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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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): February 17, 1999
SAKS INCORPORATED
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(Exact Name of Registrant as Specified in Charter)
Tennessee 1-13113 62-0331040
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(State or Other (Commission (IRS Employer
Jurisdiction of File Number) Identification No.)
Incorporation)
750 Lakeshore Parkway, Birmingham, Alabama 35211
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(Addresses of Principal Executive Offices, including Zip Code)
(205) 940-4000
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(Registrant's Telephone Number, including Area Code)
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Item 5. Other Events.
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On February 17, 1999, Saks Incorporated, a Tennessee corporation (the
"Company"), completed the issuance and sale of $200,000,000 of its 7-3/8% Notes
due 2019 (the "Notes"). The Notes were registered with the Securities and
Exchange Commission (the "Commission") pursuant to a Registration Statement on
Form S-3 (File No. 333-71933) (the "Registration Statement") filed with the
Commission on February 5, 1999 and declared effective by the Commission on
February 11, 1999. The Company is filing this Current Report on Form 8-K in
order to cause certain information contained herein and in the exhibits hereto
to be incorporated into the Registration Statement by reference. By filing this
Current Report on Form 8-K, however, the Company does not believe that any of
the information set forth herein or in the exhibits hereto represent, either
individually or in the aggregate, a "fundamental change" (as such term is used
in Item 512(a)(1)(ii) of Regulation S-K) in the information set forth in the
Registration Statement.
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Item 7. Financial Statements, Pro Forma Financial Information, and Exhibits.
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(c) Exhibits.
The following exhibits are filed herewith:
Exhibit No. * Description
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1.1 Underwriting Agreement, dated as of February 11, 1999, by and
among the Company, certain of the Company's subsidiaries set
forth on Schedule II to the Underwriting Agreement, as
guarantors of the Notes (collectively, the "Subsidiary
Guarantors"), and Salomon Smith Barney Inc., Chase Securities
Inc., Goldman, Sachs & Co., Lehman Brothers Inc., Merrill
Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan
Securities Inc., and NationsBanc Montgomery Securities LLC, as
representatives of the several underwriters set forth in
Schedule I to the Underwriting Agreement.
4.1 Indenture, dated as of February 17, 1999, by and among the
Company, the Subsidiary Guarantors and The First National Bank
of Chicago, as trustee.
4.2 Specimen Note (included in Exhibit 4.1).
4.3 Specimen Note Guarantee (included in Exhibit 4.1).
5.1 Opinion of Charles J. Hansen, Senior Vice President and
Associate General Counsel of the Company, regarding the
legality of the Notes.
23.1 Consent of Charles J. Hansen, Senior Vice President and
Associate General Counsel of the Company (included in Exhibit
5.1).
99.1 Press Release, dated February 17, 1999, announcing the
completion of the offering of the Notes.
99.2 Other Expenses of Issuance and Distribution (as required by
Item 14 of Form S-3).
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* The exhibit numbers set forth herein correspond to the exhibit list contained
in the Registration Statement.
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SIGNATURE
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 hereunto duly authorized.
SAKS INCORPORATED
/s/ Charles J. Hansen
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Charles J. Hansen
Senior Vice President and
Associate General Counsel
Date: February 18, 1999
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INDEX TO EXHIBITS
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Exhibit No. * Description
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1.1 Underwriting Agreement, dated as of February 11, 1999, by and
among the Company, certain of the Company's subsidiaries set
forth on Schedule II to the Underwriting Agreement, as
guarantors of the Notes (collectively, the "Subsidiary
Guarantors"), and Salomon Smith Barney Inc., Chase Securities
Inc., Goldman, Sachs & Co., Lehman Brothers Inc., Merrill
Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan
Securities Inc., and NationsBanc Montgomery Securities LLC, as
representatives of the several underwriters set forth in
Schedule I to the Underwriting Agreement.
4.1 Indenture, dated as of February 17, 1999, by and among the
Company, the Subsidiary Guarantors and The First National Bank
of Chicago, as trustee.
4.2 Specimen Note (included in Exhibit 4.1).
4.3 Specimen Note Guarantee (included in Exhibit 4.1).
5.1 Opinion of Charles J. Hansen, Senior Vice President and
Associate General Counsel of the Company, regarding the
legality of the Notes.
23.1 Consent of Charles J. Hansen, Senior Vice President and
Associate General Counsel of the Company (included in Exhibit
5.1).
99.1 Press Release, dated February 17, 1999, announcing the
completion of the offering of the Notes.
99.2 Other Expenses of Issuance and Distribution (as required by
Item 14 of Form S-3).
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* The exhibit numbers set forth herein correspond to the exhibit list contained
in the Registration Statement.
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EXHIBIT 1.1
Saks Incorporated
$200,000,000
7 3/8 % Notes Due 2019
Underwriting Agreement
New York, New York
February 11, 1999
Salomon Smith Barney Inc.
Chase Securities Inc.
Goldman, Sachs & Co.
Lehman Brothers Inc.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
J. P. Morgan Securities Inc.
Nationsbanc Montgomery Securities LLC
As Representatives of the several Underwriters,
c/o Salomon Smith Barney Inc.
388 Greenwich Street
New York, New York 10013
Ladies and Gentlemen:
Saks Incorporated, a Tennessee corporation (the "Company"), proposes
to sell to the several underwriters named in Schedule I hereto (the
"Underwriters"), for whom you (the "Representatives") are acting as
representatives, the principal amount of its securities listed on Schedule I
hereto (the "Notes"), to be issued under an indenture (the "Indenture") to be
dated as of February 17, 1999 among the Company, the Guarantors (as defined
herein) and The First National Bank of Chicago, as trustee (the "Trustee"). The
Notes will be fully and unconditionally guaranteed on a senior basis pursuant to
the terms of the Indenture (the "Guarantees" and, together with the Notes, the
"Securities") by the persons listed on Schedule II hereto (each, a "Guarantor,"
and collectively, the Guarantors and, collectively with the Company, the
"Issuers"). To the extent there are no additional Underwriters listed on
Schedule I other than you, the term Representatives as used herein shall mean
you, as Underwriters, and the terms Representatives and Underwriters shall mean
either the singular or plural as the context requires. Any reference herein to
the Registration Statement, a Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include the documents incorporated by
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reference therein pursuant to Item 12 of Form S-3 which were filed under the
Exchange Act on or before the Effective Date of the Registration Statement or
the issue date of such Preliminary Prospectus or the Prospectus, as the case may
be; and any reference herein to the terms "amend," "amendment" or "supplement"
with respect to the Registration Statement, any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the filing of any document
under the Exchange Act after the Effective Date of the Registration Statement,
or the issue date of any Preliminary Prospectus or the Prospectus, as the case
may be, deemed to be incorporated therein by reference. Certain terms used
herein are defined in Section 17 hereof.
1. Representations and Warranties. Each of the Issuers, jointly and
severally, represent and warrant to, and agree with, each Underwriter as set
forth below in this Section 1.
(a) The Company meets the requirements for use of Form S-3 under the
Act and has prepared and filed with the Commission a registration statement
(file number 333-71933) on Form S-3 for the registration under the Act of
the offering and sale of the Securities. The Company will next file with
the Commission a final prospectus in accordance with Rules 430A and 424(b)
or a final prospectus in accordance with Rules 415 and 424(b). As filed,
such form of final Prospectus, or such final Prospectus, shall contain all
Rule 430A Information, together with all other such required information,
and, except to the extent the Representatives shall agree in writing to a
modification, shall be in all substantive respects in the form furnished to
you prior to the Execution Time or, to the extent not completed at the
Execution Time, shall contain only such specific additional information and
other changes (beyond that contained in the latest Preliminary Prospectus)
as the Company has advised you, prior to the Execution Time, will be
included or made therein. If the Registration Statement contains the
undertaking specified by Regulation S-K Item 512(a), the Registration
Statement, at the Execution Time, meets the requirements set forth in Rule
415(a)(1)(iii).
(b) On the Effective Date, the Registration Statement did or will, and
when the Prospectus is first filed (if required) in accordance with Rule
424(b) and on the Closing Date (as defined herein), the Prospectus (and any
supplements thereto) will, comply in all material respects with the
applicable requirements of the Act, the Exchange Act and the Trust
Indenture Act and the respective rules thereunder; on the Effective Date
and at the Execution Time, the Registration Statement did not or will not
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make
the statements therein not misleading; on the Effective Date and on the
Closing Date the Indenture did or will comply in all material respects with
the requirements of the Trust Indenture Act and
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the rules thereunder; and, on the Effective Date, the Prospectus, if not
filed pursuant to Rule 424(b), will not, and on the date of any filing
pursuant to Rule 424(b) and on the Closing Date and any settlement date,
the Prospectus (together with any supplement thereto) will not, include any
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
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however, that the Company makes no representations or warranties as to (i)
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that part of the Registration Statement which shall constitute the
Statement of Eligibility and Qualification (Form T-1) under the Trust
Indenture Act of the Trustee or (ii) the information contained in or
omitted from the Registration Statement, or the Prospectus (or any
supplement thereto) in reliance upon and in conformity with information
furnished herein or in writing to the Company by or on behalf of any
Underwriter through the Representatives specifically for inclusion in the
Registration Statement or the Prospectus (or any supplement thereto).
(c) The only subsidiaries of the Company as of the date hereof are those
listed on Schedule III hereto (also referred to herein as the
"Subsidiaries"). Each of the Company and the Subsidiaries has been duly
organized or incorporated, as the case may be, and is validly existing in
good standing under the laws of its jurisdiction of incorporation or
organization, with all requisite power and authority (corporate,
partnership or otherwise) under such laws, and all necessary
authorizations, approvals, orders, licenses, certificates and permits of
and from regulatory or governmental officials, bodies and tribunals, (a) to
own, lease and operate their respective properties and to conduct their
respective businesses as now conducted and as described in the Prospectus
and (b) to enter into, deliver, incur and perform their respective
obligations under this Agreement and the Indenture, except, in the case of
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the foregoing subclause (a) for authorizations, approvals, orders,
licenses, certificates and permits, the failure of which to possess could
not reasonably be expected to have a material adverse effect on the
business, condition (financial or other), results of operations or
prospects of the Company and its Subsidiaries, taken as a whole, whether or
not arising from transactions in the ordinary course of business (a
"Material Adverse Effect"); and are all duly qualified to do business as
foreign corporations in good standing in all other jurisdictions where the
ownership or leasing of their respective properties or the conduct of their
respective businesses requires such qualification, except where the failure
to be so qualified could not reasonably be expected to have a Material
Adverse Effect.
(d) The Notes have been duly authorized by the Company and the Company
has all requisite corporate power and authority to execute, issue and
deliver the Notes and to incur and perform its respective obligations
provided for therein; the Guarantees have been duly authorized by each of
the Guarantors and each of the Guar-
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antors has all requisite power and authority to execute, issue and deliver
the Guarantees and to incur and perform their respective obligations
provided for therein.
(e) The Notes, when executed, authenticated and issued in accordance
with the terms of the Indenture (assuming the due authorization, execution
and delivery of the Indenture by the Trustee) and when delivered against
payment of the purchase price therefor as provided in this Agreement, will
constitute valid and binding obligations of the Company, entitled to the
benefits of the Indenture and enforceable against the Company in accordance
with the terms thereof; and the Guarantees, when executed, authenticated
and issued in accordance with the terms of the Indenture, upon endorsement
on the Notes by the Guarantors (assuming the due authorization, execution
and delivery of the Indenture by the Trustee), and when delivered against
payment therefor in accordance with the terms of this Agreement, will
constitute valid and binding obligations of each of the Guarantors,
enforceable against the Guarantors in accordance with the terms thereof;
subject to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other similar laws and court decisions
relating to or affecting the rights of creditors generally or of general
principles of equity.
(f) This Agreement has been duly authorized, executed and delivered by
each of the Issuers.
(g) The Indenture has been duly authorized by the Issuers and, when
duly executed and delivered by the Issuers (assuming the due execution and
delivery thereof by the Trustee), will constitute a valid and binding
obligation of each of the Issuers, enforceable against each of the Issuers
in accordance with the terms thereof, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, moratorium, reorganization or other
similar laws and court decisions relating to or affecting the rights of
creditors generally or of general principles of equity (whether considered
in a proceeding in equity or at law).
(h) No consent, waiver, authorization, approval, license, qualification
or order of, or filing or registration with, any court or governmental or
regulatory agency or body, domestic or foreign, is required for the
issuance and sale of the Notes or the issuance of the Guarantees by the
Guarantors, the performance by the Issuers of their obligations under this
Agreement and the Indenture, or for the consummation of any of the
transactions contemplated hereby or thereby, including, without limitation,
the issuance and sale of the Securities hereunder, except, such as may be
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required (A) in connection with the qualification of the Indenture under
the Trust Indenture Act or (B) by state securities or "blue sky" laws in
connection with the offer and sale of the Securities.
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(i) The issuance, sale and delivery of the Securities by the Issuers
and the execution, delivery and performance by the Issuers of this
Agreement and the Indenture, the consummation by the Issuers of the
transactions contemplated hereby and thereby and the compliance by the
Issuers with the terms of the foregoing agreements and instruments do not,
and, at the Closing Date will not, conflict with or constitute or result in
a breach or violation by the Company or any of the Subsidiaries of (A) any
of the terms or provisions of, or constitute a default (or an event which,
with notice or lapse of time or both, would constitute a default) by any of
the Company or the Subsidiaries or give rise to any right to accelerate the
maturity or require the prepayment of any indebtedness under, or result in
the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or the Subsidiaries under any contract,
indenture, mortgage, deed of trust, loan agreement, note, lease, license,
franchise agreement, authorization, permit, certificate or other agreement
or document to which any of the Issuers or the Subsidiaries is a party or
by which any of them may be bound, or to which any of them or any of their
respective assets or businesses is subject which is material to the Company
and its Subsidiaries, taken as a whole (collectively, "Contracts"), (B) the
articles or by-laws, or other similar organizational document, as the case
may be, of each of the Company and the Subsidiaries, or (C) any law,
statute, rule or regulation, or any judgment, decree or order, in any such
case, of any domestic or foreign court or governmental or regulatory agency
or other body having jurisdiction over the Company or any of the
Subsidiaries or any of their respective properties or assets.
(j) The Securities and the Indenture will each conform in all material
respects to the descriptions thereof in the Prospectus.
(k) The audited consolidated financial statements incorporated by
reference in the Prospectus, including the notes thereto, presents fairly,
in all material respects, the financial position of the Company and its
consolidated subsidiaries at the dates indicated and the statements of
operations, stockholders' equity and cash flows of the Company and its
consolidated subsidiaries for the periods have been prepared in conformity
with United States generally accepted accounting principles ("GAAP")
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applied on a consistent basis throughout the periods involved. The summary
financial information included in the Prospectus presents fairly, in all
material respects, the information shown therein and has been prepared on a
basis consistent with that of the financial statements incorporated by
reference in the Prospectus. PricewaterhouseCoopers LLP, which has audited
certain of such financial statements as set forth in its reports included
in the Prospectus, is an independent public accounting firm with respect to
the Company and its Subsidiaries within the meaning of Regulation S-X under
the Act. The summary financial data set forth under the caption "Summary
Financial and
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Operating Data -- Other Financial Data" in the Prospectus fairly present,
on the basis set forth in the Prospectus, the information included therein.
(l) Since the respective dates as of which information is given in the
Prospectus, except as otherwise specifically stated therein, there has been
no (A) material adverse change in the business, condition (financial or
otherwise), results of operations, business affairs or business prospects
of the Company and the Subsidiaries taken as a whole, whether or not
arising in the ordinary course of business, (B) transaction entered into by
the Company or any of the Subsidiaries, other than in the ordinary course
of business, that is material to the Company and the Subsidiaries, taken as
a whole or (C) dividend or distribution of any kind declared, paid or made
by the Company on its capital stock.
(m) As of October 31, 1998, the Company had the authorized, issued and
outstanding capitalization set forth in the Prospectus under the subheading
"Actual" under the caption "Capitalization"; all of the outstanding capital
stock of the Company has been duly authorized and validly issued, is fully
paid and nonassessable and was not issued in violation of any preemptive or
similar rights (whether provided contractually or pursuant to the articles
or by-laws of the Company). None of the Issuers owns, directly or
indirectly, any material amount of shares, or any other material amount of
equity or long-term debt securities or have any material equity interest in
any firm, partnership, joint venture or other entity other than the
Subsidiaries. No holder of any securities of the Company is entitled to
have such securities registered under any registration statement, other
than as disclosed in the Company's filings with the Commission. All of the
outstanding capital stock of each of the Subsidiaries has been duly
authorized and, to the knowledge of the Issuers, validly issued, is fully
paid and nonassessable and was not issued in violation of any preemptive or
similar rights (whether provided contractually or pursuant to the
organizational documents of the respective Subsidiaries).
(n) Neither of the Company nor any of the Subsidiaries is (A) in
violation of its respective articles, by-laws or other similar
organizational documents, (B) in default (or, with notice or lapse of time
or both, would be in default) in the performance or observance of any
obligation, agreement, covenant or condition contained in any Contract, or
(C) in violation of any law, statute, judgment, decree, order, rule or
regulation of any domestic or foreign court with jurisdiction over the
Company or the Subsidiaries or any of their respective assets or
properties, or other governmental or regulatory authority, agency or other
body, other than, in the case of clause (B) or (C), such defaults or
violations which, individually or in the aggregate, could not reasonably be
expected to have or result in a Material Adverse Effect; and any real
property and buildings held under lease by the Company or the Subsidiaries
which are material (in-
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dividually or in the aggregate) to the Company and the Subsidiaries, on a
consolidated basis, are held by the Company or such Subsidiary, as the case
may be, under valid, subsisting and enforceable leases, except where the
invalidity or unenforceability of any such lease would not, individually or
in the aggregate, be reasonably expected to have or result in a Material
Adverse Effect.
(o) Each of the Company and the Subsidiaries own or possess, or can
acquire on reasonable terms, adequate licenses, trademarks, service marks,
trade names, copyrights and know-how (including trade secrets and other
proprietary or confidential information, systems or procedures)
(collectively, "intellectual property") necessary to conduct the business
now or proposed to be operated by each of them as described in the
Prospectus, except where the failure to own, possess or have the ability to
acquire any such intellectual property could not, individually or in the
aggregate, be reasonably expected to have a Material Adverse Effect; and
none of the Issuers has received any notice of infringement of or conflict
with (and none of them knows of any such infringement of or conflict with)
asserted rights of others with respect to any of such intellectual
property.
(p) Each of the Company and the Subsidiaries have obtained all material
consents, approvals, orders, certificates, licenses, permits, franchises
and other authorizations of and from, and has made all material
declarations and filings with, all governmental and regulatory authorities,
all self-regulatory organizations and all courts and other tribunals
necessary to own, lease, license and use their respective properties and
assets and to conduct their respective businesses in the manner described
in the Prospectus, except where the failure to so obtain or so declare or
file would not be reasonably likely to have or result in a Material Adverse
Effect.
(q) There is no legal action, suit, proceeding, inquiry or
investigation before or by any court or governmental body or agency,
domestic or foreign, now pending or, to the best knowledge of the Issuers,
threatened against the Company or any of the Subsidiaries or affecting the
Company or the Subsidiaries or any of their respective properties which
would be required to be disclosed in a registration statement filed under
the Act and which would, individually or in the aggregate, have a Material
Adverse Effect. Except as set forth in the Prospectus, none of the Company
or any of the Subsidiaries has received any notice or claim of any default
(or event, condition or omission which with notice or lapse of time or both
would result in a default) under any of its respective Contracts or has
knowledge of any breach of any of such Contracts by the other party or
parties thereto in each case which would, individually or in the aggregate,
have a Material Adverse Effect.
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(r) Each of the Company and the Subsidiaries has filed all necessary
federal, state and foreign income and franchise tax returns, and has paid
all taxes shown as due thereon; and there is no tax deficiency that has
been asserted against any of the Company or the Subsidiaries, in each case
other than as would not individually or in the aggregate have a Material
Adverse Effect.
(s) Each of the Company and the Subsidiaries has (i) good and
marketable title to all real property described in the Prospectus as being
owned by it, (ii) good title to all personal property described in the
Prospectus as being owned by it and (iii) good title to the leasehold
estate in the real and personal property described in the Prospectus as
being leased by it, in each case, free and clear of all liens, charges,
encumbrances or restrictions, except as provided in the related lease and
to the extent the failure to have such title or the existence of such
liens, charges, encumbrances or restrictions would not be reasonably
expected to result in a Material Adverse Effect.
(t) Neither the Company nor any of the Subsidiaries is an "investment
company" or a company "controlled by" an "investment company" as such terms
are defined in the Investment Company Act of 1940, as amended, and the
rules and regulations thereunder.
(u) Neither the Company nor any of the Subsidiaries nor any of their
respective directors, officers or controlling persons has taken, directly
or indirectly, any action designed to or which has constituted or which
might reasonably be expected to cause or result, under the Exchange Act or
otherwise in stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the Securities.
(v) No strike, labor problem, dispute, slowdown, work stoppage or
disturbance with the employees of the Company or any of the Subsidiaries
exists or, to the knowledge of the Issuers, is threatened which,
individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect.
(w) The Company has insurance in such amounts and covering such risks
and liabilities as are in accordance, in all material respects, with normal
industry practice.
(x) The statistical and market-related data included in the Prospectus
are based on or derived from sources which the Company believes to be
reliable and accurate in all material respects or represent the Company's
good faith estimates that are made on the basis of data derived from such
sources.
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(y) Except as described in the Prospectus or as would not, individually
or in the aggregate, reasonably be expected to have a Material Adverse
Effect (A) each of the Company and the Subsidiaries is in compliance with
and not subject to any known liability under applicable Environmental Laws
(as defined below), (B) each of the Company and the Subsidiaries has made
all filings and provided all notices required under any applicable
Environmental Law, and has, and is in compliance with, all permits required
under any applicable Environmental Laws and each of them is in full force
and effect, (C) (x) there is no pending civil, criminal or administrative
action, or pending hearing or suit, (y) neither the Company nor any other
Issuer has received any demand, claim, or notice of violation and (z) to
the knowledge of the Issuers, there is no investigation, proceeding, notice
or demand letter or request for information threatened against the Company
or any of the Subsidiaries in the case of (x), (y) and (z), under any
Environmental Law, (D) no lien, charge, encumbrance or restriction has been
recorded under any Environmental Law with respect to any assets, facility
or property owned, operated, leased or controlled by the Company or any
Subsidiary, (E) neither the Company nor any Subsidiary has received notice
that it has been identified as a potentially responsible party under the
Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended ("CERCLA"), or any comparable state law, (F) no property
or facility of the Company or any Subsidiary is (i) listed or, to the
knowledge of the Issuers proposed for listing on the National Priorities
List under CERCLA or is (ii) listed in the Comprehensive Environmental
Response, Compensation, Liability Information System List promulgated
pursuant to CERCLA, or on any comparable list maintained by any state or
local governmental authority.
For purposes of this Agreement, "Environmental Laws" means all
applicable federal, provincial, state and local laws or regulations, codes,
orders, decrees, judgments or injunctions issued, promulgated, approved or
entered thereunder, relating to pollution or protection of public or
employee health and safety or the environment, including, without
limitation, laws relating to (i) emissions, discharges, releases or
threatened releases of Hazardous Materials (as defined below) into the
environment (including, without limitation, ambient air, surface water,
ground water, land surface or subsurface strata), (ii) the manufacture,
processing, distribution, use, generation, treatment, storage, disposal,
transport or handling of Hazardous Materials, and (iii) underground and
above ground storage tanks and related piping, and emissions, discharges,
releases or threatened releases therefrom. The term "Hazardous Material"
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means (a) any "hazardous substance" as defined in the Comprehensive
Environmental Response, the Resource Conservation and Recovery Act, as
amended, (b) any "hazardous waste" as defined by the Resource Conservation
and Recovery Act, as amended, (c) any petroleum or petroleum product, (d)
any polychlorinated biphenyl
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and (e) any pollutant or contaminant or hazardous, dangerous or toxic
chemical, material, waste or substance.
(z) Except as described in the Prospectus, neither the Company nor any
of the Subsidiaries has incurred any liability for any prohibited
transaction or funding deficiency or any complete or partial withdrawal
liability with respect to any pension, profit sharing or other plan which
is subject to the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), to which the Company or the Subsidiaries makes or ever
has made a contribution and in which any employee of the Company or any
such Subsidiary is or has ever been a participant, which in the aggregate
would reasonably be expected to have a Material Adverse Effect. With
respect to such plans, each of the Company and the Subsidiaries is in
compliance in all respects with all applicable provisions of ERISA, except
where the failure to so comply would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
(aa) The Company is in compliance with the Commission's Release No. 33-
7558, effective August 4, 1998, related to Year 2000 compliance.
Any certificate signed by any officer of the Issuers and delivered to
the Representatives or counsel for the Underwriters in connection with the
offering of the Securities shall be deemed a representation and warranty by the
Issuers, as to matters covered thereby, to each Underwriter.
2. Purchase and Sale. Subject to the terms and conditions and in
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reliance upon the representations and warranties herein set forth, the Company
agrees to sell to each Underwriter, and each Underwriter agrees, severally and
not jointly, to purchase from the Company, the principal amount of the
Securities set forth opposite such Underwriter's name in Schedule I hereto at a
purchase price of 98.712% of the principal amount thereof.
3. Delivery and Payment. Delivery of and payment for the Securities
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shall be made at 10:00 AM, New York City time, on February 17, 1999, or at such
time on such later date not more than three Business Days after the foregoing
date as the Representatives shall designate, which date and time may be
postponed by agreement between the Representatives and the Company or as
provided in Section 9 hereof (such date and time of delivery and payment for the
Securities being herein called the "Closing Date"). Delivery of the Securities
shall be made to the Representatives for the respective accounts of the several
Underwriters against payment by the several Underwriters through the
Representatives of the purchase price thereof to the Company by wire transfer
payable in same-day funds to an account specified by the Company. Delivery of
the Securities shall be made through the facilities of The Depository Trust
Company unless the Representatives shall otherwise instruct.
<PAGE>
-11-
4. Offering by Underwriters. It is understood that the several
------------------------
Underwriters propose to offer the Securities for sale to the public as set forth
in the Prospectus.
5. Agreements. Each of the Issuers, jointly and severally, agrees with
----------
the several Underwriters that:
(a) Prior to the termination of the offering of the Securities, the
Issuers will not file any amendment of the Registration Statement or
supplement to the Prospectus or any Rule 462(b) Registration Statement
unless the Company has furnished you a copy for your review prior to filing
and will not file any such proposed amendment or supplement to which you
reasonably object. The Issuers will cause the Prospectus, properly
completed, and any supplement thereto to be filed with the Commission
pursuant to the applicable paragraph of Rule 424(b) within the time period
prescribed and will provide evidence satisfactory to the Representatives of
such timely filing. The Issuers will promptly advise the Representatives
(1) when the Prospectus, and any supplement thereto, shall have been filed
(if required) with the Commission pursuant to Rule 424(b) or when any Rule
462(b) Registration Statement shall have been filed with the Commission,
(2) when, prior to termination of the offering of the Securities, any
amendment to the Registration Statement shall have been filed or become
effective, (3) of any request by the Commission or its staff for any
amendment of the Registration Statement, or any Rule 462(b) Registration
Statement, or for any supplement to the Prospectus or for any additional
information, (4) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the
institution or threatening of any proceeding for that purpose and (5) of
the receipt by any Issuer of any notification with respect to the
suspension of the qualification of the Securities for sale in any
jurisdiction or the institution or threatening of any proceeding for such
purpose. The Issuers will use their best efforts to prevent the issuance of
any such stop order or the suspension of any such qualification and, if
issued, to obtain as soon as possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the Securities is
required to be delivered under the Act, any event occurs as a result of
which the Prospectus as then supplemented would include any untrue
statement of a material fact or omit to state any material fact necessary
to make the statements therein in the light of the circumstances under
which they were made not misleading, or if it shall be necessary to amend
the Registration Statement or supplement the Prospectus to comply with the
Act or the Exchange Act or the respective rules thereunder, the Issuers
promptly will (1) notify the Representatives of such event; (2) prepare and
file with the Commission, subject to the first sentence of paragraph (a) of
this Section 5, an amendment or supplement which will correct such
statement or omission or effect such compliance; and
<PAGE>
-12-
(3) supply any supplemented Prospectus to you in such quantities as you may
reasonably request.
(c) As soon as practicable, the Company will make generally available
to its security holders and to the Representatives an earnings statement or
statements of the Company and its subsidiaries which will satisfy the
provisions of Section 11(a) of the Act and Rule 158 under the Act.
(d) The Issuers will furnish to the Representatives and counsel for the
Underwriters, without charge, signed copies of the Registration Statement
(including exhibits thereto) and to each other Underwriter a copy of the
Registration Statement (without exhibits thereto) and, so long as delivery
of a prospectus by an Underwriter or dealer may be required by the Act, as
many copies of each Preliminary Prospectus and the Prospectus and any
supplement thereto as the Representatives may reasonably request. The
Issuers will pay the expenses of printing or other production of all
documents relating to the offering.
(e) The Issuers will arrange, if necessary, for the qualification of
the Securities for sale under the laws of such jurisdictions as the
Representatives may designate, will maintain such qualifications in effect
so long as required for the distribution of the Securities and will pay any
fee of the National Association of Securities Dealers, Inc., in connection
with its review of the offering; provided that in no event shall any Issuer
be obligated to do business in any jurisdiction where it is not now so
qualified or to take any action that would subject it to service of process
in suits, other than those arising out of the offering or sale of the
Securities in any jurisdiction where it is not now so subject.
(f) The Issuers will not, without the prior written consent of Salomon
Smith Barney Inc., offer, sell or contract to sell, or otherwise dispose of
(or enter into any transaction which is designed to, or might reasonably be
expected to, result in the disposition (whether by actual disposition or
effective economic disposition due to cash settlement or otherwise) by the
Issuers or any affiliate of the Issuers or any person in privity with the
Issuers or any affiliate of the Issuers) directly or indirectly, or
announce the offering of any debt securities issued or guaranteed by the
Issuers (other than the Securities) during the period beginning from the
date of this Agreement to the Closing Time.
(g) The Issuers will not take, directly or indirectly, any action
designed to or which has constituted or which might reasonably be expected
to cause or result, under the Exchange Act or otherwise, in stabilization
or manipulation of the price of any security of the Issuers to facilitate
the sale or resale of the Securities.
<PAGE>
-13-
(h) The Company will use the proceeds received from the sale of the
Securities in the manner specified in the manner specified in the
Prospectus under the heading "Use of Proceeds."
6. Conditions to the Obligations of the Underwriters. The obligations
of the Underwriters to purchase the Securities shall be subject to the accuracy
of the representations and warranties on the part of the Issuers contained
herein as of the Execution Time and the Closing Date, to the accuracy of the
statements of the Issuers made in any certificates pursuant to the provisions
hereof, to the performance by the Issuers of their obligations hereunder and to
the following additional conditions:
(a) If filing of the Prospectus, or any supplement thereto, is required
pursuant to Rule 424(b), the Prospectus, and any such supplement, will be
filed in the manner and within the time period required by Rule 424(b); and
no stop order suspending the effectiveness of the Registration Statement
shall have been issued and no proceedings for that purpose shall have been
instituted or threatened.
(b) The Company shall have furnished to the Representatives the opinion
of each of Charles J. Hansen, Senior Vice President and Associate General
Counsel of the Company and Alston & Bird LLP, each dated the Closing Date
and addressed to the Representatives, to the effect that:
(i) each of the Company and the Guarantors has been duly
organized or incorporated, as the case may be, and is validly existing
under the laws of the jurisdiction in which it is chartered or
organized, with full power and authority to own or lease, as the case
may be, and to operate its properties and conduct its business as
described in the Prospectus, and is duly qualified to do business as a
foreign corporation and is in good standing under the laws of each
jurisdiction which requires such qualification;
(ii) all the outstanding shares of capital stock of each
Subsidiary have been duly and validly authorized and issued and are
fully paid and nonassessable, and, except as otherwise set forth in
the Prospectus, all outstanding shares of capital stock of the
Subsidiaries are owned by the Company either directly or through
wholly owned subsidiaries free and clear of any perfected security
interest and, to the knowledge of such counsel, after due inquiry, any
other security interest, claim, lien or encumbrance;
(iii) the Company's authorized equity capitalization is as set
forth in the Prospectus; the Securities conform in all material
respects to the description thereof contained in the Prospectus;
<PAGE>
-14-
(iv) the Indenture has been duly authorized, executed and
delivered, has been duly qualified under the Trust Indenture Act, and
constitutes a legal, valid and binding instrument enforceable against
the Issuers in accordance with its terms (subject, as to enforcement
of remedies, to applicable bankruptcy, reorganization, insolvency,
moratorium or other laws affecting creditors' rights generally from
time to time in effect); and the Notes have been duly authorized and,
when executed and authenticated in accordance with the provisions of
the Indenture and delivered to and paid for by the Underwriters
pursuant to this Agreement, will constitute legal, valid and binding
obligations of the Issuers entitled to the benefits of the Indenture;
(v) the Guarantees have been duly authorized and, when executed
and delivered in accordance with the provisions of the Indenture will
be entitled to the benefits of the Indenture and will be valid and
binding obligations of each of the Guarantors;
(vi) to the knowledge of such counsel, there is no pending or
threatened action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the
Company or any of its subsidiaries or its or their property of a
character required to be disclosed in the Registration Statement which
is not adequately disclosed in the Registration Statement, and there
is no franchise, contract or other document of a character required to
be described in the Registration Statement or Prospectus, or to be
filed as an exhibit thereto, which is not described or filed as
required;
(vii) the Registration Statement has become effective under the
Act; any required filing of the Prospectus, and any supplements
thereto, pursuant to Rule 424(b) has been made in the manner and
within the time period required by Rule 424(b); to the knowledge of
such counsel, no stop order suspending the effectiveness of the
Registration Statement has been issued, no proceedings for that
purpose have been instituted or threatened and the Registration
Statement and the Prospectus (other than the financial statements and
other financial information contained therein, as to which such
counsel need express no opinion) comply as to form in all material
respects with the applicable requirements of the Act, the Exchange Act
and the Trust Indenture Act and the respective rules thereunder; and
such counsel has no reason to believe that on the Effective Date or at
the Execution Time the Registration Statement contains or contained
any untrue statement of a material fact or omitted or omits to state
any material fact required to be stated therein or necessary to make
the statements therein not misleading or that the Prospectus as of its
date and on the Closing Date includes any untrue statement of a
material fact or omitted or omits to
<PAGE>
-15-
state a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading
(in each case, other than the financial statements and other financial
information contained therein, as to which such counsel need not
express any opinion);
(viii) this Agreement has been duly authorized, executed and
delivered by the Issuers;
(ix) None of the Issuers is and, after giving effect to the
offering and sale of the Securities and the application of the
proceeds thereof as described in the Prospectus, will be an
"investment company" as defined in the Investment Company Act of 1940,
as amended;
(x) no consent, approval, authorization, filing with or order of
any court or governmental agency or body is required in connection
with the transactions contemplated herein, except such as have been
obtained under the Act and such as may be required under the blue sky
laws of any jurisdiction in connection with the purchase and
distribution of the Securities by the Underwriters in the manner
contemplated in this Agreement and in the Prospectus; and
(xi) neither the execution and delivery of the Indenture, the
issue and sale of the Securities, nor the consummation of any other of
the transactions herein contemplated nor the fulfillment of the terms
hereof will conflict with, result in a breach or violation of or
imposition of any lien, charge or encumbrance upon any property or
assets of the Company or its Subsidiaries pursuant to, (i) the
Organizational Documents of the Company or its Subsidiaries, (ii) the
terms of any indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation, condition,
covenant or instrument to which the Company or its subsidiaries is a
party or bound or to which its or their property is subject, which is
material to the Company and its Subsidiaries, taken as a whole or
(iii) to the knowledge of such counsel, any statute, law, rule,
regulation, judgment, order or decree applicable to the Company or its
subsidiaries of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having jurisdiction
over the Company or its subsidiaries or any of its or their
properties.
In rendering such opinions, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the State
of Delaware and the laws of the States of Georgia, Alabama, Illinois and
Indiana or the Federal laws of the United States, to the extent they deem
proper and specified in such opinion, upon the opinion
<PAGE>
-16-
of other counsel of good standing whom they believe to be reliable and who
are satisfactory to counsel for the Underwriters and (B) as to matters of
fact, to the extent they deem proper, on certificates of responsible
officers of the Company and public officials. References to the Prospectus
in this paragraph (b) include any supplements thereto at the Closing Date.
The opinion or opinions of such counsel shall be rendered to the
Underwriters at the request of the Company and shall so state therein.
(c) The Representatives shall have received from Cahill Gordon &
Reindel, counsel for the Underwriters, such opinion or opinions, dated the
Closing Date and addressed to the Representatives, with respect to the
issuance and sale of the Securities, the Indenture, the Registration
Statement, the Prospectus (together with any supplement thereto) and other
related matters as the Representatives may reasonably require, and the
Company shall have furnished to such counsel such documents as they request
for the purpose of enabling them to pass upon such matters. The opinion of
such counsel shall be rendered to the Underwriters at the request of the
Company and shall so state therein.
(d) The Company shall have furnished to the Representatives a
certificate of the Company, signed by the Chairman of the Board or the
President and the principal financial or accounting officer of the Company,
dated the Closing Date, to the effect that the signers of such certificate
have carefully examined the Registration Statement, the Prospectus, any
supplements to the Prospectus and this Agreement and that:
(i) the representations and warranties of the Issuers in this
Agreement are true and correct in all material respects on and as of the
Closing Date with the same effect as if made on the Closing Date and the
Issuers have complied with all the agreements and satisfied all the
conditions on their part to be performed or satisfied at or prior to the
Closing Date;
(ii) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or, to the knowledge of the Issuers, threatened; and
(iii) since the date of the most recent financial statements included
in the Prospectus, there has been no material adverse effect on the
condition (financial or otherwise), prospects, earnings, business or
properties of the Company and its subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Prospectus.
<PAGE>
-17-
(e) At the Execution Time and at the Closing Date,
PricewaterhouseCoopers LLP shall have furnished to the Representatives
letters, dated respectively as of the Execution Time and as of the Closing
Date, in form and substance satisfactory to the Representatives, confirming
that they are independent accountants within the meaning of the Act and the
Exchange Act and the respective applicable published rules and regulations
thereunder and that they have performed a review of the unaudited interim
financial information of the Company for the nine-month period ended
October 31, 1998, in accordance with Statement on Auditing Standards No.
71, stating in effect that:
(i) in their opinion the audited financial statements and financial
statement schedules and pro forma financial statements included or
incorporated in the Registration Statement and the Prospectus and
reported on by them comply as to form in all material respects with the
applicable accounting requirements of the Act and the Exchange Act and
the related published rules and regulations;
(ii) on the basis of a reading of the latest unaudited financial
statements made available by the Company and its subsidiaries; their
limited review, in accordance with standards established under
Statement on Auditing Standards No. 71, of the unaudited interim
financial information for the nine-month period ended October 31, 1998,
carrying out certain specified procedures (but not an examination in
accordance with generally accepted auditing standards) which would not
necessarily reveal matters of significance with respect to the comments
set forth in such letter; a reading of the minutes of the meetings of
the stockholders and directors of the Company and the Subsidiaries and
the Audit Committee and Executive Committee of the Company; and
inquiries of certain officials of the Issuers who have responsibility
for financial and accounting matters of the Issuers and its
subsidiaries as to transactions and events subsequent to October 31,
1998, nothing came to their attention which caused them to believe
that:
(1) any unaudited financial statements included or incorporated
in the Registration Statement and the Prospectus do not comply as to
form in all material respects with applicable accounting
requirements of the Act and with the published rules and regulations
of the Commission with respect to financial statements included or
incorporated in quarterly reports on Form 10-Q under the Exchange
Act; and said unaudited financial statements are not in conformity
with generally accepted accounting principles applied on a basis
substantially consistent
<PAGE>
-18-
with that of the audited financial statements included or
incorporated in the Registration Statement and the Prospectus;
(2) with respect to the period subsequent to October 31, 1998,
there were any changes, at a specified date not more than five days
prior to the date of the letter, in the long-term debt of the
Company and its subsidiaries or capital stock of the Company or
decreases in the stockholders' equity or consolidated net assets of
the Company as compared with the amounts shown on the October 31,
1998 consolidated balance sheet included or incorporated in the
Registration Statement and the Prospectus, or for the period from
November 1, 1998 to such specified date there were any decreases, as
compared with the corresponding period in the preceding year; in net
revenues or income before income taxes or in total or per share
amounts of net income of the Company and its subsidiaries or in
operating income or income before provision for income taxes and
extraordinary items or income before extraordinary items, except in
all instances for changes or decreases set forth in such letter, in
which case the letter shall be accompanied by an explanation by the
Company as to the significance thereof unless said explanation is
not deemed necessary by the Representatives;
(3) the information included in the Registration Statement and
Prospectus in response to Regulation S-K, Item 301 (Selected
Financial Data), Item 302 (Supplementary Financial Information),
Item 402 (Executive Compensation) and Item 503(d) (Ratio of Earnings
to Fixed Charges) is not in conformity with the applicable
disclosure requirements of Regulation S-K; and
(iii) they have performed certain other specified procedures as a
result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general accounting records of the Company and its subsidiaries) set
forth in the Registration Statement and the Prospectus and in Exhibit 12
to the Registration Statement, including the information set forth under
the captions "Summary Financial and Operating Data," "Risk Factors,"
"The Company," and "Capitalization" in the Prospectus, the information
included or incorporated in Items 1, 6 and 7 of the Company's Annual
Report on Form 10-K, incorporated in the Registration Statement and the
Prospectus, and the information included in the "Management's Discussion
and Analysis of Financial Condition and Results of Operations" included
or incorporated in the Company's Quarterly Reports on Form 10-Q,
incorporated in the Registration
<PAGE>
-19-
Statement and the Prospectus, information included in the Company's
Current Reports on Form 8-K incorporated in the Registration Statement
and the Prospectus agrees with the accounting records of the Company and
its subsidiaries, excluding any questions of legal interpretation.
References to the Prospectus in this paragraph (e) include any
supplement thereto at the date of the letter.
(f) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Registration Statement and the
Prospectus, there shall not have been (i) any change or decrease specified
in the letter or letters referred to in paragraph (e) of this Section 6 or
(ii) any change, or any development involving a prospective change, in or
affecting the condition (financial or otherwise), earnings, business or
properties of the Company and its subsidiaries, taken as a whole, whether
or not arising from transactions in the ordinary course of business, except
as set forth in or contemplated in the Prospectus the effect of which, in
any case referred to in clause (i) or (ii) above, is, in the sole judgment
of the Representatives, so material and adverse as to make it impractical
or inadvisable to proceed with the offering or delivery of the Securities
as contemplated by the Registration Statement and the Prospectus.
(g) Subsequent to the Execution Time, there shall not have been any
decrease in the rating of any of the Company's debt securities by any
"nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the Act) or any notice given of any intended
or potential decrease in any such rating or of a possible change in any
such rating that does not indicate the direction of the possible change.
(h) Prior to the Closing Date, the Issuers shall have furnished to the
Representatives such further information, certificates and documents as the
Representatives may reasonably request.
If any of the conditions specified in this Section 6 shall not have
been fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Representatives and counsel for the Underwriters, this
Agreement and all obligations of the Underwriters hereunder may be canceled at,
or at any time prior to, the Closing Date by the Representatives. Notice of
such cancellation shall be given to the Company in writing or by telephone or
facsimile confirmed in writing.
<PAGE>
-20-
The documents required to be delivered by this Section 6 shall be
delivered at the office of Cahill Gordon & Reindel, counsel for the
Underwriters, at 80 Pine Street, New York, NY 10005, on the Closing Date.
7. Reimbursement of Underwriters' Expenses. If the sale of the
---------------------------------------
Securities provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 6 hereof is not satisfied,
because of any refusal, inability or failure on the part of the Issuers to
perform any agreement herein or comply with any provision hereof other than by
reason of a default by any of the Underwriters, each of the Issuers, jointly and
severally, agree to reimburse the Underwriters severally through Salomon Smith
Barney on demand for all out-of-pocket expenses (including reasonable fees and
disbursements of counsel) that shall have been incurred by them in connection
with the proposed purchase and sale of the Securities.
8. Indemnification and Contribution. (a) Each of the Issuers, jointly
--------------------------------
and severally, agrees to indemnify and hold harmless each Underwriter, the
directors, officers, employees and agents of each Underwriter and each person
who controls any Underwriter within the meaning of either the Act or the
Exchange Act against any and all losses, claims, damages or liabilities, joint
or several, to which they or any of them may become subject under the Act, the
Exchange Act or other Federal or state statutory law or regulation, at common
law or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in the registration
statement for the registration of the Securities as originally filed or in any
amendment thereof, or in any Preliminary Prospectus or the Prospectus, or in any
amendment thereof or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
agrees to reimburse each such indemnified party, as incurred, for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
-------- -------
that the Issuers will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished to
the Company by or on behalf of any Underwriter through the Representatives
specifically for inclusion therein. This indemnity agreement will be in
addition to any liability which the Company may otherwise have.
(b) Each Underwriter severally and not jointly agrees to indemnify
and hold harmless the Issuers, each of its directors, each of its officers who
signs the Registration Statement, and each person who controls any of the
Issuers within the meaning of either the Act or the Exchange Act, to the same
extent as the foregoing indemnity to each Underwriter, but only with reference
to written information relating to such Underwriter furnished to the
<PAGE>
-21-
Company by or on behalf of such Underwriter through the Representatives
specifically for inclusion in the documents referred to in the foregoing
indemnity. This indemnity agreement will be in addition to any liability which
any Underwriter may otherwise have. The Issuers acknowledge that the statements
set forth in the last paragraph of the cover page regarding delivery of the
Securities and the third, sixth and seventh paragraphs under the heading
"Underwriting" in any Preliminary Prospectus and the Prospectus constitute the
only information furnished in writing by or on behalf of the several
Underwriters for inclusion in any Preliminary Prospectus or the Prospectus.
(c) Promptly after receipt by an indemnified party under this Section
8 of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses and (ii) will not, in any
event, relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided in paragraph (a) or (b)
above. The indemnifying party shall be entitled to appoint counsel of the
indemnifying party's choice at the indemnifying party's expense to represent the
indemnified party in any action for which indemnification is sought (in which
case the indemnifying party shall not thereafter be responsible for the fees and
expenses of any separate counsel retained by the indemnified party or parties
except as set forth below); provided, however, that such counsel shall be
-------- -------
satisfactory to the indemnified party. Notwithstanding the indemnifying party's
election to appoint counsel to represent the indemnified party in an action, the
indemnified party shall have the right to employ separate counsel (including
local counsel), and the indemnifying party shall bear the reasonable fees, costs
and expenses of such separate counsel if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present such counsel
with a conflict of interest, (ii) the actual or potential defendants in, or
targets of, any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, (iii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of the institution of such action or (iv) the
indemnifying party shall authorize the indemnified party to employ separate
counsel at the expense of the indemnifying party. An indemnifying party will
not, without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any pending
or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement,
<PAGE>
-22-
compromise or consent includes an unconditional release of each indemnified
party from all liability arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or (b)
of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Issuers, jointly and severally on the one
hand, and the Underwriters severally, on the other, agree to contribute to the
aggregate losses, claims, damages and liabilities (including legal or other
expenses reasonably incurred in connection with investigating or defending same)
(collectively "Losses") to which the Issuers and one or more of the Underwriters
may be subject in such proportion as is appropriate to reflect the relative
benefits received by the Issuers on the one hand and by the Underwriters on the
other from the offering of the Securities; provided, however, that in no case
-------- -------
shall any Underwriter (except as may be provided in any agreement among
underwriters relating to the offering of the Securities) be responsible for any
amount in excess of the underwriting discount or commission applicable to the
Securities purchased by such Underwriter hereunder. If the allocation provided
by the immediately preceding sentence is unavailable for any reason, the
Issuers, jointly and severally on the one hand, and the Underwriters severally,
on the other, shall contribute in such proportion as is appropriate to reflect
not only such relative benefits but also the relative fault of the Issuers and
of the Underwriters in connection with the statements or omissions which
resulted in such Losses as well as any other relevant equitable considerations.
Benefits received by the Issuers shall be deemed to be equal to the total net
proceeds from the offering (before deducting expenses) received by it, and
benefits received by the Underwriters shall be deemed to be equal to the total
underwriting discounts and commissions, in each case as set forth on the cover
page of the Prospectus. Relative fault shall be determined by reference to,
among other things, whether any untrue or any alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information provided by the Issuers on the one hand or the
Underwriters on the other, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The Issuers and the Underwriters agree that it
would not be just and equitable if contribution were determined by pro rata
allocation or any other method of allocation which does not take account of the
equitable considerations referred to above. Notwithstanding the provisions of
this paragraph (d), no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes of
this Section 8, each person who controls an Underwriter within the meaning of
either the Act or the Exchange Act and each director, officer, employee and
agent of an Underwriter shall have the same rights to con-
<PAGE>
-23-
tribution as such Underwriter, and each person who controls the Issuers within
the meaning of either the Act or the Exchange Act, each officer of the Company
who shall have signed the Registration Statement and each director of the
Issuers shall have the same rights to contribution as the Issuers, subject in
each case to the applicable terms and conditions of this paragraph (d).
9. Default by an Underwriter. If any one or more Underwriters shall
--------------------------
fail to purchase and pay for any of the Securities agreed to be purchased by
such Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the principal amount of
Securities set forth opposite their names in Schedule I hereto bears to the
aggregate principal amount of Securities set forth opposite the names of all the
remaining Underwriters) the Securities which the defaulting Underwriter or
Underwriters agreed but failed to purchase; provided, however, that in the event
-------- -------
that the aggregate principal amount of Securities which the defaulting
Underwriter or Underwriters agreed but failed to purchase shall exceed 10% of
the aggregate principal amount of Securities set forth in Schedule I hereto, the
remaining Underwriters shall have the right to purchase all, but shall not be
under any obligation to purchase any, of the Securities, and if such
nondefaulting Underwriters do not purchase all the Securities, this Agreement
will terminate without liability to any nondefaulting Underwriter or the
Company. In the event of a default by any Underwriter as set forth in this
Section 9, the Closing Date shall be postponed for such period, not exceeding
five Business Days, as the Representatives shall determine in order that the
required changes in the Registration Statement and the Prospectus or in any
other documents or arrangements may be effected. Nothing contained in this
Agreement shall relieve any defaulting Underwriter of its liability, if any, to
the Company and any nondefaulting Underwriter for damages occasioned by its
default hereunder.
10. Termination. This Agreement shall be subject to termination in the
------------
absolute discretion of the Representatives, by notice given to the Company prior
to delivery of and payment for the Securities, if at any time prior to such time
(i) trading in the Company's Common Stock shall have been suspended by the
Commission or the New York Stock Exchange or trading in securities generally on
the New York Stock Exchange shall have been suspended or limited or minimum
prices shall have been established on such Exchange, (ii) a banking moratorium
shall have been declared either by Federal or New York State authorities or
(iii) there shall have occurred any outbreak or escalation of hostilities,
declaration by the United States of a national emergency or war or other
calamity or crisis the effect of which on financial markets is such as to make
it, in the sole judgment of the Representatives, impractical or inadvisable to
proceed with the offering or delivery of the Securities as contemplated by the
Prospectus.
11. Representations and Indemnities to Survive. The respective
-------------------------------------------
agreements, representations, warranties, indemnities and other statements of the
Issuers or their officers and of the Underwriters set forth in or made pursuant
to this Agreement will remain in
<PAGE>
-24-
full force and effect, regardless of any investigation made by or on behalf of
any Underwriter or the Issuers or any of the officers, directors or controlling
persons referred to in Section 8 hereof, and will survive delivery of and
payment for the Securities. The provisions of Sections 7 and 8 hereof shall
survive the termination or cancellation of this Agreement.
12. Notices. All communications hereunder will be in writing and
--------
effective only on receipt, and, if sent to the Representatives, will be mailed,
delivered or telefaxed to the Salomon Smith Barney Inc. General Counsel (fax
no.: (212) 783-2274) and confirmed to the General Counsel, Salomon Smith Barney
Inc., at 7 World Trade Center, New York, New York, 10048, Attention: General
Counsel; or, if sent to the Issuers, will be mailed, delivered or telefaxed to
Chief Financial Officer (fax no.: (205) 940-4098) and confirmed to it at 750
Lakeshore Parkway, Birmingham, Alabama 35211.
13. Successors. This Agreement will inure to the benefit of and be
-----------
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 8 hereof, and no
other person will have any right or obligation hereunder.
14. Applicable Law. This Agreement will be governed by and construed
---------------
in accordance with the laws of the State of New York applicable to contracts
made and to be performed within the State of New York.
15. Counterparts. This Agreement may be signed in one or more
------------
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
16. Headings. The section headings used herein are for convenience
---------
only and shall not affect the construction hereof.
17. Definitions. The terms which follow, when used in this Agreement,
------------
shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended, and the rules
and regulations of the Commission promulgated thereunder.
"Business Day" shall mean any day other than a Saturday, a Sunday or a
legal holiday or a day on which banking institutions or trust companies are
authorized or obligated by law to close in New York City.
"Commission" shall mean the Securities and Exchange Commission.
<PAGE>
-25-
"Effective Date" shall mean each date and time that the Registration
Statement, any post-effective amendment or amendments thereto and any Rule
462(b) Registration Statement became or become effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated
thereunder.
"Execution Time" shall mean the date and time that this Agreement is
executed and delivered by the parties hereto.
"Prospectus" shall mean the prospectus relating to the Securities that
is first filed pursuant to Rule 424(b) after the Execution Time or, if no
filing pursuant to Rule 424(b) is required, shall mean the form of final
prospectus relating to the Securities included in the Registration
Statement at the Effective Date.
"Registration Statement" shall mean the registration statement
referred to in paragraph 1(a) above, including exhibits and financial
statements, as amended at the Execution Time (or, if not effective at the
Execution Time, in the form in which it shall become effective) and, in the
event any post-effective amendment thereto or any Rule 462(b) Registration
Statement becomes effective prior to the Closing Date, shall also mean such
registration statement as so amended or such Rule 462(b) Registration
Statement, as the case may be. Such term shall include any Rule 430A
Information deemed to be included therein at the Effective Date as provided
by Rule 430A.
"Rule 424", "Rule 430A" and "Rule 462" refer to such rules under the
Act.
"Rule 430A Information" shall mean information with respect to the
Securities and the offering thereof permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule 430A.
"Rule 462(b) Registration Statement" shall mean a registration
statement and any amendments thereto filed pursuant to Rule 462(b) relating
to the offering covered by the initial registration statement.
"Trust Indenture Act" shall mean the Trust Indenture Act of 1939, as
amended, and the rules and regulations of the Commission promulgated thereunder.
<PAGE>
-26-
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us the enclosed duplicate hereof, whereupon this
letter and your acceptance shall represent a binding agreement among the
Company, the Guarantors and the several Underwriters.
Very truly yours,
Saks Incorporated
By: /s/ Charles J. Hansen
----------------------------------
Name: Charles J. Hansen
Title: Senior Vice President
Carson Pirie Holdings, Inc.
By: /s/ Charles J. Hansen
----------------------------------
Name: Charles J. Hansen
Title: Senior Vice President
Saks Incorporated, as the Sole Member of
Herberger's Department Stores, LLC
By: /s/ Charles J. Hansen
----------------------------------
Name: Charles J. Hansen
Title: Senior Vice President
McRae's of Alabama, Inc.
By: /s/ Charles J. Hansen
----------------------------------
Name: Charles J. Hansen
Title: Senior Vice President
<PAGE>
-27-
McRae's, Inc.
By: /s/ Charles J. Hansen
----------------------------------
Name: Charles J. Hansen
Title: Senior Vice President
McRae's Stores Services, Inc.
By: /s/ Charles J. Hansen
----------------------------------
Name: Charles J. Hansen
Title: Senior Vice President
McRae's, Inc., as managing general partner
of McRae's Stores Partnership
By: /s/ Charles J. Hansen
----------------------------------
Name: Charles J. Hansen
Title: Senior Vice President
McRae's, Inc. as General Partner of Saks
Stores Partnership, L.P.
By: /s/ Charles J. Hansen
----------------------------------
Name: Charles J. Hansen
Title: Senior Vice President
Parisian, Inc.
By: /s/ Charles J. Hansen
----------------------------------
Name: Charles J. Hansen
Title: Senior Vice President
<PAGE>
-28-
Saks & Company
By: /s/ Charles J. Hansen
----------------------------------
Name: Charles J. Hansen
Title: Senior Vice President
Saks Distribution Centers, Inc.
By: /s/ Charles J. Hansen
----------------------------------
Name: Charles J. Hansen
Title: Senior Vice President
Saks Fifth Avenue, Atlanta, Inc.
By: /s/ Charles J. Hansen
----------------------------------
Name: Charles J. Hansen
Title: Senior Vice President
Saks Fifth Avenue Distribution Company
By: /s/ Charles J. Hansen
----------------------------------
Name: Charles J. Hansen
Title: Senior Vice President
Saks Fifth Avenue of Missouri, Inc.
By: /s/ Charles J. Hansen
----------------------------------
Name: Charles J. Hansen
Title: Senior Vice President
<PAGE>
-29-
Saks Fifth Avenue of Ohio, Inc.
By: /s/ Charles J. Hansen
----------------------------------
Name: Charles J. Hansen
Title: Senior Vice President
Saks Fifth Avenue of Texas, Inc.
By: /s/ Charles J. Hansen
----------------------------------
Name: Charles J. Hansen
Title: Senior Vice President
Saks Fifth Avenue, Inc.
By: /s/ Charles J. Hansen
----------------------------------
Name: Charles J. Hansen
Title: Senior Vice President
Saks Fifth Avenue - Louisiana, Inc.
By: /s/ Charles J. Hansen
----------------------------------
Name: Charles J. Hansen
Title: Senior Vice President
Saks Fifth Avenue - Stamford, Inc.
By: /s/ Charles J. Hansen
----------------------------------
Name: Charles J. Hansen
Title: Senior Vice President
<PAGE>
-30-
Saks Holdings, Inc.
By: /s/ Charles J. Hansen
----------------------------------
Name: Charles J. Hansen
Title: Senior Vice President
Saks Shipping Company, Inc.
By: /s/ Charles J. Hansen
----------------------------------
Name: Charles J. Hansen
Title: Senior Vice President
Saks Specialty Stores, Inc.
By: /s/ Charles J. Hansen
----------------------------------
Name: Charles J. Hansen
Title: Senior Vice President
Saks Stores Partnership, L.P.
By: /s/ Charles J. Hansen
----------------------------------
Name: Charles J. Hansen
Title: Senior Vice President
S.F.A. Data Processing, Inc.
By: /s/ Charles J. Hansen
----------------------------------
Name: Charles J. Hansen
Title: Senior Vice President
<PAGE>
-31-
SFA Folio Collections, Inc.
By: /s/ Charles J. Hansen
----------------------------------
Name: Charles J. Hansen
Title: Senior Vice President
SFA Real Estate Company
By: /s/ Charles J. Hansen
----------------------------------
Name: Charles J. Hansen
Title: Senior Vice President
<PAGE>
-32-
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
Salomon Smith Barney Inc.
Chase Securities Inc.
Goldman, Sachs & Co.
Lehman Brothers Inc.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
J. P. Morgan Securities Inc.
Nationsbanc Montgomery Securities LLC
By: Salomon Smith Barney Inc.
By: /s/
----------------------------------
Name:
Title:
For themselves and the other
several Underwriters named in
Schedule I to the foregoing
Agreement.
<PAGE>
SCHEDULE I
Principal Amount
of Notes
to be Purchased
Underwriters
- ------------
Salomon Smith Barney Inc..................... $ 80,000,000
------------
Chase Securities Inc......................... $ 20,000,000
------------
Goldman, Sachs & Co.......................... $ 20,000,000
------------
Lehman Brothers Inc.......................... $ 20,000,000
------------
Merrill Lynch, Pierce, Fenner & Smith $ 20,000,000
Incorporated ------------
J. P. Morgan Securities Inc.................. $ 20,000,000
------------
Nationsbanc Montgomery Securities LLC........ $ 20,000,000
------------
Total................................... $200,000,000
============
<PAGE>
SCHEDULE II
Guarantors
Carson Pirie Holdings, Inc.
Herberger's Department Stores, LLC
McRae's of Alabama, Inc.
McRae's Inc.
McRae's Stores Services, Inc.
McRae's Stores Partnership
Parisian, Inc.
Saks & Company
Saks Distribution Centers, Inc.
Saks Fifth Avenue, Atlanta, Inc.
Saks Fifth Avenue Distribution Company
Saks Fifth Avenue of Missouri, Inc.
Saks Fifth Avenue of Ohio, Inc.
Saks Fifth Avenue of Texas, Inc.
Saks Fifth Avenue, Inc.
Saks Fifth Avenue - Louisiana, Inc.
Saks Fifth Avenue - Stamford, Inc.
Saks Holdings, Inc.
Saks Shipping Company, Inc.
Saks Specialty Stores, Inc.
Saks Stores Partnership, L.P.
S.F.A. Data Processing, Inc.
SFA Folio Collections, Inc.
SFA Real Estate Company
<PAGE>
SCHEDULE III
Subsidiaries of the Company
Parisian, Inc.
McRae's, Inc.
McRae's of Alabama, Inc.
McRae's Stores Partnership
Proffitt's Credit Corporation
Brody Brothers Dry Goods Company
P.A. Bergner & Co.
National Bank of the Great Lakes
Carson Pirie Scott Insurance Services, Inc.
Saks Holdings, Inc.
Saks & Company
Cafe SFA - Minneapolis, Inc.
The Gallery, Inc.
Gimbels Food Services, Inc.
Modern Realty Company
Saks - Chicago, Inc.
Saks Fifth Avenue Food Corporation
Saks Fifth Avenue, Inc.
Saks Fifth Avenue - Louisiana, Inc.
Saks Fifth Avenue of Missouri, Inc.
Saks Fifth Avenue of Ohio, Inc.
Saks Fifth Avenue of Texas, Inc.
Saks Fifth Avenue - Stamford, Inc.
Saks Speciality Stores, Inc.
S.F.A. Folio Collections, Inc.
Saks Fifth Avenue Distribution Company
The Restaurant at Saks Fifth Avenue Corporation
Fifth Win, Inc.
Ohio Win, Inc.
Or. Win, Inc.
Vir. Win, Inc.
York Win Realty, Inc.
Calwin Realty II, Inc.
Tex Win II, Inc.
<PAGE>
Win Realty Holdings II, Inc.
Cal SFA, Inc.
Penn SFA, Inc.
Tex SFA, Inc.
Fifteenth Win, Inc.
SFA Real Estate Company
SFA Boca Inc.
SFA Post Street Inc.
HNY, Inc.
FCT, Inc.
Florida Win Trust
SFA Finance Company
SFA Finance Company II
Saks Distribution Centers, Inc.
Saks Shipping Company, Inc.
McRae's Stores Services, Inc.
Saks Stores Partnership, L.P.
Herberger's Department Stores, LLC
Carson Pirie Holdings, Inc.
Saks Stores Partnership L.P.
Herberger's Department Stores, LLC
<PAGE>
EXHIBIT 4.1
================================================================================
SAKS INCORPORATED, as Issuer
THE SUBSIDIARY GUARANTORS named herein, as Guarantors
and
The First National Bank of Chicago, as Trustee
--------------------
INDENTURE
Dated as of February 17, 1999
--------------------
$200,000,000
7 3/8% Notes due 2019
================================================================================
<PAGE>
Reconciliation and tie between Trust Indenture Act of 1939,
as amended, and Indenture, dated as of February 17, 1999
Trust Indenture Indenture
Act Section Section
- --------------- ---------------
(S) 310 (a)(1).......................... 6.09
(a)(2).......................... 6.09
(a)(3).......................... Not Applicable
(a)(4).......................... Not Applicable
(b)............................. 6.08, 6.10
(S) 311 (a)............................. 6.07
(b)............................. 6.07
(c)............................. Not Applicable
(S) 312 (a)............................. 3.05, 7.01
(b)............................. 7.02
(c)............................. 7.02
(S) 313 (a)............................. 7.03
(b)............................. 7.03
(c)............................. 7.03
(d)............................. 7.03
(S) 314 (a)............................. 7.04
(a)(4).......................... 10.10
(b)............................. Not Applicable
(c)(1).......................... 1.04, 3.03,
4.04, 11.01
(c)(2).......................... 1.04, 4.04,
11.01
(c)(3).......................... Not Applicable
(d)............................. Not Applicable
(e)............................. 1.04
(S) 315 (a)............................. 6.01(a)
(b)............................. 6.02
(c)............................. 6.01(b)
(d)............................. 6.01(c), 6.03
(e)............................. 5.14
(S) 316 (a) (last sentence)............. 3.14
(a)(1)(A)....................... 5.12
(a)(1)(B)....................... 5.13
(a)(2).......................... Not Applicable
(b)............................. 5.08
(S) 317 (a)(1).......................... 5.03
(a)(2).......................... 5.04
(b)............................. 10.03
(S) 318 (a)............................. 1.08
<PAGE>
TABLE OF CONTENTS
Page
----
PARTIES ............................................................... 1
RECITALS .............................................................. 1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.01. Definitions............................................ 1
Section 1.02. Other Definitions...................................... 13
Section 1.03. Rules of Construction.................................. 13
Section 1.04. Form of Documents Delivered to Trustee................. 14
Section 1.05. Acts of Holders........................................ 15
Section 1.06. Notices, etc., to the Trustee, the Company and the
Guarantors........................................... 16
Section 1.07. Notice to Holders; Waiver.............................. 16
Section 1.08. Conflict with Trust Indenture Act...................... 17
Section 1.09. Effect of Headings and Table of Contents............... 17
Section 1.10. Successors and Assigns................................. 17
Section 1.11. Separability Clause.................................... 17
Section 1.12. Benefits of Indenture.................................. 18
Section 1.13. GOVERNING LAW.......................................... 18
Section 1.14. No Recourse Against Others............................. 18
Section 1.15. Independence of Covenants.............................. 18
Section 1.16. Exhibits............................................... 18
Section 1.17. Counterparts........................................... 18
Section 1.18. Duplicate Originals.................................... 19
ARTICLE TWO
NOTE AND GUARANTEE FORMS
Section 2.01. Form and Dating........................................ 19
ARTICLE THREE
THE NOTES
Section 3.01. Title and Terms........................................ 20
Section 3.02. Registrar and Paying Agent............................. 20
Section 3.03. Execution and Authentication........................... 21
-i-
<PAGE>
Page
----
Section 3.04. Temporary Notes........................................ 22
Section 3.05. Transfer and Exchange.................................. 23
Section 3.06. Mutilated, Destroyed, Lost and Stolen Notes............ 24
Section 3.07. Payment of Interest; Interest Rights Preserved......... 25
Section 3.08. Persons Deemed Owners.................................. 26
Section 3.09. Cancellation........................................... 27
Section 3.10. Computation of Interest................................ 27
Section 3.11. Legal Holidays......................................... 27
Section 3.12. CUSIP and CINS Numbers................................. 28
Section 3.13. Paying Agent To Hold Money in Trust.................... 28
Section 3.14. Treasury Notes......................................... 28
Section 3.15. Deposits of Monies..................................... 29
Section 3.16. Book-Entry Provisions for Global Notes................. 29
ARTICLE FOUR
DEFEASANCE OR COVENANT DEFEASANCE
Section 4.01. Company's Option To Effect Defeasance or Covenant
Defeasance........................................... 30
Section 4.02. Defeasance and Discharge............................... 31
Section 4.03. Covenant Defeasance.................................... 31
Section 4.04. Conditions to Defeasance or Covenant Defeasance........ 32
Section 4.05. Deposited Money and U.S. Government Obligations To Be
Held in Trust; Other Miscellaneous Provisions........ 34
Section 4.06. Reinstatement.......................................... 35
ARTICLE FIVE
REMEDIES
Section 5.01. Events of Default...................................... 36
Section 5.02. Acceleration of Maturity; Rescission and Annulment..... 38
Section 5.03. Collection of Indebtedness and Suits for Enforcement
by Trustee........................................... 39
Section 5.04. Trustee May File Proofs of Claims...................... 40
Section 5.05. Trustee May Enforce Claims Without Possession of Notes. 41
Section 5.06. Application of Money Collected......................... 41
Section 5.07. Limitation on Suits.................................... 42
Section 5.08. Unconditional Right of Holders To Receive Principal,
Premium and Interest................................. 43
-ii-
<PAGE>
Page
----
Section 5.09. Restoration of Rights and Remedies..................... 43
Section 5.10. Rights and Remedies Cumulative......................... 43
Section 5.11. Delay or Omission Not Waiver........................... 44
Section 5.12. Control by Majority.................................... 44
Section 5.13. Waiver of Past Defaults................................ 44
Section 5.14. Undertaking for Costs.................................. 45
Section 5.15. Waiver of Stay, Extension or Usury Laws................ 45
Section 5.16. Unconditional Right of Holders To Receive Payment...... 46
ARTICLE SIX
THE TRUSTEE
Section 6.01. Certain Duties and Responsibilities.................... 46
Section 6.02. Notice of Defaults..................................... 47
Section 6.03. Certain Rights of Trustee.............................. 47
Section 6.04. Trustee Not Responsible for Recitals, Dispositions of
Notes or Application of Proceeds Thereof............. 49
Section 6.05. Trustee and Agents May Hold Notes; Collections; Etc.... 49
Section 6.06. Money Held in Trust.................................... 49
Section 6.07. Compensation and Indemnification of Trustee and
Its Prior Claim...................................... 50
Section 6.08. Conflicting Interests.................................. 50
Section 6.09. Corporate Trustee Required; Eligibility................ 50
Section 6.10. Resignation and Removal; Appointment of Successor
Trustee.............................................. 51
Section 6.11. Acceptance of Appointment by Successor................. 53
Section 6.12. Merger, Conversion, Amalgamation, Consolidation or
Succession to Business............................... 54
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 7.01. Preservation of Information; Company To Furnish
Trustee Names and Addresses of Holders............... 54
Section 7.02. Communications of Holders.............................. 55
Section 7.03. Reports by Trustee..................................... 55
Section 7.04. Reports by Company and Each Guarantor.................. 56
-iii-
<PAGE>
Page
----
ARTICLE EIGHT
CONSOLIDATION, MERGER, SALE OF ASSETS, ETC.
Section 8.01. Company May Consolidate, etc., Only on Certain Terms... 56
ARTICLE NINE
SUPPLEMENTAL INDENTURES AND WAIVERS
Section 9.01. Supplemental Indentures, Agreements and Waivers
Without Consent of Holders........................... 57
Section 9.02. Supplemental Indentures, Agreements and Waivers with
Consent of Holders................................... 58
Section 9.03. Execution of Supplemental Indentures, Agreements
and Waivers.......................................... 60
Section 9.04. Effect of Supplemental Indentures...................... 60
Section 9.05. Conformity with Trust Indenture Act.................... 60
Section 9.06. Reference in Notes to Supplemental Indentures.......... 61
Section 9.07. Record Date............................................ 61
Section 9.08. Revocation and Effect of Consents...................... 61
ARTICLE TEN
COVENANTS
Section 10.01. Payment of Principal, Premium and Interest............. 62
Section 10.02. Maintenance of Office or Agency........................ 62
Section 10.03. Money for Note Payments To Be Held in Trust............ 63
Section 10.04. Corporate Existence.................................... 64
Section 10.05. Payment of Taxes and Other Claims...................... 65
Section 10.06. Maintenance of Properties.............................. 65
Section 10.07. Insurance.............................................. 65
Section 10.08. Books and Records...................................... 66
Section 10.09. Note Guarantees........................................ 66
Section 10.10. Provision of Financial Statements...................... 66
Section 10.11. Restrictions on Liens.................................. 66
Section 10.12. Statement by Officers as to Default.................... 69
Section 10.13. Restrictions on Sale and Leaseback Transactions........ 69
Section 10.14. Compliance Certificates and Opinions................... 70
Section 10.15. Additional Guarantors.................................. 71
Section 10.16. Exempted Debts......................................... 71
-iv-
<PAGE>
Page
----
ARTICLE ELEVEN
SATISFACTION AND DISCHARGE
Section 11.01. Satisfaction and Discharge of Indenture................ 72
Section 11.02. Application of Trust Money............................. 73
ARTICLE TWELVE
GUARANTEE OF NOTES
Section 12.01. Unconditional Guarantee................................ 73
Section 12.02. Execution and Delivery of Note Guarantee............... 75
Section 12.03. Additional Guarantors.................................. 75
Section 12.04. Release of a Guarantor................................. 76
Section 12.05. Waiver of Subrogation.................................. 76
Section 12.06. Reliance on Judicial Order or Certificate of
Liquidating Agent Regarding Dissolution, etc. of
Guarantors........................................... 77
Section 12.07. Article Twelve Applicable to Paying Agents............. 77
Section 12.08. No Suspension of Remedies.............................. 78
Section 12.09. Limitation of Subsidiary Guarantor's Liability......... 78
Section 12.10. Contribution from Other Guarantors..................... 78
Section 12.11. Obligations Reinstated................................. 78
Section 12.12. No Obligation To Take Action Against the Company....... 79
Section 12.13. Dealing with the Company and Others.................... 79
ARTICLE THIRTEEN
REDEMPTION
Section 13.01. Notices to Trustee..................................... 80
Section 13.02. Selection of Notes To Be Redeemed...................... 80
Section 13.03. Notice of Redemption................................... 81
Section 13.04. Effect of Notice of Redemption......................... 81
Section 13.05. Deposit of Redemption Price............................ 82
Section 13.06. Notes Redeemed in Part................................. 82
-v-
<PAGE>
Exhibit A - Form of Note
Exhibit B - Form of Legend for Book-Entry Securities
Exhibit C - Form of Note Guarantee
-vi-
<PAGE>
INDENTURE, dated as of February 17, 1999, among Saks Incorporated, a
corporation incorporated under the laws of the State of Tennessee (the
"Company"), as issuer, the Subsidiary Guarantors named herein ("Guarantors"), as
guarantors, and The First National Bank of Chicago, as trustee (the "Trustee").
RECITALS
The Company has duly authorized the creation of an issue of 7 3/8%
Notes due 2019 (the "Notes"), of substantially the tenor and amount hereinafter
set forth, and to provide therefor the Company has duly authorized the execution
and delivery of this Indenture.
The Guarantors have duly authorized their senior guarantee of the
Notes and to provide therefor, the Guarantors have duly authorized the execution
and delivery of this Indenture and their Note Guarantees (as hereinafter
defined) under the terms set forth herein.
All things necessary have been done to make the Notes and the Note
Guarantees, when executed by the Company and the Guarantors, respectively, and
authenticated and delivered hereunder and duly issued by the Company and the
Guarantors, respectively, the valid obligations of the Company and the
Guarantors and to make this Indenture a valid agreement of each of the Company,
the Guarantors and the Trustee in accordance with the terms hereof.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Notes
by the Holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders (as hereinafter defined) of the Notes, as
follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.01. Definitions.
-----------
"Accounts Receivable Subsidiary" means Proffitt's Credit Corporation,
National Bank of the Great Lakes, SFA Finance Company, SFA Finance Company II
and any other present or future subsidiary (including any credit card bank) of
the Com-
<PAGE>
-2-
pany that is, directly or indirectly, wholly-owned by the Company (except, in
the case of SFA Finance Company and SFA Finance Company II, for 1,000 Shares of
Series A Preferred Stock of SFA Finance Company owned by certain independent
directors of SFA Finance Company and except in the case of any credit card bank,
for directors' qualifying shares) and organized for the purpose of and is only
engaged in (i) originating, purchasing, financing, servicing or collecting
accounts receivable obligations of customers of the Company or its Subsidiaries,
(ii) issuing or servicing credit cards, engaging in other credit card operations
or financing accounts receivable obligations of customers of the Company and its
Subsidiaries, (iii) the sale or financing of such accounts receivable and
interests therein and (iv) other activities incident thereto.
"Attributable Debt" in respect of a Sale and Leaseback Transaction
means, at the time of determination, the present value (discounted at the
imputed rate of interest of such transaction determined in accordance with GAAP)
of the obligation of the lessee for net rental payments during the remaining
term of the lease included in such Sale and Leaseback Transaction (including any
period for which such lease has been extended or may, at the option of the
lessor, be extended). The term "net rental payments" under any lease for any
period shall mean the sum of the rental and other payments required to be paid
in such period by the lessee thereunder, not including any amounts required to
be paid by such lessee (whether or not designated as rental or additional
rental) on account of maintenance and repairs, insurance, taxes, assessment,
water rates or similar charges or any amounts required to be paid by such lessee
thereunder contingent upon the amount of sales, maintenance and repairs,
insurance, taxes, assessments, water rates or similar charges.
"Bankruptcy Law" means Title 11, United States Code or any similar
federal or state law relating to bankruptcy, insolvency, receivership, winding-
up, liquidation, reorganization or relief of debtors or the law of any other
jurisdiction relating to bankruptcy, insolvency, receivership, winding-up,
liquidation, reorganization or relief of debtors or any amendment to, succession
to or change in any such law.
"Bankruptcy Order" means any court order made in a proceeding pursuant
to or within the meaning of any Bankruptcy Law, containing an adjudication of
bankruptcy or insolvency, or providing for liquidation, receivership, winding-
up, dissolution, "concordate" or reorganization, or appointing a Custodian of a
debtor or of all or any substantial part of a debtor's
<PAGE>
-3-
property, or providing for the staying, arrangement, adjustment or composition
of indebtedness or other relief of a debtor.
"Board of Directors" means the board of directors of the Company or
any Guarantor, as the case may be, or any duly authorized committee of such
board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company or any Guarantor, as the case
may be, to have been duly adopted by its respective Board of Directors and to be
in full force and effect on the date of such certification, and delivered to the
Trustee.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in The City of New York,
State of New York are authorized or obligated by law, regulation or executive
order to close.
"Capitalized Lease Obligations" means obligations created pursuant to
leases which are required to be shown on the liability side of a balance sheet
in accordance with GAAP.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, or if at any time after the execution of this
Indenture such Commission is not existing and performing the applicable duties
now assigned to it, then the body or bodies performing such duties at such time.
"Company" means the person named as the "Company" in the first
paragraph of this Indenture, until a successor person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor person.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by any one of its Chairman of the Board, its
Chief Executive Officer, its President, an Executive Vice President, a Senior
Vice President or a Vice President, and by its Secretary or an Assistant
Secretary or the Treasurer or an Assistant Treasurer, and delivered to the
Trustee.
"Comparable Treasury Issue" means the United States of America
security selected by an Independent Investment Banker as having a maturity
comparable to the remaining term of
<PAGE>
-4-
the Notes to be redeemed that would be utilized, at the time of selection and in
accordance with customary financial practice, in pricing new issues of corporate
debt securities of comparable maturity to the remaining term of such Notes.
"Independent Investment Banker" means one of the Reference Treasury Dealers
appointed by the Trustee after consultation with the Company.
"Comparable Treasury Price" means, with respect to any Redemption
Date, (i) the average of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) on the
third business day preceding such redemption date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities" or (ii) if such release (or any successor release) is not
published or does not contain such prices on such business day, (A) the average
of the Reference Treasury Dealer Quotations for such Redemption Date, after
excluding the highest and lowest such Reference Treasury Dealer Quotations, or
(B) if the Trustee obtains fewer than four such Reference Treasury Dealer
Quotations, the average of all such quotations. "Reference Treasury Dealer
Quotations" means, with respect to each Reference Treasury Dealer and any
Redemption Date, the average, as determined by the Trustee, of the bid and asked
prices for the Comparable Treasury Issue (expressed in each case as a percentage
of its principal amount) quoted in writing to the Trustee by such Reference
Treasury Dealer at 5:00 p.m. on the third business day preceding such Redemption
Date.
"Consolidated Net Tangible Assets" means the total amount of assets
(less depreciation and valuation reserves and other reserves and items
deductible from gross book value of specific asset accounts under GAAP) which
under GAAP are included on a balance sheet of the Company and its Subsidiaries
after deducting therefrom all goodwill, trade names, trademarks, patents,
favorable lease rights, unamortized debt discount and expense and other like
intangibles (other than leasehold costs and investments in so-called safe harbor
leases), which in each such case would be so included on such balance sheet, net
of accumulated amortization.
"control" means, with respect to any specified person, the power to
direct the management and policies of such person, directly or indirectly,
whether through the ownership of Voting Stock, by contract or otherwise; and the
terms "controlling" and "controlled" have meanings correlative to the foregoing.
<PAGE>
-5-
"Corporate Trust Office" means the office of the Trustee at which at
any particular time its corporate trust business shall be principally
administered, which office at the date of execution of this Indenture is located
at One First National Plaza, Suite 1026, Chicago, Illinois 60670-0126,
Attention: Corporate Trust Administration except for purposes of Section 3.02,
6.09 and 10.02. For purposes of such sections, such office is located at 14
Wall Street, 8th Floor, New York, New York 10005.
"covenant defeasance" has the meaning set forth in Section 4.03.
"Credit Facilities" means the Credit Facility amended and restated as
of September 17, 1998, and the Credit Facility dated as of September 17, 1998,
each among the Company, NationsBank, N.A., as Agent, and other financial
institutions, as in effect on the Issue Date, and as such agreement may be
amended, renewed, extended, substituted, refinanced, replaced, supplemented or
otherwise modified from time to time, and includes related notes, guarantees and
other agreements executed in connection therewith.
"Custodian" means any receiver, interim receiver, receiver and
manager, receiver-manager, trustee, assignee, liquidator, sequestrator or
similar official under any Bankruptcy Law or any other law respecting secured
creditors and the enforcement of their security or any other person with like
powers whether appointed judicially or out of court and whether pursuant to an
interim or final appointment.
"Default" means any event that is, or after notice or passage of time
or both would be, an Event of Default.
"defeasance" has the meaning set forth in Section 4.02.
"Depository" means The Depository Trust Company, its nominees and
successors.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated by the Commission thereunder.
"Foreign Subsidiary" means a subsidiary of the Company not organized
or existing under the laws of the United States of America, any state thereof,
the district of Columbia or any territory thereof.
<PAGE>
-6-
"Funded Debt" means Indebtedness which matures more than one year from
the date of the computation thereof, or which is extendable or renewable at the
sole option of the obligor so that it may become payable more than one year from
such date; provided, however, that Funded Debt shall not include (i) obligations
-------- -------
created pursuant to leases, or (ii) any Indebtedness for the payment or
redemption of which money in the necessary amount shall have been deposited in
trust either at or before the maturity date thereof.
"GAAP" means generally accepted accounting principles in effect in the
United States of America which are applicable as of the Issue Date and which are
consistently applied for all applicable periods.
"Global Notes" means one or more Notes.
"Guarantee" or "Note Guarantee" means the guarantee by each of the
Guarantors of the Notes and the Company's obligations under this Indenture.
"guarantee" means, as applied to any obligation, (i) a guarantee
(other than by endorsement of negotiable instruments for collection in the
ordinary course of business), direct or indirect, in any manner, of any part or
all of such obligation and (ii) an agreement, direct or indirect, contingent or
otherwise, the practical effect of which is to assure in any way the payment or
performance (or payment of damages in the event of non-performance) of all or
any part of such obligation. A guarantee shall include, without limitation, any
agreement to maintain or preserve any other Person's financial condition or to
cause any other Person to achieve certain levels of operating results.
"Guarantor" means (i) each of the Company's Subsidiaries that are
guarantors or obligors in respect of the Credit Facilities on the Issue Date and
(ii) each other Subsidiary of the Company that is required to execute a
supplemental indenture and become a Guarantor subsequent to the Issue Date
pursuant to Section 10.15.
"Holder" or "Noteholder" means a Person in whose name a Note is
registered in the Note Register.
"Indebtedness" of any person means indebtedness for borrowed money and
indebtedness under purchase money Liens or conditional sales or similar title
retention agreements, in each case where such indebtedness has been created,
incurred,
<PAGE>
-7-
or assumed by such person to the extent such indebtedness would appear as a
liability upon a balance sheet of such Person prepared in accordance with GAAP,
guarantees by such Person of such indebtedness, and indebtedness for borrowed
money secured by any Lien, pledge or other lien or encumbrance upon property
owned by such Person, even though such Person has not assumed or become liable
for the payment of such indebtedness.
"Indenture" means this instrument as originally executed (including
all exhibits and schedules hereto) and as it may from time to time be
supplemented or amended by one or more indentures supplemental hereto entered
into pursuant to the applicable provisions hereof.
"Indenture Obligations" means the obligations of the Company and any
other obligor under this Indenture or under the Notes, to pay principal of,
premium, if any, and interest on the Notes when due and payable, whether at
maturity, by acceleration, call for redemption or repurchase or otherwise, and
all other amounts due or to become due under or in connection with this
Indenture, the Notes or the Guarantees and the performance of all other
obligations to the Trustee (including, but not limited to, payment of all
amounts due the Trustee under Section 6.07 hereof) and the Holders of the Notes
under this Indenture, the Notes and the Guarantees, according to the terms
thereof.
"Independent Investment Banker" has the meaning set forth in the
definition of "Comparable Treasury Issue" contained herein.
"interest," when used with respect to any Note, means the amount of
all interest accruing on such Note, including all interest accruing subsequent
to the occurrence of any event specified in Sections 5.01(f), (g) and (h) or
which would have accrued but for any such event, whether or not such claims are
allowable under applicable law.
"Interest Payment Date" means, when used with respect to any Note, the
Stated Maturity of an installment of interest on such Note, as set forth in such
Note.
"Issue Date" means the original issue date of the Notes hereunder.
"Lien" means any security interest, pledge, lien or other encumbrance.
<PAGE>
-8-
"Maturity Date" means, with respect to any Note, the date on which any
principal of such Note becomes due and payable as therein or herein provided,
whether at the Stated Maturity with respect to such principal or by declaration
of acceleration, call for redemption or purchase or otherwise.
"Notes" shall have the meaning specified in the recitals of this
Indenture.
"Officer" means, with respect to the Company or any Guarantor, the
Chairman of the Board, an Executive Vice President, a Senior Vice President, the
President, a Vice President, the Secretary, an Assistant Secretary, the
Treasurer or an Assistant Treasurer.
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, an Executive Vice President, a Senior Vice President, the President
or a Vice President, and by the Secretary, an Assistant Secretary, the Treasurer
or an Assistant Treasurer, of the Company or any Guarantor, as the case may be,
and delivered to the Trustee.
"Operating Assets" means all merchandise, inventories, furniture and
equipment (including all transportation and warehousing equipment, store racks
and showcases but excluding office equipment and data processing equipment)
owned by the Company or a Subsidiary.
"Operating Property" means all real property and improvements thereon
owned by the Company or a Subsidiary and constituting, without limitation, any
store, warehouse, service center or distribution center wherever located;
provided, however, that such term shall not include any store, warehouse,
- -------- -------
service center or distribution center which the Company's Board of Directors
declares by resolution not to be of material importance to the business of the
Company and its Subsidiaries. Operating Property is treated as having been
"acquired" on the day the Operating Property is placed in operation by the
Company or a Subsidiary after the latest of (a) its acquisition from a third
party, including a Subsidiary, (b) completion of its original construction or
(c) completion of its substantial reconstruction, renovation, remodeling,
expansion or improvement (whether or not constituting an Operating Property
prior to such reconstruction, renovation, remodeling, expansion or improvement).
<PAGE>
-9-
"Opinion of Counsel" means a written opinion of counsel who may be
counsel for the Company, a Guarantor, or the Trustee, and who shall be
reasonably acceptable to the Trustee.
"Outstanding" means, as of the date of determination, all Notes
theretofore authenticated and delivered under this Indenture, except:
(i) Notes theretofore canceled by the Trustee or delivered to the
Trustee for cancellation;
(ii) Notes, or portions thereof, for whose payment or redemption
money in the necessary amount has been theretofore deposited with the
Trustee or any Paying Agent (other than the Company or any Guarantor or any
Affiliate thereof) in trust or set aside and segregated in trust by the
Company or any Guarantor or any Affiliate thereof (if the Company or such
Guarantor or Affiliate shall act as Paying Agent) 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;
(iii) Notes with respect to which the Company has effected
defeasance or covenant defeasance as provided in Article Four, to the
extent provided in Sections 4.02 and 4.03; and
(iv) Notes in exchange for or in lieu of other Notes that have been
authenticated and delivered pursuant to this Indenture, other than any such
Notes in respect of which there shall have been presented to the Trustee
proof satisfactory to it that such Notes are held by a bona fide purchaser
---- ----
in whose hands the Notes are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
- -------- -------
principal amount of Outstanding Notes have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Notes owned by
the Company, any Guarantor or any other obligor upon the Notes or any Affiliate
of the Company, any Guarantor or such other obligor shall be disregarded and
deemed not to be Outstanding, except that, in determining whether the Trustee
shall be protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Notes that a Responsible Officer of
the Trustee knows to be so owned shall be so disregarded. The Com-
<PAGE>
-10-
pany shall notify the Trustee, in writing, when it repurchases or otherwise
acquires Notes, of the aggregate principal amount of such Notes so repurchased
or otherwise acquired. Notes so owned which have been pledged in good faith may
be regarded as Outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee's right so to act with respect to such Notes and that the
pledgee is not the Company, any Guarantor or any other obligor upon the Notes or
any Affiliate of the Company, any Guarantor or such other obligor. If the Paying
Agent holds, in its capacity as such, on any Maturity Date or on any optional
redemption date money sufficient to pay all accrued interest and principal with
respect to such Notes payable on that date and is not prohibited from paying
such money to the Holders thereof pursuant to the terms of this Indenture, then
on and after that date such Notes cease to be Outstanding and interest on them
ceases to accrue. Notes may also cease to be outstanding to the extent expressly
provided in Article Four.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Physical Notes" means notes in the form of certificated Notes in
registered form.
"Predecessor Note" means, with respect to any particular Note, every
previous Note evidencing all or a portion of the same debt as that evidenced by
such particular Note; and, for the purposes of this definition, any Note
authenticated and delivered under Section 3.06 hereof in exchange for a
mutilated Note or in lieu of a lost, destroyed or stolen Note shall be deemed to
evidence the same debt as the mutilated, lost, destroyed or stolen Note.
"Primary Treasury Dealer" has the meaning set forth in the definition
of "Reference Treasury Dealer" contained herein.
"Redemption Date" when used with respect to any Note to be redeemed,
means the date fixed for such redemption pursuant to this Indenture and the
Notes.
"Redemption Price" when used with respect to any Note to be redeemed,
means the price fixed for such redemption pursuant to this Indenture as set
forth in the form of Note attached hereto.
<PAGE>
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"Reference Treasury Dealer" means each of Salomon Smith Barney Inc.,
Chase Securities Inc., Goldman, Sachs & Co., Lehman Brothers Inc., Merrill
Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities Inc. and
NationsBanc Montgomery Securities LLC and their respective successors; provided,
--------
however, that if any of the foregoing or their affiliates shall cease to be a
- -------
primary U.S. Government securities dealer in The City of New York (a "Primary
Treasury Dealer"), the Company shall substitute therefor another Primary
Treasury Dealer.
"Regular Record Date" means the Regular Record Date specified in the
Notes.
"Remaining Scheduled Payments" means, with respect to any Notes, the
remaining scheduled payments of the principal thereof to be redeemed and
interest thereon that would be due after the related Redemption Date but for
such redemption; provided, however, that, if such Redemption Date is not an
-------- -------
Interest Payment Date, the amount of the next succeeding scheduled interest
payment thereon will be reduced by the amount of interest accrued thereon to
such Redemption Date.
"Responsible Officer" means, with respect to the Trustee, the chairman
or vice chairman of the board of directors, the chairman or vice chairman of the
executive committee of the board of directors, the president, any vice
president, the secretary, any assistant secretary, the treasurer, any assistant
treasurer, the cashier, any assistant cashier, any trust officer or assistant
trust officer, the controller and any assistant controller or any other officer
of the Trustee customarily performing functions similar to those performed by
any of the above designated officers and also means, with respect to a
particular corporate trust matter, any other officer of the Trustee to whom any
corporate trust matter is referred because of his or her knowledge of and
familiarity with the particular subject.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated by the Commission thereunder.
"Senior Funded Debt" means all Funded Debt of the Company or any
Person (except Funded Debt, the payment of which is subordinated to the payment
of the Notes).
<PAGE>
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"Special Record Date" means, with respect to the payment of any
Defaulted Interest, a date fixed by the Trustee pursuant to Section 3.07 hereof.
"Stated Maturity" means, with respect to any Note or any installment
of interest thereon, the dates specified in such Note as the fixed date on which
the principal of such Note or such installment of interest is due and payable
and, when used with respect to any other Indebtedness, means the date specified
in the instrument governing such Indebtedness as the fixed date on which the
principal of such Indebtedness, or any installment of interest, is due and
payable.
"Subsidiary" means any corporation or other business entity of which
at least a majority of the outstanding stock having voting power under ordinary
circumstances to elect a majority of the board of directors, managers or other
governing body of said corporation or business entity or otherwise direct the
business and affairs of said corporation or business entity is at the time owned
or controlled by the Company, or by the Company and one or more Subsidiaries, or
by any one or more Subsidiaries; provided, that, unless otherwise expressly
--------
stated, Subsidiary shall not include any Accounts Receivable Subsidiary or any
Foreign Subsidiary.
"Treasury Rate" means, with respect to any Redemption Date, the rate
per annum equal to the semiannual equivalent yield to maturity of the Comparable
Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as
a percentage of its principal amount) equal to the Comparable Treasury Price for
such Redemption Date.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939,
as amended.
"Trustee" means the person named as the "Trustee" in the first
paragraph of this Indenture, until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor Trustee.
"Underwriting Agreement" means the underwriting agreement dated as of
February 11, 1999, among the Company, the Guarantors and the underwriters named
therein.
"U.S. Government Obligations" means securities that are (i) direct
obligations of the United States of America for the timely payment of which its
full faith and credit is
<PAGE>
-13-
pledged or (ii) obligations of a Person controlled or supervised by and acting
as an agency or instrumentality of the United States of America the timely
payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America, which, in either case, are not
callable or redeemable at the option of the issuer thereof at any time prior to
the Stated Maturity of the Notes, and shall also include a depository receipt
issued by a bank (as defined in Section 3(a)(2) of the Securities Act) as
custodian with respect to any such U.S. Government Obligation or a specific
payment of principal of or interest on any such U.S. Government Obligation held
by such custodian for the account of the holder of such depository receipt,
provided, however, that (except as required by law) such custodian is not
- -------- -------
authorized to make any deduction from the amount payable to the holder of such
depository receipt from any amount received by the custodian in respect of the
U.S. Government Obligation or the specific payment of principal of or interest
on the U.S. Government Obligation evidenced by such depository receipt.
Section 1.02. Other Definitions.
-----------------
Defined in
Term Section
---- ----------
"Act" 1.05
"Agent Member" 3.16
"covenant defeasance" 4.03
"Defaulted Interest" 3.07
"defeasance" 4.02
"Defeased Notes" 4.01
"Event of Default" 5.01
"insolvent person" 4.04
"Note Register" 3.05
"Registrar" 3.02
"Paying Agent" or "Agent" 3.02
"Surviving Entity" 8.01
Section 1.03. Rules of Construction.
---------------------
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article, and include the plural as well as the singular;
<PAGE>
-14-
(b) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(c) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP;
(d) the words "herein" "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision;
(e) all references to "$" or "dollars" refer to the lawful currency
of the United States of America; and
(f) the words "include," "included" and "including" as used herein
are deemed in each case to be followed by the phrase "without limitation."
Section 1.04. 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 persons as to other matters, and any such person may certify or
give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company or any
Guarantor 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
may be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an officer or officers of the Company or any
Guarantor stating that the information with respect to such factual matters is
in the possession of the Company or any Guarantor, 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.
<PAGE>
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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, with
proper identification of each matter covered therein, and form one instrument.
Section 1.05. Acts of Holders.
---------------
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution (as provided below in
subsection (b) of this Section 1.05) 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 6.01 hereof) conclusive in favor of the Trustee and the
Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any person of any such
instrument or writing may be proved in any reasonable manner which the Trustee
deems sufficient.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Note shall bind every future Holder
of the same Note or the Holder of every Note issued upon the transfer thereof or
in exchange therefor or in lieu thereof to the same extent as the original
Holder, in respect of anything done, suffered or omitted to be done by the
Trustee, any Paying Agent or the Company or any Guarantor in reliance thereon,
whether or not notation of such action is made upon such Note.
<PAGE>
-16-
Section 1.06. Notices, etc., to the Trustee, the Company and the
Guarantors.
--------------------------------------------------
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with:
(a) the Trustee by any Holder or by the Company or any Guarantor
shall be sufficient for every purpose hereunder if made, given, furnished
or filed, in writing, to or with the Trustee at One First National Plaza,
Suite 0126, Chicago, Illinois 60670-0126, Attention: Corporate Trust
Administration or at any other address previously furnished in writing to
the Holders, the Company and the Guarantors by the Trustee; or
(b) the Company or a Guarantor by the Trustee or by any Holder shall
be sufficient for every purpose (except as otherwise expressly provided
herein) hereunder if in writing and mailed, first-class postage prepaid, to
the Company or such Guarantor addressed to it at Saks Incorporated, 750
Lakeshore Parkway, Birmingham, Alabama 35211, Attention: Treasurer, or at
any other address previously furnished in writing to the Trustee by the
Company.
Section 1.07. Notice to Holders; Waiver.
-------------------------
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise expressly provided herein)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at the address of such Holder as it appears in 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 Holders
is given by mail, neither the failure to mail such notice, nor any defect in any
notice so mailed, to any particular Holder shall affect the sufficiency of such
notice with respect to other Holders. Any notice when mailed to a Holder in the
aforesaid manner shall be conclusively deemed to have been received by such
Holder whether or not actually received by such Holder. Where this Indenture
provides for notice in any manner, such notice may be waived in writing by the
person entitled to receive such notice, either before or after the event, and
such waiver shall be the equivalent of such notice. Waivers of notice by
Holders shall be filed with the Trustee, but such filing shall not be a
<PAGE>
-17-
condition precedent to the validity of any action taken in reliance upon such
waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause, it shall be impracticable to mail notice of any event
as required by any provision of this Indenture, then any method of giving such
notice as shall be satisfactory to the Trustee shall be deemed to be a
sufficient giving of such notice.
Section 1.08. Conflict with Trust Indenture Act.
---------------------------------
If any provision hereof limits, qualifies or conflicts with any
provision of the Trust Indenture Act or another provision which is required or
deemed to be included in this Indenture by any of the provisions of the Trust
Indenture Act, such provision or requirement of the Trust Indenture Act shall
control.
If any provision of this Indenture modifies or excludes any provision
of the Trust Indenture Act that may be so modified or excluded, the latter
provision shall be deemed to apply to this Indenture as so modified or excluded,
as the case may be.
Section 1.09. 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 1.10. Successors and Assigns.
----------------------
All covenants and agreements in this Indenture by the Company and the
Guarantors, shall bind their respective successors and assigns, whether so
expressed or not.
Section 1.11. Separability Clause.
-------------------
In case any provision in this Indenture or in the Notes or any Note
Guarantee issued pursuant hereto 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.
<PAGE>
-18-
Section 1.12. Benefits of Indenture.
---------------------
Nothing in this Indenture or in the Notes or in any Note Guarantee
issued pursuant hereto, express or implied, shall give to any person (other than
the parties hereto and their successors hereunder, any Paying Agent and the
Holders) any benefit or any legal or equitable right, remedy or claim under this
Indenture.
Section 1.13. GOVERNING LAW.
-------------
THIS INDENTURE, THE NOTES AND THE NOTE GUARANTEE SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT
GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW.
Section 1.14. No Recourse Against Others.
--------------------------
A director, officer, employee or stockholder, as such, of the Company
or of a Guarantor shall not have any liability for any obligations of the
Company or a Guarantor under the Notes, the Note Guarantee or this Indenture or
for any claim based on, in respect of or by reason of such obligations or their
creation.
Section 1.15. Independence of Covenants.
-------------------------
All covenants and agreements in this Indenture shall be given
independent effect so that if a particular action or condition is not permitted
by any of such covenants, the fact that it would be permitted by an exception
to, or be otherwise within the limitations of, another covenant shall not avoid
the occurrence of a Default if such action is taken or condition exists.
Section 1.16. Exhibits.
--------
All exhibits attached hereto are by this reference made a part hereof
with the same effect as if herein set forth in full.
Section 1.17. Counterparts.
------------
This Indenture may be executed in any number of counterparts and by
telecopier, each of which shall be an original; but such counterparts shall
together constitute but one and the same instrument.
<PAGE>
-19-
Section 1.18. Duplicate Originals.
-------------------
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
ARTICLE TWO
NOTE AND GUARANTEE FORMS
Section 2.01. Form and Dating.
---------------
The Notes and the Trustee's certificate of authentication with respect
thereto and the Note Guarantees shall be in substantially the forms set forth,
or referenced, in Exhibit A and Exhibit C, respectively, annexed hereto, 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 any applicable law or with the rules of the
Depository, any clearing agency or any securities exchange or as may,
consistently herewith, be determined by the officers executing such Notes and
Note Guarantees, as evidenced by their execution thereof.
The definitive Notes and Note Guarantees shall be printed,
typewritten, lithographed or engraved or produced by any combination of these
methods or may be produced in any other manner permitted by the rules of any
securities exchange on which the Notes and such Note Guarantees may be listed,
all as determined by the officers executing such Notes and Note Guarantees, as
evidenced by their execution of such Notes and Note Guarantees.
Each Note shall be dated the date of its issuance and shall show the
date of its authentication. The terms and provisions contained in the Notes
shall constitute, and are expressly made, a part of this Indenture.
<PAGE>
-20-
ARTICLE THREE
THE NOTES
Section 3.01. Title and Terms.
---------------
The aggregate principal amount of Notes which may be authenticated and
delivered under this Indenture is limited to $200,000,000 in aggregate principal
amount of Notes, except for Notes authenticated and delivered upon registration
of transfer of, or in exchange for, or in lieu of, other Notes pursuant to
Section 3.03, 3.04, 3.05, 3.06 or 9.06.
The final Stated Maturity of the Notes shall be February 15, 2019.
The Notes shall bear interest at the rate of 7 3/8% per annum, from the Issue
Date or from the most recent Interest Payment Date to which interest has been
paid, as the case may be, payable semi-annually thereafter on February 15 and
August 15, in each year, commencing on August 15, 1999, to the Holders of record
at the close of business on the February 1, and August 1, respectively,
immediately preceding such Interest Payment Dates, until the principal thereof
is paid or duly provided for. Interest on any overdue principal, interest (to
the extent lawful) or premium, if any, shall be payable on demand.
At the election of the Company, the entire Indebtedness on the Notes
or certain of the Company's obligations and covenants and certain Events of
Default thereunder may be defeased as provided in Article Four.
Section 3.02. Registrar and Paying Agent.
--------------------------
The Company shall maintain an office or agency (which shall be located
in the Borough of Manhattan in The City of New York, State of New York) where
Notes may be presented for registration of transfer or for exchange (the
"Registrar"), an office or agency (which shall be located in the Borough of
Manhattan in The City of New York, State of New York) where Notes may be
presented for payment (the "Paying Agent" or "Agent") and an office or agency
where notices and demands to or upon the Company in respect of the Notes, the
Note Guarantees and this Indenture may be served. The Registrar shall keep a
register of the Notes and of their transfer and exchange. The Company may have
one or more co-registrars and one or more additional paying agents. The term
"Paying Agent" or "Agent" in-
<PAGE>
-21-
cludes any additional paying agent. The Company may act as its own Paying Agent.
The Company shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture, which shall incorporate the provisions of
the Trust Indenture Act. The agreement shall implement the provisions of this
Indenture that relate to such Agent. The Company shall notify the Trustee of
the name and address of any such Agent. If the Company fails to maintain a
Registrar or Paying Agent, or fails to give the foregoing notice, the Trustee
shall act as such and shall be entitled to appropriate compensation in
accordance with Section 6.07 hereof.
The Company initially appoints the Trustee as the Registrar and Paying
Agent and agent for service of notices and demands in connection with the Notes.
Section 3.03. Execution and Authentication.
----------------------------
The Notes and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A hereto. The Notes may have notations,
legends or endorsements required by law, stock exchange rule or usage. The
Company shall approve the form of the Notes and any notation, legend or
endorsement thereon. Each Note shall be dated the date of issuance and shall
show the date of its authentication. Each Note shall have an executed Note
Guarantee from each of the Guarantors endorsed thereon substantially in the form
of Exhibit C hereto.
The terms and provisions contained in the Notes annexed hereto as
Exhibits A shall constitute, and are hereby expressly made, a part of this
Indenture and, to the extent applicable, the Company, the Guarantors and the
Trustee, by their execution and delivery of this Indenture, expressly agree to
such terms and provisions and to be bound thereby.
The Notes shall be issued initially in the form of one or more Global
Notes, substantially in the form set forth in Exhibit A, deposited with the
Trustee, as custodian for the Depository, duly executed by the Company (and
having an executed Note Guarantee from each of the Guarantors endorsed thereon)
and authenticated by the Trustee as hereinafter provided and shall bear the
legend set forth in Exhibit B. The aggregate principal amount of the Global
Notes may from time to time be increased or decreased by adjustments made on the
rec-
<PAGE>
-22-
ords of the Trustee, as custodian for the Depository, as hereinafter provided.
One Officer shall execute the Notes for the Company, and the Note
Guarantees for the Guarantors, by manual or facsimile signature.
If an Officer whose signature is on a Note or a Note Guarantee, as the
case may be, was an Officer at the time of such execution but no longer holds
that office or position at the time the Trustee authenticates the Note, the Note
shall nevertheless be valid.
The Trustee shall authenticate Notes due for original issue in an
aggregate principal amount not to exceed $200,000,000 upon a written order of
the Company in the form of an Officers' Certificate of the Company. Each such
written order shall specify the amount of Notes to be authenticated and the date
on which the Notes are to be authenticated and such other information as the
Trustee may reasonably request. The aggregate principal amount of Notes
outstanding at any time may not exceed $200,000,000, except as provided in
Section 3.06.
The Trustee may appoint an authenticating agent reasonably acceptable
to the Company to authenticate Notes. Unless otherwise provided in the
appointment, an authenticating agent may authenticate Notes whenever the Trustee
may do so. Each reference in this Indenture to authentication by the Trustee
includes authentication by such agent. An authenticating agent has the same
rights as an Agent to deal with the Company and Affiliates of the Company.
The Notes shall be issuable in fully registered form only, without
coupons, in denominations of $1,000 and any integral multiple thereof.
Section 3.04. Temporary Notes.
---------------
Until definitive Notes are prepared and ready for delivery, the
Company may execute and upon a Company Order the Trustee shall authenticate and
deliver temporary Notes. Temporary Notes shall be substantially in the form of
definitive Notes, in any authorized denominations, but may have variations that
the Company reasonably considers appropriate for temporary Notes as conclusively
evidenced by the Company's execution of such temporary Notes.
<PAGE>
-23-
If temporary Notes are issued, the Company will cause definitive Notes
to be prepared without unreasonable delay. After the preparation of definitive
Notes, the temporary Notes shall be exchangeable for definitive Notes upon
surrender of the temporary Notes at the office or agency of the Company
designated for such purpose pursuant to Section 10.02, without charge to the
Holder. Upon surrender for cancellation of any one or more temporary Notes, the
Company shall execute and the Trustee shall authenticate and deliver in exchange
therefor a like principal amount of definitive Notes of like tenor and 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 3.05. Transfer and Exchange.
---------------------
The Company shall cause to be kept at the Corporate Trust Office of
the Trustee a register (the register maintained in such office and in any other
office or agency designated pursuant to Section 10.02 being sometimes referred
to herein as the "Note Register") in which, subject to such reasonable
regulations as the Registrar may prescribe, the Company shall provide for the
registration of Notes and of transfers and exchanges of Notes. The Trustee is
hereby initially appointed Registrar for the purpose of registering Notes and
transfers of Notes as herein provided.
When Notes are presented to the Registrar or a co-Registrar with a
request from the Holder of such Notes to register the transfer or exchange for
an equal principal amount of Notes of other authorized denominations, the
Registrar shall register the transfer or make the exchange as requested;
provided, however, that every Note presented or surrendered for registration of
- -------- -------
transfer or exchange shall be duly endorsed or be accompanied by a written
instrument of transfer or exchange in form satisfactory to the Company and the
Registrar, duly executed by the Holder thereof or his attorney duly authorized
in writing. Whenever any Notes are so presented for exchange, the Company and
any Guarantor shall execute, and the Trustee shall authenticate and deliver, the
Notes and Note Guarantees which the Holder making the exchange is entitled to
receive. No service charge shall be made to the Noteholder for any registration
of transfer or exchange. The Company may require from the Noteholder payment of
a sum sufficient to cover any transfer taxes or other governmental charge that
may be imposed in relation to a transfer or exchange, but this provision shall
not apply to any exchange pursuant to Section 9.06 hereof (in which events the
Company will be responsible for the payment of
<PAGE>
-24-
all such taxes which arise solely as a result of the transfer or exchange and do
not depend on the tax status of the Holder). The Trustee shall not be required
to exchange or register the transfer of any Note for a period of 15 days
immediately preceding the first mailing of notice of redemption of Notes to be
redeemed or of any Note selected, called or being called for redemption except,
in the case of any Note where public notice has been given that such Note is to
be redeemed in part, the portion thereof not to be redeemed.
All Notes issued upon any registration of transfer or exchange of
Notes shall be the valid obligations of the Company, evidencing the same
Indebtedness, and entitled to the same benefits under this Indenture, as the
Notes surrendered upon such registration of transfer or exchange.
Any Holder of a beneficial interest in a Global Note shall, by
acceptance of such Global Note, agree that transfers of beneficial interests in
such Global Notes may be effected only through a book-entry system maintained by
the Holder of such Global Note (or its agent), and that ownership of a
beneficial interest in the Note shall be required to be reflected in a book-
entry system.
Section 3.06. Mutilated, Destroyed, Lost and Stolen Notes.
-------------------------------------------
If a mutilated Note is surrendered to the Trustee or if the Holder of
a Note of any series claims that the Note has been lost, destroyed or wrongfully
taken, the Company shall execute and upon a Company Order, the Trustee shall
authenticate and deliver a replacement Note of like tenor and principal amount,
bearing a number not contemporaneously outstanding, and the Guarantors shall
execute a replacement Note Guarantee, if the Holder of such Note furnishes to
the Company and to the Trustee evidence reasonably acceptable to them of the
ownership and the destruction, loss or theft of such Note and an indemnity bond
shall be posted by such Holder, sufficient in the judgment of the Company or the
Trustee, as the case may be, to protect the Company, the Trustee or any Agent
from any loss that any of them may suffer if such Note is replaced. The Company
may charge such Holder for the Company's and any Guarantor's expenses in
replacing such Note (including (i) expenses of the Trustee charged to the
Company and (ii) any tax or other governmental charge that may be imposed) and
the Trustee may charge the Company for the Trustee's expenses in replacing such
Note.
<PAGE>
-25-
Every replacement Note and Note Guarantee issued pursuant to this
Section in lieu of any destroyed, lost or stolen Note shall constitute an
original additional contractual obligation of the Company and each Guarantor,
whether or not the destroyed, lost or stolen Note shall be at any time
enforceable by anyone, and shall be entitled to all benefits of this Indenture
equally and proportionately with any and all other Notes duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Notes.
Section 3.07. Payment of Interest; Interest Rights Preserved.
----------------------------------------------
Interest on any Note which is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the person in whose
name that Note (or one or more Predecessor Notes) is registered at the close of
business on the Regular Record Date for such interest.
Any interest on any Note which is payable, but is not punctually paid
or duly provided for, on any Interest Payment Date and interest on such
defaulted interest at the then applicable interest rate borne by the Notes, to
the extent lawful (such defaulted interest and interest thereon herein
collectively called "Defaulted Interest") shall forthwith cease to be payable to
the Holder on the Regular Record Date; and such Defaulted Interest may be paid
by the Company, at its election in each case, as provided in subsection (a) or
(b) below:
(a) The Company may elect to make payment of any Defaulted Interest
to the persons in whose names the Notes (or their respective Predecessor
Notes) are registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest, which shall be fixed in the
following manner. The Company shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on each Note and the date
of the proposed payment, and at the same time the Company shall deposit
with the Trustee an amount of money equal to the aggregate amount proposed
to be paid in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the
proposed payment, such money when deposited to be held in trust for the
benefit of the persons entitled to such De-
<PAGE>
-26-
faulted Interest as provided in this subsection (a). Thereupon the Trustee
shall fix a Special Record Date for the payment of such Defaulted Interest
which shall be not more than 15 days and not less than 10 days prior to the
date of the proposed payment and not less than 10 days after the receipt by
the Trustee of the notice of the proposed payment. The Trustee shall
promptly notify the Company in writing of such Special Record Date. In the
name and at the expense of the Company, the Trustee shall cause notice of
the proposed payment of such Defaulted Interest and the Special Record Date
therefor to be mailed, first-class postage prepaid, to each Holder at its
address as it appears in the Note Register, not less than 10 days prior to
such Special Record Date. Notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor having been so mailed, such
Defaulted Interest shall be paid to the persons in whose names the Notes
(or their respective Predecessor Notes) are registered on such Special
Record Date and shall no longer be payable pursuant to the following
subsection (b).
(b) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange on which the Notes may be listed, and upon such notice
as may be required by such exchange, if, after written notice given by the
Company to the Trustee of the proposed payment pursuant to this subsection
(b), such payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Note
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Note shall carry the rights to interest accrued and
unpaid, and to accrue, which were carried by such other Note.
Section 3.08. Persons Deemed Owners.
---------------------
Prior to and at the time of due presentment for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the person in whose name any Note is registered in the Note Register
as the owner of such Note for the purpose of receiving payment of principal of,
premium, if any, and (subject to Section 3.07) interest on such Note and for all
other purposes whatsoever, whether or not such Note shall be overdue, and
neither the Company, the Trustee nor any agent of the Company or the Trustee
shall be affected by notice to the contrary.
<PAGE>
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Section 3.09. Cancellation.
------------
All Notes surrendered for payment, redemption, registration of
transfer or exchange shall be delivered to the Trustee and, if not already
canceled, shall be promptly canceled by it. The Company and any Guarantor may
at any time deliver to the Trustee for cancellation any Notes previously
authenticated and delivered hereunder which the Company or such Guarantor may
have acquired in any manner whatsoever, and all Notes so delivered shall be
promptly canceled by the Trustee. The Registrar and the Paying Agent shall
forward to the Trustee any Notes surrendered to them for registration of
transfer or exchange, redemption or payment. The Trustee and no one else shall
cancel all Notes surrendered for registration of transfer, exchange, payment,
replacement or cancellation. No Notes shall be authenticated in lieu of or in
exchange for any Notes canceled as provided in this Section 3.09, except as
expressly permitted by this Indenture. All canceled Notes held by the Trustee
shall be destroyed and certification of their destruction delivered to the
Company unless by a Company Order the Company shall direct that the canceled
Notes be returned to it. The Trustee shall provide the Company a list of all
Notes that have been canceled from time to time as requested by the Company.
Section 3.10. Computation of Interest.
-----------------------
Interest on the Notes shall be computed on the basis of a 360-day year
of twelve 30-day months and, in the case of a partial month, the actual number
of days elapsed.
Section 3.11. Legal Holidays.
--------------
In any case where any Interest Payment Date, Redemption Date, date
established for the payment of Defaulted Interest or Stated Maturity of any Note
shall not be a Business Day, then (notwithstanding any other provision of this
Indenture or of the Notes) payment of principal, premium, if any, or interest
need not be made on such date, but may be made on the next succeeding Business
Day with the same force and effect as if made on the Interest Payment Date,
Redemption Date, date established for the payment of Defaulted Interest or at
the Stated Maturity, as the case may be. In such event, no interest shall
accrue with respect to such payment for the period from and after such Interest
Payment Date, Redemption Date, date established for the payment of Defaulted
Interest or Stated Maturity, as the case may be, to the next succeeding Business
Day and, with respect to any Interest Payment Date, interest for
<PAGE>
-28-
the period from and after such Interest Payment Date shall accrue with respect
to the next succeeding Interest Payment Date.
Section 3.12. CUSIP and CINS Numbers.
----------------------
The Company in issuing the Notes may use "CUSIP" and "CINS" numbers
(if then generally in use), and if so, the Trustee shall use the CUSIP or CINS
numbers, as the case may be, in notices of redemption or exchange as a
convenience to Holders; provided, however, that any such notice may state that
-------- -------
no representation is made as to the correctness or accuracy of the CUSIP or CINS
number, as the case may be, printed in the notice or on the Notes, and that
reliance may be placed only on the other identification numbers printed on the
Notes. The Company shall promptly notify the Trustee in writing of any change
in the CUSIP or CINS number of any type of Notes.
Section 3.13. Paying Agent To Hold Money in Trust.
-----------------------------------
Each Paying Agent shall hold in trust for the benefit of the
Noteholders or the Trustee all money held by the Paying Agent for the payment of
principal of, premium, if any, or interest on the Notes, and shall notify the
Trustee of any default by the Company in making any such payment. Money held in
trust by the Paying Agent need not be segregated except as required by law and
in no event shall the Paying Agent be liable for any interest on any money
received by it hereunder. The Company at any time may require the Paying Agent
to pay all money held by it to the Trustee and account for any funds disbursed
and the Trustee may at any time during the continuance of any Event of Default,
upon a Company Order to the Paying Agent, require such Paying Agent to pay
forthwith all money so held by it to the Trustee and to account for any funds
disbursed. Upon making such payment, the Paying Agent shall have no further
liability for the money delivered to the Trustee.
Section 3.14. Treasury Notes.
--------------
In determining whether the Holders of the required aggregate principal
amount of Notes have concurred in any direction, waiver, consent or notice,
Notes owned by the Company or an Affiliate of the Company shall be considered as
though they are not outstanding, except that for the purposes of determining
whether the Trustee shall be protected in relying on any such direction, waiver
or consent, only Notes which the Trustee actually knows are so owned shall be so
considered. The Company shall notify the Trustee, in writing, when it or any of
its Affiliates repurchases or otherwise acquires Notes,
<PAGE>
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of the aggregate principal amount of such Notes so repurchased or otherwise
acquired.
Section 3.15. Deposits of Monies.
------------------
Prior to 12:00 p.m. noon New York City time on each Interest Payment
Date and maturity date, the Company shall have deposited with the Paying Agent
in immediately available funds money sufficient to make cash payments, if any,
due on such Interest Payment Date and maturity date, as the case may be, in a
timely manner which permits the Paying Agent to remit payment to the Holders on
such Interest Payment Date and maturity date, as the case may be.
Section 3.16. Book-Entry Provisions for Global Notes.
--------------------------------------
(a) The Global Notes initially shall (i) be registered in the name of
the Depository or the nominee of such Depository, (ii) be delivered to the
Trustee as custodian for such Depository and (iii) bear legends as set forth in
Exhibit B.
Members of, or participants in, the Depository ("Agent Members") shall
have no rights under this Indenture with respect to any Global Note held on
their behalf by the Depository, or the Trustee as its custodian, or under the
Global Note, and the Depository may be treated by the Company, the Trustee and
any agent of the Company or the Trustee as the absolute owner of the Global Note
for all purposes whatsoever. Notwithstanding the foregoing, nothing herein
shall prevent the Company, the Trustee or any agent of the Company or the
Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Depository or impair, as between the Depository
and its Agent Members, the operation of customary practices governing the
exercise of the rights of a Holder of any Note.
(b) Transfers of Global Notes shall be limited to transfers in whole,
but not in part, to the Depository, its successors or their respective nominees.
Interests of beneficial owners in the Global Notes may be transferred or
exchanged for Physical Notes in accordance with the rules and procedures of the
Depository. In addition, Physical Notes shall be transferred to all beneficial
owners in exchange for their beneficial interests in Global Notes if (i) the
Depository notifies the Company that it is unwilling or unable to continue as
Depository for any Global Note, or that it will cease to be a
<PAGE>
-30-
"Clearing Agency" registered under the Exchange Act, and in either case a
successor Depository is not appointed by the Company within 90 days of such
notice or (ii) an Event of Default has occurred and is continuing and the
Registrar has received a written request from the Depository to issue Physical
Notes.
(c) In connection with any transfer or exchange of a portion of the
beneficial interest in any Global Note to beneficial owners pursuant to
paragraph (b), the Registrar shall (if one or more Physical Notes are to be
issued) reflect on its books and records the date and a decrease in the
principal amount of the Global Note in an amount equal to the principal amount
of the beneficial interest in the Global Note to be transferred, and the Company
shall execute, and the Trustee shall authenticate and deliver, one or more
Physical Notes of like tenor and principal amount of authorized denominations.
(d) In connection with the transfer of Global Notes as an entirety to
beneficial owners pursuant to paragraph (b), the Global Notes shall be deemed to
be surrendered to the Trustee for cancellation, and the Company shall execute,
and the Trustee shall authenticate and deliver, to each beneficial owner
identified by the Depository in exchange for its beneficial interest in the
Global Notes, an equal aggregate principal amount at maturity of Physical Notes
of like tenor of authorized denominations.
(e) The Holder of any Global Note may grant proxies and otherwise
authorize any person, including Agent Members and persons that may hold
interests through Agent Members, to take any action which a Holder is entitled
to take under this Indenture or the Notes.
ARTICLE FOUR
DEFEASANCE OR COVENANT DEFEASANCE
Section 4.01. Company's Option To Effect Defeasance or Covenant
Defeasance.
-------------------------------------------------
The Company may, at its option by Board Resolution, at any time, with
respect to the Notes, elect to have either Section 4.02 or Section 4.03 be
applied to all of the Outstanding Notes (the "Defeased Notes"), upon compliance
with the conditions set forth below in this Article Four.
<PAGE>
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Section 4.02. Defeasance and Discharge.
------------------------
Upon the Company's exercise under Section 4.01 of the option
applicable to this Section 4.02, the Company and each Guarantor shall be deemed
to have been discharged from their obligations with respect to the Defeased
Notes and the related Note Guarantees on the date the conditions set forth below
are satisfied (hereinafter, "defeasance"). For this purpose, such defeasance
means that the Company shall be deemed to have paid and discharged the entire
indebtedness represented by the Defeased Notes, which shall thereafter be deemed
to be "Outstanding" only for the purposes of Section 4.05 and the other Sections
of this Indenture referred to in (a) and (b) below, and to have satisfied all
its other obligations under such Notes and this Indenture insofar as such Notes
are concerned (and the Trustee, at the expense of the Company, and, upon Company
Request, shall execute proper instruments acknowledging the same), except for
the following, which shall survive until otherwise terminated or discharged
hereunder: (a) the rights of Holders of Defeased Notes to receive, solely from
the trust fund described in Section 4.04 and as more fully set forth in such
Section, payments in respect of the principal of, premium, if any, and interest
on such Defeased Notes when such payments are due, (b) the Company's obligations
with respect to such Defeased Notes under Sections 3.04, 3.05, 3.06, 10.02 and
10.03, (c) the rights, powers, trusts, duties and immunities of the Trustee
hereunder, including, without limitation, the Trustee's rights under Section
6.07, and (d) this Article Four. Subject to compliance with this Article Four,
the Company may exercise its option under this Section 4.02 notwithstanding the
prior exercise of its option under Section 4.03 with respect to the Notes.
Section 4.03. Covenant Defeasance.
-------------------
Upon the Company's exercise under Section 4.01 of the option
applicable to this Section 4.03, the Company and each Guarantor shall be
released from their obligations under any covenant or provision contained in
Sections 10.06 through 10.16 and the provisions of Article Eight shall not
apply, with respect to the Defeased Notes, on and after the date the conditions
set forth below are satisfied (hereinafter, "covenant defeasance"), and the
Defeased Notes shall thereafter be deemed not to be "Outstanding" for the
purposes of any direction, waiver, consent or declaration or Act of Holders (and
the consequences of any thereof) in connection with such covenants, but shall
continue to be deemed "Outstanding" for all other purposes hereunder. For this
purpose, such covenant defeasance
<PAGE>
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means that, with respect to the Defeased Notes, the Company and each Guarantor
may omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such Section or Article, whether
directly or indirectly, by reason of any reference elsewhere herein to any such
Section or Article or by reason of any reference in any such Section or Article
to any other provision herein or in any other document and such omission to
comply shall not constitute a Default or an Event of Default under Section
5.01(c) or (d), but, except as specified above, the remainder of this Indenture
and such Defeased Notes shall be unaffected thereby.
Section 4.04. Conditions to Defeasance or Covenant Defeasance.
-----------------------------------------------
The following shall be the conditions to application of either Section
4.02 or Section 4.03 to the Defeased Notes:
(1) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements
of Section 6.09 who shall agree to comply with the provisions of this
Article Four applicable to it) as trust funds in trust for the purpose of
making the following payments, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of such Notes, (a) cash in
an amount, or (b) U.S. Government Obligations which through the scheduled
payment of principal, premium, if any, and interest in respect thereof in
accordance with their terms will provide, not later than one day before the
due date of any payment, money in an amount, or (c) a combination thereof,
in any such case, sufficient, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay and discharge, and which shall be
applied by the Trustee (or other qualifying trustee) to pay and discharge,
the principal of, premium, if any, and interest on the Defeased Notes at
the Stated Maturity of such principal or installment of principal, premium,
if any, or interest; provided, however, that the Trustee shall have been
-------- -------
irrevocably instructed to apply such cash or the proceeds of such U.S.
Government Obligations to said payments with respect to the Notes;
(2) No Default shall have occurred and be continuing on the date
of such deposit or, insofar as Section 5.01(f), (g) or (h) is concerned, at
any time during the period ending on the ninety-first day after the date of
<PAGE>
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such deposit (it being understood that this condition shall not be deemed
satisfied until the expiration of such period);
(3) Neither the Company nor any Subsidiary of the Company is an
"insolvent person" within the meaning of any applicable Bankruptcy Law on
the date of such deposit or at any time during the period ending on the
ninety-first day after the date of such deposit (it being understood that
this condition shall not be deemed satisfied until the expiration of such
period);
(4) Such defeasance or covenant defeasance shall not cause the
Trustee for the Notes to have a conflicting interest in violation of
Section 6.08 and for purposes of the Trust Indenture Act with respect to
any securities of the Company or any Guarantor;
(5) Such defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a default under, this Indenture or
any other material agreement or instrument to which the Company or any
Guarantor is a party or by which it is bound;
(6) In the case of an election under Section 4.02, the Company
shall have delivered to the Trustee an Opinion of Counsel stating that (x)
the Company has received from, or there has been published by, the Internal
Revenue Service a ruling or (y) since the date hereof, there has been a
change in the applicable Federal income tax law, in either case to the
effect that, and based thereon such opinion shall confirm that, the Holders
of the Outstanding Notes will not recognize income, gain or loss for
Federal income tax purposes as a result of such defeasance and will be
subject to Federal income tax on the same amounts, in the same manner and
at the same times as would have been the case if such defeasance had not
occurred;
(7) In the case of an election under Section 4.03, the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect
that the Holders of the Outstanding Notes will not recognize income, gain
or loss for Federal income tax purposes as a result of such covenant
defeasance and will be subject to Federal income tax on the same amounts,
in the same manner and at the same times as would have been the case if
such covenant defeasance had not occurred;
<PAGE>
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(8) The Company shall have delivered to the Trustee, an Opinion
of Counsel to the effect that, immediately following the ninety-first day
after the deposit, the trust funds established pursuant to this Article
will not be subject to the effect of any applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally under
any applicable U.S. Federal or state law;
(9) The Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit made by the Company pursuant to its
election under Section 4.02 or 4.03 was not made by the Company with the
intent of preferring the Holders or any Guarantor over the other creditors
of the Company or with the intent of defeating, hindering, delaying or
defrauding creditors of the Company or others; and
(10) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that (i) all conditions
precedent (other than conditions requiring the passage of time) provided
for relating to either the defeasance under Section 4.02 or the covenant
defeasance under Section 4.03 (as the case may be) have been complied with
as contemplated by this Section 4.04 and (ii) if any other Indebtedness of
the Company or any Guarantor shall then be outstanding or committed, such
defeasance or covenant defeasance will not violate the provisions of the
agreements or instruments evidencing such Indebtedness.
Opinions required to be delivered under this Section may have such
qualifications as are customary for opinions of the type required and reasonably
acceptable to the Trustee.
Section 4.05. Deposited Money and U.S. Government Obligations To Be
Held in Trust; Other Miscellaneous Provisions.
-----------------------------------------------------
Subject to the proviso of the last paragraph of Section 10.03, all
money and U.S. Government Obligations (including the proceeds thereof) deposited
with the Trustee (or other qualifying trustee, collectively for purposes of this
Section 4.05, the "Trustee") pursuant to Section 4.04 in respect of the Defeased
Notes shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or
through any Paying Agent (other than the Company) as the Trustee may deter-
<PAGE>
-35-
mine, to the Holders of such Notes of all sums due and to become due thereon in
respect of principal, premium, if any, and interest, but such money need not be
segregated from other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee and hold it harmless
against any tax, fee or other charge imposed on or assessed against the U.S.
Government Obligations deposited pursuant to Section 4.04 or the principal,
premium, if any, and interest received in respect thereof other than any such
tax, fee or other charge which by law is for the account of the Holders of the
Defeased Notes.
Anything in this Article Four to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon Company
Request any money or U.S. Government Obligations held by it as provided in
Section 4.04 which, in the opinion of an internationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, are in excess of the amount thereof which would then
be required to be deposited to effect an equivalent defeasance or covenant
defeasance.
Section 4.06. Reinstatement.
-------------
If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations in accordance with Section 4.02 or 4.03, as the case may
be, by reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, then the
obligations of the Company and of any Guarantor under this Indenture, the Notes
and the Note Guarantees shall be revived and reinstated as though no deposit had
occurred pursuant to Section 4.02 or 4.03, as the case may be, until such time
as the Trustee or Paying Agent is permitted to apply all such money and U.S.
Government Obligations in accordance with Section 4.02 or 4.03, as the case may
be; provided, however, that if the Company makes any payment of principal,
-------- -------
premium, if any, or interest on any Note following the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of
such Notes to receive such payment from the money and U.S. Government
Obligations held by the Trustee or Paying Agent.
<PAGE>
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ARTICLE FIVE
REMEDIES
Section 5.01. Events of Default.
-----------------
"Event of Default", wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):
(a) default in the payment of any interest on the Notes when due and
payable, continued for 30 days or more; or
(b) default in payment of all or any part of principal of or premium,
if any, on the Notes at the Maturity Date; or
(c) default in the performance of or breach of any other covenant or
warranty of the Company contained in the Notes, any Note Guarantee or this
Indenture (other than a default specified in (a) or (b) above) that
continues for a period of 60 days after written notice of such failure
requiring the Company to remedy the same and stating that such notice is a
"Notice of Default" hereunder shall have been given (x) to the Company by
the Trustee or (y) to the Company and the Trustee by the Holders of at
least 25% in aggregate principal amount of the Notes then Outstanding; or
(d) acceleration of any Indebtedness, having an aggregate minimum
principal amount of $50 million, for money borrowed by the Company or a
Subsidiary under the terms of the instrument under which such Indebtedness
is issued or secured, if such acceleration is not discharged within 10 days
after written notice of such acceleration; or
(e) any Note Guarantee ceases to be in full force and effect or is
declared null and void or any Guarantor denies that it has any further
liability under any Note Guarantee, or gives notice to such effect (other
than by reason of the termination of this Indenture or the release of any
such Note Guarantee in accordance with Section 12.04 hereof) and such
condition shall have continued
<PAGE>
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for a period of 30 days after written notice of such condition requiring
the same to be remedied and stating that such notice is a "Notice of
Default" hereunder shall have been given (x) to the Company by the Trustee
or (y) to the Company and the Trustee by the Holders of at least 25% in
aggregate principal amount of the Notes then Outstanding; or
(f) the Company or any Subsidiary of the Company pursuant to or under
or within the meaning of any Bankruptcy Law:
(i) commences a voluntary case or proceeding;
(ii) consents to the making of a Bankruptcy Order in an
involuntary case or proceeding or the commencement of any case against
it;
(iii) consents to the appointment of a Custodian of it or for
any substantial part of its property;
(iv) makes a general assignment for the benefit of its
creditors;
(v) files an answer or consent seeking reorganization or
relief;
(vi) shall admit in writing its inability to pay its debts
generally; or
(vii) consents to the filing of a petition in bankruptcy; or
(g) a court of competent jurisdiction in any involuntary case or
proceeding enters a Bankruptcy Order against the Company or any Subsidiary,
and such Bankruptcy Order remains unstayed and in effect for 60 consecutive
days; or
(h) a Custodian shall be appointed out of court with respect to the
Company or any Subsidiary or with respect to all or any substantial part of
the assets or properties of the Company or any Subsidiary.
<PAGE>
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Section 5.02. Acceleration of Maturity; Rescission and Annulment.
--------------------------------------------------
If (x) an Event of Default (other than an Event of Default specified
in Section 5.01(f), (g) or (h) with respect to the Company) occurs and is
continuing then and in every such case the Trustee or the Holders of at least
25% in aggregate principal amount of the Notes then outstanding may, and the
Trustee upon the request of the Holders of not less than 25% in aggregate
principal amount of the Notes then Outstanding shall, declare all principal of
all the Notes to be due and payable immediately in an amount equal to the
principal amount of the Notes, premium, if any, thereon plus accrued and unpaid
interest, if any, to the date the Notes become due and payable by a notice in
writing to the Company (and to the Trustee, if given by the Holders) and upon
any such declaration such principal, premium, if any, and interest, shall become
immediately due and payable. If an Event of Default specified in Section
5.01(f), (g) or (h) with respect to the Company occurs and is continuing, then
the principal of, premium, if any, and accrued and unpaid interest, if any, on
all the Notes then outstanding shall ipso facto become and be immediately due
---- -----
and payable without any declaration or other act on the part of the Trustee or
any Holder of Notes.
At any time after a declaration of acceleration has been made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter provided in this Article, the Holders of a majority
in aggregate principal amount of the Notes then Outstanding, by written notice
to the Company and the Trustee, may rescind and annul such declaration of
acceleration and its consequences if:
(a) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(i) all amounts due the Trustee under Section 6.07, including
the reasonable compensation, fees, expenses, disbursements and
advances of the Trustee, its agents and counsel,
(ii) all overdue interest on all Notes,
(iii) the principal of and premium, if any, on any Notes
which have become due otherwise than by such declaration of
acceleration and interest thereon at the rate then borne by the Notes,
and
<PAGE>
-39-
(iv) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate then borne by the Notes;
and
(b) all Events of Default, other than the non-payment of principal
of, premium, if any, and any accrued and unpaid interest on, the Notes that
have become due solely by such declaration of acceleration, have been cured
or waived as provided in Section 5.13.
No such rescission shall affect any subsequent Default or impair any
right consequent thereon.
Notwithstanding the foregoing, in the event of a declaration of
acceleration in respect of the Notes because an Event of Default specified in
Section 5.01(d) shall have occurred and be continuing, such declaration of
acceleration shall be automatically annulled if the Indebtedness that is the
subject of such Event of Default has been discharged or paid or the requisite
holders thereof have rescinded their declaration of acceleration in respect of
such Indebtedness and written notice of such discharge or rescission, as the
case may be, shall have been given to the Trustee by the Company and by the
requisite holders of such Indebtedness or a trustee, fiduciary or agent for such
holders, within 60 days after such declaration of acceleration in respect of the
Notes and no other Event of Default has occurred which has not been cured or
waived during such 60-day period.
Section 5.03. Collection of Indebtedness and Suits for Enforcement
by Trustee.
----------------------------------------------------
The Company and each Guarantor covenant that if an Event of Default
specified in Section 5.01 shall have occurred and be continuing, the Company and
each Guarantor will, jointly and severally, upon demand of the Trustee, pay to
the Trustee, for the benefit of the Holders of such Notes, the whole amount then
due and payable on such Notes for principal, premium, if any, and interest, with
interest upon the overdue principal, premium, if any, and, to the extent that
payment of such interest shall be legally enforceable, upon overdue installments
of interest, at the rate then borne by the Notes; and, in addition thereto, such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
<PAGE>
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If the Company and each Guarantor, fail to pay such amounts forthwith
upon such demand, the Trustee, in its own name and as trustee of an express
trust, may, but is not obligated under this paragraph to, institute a judicial
proceeding for the collection of the sums so due and unpaid and may, but is not
obligated under this paragraph to, prosecute such proceeding to judgment or
final decree, and may, but is not obligated under this paragraph to, enforce the
same against the Company, any Guarantor or any other obligor upon the Notes and
collect the moneys adjudged or decreed to be payable in the manner provided by
law out of the property of the Company or any Guarantor or any other obligor
upon the Notes, wherever situated.
If an Event of Default occurs and is continuing, the Trustee may in
its discretion, but is not obligated under this paragraph to, (i) proceed to
protect and enforce its rights and the rights of the Holders under this
Indenture or any Note Guarantee by such appropriate private or judicial
proceedings as the Trustee shall deem most effectual to protect and enforce such
rights, whether for the specific enforcement of any covenant or agreement
contained in this Indenture or in aid of the exercise of any power granted
herein, including, without limitation, seeking recourse against any Guarantor or
(ii) proceed to protect and enforce any other proper remedy, including, without
limitation, seeking recourse against any Guarantor. No recovery of any such
judgment upon any property of the Company or any Guarantor shall affect or
impair any rights, powers or remedies of the Trustee or the Holders.
Section 5.04. Trustee May File Proofs of Claims.
---------------------------------
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the Notes,
including each Guarantor or the property of the Company or of such other obligor
or their creditors, the Trustee (irrespective of whether the principal of the
Notes shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue principal or interest) shall be entitled
and empowered, by intervention in such proceeding or otherwise,
(a) to file and prove a claim for the whole amount of principal,
premium, if any, and interest owing and unpaid in respect of the Notes and
to file such other papers
<PAGE>
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or documents as may be necessary or advisable in order to have the claims
of the Trustee (including any claim for the reasonable compensation, fees,
expenses, disbursements and advances of the Trustee, its agents and
counsel) and of the Holders allowed in such judicial proceeding, and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any Custodian, in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay the
Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 6.07 hereof.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder thereof, or to authorize the Trustee to vote in respect
of the claim of any Holder in any such proceeding.
Section 5.05. Trustee May Enforce Claims Without Possession of Notes.
------------------------------------------------------
All rights of action and claims under this Indenture, the Notes or any
Note Guarantee may be prosecuted and enforced by the Trustee without the
possession of any of the Notes or the production thereof in any proceeding
relating thereto, and any such proceeding instituted by the Trustee shall be
brought in its own name and as trustee of an express trust, and any recovery of
judgment shall, after provision for the payment of the reasonable compensation,
fees, expenses, disbursements and advances of the Trustee, its agents and
counsel, be for the ratable benefit of the Holders of the Notes in respect of
which such judgment has been recovered.
Section 5.06. Application of Money Collected.
------------------------------
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal, premium, if
any, or interest, upon presentation of the Notes and the notation thereon of
<PAGE>
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the payment if only partially paid and upon surrender thereof if fully paid:
First: to the Trustee for amounts due under Section 6.07;
Second: to Holders for interest accrued on the Notes, ratably,
without preference or priority of any kind, according to the amounts due
and payable on the Notes for interest;
Third: to Holders for principal and premium, if any, amounts owing
under the Notes, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Notes for principal and
premium, if any; and
Fourth: the balance, if any, to the Company.
The Trustee, upon prior written notice to the Company, may fix a
record date and payment date for any payment to Noteholders pursuant to this
Section 5.06.
Section 5.07. Limitation on Suits.
-------------------
No Holder of any Notes shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless
(a) such Holder has previously given written notice to the Trustee of
an Event of Default; the Holders of not less than 25% in principal amount
of the Outstanding Notes shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name
as Trustee hereunder;
(b) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(c) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(d) no direction inconsistent with such written request has been
given to the Trustee during such 60-day pe-
<PAGE>
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riod by the Holders of a majority in aggregate principal amount of the
Outstanding Notes;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture, any Note or any Note Guarantee to affect, disturb or prejudice
the rights of any other Holders, or to obtain or to seek to obtain priority or
preference over any other Holders or to enforce any right under this Indenture,
any Note or any Note Guarantee, except in the manner provided in this Indenture
and for the equal and ratable benefit of all the Holders.
Section 5.08. Unconditional Right of Holders To Receive Principal,
Premium and Interest.
----------------------------------------------------
Notwithstanding any other provision in this Indenture, the Holder of
any Note shall have the right, which is absolute and unconditional, to receive
cash payment of the principal of, premium, if any, and (subject to Section 3.07
hereof) interest on such Note on the respective Stated Maturities expressed in
such Note (or, in the case of redemption, on the respective Redemption Date) and
to institute suit for the enforcement of any such payment, and such rights shall
not be impaired without the consent of such Holder.
Section 5.09. Restoration of Rights and Remedies.
----------------------------------
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture, any Note or any Note Guarantee and
such proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Trustee or to such Holder, then and in every such
case the Company, each of the Guarantor, the Trustee and the Holders 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 Holders shall continue as though no such
proceeding had been instituted.
Section 5.10. Rights and Remedies Cumulative.
------------------------------
Except as provided in Section 3.06, no right or remedy herein
conferred upon or reserved to the Trustee or to the Holders is intended to be
exclusive of any other right or remedy, and every right and remedy shall, to the
extent permitted by law, be cumulative and in addition to every other right and
remedy given hereunder or now or hereafter existing at law or
<PAGE>
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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 5.11. Delay or Omission Not Waiver.
----------------------------
No delay or omission of the Trustee or of any Holder of any Note to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article Five or by
law to the Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders, as the case
may be.
Section 5.12. Control by Majority.
-------------------
The Holders of a majority in aggregate principal amount of the
Outstanding Notes shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred on the Trustee, provided, however, that:
-------- -------
(a) such direction shall not be in conflict with any rule of law or
with this Indenture, any Note or any Note Guarantee or expose the Trustee
to personal liability; and
(b) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
Section 5.13. Waiver of Past Defaults.
-----------------------
The Holders of not less than a majority in aggregate principal amount
of the Outstanding Notes may on behalf of the Holders of all such Notes waive
any past Default hereunder and its consequences, except a Default
(a) in the payment of the principal of, premium, if any, or interest
on any Note or
(b) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the Holder of
each Outstanding Note affected thereby.
<PAGE>
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Upon any such waiver, such Default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or Event of Default or impair any right consequent thereon.
Section 5.14. 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 5.14 shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Holder, or group of Holders, holding in
the aggregate more than 10% in principal amount of the Outstanding Notes, or to
any suit instituted by any Holder for the enforcement of the payment of the
principal of, premium, if any, or interest on any Note on or after the
respective Stated Maturities expressed in such Note (or, in the case of
redemption, on or after the respective Redemption Dates).
Section 5.15. Waiver of Stay, Extension or Usury Laws.
---------------------------------------
Each of the Company and the Guarantors 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 or any usury or other law wherever enacted, now or at any time
hereafter in force, which would prohibit or forgive the Company or any Guarantor
from paying all or any portion of the principal of, premium, if any, or interest
on the Notes contemplated herein or in the Notes or which may affect the
covenants or the performance of this Indenture; and each of the Company and the
Guarantors (to the extent that it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law, and covenants that it 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.
<PAGE>
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Section 5.16. Unconditional Right of Holders To Receive Payment.
-------------------------------------------------
Notwithstanding any other provision in this Indenture and any other
provision of any Note, the right of any Holder of any Note to receive payment of
the principal of, premium, if any, and interest on such Note on or after the
respective Stated Maturities (or the respective Redemption Dates, in the case of
redemption) expressed in such Note, or after such respective dates, shall not be
impaired or affected without the consent of such Holder.
ARTICLE SIX
THE TRUSTEE
Section 6.01. 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 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.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negli-
<PAGE>
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gent failure to act, or its own willful misconduct, except that 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.
(d) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section 6.01.
Section 6.02. Notice of Defaults.
------------------
Within 60 days after the occurrence of any Default, the Trustee shall
transmit by mail to all Holders, as their names and addresses appear in the Note
Register, notice of such Default hereunder known to the Trustee, unless such
Default shall have been cured or waived; provided, however, that, except in the
-------- -------
case of a Default in the payment of the principal of, premium, if any, or
interest on any Note, the Trustee shall be protected in withholding such notice
if and so long as a trust committee of Responsible Officers of the Trustee in
good faith determines that the withholding of such notice is in the interest of
the Holders.
Section 6.03. Certain Rights of Trustee.
-------------------------
Subject to Section 6.01 hereof and the provisions of Section 315 of
the Trust Indenture Act:
(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, debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed or presented
by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors of the Company or any Guarantor may be
sufficiently evidenced by a Board Resolution thereof;
<PAGE>
-48-
(c) the Trustee may consult with counsel and any written advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon in accordance
with such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Holders pursuant to this Indenture, unless such Holders shall
have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which might be incurred by the Trustee in
compliance with such request or direction;
(e) the Trustee shall not be liable for any action taken or omitted
by it in good faith and believed by it to be authorized or within the
discretion, rights or powers conferred upon it by this Indenture other than
any liabilities arising out of its own negligence;
(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,
approval, appraisal, bond, debenture, note, coupon, security, other
evidence of indebtedness or other paper or document unless requested in
writing so to do by the Holders of not less than a majority in aggregate
principal amount of the Notes then Outstanding; provided, however, that, if
-------- -------
the payment within a reasonable time to the Trustee of the costs, expenses
or liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not reasonably assured to
the Trustee by the security afforded to it by the terms of this Indenture,
the Trustee may require reasonable indemnity against such expenses or
liabilities as a condition to proceeding; the reasonable expenses of every
such investigation shall be paid by the Company or, if paid by the Trustee
or any predecessor Trustee, shall be repaid by the Company upon demand;
provided, further, the Trustee in its discretion may make such further
-------- -------
inquiry or investigation into such facts or matters as it may deem fit,
and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and
premises of the Company, personally or by agent or attorney; and
<PAGE>
-49-
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder.
Section 6.04. Trustee Not Responsible for Recitals, Dispositions of
Notes or Application of Proceeds Thereof.
-----------------------------------------------------
The recitals contained herein and in the Notes, except the Trustee's
certificates of authentication, shall be taken as the statements of the Company
and the Guarantors, and the Trustee assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Notes or of any Note Guarantee except
that the Trustee represents that it is duly authorized to execute and deliver
this Indenture, authenticate the Notes and perform its obligations hereunder and
that the statements made by it in a Statement of Eligibility and Qualification
on Form T-1, if any, to be supplied to the Company are true and accurate subject
to the qualifications set forth therein. The Trustee shall not be accountable
for the use or application by the Company of Notes or the proceeds thereof.
Section 6.05. Trustee and Agents May Hold
Notes; Collections; Etc.
---------------------------
The Trustee, any Paying Agent, Registrar or any other agent of the
Company, in its individual or any other capacity, may become the owner or
pledgee of Notes, with the same rights it would have if it were not the Trustee,
Paying Agent, Registrar or such other agent and, subject to Sections 6.08 and
6.13 hereof and Sections 310 and 311 of the Trust Indenture Act, may otherwise
deal with the Company and receive, collect, hold and retain collections from the
Company with the same rights it would have if it were not the Trustee, Paying
Agent, Registrar or such other agent.
Section 6.06. Money Held in Trust.
-------------------
All moneys received by the Trustee shall, until used or applied as
herein provided, be held in trust for the purposes for which they were received,
but need not be segregated from other funds except to the extent required herein
or by law. The Trustee shall not be under any liability for interest on any
moneys received by it hereunder.
<PAGE>
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Section 6.07. Compensation and Indemnification of Trustee and Its
Prior Claim.
---------------------------------------------------
The Company and each Guarantor covenant and agree: (a) to pay to the
Trustee from time to time, and the Trustee shall be entitled to, reasonable
compensation for all services rendered by it hereunder (which shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust); (b) to reimburse the Trustee and each predecessor Trustee upon
its request for all reasonable expenses, fees, disbursements and advances
incurred or made by or on behalf of it in accordance with any of the provisions
of this Indenture (including the reasonable compensation, fees, and the expenses
and disbursements of its counsel and of all agents and other persons not
regularly in its employ), except any such expense, disbursement or advance as
may arise from its negligence or bad faith; and (c) to indemnify the Trustee and
each predecessor Trustee for, and to hold it harmless against, any loss,
liability or expense incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or administration of this
Indenture or the trusts hereunder and its duties hereunder, including
enforcement of this Section 6.07. The obligations of the Company and each
Guarantor under this Section to compensate and indemnify the Trustee and each
predecessor Trustee and to pay or reimburse the Trustee and each predecessor
Trustee for expenses, fees, disbursements and advances shall constitute an
additional obligation hereunder and shall survive the satisfaction and discharge
of this Indenture. To secure the obligations of the Company and of each
Guarantor to the Trustee under this Section 6.07, the Trustee shall have a prior
Lien upon all property and funds held or collected by the Trustee as such,
except funds and property paid by the Company or any Guarantor and held in trust
for the benefit of the Holders of particular Notes.
Section 6.08. Conflicting Interests.
----------------------
The Trustee shall be subject to and comply with the provisions of
Section 310(b) of the Trust Indenture Act.
Section 6.09. Corporate Trustee Required;
Eligibility.
---------------------------
There shall at all times be a Trustee hereunder which shall be
eligible to act as Trustee under Trust Indenture Act Sections 310(a)(1) and (2)
and which shall have a combined capital and surplus of at least $100,000,000,
and have a Corporate Trust Office in the Borough of Manhattan in The City of
<PAGE>
-51-
New York, State of New York. If such corporation publishes reports of condition
at least annually, pursuant to law or to the requirements of any Federal, state,
territorial or District of Columbia supervising or examining authority, then for
the purposes of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. If at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section,
the Trustee shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
Section 6.10. Resignation and Removal; Appointment of Successor
Trustee.
-------------------------------------------------
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee under Section 6.11.
(b) The Trustee, or any trustee or trustees hereinafter appointed,
may at any time resign by giving written notice thereof to the Company at least
20 Business Days prior to the date of such proposed resignation. Upon receiving
such notice of resignation, the Company shall promptly appoint a successor
trustee by written instrument executed by authority of the Board of Directors of
the Company, a copy of which shall be delivered to the resigning Trustee and a
copy to the successor Trustee. If an instrument of acceptance by a successor
Trustee shall not have been delivered to the Trustee within 20 Business Days
after the giving of such notice of resignation, the resigning Trustee may, or
(if an instrument of acceptance by a successor Trustee shall not have been
delivered to the Trustee within 30 Business Days after the giving of such notice
of resignation) any Holder who has been a bona fide Holder of a Note 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, appoint a successor Trustee.
(c) The Trustee may be removed at any time by an Act of the Holders
of a majority in principal amount of the Outstanding Notes, delivered to the
Trustee and to the Company.
(d) If at any time:
<PAGE>
-52-
(1) the Trustee shall fail to comply with the provisions of
Section 310(b) of the Trust Indenture Act in accordance with Section 6.08
hereof after written request therefor by the Company or by any Holder who
has been a bona fide Holder of a Note for at least six months, or
(2) the Trustee shall cease to be eligible under Section 6.09
hereof and shall fail to resign after written request therefor by the
Company or by any Holder who has been a bona fide Holder of a Note for at
least six months, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent, or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose or
rehabilitation, conservation or liquidation,
then, in any case, (i) the Company by a Board Resolution may remove the Trustee,
or (ii) subject to Section 5.14, the Holder of any Note who has been a bona fide
Holder of a Note for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee. Such court
may thereupon, after such notice, if any, as it may deem proper and prescribe,
remove the Trustee and appoint a successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, the
Company, by a Board Resolution of its Board of Directors, shall promptly appoint
a successor Trustee. If, within one year after such resignation, removal or
incapability, or the occurrence of such vacancy, a successor Trustee shall be
appointed by Act of the Holders of a majority in principal amount of the
Outstanding Notes delivered to the Company and the retiring Trustee, the
successor Trustee so appointed shall, forthwith upon its acceptance of such
appointment, become the successor Trustee and supersede the successor Trustee
appointed by the Company. If no successor Trustee shall have been so appointed
by the Company or the Holders of the Notes and accepted appointment in the
manner hereinafter provided, the Holder of any Note who has been a bona fide
Holder for at least six months may, subject to Section 5.14, on behalf of
himself and all others similarly situated, petition any court of competent
jurisdiction for the appointment of a successor Trustee.
<PAGE>
-53-
(f) The Company shall give notice of each resignation and each
removal of the Trustee and each appointment of a successor Trustee by mailing
written 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 6.11. Acceptance of Appointment by
Successor.
----------------------------
Every successor Trustee appointed hereunder shall execute, acknowledge
and deliver to the Company and to the retiring Trustee an instrument accepting
such appointment, and thereupon the resignation or removal of the retiring
Trustee shall become effective and such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers, trusts
and duties of the retiring Trustee as if originally named as Trustee hereunder;
but, nevertheless, on the written request of the Company or the successor
Trustee, upon payment of amounts due it pursuant to Section 6.07, such retiring
Trustee shall duly assign, transfer and deliver to the successor Trustee all
moneys and property at the time held by it hereunder and shall execute and
deliver an instrument transferring to such successor Trustee all the rights,
powers, duties and obligations of the retiring Trustee. Upon request of any
such successor Trustee, the Company shall execute any and all instruments for
more fully and certainly vesting in and confirming to such successor Trustee all
such rights and powers. Any Trustee ceasing to act shall, nevertheless, retain
a prior claim upon all property or funds held or collected by such Trustee to
secure any amounts then due it pursuant to the provisions of Section 6.07.
No successor Trustee with respect to the Notes shall accept
appointment as provided in this Section 6.11 unless at the time of such
acceptance such successor Trustee shall be eligible to act as Trustee under this
Article.
Upon acceptance of appointment by any successor Trustee as provided in
this Section 6.11, the successor shall give notice thereof to the Holders of the
Notes, by mailing such notice to such Holders at their addresses as they shall
appear on the Note Register. If the acceptance of appointment is substantially
contemporaneous with the resignation, then the notice called for by the
preceding sentence may be combined with the notice called for by Section 6.10.
If the Company fails to give such notice within 10 days after acceptance of
appointment
<PAGE>
-54-
by the successor Trustee, the successor Trustee shall cause such notice to be
given at the expense of the Company.
Section 6.12. Merger, Conversion, Amalgamation, Consolidation or
Succession to Business.
--------------------------------------------------
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated or amalgamated, or any corporation resulting
from any merger, conversion, amalgamation or consolidation to which the Trustee
shall be a party, or any corporation succeeding to all or substantially all of
the corporate trust business of the Trustee, shall be the successor of the
Trustee hereunder without the execution or filing of any paper or any further
act on the part of any of the parties hereto, provided such corporation shall be
eligible under this Article Six to serve as Trustee hereunder.
In case at the time such successor to the Trustee under this Section
6.12 shall succeed to the trusts created by this Indenture any of the Notes
shall have been authenticated but not delivered, any such successor to the
Trustee may adopt the certificate of authentication of any predecessor Trustee
and deliver such Notes so authenticated; and, in case at that time any of the
Notes shall not have been authenticated, any successor to the Trustee under this
Section 6.12 may authenticate such Notes either in the name of any predecessor
hereunder or in the name of the successor Trustee; and in all such cases such
certificate shall have the full force which it is anywhere in the Notes or in
this Indenture provided that the certificate of the Trustee shall have been
authenticated.
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 7.01. Preservation of Information; Company To Furnish Trustee
Names and Addresses of Holders.
-------------------------------------------------------
(a) The Trustee shall preserve the names and addresses of the
Noteholders and otherwise comply with TIA Section 312(a). If the Trustee is not
the Registrar, the Company shall furnish or cause the Registrar to furnish to
the Trustee before each Interest Payment Date, and at such other times as the
Trustee may request in writing, a list in such form and as
<PAGE>
-55-
of such date as the Trustee may reasonably require of the names and addresses of
the Noteholders. Neither the Company nor the Trustee shall be under any
responsibility with regard to the accuracy of such list.
(b) The Company will furnish or cause to be furnished to the Trustee
(i) semi-annually, not more than 15 days after each Regular Record
Date, a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Holders as of such Regular Record Date; and
(ii) at such other times as the Trustee may reasonably request in
writing, within 30 days after receipt by the Company of any such request, a
list of similar form and content as of a date not more than 15 days prior
to the time such list is furnished;
provided, however, that if and so long as the Trustee shall be the Registrar, no
- -------- -------
such list need be furnished pursuant to this Subsection 7.01(b).
Section 7.02. Communications of Holders.
-------------------------
Holders may communicate with other Holders with respect to their
rights under this Indenture or under the Notes pursuant to Section 312(b) of the
Trust Indenture Act. The Company and the Trustee and any and all other persons
benefited by this Indenture shall have the protection afforded by Section 312(c)
of the Trust Indenture Act.
Section 7.03. Reports by Trustee.
------------------
Within 60 days after May 15 of each year commencing with the first May
15 following the date of this Indenture, the Trustee shall mail to all Holders,
as their names and addresses appear in the Note Register, a brief report dated
as of such May 15, in accordance with, and to the extent required under Section
313 of the Trust Indenture Act. At the time of its mailing to Holders, a copy
of each such report shall be filed by the Trustee with the Company, the
Commission and with each stock exchange on which the Notes are listed. The
Company shall notify the Trustee when the Notes are listed on any stock
exchange.
<PAGE>
-56-
Section 7.04. Reports by Company and Each Guarantor.
-------------------------------------
The Company and each Guarantor shall:
(a) file with the Commission, the copies of annual reports and of the
information, documents and other reports (or copies of such portions of any
of the foregoing as the Commission may from time to time by rules and
regulations prescribe) required to be filed with Commission pursuant to
Section 13 or Section 15 of the Exchange Act, whether or not the Company or
any Guarantor has a class of securities registered under the Exchange Act;
(b) file with the Trustee within 15 days after it files or would be
required to file the information specified in subsection (a) of this
Section 7.04 reports and documents with the Commission copies of such
information;
(c) file with the Trustee and the Commission in accordance with rules
and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance by
the Company and each Guarantor with the conditions and covenants of this
Indenture as may be required from time to time by such rules and
regulations; and
(d) transmit by mail to all Holders, as their names and addresses
appear in the Note Register, within 30 days after the filing thereof with
the Trustee, such summaries of any information, documents and reports
required to be filed by the Company and each Guarantor pursuant to
subsections (a) and (c) of this Section as may be required by rules and
regulations prescribed from time to time by the Commission.
ARTICLE EIGHT
CONSOLIDATION, MERGER, SALE OF ASSETS, ETC.
Section 8.01. Company May Consolidate, etc., Only on Certain Terms.
-----------------------------------------------------
The Company may, without the consent of the holders of the Notes,
consolidate with or merge with or into any other corporation, or convey,
transfer or lease its properties and assets substantially as an entirety to any
Person, provided,
--------
<PAGE>
-57-
however, that in any such case (i) the successor corporation shall be the
- -------
Company or a domestic corporation and such corporation (if other than the
Company) shall assume by a supplemental indenture the Company's obligations
under this Indenture and the Notes, (ii) immediately after such transaction, no
Event of Default shall have occurred and be continuing, and (iii) if, as a
result of any such merger or consolidation, or such conveyance, transfer or
lease, an Operating Property or an Operating Asset of the Company or a
Subsidiary would become subject to a Lien which would not be permitted under
Section 10.11 or Section 10.16, the Notes shall be secured, equally and ratably
with (or prior to) all Indebtedness so secured. Upon compliance with these
provisions by a successor corporation, the Company (except in the case of a
lease) shall be relieved of its obligations under this Indenture and the Notes.
ARTICLE NINE
SUPPLEMENTAL INDENTURES AND WAIVERS
Section 9.01. Supplemental Indentures, Agreements
and Waivers Without Consent of Holders.
---------------------------------------
Without the consent of any Holders, the Company and the Guarantors,
when authorized by a Board Resolution of the Board of Directors of the Company
and each Guarantor, and the Trustee, at any time and from time to time, may
amend, waive, modify or supplement this Indenture or the Notes or the Note
Guarantees for any of the following purposes:
(a) to evidence the succession of another person to the Company or a
Guarantor, and the assumption by any such successor of the covenants of the
Company or such Guarantor herein and in the Notes and/or in any Note
Guarantee, as the case may be;
(b) to add to the covenants of the Company or any Guarantor for the
benefit of the Holders, or to surrender any right or power herein conferred
upon the Company or any Guarantor, as applicable, herein, in the Notes or
in any Note Guarantee, as the case may be;
(c) to cure any ambiguity, to correct or supplement any provision
herein, in the Notes or in any Note Guaran-
<PAGE>
-58-
tee which may be defective or inconsistent with any other provision herein
or to make any other provisions with respect to matters or questions
arising under this Indenture, the Notes or any Note Guarantee; provided,
--------
however, that, in each case, such provisions shall not materially adversely
-------
affect the legal rights of the Holders;
(d) to comply with the requirements of the Commission in order to
effect or maintain the qualification of this Indenture under the Trust
Indenture Act, as contemplated by Section 9.05 hereof or otherwise;
(e) to add a Guarantor pursuant to the requirements of Section 10.15
hereof or otherwise;
(f) to evidence and provide the acceptance of the appointment of a
successor Trustee hereunder;
(g) to mortgage, pledge, hypothecate or grant a security interest in
any property or assets in favor of the Trustee for the benefit of the
Holders as security for the payment and performance of the Indenture
Obligations; or
(h) to make any other change that does not materially adversely
affect the legal rights of any Holder;
provided, however, that the Company has delivered to the Trustee an Opinion of
- -------- -------
Counsel stating that such change, agreement or waiver does not materially
adversely affect the legal rights of any Holder.
Section 9.02. Supplemental Indentures, Agreements and Waivers with
Consent of Holders.
-----------------------------------------------------
With the written consent of the Holders of not less than a majority in
aggregate principal amount of the Outstanding Notes delivered to the Company,
each Guarantor and the Trustee, the Company and each Guarantor (if a party
thereto) when authorized by a Board Resolution, together with the Trustee, may
amend, waive, modify or supplement any other provision of this Indenture or the
Notes or the Note Guarantees; provided, however, that no such amendment, waiver,
-------- -------
modification or supplement may, without the written consent of the Holder of
each Outstanding Note affected thereby:
(i) reduce the principal of or change the Stated Maturity of any
Note, or alter the provisions with respect
<PAGE>
-59-
to the redemption or repurchase of the Notes in any manner adverse to the
Holders of the Notes;
(ii) reduce the rate of or change the time for payment of interest
on any such Note;
(iii) change the place or currency of payment of principal of (or
premium) or interest on any such Note;
(iv) modify any provisions of this Indenture relating to the
waiver of past defaults (other than to add sections of this Indenture or
the Notes subject thereto) or the right of the Holders of Notes to
institute suit for the enforcement of any payment on or with respect to any
such Note or any Note Guarantee in respect thereof or the modification and
amendment provisions of this Indenture and the Notes (other than to add
sections of this Indenture or the Notes which may not be amended,
supplemented or waived without the consent of each Holder therein
affected);
(v) modify any of the provisions of clauses (i) through (ix) of
this Section 9.02 or reduce the percentage of the principal amount of
outstanding Notes necessary for amendment to or waiver of compliance with
any provision of this Indenture or the Notes or for waiver of any Default
in respect thereof;
(vi) waive a default in the payment of principal of, interest on,
or redemption payment with respect to, the Notes (except a rescission of
acceleration of the Notes by the Holders thereof as provided in this
Indenture and a waiver of the payment default that resulted from such
acceleration);
(vii) modify the ranking or priority of any Note or the Note
Guarantee in respect thereof of any Guarantor in any manner adverse to the
Holders of the Notes; or
(viii) release any Guarantor from any of its obligations under its
Note Guarantee or this Indenture otherwise than in accordance with this
Indenture.
Upon the written request of the Company and each Guarantor accompanied
by a copy of a Board Resolution of the Board of Directors of each of them
authorizing the execution of any such supplemental indenture or other agreement,
instrument or waiver, and upon the filing with the Trustee of evidence of the
consent of Holders as aforesaid, the Trustee shall join
<PAGE>
-60-
with the Company and each Guarantor in the execution of such supplemental
indenture or other agreement, instrument or waiver.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture or other
agreement, instrument or waiver, but it shall be sufficient if such Act shall
approve the substance thereof.
Section 9.03. Execution of Supplemental Indentures, Agreements and
Waivers.
-----------------------------------------------------
In executing, or accepting the additional trusts created by, any
supplemental indenture, agreement, instrument or waiver permitted by this
Article Nine or the modifications thereby of the trusts created by this
Indenture, the Trustee shall be entitled to receive, and (subject to Section
6.01 hereof) shall be fully protected in relying upon, an Opinion of Counsel and
an Officers' Certificate from each obligor under the Notes entering into such
supplemental indenture, agreement, instrument or waiver, each stating that the
execution of such supplemental indenture, agreement, instrument or waiver (a) is
authorized or permitted by this Indenture and (b) does not violate the
provisions of any agreement or instrument evidencing any other Indebtedness of
the Company, any Guarantor or any other Subsidiary of the Company. The Trustee
may, but shall not be obligated to, enter into any such supplemental indenture,
agreement, instrument or waiver which affects the Trustee's own rights, duties
or immunities under this Indenture, the Notes, any Note Guarantee or otherwise.
Section 9.04. Effect of Supplemental Indentures.
---------------------------------
Upon the execution of any supplemental indenture under this Article
Nine, this Indenture, the Notes, if applicable, and/or the applicable Note
Guarantee shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture, the Notes, if applicable, and/or
the applicable Note Guarantee, as the case may be, for all purposes; and every
Holder of Notes theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
Section 9.05. Conformity with Trust Indenture Act.
-----------------------------------
Every supplemental indenture executed pursuant to this Article Nine
shall conform to the requirements of the Trust Indenture Act as then in effect.
<PAGE>
-61-
Section 9.06. Reference in Notes to
Supplemental Indentures.
-----------------------
Notes authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Notes so modified as to conform, in the opinion of the Trustee and the Board
of Directors of the Company, to any such supplemental indenture may be prepared
and executed by the Company and each Guarantor and authenticated and delivered
by the Trustee upon a Company Order in exchange for Outstanding Notes.
Section 9.07. Record Date.
-----------
The Company may, but shall not be obligated to, fix, a record date for
the purpose of determining the Holders entitled to consent to any supplemental
indenture, agreement or instrument or any waiver, and shall promptly notify the
Trustee of any such record date. If a record date is fixed those persons who
were Holders at such record date (or their duly designated proxies), and only
those persons, shall be entitled to consent to such supplemental indenture,
agreement or instrument or waiver or to revoke any consent previously given,
whether or not such persons continue to be Holders after such record date. No
such consent shall be valid or effective for more than 90 days after such record
date.
Section 9.08. Revocation and Effect of Consents.
---------------------------------
Until an amendment or waiver becomes effective, a consent to it by a
Holder of a Note is a continuing consent by the Holder and every subsequent
Holder of a Note or portion of a Note that evidences the same debt as the
consenting Holder's Note, even if a notation of the consent is not made on any
Note. However, any such Holder, or subsequent Holder, may revoke the consent as
to his Note or portion of a Note if the Trustee receives the notice of
revocation before the date the amendment or waiver becomes effective. An
amendment or waiver shall become effective in accordance with its terms and
thereafter bind every Holder.
<PAGE>
-62-
ARTICLE TEN
COVENANTS
Section 10.01. Payment of Principal, Premium and
Interest.
---------------------------------
The Company will duly and punctually pay the principal of, premium, if
any, and interest on the Notes in accordance with the terms of the Notes and
this Indenture.
Section 10.02. Maintenance of Office or Agency.
-------------------------------
The Company will maintain in the Borough of Manhattan in The City of
New York, State of New York, an office or agency where Notes may be presented or
surrendered for payment, where Notes may be surrendered for registration of
transfer or exchange and where notices and demands to or upon the Company in
respect of the Notes and this Indenture may be served. The office of the
Trustee at its Corporate Trust Office will be such office or agency of the
Company, unless the Company shall designate and maintain some other office or
agency for one or more of such purposes. The Company will give prompt written
notice to the Trustee of any change in the location of any such office or
agency. If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee, and the Company hereby appoints the
Trustee as its agent to receive all such presentations, surrenders, notices and
demands.
The Company may also from time to time designate one or more other
offices or agencies (in or outside of The City of New York, State of New York)
where the Notes may be presented or surrendered for any or all such purposes,
and may from time to time rescind such designation; provided, however, that no
-------- -------
such designation or rescission shall in any manner relieve the Company of its
obligation to maintain an office or agency in The City of New York, State of New
York for such purposes. The Company will give prompt written notice to the
Trustee of any such designation or rescission and any change in the location of
any such other office or agency.
<PAGE>
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Section 10.03. Money for Note Payments To Be Held in Trust.
--------------------------------------------
If the Company shall at any time act as its own Paying Agent, it will,
on or before each due date of the principal of, premium, if any, or interest on
any of the Notes, segregate and hold in trust for the benefit of the Holders
entitled thereto a sum sufficient to pay the principal, premium, if any, or
interest so becoming due until such sums shall be paid to such persons or
otherwise disposed of as herein provided, and will promptly notify the Trustee
of its action or failure so to act.
If the Company is not acting as Paying Agent, the Company will, on or
before each due date of the principal of, premium, if any, or interest on, any
Notes, deposit with a Paying Agent a sum in same day funds sufficient to pay the
principal, premium, if any, or interest so becoming due, such sum to be held in
trust for the benefit of the Holders entitled to such principal, premium or
interest, and (unless such Paying Agent is the Trustee) the Company will
promptly notify the Trustee of such action or any failure so to act.
If the Company is not acting as Paying Agent, the Company will cause
each Paying Agent other than the Trustee to execute and deliver to the Trustee
an instrument in which such Paying Agent will agree with the Trustee, subject to
the provisions of this Section 10.03, that such Paying Agent will:
(a) hold all sums held by it for the payment of the principal of,
premium, if any, or interest on Notes in trust for the benefit of the
Holders entitled thereto until such sums shall be paid to such Holders or
otherwise disposed of as herein provided;
(b) give the Trustee notice of any Default by the Company or any
Guarantor (or any other obligor upon the Notes) in the making of any
payment of principal of, premium, if any, or interest on the Notes;
(c) at any time during the continuance of any such Default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent; and
(d) acknowledge, accept and agree to comply in all aspects with the
provisions of this Indenture relating to the duties, rights and liabilities
of such Paying Agent.
<PAGE>
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The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent will be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of, premium, if any,
or interest on any Note and remaining unclaimed for two years after such
principal, premium, if any, or interest has become due and payable shall be paid
to the Company upon receipt of a Company Request therefor, or (if then held by
the Company) will be discharged from such trust; and the Holder of such Note
will thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, will thereupon cease; provided, however, that the Trustee or such
-------- -------
Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, at the option of the Company
in the New York Times or the Wall Street Journal (national edition), 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 shall be repaid to the Company.
Section 10.04. Corporate Existence.
-------------------
Subject to Article Eight, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect the corporate
existence, rights (charter and statutory), licenses and franchises of the
Company and each of the Subsidiaries; provided, however, that the Company will
-------- -------
not be required to preserve any such right, license or franchise if the Board of
Directors of the Company shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company and the
Subsidiaries as a whole and that the loss thereof is not adverse in any material
respect to the Holders; provided, further, that the foregoing will not prohibit
-------- -------
a sale, transfer or conveyance of a Subsidiary of the Company or any of its
assets in compliance with the terms of this Indenture.
<PAGE>
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Section 10.05. Payment of Taxes and Other Claims.
---------------------------------
The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (a) all material taxes, assessments and
governmental charges levied or imposed (i) upon the Company or any of its
Subsidiaries or (ii) upon the income, profits or property of the Company or any
of the Subsidiaries and (b) all material lawful claims for labor, materials and
supplies, which, if unpaid, could reasonably be expected to become a Lien upon
the property of the Company or any of the Subsidiaries; provided, however, that
-------- -------
the Company will not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim (x) whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings properly instituted and diligently conducted or (y) if the failure
to so pay, discharge or cause to be paid or discharged could not reasonably be
expected to have a Material Adverse Effect (as defined in the Underwriting
Agreement).
Section 10.06. Maintenance of Properties.
-------------------------
The Company will cause all material properties owned by the Company or
any of the Subsidiaries or used or held for use in the conduct of their
respective businesses to be maintained and kept in good condition, repair and
working order and supplied with all necessary equipment and will cause to be
made all necessary repairs, renewals, replacements, betterments and improvements
thereof, all as in the judgment of the Company may be necessary so that the
business carried on in connection therewith may be properly and advantageously
conducted at all times; provided, however, that nothing in this Section 10.06
-------- -------
will prevent the Company from discontinuing the maintenance of any of such
properties if such discontinuance is, in the judgment of the Company, desirable
in the conduct of its business or the business of any of the Subsidiaries and is
not disadvantageous in any material respect to the Holders.
Section 10.07. Insurance.
---------
The Company will at all times keep all of its and the Subsidiaries'
properties which are of an insurable nature insured with insurers, believed by
the Company in good faith to be financially sound and responsible, against loss
or damage to the extent that property of similar character is usually and
customarily so insured by corporations similarly situated and owning like
properties.
<PAGE>
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Section 10.08. Books and Records.
-----------------
The Company will keep proper books of record and account, in which
full and correct entries will be made of all financial transactions
and the assets and business of the Company and each Subsidiary of the
Company in material compliance with GAAP.
Section 10.09. Note Guarantees.
---------------
Each of the Guarantors and the Company will, and the Company will
cause each of the Guarantors to, ensure at all times that, unless
otherwise permitted by this Indenture, each Note Guarantee will remain
in full force and effect and shall not be subordinated by written
agreement in right of payment to any Indebtedness or other obligations
of the Guarantors, unless required by applicable law.
Section 10.10. Provision of Financial Statements.
---------------------------------
The Company will file with the Commission (so long as the Commission
will accept any such filings) and the Trustee the annual reports,
quarterly reports and other documents required to be filed with the
Commission pursuant to Sections 13 and 15 of the Exchange Act, whether
or not the Company has a class of securities registered under the
Exchange Act. The Company will also comply with the other provisions
of Section 314(a) of the Trust Indenture Act.
Section 10.11. Restrictions on Liens.
---------------------
The Company will not, and will not permit any Subsidiary to issue,
assume or guarantee any Indebtedness secured by any Lien upon any
Operating Property or Operating Asset of the Company or any
Subsidiary, whether such property or assets are now owned or hereafter
acquired, without in any such case effectively providing that the
Notes (together with, if the Company shall so determine, any other
Indebtedness ranking equally with the Notes) shall be secured at least
equally and ratably with such Indebtedness, except that the foregoing
restrictions shall not apply to:
(i) (A) a purchase money Lien on such property (including security for
inventory financing in the ordinary course of business and vendors'
rights under purchase contracts under an agreement whereby title is
retained for the purpose of securing the purchase price thereof) given
simultaneously with or within 180 days after the later of
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(1) the acquisition or completion of construction or completion of
substantial reconstruction, renovation, remodeling, expansion or
improvement (each a "substantial improvement") of such property, or (2) the
date such property was placed in operation after the acquisition or
completion of any such construction or substantial improvement, or (B) the
acquisition of property not theretofore owned by the Company or such
Subsidiary subject to an existing Lien securing Indebtedness (whether or
not assumed), including in each case, Indebtedness incurred for
reimbursement of funds previously expended for any construction or
substantial improvement, provided, however, that in each case (x) such Lien
-------- -------
is limited to any or all of (i) such acquired or constructed property or
substantial improvement (including accretions thereto), (ii) the real
property on which any construction or substantial improvement occurs, or
(iii) with respect to distribution centers, any equipment used directly in
the operation of, or the business conducted on, the real property on which
any construction or substantial improvement occurs, and (y) the total
amount of the Indebtedness secured by such Lien, together with all other
Indebtedness to Persons other than the Company or a Subsidiary secured by
Liens on such property, shall not exceed the lesser of (i) the total cost
of such property, including any such construction or substantial
improvement, to the Company or a Subsidiary, and (ii) the fair market value
thereof immediately following the acquisition, construction or substantial
improvement thereof by the Company or a Subsidiary as determined by the
Company's Board of Directors or a member of the Company's senior management
in good faith;
(ii) a Lien on real property of the Company or a Subsidiary or, with
respect to distribution centers, on equipment used directly in the
operation of, or the business conducted on, such real property, which Lien
is the sole security for Indebtedness and (x) is incurred within three
years after the latest of (1) the date of issuance of the Notes under this
Indenture, (2) the acquisition of the real property or equipment or (3) the
completion of construction or substantial improvement on such real
property; (y) is incurred for the purpose of reimbursing the Company or
such Subsidiary, as the case may be, for the cost of acquisition and/or the
cost of improvement of such real property or equipment, and (z) the amount
of which does not exceed the lesser of the aggregate cost of such real
property, improvements and equipment and the fair market value thereof, as
determined by the Company's Board
<PAGE>
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of Directors or a member of the Company's senior management in good faith;
(iii) (a) Liens on the Operating Property of the Company or any of
its Subsidiaries securing (1) nondelinquent performance of bids or
contracts (other than for borrowed money, obtaining of advances or credit
or the securing of debt), (2) contingent obligations on surety and appeal
bonds and (3) other nondelinquent obligations of a like nature, in each
case, incurred in the ordinary course of business, (b) Liens arising solely
by virtue of any statutory or common law provision relating to banker's
liens, rights of set-off or similar rights and remedies as to deposit
account or other funds, provided that such deposit account is not a
dedicated cash collateral account and is not subject to restrictions
against access by the Company in excess of those set forth by regulations
promulgated by the Federal Reserve Board and such deposit account is not
intended by the Company or any Subsidiary to provide collateral to the
depository institution, (c) pledges or deposits under worker's compensation
laws, unemployment insurance laws or similar legislation, (d) statutory and
tax Liens for sums not yet due or delinquent or which are being contested
or appealed in good faith by appropriate proceedings and (e) Liens arising
solely by operation of law and in the ordinary course of business, such as
mechanics', materialmen's, warehousemen's and carriers' Liens and Liens of
landlords or of mortgages of landlords, on fixtures and Operating Assets
located on premises leased in the ordinary course of business;
(iv) Liens (1) existing on the date of this Indenture, or (2) on
assets of a Subsidiary existing on the date it became a Subsidiary;
(v) Liens in favor of the Company or a Subsidiary;
(vi) Liens securing only the Indebtedness issued under this
Indenture; and
(vii) Liens to secure Indebtedness incurred to extend, renew,
refinance or replace Indebtedness secured by any Liens referred to in the
foregoing clauses (i) to (vi), provided, however, that the principal amount
-------- -------
of the extending, renewal, refinancing or replacement Indebtedness does not
exceed the principal amount of Indebtedness so extended, renewed,
refinanced or replaced, plus transaction costs and fees, and that any such
Lien applies only
<PAGE>
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to any part or all of the same property or assets that were subject to the
prior permitted Lien (and, in the case of real property, improvements
thereon).
Section 10.12. Statement by Officers as to Default.
-----------------------------------
The Company and the Guarantors will deliver to the Trustee, within 120
days after the end of each of their fiscal years ending after the date hereof, a
written statement signed by the chairman or a chief executive officer, the
principal financial officer, principal accounting officer or Treasurer of the
Company or such Guarantor (as applicable), stating (i) that a review of the
activities of the Company or such Guarantor (as applicable) during the preceding
fiscal year has been made under the supervision of the signing officer with a
view to determining whether the Company or such Guarantor (as applicable) has
kept, observed, performed and fulfilled its obligations under this Indenture,
and (ii) that, to the knowledge of each officer signing such certificate, the
Company or such Guarantor (as applicable) has kept, observed, performed and
fulfilled each and every covenant and condition contained in this Indenture and
is not in default in the performance or observance of any of the terms,
provisions, conditions and covenants hereof (or, if a Default shall have
occurred, describing all such Defaults of which such officers may have
knowledge, their status and what action the Company or such Guarantor (as
applicable) is taking or proposes to take with respect thereto). When any
Default has occurred and is continuing, or if the Trustee or any Holder or the
trustee for or the holder of any other evidence of Indebtedness of the Company
or any Subsidiary gives any notice or takes any other action with respect to a
claimed default (other than with respect to Indebtedness (other than
Indebtedness evidenced by the Notes) in the principal amount of less than
$50,000,000), the Company will promptly deliver to the Trustee by registered or
certified mail or by telegram, or facsimile transmission followed by hard copy
by registered or certified mail an Officers' Certificate specifying such event,
notice or other action no later than five Business Days after the Company
becomes aware of such occurrence and what action the Company is taking or
proposes to take with respect thereto.
Section 10.13. Restrictions on Sale and Leaseback Transactions.
-----------------------------------------------
Without equally and ratably securing the Notes (together with, if the
Company shall so determine, any other Indebtedness ranking equally with the
Notes), the Company will not, nor will it permit any Subsidiary to, enter into
any ar-
<PAGE>
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rangement with any Person providing for the leasing by the Company or any
Subsidiary of any Operating Property or Operating Asset that has been or is to
be sold or transferred by the Company or such Subsidiary to such person with the
intention of taking back a lease of such property (a "Sale and Leaseback
Transaction") unless the terms of such sale or transfer have been determined by
the Company's Board of Directors, in the case of any sale or transfer involving
proceeds in excess of $25 million, to be fair and arms'-length and (i) within
365 days after the receipt of the proceeds of such sale or transfer, the Company
or any Subsidiary applies an amount equal to the greater of the net proceeds of
such sale or transfer or the fair value of such Operating Property or Operating
Asset at the time of such sale or transfer to (A) the prepayment or retirement
(other than any mandatory prepayment or retirement) of Senior Funded Debt of the
Company or a Subsidiary, or (B) to the acquisition, construction, development or
improvement of Operating Assets or Operating Properties, or (ii) the Company or
such Subsidiary would be entitled, at the effective date of such sale or
transfer, to incur Indebtedness secured by a Lien on such Operating Property or
Operating Assets, in an amount at least equal to the Attributable Debt in
respect thereof, without equally and ratably securing the Notes pursuant to
Section 10.11. The foregoing restriction will not apply to (w) any Sale and
Leaseback Transaction for a term of not more than three years including
renewals, (x) any Sale and Leaseback Transaction with respect to Operating
Property (and, with respect to distribution centers, equipment used directly in
the operation of, or the business conducted on, such Operating Property) if a
binding commitment with respect thereto is entered into within three years after
the later of (1) the date of issuance of the Notes under this Indenture or (2)
the date such Operating Property was acquired (as the term "acquired" is used in
the definition of Operating Property), (y) any Sale and Leaseback Transaction
with respect to Operating Assets if a binding commitment with respect thereto is
entered into within 180 days after the later of the date such property was
acquired and, if applicable, the date such property was first placed in
operation, or (z) any Sale and Leaseback Transaction between the Company and a
Subsidiary or between Subsidiaries provided that the lessor shall be the Company
or a Subsidiary.
Section 10.14. Compliance Certificates and Opinions.
------------------------------------
Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company, the Guarantors
and any other obligor on the Notes will furnish to the Trustee an Officers'
Certificate
<PAGE>
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stating that all conditions precedent, if any, provided for in this Indenture
(including any covenants compliance with which constitutes a condition
precedent) relating to the proposed action have been complied with, and an
Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that, in the case
of any such application or request as to which the furnishing of such documents,
certificates and/or opinions 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 will include:
(i) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(ii) 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;
(iii) a statement that, in the opinion of each such individual, he
has made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether such covenant or condition has
been complied with; and
(iv) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
Section 10.15. Additional Guarantors.
---------------------
The Company will cause each of its Subsidiaries that becomes a
guarantor or obligor in respect of the Credit Facilities following the Issue
Date to execute and deliver a supplemental indenture pursuant to which it will
become a Guarantor under this Indenture.
Section 10.16. Exempted Debts.
--------------
Notwithstanding the restrictions in this Indenture contained in
Sections 10.11 and 10.13, the Company or its Subsidiaries may, in addition to
amounts permitted under such re-
<PAGE>
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strictions, issue, assume or guarantee Indebtedness secured by Liens, or enter
into Sale and Leaseback Transactions, provided, however, that, after giving
-------- -------
effect thereto, the aggregate outstanding amount of all such Indebtedness
secured by Liens plus Attributable Debt resulting from such Sale and Leaseback
Transactions (collectively, the "Exempted Debt") does not exceed 15% of
Consolidated Net Tangible Assets at the time such Lien is granted or at the time
such Sale and Leaseback Transaction is entered into.
ARTICLE ELEVEN
SATISFACTION AND DISCHARGE
Section 11.01. Satisfaction and Discharge of
Indenture.
-----------------------------
This Indenture shall be discharged and cease to be of further effect
(except as to surviving rights or registration of transfer or exchange of Notes
herein expressly provided for) and the Trustee, on written demand of and at the
expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when either
(a) all Notes theretofore authenticated and delivered (other than (A)
Notes which have been destroyed, lost or stolen and which have been
replaced or paid as provided in Section 3.06 hereof and (B) Notes for whose
payment money has theretofore been deposited in trust or segregated and
held in trust by the Company and thereafter repaid to the Company or
discharged from such trust, as provided in Section 10.03) have been
delivered to the Trustee for cancellation; or
(b) (i) all Notes not theretofore delivered to the Trustee for
cancellation have become due and payable and the Company or any Guarantor
has irrevocably deposited or caused to be deposited with the Trustee in
trust funds in an amount sufficient to pay and discharge the entire
Indebtedness on such Notes not theretofore delivered to the Trustee for
cancellation, for the principal of, premium, if any, and interest to the
date of such deposit;
(ii) the Company or any Guarantor has paid or caused to be paid
all other sums payable hereunder by the Company and the Guarantors; and
<PAGE>
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(iii) the Company and each of the Guarantors have delivered to the
Trustee (i) irrevocable instructions to apply the deposited funds toward
payment of the Notes at the Stated Maturities and the Redemption Dates
thereof, and (ii) an Officers' Certificate and an Opinion of Counsel each
stating that all conditions precedent herein provided for relating to the
satisfaction and discharge of this Indenture have been complied with;
provided, that such Opinion of Counsel may rely, as to matters of fact,
--------
upon an Officers' Certificate.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 6.07 and, if money shall
have been deposited with the Trustee pursuant to subclause (a)(ii) of this
Section 11.01, the obligations of the Trustee under Section 11.02 and the last
paragraph of Section 10.03 shall survive.
Section 11.02. Application of Trust Money.
--------------------------
Subject to the provisions of the last paragraph of Section 10.03, all
money deposited with the Trustee pursuant to Section 11.01 shall be held in
trust and applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the persons entitled thereto, of the principal of, premium, if
any, and interest on the Notes for whose payment such money has been deposited
with the Trustee.
ARTICLE TWELVE
GUARANTEE OF NOTES
Section 12.01. Unconditional Guarantee.
-----------------------
Each Guarantor hereby jointly and severally fully and unconditionally
guarantees to each Holder of a Note authenticated and delivered by the Trustee
and to the Trustee and its successors and assigns, irrespective of the validity
and enforceability of this Indenture, the Notes or the obligations of the
Company or any other Note Guarantor to the Holders or the Trustee hereunder or
thereunder, that: (a) the principal of, premium, if any, and interest on the
Notes will be duly and punctually paid in full when due, whether at maturity,
upon redemption, by acceleration or otherwise, and interest on the
<PAGE>
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overdue principal and (to the extent permitted by law) interest, if any, on the
Notes and all other obligations of the Company or the Guarantor to the Holders
or the Trustee hereunder or thereunder (including fees, expenses or other) and
all other Indenture Obligations will be promptly paid in full or performed, all
in accordance with the terms hereof and thereof; and (b) in case of any
extension of time of payment or renewal of any Notes or any of such other
Indenture Obligations, the same will be promptly paid in full when due or
performed in accordance with the terms of the extension or renewal, whether at
Stated Maturity, by acceleration or otherwise. Failing payment when due of any
amount so guaranteed, or failing performance of any other obligation of the
Company to the Holders, for whatever reason, each Guarantor shall be obligated
to pay, or to perform or cause the performance of, the same immediately. An
Event of Default under this Indenture or the Notes shall constitute an event of
default under this Guarantee, and shall entitle the Holders of Notes to
accelerate the obligations of the Guarantor hereunder in the same manner and to
the same extent as the obligations of the Company.
Each Guarantor hereby agrees that its obligations hereunder shall be
unconditional, irrespective of the validity, regularity or enforceability of the
Notes or this Indenture, the absence of any action to enforce the same, any
waiver or consent by any Holder of the Notes with respect to any provisions
hereof or thereof, any release of any other Guarantor, the recovery of any
judgment against the Company, any action to enforce the same, whether or not a
Note Guarantee is affixed to any particular Note, or any other circumstance
which might otherwise constitute a legal or equitable discharge or defense of a
guarantor.
Each Guarantor hereby waives the benefit of diligence, presentment,
demand of payment, filing of claims with a court in the event of insolvency or
bankruptcy of the Company, any right to require a proceeding first against the
Company, protest, notice and all demands whatsoever and covenants that its Note
Guarantee shall not be discharged except by complete performance of the
obligations contained in the Notes, this Indenture and this Note Guarantee.
This Note Guarantee is a guarantee of payment and not of collection. If any
Holder or the Trustee is required by any court or otherwise to return to the
Company or to any Guarantor, or any custodian, trustee, liquidator or other
similar official acting in relation to the Company or such Guarantor, any amount
paid by the Company or such Guarantor to the Trustee or such Holder, this Note
Guarantee, to the extent theretofore discharged, shall be reinstated
<PAGE>
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in full force and effect. Each Guarantor further agrees that, as between it, on
the one hand, and the Holders of Notes and the Trustee, on the other hand, (a)
subject to this Article Twelve, the maturity of the obligations guaranteed
hereby may be accelerated as provided in Article Five hereof for the purposes of
this Note Guarantee, notwithstanding any stay, injunction or other prohibition
preventing such acceleration in respect of the obligations guaranteed hereby,
and (b) in the event of any acceleration of such obligations as provided in
Article Five hereof, such obligations (whether or not due and payable) shall
forthwith become due and payable by the Note Guarantor for the purpose of this
Guarantee.
Section 12.02. Execution and Delivery of Note Guarantee.
----------------------------------------
To further evidence the Note Guarantee set forth in Section 12.01,
each Guarantor hereby agrees that a notation of such Note Guarantee shall be
endorsed on each Note authenticated and delivered by the Trustee and executed by
either manual or facsimile signature of an Officer of each Guarantor.
Each of the Guarantors hereby agrees that its Note Guarantee set forth
in Section 12.01 shall remain in full force and effect notwithstanding any
failure to endorse on each Note a notation of such Note Guarantee.
If an Officer of a Guarantor whose signature is on this Indenture or a
Note Guarantee no longer holds that office at the time the Trustee authenticates
such Note or at any time thereafter, such Guarantor's Note Guarantee of such
Note shall be valid nevertheless.
The delivery of any Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of any Note Guarantee set forth
in this Indenture on behalf of each Guarantor.
Section 12.03. Additional Guarantors.
---------------------
Any Person that was not a Guarantor on the date of this Indenture may
become a Guarantor by executing and delivering to the Trustee (a) a supplemental
indenture in form and substance satisfactory to the Trustee, which subjects such
person to the provisions (including the representations and warranties) of this
Indenture as a Guarantor, and (b) an Opinion of Counsel to the effect that such
supplemental indenture has been duly authorized and executed by such Person and
consti-
<PAGE>
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tutes the legal, valid and binding obligation of such Person (subject to such
customary assumptions and exceptions as may be acceptable to the Trustee in its
reasonable discretion).
Section 12.04. Release of a Guarantor.
----------------------
(i) Upon the sale, exchange, transfer or other disposition (by merger
or otherwise), other than a lease, of a Subsidiary of the Company that is a
Guarantor of all of the Capital Stock of such Subsidiary or all, or
substantially all, the assets of such Subsidiary, to any person that is not an
Affiliate of the Company, and which sale or other disposition is otherwise in
compliance with the terms of this Indenture or (ii) at the request of the
Company, in the event that the lenders under the Credit Facilities
unconditionally release such Guarantor from its guarantee obligations under such
facilities, such Guarantor shall be deemed automatically and unconditionally
released and discharged from all obligations under this Article Twelve without
any further action required on the part of the Trustee or any Holder. The
Trustee shall deliver an appropriate instrument evidencing such release upon
receipt of a request of the Company accompanied by an Officers' Certificate
certifying as to the compliance with this Section. Any Guarantor not so
released will remain liable for the full amount of principal of, premium, if
any, and interest on the Notes as provided in this Article Twelve.
Section 12.05. Waiver of Subrogation.
---------------------
Until this Indenture is discharged and all of the Notes are discharged
and paid in full, each Guarantor hereby irrevocably waives and agrees not to
exercise any claim or other rights which it may now or hereafter acquire against
the Company that arise from the existence, payment, performance or enforcement
of the Company's obligations under the Notes or this Indenture and such
Guarantor's obligations under this Note Guarantee and this Indenture, in any
such instance including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution, indemnification, and any right to
participate in any claim or remedy against the Company, whether or not such
claim, remedy or right arises in equity, or under contract, statute or common
law, including, without limitation, the right to take or receive from the
Company, directly or indirectly, in cash or other property or by set-off or in
any other manner, payment or security on account of such claim or other rights.
If any amount shall be paid to any Guarantor in violation of the preceding
sentence and any amounts owing to the Trustee or the Holders of Notes under the
Notes, this In-
<PAGE>
-77-
denture, or any other document or instrument delivered under or in connection
with such agreements or instruments, shall not have been paid in full, such
amount shall have been deemed to have been paid to such Guarantor for the
benefit of, and held in trust for the benefit of, the Holders of the Notes, and
shall forthwith be paid to the Trustee for the benefit of such Holders to be
credited and applied to the Notes, whether matured or unmatured, in accordance
with the terms of this Indenture. Each Guarantor acknowledges that it will
receive direct and indirect benefits from the financing arrangements
contemplated by this Indenture and that the waiver set forth in this Section
12.05 is knowingly made in contemplation of such benefits.
Section 12.06. Reliance on Judicial Order or
Certificate of Liquidating Agent
Regarding Dissolution, etc. of
Guarantors.
--------------------------------
Upon any payment or distribution of assets of any Guarantor referred
to in this Article Twelve, the Trustee, subject to the provisions of Section
6.01, and the Holders, shall be entitled to rely upon any order or decree
entered by any court of competent jurisdiction in which such insolvency,
bankruptcy, receivership, liquidation, reorganization, dissolution, winding-up
or similar case or proceeding is pending, or a certificate of the trustee in
bankruptcy, receiver, liquidating trustee, custodian, assignee for the benefit
of creditors, agent or other person making such payment or distribution,
delivered to the Trustee or to the Holders, for the purpose of ascertaining the
persons entitled to participate in such payment or distribution, the amount
thereof or payable thereon, the amount or amounts paid or distributed thereon
and all other facts pertinent thereto or to this Article Twelve; provided,
--------
however, that the foregoing shall apply only if such court has been fully
- -------
apprised of the provisions of this Article Twelve.
Section 12.07. Article Twelve Applicable to Paying Agents.
------------------------------------------
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term "Trustee"
as used in this Article Twelve shall in such case (unless the context otherwise
requires) be construed as extending to and including such Paying Agent within
its meaning as fully for all intents and purposes as if such Paying Agent were
named in this Article Twelve in addition to or in place of the Trustee.
<PAGE>
-78-
Section 12.08. No Suspension of Remedies.
-------------------------
Nothing contained in this Article Twelve shall limit the right of the
Trustee or the Holders of Notes to take any action to accelerate the maturity of
the Notes pursuant to Article Five or to pursue any rights or remedies hereunder
or under applicable law.
Section 12.09. Limitation of Subsidiary Guarantor's Liability.
----------------------------------------------
Each Guarantor that is a Subsidiary of the Company, and by its
acceptance hereof each Holder, hereby confirms that it is the intention of all
such parties that the Note Guarantee by such Guarantor pursuant to its Note
Guarantee not constitute a fraudulent transfer or conveyance for purposes of the
Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent
Transfer Act or any similar Federal or state law. To effectuate the foregoing
intention, the Holders and such Guarantor hereby irrevocably agree that the
obligations of such Guarantor under this Note Guarantee shall be limited to the
maximum amount which, after giving effect to all other contingent and fixed
liabilities of such Guarantor, and after giving effect to any collections from
or payments made by or on behalf of, any other Guarantor in respect of the
obligations of such other Guarantor under its Note Guarantee or pursuant to its
contribution obligations under this Article Twelve, will result in the
obligations of such Guarantor under its Note Guarantee not constituting such
fraudulent transfer or conveyance.
Section 12.10. Contribution from Other Guarantors.
----------------------------------
Each Guarantor that makes a payment or distribution under its Note
Guarantee shall be entitled to a contribution from each other Guarantor in a pro
rata amount based on the net assets of each Guarantor, determined in accordance
with GAAP.
Section 12.11. Obligations Reinstated.
----------------------
The obligations of each Guarantor hereunder shall continue to be
effective or shall be reinstated, as the case may be, if at any time any payment
which would otherwise have reduced the obligations of any Guarantor hereunder
(whether such payment shall have been made by or on behalf of the Company or by
or on behalf of a Guarantor) is rescinded or reclaimed from any of the Holders
upon the insolvency, bankruptcy, liquidation or reorganization of the Company or
any Guarantor or otherwise, all as though such payment had not been
<PAGE>
-79-
made. If demand for, or acceleration of the time for, payment by the Company is
stayed upon the insolvency, bankruptcy, liquidation or reorganization of the
Company, all such Indebtedness otherwise subject to demand for payment or
acceleration shall nonetheless be payable by each Guarantor as provided herein.
Section 12.12. No Obligation To Take Action Against the Company.
------------------------------------------------
Neither the Trustee nor any other Person shall have any obligation to
enforce or exhaust any rights or remedies or to take any other steps under any
security for the Indenture Obligations or against the Company or any other
Person or any property of the Company or any other Person before the Trustee is
entitled to demand payment and performance by any or all Guarantors of their
liabilities and obligations under their Note Guarantees or under this Indenture.
Section 12.13. Dealing with the Company and Others.
-----------------------------------
The Holders, without releasing, discharging, limiting or otherwise
affecting in whole or in part the obligations and liabilities of any Guarantor
hereunder and without the consent of or notice to any Guarantor, may
(a) grant time, renewals, extensions, compromises, concessions,
waivers, releases, discharges and other indulgences to the Company or any
other Person;
(b) take or abstain from taking security or collateral from the
Company or from perfecting security or collateral of the Company;
(c) release, discharge, compromise, realize, enforce or otherwise
deal with or do any act or thing in respect of (with or without
consideration) any and all collateral, mortgages or other security given by
the Company or any third party with respect to the obligations or matters
contemplated by this Indenture or the Notes;
(d) accept compromises or arrangements from the Company;
(e) apply all monies at any time received from the Company or from
any security upon such part of the Indenture Obligations as the Holders may
see fit or change any
<PAGE>
-80-
such application in whole or in part from time to time as the Holders may
see fit; and
(f) otherwise deal with, or waive or modify their right to deal with,
the Company and all other Persons and any security as the Holders or the
Trustee may see fit.
ARTICLE THIRTEEN
REDEMPTION
Section 13.01. Notices to Trustee.
------------------
If the Company elects to redeem Notes pursuant to paragraph 3 of the
Notes at the applicable redemption price set forth thereon, it shall notify the
Trustee in writing of the Redemption Date and the principal amount of Notes to
be redeemed. The Company shall give such notice to the Trustee at least 60 days
before the Redemption Date (unless a shorter notice shall be agreed to by the
Trustee in writing), together with an Officers' Certificate stating that such
redemption shall comply with the conditions contained herein.
Section 13.02. Selection of Notes To Be Redeemed.
---------------------------------
If less than all the Notes are to be redeemed pursuant to paragraph 3
of the Notes, the Trustee shall select the Notes to be redeemed in compliance
with the requirements of the national securities exchange, if any, on which the
Notes are listed or, if the Notes are not then listed on a national securities
exchange, on a pro rata basis, by lot or in such other manner as the Trustee
shall deem fair and appropriate. The Trustee shall make the selection from the
Notes then outstanding, subject to redemption and not previously called for
redemption.
The Trustee may select for redemption pursuant to paragraph 3 of the
Notes portions of the principal amount of Notes that have denominations equal to
or larger than $1,000 principal amount. Notes and portions of the Notes the
Trustee so selects shall be in amounts of $1,000 principal amount or integral
multiples thereof. Provisions of this Indenture that apply to Notes called for
redemption also apply to portions of Notes called for redemption.
<PAGE>
-81-
Section 13.03. Notice of Redemption.
--------------------
At least 30 days but not more than 60 days before a Redemption Date,
the Company shall mail a notice of redemption by first-class mail to each Holder
whose Notes are to be redeemed at such Holder's registered address.
Each notice of redemption shall identify the Notes to be redeemed
(including the CUSIP number thereon) and shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) the name and address of the Paying Agent to which the Notes are to
be surrendered for redemption;
(4) that Notes called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price;
(5) that, unless the Company defaults in making the redemption
payment, interest on Notes called for redemption ceases to accrue on and
after the Redemption Date and the only remaining right of the Holders is to
receive payment of the Redemption Price upon surrender to the Paying Agent;
and
(6) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the Redemption
Date, upon surrender of such Note, a new Note or Notes in principal amount
equal to the unredeemed portion thereof will be issued.
At the Company's request, the Trustee shall give the notice of
redemption on behalf of the Company, in the Company's name and at the Company's
expense.
Section 13.04. Effect of Notice of Redemption.
------------------------------
Once a notice of redemption is mailed, Notes called for redemption
become due and payable on the Redemption Date and at the Redemption Price. Upon
surrender to the Paying Agent, such Notes shall be paid at the Redemption Price,
plus accrued interest thereon, if any, to the Redemption Date, but interest
installments whose maturity is on or prior to such Redemption Date shall be
payable to the Holders of record at the close of business on the relevant
Interest Record Date.
<PAGE>
-82-
Section 13.05. Deposit of Redemption Price.
---------------------------
Prior to 10:00 a.m. New York City time on the Redemption Date, the
Company shall deposit with the Paying Agent (or if the Company is its own Paying
Agent shall, on or before the Redemption Date, segregate and hold in trust)
money sufficient to pay the Redemption Price of and accrued interest, if any, on
all Notes to be redeemed on that date other than Notes or portions thereof
called for redemption on that date which have been delivered by the Company to
the Trustee for cancellation.
If any Note surrendered for redemption in the manner provided in the
Notes shall not be so paid on the Redemption Date due to the failure of the
Company to deposit with the Paying Agent money sufficient to pay the Redemption
Price thereof, the principal and accrued and unpaid interest, if any, thereon
shall, until paid or duly provided for, bear interest as provided in this
Indenture with respect to any payment default.
Section 13.06. Notes Redeemed in Part.
----------------------
Upon surrender of a Note that is redeemed in part, the Trustee shall
authenticate for the Holder a new Note equal in principal amount to the
unredeemed portion of the Note surrendered.
[signatures on following pages]
<PAGE>
-83-
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the day and year first above written.
SAKS INCORPORATED
By: /s/ Charles J. Hansen
----------------------------
Name: Charles J. Hansen
Title: Senior Vice President
CARSON PIRIE HOLDINGS, INC.
By: /s/ Charles J. Hansen
----------------------------
Name: Charles J. Hansen
Title: Senior Vice President
SAKS INCORPORATED, AS THE SOLE MEMBER OF
HERBERGER'S DEPARTMENT STORES, LLC
By: /s/ Charles J. Hansen
----------------------------
Name: Charles J. Hansen
Title: Senior Vice President
MCRAE'S OF ALABAMA, INC.
By: /s/ Charles J. Hansen
----------------------------
Name: Charles J. Hansen
Title: Senior Vice President
MCRAE'S, INC.
By: /s/ Charles J. Hansen
----------------------------
Name: Charles J. Hansen
Title: Senior Vice President
<PAGE>
-84-
MCRAE'S STORES SERVICES, INC.
By: /s/ Charles J. Hansen
----------------------------
Name: Charles J. Hansen
Title: Senior Vice President
MCRAE'S, INC., AS MANAGING GENERAL PARTNER OF
MCRAE'S STORES PARTNERSHIP
By: /s/ Charles J. Hansen
----------------------------
Name: Charles J. Hansen
Title: Senior Vice President
MCRAE'S, INC., AS GENERAL PARTNER OF SAKS STORES
PARTNERSHIP, L.P.
By: /s/ Charles J. Hansen
----------------------------
Name: Charles J. Hansen
Title: Senior Vice President
PARISIAN, INC.
By: /s/ Charles J. Hansen
----------------------------
Name: Charles J. Hansen
Title: Senior Vice President
SAKS & COMPANY
By: /s/ Charles J. Hansen
----------------------------
Name: Charles J. Hansen
Title: Senior Vice President
<PAGE>
-85-
SAKS DISTRIBUTION CENTERS, INC.
By: /s/ Charles J. Hansen
----------------------------
Name: Charles J. Hansen
Title: Senior Vice President
SAKS FIFTH AVENUE, ATLANTA, INC.
By: /s/ Charles J. Hansen
----------------------------
Name: Charles J. Hansen
Title: Senior Vice President
SAKS FIFTH AVENUE DISTRIBUTION COMPANY
By: /s/ Charles J. Hansen
----------------------------
Name: Charles J. Hansen
Title: Senior Vice President
SAKS FIFTH AVENUE OF MISSOURI, INC.
By: /s/ Charles J. Hansen
----------------------------
Name: Charles J. Hansen
Title: Senior Vice President
SAKS FIFTH AVENUE OF OHIO, INC.
By: /s/ Charles J. Hansen
----------------------------
Name: Charles J. Hansen
Title: Senior Vice President
SAKS FIFTH AVENUE OF TEXAS, INC.
By: /s/ Charles J. Hansen
----------------------------
Name: Charles J. Hansen
Title: Senior Vice President
<PAGE>
-86-
SAKS FIFTH AVENUE, INC.
By: /s/ Charles J. Hansen
----------------------------
Name: Charles J. Hansen
Title: Senior Vice President
SAKS FIFTH AVENUE - LOUISIANA, INC.
By: /s/ Charles J. Hansen
----------------------------
Name: Charles J. Hansen
Title: Senior Vice President
SAKS FIFTH AVENUE - STAMFORD, INC.
By: /s/ Charles J. Hansen
----------------------------
Name: Charles J. Hansen
Title: Senior Vice President
SAKS HOLDINGS, INC.
By: /s/ Charles J. Hansen
----------------------------
Name: Charles J. Hansen
Title: Senior Vice President
SAKS SHIPPING COMPANY, INC.
By: /s/ Charles J. Hansen
----------------------------
Name: Charles J. Hansen
Title: Senior Vice President
SAKS SPECIALTY STORES, INC.
By: /s/ Charles J. Hansen
----------------------------
Name: Charles J. Hansen
Title: Senior Vice President
<PAGE>
-87-
SAKS STORES PARTNERSHIP, L.P.
By: /s/ Charles J. Hansen
----------------------------
Name: Charles J. Hansen
Title: Senior Vice President
S.F.A. DATA PROCESSING, INC.
By: /s/ Charles J. Hansen
----------------------------
Name: Charles J. Hansen
Title: Senior Vice President
SFA FOLIO COLLECTIONS, INC.
By: /s/ Charles J. Hansen
----------------------------
Name: Charles J. Hansen
Title: Senior Vice President
SFA REAL ESTATE COMPANY
By: /s/ Charles J. Hansen
----------------------------
Name: Charles J. Hansen
Title: Senior Vice President
THE FIRST NATIONAL BANK OF CHICAGO, as Trustee
By: /s/ Charles J. Hansen
----------------------------
Name:
Title:
<PAGE>
EXHIBIT A
---------
[FORM OF NOTE]
SAKS INCORPORATED
---------------------
7 3/8% NOTES DUE 2019
CUSIP No.
-------------
No. $
-----------
SAKS INCORPORATED, a corporation incorporated under the laws of the
State of Tennessee (herein called the "Company," which term includes any
successor corporation under the Indenture hereinafter referred to), for value
received, hereby promises to pay to _______________ or registered assigns, the
principal sum of _______________ Dollars on February 15, 2019, at the office or
agency of the Company referred to below, and to pay interest thereon on February
15 and August 15 (each an "Interest Payment Date"), of each year, commencing on
August 15, 1999, accruing from the Issue Date or from the most recent Interest
Payment Date to which interest has been paid, at the rate of 7 3/8% per annum,
until the principal hereof is paid or duly provided for. Interest shall be
computed on the basis of a 360-day year of twelve 30-day months.
The interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in the Indenture referred to on the
reverse hereof, be paid to the person in whose name this Note (or one or more
Predecessor Notes) is registered at the close of business on the February 1 and
August 1 (each a "Regular Record Date"), whether or not a Business Day, as the
case may be, next preceding such Interest Payment Date. Any such interest not
so punctually paid, or duly provided for, and interest on such defaulted
interest at the then applicable interest rate borne by the Notes, to the extent
lawful, shall forthwith cease to be payable to the Holder on such Regular Record
Date, and may be paid to the person in whose name this Note (or one or more
Predecessor Notes) is registered at the close of business on a Special Record
Date for the payment of such defaulted interest to be fixed by the Trustee,
notice of which shall be given to Holders of Notes not less than 10 days prior
to such Special Record Date, or may be paid at any time in any other lawful
manner not inconsistent
A-1
<PAGE>
with the requirements of any securities exchange on which the Notes may be
listed, and upon such notice as may be required by such exchange, all as more
fully provided in such Indenture.
Payment of the principal of, premium, if any, and interest on this
Note will be made at the office or agency of the Company maintained for that
purpose in the Borough of Manhattan in The City of New York, State of New York,
or at such other office or agency of the Company as may be maintained for such
purpose, in such coin or currency of the United States of America as at the time
of payment is legal tender for payment of public and private debts; provided,
--------
however, that payment of interest may be made at the option of the Company by
- -------
check mailed to the address of the person entitled thereto as such address shall
appear on the Note Register.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof.
Unless the certificate of authentication hereon has been duly executed
by the Trustee referred to on the reverse hereof by manual signature, this Note
shall not be entitled to any benefit under the Indenture, or be valid or
obligatory for any purpose.
[Remainder of Page Intentionally Left Blank]
A-2
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
Dated: SAKS INCORPORATED
By:
----------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the 7 3/8% Notes due 2019 referred to in the within-
mentioned Indenture.
THE FIRST NATIONAL BANK OF CHICAGO, as Trustee
By:
----------------------------
Authorized Officer
A-3
<PAGE>
[REVERSE OF NOTE]
1. Indenture. This Note is one of a duly authorized issue of Notes
---------
of the Company designated as its 7 3/8% Notes due 2019. The Notes are limited
(except as otherwise provided in the Indenture referred to below) in aggregate
principal amount to $200,000,000, which may be issued under an indenture (herein
called the "Indenture") dated as of February 17, 1999, by and among the Company,
each of the Guarantors named in the Indenture (the "Guarantors") and The First
National Bank of Chicago, as trustee (herein called the "Trustee," which term
includes any successor Trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties, obligations and immunities
thereunder of the Company, the Trustee, the Guarantors and the Holders of the
Notes, and of the terms upon which the Notes are, and are to be, authenticated
and delivered.
All capitalized terms used in this Note which are defined in the
Indenture and not otherwise defined herein shall have the meanings assigned to
them in the Indenture.
The terms of the Notes include those stated in the Indenture and those
made part of the Indenture by reference to the Trust Indenture Act of 1939 (15
U.S.C. (S)(S) 77aaa-77bbbb) (the "TIA"), as in effect on the date of the
Indenture. Notwithstanding anything to the contrary herein, the Notes are
subject to all such terms, and Holders of Notes are referred to the Indenture
and the TIA for a statement of such terms.
No reference herein to the Indenture and no provisions of this Note or
of the Indenture shall alter or impair the obligation of the Company or any
Guarantor, which is absolute and unconditional, to pay the principal of,
premium, if any, and interest on this Note at the times, place, and rate, and in
the coin or currency, herein prescribed.
2. Note Guarantees. This Note is initially entitled to the benefits
---------------
of the certain senior Note Guarantees of the Guarantors and may thereafter be
entitled to certain other senior Note Guarantees made for the benefit of the
Holders. Reference is hereby made to Article Twelve of the Indenture and to the
Note Guarantees endorsed on this Note for a statement of the respective rights,
limitations of rights, duties and obligations thereunder of the Guarantors, the
Trustee and the Holders.
A-4
<PAGE>
3. Redemption. The Notes will be redeemable, in whole or in part, at
----------
the option of the Company, at any time or from time to time, upon not less than
30 and not more than 60 days' notice mailed to each Beneficial Owner of Notes to
be redeemed as shown in the security register for the Notes, on any date prior
to their maturity date at a price equal to the greater of (i) 100% of the
principal amount thereof and (ii) the sum of the present values of the Remaining
Scheduled Payments thereon discounted to the Redemption Date on a semiannual
basis (assuming a 360-day year consisting of twelve 30-day months) at the
Treasury Rate plus 35 basis points, plus in either case accrued and unpaid
interest on the principal amount being redeemed to the Redemption Date (subject
to the right of persons in whose name the Notes are registered on the relevant
record date to receive interest due on an Interest Payment Date that is on or
prior to the Redemption Date).
4. Notice of Redemption. Notice of redemption will be mailed by
--------------------
first-class mail at least 30 days but not more than 60 days before the
Redemption Date to each Holder of Notes to be redeemed at its registered
address. In the event that less than all of the Notes are to be redeemed at any
time pursuant to an optional redemption, selection of such Notes for redemption
will be made by the Trustee in compliance with the requirements of the principal
national securities exchange, if any, on which the Notes are listed or, if the
Notes are not then listed on a national securities exchange, on a pro rata
basis, by lot or by such method as the Trustee shall deem fair and appropriate;
provided, however, that no Securities of a principal amount of each class of
$1,000 or less shall be redeemed in part; provided, further, however, that if a
partial redemption is made pursuant to the provisions described in paragraph 3,
selection of the Notes or portions thereof for redemption shall be made by the
Trustee only on a pro rata basis or on as nearly a pro rata basis as is
practicable (subject to the procedures of The Depository Trust Company), unless
such method is otherwise prohibited.
If any Note is to be redeemed in part only, the notice of redemption
that relates to such Note shall state the portion of the principal amount
thereof to be redeemed. A new Note in a principal amount equal to the
unredeemed portion thereof will be issued in the name of the Holder thereof upon
cancellation of the original Note. On and after the Redemption Date, interest
will cease to accrue on Notes or portions thereof called for redemption as long
as the Company has deposited with the Paying Agent for the Notes funds in
satisfaction of the Redemption Price pursuant to the Indenture.
A-5
<PAGE>
5. Defaults and Remedies. If an Event of Default occurs and is
---------------------
continuing, the principal of all of the Outstanding Notes, plus all accrued and
unpaid interest, if any, to and including the date the Notes are paid, may be
declared due and payable in the manner and with the effect provided in the
Indenture.
6 Defeasance. The Indenture contains provisions (which provisions
----------
apply to this Note) for defeasance at any time of (a) the entire indebtedness of
the Company and the Guarantors on this Note and (b) certain restrictive
covenants and related Defaults and Events of Default, in each case upon
compliance by the Company with certain conditions set forth therein.
7. Amendments and Waivers. The Indenture permits, with certain
----------------------
exceptions as provided therein, the amendment thereof and the modification of
the rights and obligations of the Company and the rights of the Holders under
the Indenture at any time by the Company and the Trustee with the consent of the
Holders of not less than a majority in aggregate principal amount of the Notes
at the time Outstanding. The Indenture also contains provisions permitting the
Holders of specified percentages in aggregate principal amount of the Notes at
the time Outstanding, on behalf of the Holders of all the Notes, to waive
compliance by the Company with certain provisions of the Indenture and certain
past Defaults under the Indenture and this Note and their consequences. Any
such consent or waiver by or on behalf of the Holder of this Note shall be
conclusive and binding upon such Holder and upon all future Holders of this Note
and of any Note issued upon the registration of transfer hereof or in exchange
herefor or in lieu hereof whether or not notation of such consent or waiver is
made upon this Note.
8. Denominations, Transfer and Exchange. The Notes are issuable only
------------------------------------
in registered form without coupons in denominations of $1,000 and any integral
multiple thereof. As provided in the Indenture and subject to certain
limitations therein set forth, the Notes are exchangeable for a like aggregate
principal amount of Notes of a different authorized denomination, as requested
by the Holder surrendering the same.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Note is registrable on the Note Register
of the Company, upon surrender of this Note for registration of transfer at the
office or agency of the Company maintained for such purpose in the Borough of
Manhattan in The City of New York, State of New York, or at such other office or
agency of the Company as may be
A-6
<PAGE>
maintained for such purpose, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Registrar
duly executed by, the Holder hereof or his attorney duly authorized in writing,
and thereupon one or more new Notes, of authorized denominations and for the
same aggregate principal amount, will be issued to the designated transferee or
transferees.
No service charge shall be made for any registration of transfer or
exchange or redemption of Notes, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
9. Persons Deemed Owners. Prior to and at the time of due
---------------------
presentment of this Note for registration of transfer, the Company, the Trustee
and any agent of the Company or the Trustee may treat the person in whose name
this Note is registered as the owner hereof for all purposes, whether or not
this Note shall be overdue, and neither the Company, the Trustee nor any agent
shall be affected by notice to the contrary.
10. GOVERNING LAW. THE INDENTURE, THIS NOTE AND EACH NOTE GUARANTEE
-------------
SET FORTH BELOW SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF
LAW.
The Company will furnish to any Holder of a Note upon written request
and without charge a copy of the Indenture. Requests may be made to: Saks
Incorporated, 750 Lakeshore Parkway, Birmingham, Alabama 35211.
A-7
<PAGE>
ASSIGNMENT FORM
If you the holder want to assign this Note, fill in the form below and have your
signature guaranteed:
I or we assign and transfer this Note to
- -------------------------------------------------------------------------------
(Insert assignee's social security or tax ID number)
---------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code) and irrevocably appoint
- -------------------------------------------------------------------------------
agent to transfer this Note on the books of the Company. The agent may
substitute another to act for such agent.
- -------------------------------------------------------------------------------
Date: Your signature:
-------------- -----------------------------------------
(Sign exactly as your name appears on
the other side of this Note)
By:
--------------------------------------
NOTICE: To be executed
by an executive officer
Signature Guarantee:
---------------------
A-8
<PAGE>
EXHIBIT B
---------
FORM OF LEGEND FOR BOOK-ENTRY SECURITIES
Any Global Note authenticated and delivered hereunder shall bear a
legend in substantially the following form:
THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A
NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS NOTE IS NOT
EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN
THE DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED
IN THE INDENTURE, AND NO TRANSFER OF THIS NOTE (OTHER THAN A TRANSFER OF
THIS NOTE AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY
A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE
DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED
IN THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND
ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
B-1
<PAGE>
EXHIBIT C
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FORM OF NOTE GUARANTEE
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For value received, the undersigned hereby fully and unconditionally
guarantees to the Holder of this Note the cash payments in United States dollars
of principal of, premium, if any, and interest on this Note in the amounts and
at the time when due and interest on the overdue principal, premium, if any, and
interest, if any, on this Note, if lawful, and the payment or performance of all
other obligations of the Company under the Indenture or the Notes, to the Holder
of this Note and the Trustee, all in accordance with and subject to the terms
and limitations of this Note, Article Twelve of the Indenture and this Note
Guarantee. This Note Guarantee will become effective in accordance with Article
Twelve of the Indenture and its terms shall be evidenced therein. The validity
and enforceability of any Note Guarantee shall not be affected by the fact that
it is not affixed to any particular Note. Capitalized terms used but not
defined herein shall have the meanings ascribed to them in the Indenture dated
as of February 17, 1999, by and among Saks Incorporated, the undersigned and The
First National Bank of Chicago, as Trustee, as amended or supplemented (the
"Indenture").
The obligations of the undersigned to the Holders of Notes and to the
Trustee pursuant to the Note Guarantee and the Indenture are expressly set forth
in Article Twelve of the Indenture and reference is hereby made to the Indenture
for the precise terms of the Note Guarantee and all of the other provisions of
the Indenture to which this Note Guarantee relates.
THIS NOTE GUARANTEE WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS
OF LAW. THE SUBSIDIARY GUARANTOR HEREUNDER AGREES TO SUBMIT TO THE NON-
EXCLUSIVE JURISDICTION OF THE STATE OF NEW YORK IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THE INDENTURE, THE NOTES OR THIS NOTE GUARANTEE.
This Note Guarantee is subject to release upon the terms set forth in
the Indenture.
C-1
<PAGE>
IN WITNESS WHEREOF, the undersigned Guarantor has caused this Note
Guarantee to be duly executed.
Dated:
[NAME OF GUARANTOR]
By:
--------------------------------
Name:
Title:
C-2
<PAGE>
EXHIBIT 5.1
Saks Incorporated
750 Lakeshore Parkway
Birmingham, Alabama 35211
February 11, 1999
Saks Incorporated
and its Subsidiary Guarantors
750 Lakeshore Parkway
Birmingham, Alabama 35211
Registration Statement on Form S-3 (No. 71933)
of Saks Incorporated and Affiliated Registrants
(the "Registration Statement")
Ladies and Gentlemen:
I refer to the Registration Statement filed with the Securities and
Exchange Commission on February 5, 1999 with respect to the proposed issuance
and sale of $200 million of 7-3/8% Notes due 2019 (the "Notes") of Saks
Incorporated (the "Company"). The Notes are unconditionally guaranteed (the
"Note Guarantees") by the subsidiary corporations, partnerships, and a limited
liability company (the "Guarantors" and together with the Company the "Saks
Entities") listed on Schedule II of the Underwriting Agreement dated February
11, 1999 among the Company, the Guarantors, and the several underwriters named
in Schedule I to the Underwriting Agreement (the "Underwriters"). The Notes and
the Note Guarantees (together the "Offered Securities") are proposed to be
issued under an Indenture to be dated as of February 17, 1999 (the "Indenture")
among the Saks Entities and The First National Bank of Chicago, as Trustee (the
"Trustee").
I examined the articles or certificate of incorporation, bylaws,
partnership agreement, or other applicable organization documents of each of the
Saks Entities, the form of Note, Note Guarantee, and Indenture, and all matters
of fact and law as I determined were necessary for purposes of this opinion
letter. I am familiar with the corporate proceedings relating to the
Registration Statement and the proposed issuance and sale of the Offered
Securities.
Based on the foregoing and subject to the next sentence, I am of the
opinion that when the Indenture has been duly executed and delivered, the
Offered Securities have been duly executed by the Saks Entities and duly
authenticated by the Trustee, and the Offered Securities have been delivered to
the Underwriters against payment by them for the Offered Securities, the Offered
Securities will be legally issued and binding obligations of the Saks Entities
in accordance with their terms. My opinion in the preceding sentence is subject
to applicable bankruptcy, insolvency, fraudulent
<PAGE>
Saks Incorporated
And its Subsidiary Guarantors
February 11, 1999
Page 2
conveyance, reorganization, moratorium, and similar laws affecting creditors'
rights and remedies generally, and subject to general principles of equity,
including principles of commercial reasonableness, good faith, and fair dealing
(regardless of whether enforcement is sought in a proceeding at law or in
equity).
I consent to the filing of this opinion letter as Exhibit 5.1 to the
Registration Statement and to the use of my name under the caption "Legal
Opinions."
Very truly yours,
/s/ Charles J. Hansen
-------------------------
Charles J. Hansen
Senior Vice President and
Associate General Counsel
<PAGE>
EXHIBIT 99.1
Wednesday February 17, 4:31 pm Eastern Time
Company Press Release
Saks Incorporated Announces Completion of $200 Million Notes Offering
BIRMINGHAM, Ala.--(BUSINESS WIRE)--Feb. 17, 1999--Department store retailer Saks
Incorporated (NYSE: SKS - news; the ``Company;'' formerly Proffitt's, Inc.)
announced today it completed the sale of $200 million of its 7-3/8% Notes due
2019. The Notes were priced at 99.587%. The Company will use the proceeds of the
offering to repay outstanding amounts under the Company's unsecured credit
facilities. The Notes are part of the securities registered on a $2.5 billion
shelf registration statement the Company filed with the U.S. Securities and
Exchange Commission in 1998, of which $1.2 billion of securities remain
available to be issued. Senior debt securities to be issued under the shelf
registration statement have been assigned preliminary ratings of Baa3 by
Moody's, BB+ by Standard and Poor's, and BBB- by Duff & Phelps.
Salomon Smith Barney acted as lead manager for the transaction, and Chase
Securities Inc., Goldman, Sachs & Co., Lehman Brothers, Merrill Lynch & Co.,
J.P. Morgan & Co., and NationsBanc Montgomery Securities LLC acted as co-
managers.
Saks Incorporated operates over 345 department stores and four free-standing
furniture stores under the names of Saks Fifth Avenue, Proffitt's, McRae's,
Younkers, Parisian, Herberger's, Carson Pirie Scott, Bergner's, Boston Store,
and Off 5th. The Company also operates two direct mail businesses, Folio and
Bullock & Jones. The Company's annual revenues exceed $6 billion.
- ------------------
Contact:
Saks Inc., Birmingham
Charles Hansen, 205/940-4600
<PAGE>
EXHIBIT 99.2
The estimated expenses incurred by the Company in connection with its issuance
and distribution of the Notes are set forth in the following table:
SEC Registration Fee* $ 55,600
NYSE Listing Fee --
Blue Sky Fees and Expenses --
Printing and Engraving Costs 25,000
Rating Agencies' Fees --
Accounting Fees and Expenses 12,500
Legal Fees and Expenses 20,000
Trustee and Registrar Fees 3,000
Miscellaneous 3,900
========
Total $120,000
- ----------------------
* On February 5, 1999, the Company filed with the Securities and Exchange
Commission (the "Commission") a Registration Statement (the "Registration
Statement") on Form S-3 for the registration of $1.4 billion of various
securities. In connection with the filing of such Registration Statement, the
Company applied funds previously paid to the Commission to cover the
registration fee of $389,200. Because the Notes were issued pursuant to the
Registration Statement, the amount set forth represents the amount of the
previously paid registration fee properly allocable to the registration of the
Notes.
