed as a percentage) set
forth below opposite the applicable Fixed Charge
Coverage in effect at that time,provided, however,
that in the event the Agent does not receive the
certificate with respect to Fixed Charge Coverage for
any Fiscal Month within the time required by Section
5.1(a), the Applicable Margin shall be 1.50% until
the Applicable Margin can be redetermined (as
provided herein) in accordance with a certificate
with respect to Fixed Charge Coverage which is timely
delivered under Section 5.1(a):
<TABLE>
<CAPTION>
Fixed Charge Coverage Applicable Margin
--------------------- -----------------
<S> <C>
less than or equal to 1.50%
1.25
greater than 1.25 and 1.25%
less than or equal to
1.50
greater than 1.50 1.00%
</TABLE>
The Applicable Margin shall be determined for each
calendar month based on Fixed Charge Coverage as most
recently reported to each Lender in accordance
withSection 5.1(a), and the Applicable Margin so
determined shall remain in effect for that calendar
month.
(c) amend and restate the first sentence of the
definition of "Borrowing Base" in its entirety to read as
follows:
"Borrowing Base" shall mean, at any time, the
lesser of (i) the Commitment or (ii) up to 50% (or,
during the period from October 15 through December 15
during each calendar year, up to 55%) of Eligible
Inventory (valued on a first-in, first-out basis, at
the lower of cost or market), less such reserves as
the Required Lenders may deem necessary from time to
time.
-3-
<PAGE> 4
(d) amend clause (i) of the definition of
"Commitment Termination Date" to delete the reference to the
date "October 31, 1995" therein and insert in lieu thereof the
date "October 8, 1996".
(e) add the following definitions of
"Consolidated Interest Expense" and "Fixed Charge Coverage":
"Consolidated Interest Expense" shall mean
for any period total interest expense of the Borrower
and its Subsidiaries, whether paid or accrued, for
the period, including without limitation (to the
extent included in interest expense) (i) the interest
component of payments under Capital Leases, (ii) all
commissions, discounts and other fees and charges
owed with respect to letters of credit and bankers
acceptance financing, (iii) the fees payable under
this Agreement and the Accounts Receivable Facility
(other than capitalized fees the amortization of
which is included in clause (iv) hereof), (iv)
amortization of financing fees and expenses which
have been capitalized, (v) amortization of discount
premium (if any), (vi) the interest component of any
deferred payment obligation, (vii) net costs (less
net benefits) under interest rate protection
agreements and (viii) all other cash or non-cash
interest expenses, in each case as determined in
conformity with GAAP.
"Fixed Charge Coverage" shall mean for the
period of twelve consecutive Fiscal Months ending on
the date of determination the ratio of (a) the sum of
(i) Consolidated EBITDA for that periodless (ii)
consolidated Capital Expenditures of the Borrower and
its Subsidiaries for that period over (b) the sum of
(i) Consolidated Interest Expense for the Borrower
and its Subsidiaries for that period,plus (ii)
principal payments paid or payable during that period
on all Indebtedness (determined on a consolidated
basis) of the Borrower and its Subsidiaries,
including without limitation Capital Lease
Obligations and mortgage payments, but excluding
payments with respect to current liabilities arising
in the ordinary course of business for the deferred
purchase price of property or servicesplus (iii) cash
payments actually paid during that period with
respect to
-4-
<PAGE> 5
consolidated tax liabilities of the Borrower and its
Subsidiaries.
(f) amend the definition of "Letter of Credit
Obligations" by inserting the following parenthetical phrase
immediately following the words "outstanding obligations"
therein:
(including without limitation fundings under Letters
of Credit for which the Borrower has not reimbursed
GE Capital, either through a Borrowing, to the extent
permitted bySection 2.1(a), or through payment in
accordance with Section 2.7).
(g) amend the definition of "Obligations" by
deleting the parenthetical phrase "(whether or not such
amounts or duties are contingent, liquidated or determinable)"
therein and inserting in lieu thereof the following:
(whether or not such amounts or duties are
contingent, liquidated, determinable, secured or
unsecured and whether or not such amounts or duties
are discharged, stayed or otherwise affected by any
proceeding referred to in Section 9.1(h) or 9.1(i))
(h) amend and restate the definition of
"Receivables Borrower" in its entirety to read as follows:
"Receivables Borrower" shall mean Broadway
Receivables, Inc., a Delaware corporation formerly
known as CHH Receivables, Inc.
(i) add the following definitions of "Seventh
Amendment Effective Date" and "Subordinated Credit Card Note
Documents":
"Seventh Amendment Effective Date" shall mean
September 13, 1994, which is the Effective Date, as
defined in the Seventh Amendment to this Agreement
dated as of September 13, 1994.
"Subordinated Credit Card Note Documents"
shall mean the Indenture dated as of September 1,
1994 between the Receivables Borrower and Bankers
Trust Company, as Trustee, and the Notes (as defined
therein) issued pursuant thereto.
-5-
<PAGE> 6
(j) add the following paragraph at the end of
Article 1:
Each reference in this Agreement and any
other Loan Document (a) to "the Borrower" or "Carter
Hawley Hale Stores, Inc." shall mean, and be deemed a
reference to, Broadway Stores, Inc., a Delaware
corporation formerly known as Carter Hawley Hale
Stores, Inc. and (b) to "the Receivables Borrower" or
"CHH Receivables, Inc." shall mean, and be deemed a
reference to, Broadway Receivables, Inc., a Delaware
corporation formerly known as CHH Receivables, Inc.
1.3 Amendments to Article 2. Article 2 of the
Credit Agreement is hereby amended to:
(a) amend and restate the first sentence of
Section 2.2 to read in its entirety as follows:
Each Lender agrees, subject to the terms and
conditions hereinafter set forth, to incur (in the
case of GE Capital) or participate in (in the case of
each other Lender) Letter of Credit Obligations in
respect of the issuance of Letters of Credit
supporting Indebtedness of the Borrower incurred in
the ordinary course of the Borrower's business for
insurance premiums, employee benefit plans, inventory
purchase obligations, utility and other operating
expenses and other general corporate purposes as the
Borrower shall request by written notice to the Agent
which is received by the Agent not less than two
Business Days prior to the proposed issuance of such
Letter of Credit; provided, however, that the
aggregate amount of all Letter of Credit Obligations
at any one time outstanding (whether or not then due
and payable) shall not exceed the lesser of (i)
$75,000,000 and (ii) the Borrowing Baseless the
aggregate amount of all Advances then outstanding;
provided, further, however, that no such Letter of
Credit shall have an expiry date which is later than
the earlier of (i) 365 days following the date of
issuance thereof and (ii) 54 months after the Funding
Date.
(b) amend and restate Section 2.4 in its entirety
to read as follows:
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<PAGE> 7
2.4 Use of Proceeds. The Borrower shall
use the proceeds of the Advances for working capital
needs and other general corporate purposes.
(c) amend and restate the first sentence of
Section 2.6(a) in its entirety to read as follows:
Subject to the following sentence, the Borrower shall
be obligated to pay interest on the unpaid principal
amount of the Advances owing to each Lender from the
Funding Date until the Loan is paid in full at a rate
per annum equal to the sum of (i) either (A) for
interest payable on or before February 10, 1995,
1.50% or (B) for interest payable after February 10,
1995, the Applicable Margin plus (ii) the Index Rate
(expressed as a percentage) in effect from time to
time payable monthly in arrears, due on the tenth day
of each calendar month (each, an Interest Payment
Date") for the immediately preceding calendar month,
commencing on November 10, 1992, and on the date the
Loan shall be repaid in full.
1.4 Amendments to Article 5. Article 5 of the
Credit Agreement is hereby amended to delete the word "and"
immediately preceding clause (B) of Section 5.1(a) and add the
following immediately preceding theproviso (as added by the Third
Amendment and amended by the Fourth Amendment) at the end of Section
5.1(a):
and (C) for each Fiscal Month ending after January 1,
1995, a certificate of the chief financial officer of
the Borrower, in form acceptable to the Agent,
setting forth in reasonable detail the calculation of
Fixed Charge Coverage as of the last day of the
immediately preceding Fiscal Month
1.5 Amendments to Article 6. Article 6 of the
Credit Agreement is hereby amended by adding the following at the end
of Section 6.17 thereof:
The Borrower further agrees to furnish to the Agent
(i) on or before September 30, 1994, written
confirmation that Schedules 4.2, 4.3, 4.10, 4.14,
4.22, 4.23 and 12.8 are accurate and complete as of
the Seventh Amendment Effective Date (together with,
if applicable, any amendments required to make those
Schedules accurate and complete) and (ii) on or
before October 14, 1994, (A) certificates
representing the Pledged Shares referred to in the
Pledge and Security Agreement,
-7-
<PAGE> 8
reissued to reflect the new corporate name of the
Borrower or the Receivables Borrower, as the case
may be, (B) the original executed copy of the Pledged
Instrument referred to in the Pledge and Security
Agreement, reissued to reflect the new corporate name
of the Borrower and the Receivables Borrower and (C)
written acknowledgements from each Blocked Deposit
Bank that the Borrower has changed the corporate name
in which it maintains Blocked Deposit Accounts at
the bank to reflect its new name and that the Blocked
Deposit Agreements with respect to the accounts
remain in full force and effect.
1.6 Amendments to Article 7. Article 7 of the
Credit Agreement is hereby amended to:
(a) amend and restate Section 7.1 in its entirety
to read as set forth in Annex A hereto.
(b) amend and restate clause (h) of Section 7.14
in its entirety to read as follows:
(h) Indebtedness of the Receivables
Borrower incurred pursuant to the Accounts Receivable
Facility and the Subordinated Credit Card Note
Documents;
(c) amend Section 7.16 by adding at the end
thereof the following sentence:
The Borrower shall not, and shall not permit the
Receivables Borrower to, consent to any amendment,
supplement or other modification of any of the terms
or provisions contained in, or applicable to, the
Subordinated Credit Card Note Documents.
1.7 Amendments to Article 9. Article 9 of the
Credit Agreement is hereby amended to add the following at the end of
Section 9.1:
(p) Any "Event of Default" under (and as
defined in) either the Receivables-Backed Credit
Agreement referred to in clauses (b) and (ii) of the
definition of "Accounts Receivable Facility" or the
Subordinated Credit Card Note Documents (in each
case, as in effect on the Seventh Amendment Effective
Date and without giving effect to any amendment,
waiver or modification thereof) shall have occurred.
-8-
<PAGE> 9
(q) Any Early Amortization Event under
(and as defined in) the Amended and Restated
Assignment and Security Agreement (as in effect on
the Seventh Amendment Effective Date and without
giving effect to any amendment, waiver or
modification thereof) referred to in clause (iv) of
the definition of "Accounts Receivable Facility"
shall have occurred.
2. Amendments to the Note. The third paragraph of the
Note is hereby amended and restated in its entirety to read as follows:
The principal amount of the Indebtedness from
time to time evidenced hereby shall be payable in the
manner specified in the Credit Agreement and, if not
sooner paid in full, on October 8, 1996.
3. Effective Date. This Amendment shall become
effective upon the date (the "Effective Date") on or before September 15, 1994
on which all of the following conditions have been simultaneously satisfied:
(a) The Agent has received each of the following:
(i) counterparts hereof signed by the
Borrower, the Lenders and the Agent;
(ii) payment in the amount of $843,750 in
same day funds for the account of the Lenders in accordance
with their respective Percentages;
(iii) certified copies of the amendments to
the Accounts Receivable Facility referred to in Section 1.2(a)
of this Amendment (other than Amendment No. 1 to
Receivables-Backed Credit Agreement), each in form and
substance satisfactory to the Required Lenders, which
certificate shall confirm that all conditions to the
effectiveness of the amendments have been satisfied or waived
and that the amendments are in full force and effect;
(iv) a certified copy of the Indenture
referred to in the definition of "Subordinated Credit Card
Note Documents", which Indenture shall be satisfactory in form
and substance to the Required Lenders and which certificate
shall confirm that all conditions to the effectiveness of the
Indenture shall have been satisfied, that the Notes (as
defined in the Indenture) shall have been issued and that the
Receivables Borrower shall have received at least
-9-
<PAGE> 10
$60,000,000 in net cash proceeds from the issuance thereof;
(iv) acknowledgement copies (or other
suitable evidence of filing) of proper financing statements
(Form UCC- 1) duly filed under the UCC of each jurisdiction as
may be necessary or desirable to maintain the perfection of
the Liens and security interests created by the Pledge and
Security Agreement and the Trademark Security Agreement;
(v) a certificate, dated the Effective Date,
of the Secretary or any Assistant Secretary of the Borrower as
to resolutions of the Board of Directors of the Borrower
authorizing this Amendment and the transactions contemplated
thereby, which certificate shall certify that the resolutions
have not been amended and remain in full force and effect,
together with a certificate as to the incumbency and
signatures of each officer of the Borrower executing this
Amendment or any of the Loan Documents delivered in connection
therewith and a certificate as to the matters set forth in
Sections 3(d) and 3(e) of this Amendment; and
(vi) opinions, dated the Effective Date and
addressed to the Agent and each Lender, of Marc Bercoon,
general counsel of the Borrower, and of Skadden, Arps, Slate,
Meagher & Flom, counsel to the Borrower, each in form and
substance satisfactory to the Agent.
(b) The Borrower, the Receivables Borrower and
each other party to the Accounts Receivable Facility shall have
executed and delivered the amendments to the Accounts Receivable
Facility referred to in Section 1.2(a) of this Amendment, each of
which shall be in form and substance satisfactory to the Required
Lenders (and all conditions to the effectiveness of the amendments
shall have been satisfied).
(c) The Agent (as defined in the
Receivables-Backed Credit Agreement referred to in the definition of
"Accounts Receivable Facility") shall have received at least
$60,000,000 in net cash proceeds (after deducting all fees and
expenses, including, without limitation, underwriting and brokerage
commissions, fees and discounts) pursuant to the issuance of the notes
under the Subordinated Credit Card Note Documents and the
contemporaneous sale of Accounts to the Receivables Borrower under the
Accounts Receivable Facility.
-10-
<PAGE> 11
(d) After giving effect to this Amendment, no
Default or Event of Default has occurred or is continuing.
(e) The representations and warranties contained
in Article 4 of the Credit Agreement (other than representations and
warranties which expressly speak as of a different date) are true,
correct and complete in all material respects, except that such
representations and warranties need not be true, correct and complete
to the extent that changes in the facts and conditions on which such
representations and warranties are based are required or permitted
under the Credit Agreement.
4. Representations and Warranties. The Borrower hereby
represents and warrants that, as of the date hereof and as of the Effective
Date, after giving effect to this Amendment:
(a) The execution, delivery and performance by
the Borrower of this Amendment have been duly authorized by all
necessary corporate action;
(b) No Default or Event of Default has occurred
or is continuing; and
(c) The representations and warranties of the
Borrower contained in Article 4 of the Credit Agreement and any other
Loan Document (other than representations and warranties which
expressly speak as of a different date) are true, correct and complete
in all material respects, except that such representations and
warranties need not be true, correct and complete to the extent that
changes in the facts and conditions on which such representations and
warranties are based are required or permitted under the Credit
Agreement.
5. Limitation on Amendment. This Amendment shall be
limited solely to the matters expressly set forth herein and shall not (i)
constitute a waiver or amendment of any other term or condition of the Credit
Agreement, or of any instruments or agreements referred to therein, (ii)
prejudice any right or rights which the Agent or any of the Lenders may now
have or may have in the future under or in connection with the Credit Agreement
or any instruments or agreements referred to therein, or (iii) require the
Lenders to agree to a similar waiver or amendment or grant a similar waiver or
amendment for a similar transaction or on a future occasion. Except to the
extent specifically waived herein, the provisions of the Credit Agreement shall
not be amended, modified, impaired or otherwise affected hereby, and the Credit
Agreement and all of the Obligations are hereby confirmed in full force and
effect.
-11-
<PAGE> 12
6. Miscellaneous. This Amendment is a Loan Document
and, together with the Credit Agreement and the other Loan Documents, comprises
the complete and integrated agreement of the parties on the subject matter
hereof. The headings herein are for convenience of reference only and shall
not alter or otherwise affect the meaning hereof.
7. Governing Law. This Amendment shall be governed by,
and shall be construed and enforced in accordance with, the laws of the State
of New York.
8. Counterparts. This Amendment may be executed in any
number of counterparts which, when taken together, shall be deemed to
constitute one and the same instrument.
WITNESS the due execution hereof as of the date first above
written.
BROADWAY STORES, INC., as the Borrower
By: __________________________________
Title:
GENERAL ELECTRIC CAPITAL CORPORATION,
as Agent and as the Lender
By: __________________________________
Title:
-12-
<PAGE> 13
ANNEX A TO SEVENTH AMENDMENT
7.1 Financial Covenants.
(a) Consolidated EBITDA. The Borrower will not permit
aggregated Consolidated EBITDA for the Fiscal Months which are substantially
coextensive with any period set forth below to be less than the amount set
forth below opposite such period (except that any amount set forth below in
parentheses shall be the maximum amount of permitted Consolidated EBITDA
deficit for the period of Fiscal Months set forth opposite such amount):
<TABLE>
<CAPTION>
Period Amount
------ ------
<S> <C>
February 1994 ($20,100,000)
February 1994 - March 1994 $16,300,000)
February 1994 - April 1994 ($13,300,000)
February 1994 - May 1994 ($6,300,000)
February 1994 - June 1994 $3,200,000
February 1994 - July 1994 $3,500,000
February 1994 - August 1994 $5,300,000
February 1994 - September 1994 $9,600,000
February 1994 - October 1994 $12,800,000
February 1994 - November 1994 $22,000,000
February 1994 - December 1994 $78,100,000
February 1994 - January 1995 $73,200,000
March 1994 - February 1995 $78,800,000
April 1994 - March 1995 $82,000,000
May 1994 - April 1995 $85,600,000
June 1994 - May 1995 $88,800,000
July 1994 - June 1995 $92,600,000
August 1994 - July 1995 $96,600,000
September 1994 - August 1995 $100,500,000
October 1994 - September 1995 $104,000,000
November 1994 - October 1995 $107,300,000
December 1994 - November 1995 $111,400,000
January 1995 - December 1995 $117,300,000
February 1995 - January 1996 $120,600,000
March 1995 - February 1996 $120,600,000
April 1995 - March 1996 $120,600,000
May 1995 - April 1996 $120,600,000
June 1995 - May 1996 $120,600,000
July 1995 - June 1996 $120,600,000
August 1995 - July 1996 $120,600,000
September 1995 - August 1996 $120,600,000
October 1995 - September 1996 $120,600,000
</TABLE>
(b) Consolidated Net Cash Flow. The Borrower will not
permit Consolidated Net Cash Flow for the Fiscal Months which are substantially
coextensive with any period set forth below to be less that the amount set
forth below opposite such period (except that any amount set forth below in
parentheses shall be the maximum amount of permitted Consolidated Net Cash Flow
deficit for the period of Fiscal Months set forth opposite such amount):
<PAGE> 14
<TABLE>
<CAPTION>
Period Amount
------ ------
<S> <C>
February 1994 ($27,800,000)
February 1994 - March 1994 ($32,100,000)
February 1994 - April 1994 ($36,100,000)
February 1994 - May 1994 ($35,700,000)
February 1994 - June 1994 ($33,600,000)
February 1994 - July 1994 ($40,200,000)
February 1994 - August 1994 ($44,800,000)
February 1994 - September 1994 ($47,900,000)
February 1994 - October 1994 ($51,100,000)
February 1994 - November 1994 ($48,200,000)
February 1994 - December 1994 $800,000
February 1994 - January 1995 ($10,400,000)
February 1994 - February 1995 ($29,600,000)
February 1994 - March 1995 ($28,300,000)
February 1994 - April 1995 ($26,500,000)
February 1994 - May 1995 ($21,000,000)
February 1994 - June 1995 ($13,000,000)
February 1994 - July 1995 ($13,200,000)
February 1994 - August 1995 ($12,000,000)
February 1994 - September 1995 ($9,700,000)
February 1994 - October 1995 ($10,400,000)
February 1994 - November 1995 ($5,200,000)
February 1994 - December 1995 $47,700,000
February 1994 - January 1996 $38,300,000
February 1994 - February 1996 $28,300,000
February 1994 - March 1996 $35,100,000
February 1994 - April 1996 $52,400,000
February 1994 - May 1996 $68,400,000
February 1994 - June 1996 $106,900,000
February 1994 - July 1996 $132,200,000
February 1994 - August 1996 $143,900,000
February 1994 - September 1996 $144,200,000
</TABLE>
(c) Consolidated Net Inventory Ratio. The Borrower will not
permit the Consolidated Net Inventory Ratio on the last day of any two
consecutive Fiscal Months set forth below to exceed the percentages set forth
below opposite such Fiscal Months:
<TABLE>
<CAPTION>
Fiscal Month Percentage
------------ ----------
<S> <C>
June 1993 90.0%
July 1993 87.0%
August 1993 81.7%
September 1993 82.0%
October 1993 75.2%
November 1993 73.9%
December 1993 81.4%
January 1994 86.6%
February 1994 82.8%
March 1994 87.1%
</TABLE>
A-2
<PAGE> 15
<TABLE>
<S> <C>
April 1994 87.2%
May 1994 82.3%
June 1994 89.8%
July 1994 87.1%
August 1994 81.9%
September 1994 81.9%
October 1994 77.1%
November 1994 73.3%
December 1994 81.7%
January 1995 85.8%
February 1995 83.1%
March 1995 87.1%
April 1995 87.0%
May 1995 82.7%
June 1995 89.8%
July 1995 86.5%
August 1995 78.9%
September 1995 80.1%
October 1995 76.9%
November 1995 73.3%
December 1995 81.7%
January 1996 85.8%
February 1996 83.1%
March 1996 87.1%
April 1996 87.0%
May 1996 82.7%
June 1996 89.8%
July 1995 86.5%
August 1996 78.9%
September 1996 80.1%
</TABLE>
(d) Consolidated Maximum/Minimum Inventory Balance. The
Borrower will not permit the aggregate amount of all inventory of the Borrower
and its Subsidiaries (determined on the lower of a first-in, first-out or
market basis) on the last day of any two consecutive Fiscal Months set forth
below to exceed the maximum amount, or to be less than the minimum amount, set
forth below opposite such Fiscal Months:
<TABLE>
<CAPTION>
Fiscal Month Maximum Amount Minimum Amount
------------ -------------- --------------
<S> <C> <C>
February 1994 $436,900,000 $386,900,000
March 1994 $417,400,000 $367,400,000
April 1994 $415,000,000 $365,000,000
May 1994 $433,300,000 $383,300,000
June 1994 $400,800,000 $350,800,000
July 1994 $404,000,000 $354,000,000
August 1994 $483,100,000 $433,100,000
September 1994 $500,000,000 $450,000,000
October 1994 $554,100,000 $504,100,000
November 1994 $609,600,000 $559,600,000
December 1994 $468,500,000 $418,500,000
January 1995 $464,500,000 $414,500,000
</TABLE>
A-3
<PAGE> 16
<TABLE>
<S> <C> <C>
February 1995 $502,300,000 $452,300,000
March 1995 $471,800,000 $421,800,000
April 1995 $467,500,000 $417,500,000
May 1995 $484,300,000 $434,300,000
June 1995 $440,600,000 $390,600,000
July 1995 $440,600,000 $390,600,000
August 1995 $490,600,000 $440,600,000
September 1995 $489,900,000 $439,900,000
October 1995 $529,000,000 $479,000,000
November 1995 $591,800,000 $541,800,000
December 1995 $439,700,000 $389,700,000
January 1996 $440,700,000 $390,700,000
February 1996 $502,300,000 $452,300,000
March 1996 $471,800,000 $421,800,000
April 1996 $467,500,000 $417,500,000
May 1996 $484,300,000 $434,300,000
June 1996 $440,600,000 $390,600,000
July 1996 $440,600,000 $390,600,000
August 1996 $490,600,000 $440,600,000
September 1996 $489,900,000 $439,900,000
</TABLE>
(e) Consolidated Capital Expenditures. The Borrower will not
permit the aggregate amount of all Capital Expenditures of the Borrower and its
Subsidiaries to exceed, during any period set forth below, the amount set forth
below opposite such period:
<TABLE>
<CAPTION>
Period (Fiscal Months)
----------------------
From Through (and including) Amount
---- ----------------------- ------
<S> <C> <C>
February 1994 January 1995 $110,000,000
February 1995 January 1996 $106,000,000
February 1996 September 1996 $ 62,000,000;
</TABLE>
provided, however, that the aggregate amount of Capital Expenditures otherwise
permitted pursuant to this Section 7.1(e) during the period from the February
1996 through and including the September 1996 Fiscal Months shall be increased
(i) by an amount equal to the lesser of $20,000,000 or the unused portion of
the allowance for Capital Expenditures for the period from February 1994
through January 1996 and (ii) by an amount equal to the lesser of $16,000,000
or 75% of the excess, if any, of Consolidated EBITDA as of the end of any
Fiscal Month after February 1994 through January 1996 over the Consolidated
EBITDA required to be achieved by the Borrower pursuant to Section 7.1(a)
hereof as of the end of such Fiscal Month. Notwithstanding anything to the
contrary set forth in this Section 7.1(e), in no event shall the aggregate
amount of Capital Expenditures of the Borrower and its Subsidiaries exceed
$25,000,000 during any Fiscal Month.
A-4
<PAGE> 1
EXHIBIT 20.1
FOR IMMEDIATE RELEASE
09/14/94
CONTACT:
BILL IHLE
BROADWAY STORES, INC.
(213) 227-3884
BROADWAY STORES COMPLETES NEW WORKING CAPITAL FINANCING
LOS ANGELES, CA -- (09/14/94) -- Broadway Stores, Inc. today announced it has
completed a two-part program to enhance its working capital financing. The
company has completed the sale of $64.0 million of subordinated notes of a
wholly-owned subsidiary, Broadway Receivables, Inc., and has extended, by one
year, the maturity of its two working capital financing facilities with
GE Capital. These facilities total $800.0 million.
The subordinated asset-backed notes were sold in two classes: The first class
was $38.0 million of 7.55% Class A notes, due 1999 (rated BBB by Standard &
Poor's and Fitch Investors Services). The second class was $26.0 million of
11.00% Class B notes, due 1999 (rated BB by the same two agencies). The effect
of the financing is to increase the advance rate on Broadway's receivables to
approximately 91.0%.
In conjunction with the issuance of the notes, the company has extended the
maturity dates of both working capital facilities from October 1995 to October
1996. The facilities consist of a $575.0 million accounts receivable line and
a $225.0 million revolving credit line.
"The new financing provides us with additional working capital resources as we
focus on the rebuilding of our business." said David L. Dworkin, president
and chief executive officer.
The sale of the notes was not registered under the Securities Act of 1993, as
amended, and the notes may not be offered or sold in the United States absent
registration or an applicable exemption from the registration requirements.
Broadway Stores, Inc. (NYSE:BWY) is one of the leading operators of full-line
department stores in the Western United States with annual sales in excess of
$2.0 billion. It operates 83 department stores under the names The Broadway,
Emporium and Weinstocks.
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