<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 25, 1994
REGISTRATION NO. 33-52665
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- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
----------------
WABAN INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 33-0109661
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
----------------
ONE MERCER ROAD
NATICK, MASSACHUSETTS 01760
(508) 651-6500
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
DALE N. GARTH
SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
WABAN INC.
ONE MERCER ROAD
NATICK, MASSACHUSETTS 01760
(508) 651-6500
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
----------------
COPIES TO:
MARK G. BORDEN, ESQ. DENNIS J. BLOCK, ESQ.
HALE AND DORR WEIL, GOTSHAL & MANGES
60 STATE STREET 767 FIFTH AVENUE
BOSTON, MASSACHUSETTS 02109 NEW YORK, NEW YORK 10153
(617) 526-6000 (212) 310-8000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
If the securities being registered on this Form are being offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [_]
----------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The fees and expenses incurred by the Company in connection with the offering
are payable by the Company and, other than filing fees, are estimated as
follows:
<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee.............. $ 34,483
National Association of Securities Dealers, Inc. Filing Fee...... 10,500
Rating Agency Fees............................................... 60,000
Printing and Engraving Expenses.................................. 110,000
Legal Fees and Expenses.......................................... 130,000
Accounting Fees and Expenses..................................... 60,000
Trustee Fees and Expenses........................................ 20,000
Blue Sky Fees and Expenses....................................... 15,000
Miscellaneous.................................................... 10,017
--------
Total.......................................................... $450,000
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law, as amended, provides
that a corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation) by reason of the
fact that he is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful.
Section 145 further provides that a corporation similarly may indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor against expenses (including
attorneys' fees) actually and reasonably incurred by him in connection with the
defense or settlement of such action or suit if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of
the corporation, except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the corporation unless and only to the extent that the Delaware Court
of Chancery or the court in which such action or suit was brought shall
determine upon application that, despite an adjudication of liability but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Court of Chancery or such
other court shall deem proper.
The Registrant has entered into indemnification agreements with each of its
directors and officers indemnifying them against expenses, settlements,
judgments and fines incurred in connection with any threatened, pending or
completed action, suit, arbitration or proceeding, where the individual's
involvement is by reason of the fact that such person is or was a director or
officer or served at the Company's request as a director of another
organization (except that indemnification is not provided against judgments and
fines in a derivative suit unless permitted by Delaware law). An individual may
not be indemnified if such person is found not to have acted in good faith and
in a manner such person reasonably believed to be in or not opposed to the best
interests of the Registrant, except to the extent Delaware law permits broader
contractual
II-1
<PAGE>
indemnification. These indemnification agreements provide procedures,
presumptions and remedies which substantially strengthen the indemnification
rights beyond those provided by the Registrant's Restated Certificate of
Incorporation (the "Certificate") and by Delaware law.
The Registrant's Certificate provides that each person who was or is made a
party to, or is involved in, any action, suit, proceeding or claim by reason of
the fact that he or she is or was a director, officer or employee of the
Registrant (or is or was serving at the request of the Registrant as a
director, officer, trustee, employee or agent of any other enterprise including
service with respect to employee benefit plans) shall be indemnified and held
harmless by the Registrant, to the full extent permitted by Delaware law, as in
effect from time to time, against all expenses (including attorneys' fees and
expenses), judgments, fines, penalties and amounts to be paid in settlement
incurred by such person in connection with the investigation, preparation to
defend or defense of such action, suit, proceeding or claim.
The rights to indemnification and the payment of expenses provided by the
Registrant's Certificate do not apply to any action, suit, proceeding or claim
initiated by or on behalf of a person otherwise entitled to the benefit of such
provisions. Any person seeking indemnification under the Registrant's
Certificate shall be deemed to have met the standard of conduct required for
such indemnification unless the contrary shall be established. The Registrant's
Certificate provides that the rights to indemnification and the payment of
expenses provided thereby shall not be exclusive of any other right which any
person may have or acquire under any statute, provision of the Registrant's
Certificate or By-laws, or otherwise. Any repeal or modification of such
indemnification provisions shall not adversely affect any right or protection
of a director or officer with respect to any conduct of such director or
officer occurring prior to such repeal or modification.
Section 102(b) of the Delaware General Corporation Law, as amended, permits a
corporation to include in its certificate of incorporation a provision
eliminating or limiting the personal liability of a director to the corporation
or its stockholders for monetary damages for breach of fiduciary duty as a
director, provided that such provision shall not eliminate or limit the
liability of a director (i) for any breach of the director's duty of loyalty to
the corporation or its stockholders, (ii) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law,
(iii) under Section 174 of the Delaware General Corporation Law (relating to
unlawful payment of dividend and unlawful stock purchase and redemption) or
(iv) for any transaction from which the director derived an improper personal
benefit. The Registrant has provided in its Certificate that its directors
shall be exculpated from liability as provided under Delaware Law.
ITEM 16. EXHIBITS.
The exhibits listed in the Exhibit Index as filed as part of this
Registration Statement.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
1.1 Form of Underwriting Agreement
4.1 Restated Certificate of Incorporation(1)
4.2 Certificate of Designation(2)
4.3 By-laws, as amended(3)
4.4 Rights Agreement dated as of May 23, 1989 between the Company and
First Chicago Trust Company of New York, formerly Morgan Shareholder
Services Trust Company, as Rights Agent(1)
4.5 Form of Indenture between the Company and the Trustee (including
form of Note)
4.6 Instruments with respect to other long-term debt of the Company and
its consolidated subsidiaries are omitted pursuant to Item
601(b)(4)(iii) of Regulation S-K since the total amount authorized
under each such omitted instrument does not exceed 10 percent of the
total assets of the Company and its subsidiaries on a consolidated
basis. The Company hereby agrees to furnish a copy of any such
instrument to the Securities and Exchange Commission upon request.
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
5.1 Opinion of Hale and Dorr
12.1+ Calculation of Ratio of Earnings to Fixed Charges
23.1+ Consent of Coopers & Lybrand
23.2 Consent of Hale and Dorr (included in the opinion filed as Exhibit
5.1).
24.1+ Power of Attorney
25.1+ Statement of Eligibility of Trustee (Form T-1)
</TABLE>
- --------
+ Previously filed.
(1) Incorporated hereby by reference to the similarly-numbered Exhibit to the
Company's Form 10, as amended, (#1-10259)(the "Form 10").
(2) Incorporated herein by reference to Exhibit 28.1 to the Company's Form 10.
(3) Incorporated herein by reference to Exhibit 3.2 of the Company's Annual
Report on Form 10-K for the fiscal year ended January 27, 1990.
ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to section 13(a) or section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to section 15(d) of the Exchange Act) that is
incorporated by reference to the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at the time shall be deemed to be the initial bona
fide offering thereof.
(b) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
(c) The undersigned Registrant hereby undertakes that:
(i) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in the
form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act of 1933 shall be deemed to be part
of this registration statement as of the time it was declared effective.
(ii) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Amendment No. 2 to Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the Town of
Natick, Commonwealth of Massachusetts on the 22nd day of April, 1994.
Waban Inc.
By: /s/ Herbert J Zarkin
---------------------------------
HERBERT J ZARKIN President and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 2 to Registration Statement has been signed by the following persons in the
capacities indicated on the 22nd day of April, 1994.
SIGNATURES TITLE
/s/ Sumner L. Feldberg* Chairman of the Board
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SUMNER L. FELDBERG
/s/ Herbert J Zarkin President, Chief
- ------------------------------------- Executive Officer and
HERBERT J ZARKIN Director (Principal
Executive Officer)
/s/ Dale N. Garth Senior Vice President,
- ------------------------------------- Treasurer and Chief
DALE N. GARTH Financial Officer
(Principal Financial
Officer)
/s/ Edward J. Weisberger Vice President--Finance
- ------------------------------------- (Principal Accounting
EDWARD J. WEISBERGER Officer)
/s/ S. James Coppersmith* Director
- -------------------------------------
S. JAMES COPPERSMITH
/s/ Stanley H. Feldberg* Director
- -------------------------------------
STANLEY H. FELDBERG
/s/ Allyn L. Levy* Director
- -------------------------------------
ALLYN L. LEVY
II-4
<PAGE>
SIGNATURES TITLE
/s/ Arthur F. Loewy* Director
- -------------------------------------
ARTHUR F. LOEWY
/s/ Thomas J. Shields* Director
- -------------------------------------
THOMAS J. SHIELDS
/s/ Lorne R. Waxlax* Director
- -------------------------------------
LORNE R. WAXLAX
/s/ Dale N. Garth
*By__________________________________
DALE N. GARTH, ATTORNEY-IN-FACT
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION PAGE NO.
------- ----------- --------
<C> <S> <C>
1.1 Form of Underwriting Agreement
4.1 Restated Certificate of Incorporation(1)
4.2 Certificate of Designation(2)
4.3 By-laws, as amended(3)
4.4 Rights Agreement dated as of May 23, 1989 between the
Company and First Chicago Trust Company of New York,
formerly Morgan Shareholder Services Trust Company, as
Rights Agent(1)
4.5 Form of Indenture between the Company and the Trustee
(including form
of Note)
4.6 Instruments with respect to other long-term debt of the
Company and its consolidated subsidiaries are omitted
pursuant to Item 601(b)(4)(iii) of Regulation S-K since
the total amount authorized under each such omitted
instrument does not exceed 10 percent of the total assets
of the Company and its subsidiaries on a consolidated
basis. The Company hereby agrees to furnish a copy of any
such instrument to the Securities and Exchange Commission
upon request.
5.1 Opinion of Hale and Dorr
12.1+ Calculation of Ratio of Earnings to Fixed Charges
23.1+ Consent of Coopers & Lybrand
23.2 Consent of Hale and Dorr (included in the opinion filed
as Exhibit 5.1).
24.1+ Power of Attorney
25.1+ Statement of Eligibility of Trustee (Form T-1)
</TABLE>
- --------
+ Previously filed.
(1) Incorporated hereby by reference to the similarly-numbered Exhibit to the
Company's Form 10, as amended, (#1-10259)(the "Form 10").
(2) Incorporated herein by reference to Exhibit 28.1 to the Company's Form 10.
(3) Incorporated herein by reference to Exhibit 3.2 of the Company's Annual
Report on Form 10-K for the fiscal year ended January 27, 1990.
<PAGE>
$100,000,000
WABAN INC.
______% Senior Subordinated Notes due 2004
UNDERWRITING AGREEMENT
-----------------------
April ___, 1994
Bear, Stearns & Co. Inc.
245 Park Avenue
New York, New York 10167
Dear Sirs:
Waban Inc., a Delaware corporation (the "Company"), proposes
to issue and sell to you, upon the terms hereinafter set forth,
$100,000,000 aggregate principal amount of its ______% Senior
Subordinated Notes due 2004 (the "Securities"). The Securities will
be issued pursuant to an indenture between the Company and The First
National Bank of Boston, as Trustee (the "Trustee"), substantially in
the form filed as an exhibit to the Registration Statement (the
"Indenture") referred to below and are more fully described in the
Registration Statement.
1. Registration Statement and Prospectus. The Company has
-------------------------------------
prepared and filed with the Securities and Exchange Commission (the
"Commission") in accordance with the provisions of the Securities Act
of 1933, as amended (the "Act"), and the rules and regulations of the
Commission promulgated thereunder (the "Regulations"), a registration
statement on Form S-3 (File No. 33-52665) relating to the Securities and
one or more amendments thereto. The Company proposes to prepare and file
with the Commission a further amendment to that registration statement,
including therein a final prospectus, necessary to permit the
registration statement to become effective or, if no amendment is
required for that purpose, then promptly following the effectiveness of
the registration statement, the Company proposes to prepare and file with
the Commission, pursuant to Rule 424(b) of the Regulations, a final
prospectus containing all Rule 430A Information (as hereinafter defined)
omitted from the registration statement at the time that it is declared
effective by the Commission. The Company will not file any such further
1
<PAGE>
amendment or final prospectus to which you shall reasonably object in
writing after being furnished a copy thereof prior to filing. As used
in this Agreement, (i) the term "Effective Date" means the date that
the registration statement hereinabove referred to is declared
effective by the Commission, (ii) the term "Registration Statement"
means such registration statement as last amended prior to the time it
was declared effective by the Commission, including all exhibits and
schedules thereto and all Rule 430A Information deemed to be included
therein at the Effective Date pursuant to Rule 430A of the
Regulations, (iii) the term "Rule 430A Information" means information
with respect to the Securities and the public offering thereof
permitted, pursuant to the provisions of paragraph (a) of Rule 430A of
the Regulations, to be omitted from the form of prospectus included in
the Registration Statement at the time it is declared effective by the
Commission, (iv) the term "Prospectus" means the form of final
prospectus relating to the Securities first filed with the Commission
pursuant to Rule 424(b) of the Regulations or, if no filing pursuant
to Rule 424(b) is required, the form of final prospectus included in
the Registration Statement at the time it is declared effective by the
Commission, and (v) the term "preliminary prospectus" means each
preliminary prospectus (as described in Rule 430 of the Regulations)
with respect to the Securities that omit Rule 430A Information. Any
reference herein to the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to refer to and include
the documents incorporated by reference therein pursuant to Item 12 of
Form S-3 that were filed under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), on or before the effective date of the
Registration Statement, the date of such preliminary prospectus or the
date of the Prospectus, as the case may be, as well as any and all
documents filed by the Company with the Commission after the date of
the Registration Statement, such preliminary prospectus or the
Prospectus, as the case may be, pursuant to the Exchange Act and so
incorporated by reference (all such documents being hereinafter
referred to as the "Incorporated Documents").
2. Representations and Warranties of the Company. The
---------------------------------------------
Company represents and warrants to you as follows:
(a) On the Effective Date, the date the Prospectus is first
filed with the Commission pursuant to Rule 424(b) (if required),
at all times subsequent thereto to and including the Closing Date
(as hereinafter defined) and when any post-effective amendment to
the Registration Statement becomes effective or any amendment or
supplement to the Prospectus is filed with the Commission, the
Registration Statement
2
<PAGE>
and, if filed at such time, the Prospectus (as amended or as
supplemented if the Company shall have filed with the Commission
any amendment or supplement thereto) complied and will comply in
all material respects with the applicable provisions of the Act
and the Regulations, and the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"), and the rules and
regulations thereunder, and did not and will not contain an
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 (in the case of the Prospectus, in light
of the circumstances under which they were made) not misleading.
When any preliminary prospectus was first filed with the
Commission (whether filed as part of the Registration Statement
or an amendment thereof or pursuant to Rule 424(a) of the
Regulations) and when any amendment thereof or supplement thereto
was first filed with the Commission, such preliminary prospectus
and any amendments thereof and supplements thereto complied in
all material respects with the applicable provisions of the Act
and the Regulations and did not contain an untrue statement of a
material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading. No representation or warranty is made in this
subsection (a), however, with respect to information relating to
you or the public offering of the Securities by you contained in
or omitted from the Registration Statement or the Prospectus or
any related preliminary prospectus or any amendment thereof or
supplement thereto in reliance upon and in conformity with
information furnished in writing to the Company by you expressly
for use therein. The Incorporated Documents, when they were
first filed with the Commission, complied in all material
respects with the applicable provisions of the Exchange Act and
the rules and regulations of the Commission thereunder. If the
Registration Statement has become effective, no stop order
suspending the effectiveness of the Registration Statement has
been issued and no proceeding for that purpose has been initiated
or threatened by the Commission and the Company shall file with
the Commission in accordance with Rule 424(b) of the Regulations
a final Prospectus containing all Rule 430A Information omitted
at the time such Registration Statement was declared effective by
the Commission. The Company will not file any such final
Prospectus or further amendment to such Registration Statement
(including without limitation in each case any document that upon
filing becomes an Incorporated Document if, at the time of such
3
<PAGE>
filing, a prospectus relating to the Securities is required to be
delivered under the Act) to which you shall reasonably object in
writing after being furnished a copy thereof prior to filing.
(b) Subsequent to the respective dates as of which
information is given in the Registration Statement, except as set
forth in the Registration Statement, there has not been any
material adverse change, or any development involving a
prospective material adverse change, in the business, prospects,
properties, operations, condition (financial or other) or results
of operations of the Company and its subsidiaries taken as a
whole, whether or not arising from transactions in the ordinary
course of business, and since the date of the latest consolidated
balance sheet of the Company and its subsidiaries included in the
Registration Statement, neither the Company nor any of its
subsidiaries has incurred or undertaken any liabilities or
obligations, direct or contingent, that are material to the
Company and its subsidiaries taken as a whole, except for
liabilities or obligations that were incurred or undertaken in
the ordinary course of business or that are fully disclosed in
the Registration Statement.
(c) This Agreement has been duly and validly authorized,
executed and delivered by the Company and is a valid and binding
obligation of the Company, enforceable against the Company in
accordance with its terms, (i) subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and
similar laws affecting creditors' rights and remedies generally,
(ii) subject, as to enforceability, to general principles of
equity (regardless of whether enforcement is sought in a
proceeding at law or in equity) and (iii) except to the extent
that rights to indemnification or contribution hereunder may be
limited by federal or state securities laws or public policy
relating thereto.
(d) The execution, delivery, and performance of this
Agreement, the Indenture and the Securities and the consummation
of the transactions contemplated hereby and thereby, including
the issuance, sale and delivery of the Securities and application
of the proceeds therefrom as set forth in the Registration
Statement, will not, except as set forth in the Registration
Statement, (i) conflict with or result in a breach of any of the
terms and provisions of, or constitute a default (or an event
that with notice or lapse of time, or both, would constitute a
default) or require
4
<PAGE>
consent under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the
Company or any of its subsidiaries, pursuant to the terms of any
agreement, instrument, franchise, license or permit to or by
which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries or their respective
properties or assets may be bound (other than those as to which
requisite waivers or consents have been obtained by the Company)
or (ii) violate or conflict with any provision of the certificate
of incorporation, by-laws, or equivalent instruments, of the
Company or any of its subsidiaries or any judgment, decree,
order, statute, rule or regulation of any court or any public,
governmental or regulatory agency or body having jurisdiction
over the Company or any of its subsidiaries or any of their
respective properties or assets. No consent, approval,
authorization, order, registration, filing, qualification,
license or permit of or with any court or any public,
governmental or regulatory agency or body having jurisdiction
over the Company or any of its subsidiaries or any of their
respective properties or assets is required for the execution,
delivery and performance of this Agreement, the Indenture or the
Securities and the consummation by the Company of the
transactions contemplated hereby and thereby, except for the
registration under the Act of the Securities, the qualification
of the Indenture under the Trust Indenture Act and such consents,
approvals, authorizations, orders, registrations, filings,
qualifications, licenses and permits as may be required under the
state securities or Blue Sky laws in connection with your
purchase and distribution of the Securities.
(e) The Company and each of its subsidiaries has been duly
incorporated, is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation and
has the corporate power and authority required to carry on its
business as described in the Registration Statement and to own,
lease and operate its properties, and each is duly qualified and
is in good standing as a foreign corporation authorized to do
business in each jurisdiction in which the nature of its business
or its ownership or leasing of property requires such
qualification, except where the failure to be so qualified would
not have a material adverse effect on the business, financial
condition or results of operations of the Company and its
subsidiaries, taken as a whole.
5
<PAGE>
(f) All of the outstanding shares of capital stock of each
subsidiary of the Company have been duly and validly authorized
and issued and are fully paid and non-assessable, and are owned
by the Company, free and clear of any security interest, adverse
claim, lien, encumbrance, restriction on transfer, shareholders'
agreement, voting trust or encumbrance whatsoever (except as
expressly disclosed in the Registration Statement and as will be
expressly disclosed in the Prospectus). There are no rights
granted to or in favor of any person to acquire any such capital
stock except as otherwise expressly disclosed in the Registration
Statement and the Prospectus. None of the Company's subsidiaries
is a "significant subsidiary" within the meaning of Rule 1-02(v)
of Regulation S-X promulgated by the Commission.
(g) The Company had, at January 29, 1994, an authorized and
outstanding capitalization as set forth in the Registration
Statement and will have the adjusted capitalization described
therein at the Closing (as hereinafter defined) (based on the
assumptions set forth in the Registration Statement). All of the
currently outstanding shares of common stock of the Company have
been duly authorized and validly issued, are fully paid and non-
assessable and were not issued in violation of or subject to any
preemptive rights.
(h) The Indenture conforms in all material respects to the
description thereof set forth in the Registration Statement and
as shall be set forth in the Prospectus, has been duly and
validly authorized by all necessary corporate action on the part
of the Company and, when executed and delivered by the Company
and the Trustee and qualified under the Trust Indenture Act, will
constitute a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms,
(i) subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws relating
to creditors' rights and remedies generally, (ii) subject, as to
enforceability, to general principles of equity (regardless of
whether enforcement is sought in a proceeding at law or in
equity) and (iii) except insofar as the usury waiver therein may
be deemed to be unenforceable.
(i) The Securities have been duly and validly authorized by
all necessary corporate action and, when authenticated by the
Trustee and issued, sold and delivered by the Company pursuant to
this Agreement against payment therefor, will have been duly and
validly executed,
6
<PAGE>
authenticated, issued and delivered and will constitute valid and
binding obligations of the Company entitled to the benefits of
the Indenture and enforceable against the Company in accordance
with their terms, (i) subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and
similar laws relating to creditors' rights and remedies
generally, (ii) subject, as to enforceability, to general
principles of equity (regardless of whether enforcement is sought
in a proceeding at law or in equity) and (iii) except insofar as
the usury waiver therein may be deemed to be unenforceable. The
Securities, when issued, will conform in all material respects to
the description thereof set forth in the Registration Statement
and as shall be set forth in the Prospectus.
(j) There are no rights of third parties to require
registration of any securities of the Company in connection with
the filing of the Registration Statement or to otherwise require
the Company to register any securities under the Act except such
as have been waived or otherwise disclosed in the Registration
Statement.
(k) Neither the Company nor any of its subsidiaries is in
violation of its charter or by-laws or in default in the
performance of any obligation, agreement or condition contained
in any bond, debenture, note or any other evidence of
indebtedness or in any other agreement, indenture or instrument
to which it is a party or by which it or any of its property is
bound, except for those defaults that, individually or in the
aggregate, would not have a material adverse effect on the
business, financial condition or results of operations of the
Company and its subsidiaries, taken as a whole.
(l) There are no legal or governmental proceedings pending
or, to the knowledge of the Company, threatened to which the
Company or any of its subsidiaries is a party or of which any of
their respective properties or assets is the subject that are
required to be described in the Registration Statement or the
Prospectus and are not so described. There is no statute,
regulation, contract or other document of a character required to
be described in the Registration Statement or the Prospectus or
to be filed as an exhibit to the Registration Statement that is
not so described or filed as required.
7
<PAGE>
(m) The Company and each of its subsidiaries have all
necessary licenses, consents, authorizations, approvals, orders,
certificates and permits, including without limitation those
relating to the environment or environmental matters
(collectively, "Licenses") of and from, and have made all
declarations and filings with and satisfied all eligibility and
other similar requirements imposed by all federal, state, local
and other governmental authorities, all self-regulatory
organizations and all courts and other tribunals, in each case as
required for the conduct of the business in which it is engaged,
and each such License is in full force and effect, except to the
extent that, individually or in the aggregate, the failure to
obtain any such License or to keep such License in effect or to
make any such declaration or filing or satisfy any such
requirement would not have a material adverse effect on the
business, prospects, financial condition or results of operations
of the Company and its subsidiaries, taken as a whole.
(n) The Company and its subsidiaries are in compliance with
all applicable federal, state and local laws and regulations
relating to (i) zoning, land use, and human health and safety and
(ii) employee or occupational safety, discrimination in hiring,
promotion or pay of employees, employee hours and wages or
employee benefits, except in each case where such noncompliance
would not, individually or in the aggregate, have a material
adverse effect upon the Company and its subsidiaries taken as a
whole.
(o) Coopers & Lybrand, whose report is included in the
Registration Statement, are independent public accountants with
respect to the Company, as required by the Act and the
Regulations.
(p) The consolidated financial statements of the Company
and its subsidiaries, together with the related schedules and
notes, forming part of the Registration Statement (and any
amendment thereto) present fairly in all material respects the
consolidated financial position, results of operations, cash flow
and stockholder's equity of the Company and its subsidiaries in
conformity with generally accepted accounting principles on the
basis stated in the Registration Statement at the respective
dates and for the respective periods to which they apply; such
financial statements and related schedules and notes have been
prepared in accordance with generally accepted accounting
principles consistently applied throughout the
8
<PAGE>
periods involved, except as disclosed therein; and the other
financial and statistical information and data with respect to
the Company and its subsidiaries set forth in the Registration
Statement (and any amendment thereto) present fairly the
information purported to be shown thereby at the respective dates
or for the respective periods to which they apply and have been
prepared on a basis consistent with such financial statements and
the books and records of the Company.
(q) The Company has not received notice of any violation,
proceeding, claim, or lawsuit arising out of environmental
matters with respect to the operation of its business or the
property owned or leased by the Company, which is reasonably
likely to have a material adverse effect on the Company and its
subsidiaries taken as a whole; there is no treatment, storage,
disposal or release of any hazardous or toxic substances,
materials, or wastes or any pollutants, contaminants, or
petroleum products at, onto or from sites presently or formerly
(through the date the Company or such subsidiary last owned,
leased or used such property) owned, leased or used by the
Company, liability for which is reasonably likely to have a
material adverse effect on the business, financial condition or
results of operations of the Company and its subsidiaries taken
as a whole.
(r) The Company owns, directly or indirectly, the trademarks
"BJs Wholesale Club" and "HomeBase". There are no other trade names,
trademarks, service marks or brand names that individually or in the
aggregate are material to the Company and its subsidiaries taken as
a whole. None of the Company or any of its subsidiaries has received
notice of any claim of infringement of any intangible property of
the character described above which claim would have a material
adverse effect on the business, financial condition or results of
operations of the Company and its subsidiaries taken as a whole.
(s) The Company is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
3. Purchase, Sale and Delivery of the Securities. (a) On
---------------------------------------------
the basis of the representations, warranties, covenants and agreements
herein contained, but subject to the terms and conditions herein set
forth, the Company agrees to sell to you, and you agree to purchase
from the Company, all of the Securities
9
<PAGE>
at a purchase price equal to ___% of the principal amount thereof,
together with accrued interest, if any, on the Securities from April
__, 1994, to the Closing Date.
(b) Delivery of the Securities and payment of the purchase
price therefor shall be made at the offices of Bear, Stearns & Co.
Inc. located at 245 Park Avenue, New York, New York 10167, or at such
other location as may be mutually acceptable to the Company and you.
Such delivery and payment shall be made at 10:00 A.M., New York City
time, on the fifth full business day following the later of the date
of this Agreement or the Effective Date (unless such time and date are
postponed in accordance with the provisions of Section 8(c) hereof),
or at such other time as shall be mutually agreed upon by the Company
and you. The time and date of such delivery and payment are herein
called the "Closing Date." Delivery of the Securities shall be made
to you against payment of the purchase price therefor by certified or
official bank check payable in New York Clearing House funds to the
order of the Company.
(c) The Securities shall be registered in such name or
names and in such authorized denominations as you may request in
writing at least two full business days prior to the Closing Date,
provided that, if you so specify, the Securities may be represented by
a global instrument registered in the name of Cede & Co., as nominee
of the Depositary Trust Company. The Company will permit you to
examine and package the Securities for delivery at least one full
business day prior to the Closing Date, unless the Securities are to
be represented by a global instrument.
4. Offering. It is understood that, if the Registration
--------
Statement is not already effective at the time of execution of this
Agreement, then as soon after the Registration Statement becomes
effective as you deem it advisable to do so, you will offer the
Securities for sale to the public as set forth in the Prospectus.
5. Agreements of the Company. The Company covenants and
-------------------------
agrees with you as follows:
(a) If the Registration Statement is not already effective,
then the Company will use its best efforts to cause the
Registration Statement to become effective. If the Registration
Statement has become or becomes effective pursuant to Rule 430A
of the Regulations, or filing of the Prospectus is otherwise
required by Rule 424(b) of the Regulations, the Company will file
the Prospectus, properly
10
<PAGE>
completed, pursuant to Rule 424(b) of the Regulations within the
time period therein prescribed and will provide evidence
satisfactory to you of such timely filing.
(b) The Company will advise you promptly and, if so
requested by you, will confirm such advice in writing, (i) when
the Registration Statement has become effective and when any
post-effective amendment thereto becomes effective, (ii) of any
request by the Commission for amendments to the Registration
Statement or amendments or supplements to the Prospectus or for
additional information, (iii) of the issuance by the Commission
of any stop order suspending the effectiveness of the
Registration Statement or of the suspension of qualification of
the Securities for offering or sale in any jurisdiction, or the
initiation or threat of initiation of any proceeding for such
purposes, and (iv) of the happening, during the period referred
to in paragraph (e) below, of any event of which the Company has
knowledge that makes any statement of a material fact made in the
Registration Statement or the Prospectus untrue or which requires
the making of any additions to or changes in the Registration
Statement or the Prospectus in order to comply with the Act or
the Regulations or to make the statements therein not misleading.
The Company will use every reasonable effort to prevent the
issuance of any stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment thereto or
any suspension of qualification of the Securities in any
jurisdiction and if at any time the Commission shall issue any
such stop order, the Company will make every reasonable effort to
obtain the withdrawal or lifting of such order or suspension at
the earliest possible time.
(c) The Company will furnish (i) to your counsel, for
delivery to you, two manually signed copies of the Registration
Statement (including all exhibits thereto filed therewith and
documents incorporated by reference therein) and each amendment
thereto (including all exhibits filed therewith), and (ii) to you
and to those persons who you identify to the Company such number
of copies of each preliminary prospectus, the Prospectus, the
Registration Statement, the Indenture and all amendments of and
supplements to such documents, if any, and all Incorporated
Documents including all documents incorporated by reference in
any amendment of the Registration Statement or supplement to the
Prospectus, without exhibits, as you reasonably may request. The
Company consents to the respective use of each preliminary
prospectus, the Prospectus and any amendment or
11
<PAGE>
supplement thereto by you and by all dealers to whom the
Securities may be sold, in connection with the offering or sale
of the Securities and, as to the Prospectus or any amendment or
supplement thereto, during such period of time thereafter as the
Prospectus is required by law to be delivered in connection
therewith.
(d) The Company will not file any amendment to the
Registration Statement, whether before or after the Effective
Date, or issue any supplement to the Prospectus, of which you
shall not previously have been advised or to which you shall
reasonably object; and the Company will prepare and file with the
Commission, promptly upon your reasonable request, any amendment
to the Registration Statement or supplement to the Prospectus
that may be necessary or advisable in connection with the
distribution of the Securities by you, and will use its best
efforts to cause the same to become effective promptly.
(e) Promptly after the Registration Statement becomes
effective, and from time to time thereafter for such period as in
the opinion of your counsel a prospectus is required by law to be
delivered in connection with sales of Securities by you or any
dealer, the Company will furnish to you and each dealer as many
copies of the Prospectus (and of any amendment or supplement to
the Prospectus) as you or such dealer reasonably may request.
(f) If during the period specified in paragraph (e) above
any event shall occur as a result of which it becomes necessary
to amend or supplement the Prospectus in order to make the
statements therein, in light of the circumstances existing when
the Prospectus is delivered to a purchaser, not misleading, or if
it becomes necessary to amend or supplement the Prospectus to
comply with any law, the Company will forthwith prepare and file
with the Commission an appropriate amendment or supplement to the
Prospectus so that the statements in the Prospectus, as so
amended or supplemented, will not, in light of the circumstances
existing when it is so delivered, be misleading, or so that the
Prospectus will comply with law, and the Company will furnish to
you and to those dealers as you shall specify, such number of
copies thereof as you or those dealers reasonably may request.
(g) Prior to any public offering of the Securities, the
Company will cooperate with you and your counsel in connection
with the registration or qualification of the
12
<PAGE>
Securities under the securities or Blue Sky laws of such
jurisdictions as you may request, will continue such
qualification in effect so long as required for such purpose and
will file such consents to service of process or other documents
as may be necessary in order to effect such registration or
qualification; provided, however, that in connection therewith
-------- -------
the Company shall not be required to qualify as a foreign
corporation or to file any general consent to service of process
in any jurisdiction in which it is not already so qualified or
subject.
(h) The Company will mail and make generally available to
its securityholders as soon as reasonably practicable an earnings
statement covering a period of at least twelve consecutive months
commencing after the Effective Date (but in no event commencing
later than 90 days after such date) that shall satisfy the
provisions of Section 11(a) of the Act and Rule 158 thereunder.
(i) So long as any of the Securities remains outstanding,
the Company will file with the Commission, whether or not then
obligated to do so, all such reports and other information as
would be required by Section 13 or 15(d) of the Exchange Act.
Within fifteen days after the same are filed with the Commission
in definitive form, the Company will file with the Trustee and
supply to each holder of the Securities, without cost, copies of
such reports (without exhibits) or other information. So long as
any of the Securities remains outstanding, the Company will, if
such information is not included in such reports filed with the
Commission, (i) mail as soon as reasonably practicable after the
end of each fiscal year to the record holders of the Securities,
a financial report of the Company and its subsidiaries on a
consolidated basis, including in each such financial report a
consolidated balance sheet, a consolidated statement of
operations, a consolidated statement of cash flows and a
consolidated statement of stockholder's equity as of the end of
and for such fiscal year, together with comparable information as
of the end of and for the preceding year, certified by
independent public accountants, and (ii) mail and make generally
available to such holders as soon as practicable after the end of
each quarterly period (except for the last quarterly period of
each fiscal year), a consolidated balance sheet, a consolidated
statement of operations and a consolidated statement of cash
flows as of the end of and for such period, and for the period
from the beginning of such year to the close of such quarterly
period, together with
13
<PAGE>
comparable information for the corresponding periods of the
preceding year, none of which statements need be audited.
(j) During the period referred to in paragraph (i) above,
the Company will furnish you as soon as available a copy of each
report mailed by the Company to holders of its securities or
filed by the Company with the Commission and such other publicly
available information concerning the Company and its subsidiaries
as you reasonably may request.
(k) Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, the
Company will pay all costs, expenses and fees incident to (i) the
preparation, printing, filing under the Act and distribution of
the Registration Statement (including financial statements and
exhibits), each preliminary prospectus and all amendments and
supplements to any of them, (ii) the printing, filing under the
Act (if required), distribution and delivery of the Prospectus
and all amendments thereof or supplements thereto, (iii) the
reproduction and delivery of this Agreement, the Blue Sky
Memorandum and any supplement thereto and all other agreements,
memoranda, correspondence and other documents printed and
delivered in connection with the offering of the Securities
(including in each case any reasonable disbursements of your
counsel relating to such reproduction and delivery), (iv) the
registration or qualification of the Securities under the
securities or Blue Sky laws of the several states (including in
each case the reasonable fees and disbursements of your counsel
relating to such registration or qualification and the
preparation of a Blue Sky Memorandum relating thereto),
(v) filings with the National Association of Securities Dealers,
Inc. in connection with its review of the fairness of the
underwriting terms and arrangements for the public offering of
the Securities by you (including the reasonable fees and
disbursements of your counsel in connection therewith),
(vi) furnishing such copies of the Registration Statement, the
Prospectus and all amendments and supplements thereto as may be
requested for use in connection with the offering or sale of the
Securities by you or by dealers to whom Securities may be sold,
(vii) the fees and expenses of the Trustee and any agent of such
Trustee and the fees and disbursements of counsel for such
Trustee in connection with the Indenture, (viii) the fees of the
national rating agencies in connection with the rating of the
Securities, and (ix) the performance by the Company of its other
obligations under this Agreement.
14
<PAGE>
(l) The Company will apply the proceeds from the sale of
the Securities as set forth under "Use of Proceeds" in the
Prospectus.
(m) The Company will use its best efforts to do and perform
all things required or necessary to be done and performed under
this Agreement by the Company prior to the Closing Date and to
satisfy all conditions precedent to the delivery of the
Securities.
(n) During the period of ninety (90) days following the
date of the Prospectus, the Company will not, without your prior
written consent, directly or indirectly issue, sell, offer or
agree to sell, or otherwise dispose of any debt or redeemable
equity (other than for other non-redeemable equity securities)
securities (or any securities convertible into, exercisable for
or exchangeable for any such securities) other than the
Securities to be issued and sold pursuant hereto.
6. Indemnification. (a) The Company agrees to indemnify
---------------
and hold harmless you and each person, if any, who controls you within
the meaning of Section 15 of the Act or Section 20 of the Exchange
Act, from and against any and all losses, claims, damages, liabilities
and judgments arising out of or relating to any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement or the Prospectus (as amended or supplemented
if the Company shall have furnished any amendments or supplements
thereto) or any preliminary prospectus, or caused by any omission or
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages,
liabilities or judgments arise out of or relate to any such untrue
statement or omission or alleged untrue statement or omission based
upon information relating to you furnished by you in writing to the
Company expressly for use therein; provided, however, that the
-------- -------
foregoing indemnity agreement with respect to any preliminary
prospectus shall not inure to your benefit or that of any such
controlling person if the person asserting any such losses, claims or
damages purchased Securities from you and if a copy of the Prospectus
(as then amended or supplemented if the Company shall have furnished
any amendments or supplements thereto, excluding documents
incorporated by reference) was not sent or given by you or on your
behalf to such person, if required by law to have been so delivered,
at or prior to the written confirmation of the sale of Securities to
such person, if the Prospectus (as so amended or supplemented,
excluding
15
<PAGE>
documents incorporated by reference) would have cured the defect
giving rise to such losses, claims, damages, liabilities or judgments
and if the Company shall have fully complied in all material respects
with Sections 5(c) (other than Section 5(c)(i) through 5(f) hereof).
(b) In case any action shall be brought against you or any
person controlling you, based upon the Registration Statement, any
preliminary prospectus or the Prospectus or any amendment or
supplement thereto and with respect to which indemnity may be sought
against the Company, you shall promptly notify the Company in writing
(but failure to so notify an indemnifying party shall not relieve it
from any liability which it may have under this Section 6 except to
the extent that it has been prejudiced in any material respect by such
failure or from any liability which it may otherwise have) and the
Company shall assume the defense thereof, including the employment of
counsel reasonably satisfactory to you, and payment of all fees and
expenses. You or any such controlling person shall have the right to
employ separate counsel in any such action and participate in the
defense thereof, but the fees and expenses of such counsel shall be at
your expense or at the expense of such controlling person unless
(i) the employment of such counsel has been specifically authorized in
writing by the Company, or (ii) the Company has failed to assume the
defense and employ counsel reasonably satisfactory to you or (iii) the
named parties to any such action (including any impleaded parties)
include both you or such controlling person and the Company, and you
or such controlling person shall have been advised by such counsel
that there may be one or more legal defenses available to you or such
controlling person that are different from or additional to those
available to the Company (in which case the Company shall not have the
right to assume the defense of such action on behalf of you or such
controlling person, it being understood, however, that the Company
shall not, in connection with any one such action or separate but
substantially similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of more than one separate
firm of attorneys (in addition to any local counsel) for you and all
such controlling persons, which firm shall be designated in writing by
you and that all such fees and expenses shall be reimbursed as they
are incurred). The Company shall not be liable for any settlement of
any such action effected without its written consent (which consent
shall not be unreasonably withheld), but if settled with its written
consent, the Company agrees to indemnify and hold harmless you and
each such controlling person from and against any loss or liability by
reason of such settlement. No
16
<PAGE>
indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or has been
threatened to be made a party and indemnity could have been sought
hereunder by that indemnified party; provided, however, that an
-------- -------
indemnifying party may effect such a settlement without the consent of
the indemnified party if such settlement includes an unconditional
release of the indemnified party from all liability on claims that are
the subject matter of the proceeding or the indemnifying party
indemnifies the indemnified party in writing and posts a bond for an
amount equal to the maximum liability on all such claims.
(c) You agree severally to indemnify and hold harmless the
Company, its directors, its officers who sign the Registration
Statement, and each person, if any, controlling the Company within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, to
the same extent as the foregoing indemnity from the Company to you but
only with reference to information relating to you furnished in
writing by you expressly for use in the Registration Statement, the
Prospectus, any preliminary prospectus or any amendment or supplement
thereto. In case any action shall be brought against the Company, any
of its directors, any such officer or any such controlling person
based on the Registration Statement, the Prospectus or any preliminary
prospectus or any amendment or supplement thereto and in respect of
which indemnity may be sought against you, you shall have the same
rights and duties as are given to the Company by Section 6(b) hereof
(except that if the Company shall have assumed the defense thereof,
you shall not be required to do so, but may employ separate counsel
therein and participate in the defense thereof but the fees and
expenses of such separate counsel shall be at your expense, except as
otherwise provided in Section 6(b)), and the Company, its directors,
each such officer and each such controlling person shall have the same
rights and duties as are given to you by Section 6(b) hereof.
(d) If the indemnification provided for in this Section 6
is unavailable or insufficient to an indemnified party in respect of
any losses, claims, damages, liabilities or judgments referred to
therein, then each indemnifying party, in lieu of or in addition to
indemnifying such indemnified party, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses,
claims, damages, liabilities and judgments (i) in such proportion as
is appropriate to reflect the relative benefits received by the
Company on the one hand and you on the other hand from the offering of
the Securities or (ii) if the allocation provided by
17
<PAGE>
clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the
Company and you in connection with the statements or omissions that
resulted in such losses, claims, damages, liabilities or judgments, as
well as any other relevant equitable considerations. The relative
benefits received by the Company and you shall be deemed to be in the
same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company, and the total
underwriting discounts and commissions received by you, bear to the
total price to the public of the Securities, in each case as set forth
in the table on the cover page of the Prospectus. The relative fault
of the Company and you shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material
fact relates to information supplied by the Company or you and each
party's relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Company and you agree that it would not be just and
equitable if contribution pursuant to this Section 6(d) were
determined by any other method of allocation that does not take
account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an indemnified
party as a result of the losses, claims, damages, liabilities or
judgments referred to in the immediately preceding paragraph shall be
deemed to include, subject to the limitations set forth above, any
legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or
claim. Notwithstanding the provisions of this Section 6, you shall
not be required to contribute any amount in excess of the amount by
which the underwriting discount applicable to the Securities purchased
by you exceeds the aggregate amount of all damages which you are
required to pay or have paid by reason of such untrue or alleged
untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. No party shall be liable
for contribution with respect to any action or claim settled without
its written consent; provided, however, that such written consent was
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not unreasonably withheld.
7. Conditions of Underwriter's Obligations. Your
---------------------------------------
obligation to purchase and pay for the Securities shall be
18
<PAGE>
subject to (i) the accuracy of the representations and warranties of
the Company herein contained, as of the date hereof and as of the
Closing Date, (ii) the absence from any certificates, opinions,
written statements or letters furnished pursuant to this Section 7 to
you or to your counsel, of any qualification or limitation not
previously approved by you, (iii) the performance by the Company of
all its obligations hereunder required to be performed on or before
the Closing Date, and (iv) the following additional conditions:
(a) Notice that the Registration Statement shall have
become effective shall be received by you not later than 5:00
P.M., New York City time, on the date of this Agreement or at
such later date and time as you may approve in writing, all
filings required by Rule 424 and Rule 430A under the Regulations
shall have been made on a timely basis and as of the Closing Date
no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that
purpose shall have been commenced or shall be pending before or
threatened by the Commission.
(b) (i) Since the date of the latest balance sheet of the
Company and its subsidiaries included in the Registration
Statement and the Prospectus, there shall not have been any
material adverse change, or any development involving a
prospective material adverse change, in the condition, financial
or otherwise, or in the earnings, affairs, business, prospects or
operations, whether or not arising in the ordinary course of
business, of the Company and its subsidiaries, taken as a whole,
or any material adverse change, or any development involving a
prospective material adverse change, in the sales, the capital
stock or in the long-term debt of the Company or any of its
subsidiaries from that set forth in or contemplated by the
Registration Statement and the Prospectus, (ii) neither the
Company nor any subsidiary shall have any liability or
obligation, direct or contingent, that is material to the Company
and its subsidiaries, taken as a whole, and that is not disclosed
in the Registration Statement and the Prospectus and (iii) on the
Closing Date you shall have received a certificate dated the
Closing Date, signed by each of the Chief Executive Officer and
the Chief Financial Officer of the Company, and such other
certificates of executive officers as you may specify, confirming
the matters set forth in the introduction to, and paragraphs (a)
and (b) of, this Section 7.
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<PAGE>
(c) On the Closing Date, you shall have received the
opinion of Hale and Dorr, counsel to the Company, dated the date
of its delivery, addressed to you, and in form and scope
satisfactory to you and your counsel, to the effect that:
(i) The Company has been duly organized and is validly
existing and in good standing under the laws of its jurisdiction
of incorporation.
(ii) The Company is duly qualified to do business as a
foreign corporation and is in good standing in the Commonwealth
of Massachusetts.
(iii) The Company has the corporate power and authority to
own, lease or license its respective properties and to conduct
its business as presently being conducted and as described in the
Registration Statement and the Prospectus.
(iv) Such counsel has read all contracts referred to in the
Registration Statement and the Prospectus (other than real estate
contracts) and such contracts are fairly summarized as disclosed
therein, conform in all material respects to the descriptions
thereof contained therein, and are filed as exhibits thereto or are
fairly summarized as disclosed therein, or are incorporated by
reference therein as required in the list of exhibits contained in
Part II thereof, and, to the best knowledge of such counsel, there
are no statutes or regulations or pending or threatened legal or
governmental proceedings required to be disclosed in the Prospectus
which have not been disclosed as required.
(v) The authorized capital stock of the Company is as set
forth in the Registration Statement and the Prospectus.
(vi) The Indenture has been duly and validly authorized,
executed and delivered by the Company, has been duly qualified
under the Trust Indenture Act of 1939, as amended, and assuming
due authorization, execution and delivery by the Trustee,
constitutes a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, (A)
subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws now or
hereafter in effect relating to or affecting creditors' rights
and remedies generally, (B) subject, as to enforceability, to
general principles of equity, including principles of
20
<PAGE>
commercial reasonableness, conscionability, good faith and fair
dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity), (C) except insofar as the usury
waiver therein may be deemed to be unenforceable and (D) except
that no opinion shall be rendered as to the remedies of specific
performance.
(vii) The Securities have been duly and validly authorized
by the Company, and when executed, authenticated and delivered in
accordance with the terms of the Indenture and delivered to and
paid for by you pursuant to this Agreement, will constitute valid
and binding obligations of the Company, enforceable against the
Company in accordance with their respective terms, (A) subject to
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws now or hereafter in
effect relating to creditors' rights and remedies generally, (B)
subject, as to enforceability, to general principles of equity,
including principles of commercial reasonableness,
conscionability, good faith and fair dealing (regardless of
whether enforcement is sought in a proceeding at law or at
equity), (C) except insofar as the usury waiver therein may be
deemed to be unenforceable and (D) except that no opinion shall
be rendered as to the remedies of specific performance. No taxes
are required to be paid with respect to the execution of the
Indenture by the Company and the issuance of the Securities. The
holders of the Securities will be entitled to the benefits of the
Indenture
(viii) Upon delivery of the Securities being sold by the
Company and payment therefor as contemplated by this Agreement,
you will receive the Securities free and clear of any liens,
encumbrances, adverse claims, security interests, restrictions on
transfer (other then such resale and other restrictions as may be
imposed under Federal or state securities laws) and other defects
of title (other than those resulting from actions taken by you),
assuming you purchase such Securities without actual knowledge of
any lien, encumbrance, equity, claim or other "Adverse Claim" (as
such term is defined in Article 8-302 of the New York Uniform
Commercial Code).
(ix) This Agreement has been duly and validly authorized,
executed and delivered by the Company.
(x) To such counsel's knowledge, there is no action,
proceeding, inquiry or investigation, before or brought by
21
<PAGE>
any court or governmental agency or body, to which the Company or
any of its subsidiaries is a party or to which the property of
the Company or any of its subsidiaries is subject, which is
required to be disclosed in the Registration Statement or the
Prospectus and that has not been so disclosed.
(xi) Except as disclosed in the Prospectus, the execution,
delivery and performance by the Company of this Agreement, the
Indenture and the Securities and the consummation of the
transactions contemplated hereby and thereby, including without
limitation the issuance, sale and delivery of the Securities, do
not (A) conflict with or result in a breach of 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) or
require consent under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of
the Company pursuant to the terms of any contract, document or
agreement filed as an exhibit to the Company's Annual Report on
Form 10-K for the fiscal year ended January 29, 1994
(collectively, the "Material Agreements" and individually a
"Material Agreement") (provided that such counsel need express no
opinion in this Clause (A) with respect to acts or omissions of
the Company occurring after the Closing Date), (B) conflict with
or violate any statute, rule, regulation or, to such counsel's
knowledge, any judgment, decree or order of any governmental
agency or body or any court having jurisdiction over the Company
or any of its properties (provided that such counsel need express
no opinion in this clause (B) with respect to state securities or
blue sky laws or the antifraud provisions of the federal securities
laws); or (C) conflict with or violate the certificate of
incorporation or bylaws or equivalent charter documents of the
Company.
(xii) No consent, approval, authorization, permit or order
of, or filing with, any governmental agency or body or, to such
counsel's knowledge, any court that has jurisdiction over the
Company or any of its assets or properties, is required to be
obtained or made by the Company for the sale of the Securities to
you as contemplated by this Agreement and the Indenture, except
for such as have been obtained and made and such as may be
required under state securities or blue sky laws in connection
with the purchase and distribution of the Securities by you, as
to which such counsel need not opine.
22
<PAGE>
(xiii) The Registration Statement, the Prospectus and each
amendment or supplement thereto filed by the Company with the
Commission comply as to form in all material respects with the
requirements of the Securities Act and the rules and regulations
thereunder (except that no opinion need be expressed with respect
to (i) the financial statements or schedules or other financial
or statistical data contained in the Registration Statement or
incorporated therein by reference, (ii) the Statement of
Eligibility and Qualification of the Trustee under the Trust
Indenture Act or (iii) any of the exhibits to the Registration
Statement). The documents filed under the Exchange Act and
incorporated by reference in the Registration Statement and the
Prospectus or any amendment thereof or supplement thereto (other
than the financial statements the notes thereto and the other
financial and accounting data included or incorporated by
reference therein, as to which no opinion need be rendered)
complied, as of the respective dates such documents were filed
with the Commission or were amended subsequent to such filing, as
to form in all material respects with the Exchange Act and the
rules and regulations of the Commission thereunder.
(xiv) The Securities and the Indenture conform in all
material respects to the respective descriptions thereof in the
Registration Statement and the Prospectus.
(xv) The Registration Statement has become effective under
the Securities Act and, to the best of such counsel's knowledge,
no stop order suspending the effectiveness of the Registration
Statement or any post-effective amendment thereto has been issued
and no proceedings for that purpose have been instituted or are
pending or, to such counsel's knowledge, threatened under the
Securities Act.
(xvi) The Company is not an "investment company" or a
company "controlled" by an "investment company" within the
meaning of the Investment Company Act of 1940, as amended.
In addition, such counsel shall state that they have
participated in conferences with officers and other
representatives of the Company, representatives of the
independent public accountant of the Company and your
representatives at which the contents of the Registration
Statement, the Prospectus and any amendment thereof or supplement
thereto and related matters were discussed and, although such
counsel has not undertaken to investigate or verify
independently, and does not assume any responsibility
23
<PAGE>
for, the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus or any
amendment thereof or supplement thereto (other than as to those
matters contained in clauses (v) and (xiv) of this Section
7(c)), on the basis of the foregoing (relying as to materiality
to a large extent upon the opinions of officers and other repre-
sentatives of the Company), no facts have come to such counsel's
attention leading such counsel to believe that either the
Registration Statement at the time it became effective (or at the
date of any amendment thereof made after the Effective Date but
prior to the Closing Date) contained an untrue statement of a
material fact or omitted to state any material fact required to
be stated therein or necessary to make the statements therein not
misleading or that the Prospectus at the date thereof or as of
the Closing Date (or at the date of any amendment thereof or
supplement thereto made after the Effective Date but prior to the
Closing Date) contained an untrue statement of a material fact or
omitted to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading (it
being understood that such counsel need express no view with
respect to the financial statements and schedules and other
financial and statistical data included therein, the Statement of
Eligibility and Qualification of the Trustee under the Trust
Indenture Act or the exhibits to the Registration Statement).
In rendering the foregoing opinion, such counsel may
rely (A) as to matters involving the application of laws other
than the laws of the United States, the Commonwealth of
Massachusetts and the Delaware General Corporation Law statute, to
the extent such counsel deems proper and to the extent specified in
such opinion, if at all, upon an opinion or opinions (in form and
scope reasonably satisfactory to your counsel) of other counsel,
reasonably acceptable to your counsel, familiar with the applicable
laws, which opinion shall be addressed and delivered to you; and (B)
as to matters of fact, to the extent such counsel deems proper, on
certificates of responsible officers and other representatives of
the Company, certificates of public officials, and certificates or
other written statements of officers of departments of various
jurisdictions having custody of documents respecting the corporate
existence or good standing of the Company and its subsidiaries,
provided that copies of any such statements or certificates shall be
delivered to your counsel. The opinion of counsel for the
24
<PAGE>
Company shall state that the opinion of any such other counsel is
in form and scope satisfactory to such counsel and, in such
counsel's opinion, you and your counsel are justified in relying
thereon.
(d) On the Closing Date you shall have received an opinion
from Sarah M. Gallivan, Esq., Vice President, General Counsel and
Secretary of the Company, dated the date of its delivery,
addressed to you, and in form and scope satisfactory to you and
your counsel, to the effect that:
(i) Each of the Company's subsidiaries is a duly organized
and validly existing corporation and is in good standing under
the laws of its jurisdiction of incorporation and has the
corporate power and all authority necessary for the ownership or
leasing or licensing of its properties and the conduct of its
business as presently being conducted and as described in the
Registration Statement and the Prospectus, and the Company and
each of its Subsidiaries is qualified to do business and is in
good standing in each jurisdiction in which its ownership or
leasing of real properties or the conduct of its business
requires such qualification (except where the failure to so
qualify would not have a material adverse effect on the business,
operations, financial condition or results of operation of the
Company and its subsidiaries taken as a whole);
(ii) The Company and its subsidiaries have good and
marketable title to, or lease under valid and subsisting leases,
all the real properties described under the caption "Properties"
in the Registration Statement and Prospectus, and, to such
counsel's knowledge, neither the Company nor any of its
subsidiaries has received notice of any breach or termination of
leases (other than expirations in the normal course) the
termination of which, singly or in the aggregate, would
materially and adversely affect the business, operations, financial
condition or results of operations of the Company and its
subsidiaries taken as a whole;
(iii) To such counsel's knowledge, there is no action,
proceeding, inquiry or investigation, before or brought by any
court or governmental agency or body, to which the Company or any
of its subsidiaries is a party or to which the property of the
Company or any of its subsidiaries is subject, which is required
to be disclosed or incorporated in the Prospectus or the
Registration Statement which is not disclosed and correctly
summarized or incorporated therein;
25
<PAGE>
(iv) All the outstanding capital stock of each of the
Company's subsidiaries is duly authorized, validly issued and
outstanding and non-assessable and free of preemptive rights
provided in the certificate of incorporation or other constituent
documents of such subsidiary or by any Material Agreement and is
owned, directly or indirectly, by the Company free and clear of
all liens, charges, claims, security interests, restrictions on
transfer, stockholders' agreement, voting trust or encumbrances
of any nature whatsoever; and none of the Company's subsidiaries
has granted any outstanding options, warrants or commitments with
respect to any shares of its capital stock whether issued or
unissued;
(v) Except as disclosed in the Prospectus, the execution,
delivery and performance by the Company of this Agreement, the
Indenture and the Securities and the consummation of the
transactions contemplated hereby and thereby, including without
limitation the issuance, sale and delivery of the Securities, do
not (A) conflict with or result in a breach of 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) or
require consent under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of
the Company or any of its subsidiaries pursuant to the terms of
any Material Agreement (provided that such counsel need express
no opinion in this Clause (A) with respect to acts or omissions
of the Company occurring after the Closing Date), (B) conflict
with or violate any statute, rule, regulation or, to such
counsel's knowledge, any judgment, decree or order of any
governmental agency or body or any court having jurisdiction over
the Company or any of its subsidiaries or any of their respective
properties (provided that such counsel need express no opinion in
this clause (B) with respect to state securities or blue sky
laws); or (C) conflict with or violate the certificate of
incorporation or bylaws or equivalent charter documents of the
Company or any of its subsidiaries.
(vi) To such counsel's knowledge, neither the Company nor
any of its subsidiaries is currently in breach of or in default
(in any respect that is material in light of the financial
condition of the Company and its subsidiaries taken as a whole)
under any indenture, mortgage, deed of trust, lease, bank loan or
credit agreement or any other agreement, or instruments of which
such counsel has knowledge to which the Company or any of its
subsidiaries is
26
<PAGE>
a party or any of them or any of their properties may be bound or
affected; and
(vii) Other than certain specified agreements with respect to
which Hale and Dorr has rendered their opinion, such counsel has
read all contracts referred to in the Registration Statement and the
Prospectus and such contracts are fairly summarized as disclosed
therein, conform in all material respects to the descriptions
thereof contained therein, and are filed as exhibits thereto or are
fairly summarized as disclosed therein, or are incorporated by
reference therein as required in the list of exhibits contained in
Part II thereof, and such counsel does not know of any contracts or
other documents required to be so summarized or disclosed, or so
filed or incorporated, which have not been so summarized or
disclosed, or so filed or incorporated, and, to the best of such
counsel's knowledge, there are no statutes or regulations or pending
or threatened legal or governmental proceedings required to be
disclosed in the Prospectus which have not been disclosed as
required.
(viii) No consent, approval, authorization, permit or order
of, or filing with, any governmental agency or body or, to such
counsel's knowledge, any court that has jurisdiction over the
Company or any of its subsidiaries or any of its assets or
properties, is required to be obtained or made by the Company or
any of its subsidiaries for the sale of the Securities to you as
contemplated by this Agreement and the Indenture, except for such
as have been obtained and made and such as may be required under
state securities or blue sky laws in connection with the purchase
and distribution of the Securities by you, as to which such
counsel need not opine.
(ix) To such counsel's knowledge, no cease and desist order
directed to any document incorporated by reference in the Prospectus
has been issued by the Commission and since the respective date of
filing of any such document, no challenge has been made by the
Commission to the accuracy or adequacy of any such document.
(x) The Registration Statement has become effective under
the Securities Act and, to the best of such counsel's knowledge,
no stop order suspending the effectiveness of the Registration
Statement or any post-effective amendment thereto has been issued
and no proceedings for that purpose have been instituted or are
pending or, to such counsel's knowledge, threatened under the
Securities Act.
In addition, such counsel shall state that she has
participated in conferences with officers and other
27
<PAGE>
representatives of the Company, representatives of the
independent public accountant of the Company and your
representatives at which the contents of the Registration
Statement, the Prospectus and any amendment thereof or supplement
thereto and related matters were discussed and, although such
counsel has not undertaken to investigate or verify
independently, and does not assume any responsibility for, the
accuracy, completeness or fairness of the statements contained in
the Registration Statement or the Prospectus or any amendment
thereof or supplement thereto, on the basis of the foregoing
(relying as to materiality to a large extent upon the opinions of
officers and other representatives of the Company), no facts have
come to such counsel's attention leading such counsel to believe
that either the Registration Statement at the time it became
effective (or at the date of any amendment thereof made after the
Effective Date but prior to the Closing Date) contained an untrue
statement of a material fact or omitted to state any material
fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus at the
date thereof or as of the Closing Date (or at the date of any
amendment thereof or supplement thereto made after the Effective
Date but prior to the Closing Date) contained an untrue statement
of a material fact or omitted to state any material fact required
to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not
misleading (it being understood that such counsel need express no
view with respect to the financial statements and schedules and
other financial and statistical data included therein, the
Statement of Eligibility and Qualification of the Trustee under
the Trust Indenture Act or the exhibits to the Registration
Statement).
In rendering the foregoing opinion, such counsel may
rely (A) as to matters involving the application of laws other
than the laws of the United States, the Commonwealth of
Massachusetts and the Delaware General Corporation Law statute, to
the extent such counsel deems proper and to the extent specified in
such opinion, if at all, upon an opinion or opinions (in form and
scope reasonably satisfactory to your counsel) of other counsel,
reasonably acceptable to your counsel, familiar with the applicable
laws, which opinion shall be addressed and delivered to you; and (B)
as to matters of fact, to the extent such counsel deems proper, on
certificates of responsible officers and other representatives of
the Company, certificates of public officials, and certificates or
other written statements of
28
<PAGE>
officers of departments of various jurisdictions having custody
of documents respecting the corporate existence or good standing
of the Company and its subsidiaries, provided that copies of any
such statements or certificates shall be delivered to your
counsel. Such counsel shall state that the opinion of any such
other counsel is in form and scope satisfactory to such counsel
and, in such counsel's opinion, you and your counsel are
justified in relying thereon.
(e) On the Closing Date you shall have received from your
counsel, Weil, Gotshal & Manges, an opinion, dated the date of
its delivery, addressed to you, with respect to the Company, the
Registration Statement, the Prospectus and other related matters
as you reasonably may require, and the Company shall have
furnished to your counsel such documents as they may reasonably
request for the purpose of enabling them to pass upon such
matters.
(f) Concurrently with the execution and delivery of this
Agreement and on the Closing Date you shall have received from
Coopers & Lybrand, a letter addressed to you, dated the date of
its delivery, substantially in the form and to the effect and
with respect to such matters as shall have been previously agreed
upon by you.
(g) At the Closing Date, you shall have received an opinion
from counsel to the Trustee, dated the date of its delivery,
addressed to you and in form and substance satisfactory to your
counsel, to the effect that:
(i) the Trustee is a national banking association or
state chartered bank or trust company and is validly
existing in good standing under the laws of the jurisdiction
in which it is incorporated;
(ii) the Trustee has the power and authority to enter
into the Indenture and authenticate the Securities as
Trustee under the Indenture;
(iii) the Indenture has been duly authorized, executed
and delivered by the Trustee, as Trustee under the
Indenture, and the Indenture is valid and binding on the
Trustee in accordance with its terms, (i) subject to
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws now or hereafter
in effect relating to creditors' rights and remedies
generally, (ii) subject, as to enforceability, to general
principles of equity,
29
<PAGE>
including principles of commercial reasonableness, good
faith and fair dealing (regardless of whether enforcement is
sought in a proceeding at law or in equity) and (iii) except
insofar as the usury waiver therein may be deemed to be
unenforceable; and
(iv) the Securities have been duly authenticated and
delivered by the Trustee, as Trustee, under the Indenture.
(h) All proceedings taken in connection with the sale of
the Securities as herein contemplated shall be satisfactory in
form and substance to you and to your counsel.
(i) Prior to the Closing Date the Company shall have
furnished to you such further information, certificates and
documents as you reasonably may request.
If any of the conditions specified in this Section 7 shall
not have been fulfilled when and as required by this Agreement, or if
any of the certificates, opinions, written statements or letters
furnished to you or to your counsel pursuant to this Section 7 shall
not be reasonably satisfactory in form and scope in all material
respects reasonably to you and to your counsel, all of your
obligations hereunder may be canceled by you at, or at any time prior
to, the Closing Date. Notice of such cancellation shall be given to
the Company in writing or by telephone, telecopy, telex or telegraph,
confirmed in writing.
8. Effective Date of Agreement and Termination. (a) This
-------------------------------------------
Agreement shall become effective upon the later of (i) its execution
or (ii) when notification of the effectiveness of the Registration
Statement has been released by the Commission and communicated by the
Company or its counsel to you. Until this Agreement becomes effective
as aforesaid, it may be terminated by the Company by notifying you or
by you by notifying the Company. Notwithstanding the foregoing, the
provisions of this Section 8 and of Sections 2, 5(k) and 6 hereof
shall at all times be in full force and effect.
(b) This Agreement may be terminated at any time prior to
the Closing Date by you by written notice to the Company if any of the
following has occurred: (i) on or prior to such date, the Company
shall have failed, refused or been unable to perform in any material
respect any agreement on its part to be performed hereunder, (ii) any
other condition of your obligations hereunder
30
<PAGE>
as provided in Section 5 is not fulfilled when and as required in any
material respect, (iii) since the respective dates as of which
information is given in the Registration Statement and the Prospectus,
any adverse change or development involving a prospective adverse
change in, or affecting particularly the condition, financial or
otherwise, of the Company, any of its material subsidiaries, or the
earnings, affairs, prospects, business or operations of the Company or
any of its material subsidiaries, whether or not arising in the
ordinary course of business, that would, in your reasonable judgment,
make it impracticable to market the Securities on the terms and in the
manner contemplated in the Prospectus, (iv) any outbreak or escalation
of hostilities or other national or international calamity or crisis
or material change in economic conditions, if the effect of such
outbreak, escalation, calamity, crisis or change on the financial
markets of the United States or elsewhere would, in your reasonable
judgment, make it impracticable to market the Securities on the terms
and in the manner contemplated in the Prospectus, (v) suspension of
trading in securities on the New York Stock Exchange, the American
Stock Exchange or Nasdaq Stock Market or limitation on prices (other
than limitations on hours or numbers of days of trading) for
securities on any such exchange or Nasdaq Stock Market, (vi) the
enactment, publication, decree or other promulgation of any federal or
state statute, regulation, rule or order of any court or other
governmental authority which in your reasonable opinion materially and
adversely affects, or will materially and adversely affect, the
business or operations of the Company and its subsidiaries, taken as a
whole, (vii) declaration of a banking moratorium by either federal or
New York State authorities, (viii) the taking of any action by any
federal, state or local government or agency in respect of its
monetary or fiscal affairs that in your reasonable opinion has a
material adverse effect on the financial markets in the United States,
(ix) there shall have been any downgrading in the rating accorded any
of the Company's debt securities by Moody's Investor Services, Inc. or
Standard and Poor's Corporation or any such organization shall have
issued a notice that it has its rating under surveillance or review
for a possible change (other than one involving no implication of a
downgrading), or (x) there shall have been such a material adverse
change in general economic, political or financial conditions or if
the effect of international conditions on the financial markets in the
United States shall be such as, in your judgment, makes it inadvisable
or impracticable to market the Securities on the terms and in the
manner contemplated in the Prospectus.
31
<PAGE>
(c) Any notice of termination pursuant to this Section 8
shall be by telephone, telex, telephonic facsimile, or telegraph,
confirmed in writing by letter.
(d) If this Agreement shall be terminated pursuant to any
of the provisions hereof (otherwise than pursuant to (i) notification
by you as provided in Section 8(a) hereof or (ii) Section 8(b) hereof
by virtue of any of the conditions set forth in clauses (iii) through
(x) of Section 8(b)), or if the sale of the Securities provided for
herein is not consummated because any condition to your obligations
set forth herein is not satisfied or because of any refusal, inability
or failure on the part of the Company to perform any agreement herein
or comply with any provision hereof, the Company will, subject to
demand by you, reimburse you for all out-of-pocket expenses (including
the reasonable fees and expenses of your counsel), incurred by you in
connection herewith.
9. Survival of Representations and Agreements. All
------------------------------------------
representations and warranties, covenants and agreements of you and
the Company contained in this Agreement, including the agreements
contained in Sections 5(k) and 8(d) hereof, the indemnity agreements
contained in Section 6 hereof and the contribution agreements
contained in Section 6(d) hereof, shall remain operative and in full
force and effect regardless of any investigation made by or on behalf
of you or any controlling person or by or on behalf of the Company,
any of its officers and directors or any controlling person thereof,
and shall survive delivery of and payment for the Securities to and by
you. The representations contained in Section 2 hereof and the
agreements contained in Sections 5(k), 6 and 8(d) hereof shall survive
the termination of this Agreement, including pursuant to Section 8
hereof.
10. Miscellaneous. (a) Notices given pursuant to any
-------------
provision of this Agreement shall be addressed as follows: (a) if to
the Company, to Waban Inc., One Mercer Road, Natick, Massachusetts,
01760, Attention: Chief Financial Officer, and (b) if to you, to
Bear, Stearns & Co. Inc., 245 Park Avenue, New York, New York 10167,
Attention: Corporate Finance Department.
(b) The Company acknowledges that the statements with
respect to the public offering of the Securities set forth on the
cover page of the Prospectus and the information with respect thereto
and with respect to you under the caption "Underwriting" in the
Prospectus constitute the only information furnished in writing by you
expressly for use in the Registration Statement and the Prospectus.
32
<PAGE>
(c) If this Agreement shall be terminated by you because of
any failure or refusal on the part of the Company to comply with the
terms or to fulfill any of the conditions of this Agreement, the
Company shall reimburse you for all out-of-pocket expenses (including
the reasonable fees and disbursements of your counsel) reasonably
incurred by you.
(d) Except as otherwise provided, this Agreement has been
and is made solely for the benefit of and shall be binding upon the
Company, you, the controlling persons, directors, officers, employees
and agents referred to in Section 6 hereof, and their respective
successors and assigns, all as and to the extent provided in this
Agreement, and no other person shall acquire or have any right under
or by virtue of this Agreement or any provision herein contained. The
term "successors and assigns" shall not include a purchaser of any of
the Securities from you merely because of such purchase.
(e) This Agreement shall be governed and construed in
accordance with the laws of the State of New York (without regard to
the choice of law provisions thereof).
(f) This Agreement may be signed in various counterparts,
all of which together shall constitute one and the same instrument.
33
<PAGE>
Please confirm that the foregoing correctly sets forth the
agreement between the Company and you.
Very truly yours,
WABAN INC.
By:___________________________
Name:
Title: Senior Vice President and
Chief Financial Officer
Accepted in New York, New York
April ___, 1994
BEAR, STEARNS & CO. INC.
By:___________________________
Name:
Title:
34
<PAGE>
WABAN INC., as Issuer
and
THE FIRST NATIONAL BANK OF BOSTON, as Trustee
______________________________
INDENTURE
Dated as of May __, 1994
______________________________
$100,000,000
_____% Senior Subordinated Notes due _______, 2004
<PAGE>
<TABLE>
<CAPTION>
CROSS REFERENCE TABLE(F1)
TIA Indenture
Section Section
<S> <C>
310(a)(1)............................................7.10
(a)(2)............................................7.10
(a)(3)............................................N.A.(F2)
(a)(4)............................................N.A.
(b)...............................................7.08; 7.10
(c)...............................................N.A.
311(a)...............................................7.11
(b)...............................................7.11
(c)...............................................N.A.
312(a)...............................................2.05
(b)............................................... 11.03
(c)............................................... 11.03
313(a)............................................... 7.06
(b)(1)............................................ N.A.
(b)(2)............................................ 7.06
(c)............................................... 7.06; 11.02
(d)............................................... 7.06
314(a)............................................... 4.02; 4.03; 11.02
(b)............................................... N.A.
(c)(1)............................................ 11.04
(c)(2)............................................ 11.04
(c)(3)............................................ N.A.
(d)............................................... N.A.
(e)............................................... 11.05
(f)............................................... 4.04
315(a)............................................... 7.01
(b)............................................... 7.05; 11.02
(c)............................................... 7.01
(d)............................................... 7.01
(e)............................................... 6.11
316(a)(last sentence)................................ 2.08
(a)(1)(A)......................................... 6.05
(a)(1)(B)......................................... 6.04
(a)(2)............................................ N.A.
(b)............................................... 6.07
(c)............................................... 1.05
317(a)(1)............................................ 6.08
(a)(2)............................................ 6.09
(b)............................................... 2.04
318(a)............................................... 11.01
</TABLE>
(F1) Note: This Cross Reference Table shall not, for any
purpose, be deemed to be part of this Indenture.
(F2) N.A. means Not Applicable.
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS(F3)
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ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE . . . 1
SECTION 1.01. Definitions . . . . . . . . . . . . . . . 1
SECTION 1.02. Other Definitions . . . . . . . . . . . . 15
SECTION 1.03. Incorporation by Reference of Trust
Indenture Act . . . . . . . . . . . . . 15
SECTION 1.04. Rules of Construction . . . . . . . . . . 16
SECTION 1.05. Acts of Holders . . . . . . . . . . . . . 16
ARTICLE 2
THE SECURITIES . . . . . . . . . . 17
SECTION 2.01. Form and Dating . . . . . . . . . . . . . 17
SECTION 2.02. Execution and Authentication . . . . . . 18
SECTION 2.03. Registrar and Paying Agent . . . . . . . 19
SECTION 2.04. Paying Agent to Hold Money in Trust . . . 19
SECTION 2.05. Securityholder Lists . . . . . . . . . . 20
SECTION 2.06. Transfer and Exchange . . . . . . . . . . 20
SECTION 2.07. Replacement Securities . . . . . . . . . 21
SECTION 2.08. Outstanding Securities; Determinations
of Holders' Action . . . . . . . . . . 22
SECTION 2.09. Temporary Securities . . . . . . . . . . 23
SECTION 2.10. Cancellation . . . . . . . . . . . . . . 23
SECTION 2.11. CUSIP Numbers . . . . . . . . . . . . . . 23
SECTION 2.12. Defaulted Interest . . . . . . . . . . . 24
ARTICLE 3
REDEMPTION . . . . . . . . . . . 24
SECTION 3.01. Right to Redeem; Notices to Trustee . . . 24
SECTION 3.02. Selection of Securities to Be Redeemed . 24
SECTION 3.03. Notice of Redemption . . . . . . . . . . 25
SECTION 3.04. Effect of Notice of Redemption . . . . . 26
SECTION 3.05. Deposit of Redemption Price . . . . . . . 26
SECTION 3.06. Securities Redeemed in Part . . . . . . . 26
</TABLE>
(F3) This Table of Contents shall not, for any purpose, be
deemed to be part of this Indenture.
<PAGE>
<TABLE>
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ARTICLE 4
COVENANTS . . . . . . . . . . . . 26
SECTION 4.01. Payment of Securities . . . . . . . . . . 26
SECTION 4.02. SEC Reports . . . . . . . . . . . . . . . 27
SECTION 4.03. Compliance Certificates . . . . . . . . . 28
SECTION 4.04. Further Instruments and Acts . . . . . . 29
SECTION 4.05. Maintenance of Office or Agency . . . . . 29
SECTION 4.06. Limitation on Restricted Payments . . . . 29
SECTION 4.07. Limitation on Payment Restrictions
Affecting Subsidiaries . . . . . . . . 32
SECTION 4.08. Limitation on Other Senior
Subordinated Indebtedness . . . . . . . 32
SECTION 4.09. Limitation on Additional Indebtedness . . 32
SECTION 4.10. Limitation on Liens . . . . . . . . . . . 33
SECTION 4.11. Repurchase Upon Change of Control . . . . 33
SECTION 4.12. Limitation on Use of Proceeds
from Asset Sales . . . . . . . . . . . 36
SECTION 4.13. Limitation on Transactions
with Affiliates . . . . . . . . . . . . 37
SECTION 4.14. Susidiary Guarantees . . . . . . . . . . 37
SECTION 4.15. Payment of Taxes and Other Claims . . . . 38
SECTION 4.16. Corporate Existence . . . . . . . . . . . 38
SECTION 4.17. Maintenance of Properties and
Insurance . . . . . . . . . . . . . . . 39
SECTION 4.18. Stay, Extension and Usury Laws . . . . . 39
SECTION 4.19. Investment Company Act . . . . . . . . . 40
SECTION 4.20. Payments for Consents . . . . . . . . . . 40
SECTION 4.21. Covenant to Comply with Securities
Laws upon Purchase of Securities . . . 40
ARTICLE 5
SUCCESSOR CORPORATION . . . . . . . . . 40
SECTION 5.01. When the Company May Merge or Transfer
Assets . . . . . . . . . . . . . . . . 40
SECTION 5.02. Successor Corporation Substituted . . . . 41
ARTICLE 6
DEFAULTS AND REMEDIES . . . . . . . . . 42
SECTION 6.01. Events of Default . . . . . . . . . . . . 42
SECTION 6.02. Acceleration . . . . . . . . . . . . . . 44
SECTION 6.03. Other Remedies . . . . . . . . . . . . . 45
SECTION 6.04. Waiver of Past Defaults . . . . . . . . . 45
SECTION 6.05. Control by Majority . . . . . . . . . . . 46
SECTION 6.06. Limitation on Suits . . . . . . . . . . . 46
</TABLE>
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<TABLE>
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SECTION 6.07.Rights of Holders to Receive Payment 46
SECTION 6.08. Collection Suit by Trustee . . . . . . . 47
SECTION 6.09. Trustee May File Proofs of Claim . . . . 47
SECTION 6.10. Priorities . . . . . . . . . . . . . . . 48
SECTION 6.11. Undertaking for Costs . . . . . . . . . . 48
SECTION 6.12. Waiver of Stay, Extension or Usury Laws . 48
ARTICLE 7
TRUSTEE . . . . . . . . . . . . 49
SECTION 7.01. Duties of Trustee . . . . . . . . . . . . 49
SECTION 7.02. Rights of Trustee . . . . . . . . . . . . 50
SECTION 7.03. Individual Rights of Trustee . . . . . . 51
SECTION 7.04. Trustee's Disclaimer . . . . . . . . . . 51
SECTION 7.05. Notice of Defaults . . . . . . . . . . . 51
SECTION 7.06. Reports by Trustee to Holders . . . . . . 52
SECTION 7.07. Compensation and Indemnity . . . . . . . 52
SECTION 7.08. Replacement of Trustee . . . . . . . . . 53
SECTION 7.09. Successor Trustee by Merger . . . . . . . 54
SECTION 7.10. Eligibility; Disqualification . . . . . . 54
SECTION 7.11. Preferential Collection of Claims
Against the Company . . . . . . . . . . 54
ARTICLE 8
SATISFACTION AND DISCHARGE OF INDENTURE . . . . 54
SECTION 8.01. Termination of the Company's
Obligations . . . . . . . . . . . . . . 54
SECTION 8.02. Application of Trust Money . . . . . . . 55
SECTION 8.03. Repayment to the Company . . . . . . . . 56
SECTION 8.04. Reinstatement . . . . . . . . . . . . . . 56
ARTICLE 9
AMENDMENTS . . . . . . . . . . . 56
SECTION 9.01. Without Consent of Holders . . . . . . . 56
SECTION 9.02. With Consent of Holders . . . . . . . . . 57
SECTION 9.03. Compliance with Trust Indenture Act . . . 58
SECTION 9.04. Revocation and Effect of Consents,
Waivers and Actions . . . . . . . . . . 58
SECTION 9.05. Notation on or Exchange of Securities . . 59
SECTION 9.06. Trustee to Sign Supplemental Indentures . 59
SECTION 9.07. Effect of Supplemental Indentures . . . . 59
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
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ARTICLE 10
SUBORDINATION . . . . . . . . . . . 59
SECTION 10.01. Agreement to Subordinate . . . . . . . . 59
SECTION 10.02. Liquidation; Dissolution; Bankruptcy . . 60
SECTION 10.03. Default on Senior Indebtedness . . . . . 61
SECTION 10.04. No Suspension of Remedies . . . . . . . . 62
SECTION 10.05. When Distribution Must Be Paid Over . . . 63
SECTION 10.06. Notice by the Company . . . . . . . . . . 63
SECTION 10.07. Subrogation . . . . . . . . . . . . . . . 63
SECTION 10.08. Relative Rights . . . . . . . . . . . . . 64
SECTION 10.09. No Waiver of Subordination Provisions . . 65
SECTION 10.10. Distribution or Notice to
Representative . . . . . . . . . . . . 65
SECTION 10.11. Rights of Trustee and Paying Agent . . . 66
SECTION 10.12. Authorization to Effect Subordination;
No Fiduciary Duty to Holders of
Senior Indebtedness . . . . . . . . . . 66
SECTION 10.13. Miscellaneous . . . . . . . . . . . . . . 67
ARTICLE 11
MISCELLANEOUS . . . . . . . . . . . 67
SECTION 11.01. Trust Indenture Act Controls . . . . . . 67
SECTION 11.02. Notices . . . . . . . . . . . . . . . . . 68
SECTION 11.03. Communication by Holders with
Other Holders . . . . . . . . . . . . . 69
SECTION 11.04. Certificate and Opinion as to
Conditions Precedent . . . . . . . . . 69
SECTION 11.05. Statements Required in Certificate
or Opinion . . . . . . . . . . . . . . 69
SECTION 11.06. Separability Clause . . . . . . . . . . . 70
SECTION 11.07. Rules by Trustee, Paying Agent
and Registrar . . . . . . . . . . . . . 70
SECTION 11.08. Legal Holidays . . . . . . . . . . . . . 70
SECTION 11.09. GOVERNING LAW . . . . . . . . . . . . . . 70
SECTION 11.10. No Recourse Against Others . . . . . . . 70
SECTION 11.11. Successors . . . . . . . . . . . . . . . 70
SECTION 11.12. Multiple Originals . . . . . . . . . . . 70
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . 72
EXHIBIT A . . . . . . . . . . . . . . . . . . . . . . . A-1
EXHIBIT B . . . . . . . . . . . . . . . . . . . . . . . B-1
EXHIBIT C . . . . . . . . . . . . . . . . . . . . . . . C-1
</TABLE>
<PAGE>
INDENTURE, dated as of May __, 1994, between Waban
Inc., a Delaware corporation (the "Company"), and The First National
Bank of Boston, a national banking association (the "Trustee").
Each party agrees as follows for the benefit of the
other party and for the equal and ratable benefit of the Holders
of the Company's Senior Subordinated Notes due , 2004
----- ------
(the "Securities"):
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
------------------------------------------
SECTION 1.01. Definitions.
-----------
"Affiliate" of any specified Person means any other
Person directly or indirectly controlling or controlled by or
under direct or indirect common control with such specified
Person. A Person shall be deemed to "control" (including the
correlative meanings, the terms "controlling," "controlled by,"
and "under common control with") another Person if the
controlling Person (a) possesses, directly or indirectly, the
power to direct or cause the direction of the management or
policies, of the controlled Person, whether through ownership of
voting securities, by agreement or otherwise, or (b) owns,
directly or indirectly, 10% or more of any class of Voting Stock
of the controlled Person.
"Asset Sale" means, with respect to any Person, (i) the
sale, lease, conveyance, disposition or other transfer by such
Person of any of its assets (including by way of a sale-and-
leaseback transaction and including the sale or other transfer of
any of the Capital Stock of any Subsidiary of such Person) or
(ii) the issuance, sale, conveyance, disposition or other
transfer by such Person of any Capital Stock of such Person or
any Subsidiary of such Person or a Subsidiary of any such
Subsidiary; provided, however, that notwithstanding the
foregoing, the term "Asset Sale" shall not include (A) the sale,
lease, conveyance, disposition or other transfer of any inventory
in the ordinary course of business, (B) the issuance by the
Company of shares of its Capital Stock, (C) the sale of a
Permitted Investment (other than a Permitted Investment under
clause (vii) of such definition), (D) the assignment or sublease
of a lease (where the Person or its Subsidiary is the lessee) or
the execution of a new lease (where the Person or its Subsidiary
is the lessor) in connection with the closing down of any retail
warehouse of such Person or Subsidiary, (E) the sale, lease,
<PAGE>
conveyance, disposition or other transfer of any asset in
connection with the restructuring plan implemented by the Company
prior to the date of this Indenture, (F) the sale, lease,
conveyance or other transfer of assets by the Company to any
Wholly-owned Subsidiary or by any Wholly-owned Subsidiary of the
Company to the Company or any other Wholly-owned Subsidiary of
the Company, or (G) the liquidation or sale for cash of
Marketable Securities.
"Average Life" means, as of the date of determination,
with respect to any debt security, the quotient obtained by
dividing (i) the sum of the products of the numbers of years from
the date of determination to the dates of each successive
scheduled principal payment (assuming the exercise by the obligor
of such debt security of all unconditional (other than as to the
giving of notice) extension options of each such scheduled
payment date) of such debt security multiplied by the amount of
such principal payment by (ii) the sum of all such principal
payments.
"Board of Directors" of any corporation means the Board
of Directors of such corporation, or any duly authorized
committee of such Board of Directors.
"Business Day" means any day that is not a Saturday, a
Sunday or a day on which banking institutions in New York are
required to close.
"Capital Lease Obligation" means, at the time any
determination thereof is to be made, the amount of the liability
in respect of a capital lease which would at such time be so
required to be capitalized on the balance sheet in accordance
with GAAP.
"Capital Stock" means any and all shares, interests,
participations, rights or other equivalents (however designated)
of corporate stock (including common and preferred stock) or
partnership interests.
"Cash" shall mean (i) cash; (ii) cash equivalents;
(iii) direct or guaranteed obligations of the United States of
America that mature within two (2) years from the date of
purchase by the Company or any of its Subsidiaries; (iv) demand
deposits, certificates of deposit, bankers' acceptances and time
deposits of United States banks having total assets in excess of
$10,000,000,000 United States dollars and which are rated not
less than (A) "A 1" if such deposits or acceptances mature over a
year from the date made or created or (B) "A 2" if such deposits
<PAGE>
or acceptances mature within one year of the date made or
created, in each case as rated by Standard and Poor's
Corporation; (v) securities commonly known as "commercial paper"
issued by a corporation organized and existing under the laws of
the United States of America or any state thereof that at the
time of purchase have been rated and the ratings for which are
not less than "P 2" as rated by Moody's Investors Services, Inc.
and not less than "A 2" as rated by Standard and Poor's
Corporation; (vi) investments in tax-free government securities
rated "A" or better, as rated by Standard and Poor's Corporation,
and government securities mutual funds which have a weighted
average life of less than two (2) years; (vii) investments in
repurchase agreements relating to a security which is rated "A"
or better, as rated by Standard and Poor's Corporation, that
mature within two (2) years from the date the Investment is made
by the Company or any of its Subsidiaries; (viii) investments in
corporate securities rated "A" or better, as rated by Standard
and Poor's Corporation, that mature within two (2) years from the
date the Investment is made by the Company or any of its
Subsidiaries; and (ix) indebtedness for borrowed money assumed by
the purchaser in connection with any Asset Sale provided that
neither the Company nor any of its Subsidiaries has any further
liability in respect of such indebtedness; provided, that when
any non-Cash proceeds are liquefied, such proceeds will be deemed
to be Cash at that time. The non-capitalized term "cash", as used
in this Indenture (including, without limitation, Article 10), means cash.
"Consolidated Interest Coverage Ratio" means the ratio
of (i) the sum of (a) Consolidated Net Income, (b) Consolidated
Interest Expense, (c) Consolidated Tax Expense, (d) depreciation,
(e) any expense recognized in respect of step rentals (or minus
any income recognized in respect of step rentals) and (f),
without duplication, all amortization, in each case, for such
period, of the Company and its Subsidiaries on a consolidated
basis, all as determined in accordance with GAAP, to (ii) the sum
of (a) Consolidated Interest Expense, (b) all dividends for such
period in respect of Redeemable Stock issued by a Subsidiary of
the Company and (c) the product of (x) the amount of all
dividends paid or accrued on any series of preferred stock issued
by a Subsidiary of the Company and (y) a fraction, the numerator
of which is one and the denominator of which is one minus the
effective combined consolidated federal, state and local tax rate
of such Subsidiary, expressed as a decimal; provided, that in
calculating Consolidated Interest Expense on a pro forma basis,
any Indebtedness bearing a floating interest rate shall be
computed as if the rate in effect on the date of computation had
been the applicable rate for the entire period.
<PAGE>
"Consolidated Interest Expense" means for any period
the aggregate amount of interest in respect of Indebtedness
(including all commissions, discounts and other fees and charges
owed with respect to letters of credit and bankers' acceptance
financing and the net cost (benefit) associated with Interest
Rate Agreements and excluding amortization of deferred finance
fees and interest recorded as accretion in the carrying value of
liabilities (other than Indebtedness) recorded at a discounted
value) and all but the principal component of rentals in respect
of Capital Lease Obligations, paid, accrued or scheduled to be
paid or accrued by the Company and its Subsidiaries during such
period (without duplication), other than fees, commissions and
expenses associated with the Securities, the Senior Securities,
the Credit Agreement and the Convertible Subordinated Debentures,
and excluding amortization of original issue discount and other
non-cash charges incurred on or prior to the date of the initial
issuance of the Securities or incurred as a result of the
application of the net proceeds from the sale of the Securities
offered hereby.
"Consolidated Net Income" means for any period the net
income or loss of the Company and its Subsidiaries for such
period on a consolidated basis as determined in accordance with
GAAP adjusted by excluding, without duplication, (i) net gains or
losses in respect of dispositions of assets other than in the
ordinary course of business; (ii) any gains or losses from
currency exchange transactions not in the ordinary course of
business consistent with past practice; (iii) any gains (but not
losses) attributable to any extraordinary items; (iv) the net
income of any Person acquired in a pooling of interest
transaction for any period prior to the date of such transaction;
(v) the net income of any Person accounted for by the equity
method of accounting, except that (A) the Company's equity in the
net income of any such Subsidiary for such period shall be
included in such Consolidated Net Income up to the aggregate
amount of cash actually distributed by such Subsidiary during
such period to the Company or another Subsidiary as a dividend or
other distribution (subject, in the case of a dividend or other
distribution to another Subsidiary, to the limitation contained
in this clause (v)) and (B) the Company's equity in a net loss of
any such Subsidiary for such period shall be included in
determining such Consolidated Net Income; (vi) the Net Income of
any Subsidiary to the extent such Net Income has any restrictions
or encumbrances on making distributions to the Company; (vii) the
income or loss of any Person (not acquired in a pooling of
interest transaction) accrued prior to the date it becomes a
Subsidiary of the Company or any of its Subsidiaries or is merged
into or consolidated with the Company or any of its Subsidiaries
<PAGE>
or that Person's assets are acquired by the Company or any of its
Subsidiaries; (viii) non-cash charges in connection with the
issuance of Equity Interests of the Company to employees of the
Company as compensation; (ix) the effect of non-cash charges
incurred prior to the date of this Indenture in connection with
the sale, discontinuance, disposition or rationalization of the
Company's operations; and (x) income attributable to the reversal of
non-cash charges previously excluded pursuant to clause (ix) of this
definition.
"Consolidated Net Worth" means, with respect to any
Person, as of any date, the amount which, in accordance with GAAP,
would be set forth under the caption "Stockholders' Equity"
(or any like caption) on the consolidated balance sheet of such
Person and its Subsidiaries, less amounts attributable to Redeemable
Stock of such Person and preferred stock of any of its Subsidiaries.
"Consolidated Tax Expense" of the Company means, for
any period, the aggregate of the federal, state, local and
foreign income tax expenses (net of benefits) of the Company and
its consolidated Subsidiaries for such period, determined in
accordance with GAAP.
"Convertible Subordinated Debentures" means the 6.5%
Convertible Subordinated Debentures due 2002 issued by the
Company under the Indenture, dated as of July 1, 1992, between
the Company and Continental Bank, National Association, as
trustee.
"Credit Agreement" means the Company's Credit
Agreement, dated as of July 8, 1993, as amended on November 15,
1993, by and among the Company, Bank of America National Trust
and Savings Association, The First National Bank of Boston,
Continental Bank, N.A. and The First National Bank of Chicago.
"Credit Facility" means the Credit Agreement and the
Letter of Credit Agreement and any extension, renewal,
replacement or substitute thereof or any subsequent or additional
credit facility.
"Default" means any event which is, or after notice or
passage of time or both would be, an Event of Default.
"Equity Interests" means Capital Stock, warrants,
options or other rights to acquire Capital Stock (but excluding
any debt security which is convertible into, or exchangeable for,
Capital Stock).
"Existing Indebtedness" means Indebtedness of the
Company and its Subsidiaries in existence on the date of the
Indenture.
"Existing Investments" means Investments existing on
the date of this Indenture.
<PAGE>
"GAAP" means generally accepted accounting principles
set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the
accounting profession of the United States, which are applicable
as of the date of determination; provided, however, that these
definitions and all ratios and calculations contained in the
covenants in this Indenture shall be determined in accordance
with GAAP as in effect and applied by the Company on the date of
this Indenture, consistently applied.
"Guarantee" means a guarantee (other than by
endorsement of negotiable instruments for collection in the
ordinary course of business), direct or indirect, in any manner
(including, without limitation, letters of credit and
reimbursement agreements in respect thereof), of all or any part
of any Indebtedness.
"Holder" or "Securityholder" means a Person in whose
name a Security is registered on the Registrar's books.
"Indebtedness" means, without duplication, (a) any
liability of any Person, if and to the extent it would appear as
a liability upon a balance sheet of such Person prepared on a
consolidated basis in accordance with GAAP, (1) for borrowed
money, (2) evidenced by a bond, note, debenture or similar
instrument (including a purchase money obligation) given in
connection with the acquisition of any businesses, properties or
assets of any kind or (3) in respect of Capital Lease Obligations
(including by way of a sale-and-leaseback transaction); (b) any
liability of any Person under any reimbursement obligation
relating to a letter of credit; (c) all Redeemable Stock valued
at the greater of its voluntary or involuntary liquidation
preference plus accrued and unpaid dividends; (d) preferred stock
of any Subsidiary of the Company (other than preferred stock held
by the Company or any of its Wholly-owned Subsidiaries); (e)
obligations with respect to Interest Rate Agreements; (f) any
liability of others described in the preceding clauses (a), (b),
(c), (d) and (e) that the Person has guaranteed or with respect
to which it is otherwise contingently liable; and (g) any
amendment, supplement, modification, deferral, renewal, extension
or refunding of any liability of the types referred to in clauses
(a), (b), (c), (d), (e) and (f) above. Notwithstanding anything
to the contrary in the foregoing, Indebtedness shall not include
(x) any obligations in respect of Operating Lease Obligations and
(y) trade payables, accrued liabilities for deferred taxes,
<PAGE>
insurance and similar items and current liabilities for goods,
materials or services purchased or for compensation to employees,
in each case arising in the ordinary course of business.
"Indenture" means this Indenture, as amended or
supplemented from time to time in accordance with the terms
hereof, including the provisions of the TIA that are deemed to be
a part hereof.
"Interest Rate Agreement" means the obligation of any
Person pursuant to any interest rate swap agreement, interest
rate collar agreement, currency swap or other similar agreement
or arrangement designed to protect such Person or any of its
subsidiaries against fluctuations in interest rates or the value
of currencies.
"Investment" means any direct or indirect advance, loan
or other extension of credit or capital contribution to (by means
of a transfer of cash or other property to others or a payment
for property or services for the account or use of others), or
any purchase or acquisition of Capital Stock, bonds, notes,
debentures or other securities issued by any other Person.
Notwithstanding anything to the contrary in the foregoing,
Investment shall not include (a) advances to customers or vendors
in the ordinary course of business, which are recorded as
accounts receivable on the balance sheet of any Person or its
Subsidiaries and other than advances or loans to officers and
employees of the Company or any of its Subsidiaries up to $5
million in aggregate principal amount outstanding at any one time,
(b) loans and advances to developers of real estate upon which the
Company's or any of its Wholly-owned Subsidiary's warehouse
merchandising stores are located provided that the aggregate
amount of all such loans and advances does not exceed $25,000,000
at any one time outstanding, (c) obligations (direct, contingent
or otherwise) incurred by the Company to purchase real estate
upon which the Company's or any of its Wholly-owned Subsidiary's
warehouse merchandising stores are located, and (d) any
obligations in respect of Operating Lease Obligations.
"Letter of Credit Agreement" means the Company's letter
of credit facility between the Company and Bank of America
National Trust Savings Association.
"Lien" means any mortgage, lien, pledge, charge,
security interest or encumbrance of any kind, whether or not
filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention
agreement, any lease in the nature thereof, any option or other
<PAGE>
agreement to sell or give any security interest in any filing or
other agreement to give any financing statement (other than any
filing or financing statement given in connection with a Capital
Lease Obligation in the ordinary course of business) under the
Uniform Commercial Code (or equivalent statutes) of any
jurisdiction and including a sale-and-leaseback transaction).
"Marketable Securities" means securities that are rated
investment grade by a nationally recognized rating agency such as
Standard and Poor's Corporation or Moody's Investor Services,
Inc. or securities for which a trading market exists on a
nationally registered securities exchange or pursuant to the
Nasdaq Stock Market and such securities are registered under the
Securities Act of 1933, as amended, for sale by the Person who
owns such securities or are exempt from registration in
connection with any proposed sale by such Person.
"Moody's" means Moody's Investors Service, Inc. and its
successors.
"Net Proceeds" means the aggregate proceeds received by
the Company or any of its Subsidiaries in respect of any Asset
Sale, net of the out-of-pocket costs relating to such Asset Sale
(including, without limitation, legal, accounting and investment
banking fees and sale commissions) and any relocation expenses
and severance and shutdown costs incurred as a result thereof,
taxes paid or payable as a result thereof, amounts required to be
applied to the repayment of Indebtedness secured by a Lien on the
asset or assets which are the subject of such Asset Sale and any
reasonable reserve in accordance with GAAP for adjustment in
respect of the sale price of such asset or assets.
"Obligations" means any principal, interest, penalties,
fees, indemnifications, reimbursements, damages and other
liabilities payable under the documentation governing any
Indebtedness.
"Officer" means, with respect to any corporation, the
Chairman of the Board, any Vice Chairman, the President, any Vice
President, the Treasurer, the Secretary, any Assistant Treasurer
or any Assistant Secretary of such corporation.
"Officers' Certificate" means a written certificate
containing the information specified in Sections 11.04 and 11.05
hereof, signed in the name of the Company by any two of its
Officers, and delivered to the Trustee.
<PAGE>
"Operating Lease Obligation" means at the time any
determination thereof is to be made, the amount of the liability
in respect of an operating lease which would at such time be so
required to be classified as such in accordance with GAAP.
"Opinion of Counsel" means a written opinion containing
the information specified in Sections 11.04 and 11.05 hereof,
rendered by legal counsel who is acceptable to the Trustee.
"Permitted Indebtedness" means (i) Indebtedness under
the Credit Facility (provided that Indebtedness under the Credit
Facility, including unused commitments, shall not at any time
exceed $150 million in aggregate outstanding principal amount
(including the available undrawn amount of any letters of credit
issued under the Credit Facility)); (ii) Existing Indebtedness;
(iii) Indebtedness represented by the Securities; (iv)
Indebtedness created, incurred, issued, assumed or guaranteed in
exchange for or the proceeds of which are used to extend,
refinance, renew, replace, substitute or refund Indebtedness
referred to in clauses (i), (ii) and (iii) above (the
"Refinancing Indebtedness"); provided, however, that (A) the
principal amount of such Refinancing Indebtedness shall not
exceed the principal amount of Indebtedness (including unused
commitments) so extended, refinanced, renewed, replaced,
substituted or refunded, (B) such Indebtedness ranks in right of
payment to the Securities at least to the same extent as the
Indebtedness so extended, refinanced, renewed, replaced,
substituted or refunded, (C) with respect to Refinancing
Indebtedness incurred pursuant to this clause, the Refinancing
Indebtedness shall have an Average Life and Stated Maturity equal
to or greater than the Average Life and Stated Maturity of the
Indebtedness being extended, refinanced, renewed, replaced,
substituted or refunded, and (D) a Subsidiary shall not incur
Refinancing Indebtedness to extend, refinance, renew, replace,
substitute or refund Indebtedness of the Company or another
Subsidiary unless such Subsidiary was previously obligated by
Guaranty or otherwise for the Indebtedness being refinanced; (v)
intercompany Indebtedness permitted by the covenants set forth in
Section 4.06, "Limitation on Restricted Payments" below; (vi)
---------------------------------
Interest Rate Agreements entered into in the ordinary course of
business; (vii) obligations in connection with the construction or
acquisition of retail warehouses in the ordinary course of business
in an aggregate amount not exceeding $30 million, and such
additional obligations as would not appear as a liability upon a
balance sheet prepared in accordance with GAAP; (viii) letters of
credit and bankers' acceptances for the purchase of merchandise and
guarantees of obligations of suppliers, licensees, and franchises,
in either event in the ordinary course of business, and in the
aggregate in an amount not exceeding 10% of the aggregate book
value of the inventories
<PAGE>
held by the Company and its Subsidiaries (measured at the time of
such issuance); (ix) letters of credit securing workers'
compensation and self-insurance obligations of the Company in the
ordinary course of business; and (x) Indebtedness not otherwise
permitted in an aggregate principal amount which shall not exceed
$50 million.
"Permitted Investments" means, (i) direct or guaranteed
obligations of the United States of America that mature within
two (2) years from the date of purchase by the Company or any of
its Subsidiaries; (ii) demand deposits, certificates of deposit,
bankers' acceptances and time deposits of United States banks
having total assets in excess of $10,000,000,000 United States
dollars and which are rated not less than (A) "A 1" if such
deposits or acceptances mature over a year from the date made or
created or (B) "A 2" if such deposits or acceptances mature
within one year of the date made or created, in each case as
rated by Standard and Poor's Corporation; (iii) securities
commonly known as "commercial paper" issued by a corporation
organized and existing under the laws of the United States of
America or any state thereof that at the time of purchase have
been rated and the ratings for which are not less than "P 2", as
rated by Moody's Investors Services, Inc., and not less than "A
2", as rated by Standard and Poor's Corporation; (iv) investments
in tax-free government securities rated "A" or better, as rated
by Standard and Poor's Corporation, and government securities
mutual funds which have a weighted average life of less than two
(2) years; (v) investments in repurchase agreements relating to a
security which is rated "A" or better, as rated by Standard and
Poor's Corporation, that mature within two (2) years from the
date the Investment is made by the Company or any of its
Subsidiaries; (vi) Investments in corporate securities rated "A"
or better, as rated by Standard and Poor's Corporation, that
mature within two (2) years from the date the Investment is made
by the Company or any of its Subsidiaries; (vii) Investments in
Persons which, after giving effect to the Investment, are Wholly-
owned Subsidiaries of the Company or any of its Subsidiaries and
which are engaged in businesses directly related to the business
of the Company and its Subsidiaries, and Investments consisting
of assets which, after giving effect to the Investment, are used
by the Company or any of its Subsidiaries in such businesses and
(viii) Existing Investments.
"Permitted Liens" means (a) Liens securing Senior Debt
of the Company or Indebtedness of any Subsidiary that is
permitted by this Indenture to be incurred; (b) Liens in favor of
the Company; (c) Liens on property of a Person existing or
created at the time such Person is merged into or consolidated
<PAGE>
with the Company or any Subsidiary of the Company; (d) Liens on
property existing or created at the time of acquisition thereof
by the Company or any Subsidiary of the Company; (e) Liens to
secure the performance of statutory obligations, surety or appeal
bonds, performance bonds or other obligations of a like nature
incurred in the ordinary course of business; (f) Liens existing
on the date of this Indenture; (g) Liens for taxes, assessments
or governmental charges or claims or mechanics', suppliers',
materialmen's, repairmen's, or other like Liens arising in the
ordinary course of business, in either case, that are not yet
delinquent or that are being contested in good faith by
appropriate proceedings promptly instituted and diligently
concluded; provided, that any reserve or other appropriate
provision as shall be required in conformity with GAAP shall have
been made therefor; (h) Liens incurred in the ordinary course of
business of the Company or any Subsidiary of the Company that are
not incurred in connection with the borrowing of money or the
obtaining of advances or credits (other than trade credit in the
ordinary course of business); (i) Liens securing Indebtedness
created, incurred, issued, assumed or guaranteed in exchange for
or the proceeds of which are used to extend, refinance, renew,
replace, substitute or refund Indebtedness secured by a Permitted
Lien; and (j) Liens securing Indebtedness that is pari passu with
the Securities so long as at the time such Liens are granted the
Securities are equally and ratably secured.
"Person" means any individual, corporation,
partnership, joint venture, incorporated or unincorporated
association, joint-stock company, trust, unincorporated
organization or government or other agency or political
subdivision thereof or other entity of any kind.
"Real Estate Financing" means Indebtedness incurred by
a Subsidiary that is secured by real estate owned by such
Subsidiary which at the time the Indebtedness is incurred has an
appraised value (as determined by a nationally-recognized
independent real estate appraiser who is qualified to make
appraisals of such real estate) equal to or greater than the
aggregate principal amount of such Indebtedness.
"Redeemable Stock" means any Equity Interest which, by
its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable before the stated
maturity of the Securities) or upon the happening of any event,
matures or is mandatorily redeemable, in whole or in part, prior
to the stated maturity of the Securities.
<PAGE>
"Redemption Date" or "redemption date" means the date
specified for redemption of the Securities in accordance with the
terms of the Securities and this Indenture.
"Redemption Price" or "redemption price" shall have the
meaning set forth in paragraph 5 of the Securities.
"Refinancing Indebtedness" shall have the meaning
prescribed in the definition of Permitted Indebtedness.
"S&P" means Standard and Poor's Corporation and its
successors.
"SEC" means the Securities and Exchange Commission.
"Securities" means any of the Company's ______% Senior
Subordinated Notes due ________, 2004 issued under this
Indenture.
"Securityholder" or "Holder" means a Person in whose
name a Security is registered on the Registrar's books.
"Senior Indebtedness" means the principal of, premium, if any,
and interest (including, without limitation, post-petition interest
whether or not allowed as a claim in bankruptcy, reorganization,
insolvency, receivership or a similar proceeding) on any Indebtedness of
the Company, whether outstanding on the date of this Indenture or
thereafter created, incurred, assumed or guaranteed, unless, in the case
of any particular Indebtedness, the instrument under which such
Indebtedness is created, incurred, assumed or guaranteed expressly
provides that such Indebtedness shall not be senior or superior in right
of payment to the Securities. Without limiting the generality of the
foregoing, "Senior Indebtedness" shall include (i) Indebtedness under the
Credit Facility including the available undrawn amount of any letters of
credit issued under the Credit Facility (together with all interest
(including, without limitation, post-petition interest whether or not
allowed as a claim in any bankruptcy, reorganization, insolvency,
receivership or similar proceeding), fees, reasonable expenses,
indemnities and charges payable on or in respect of such Indebtedness)),
(ii) Indebtedness evidenced by the Company's Senior Securities (together
with all interest (including, without limitation, post-petition interest
whether or not allowed as a claim in any bankruptcy, reorganization,
insolvency, receivership or similar proceeding), premium, if any, fees,
reasonable expenses, indemnities and charges payable on or in respect of
such Indebtedness)), (iii) Existing Indebtedness, and (iv) Refinancing
Indebtedness. Notwithstanding anything to the contrary in the foregoing,
Senior Indebtedness shall not include a) any Indebtedness of the Company
to any of its Subsidiaries or other Affiliates, (b) any Indebtedness
incurred after the date of this Indenture that is
<PAGE>
contractually subordinated in right of payment to any Senior
Indebtedness, (c) trade payables and current liabilities for
goods, materials or services purchased or for compensation to
employees, in each case arising in the ordinary course of
business, (d) any Indebtedness in respect of Capital Lease
Obligations, unless such Indebtedness expressly provides that it
shall be senior or superior in right of payment to the
Securities, and (e) any obligations in respect of Operating Lease
Obligations. Notwithstanding anything to the contrary in this
Indenture or the Securities, the Indebtedness represented by the
Securities shall be superior in right of payment to, and Senior
Indebtedness shall not include, any Indebtedness represented by
the Company's 6.5% convertible subordinated debentures due 2002.
"Senior Securities" means the Company's 9.58% Notes
due May 31, 1998 issued pursuant to the separate Note Purchase
Agreements, dated as of June 15, 1991, between the Company and,
respectively, the purchasers named on Annex 1 thereto, as the
same may be amended, modified or restated from time to time.
"Significant Subsidiary" shall have the meaning set
forth for such term in Rule 1-02 of Regulation S-X under the
Securities Act of 1933, as amended.
"Specified Senior Indebtedness" means Indebtedness
under (i) the Credit Facility, (ii) the Senior Securities and
(iii) any other Senior Indebtedness of the Company, the then
outstanding principal amount of which exceeds $20 million.
"Stated Maturity" means, with respect to any security,
the date specified in such security as the fixed date on which
the principal of such security is due and payable, including
pursuant to any mandatory redemption provision.
"Subsidiary" means any corporation, association or
other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the
occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by any Person or one or more
of other Subsidiaries of that Person or a combination thereof.
"Subsidiary Guarantee" means each Guarantee by any
Subsidiary Guarantor of the Company's Obligations under this
Indenture and the Securities required to be given pursuant to the
covenant entitled "Subsidiary Guarantees" in the form attached as
Exhibit C to this Indenture.
"Subsidiary Guarantor" means any Subsidiary that is
required to execute a Subsidiary Guarantee in accordance with the
<PAGE>
provisions of the covenant entitled "Subsidiary Guarantees," and
its successors and assigns.
"TIA" means the Trust Indenture Act of 1939 as amended
and as in effect on the date of this Indenture; provided,
however, that in the event the TIA is amended after such date,
TIA means, to the extent required by any such amendment, the TIA
as so amended.
"Trust Officer," when used with respect to the Trustee,
means 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 to whom such
matter is referred because of his knowledge of and familiarity
with the particular subject.
"Trustee" means the party named as the "Trustee" in the
first paragraph of this Indenture until a successor replaces it
pursuant to the applicable provisions of this Indenture and,
thereafter, shall mean such successor.
"Voting Stock" means any class or classes of Equity
Interests pursuant to which the Holders thereof have the general
voting power under ordinary circumstances to elect at least a
majority of the board of directors, managers or trustees of any
Person (irrespective of whether or not at the time stock of any
other class or classes shall have or might have voting power by
reason of the happening of any contingency).
"Wholly-owned Subsidiary" of any Person means any
Subsidiary of such Person to the extent the entire voting share
capital of such Subsidiary, other than directors' qualifying shares, is
owned by such Person (either directly or indirectly through Wholly-owned
Subsidiaries).
<PAGE>
<TABLE>
<CAPTION>
SECTION 1.02. Other Definitions.
-----------------
Defined in
Term Section
<S> <C>
"Act".................................... 1.05
"Bankruptcy Law"......................... 6.01
"Change of Control"...................... 4.11
"Change of Control Offer"................ 4.11
"Change of Control Payment Date"......... 4.11
"Custodian".............................. 6.01
"Event of Default"....................... 6.01
"Excess Proceeds"........................ 4.12
"Excess Proceeds Offer".................. 4.12
"Exchange Act"........................... 4.02
"Legal Holiday".......................... 11.08
"Non-Payment Default".................... 10.03
"Notice of Default"...................... 6.01
"Paying Agent"........................... 2.03
"Payment Default"........................ 10.03
"Register"............................... 2.03
"Registrar".............................. 2.03
"Securities Act"......................... 7.04
"surviving entity"....................... 5.01
"U.S. Government Obligations"............ 8.01
</TABLE>
SECTION 1.03. Incorporation by Reference of Trust
-----------------------------------
Indenture Act. Whenever this Indenture refers to a provision of
-------------
the TIA, such provision is incorporated by reference in and made
a part of this Indenture. The following TIA terms used in this
Indenture have the following meanings:
"Commission" means the SEC.
"Indenture securities" means the Securities.
"Indenture security holder" means a Securityholder.
"Indenture to be qualified" means this Indenture.
"Indenture trustee" or "institutional trustee" means
the Trustee.
"Obligor" on the indenture securities means the
Company.
All other TIA terms used in this Indenture that are
defined by the TIA, defined by TIA reference to another statute
<PAGE>
or defined by SEC rule have the meanings assigned to them by such
definitions.
SECTION 1.04. Rules of Construction. Unless the
---------------------
context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including, without limitation;
and
(5) words in the singular include the plural, and
words in the plural include the singular.
SECTION 1.05. Acts of Holders.
---------------
(1) 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 Holders
signing such instrument or instruments. Proof of execution of
any such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Indenture and
conclusive in favor of the Trustee and the Company, if made in
the manner provided in this Section.
(2) The fact and date of the execution by any Person
of any such instrument or writing may be proved in any manner
which the Trustee deems sufficient.
(3) The ownership of Securities shall be proved by the
Register.
(4) Any request, demand, authorization, direction,
notice, consent, waiver or other Act of the Holder of any
Security shall bind every future Holder of the same Security and
<PAGE>
the holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the
Trustee or the Company in reliance thereon, whether or not
notation of such action is made upon such Security.
(5) If the Company shall solicit from the Holders any
request, demand, authorization, direction, notice, consent,
waiver or other Act, the Company may, at its option, by or
pursuant to a resolution of its Board of Directors, fix in
advance a record date for the determination of Holders entitled
to give such request, demand, authorization, direction, notice,
consent, waiver or other Act, but the Company shall have no
obligation to do so. If such a record date is fixed, such
request, demand, authorization, direction, notice, consent,
waiver or other Act may be given before or after such record
date, but only the Holders of record at the close of business on
such record date shall be deemed to be Holders for the purposes
of determining whether Holders of the requisite proportion of
outstanding Securities have authorized or agreed or consented to
such request, demand, authorization, direction, notice, consent,
waiver or other Act, and for that purpose the outstanding
Securities shall be computed as of such record date; provided
that no such authorization, agreement or consent by the Holders
on such record date shall be deemed effective unless it shall
become effective pursuant to the provisions of this Indenture not
later than six (6) months after the record date.
ARTICLE 2
THE SECURITIES
--------------
SECTION 2.01. Form and Dating. The Securities and the
---------------
Trustee's certificate of authentication shall be substantially in
the form of Exhibit A attached hereto. The Securities may have
notations, legends or endorsements required by law, stock
exchange rule or usage. The form of the Securities and any
notation, legend or endorsement shall be in a form acceptable to
the Company and the Trustee. Each Security shall be dated the
date of its authentication.
The terms and provisions contained in the Securities,
annexed hereto as Exhibit A, shall constitute, and are hereby
expressly made, a part of this Indenture. To the extent
applicable, the Company, by its execution and delivery of this
Indenture, expressly agrees to such terms and provisions and to
be bound thereby.
<PAGE>
SECTION 2.02. Execution and Authentication. The
----------------------------
Securities shall be executed on behalf of the Company by
its Chairman of the Board, one of its Vice Chairmen, its
President or one of its Vice Presidents, under its corporate seal
reproduced thereon attested by its Secretary or one of its
Assistant Secretaries. The signature of any such Officer on the
Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures
of individuals who were at any time the proper Officers of the
Company shall bind the Company, notwithstanding that such
individuals or any of them have ceased to hold such offices prior
to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
No Security shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there
appears on such Security a certificate of authentication
substantially in the form provided for in Exhibit A annexed
hereto duly executed by the Trustee by manual signature of an
authorized officer, and such certificate upon any Security shall
be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and made available for delivery
hereunder.
The Trustee shall authenticate and make available for
delivery Securities for original issue in the aggregate principal
amount of $100,000,000 upon a Board of Directors' resolution and
a written order of the Company signed by two Officers of the
Company, but without any further action by the Company. Such
order shall specify the amount of the Securities to be
authenticated and the date on which the original issue of
Securities is to be authenticated and delivered. The aggregate
principal amount of Securities outstanding at any time may not
exceed $100,000,000, except as provided in Section 2.07.
The Trustee shall act as the initial authenticating
agent. Thereafter, the Trustee may appoint an authenticating
agent reasonably acceptable to the Company to authenticate
Securities. An authenticating agent may authenticate Securities
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 a Paying
Agent to deal with the Company or an Affiliate of the Company.
The Securities shall be issuable only in registered
form without coupons and only in denominations of $1,000 and any
integral multiple thereof.
<PAGE>
SECTION 2.03. Registrar and Paying Agent. The Company
--------------------------
shall maintain or cause to be maintained an office or agency
where the Securities may be presented for registration of
transfer or for exchange ("Registrar"), an office or agency where
Securities may be presented or surrendered for purchase or
payment ("Paying Agent") and an office or agency where notices
and demands to or upon the Company in respect of the Securities
and this Indenture may be served. The Registrar shall keep a
register of the Securities and of their transfer and exchange
(the "Register"). The Company may have one or more co-registrars
and one or more additional paying agents. The term Paying Agent
includes any additional paying agent.
The Company shall enter into an appropriate agency
agreement with any Registrar, Paying Agent or co-registrar (if
not the Trustee or the Company). 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, Paying
Agent or agent for service of notices or demands, the Trustee
shall act as such and shall be entitled to appropriate
compensation therefor pursuant to Section 7.07 hereof. The
Company or any Subsidiary or an Affiliate of either of them may
act as Paying Agent, Registrar or co-registrar or agent for
service of notices and demands.
The Company initially appoints the Trustee as Registrar
and Paying Agent and agent for service of notices and demands.
SECTION 2.04. Paying Agent to Hold Money in Trust.
-----------------------------------
Except as otherwise provided herein, prior to each due date of
the principal, premium, if any, and interest on any Security, the
Company shall deposit with the Paying Agent a sum of money
sufficient to pay such principal, premium, if any, and interest
so becoming due. The Company shall require each Paying Agent
(other than the Trustee or the Company) to agree in writing that
such Paying Agent shall hold in trust for the benefit of
Securityholders or the Trustee all money held by the Paying Agent
for the payment of principal, premium, if any, and interest on
the Securities (whether such money has been paid to it by the
Company or any other obligor on the Securities) and shall notify
the Trustee of any default by the Company (or any other obligor
on the Securities) in making any such payment. At any time
during the continuance of any such default, the Paying Agent
shall, upon the request of the Trustee, forthwith pay to the
Trustee all money so held in trust and account for any money
disbursed by it. The Company at any time may require a Paying
Agent to pay all money held by it to the Trustee and to account
<PAGE>
for any money disbursed by it. Upon doing so, the Paying Agent
shall have no further liability for the money so paid over to the
Trustee. If the Company, a Subsidiary or an Affiliate of either
of them acts as Paying Agent, it shall segregate the money held
by it as Paying Agent and hold it as a separate trust fund.
SECTION 2.05. Securityholder Lists. The Trustee shall
--------------------
preserve in as current a form as is reasonably practicable the
most recent list available to it of the names and addresses of
Securityholders. If the Trustee is not the Registrar, the
Company shall cause to be furnished to the Trustee not more than
five (5) days after each record date and at such other times as
the Trustee may request in writing, within five (5) Business Days
of such request, a list in such form as the Trustee may
reasonably require of the names and addresses of Securityholders.
SECTION 2.06. Transfer and Exchange. Upon surrender
---------------------
for registration of transfer of any Security at the office or
agency of the Company designated as Registrar or co-registrar
pursuant to Section 2.03 or at the office or agency referred to
in Section 4.05, the Company shall execute, and the Trustee shall
authenticate and make available for delivery, in the name of the
designated transferee or transferees, one or more new Securities
of any authorized denomination or denominations, of a like
aggregate principal amount.
At the option of the Holder, Securities may be
exchanged for other Securities of any authorized denomination or
denominations, of a like aggregate principal amount, upon
surrender of the Securities to be exchanged at such office or
agency. Whenever any Securities are so surrendered for exchange,
the Company shall execute, and the Trustee shall authenticate and
make available for delivery, the Securities which the Holder
making the exchange is entitled to receive.
Every Security presented or surrendered for
registration of transfer or for exchange shall (if so required by
the Company or the Trustee) be duly endorsed or be accompanied by
a written instrument of transfer in form satisfactory to the
Company and the Registrar duly executed by the Holder or his
attorney duly authorized in writing.
The Company shall not charge a service charge for any
registration of transfer or exchange, but the Company may require
payment of a sum sufficient to pay all taxes, assessments or
other governmental charges that may be imposed in connection with
the transfer or exchange of the Securities from the
Securityholder requesting such transfer or exchange (other than
<PAGE>
any exchange of a temporary Security for a definitive Security
not involving any change in ownership).
The Company shall not be required to make, and the
Registrar need not register, transfers or exchanges of Securities
selected for redemption (except, in the case of Securities to be
redeemed in part, the portion thereof not to be redeemed) or any
Securities for a period of fifteen (15) days before a selection
of Securities to be redeemed.
SECTION 2.07. Replacement Securities. If (a) any
----------------------
mutilated Security is surrendered to the Company or the Trustee
or (b) the Company and the Trustee receive evidence to their
satisfaction of the destruction, loss or theft of any Security,
and there is delivered to the Company and the Trustee such
security or indemnity as may be required by them to save each of
them harmless, then, in the absence of notice to the Company or
the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute, and upon its written
request, the Trustee shall authenticate and make available for
delivery, in exchange for any such mutilated Security or in lieu
of any such destroyed, lost or stolen Security, a new Security of
like tenor and principal amount, bearing a number not con-
temporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen
Security has become or is about to become due and payable, or is
about to be purchased by the Company pursuant Article 4 hereof,
the Company in its discretion may, instead of issuing a new
Security, pay or purchase such Security, as the case may be.
Upon the issuance of any new Securities under this
Section 2.07, the Company may require the payment of a sum
sufficient to cover any tax or other governmental charge that may
be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) in connection therewith.
Every new Security issued pursuant to this Section 2.07
in lieu of any mutilated, destroyed, lost or stolen Security
shall constitute an original additional contractual obligation of
the Company, whether or not the mutilated, destroyed, lost or
stolen Security 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 Securities duly issued
hereunder.
The provisions of this Section 2.07 are exclusive and
shall preclude (to the extent lawful) all other rights and
<PAGE>
remedies with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Securities.
SECTION 2.08. Outstanding Securities; Determinations
--------------------------------------
of Holders' Action. Securities outstanding at any time are all
------------------
the Securities authenticated by the Trustee except for those
canceled by it, those delivered to it for cancellation, those
referred to in Section 2.07 hereof or purchased by the Company
pursuant to Article 4 hereof and those described in this
Section 2.08 as not outstanding. A Security does not cease to be
outstanding because the Company or an Affiliate thereof holds the
Security; provided, however, that in determining whether the
Holders of the requisite principal amount of Securities have
given or concurred in any request, demand, authorization,
direction, notice, consent or waiver hereunder, Securities owned
by the Company, any other obligor upon the Securities or any
Affiliate of the Company or such other obligor shall be
disregarded and deemed not to be outstanding, except that, in
determining whether the Trustee shall be protected in relying
upon any such request, demand, authorization, direction, notice,
consent or waiver, only Securities which the Trustee knows based
upon an examination of the Register to be so owned shall be so
disregarded. Subject to the foregoing, only Securities
outstanding at the time of such determination shall be considered
in any such determination (including determinations pursuant to
Articles 7 and 10 hereof).
If a Security is replaced pursuant to Section 2.07, it
ceases to be outstanding unless the Trustee receives proof
satisfactory to it that the replaced Security is held by a bona
fide purchaser.
If the Paying Agent (other than the Company) holds, in
accordance with this Indenture, at maturity or on a Redemption
Date, money sufficient to pay the Securities payable on that
date, then immediately on the date of maturity or such Redemption
Date, as the case may be, such Securities shall cease to be
outstanding and interest, if any, on such Securities shall cease
to accrue.
SECTION 2.09. Temporary Securities. Pending the
--------------------
preparation of definitive Securities, the Company may execute,
and upon written request from the Company signed by two Officers
of the Company, the Trustee shall authenticate and make available
for delivery, temporary Securities which are printed,
lithographed, typewritten, mimeographed or otherwise produced, in
any authorized denomination, substantially of the tenor of the
definitive Securities in lieu of which they are issued and with
<PAGE>
such appropriate insertions, omissions, substitutions and other
variations as the Officers of the Company executing such
Securities may determine, as conclusively evidenced by their
execution of such Securities.
If temporary Securities are issued, the Company will
cause definitive Securities to be prepared without unreasonable
delay. After the preparation of definitive Securities, the
temporary Securities shall be exchangeable for definitive
Securities upon surrender of the temporary Securities at the
office or agency of the Company designated for such purpose
pursuant to Section 2.03 hereof, without charge to the Holder.
Upon surrender for cancellation of any one or more temporary
Securities, the Company shall execute and the Trustee, upon
written request of the Company signed by two Officers of the
Company, shall authenticate and make available for delivery in
exchange therefor a like principal amount of definitive
Securities of authorized denominations. Until so exchanged, the
temporary Securities shall in all respects be entitled to the
same benefits under this Indenture as definitive Securities.
SECTION 2.10. Cancellation. All Securities
------------
surrendered for payment, purchase by the Company, redemption by
the Company pursuant to Article 4 hereof, or registration of
transfer or exchange shall, if surrendered to any Person other
than the Trustee, be delivered to the Trustee and shall be
promptly cancelled by it. The Company may at any time deliver to
the Trustee for cancellation any Securities previously
authenticated and made available for delivery hereunder which the
Company may have acquired in any manner whatsoever, and all
Securities so delivered shall be promptly cancelled by the
Trustee. The Company may not reissue, or issue new Securities to
replace Securities it has paid or delivered to the Trustee for
cancellation. No Securities shall be authenticated in lieu of or
in exchange for any Securities cancelled as provided in this
Section 2.10, except as expressly permitted by this Indenture.
All cancelled Securities held by the Trustee shall be destroyed
by the Trustee and a certificate of destruction delivered to the
Company.
SECTION 2.11. CUSIP Numbers. The Company in issuing
-------------
the Securities may use "CUSIP" numbers (if then generally in use)
and the Trustee shall use CUSIP numbers in notices of redemption
or exchange as a convenience to Holders; provided that any such
notice shall state that no representation is made as to the
correctness of such numbers either as printed on the Securities
or as contained in any notice of redemption or exchange and that
reliance may be placed only on the other identification numbers
<PAGE>
printed on the Securities and any redemption shall not be
affected by any defect in or omission of such numbers.
SECTION 2.12. Defaulted Interest. If the Company
------------------
defaults in a payment of interest on the Securities, it shall pay
the defaulted interest, plus (to the extent lawful) any interest
payable on the defaulted interest, to the Persons who are Holders
on a subsequent special record date, and such special record
date, as used in this Section 2.12 with respect to the payment of
any defaulted interest, shall mean the 15th day next preceding
the date fixed by the Company for the payment of defaulted
interest, whether or not such day is a Business Day. At least 20
days before the subsequent special record date, the Company shall
mail to the Trustee a notice that states the subsequent special
record date, the payment date and the amount of defaulted
interest to be paid. At least fifteen (15) days before the
subsequent special record date, the Company shall mail to each
Holder a notice that states the subsequent special record date,
the payment date and the amount of defaulted interest to be paid.
The Company may also pay defaulted interest in any other lawful
manner.
ARTICLE 3
REDEMPTION
----------
SECTION 3.01. Right to Redeem; Notices to Trustee. At
-----------------------------------
any time on and after ______, 1999, the Company, at its option,
may redeem the Securities for cash in accordance with this
Article 3 and the provisions of paragraph 5 of the Securities.
If the Company elects to redeem Securities pursuant to paragraph
5 of the Securities, it shall notify the Trustee in writing of
the Redemption Date, the principal amount of Securities to be
redeemed and the Redemption Price.
The Company shall give the notice to the Trustee
provided for in this Section 3.01 at least forty-five (45) days
before the Redemption Date (unless a shorter notice shall be
satisfactory to the Trustee).
SECTION 3.02. Selection of Securities to Be Redeemed.
--------------------------------------
If less than all the outstanding Securities are to be redeemed at
any time, the Trustee shall select the Securities to be redeemed
in compliance with the requirements of the principal national
securities exchange, if any, on which the Securities are listed
or, if the Securities are not listed on a national securities
exchange, on a pro rata basis by lot or by such other method as
the Trustee shall deem fair and appropriate. The Trustee shall
<PAGE>
make the selection at least thirty (30) but not more than sixty
(60) days before the Redemption Date from outstanding Securities
not previously called for redemption. Securities and portions of
them the Trustee selects shall be in principal amounts of $1,000
or an integral multiple of $1,000. Provisions of this Indenture
that apply to Securities called for redemption also apply to
portions of Securities called for redemption. The Trustee shall
notify the Company promptly of the Securities or portions of
Securities to be redeemed.
SECTION 3.03. Notice of Redemption. At least fifteen
--------------------
(15) days but not more than sixty (60) days before a Redemption
Date, the Company shall mail or cause to be mailed a notice of
redemption by first-class mail, postage prepaid, to each Holder
of Securities to be redeemed at the Holder's last address, as it
shall appear on the Register.
The notice shall identify the Securities to be redeemed
and shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) the CUSIP number (subject to the provisions of
Section 2.11 hereof);
(4) the name and address of the Paying Agent;
(5) that Securities called for redemption must be
surrendered to the Paying Agent to collect the Redemption Price;
(6) if fewer than all the outstanding Securities are
to be redeemed, the identification and principal amounts of the
particular Securities to be redeemed; and
(7) that, unless the Company defaults in making such
redemption payment, interest will cease to accrue on Securities
called for redemption on and after the Redemption Date.
At the Company's written request, the Trustee shall
give the notice of redemption in the Company's name and at the
Company's expense; provided, however, that in all cases, the text
of such notice of redemption shall be prepared or approved by the
Company and the Trustee shall have no responsibility whatsoever
with regard to such notice being accurate or correct.
<PAGE>
SECTION 3.04. Effect of Notice of Redemption. Once
------------------------------
notice of redemption is given, Securities called for redemption
become due and payable on the Redemption Date and at the
Redemption Price. Upon the later of the Redemption Date and the
date such Securities are surrendered to the Paying Agent, such
Securities called for redemption shall be paid at the Redemption
Price plus accrued interest to the Redemption Date, if money
sufficient for that purpose has been deposited as provided in
Section 3.05 hereof.
Notice of redemption shall be deemed to be given when
mailed, whether or not the Holder receives the notice. In any
event, failure to give such notice, or any defect therein, shall
not affect the validity of the proceedings for the redemption of
the Securities.
SECTION 3.05. Deposit of Redemption Price. Prior to
---------------------------
the Redemption Date, the Company shall deposit with the Paying
Agent (or if the Company or a Subsidiary or an Affiliate of
either of them is the Paying Agent, shall segregate and hold in
trust) money sufficient to pay the Redemption Price of all
Securities to be redeemed on that date other than Securities or
portions of Securities called for redemption which prior thereto
have been delivered by the Company to the Trustee for
cancellation.
SECTION 3.06. Securities Redeemed in Part. Upon
---------------------------
surrender of a Security that is redeemed in part, the Company
shall execute, and the Trustee shall authenticate and make
available for delivery to the Holder, a new Security in an
authorized denomination equal in principal amount to the
unredeemed portion of the Security surrendered.
ARTICLE 4
COVENANTS
---------
SECTION 4.01. Payment of Securities. The Company
---------------------
shall pay the principal of, premium, if any, and interest
(including interest accruing on or after the filing of a petition
in bankruptcy or reorganization relating to the Company, whether
or not a claim for post-filing interest is allowed in such
proceeding) on the Securities on (or prior to) the dates and in
the manner provided in the Securities or pursuant to this
Indenture. An installment of principal, premium, if any, or
interest shall be considered paid on the applicable date due if
on such date the Trustee or the Paying Agent holds, in accordance
with this Indenture, money sufficient to pay all of such
<PAGE>
installment then due. The Company shall pay interest on overdue
principal and premium, if any, and interest on overdue
installments of interest (including interest accruing on or after
the filing of a petition in bankruptcy or reorganization relating
to the Company whether or not a claim for post-filing interest is
allowed in such proceeding), to the extent lawful, at the rate
per annum borne by the Securities, which interest on overdue
interest shall accrue from the date such amounts became overdue.
SECTION 4.02. SEC Reports.
-----------
(1) The Company shall file with the Trustee and supply
to each Holder, without cost, within fifteen (15) days after it
files the same with the SEC, copies of its annual and quarterly
reports, information, documents and other reports, (or copies of
such portions of any of the foregoing as the SEC may by rules and
regulations prescribe), without exhibits, which it is required to
file with the SEC pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). In the
event that the Company is at any time not subject to the reporting
requirements of the Exchange Act, it shall provide to the Trustee
and supply to each Holder without cost, within fifteen (15) days
after it would have been required to file such information with the
SEC, financial statements, including any notes thereto and, with
respect to annual reports, an auditors' report by an accounting
firm of established national reputation and a "Management's
Discussion and Analysis of Financial Condition and Results of
Operations," both comparable to that which the Company would have
been required to include in such annual reports, information,
documents or other reports if the Company had been subject to the
requirements of such Sections 13 or 15(d) of the Exchange Act.
The Company also shall comply with the other provisions of TIA
Section 314(a).
(2) So long as any Securities remain outstanding, the
Company shall cause its annual report to stockholders and any
other financial reports furnished by it to stockholders
generally, to be mailed to the Holders at their addresses
appearing in the register of Securities maintained by the
Registrar in each case at the time of such mailing or furnishing
to stockholders. If the Company is not required to furnish
annual or quarterly reports to its stockholders pursuant to the
Exchange Act, the Company shall cause its financial statements,
including any notes thereto and with respect to annual reports,
an auditors' report by an accounting firm of established national
reputation and a "Management's Discussion and Analysis of
Financial Condition and Results of Operations," to be so filed
with the Trustee and mailed to the Holders within 120 days after
<PAGE>
the end of each of the Company's fiscal years and within sixty
(60) days after the end of each of the first three quarters of
each fiscal year.
(3) The Company shall provide the Trustee with a
sufficient number of copies of all reports and other documents
and information that the Company may be required to deliver to
the Securityholders under this Section 4.02.
SECTION 4.03. Compliance Certificates.
-----------------------
(1) The Company shall deliver to the Trustee within
ninety (90) days after the end of each of the Company's fiscal
years a certificate containing a certification from the principal
executive officer, principal financial officer or principal
accounting officer of the Company as to his or her knowledge of
the Company's compliance with all conditions and covenants under
this Indenture. For purposes of this Section 4.03(1), such
compliance shall be determined without regard to any period of
grace or requirement of notice provided under this Indenture. If
they do know of such a Default or Event of Default, the
certificate shall describe any such Default or Event of Default
and its status. Such certificate need not comply with Sections
11.04 and 11.05 hereof.
(2) So long as not contrary to the then current
recommendation of the American Institute of Certified Public
Accountants, the Company shall deliver to the Trustee within 120
days after the end of each fiscal year a written statement by the
Company's independent certified public accountants stating
(A) that their audit examination has included a review of the
terms of this Indenture and the Securities as they relate to
accounting matters and (B) whether, in connection with their
audit examination, any Default has come to their attention and,
if such a Default has come to their attention, specifying the
nature and period of the existence thereof; provided, however,
that the independent certified public accountants delivering such
statement shall not be liable in respect of such statement by
reason of any failure to obtain knowledge of any such Default or
Event of Default that would not be disclosed in the course of an
audit examination conducted in accordance with GAAP.
(3) The Company shall deliver to the Trustee as soon
as possible and in any event within fifteen (15) days after the
Company becomes aware of the occurrence of each Default or Event
of Default, which is continuing, an Officers' Certificate (which
need not comply with Sections 11.04 and 11.05 hereof) setting
<PAGE>
forth the details of such Default or Event of Default, and the
action which the Company proposes to take with respect thereto.
SECTION 4.04. Further Instruments and Acts. Upon
----------------------------
request of the Trustee, the Company shall execute and deliver
such further instruments and do such further acts as may be
reasonably necessary or proper to carry out more effectively the
purposes of this Indenture.
SECTION 4.05. Maintenance of Office or Agency. The
-------------------------------
Company shall maintain or cause to be maintained, within the
Borough of Manhattan, the City of New York, an office or agency
of the Trustee, Registrar and Paying Agent where Securities may
be presented or surrendered for payment, where Securities may be
surrendered for registration of transfer, exchange or redemption
and where notices and demands to or upon the Company in respect
of the Securities and this Indenture may be served. The
corporate trust office of the Trustee at the address specified in
Section 11.02 hereof shall initially be such office or agency for
all of the aforesaid purposes. The Company shall give prompt
written notice to the Trustee of any change of location of such
office or agency. If at any time the Company shall fail to
maintain or cause to be maintained any such required office or
agency or shall fail to furnish the Trustee with the address
thereof, such presentations, surrenders, notices and demands may
be made or served at the address of the Trustee set forth in
Section 11.02 hereof.
The Company may also from time to time designate one or
more other offices or agencies where the Securities may be
presented or surrendered for any or all such purposes and may
from time to time rescind such designations. The Company shall
give prompt written notice to the Trustee of any such designation
or rescission and of any change in location of any such other
office or agency.
SECTION 4.06. Limitation on Restricted Payments. The
---------------------------------
Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly, (i) declare or pay any dividend or make
any distribution or repurchase on account of the Company's or any
of its Subsidiaries' Capital Stock or other Equity Interests
(other than dividends or distributions payable to the Company or
any of its Wholly-owned Subsidiaries or payable in shares of
Capital Stock of the Company other than Redeemable Stock), (ii)
purchase, redeem or otherwise retire for value any Equity
Interests of the Company or any of its Subsidiaries (other than
any purchase, redemption or retirement of such Equity Interests
owned by the Company or any of its Wholly-owned Subsidiaries);
<PAGE>
(iii) purchase, redeem, prepay, defease or otherwise retire for
value prior to scheduled maturity, repayment or sinking fund
payment (A) any Indebtedness of the Company that is contractually
subordinated in right of payment to the Securities or (B) any
Indebtedness of any Subsidiary that is contractually subordinated
in right of payment to the Securities other than Indebtedness to
the Company; or (iv) make Investments (either through the Company
or any of its Wholly-owned Subsidiaries) other than Permitted
Investments (the foregoing actions set forth in clauses (i)
through (iv) being referred to as "Restricted Payments"), if at
the time of such Restricted Payment:
(a) a Default or Event of Default shall have occurred
and be continuing or shall occur as a consequence thereof; or
(b) such Restricted Payment, together with the
aggregate of all other Restricted Payments made on or after the
date of this Indenture, exceeds (x) $75 million (in the event the
Securities on the date of computation are rated BBB- (or better)
by Standard & Poor's Corporation and Baa3 (or better) by Moody's
---
Investors Service, Inc., such amount shall be increased by $50
million) plus 50% of the amount of the cumulative Consolidated
Net Income of the Company for the period (taken as one accounting
period) from January 29, 1994 through the last fiscal quarter
immediately preceding such Restricted Payment (or, if
Consolidated Net Income for such period is a deficit, minus 100%
of such deficit); plus (y) 100% of the aggregate net cash proceeds
received by the Company on or after January 29, 1994 from (i) the
issue or sale of Equity Interests of the Company (other than such
Equity Interests issued or sold to a Subsidiary of the Company
and other than Redeemable Stock), (ii) the conversion of
Indebtedness of the Company (other than (A) in respect of the
Convertible Subordinated Debentures or (B) such Indebtedness held
by a Subsidiary of the Company) into Capital Stock of the Company
(other than Redeemable Stock), which for purposes of this clause
(b) shall be valued at the net cash proceeds received by the
Company upon the initial issuance of such Indebtedness plus such
additional Cash consideration payable to the Company upon such
conversion, or (iii) the net cash proceeds received by the
Company from its investment in, and the sale, disposition or
other liquidation of, Investments that are not Permitted Invest-
ments; or
(c) immediately after such Restricted Payment, the
Company would not be permitted to incur $1.00 of additional
Indebtedness pursuant to the covenants set forth in "Limitation
----------
of Additional Indebtedness" below.
--------------------------
<PAGE>
The foregoing provisions will not prohibit, so long as
no Default or Event of Default shall have occurred and be
continuing: (i) the payment of any dividend within sixty (60)
days after the date of declaration thereof, if at the said date
of declaration such payment would have complied with the
provisions of this Indenture; (ii) the retirement of any shares of
the Company's Capital Stock in exchange for, or out of the net
proceeds of the substantially concurrent sale (other than to a
Subsidiary of the Company) of other shares of the Company's
Capital Stock, other than any Redeemable Stock; (iii) Investments
by the Company or a Subsidiary of the Company in the Company or a
Wholly-owned Subsidiary of the Company or the purchase,
redemption, or other acquisition or retirement for value of such
Investments; (iv) acquisitions of Wholly-owned Subsidiaries; (v)
the purchase, redemption, prepayment, defeasance or other
acquisition or retirement for value prior to scheduled maturity
or any repayment or sinking fund payment of any Indebtedness of
any Wholly-owned Subsidiary of the Company which is not
contractually subordinated in right of payment to the Securities;
(vi) the redemption, repurchase or other acquisition or
retirement for value of subordinated Indebtedness of the Company
which is made in exchange for, or out of proceeds of the
substantially concurrent issue and sale (other than to a
Subsidiary) of (A) shares of Capital Stock (other than Redeemable
Stock) of the Company, provided, however, that any net cash
proceeds from such issue are excluded from clause (b)(y)(i) of
the preceding paragraph or (B) new Indebtedness of the Company,
so long as (1) such Indebtedness is expressly subordinated to the
Securities at least to the same extent as the subordinated
Indebtedness being so refinanced; (2) such Indebtedness has an
Average Life to Stated Maturity equal to or greater than the
remaining Average Life to Stated Maturity of the Securities; and
(3) such Indebtedness has a final scheduled maturity which
exceeds the final Stated Maturity of the Securities, provided,
however, that any net cash proceeds from such issue are excluded
from clause (b)(y)(ii) of the preceding paragraph; and (vii)
loans and advances to officers and employees of the Company or
any of its Subsidiaries up to $5 million in the aggregate
outstanding at any one time. For purposes of determining the
aggregate permissible amount of Restricted Payments in accordance
with clause (b) of the first paragraph of this covenant, no
amounts expended pursuant to clauses (iii), (iv), (v), (vi) and
(vii) of this paragraph shall be included.
The Company shall deliver to the Trustee within sixty
(60) days after the end of the Company's fiscal year in which a
Restricted Payment is made under the first paragraph of this
Section 4.06, an Officers' Certificate setting forth each
<PAGE>
Restricted Payment made in such fiscal year (other than
Restricted Payments made to purchase Marketable Securities that
do not constitute Permitted Investments but that are liquidated
for cash within ninety (90) days of the date of such Investment
in an amount at least equal to the initial purchase price of such
Investment), stating that each such Restricted Payment is
permitted and setting forth the basis upon which the calculations
required by this Section 4.06 were computed.
SECTION 4.07. Limitation on Payment Restrictions
----------------------------------
Affecting Subsidiaries. The Company shall not, and shall not permit
----------------------
any of its Subsidiaries to, directly or indirectly, create or
otherwise cause or permit to exist or become effective or enter into
any agreement with any Person that would cause or permit to exist or
become effective, any encumbrance or restriction on the ability of
(i) any Wholly-owned Subsidiary to pay dividends or make any other
distributions on its Capital Stock or any other interest or participation
in, or measured by, its profits, owned by the Company or any of its
Subsidiaries or (ii) any Subsidiary to (A) pay any Indebtedness
owed to the Company or any Subsidiary, (B) make loans or advances
to the Company, or (C) transfer any of its properties or assets to
the Company, except for purposes of clauses (i) and (ii), for such
encumbrances or restrictions existing under or by reason of (1)
applicable law, (2) this Indenture, (3) customary non-assignment
provisions of any lease governing a leasehold interest of the Company
or any of its Subsidiaries, (4) any instrument governing Indebtedness
of a Person acquired by the Company or any of its Subsidiaries at the
time of such acquisition, which encumbrance or restriction is
applicable to any Person so acquired or its properties or assets
and was not entered into in connection with such acquisition, (5)
encumbrances or restrictions under Existing Indebtedness or (6)
encumbrances or restrictions under any Real Estate Financing by
any of the Company's Subsidiaries.
SECTION 4.08. Limitation on Other Senior Subordinated
---------------------------------------
Indebtedness. The Company will not incur, create, assume, guarantee
------------
or otherwise become liable for any Indebtedness that is contractually
subordinated in right of payment to any Senior Indebtedness and
contractually senior in any respect in right of any payment to the
Securities.
SECTION 4.09. Limitation on Additional Indebtedness.
-------------------------------------
The Company shall not, and shall not permit any of its
Subsidiaries, directly or indirectly, to create, incur, issue,
<PAGE>
assume, guarantee or otherwise become directly or indirectly
liable with respect to any Indebtedness other than Permitted
Indebtedness; provided, however, that (a) the Company or any
Subsidiary may incur Indebtedness if, after giving pro forma
effect to the incurrence of such Indebtedness and the application
of any of the proceeds therefrom to repay Indebtedness as if such
incurrence had occurred on the first day of such period, the
Consolidated Interest Coverage Ratio for its four full fiscal
quarters ending immediately prior to the date such additional
Indebtedness is created, incurred, issued, assumed or guaranteed
will be at least 2.0 to 1.0, provided that such calculation shall
give effect to (A) the incurrence of any Indebtedness (after
giving effect to the application of the proceeds thereof) in
connection with the simultaneous acquisition of any Person,
business, property or assets and (B) the Consolidated Net Income
generated by such acquired Person, business, property or assets,
giving effect in each case to such incurrence of Indebtedness,
application of proceeds and Consolidated Net Income as if such
acquisition had occurred at the beginning of such four quarter
period, and (b) a Subsidiary of the Company may incur
Indebtedness if (i) the assets of the Subsidiary consist solely
of (x) real estate securing Real Estate Financing and (y) other
assets with a book value not in excess of 10% of the principal
amount of any Indebtedness incurred by such Subsidiary and such
Indebtedness constitutes Real Estate Financing at the time it is
created, incurred, issued, assumed or guaranteed by such
Subsidiary of the Company (which shall not have been guaranteed
by the Company) or (ii) such Indebtedness, together with all
other Indebtedness of all Subsidiaries of the Company (other than
Indebtedness incurred pursuant to clause (b)(i) of this
paragraph), is an aggregate amount not exceeding $5 million at
any time outstanding.
SECTION 4.10. Limitation on Liens. The Company will
-------------------
not, and will not permit any of its Subsidiaries to, directly or
indirectly, create, incur, assume or suffer to exist any Lien on
any of its respective assets, now owned or hereafter acquired, or
any income or properties therefrom, securing any Indebtedness
that is pari passu with or contractually subordinated in right of
payment to the Securities, other than Permitted Liens.
SECTION 4.11. Repurchase Upon Change of Control. Upon
---------------------------------
the occurrence of a Change of Control (as defined below), each
Holder shall have the right to require at such Holder's election
the repurchase of all or a portion (in $1,000 increments) of such
Holder's Securities pursuant to the offer described below (the
"Change of Control Offer") at a purchase price equal to 101% of
the aggregate principal amount plus accrued and unpaid interest,
<PAGE>
if any, to the date of purchase. Immediately following any
Change of Control, the Company shall mail a notice to the Trustee
and to each Holder stating: (i) that the Change of Control Offer
is being made pursuant to the "Repurchase Upon Change of Control"
---------------------------------
covenant in this Indenture and that all Securities tendered will
be accepted for payment; (ii) the purchase price and the purchase
date (which shall be no earlier than thirty (30) days nor later
than sixty (60) days from the date such notice is mailed) (the
"Change of Control Payment Date"); (iii) that any Security not
tendered will continue to accrue interest; (iv) that, unless the
Company defaults in the payment thereof, all Securities accepted
for payment pursuant to the Change of Control Offer shall cease
to accrue interest on and after the Change of Control Payment
Date; (v) that Holders electing to have any Securities purchased
pursuant to a Change of Control Offer will be required to
surrender the Securities to be purchased to the Paying Agent at
the address specified in the notice prior to the close of
business on the Business Day preceding the Change of Control
Payment Date; (vi) that Holders will be entitled to withdraw
their election on the terms and conditions set forth in such
notice; (vii) that Holders whose Securities are being purchased
only in part will be issued new Securities equal in principal
amount to the unpurchased portion of the Securities surrendered;
provided that each Security purchased and each such new Security
issued shall be in a principal amount of $1,000 or integral
multiples thereof; and (viii) the circumstances and relevant
facts regarding such Change of Control (including pro forma
historical financial information after giving effect to such
Change of Control) and information regarding the Person or
Persons acquiring control.
On the Change of Control Payment Date, the Company
shall (i) accept for payment all Securities or portions thereof
tendered, pursuant to the Change of Control Offer, (ii) deposit
with the Paying Agent money sufficient to pay the purchase price
of all Securities or portions thereof so tendered, and (iii)
deliver or cause to be delivered to the Trustee, all Securities
so tendered together with an officer's certificate specifying the
Securities or portions thereof tendered to the Company. The
Paying Agent shall promptly mail to each Holder of Securities so
tendered, payment in an amount equal to the purchase price for
such Securities, and the Trustee shall promptly authenticate and
mail to such Holder a new Security equal in principal amount to
any unpurchased portion of the Securities surrendered; provided
that such new Security shall be in a principal amount of $1,000
or integral multiples thereof. The Company will publicly
announce the results of the Change of Control Offer on or as soon
as practicable after the Change of Control Payment Date.
<PAGE>
The Company will comply with the requirements of Rule 14e-1
under the Exchange Act, and any other securities laws and regulations
thereunder to the extent such laws and regulations are applicable
in connection with the repurchase of the Securities triggered by
a Change of Control.
"Change of Control" means (a) the acquisition,
including through merger, consolidation or otherwise, by any
Person or any group for purposes of Section 13(d) of the Exchange
Act, together with any Affiliates thereof, of direct or indirect
beneficial ownership (as defined in Rule 13d-3 of the Exchange
Act) of 50% or more of either (i) the outstanding shares of
common stock of the Company or (ii) the total voting power of all
classes of capital stock of the Company entitled to vote generally
in the election of directors or (b) the Company sells, conveys,
transfers or leases all or substantially all of its assets
(including without limitation the stock of one or more Subsidiary
Guarantors which singly or in the aggregate own all or
substantially all of the assets of the Company and its Subsidiaries
determined on a consolidated basis to any Person (other than one or
more Wholly-owned Subsidiaries)) in a transaction or series of
related transactions, other than in connection with the
reincorporation of the Company in another jurisdiction where each
Holder of common stock immediately prior to such reincorporation
owns the same percentage of the Company immediately after its
reincorporation.
<PAGE>
SECTION 4.12. Limitation on Use of Proceeds from Asset
----------------------------------------
Sales. The Company and its Subsidiaries will not, directly or
-----
indirectly, consummate any Asset Sales unless (i) the Company or the
Subsidiary, as the case may be, receives consideration at the time of any
such Asset Sale at least equal to the fair market value of the assets
sold or otherwise disposed of, (ii) at least 80% of the Net Proceeds from
the Asset Sales are received in Cash and Marketable Securities at closing
and (iii) with respect to any Asset Sale involving the Equity Interests
of any Subsidiary, the Company shall sell all of the Equity Interests it
owns of such Subsidiary in such Asset Sale. Within twelve (12) months
(or, in the event of a sale-and-leaseback transaction, twenty-four (24)
months) after the receipt of Cash in respect of any Asset Sale, the
Company or a Subsidiary may use all such Cash either to (x) invest in
capital assets, (y) purchase properties and assets that are of a type
similar to the properties and assets that were the subject of such Asset
Sale, and in the case of clauses (x) and (y) the acquired capital assets
or properties and assets, as the case may be, are to be used primarily in
a retail warehousing business of the Company which is operated by the
Company or a Significant Subsidiary of the Company (or is a business
which meets the test necessary to be a Significant Subsidiary)
immediately prior to such acquisition or (z) permanently reduce Senior
Indebtedness. "Excess Proceeds" shall mean any Cash from an Asset Sale
that is not invested or used to permanently reduce Senior Indebtedness as
provided in the preceding sentence. When the aggregate amount of Excess
Proceeds from any Asset Sale or series of related Asset Sales exceeds (a)
10% of the aggregate book value of the tangible assets of the Company and
its Subsidiaries (measured at the end of the most recent fiscal quarter
ended prior to such Asset Sale) and (b) $5 million for the fiscal year in
which the amount of Excess Proceeds is determined, the Company shall
offer to purchase from all Holders the maximum principal amount of
Securities that may be purchased out of such Excess Proceeds, at an offer
price in cash in an amount equal to 100% of the principal amount thereof
plus accrued interest, if any, to the date fixed for the closing of such
offer, in accordance with the same procedures applicable to offers to
purchase Securities upon the occurrence of a Change of Control (the
"Excess Proceeds Offer"). To the extent that the aggregate amount of the
Securities tendered pursuant to the Excess Proceeds Offer is less than
the Excess Proceeds, the Company may use such deficiency, or a portion
thereof, for general corporate purposes. If the aggregate principal
amount of the Securities surrendered by Holders thereof exceeds the
amount of Net Proceeds, the Company shall select the Securities to be
purchased on a pro rata basis. Upon completion of such offer, the amount
of Excess Proceeds shall be reset at zero.
<PAGE>
The Company will comply with the requirements of Rule
14e-1 under the Exchange Act and any other securities laws and
regulations thereunder to the extent such laws and regulations
are applicable in connection with the repurchase of the
Securities pursuant to an Excess Proceeds offer.
SECTION 4.13. Limitation on Transactions with
-------------------------------
Affiliates. Except as otherwise permitted by this Indenture,
----------
neither the Company, nor any of its Subsidiaries, will make any
Investment, loan, advance, guarantee or capital contribution to,
or for the benefit of, or sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or for the benefit
of, or purchase or lease any property or assets from, or enter
into or amend any contract, agreement or understanding with, or
for the benefit of, any Affiliate of the Company or any of its
Subsidiaries (other than the Company or any of its Wholly-owned
Subsidiaries) unless (i) the Board of Directors of the Company or
such Subsidiary, as the case may be, determines, in its reason-
able good faith judgment, that such transaction or series of
transactions is in the best interest of the Company or such
Subsidiary based on full disclosure of all relevant facts and
circumstances, (ii) such transaction or series of transactions is
fair to the Company or such Subsidiary and on terms that are no
less favorable to the Company or the relevant Subsidiary, as the
case may be, than those that could have been obtained in a
comparable transaction on an arm's length basis from a Person
that is not an Affiliate and (iii) with respect to a transaction
or series of transactions involving aggregate payments greater
than $5 million, a majority of independent directors of the
Company shall approve such transaction or series of transactions
by a resolution certifying that such transaction or series of
related transactions comply with the clause (ii) above.
SECTION 4.14. Subsidiary Guarantees. If (i) the
---------------------
Company or any Subsidiary of the Company that is a Subsidiary
Guarantor transfers or causes to be transferred, in one
transaction or a series of related transactions, property or
assets (including, without limitation, businesses, divisions,
real property, assets or equipment) which in the aggregate have a
book value equal to or greater than 15% of the book value of the
Company's total assets determined on a consolidated basis as of
the time of transfer to any Subsidiary or Subsidiaries of the
Company that is not a Subsidiary Guarantor, other than in
connection with a Real Estate Financing or (ii) any Subsidiary of
the Company guarantees or otherwise becomes obligated with
<PAGE>
respect of any Indebtedness, other than Real Estate Financing,
the Company shall cause such Subsidiary or Subsidiaries to
(A) execute and deliver to the Trustee a supplemental indenture
substantially in the form of Exhibit B hereto, which supplemental
indenture shall also be in form and substance reasonably
satisfactory to the Trustee, pursuant to which such Subsidiary or
Subsidiaries shall unconditionally guarantee all of the Company's
Obligations under this Indenture and the Securities on the terms
set forth in such supplemental indenture, which Guarantee shall
be subordinate to any Guarantee granted by such Subsidiary
Guarantor in respect of Senior Indebtedness of the Company or
Indebtedness of the Subsidiary or Subsidiaries, and (B) deliver
to the Trustee (x) an Opinion of Counsel reasonably satisfactory
to the Trustee that such supplemental indenture has been duly
executed and delivered by such Subsidiary Guarantor or
Subsidiary Guarantors and (y) an opinion from a nationally
recognized appraisal firm, in form and substance reasonably
satisfactory to the Trustee, stating that after giving effect to
such Guarantee, the Subsidiary Guarantor or Subsidiaries
Guarantors is or are solvent, as the case may be.
SECTION 4.15. Payment of Taxes and Other Claims. The
---------------------------------
Company shall pay or discharge or cause to be paid or discharged,
before any penalty accrues thereon, (i) all material taxes,
assessments and governmental charges levied or imposed upon the
Company or any Subsidiary thereof upon the income, profits or
property of the Company or any Subsidiary thereof and (ii) all
material lawful claims for labor, materials and supplies which,
if unpaid, would by law become a Lien upon the property of the
Company or any Subsidiary thereof; provided that none of the
Company or any Subsidiary thereof shall be required to pay or
discharge or cause to be paid or discharged any such tax,
assessment, charge or claims the amount, applicability or
validity of which is being contested in good faith by appropriate
proceedings and for which adequate provision has been made or
where the failure to effect such payment or discharge is not
adverse in any material respect to the Holders.
SECTION 4.16. Corporate Existence. Subject to Article
-------------------
5 hereof, the Company will do or cause to be done all things
necessary to preserve and keep in full force and effect its
corporate existence and the corporate, partnership or other
existence of any of its Subsidiaries in accordance with the
respective organizational documents of such Subsidiary and the
rights (charter and statutory), licenses and franchises of the
Company and its Subsidiaries; provided, however, that the Company
<PAGE>
shall not be required to preserve any such right, license or
franchise, or the corporate, partnership or other existence of
any of its Subsidiaries, 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 its
Subsidiaries taken as a whole and that the loss thereof is not
adverse in any material respect to the Holders.
SECTION 4.17. Maintenance of Properties and Insurance.
---------------------------------------
The Company shall cause all material properties owned by or
leased to it or any of its Subsidiaries and used or useful in the
conduct of its business or the business of such Subsidiary to be
maintained and kept in normal condition, repair and working order
and supplied with all necessary equipment and shall cause to be
made all necessary repairs, renewals, replacements, betterments
and improvements thereof, all as in the judgment of the Company
may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all
times; provided, however, that nothing in this Section 4.17 shall
prevent the Company or any Subsidiary thereof from discontinuing
the maintenance of any such properties, if such discontinuance is
desirable in the conduct of its business or the business of such
Subsidiary.
The Company shall provide or cause to be provided, for
itself and any of its Subsidiaries, insurance (including
appropriate self-insurance) against loss or damage of the kinds
customarily insured against by corporations similarly situated
and owning like properties, including, but not limited to, public
liability insurance, with reputable insurers in such amounts with
such deductibles and by such methods as shall be customary for
corporations similarly situated in the industry.
SECTION 4.18. Stay, Extension and Usury Laws. The
------------------------------
Company covenants (to the extent it may lawfully do so) that it
will not at any time insist upon, plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay,
extension or usury law wherever enacted, now or at any time
hereafter in force, which may affect the covenants or the
performance of this Indenture and the Company (to the extent it
may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and covenants that it will not, by
resort to any such law, 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
has been enacted.
<PAGE>
SECTION 4.19. Investment Company Act. The Company
----------------------
shall not become an investment company subject to registration
under the Investment Company Act of 1940, as amended.
SECTION 4.20. Payments for Consents. Neither the
---------------------
Company nor any of its Subsidiaries shall, directly or
indirectly, pay or cause to be paid any consideration, whether by
way of interest, fee or otherwise, to any Securityholder of any
Securities for or as an inducement to any consent, waiver or
amendment of any of the terms or provisions of this Indenture or
the Securities unless such consideration is offered to be paid or
agreed to be paid to all Securityholders of the Securities which
so consent, waive or agree to amend in the time frame set forth
in solicitation documents relating to such consent, waiver or
agreement.
SECTION 4.21. Covenant to Comply with Securities Laws
---------------------------------------
upon Purchase of Securities. In connection with any offer to
---------------------------
purchase or purchase of Securities under Section 4.11 or 4.12
hereof, the Company shall (i) comply with Rule 14e-1 under the
Exchange Act and (ii) otherwise comply with all Federal and state
securities laws so as to permit the rights and obligations under
Sections 4.11 and 4.12 hereof to be exercised in the time and in
the manner specified in Sections 4.11 and 4.12 hereof.
ARTICLE 5
SUCCESSOR CORPORATION
---------------------
SECTION 5.01. When the Company May Merge or Transfer
--------------------------------------
Assets. The Company shall not consolidate with or merge into any
------
Person or permit any Person to merge with or into it or directly
or indirectly transfer (by lease, assignment, sale, conveyance or
otherwise) all or substantially all of its properties and assets,
in a single transaction or through a series of related
transactions, to another Person or group of affiliated Persons or
permit a Subsidiary of the Company to enter into any such
transaction or transactions if such transaction or transactions
would result in a direct or indirect transfer (by lease,
assignment, sale, conveyance or otherwise) of all or
substantially all of the assets of the Company and its
Subsidiaries on a consolidated basis, unless:
(1) The Company shall be the continuing Person, or the
Person, if other than the Company, formed by such consolidation
or into or with which the Company is merged or to which the
properties and assets of the Company, substantially as an
entirety, are transferred shall be a corporation organized and
<PAGE>
existing under the laws of the United States or any state thereof
or the District of Columbia and shall expressly assume, by an
indenture supplemental hereto, executed and delivered to the
Trustee, in form satisfactory to the Trustee, all the Obligations
of the Company under the Securities and this Indenture, and this
Indenture remains in full force and effect;
(2) immediately before and immediately after giving
effect to such transaction, no Event of Default and no Default
shall have occurred and be continuing;
(3) the Person which is formed by or survives such
consolidation or merger or to which such assets are transferred
(the "surviving entity"), after giving pro forma effect to such
transaction, could incur $1.00 of additional Indebtedness under
the first paragraph of Section 4.09 hereof; provided, however,
that the transfer by the Company of all or substantially all of
its assets (as an entirety or substantially as an entirety in one
transaction or a series of related transactions) to one or more
Wholly-owned Subsidiaries shall not be subject to the provisions
of this paragraph if each such Subsidiary (i) is organized and
existing under the laws of the United States or any State thereof
or the District of Columbia and (ii) complies with the covenants
described in Section 4.14; and
(4) immediately after giving effect to such
transaction on a pro forma basis, the Consolidated Net Worth of
the surviving entity shall be equal to or greater than the
Consolidated Net Worth of the Company immediately before such
transaction.
In connection with any consolidation, merger or
transfer contemplated hereby, the Company shall deliver, or cause
to be delivered, to the Trustee, in form and substance reasonably
satisfactory to the Trustee, an Officers' Certificate and an
Opinion of Counsel, each stating that such consolidation, merger
or transfer and the supplemental indenture in respect thereto
comply with this Section 5.01 and that all conditions precedent
herein provided for relating to such transactions have been
complied with.
SECTION 5.02. Successor Corporation Substituted. Upon
---------------------------------
any consolidation or merger or any sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially
all of the assets of the Company in accordance with Section 5.01
hereof, the successor corporation formed by such consolidation or
into or with which the Company is merged or to which such sale,
assignment, transfer, lease, conveyance or other disposition is
<PAGE>
made, shall succeed to, and be substituted for, and may exercise
every right and power of the Company under this Indenture with
the same effect as if such successor corporation had been named
as the Company herein and the Company shall be discharged and released
from all obligations and covenants under this Indenture and the
Securities.
ARTICLE 6
DEFAULTS AND REMEDIES
---------------------
SECTION 6.01. Events of Default. An "Event of
-----------------
Default" occurs if one of the following shall have occurred and
be continuing:
(1) The Company defaults in the payment, when due and
payable, of (i) interest on any Security and the default
continues for a period of thirty (30) days or (ii) the principal
of or premium, if any, on any Securities when the same becomes
due and payable at maturity, acceleration, on the Redemption
Date, on the Change of Control Payment Date, on any payment date
respecting an Excess Proceeds Offer or otherwise;
(2) The Company fails to comply with any of its
covenants or agreements in the Securities or this Indenture
(other than those referred to in clause (1) above) and such
failure continues for forty-five (45) days after receipt by the
Company of a Notice of Default;
(3) default under any mortgage, indenture or
instrument under which there may be issued or by which there may be
secured or evidenced any Indebtedness for money borrowed by the
Company or any of its Subsidiaries (or the payment of which is guaranteed
by the Company or any of its Subsidiaries) whether such Indebtedness or
guarantee is now existing or hereafter created and either (i) such
default is in the payment of any principal of or interest on any such
Indebtedness when due at maturity and the principal amount of such
Indebtedness exceeds $10 million in the aggregate and such
Indebtedness does not constitute Real Estate Financing that is
guaranteed by or with recourse to the Company or any of its other
Subsidiaries and, as a result of such default, Indebtedness of the
Company or its Subsidiaries (other than such Real Estate Financing)
aggregating $10 million or more is accelerated or (ii) as a result of
such default the maturity of such Indebtedness has been accelerated
prior to its express maturity and the principal amount of such
Indebtedness, together with the principal amount of any other such
Indebtedness (in each case other than Real Estate Financing that is
not guaranteed by or not with recourse to the Company or any
<PAGE>
of the Subsidiaries) the maturity of which has been accelerated,
aggregates $10 million or more;
(4) The Company or one or more of its Subsidiaries that
individually or when considered as one entity would constitute a
Significant Subsidiary pursuant to or within the meaning of any
Bankruptcy Law:
(A) commences a voluntary case or proceeding;
(B) consents to the entry of an order for relief
against it in an involuntary case or
proceeding;
(C) consents to the appointment of a Custodian of
it or for all or substantially all of its
property;
(D) makes a general assignment for the benefit of
its creditors; or
(E) admits in writing its inability to pay its
debts generally as they become due;
(5) a court of competent jurisdiction enters an order
or decree under any Bankruptcy Law that:
(A) is for relief against the Company or one or more of
its Subsidiaries that individually or when considered
as one entity would constitute a Significant
Subsidiary in an involuntary case or proceeding;
(B) appoints a Custodian of the Company or one or more of
its Subsidiaries that individually or when considered
as one entity would constitute a Significant
Subsidiary for all or substantially all of its
property;
(C) orders the liquidation of the Company or one or more
of its Subsidiaries that individually or when
considered as one entity would constitute a
Significant Subsidiary;
(D) and in each case the order or decree remains
unstayed and in effect for sixty (60) days;
or
(6) final judgments for the payments of money which in
the aggregate exceed $10,000,000 and which are not related to Real Estate
Financing that is not guaranteed by the Company and that is without
recourse to the Company or any of its Subsidiaries, shall be rendered
against the Company or any Subsidiary by a court and either (i) enforcement
proceedings have been commenced upon such judgments or (ii) such judgements
shall remain unstayed or undischarged for a period of sixty (60) days and
the Trustee shall receive notice thereof from the Company or any Holder or
shall otherwise obtain actual knowledge thereof.
<PAGE>
"Bankruptcy Law" means Title 11, United States Code, or
any similar Federal or state law for the relief of debtors.
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator, custodian or similar official under any Bankruptcy
Law.
A Default under clause (2) above is not an Event of
Default until the Trustee notifies the Company or the Holders of
at least 25% in aggregate principal amount of the Securities at
the time outstanding notify the Company and the Trustee of the
Default and the Company does not cure such Default within the
time specified in clause (2) above after receipt of such notice.
Any such notice must be in writing, specify the Default, demand
that it be remedied and state that such notice is a "Notice of
Default."
In the case of any Event of Default (other than as a
result of a failure to comply with Section 4.11 hereof) pursuant
to the provisions of this Section 6.01 occurring by reason of any
willful action (or inaction) taken (or not taken) by or on behalf
of the Company with the intention of avoiding payment of the
premium which the Company would have to pay if the Company then
had elected to redeem the Securities pursuant to paragraph 5 of
the Securities, an equivalent premium shall also become and be
immediately due and payable to the extent permitted by law,
anything in this Indenture or in the Securities contained to the
contrary notwithstanding.
In the case of an Event of Default as a result of a
failure to comply with Section 4.11 hereof occurring by reason of
any willful action (or inaction) taken (or not taken) by or on
behalf of the Company with the intention of avoiding payment of
the premium which the Company would have to pay pursuant to
Section 4.11 hereof, such premium shall also become and be
immediately due and payable at such time as the principal and
interest on the Securities become due and payable pursuant to
Section 6.02 hereof to the extent permitted by law, anything in
this Indenture or in the Securities contained to the contrary
notwithstanding.
SECTION 6.02. Acceleration. If any Event of Default
------------
under clauses (1), (2), (3) or (6) of Section 6.01 occurs and is
continuing, the Trustee may, by notice to the Company, or the
Holders of at least 25% in aggregate principal amount of the
Securities then outstanding may, by notice to the Company and the
Trustee (each, an "Acceleration Notice"), and the Trustee shall,
upon the request of such Holders, declare the principal of the
Securities, premium, if any, and accrued but unpaid interest on
all Securities to be due and payable (i) immediately if no amount
<PAGE>
is outstanding and no commitment is in effect under the Specified
Senior Indebtedness or (ii) if any amount is outstanding or there
exists any commitment under the Specified Senior Indebtedness,
upon the earlier of five business days after delivery of the
Acceleration Notice to the Company by the Trustee or the Holders,
as the case may be, or acceleration of the Specified Senior
Indebtedness, and thereupon the Trustee may, at its discretion,
proceed to protect and enforce the rights of the Holders of the
Securities by appropriate judicial proceedings. Upon a
declaration of acceleration, such principal, premium, if any, and
accrued interest shall be due and payable. If any Event of
Default under clauses (4) or (5) of Section 6.01 occurs, all
principal, premium, if any, and interest on the Securities will
ipso facto become and be immediately due and payable. Except as
set forth in Section 10.05, the Holders of a majority in
aggregate principal amount of the Securities then outstanding by
written notice to the Trustee and to the Company may rescind an
acceleration and its consequences (except an acceleration due to
a default in payment of the principal or interest on any of the
Securities) if all existing Events of Default have been cured or
waived except non-payment of principal, interest or premium that
has become due solely because of the acceleration.
SECTION 6.03. Other Remedies. If an Event of Default
--------------
occurs and is continuing, the Trustee may pursue any available
remedy by proceeding at law or in equity to collect the payment
of principal of, premium, if any, or interest on the Securities
or to enforce the performance of any provision of the Securities
or this Indenture.
The Trustee may maintain a proceeding even if the
Trustee does not possess any of the Securities or does not
produce any of the Securities in the proceeding. A delay or
omission by the Trustee or any Securityholder in exercising any
right or remedy accruing upon an Event of Default shall not
impair the right or remedy or constitute a waiver of, or
acquiescence in, the Event of Default. No remedy is exclusive of
any other remedy. Except as set forth in Section 2.07 hereof,
all remedies are cumulative to the extent permitted by law.
SECTION 6.04. Waiver of Past Defaults. The Holders of
-----------------------
a majority in aggregate principal amount of the Securities at the
time outstanding, by notice to the Trustee (and without notice to
any other Securityholder), may waive an existing Default or Event
of Default and its consequences except (a) an Event of Default
described in Section 6.01(1) hereof or (b) a Default in respect
of a provision that under Section 9.02 hereof cannot be amended
without the consent of each Securityholder affected. When a
<PAGE>
Default is waived, it is deemed cured and shall cease to exist,
but no such waiver shall extend to any subsequent or other
Default or impair any consequent right.
SECTION 6.05. Control by Majority. The Holders of a
-------------------
majority in aggregate principal amount of the Securities at the
time outstanding may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee
or of exercising any trust or power conferred on the Trustee.
However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture or that the Trustee
determines in good faith is unduly prejudicial to the rights of
other Securityholders or would involve the Trustee in personal
liability. The Trustee may take any other action deemed proper
by the Trustee which is not inconsistent with such direction.
SECTION 6.06. Limitation on Suits. Except as provided
-------------------
in Section 6.07 hereof, a Securityholder may not pursue any
remedy with respect to this Indenture or the Securities unless:
(1) the Holder gives to the Trustee written notice
stating that an Event of Default is continuing;
(2) the Holders of at least 25% in aggregate principal
amount of the Securities at the time outstanding make a written
request to the Trustee to pursue the remedy;
(3) such Holder or Holders offer to the Trustee
reasonable security or indemnity against any loss, liability or
expense satisfactory to the Trustee;
(4) the Trustee does not comply with the request
within thirty (30) days after receipt of the notice, the request
and the offer of security or indemnity; and
(5) the Holders of a majority in aggregate principal
amount of the Securities at the time outstanding do not give the
Trustee a direction inconsistent with the request during such
30-day period.
A Securityholder may not use this Indenture to
prejudice the rights of any other Securityholder or to obtain a
preference or priority over any other Securityholder.
SECTION 6.07. Rights of Holders to Receive Payment.
------------------------------------
Notwithstanding any other provision of this Indenture, the right
of any Holder to receive payment of the principal amount,
premium, if any, or interest, in respect of the Securities held
<PAGE>
by such Holder, on or after the respective due dates expressed in
the Securities, any Redemption Date, any Change of Control
Payment Date or any payment date respecting an Excess Proceeds Offer,
or to bring suit for the enforcement of any such payment on or after
such respective dates or the right to convert, shall not be impaired or
affected adversely without the consent of each such Holder.
SECTION 6.08. Collection Suit by Trustee. If an Event
--------------------------
of Default described in Section 6.01(1) hereof occurs and is
continuing, the Trustee may recover judgment in its own name and
as trustee of an express trust against the Company for the whole
amount owing with respect to the Securities and the amounts
provided for in Section 7.07 hereof.
SECTION 6.09. Trustee May File Proofs of Claim. In
--------------------------------
case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment,
composition or other judicial proceeding relative to the Company
or the property of the Company, the Trustee shall be entitled and
empowered, by intervention in such proceeding or otherwise:
(1) to file and prove a claim for the whole amount of
the principal amount, premium, if any, and interest on the
Securities and to file such other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel) and of the Holders allowed in such judicial proceeding;
and
(2) 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 7.07
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 Securities or the rights
<PAGE>
of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
SECTION 6.10. Priorities. If the Trustee collects any
----------
money pursuant to this Article 6, it shall pay out the money in
the following order:
FIRST: to the Trustee for amounts due under
Section 7.07 hereof;
SECOND: to Securityholders for amounts due and unpaid
on the Securities for the principal, premium, if any, and
interest, ratably, without preference or priority of any kind,
according to such amounts due and payable on the Securities for
principal, premium, if any, and interest respectively; and
THIRD: the balance, if any, to the Company.
The Trustee may fix a record date and payment date for
any payment to Securityholders pursuant to this Section 6.10.
SECTION 6.11. Undertaking for Costs. In any suit for
---------------------
the enforcement of any right or remedy under this Indenture or in
any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing
by any party litigant (other than the Trustee) in the suit of an
undertaking to pay the costs of the suit and the court in its
discretion may assess reasonable costs, including reasonable
attorneys' fees and expenses, against any party litigant in the
suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. This Section 6.11
does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 6.07 hereof or a suit by Holders of more than
25% in aggregate principal amount of the Securities at the time
outstanding.
<PAGE>
ARTICLE 7
TRUSTEE
-------
SECTION 7.01. Duties of Trustee.
-----------------
(1) If an Event of Default has occurred and is
continuing, the Trustee shall exercise the rights and powers
vested in it by this Indenture and use the same degree of care
and skill in its exercise as a prudent man would exercise or use
under the circumstances in the conduct of his own affairs.
(2) Except during the continuance of an Event of
Default:
(A) the Trustee need perform only those duties
that are specifically set forth in this
Indenture and no implied covenants or
obligations shall be read into this Indenture
against the Trustee; and
(B) 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; however, in the case of any
such certificate or opinion which by any
provision hereof are specifically required to
be furnished to the Trustee, the Trustee
shall examine the certificates and opinions
to determine whether or not they conform to
the requirements of this Indenture.
(3) The Trustee may not be relieved from liability for
its own negligent action, its own negligent failure to act or its
own willful misconduct, except that:
<PAGE>
(A) this paragraph (3) does not limit the effect
of paragraph (2) of this Section 7.01;
(B) the Trustee shall not be liable for any error
of judgment made in good faith by a Trust
Officer unless it is proved that the Trustee
was negligent in ascertaining the pertinent
facts; and
(C) the Trustee shall not be liable with respect
to any action it takes or omits to take in
good faith in accordance with a direction
received by it pursuant to Section 6.05
hereof.
(4) Whether or not expressly so provided, every
provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (1), (2), (3) and (5) of this
Section 7.01.
(5) The Trustee may refuse to perform any duty or
exercise any right or power or extend or risk its own funds or
otherwise incur any financial liability unless it receives
security or indemnity satisfactory to it against any loss,
liability or expense.
(6) Money held by the Trustee in trust hereunder need
not be segregated from other funds except to the extent required
by law. The Trustee shall be under no liability for interest on
any money held by it hereunder.
SECTION 7.02. Rights of Trustee.
-----------------
(1) The Trustee may rely on any document believed by
it to be genuine and to have been signed or presented by the
proper Person. The Trustee need not investigate any fact or
matter stated in the document.
(2) Before the Trustee acts or refrains from acting,
it may require an Officers' Certificate and an Opinion of
Counsel. The Trustee shall not be liable for any action it takes
or omits to take in good faith in reliance on such Officers'
Certificate and Opinion of Counsel.
(3) The Trustee may act through agents and shall not
be responsible for the misconduct or negligence of any agent
appointed with due care.
<PAGE>
(4) The Trustee shall not be liable for any action it
takes or omits to take in good faith which it believes to be
authorized or within its rights or powers.
(5) The Trustee may consult with counsel of its
selection and the advice of such counsel or any Opinion of
Counsel shall be full and complete authorization and protection
in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon.
(6) 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 and indemnity against
the costs, expenses and liabilities which might be incurred by it
in compliance with such request or direction.
SECTION 7.03. Individual Rights of Trustee. The
----------------------------
Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the
Company or its Affiliates with the same rights it would have if
it were not Trustee. Any Paying Agent, Registrar or co-registrar
may do the same with like rights. However, the Trustee must
comply with Sections 7.10 and 7.11 hereof.
SECTION 7.04. Trustee's Disclaimer. The Trustee makes
--------------------
no representation as to the validity or adequacy of this
Indenture or the Securities. The Trustee shall not be account-
able for the Company's use of the proceeds from the Securities
and it shall not be responsible for any statement in the
registration statement for the Securities under the Securities
Act of 1933, as amended (the "Securities Act"), (other than
statements contained in the Form T-1 filed with the SEC under the
TIA) or in this Indenture or in the Securities (other than its
certificate of authentication) or responsible for the
determination as to which beneficial owners are entitled to
receive any notices hereunder.
SECTION 7.05. Notice of Defaults. If a Default occurs
------------------
and is continuing and if it is known to the Trustee, the Trustee
shall mail to each Securityholder, as their names and addresses
appear on the Register, notice of the Default within ninety (90)
days after it becomes known to the Trustee unless such Default
shall have been cured or waived. Except in the case of a Default
described in Sections 6.01(1) and 6.01(2) hereof, the Trustee may
withhold such notice if and so long as a committee of Trust
<PAGE>
Officers in good faith determines that the withholding of such
notice is in the interests of Securityholders.
SECTION 7.06. Reports by Trustee to Holders. Within
-----------------------------
sixty (60) days after each May 15 beginning with the May 15
following the date of this Indenture, the Trustee shall mail to
each Securityholder a brief report dated as of such reporting
date that complies with Section 313(a) of the TIA. The Trustee
shall also transmit all reports as required by Section 313(b)(2) of
the TIA to such Holders. The Trustee shall transmit such reports
in such manner as required by Section 313(c) of the TIA.
A copy of each report at the time of its mailing to
Securityholders shall be filed with the Company, the SEC and each
stock exchange on which the Securities are listed. The Company
shall promptly notify the Trustee whenever the Securities become
listed on any stock exchange and of any delisting thereof.
SECTION 7.07. Compensation and Indemnity. The Company
--------------------------
agrees:
(1) To pay to the Trustee from time to time such
compensation as shall be agreed in writing between the Company
and the Trustee for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust);
(2) To reimburse the Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made
by the Trustee in accordance with any provision of this Indenture
(including the reasonable compensation and the expenses,
disbursements and advances of its agents and counsel), except any
such expense, disbursement or advance as may be attributable to
its negligence or bad faith; and
(3) To indemnify the Trustee for, and to hold it
harmless against, any and all loss, liability or expense,
incurred without negligence, willful misconduct or bad faith on
its part, arising out of or in connection with the acceptance or
administration of this trust, including the costs and expenses of
defending itself against any claim or liability in connection
with the exercise or performance of any of its powers or duties
hereunder.
The Trustee shall have a claim and lien prior to the
Securities as to all property and funds held by it hereunder for
any amount owing it or any predecessor Trustee pursuant to this
Section 7.07, except with respect to funds held in trust for the
<PAGE>
payment of principal of, premium, if any, or interest on
particular Securities.
The Company's payment obligations pursuant to this
Section 7.07 shall survive the discharge of this Indenture. When
the Trustee renders services or incurs expenses after the
occurrence of a Default specified in Section 6.01(4) or (5)
hereof, the compensation for services and expenses are intended
to constitute expenses of administration under any Bankruptcy
Law.
SECTION 7.08. Replacement of Trustee. The Trustee may
----------------------
resign by so notifying the Company in writing at least thirty
(30) days prior to the date of the proposed resignation;
provided, however, no such resignation shall be effective until a
successor Trustee has accepted its appointment pursuant to this
Section 7.08. The Holders of a majority in aggregate principal
amount of the Securities at the time outstanding may remove the
Trustee by so notifying the Trustee and the Company. The Company
may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10
hereof;
(2) the Trustee is adjudged bankrupt or insolvent or
an order for relief is entered with respect to the
Trustee under any Bankruptcy Law;
(3) a Custodian or public officer takes charge of the
Trustee or its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy
exists in the office of Trustee for any reason, the Company shall
promptly appoint, by resolution of its Board of Directors, a
successor Trustee.
A successor Trustee shall deliver a written acceptance
of its appointment to the retiring Trustee and to the Company.
Thereupon the resignation or removal of the retiring Trustee
shall become effective, and the successor Trustee shall have all
the rights, powers and duties of the Trustee under this
Indenture. The successor Trustee shall mail a notice of its
succession to Securityholders. Subject to payment of all amounts
owing to the Trustee under Section 7.07 hereof and subject
further to its lien under Section 7.07 hereof, the retiring
<PAGE>
Trustee shall promptly transfer all property held by it as
Trustee to the successor Trustee.
If a successor Trustee does not take office within
thirty (30) days after the retiring Trustee resigns or is
removed, the retiring Trustee, the Company or the Holders of a
majority in aggregate principal amount of the Securities at the
time outstanding may petition any court of competent jurisdiction
for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10
hereof, any Securityholder may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment
of a successor Trustee.
SECTION 7.09. Successor Trustee by Merger. If the
---------------------------
Trustee consolidates with, merges or converts into, or transfers
all or substantially all its corporate trust business or assets
to, another corporation, the resulting, surviving or transferee
corporation without any further act shall be the successor
Trustee; provided that such successor is eligible and qualified
under Section 7.10 hereof.
SECTION 7.10. Eligibility; Disqualification. The
-----------------------------
Trustee shall at all times satisfy the requirements of
Section 310(a)(1) of the TIA. The Trustee shall have a combined
capital and surplus of at least $50,000,000 as set forth in its
most recent published annual report of condition. The Trustee
shall comply with Section 310(b) of the TIA. In determining
whether the Trustee has conflicting interests as defined in
Section 310(b)(1) of the TIA, the provisions contained in the
proviso to Section 310(b)(1) of the TIA shall be deemed
incorporated herein.
SECTION 7.11. Preferential Collection of Claims
---------------------------------
Against the Company. The Trustee is subject to Section 311(a) of
-------------------
the TIA, excluding any creditor relationship listed in
Section 311(b) of the TIA. A Trustee who has resigned or been
removed shall be subject to Section 311(a) of the TIA to the
extent indicated therein.
ARTICLE 8
SATISFACTION AND DISCHARGE OF INDENTURE
---------------------------------------
SECTION 8.01. Termination of the Company's Obliga
-----------------------------------
tions. The Company may terminate all of its obligations under
-----
the Securities and this Indenture (except those obligations
<PAGE>
referred to in the immediately succeeding paragraph) if all
Securities previously authenticated and delivered (other than
destroyed, lost or stolen Securities which have been replaced or
paid or Securities for whose payment money has theretofore been
held in trust and thereafter repaid to the Company as provided in
Section 8.03 hereof) have been delivered to the Trustee for
cancellation and the Company has paid all sums payable by it
hereunder, or if the Company irrevocably deposits or causes to be
deposited in trust with the Trustee or the Paying Agent money or
U.S. Government Obligations maturing as to principal and interest
in such amounts and at such times as are sufficient, without
consideration of any reinvestment of such interest, to pay the
principal of and interest on the Securities then outstanding to
maturity and to pay all other sums payable by it hereunder. The
Company may make an irrevocable deposit pursuant to this Section
8.01 only if at such time it is not prohibited from doing so
under the provisions of Article 10 hereof and the Company shall
have delivered to the Trustee and any such Paying Agent an
Officers' Certificate to that effect.
The Company's obligations in paragraph 10 of the
Securities and in Sections 2.03, 2.04, 2.05, 2.06, 2.07, 4.01,
7.07, 7.08 and 8.04 hereof shall survive until the Securities are
no longer outstanding. Thereafter, the Company's obligations in
such paragraph 10 and in Section 7.07 shall survive.
After such irrevocable deposit, the Trustee upon
request shall acknowledge in writing the discharge of the
Company's obligations under the Securities and this Indenture,
except for those surviving obligations specified above.
"U.S. Government Obligations" means direct non-callable
obligations of, or non-callable obligations guaranteed by, the
United States of America for the payment of which guarantee or
obligation the full faith and credit of the United States is
pledged.
SECTION 8.02. Application of Trust Money. The Trustee
--------------------------
or Paying Agent shall hold in trust, for the benefit of the
Holders, money or U.S. Government Obligations deposited with it
pursuant to Section 8.01 hereof, and shall apply the deposited
money and the money from U.S. Government Obligations in
accordance with this Indenture to the payment of the principal of
and interest on the Securities. Money and U.S. Government
Obligations so held in trust shall not be subject to the
subordination provisions of Article 10 hereof.
<PAGE>
SECTION 8.03. Repayment to the Company. Subject to
------------------------
Section 8.01 hereof, the Trustee and the Paying Agent shall
promptly pay to the Company upon request any excess money or U.S.
Government Obligations held by them at any time.
The Trustee and the Paying Agent shall pay to the
Company upon request any money held by them for the payment of
principal or interest that remains unclaimed for two (2) years
after a right to such money has matured; provided, however, that
the Trustee or such Paying Agent, before being required to make
any such payment, may at the expense of the Company cause to be
published once in a newspaper of general circulation in the City
of New York or mail to each Holder entitled to such money notice
that such money remains unclaimed and that after a date specified
therein, which shall be at least thirty (30) days from the date
of such publication or mailing, any unclaimed balance of such
money then remaining will be repaid to the Company. After
payment to the Company, Securityholders entitled to money must
look to the Company for payment as general creditors unless
otherwise prohibited by law.
SECTION 8.04. Reinstatement. If the Trustee or Paying
-------------
Agent is unable to apply any money or U.S. Government Obligations
in accordance with Section 8.01 hereof by reason of any legal
proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise
prohibiting such application, the Company's obligations under
this Indenture and the Securities shall be revived and reinstated
as though no deposit had occurred pursuant to Section 8.01 hereof
until such time as the Trustee or Paying Agent is permitted to
apply all such money or U.S. Government Obligations in accordance
with Section 8.01 hereof; provided, however, that if the Company
has made any payment of the principal of or interest on any
Securities because of the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of such
Securities to receive any such payment from the money or U.S.
Government Obligations held by the Trustee or Paying Agent.
ARTICLE 9
AMENDMENTS
----------
SECTION 9.01. Without Consent of Holders. From time
--------------------------
to time, when authorized by a resolution of its Board of
Directors, the Company and the Trustee, without notice to or the
consent of the holders of the Securities issued hereunder, may
amend or supplement this Indenture or the Securities as follows:
<PAGE>
(1) to cure any ambiguity, defect or inconsistency;
(2) to comply with Section 5.01 hereof;
(3) to provide for uncertificated Securities in
addition to or in place of certificated Securities so long as
such uncertificated Securities are in registered form for
purposes of the Internal Revenue Code of 1986, as amended;
(4) to make any other change that does not adversely
affect the rights of any Securityholder;
(5) to comply with any requirement of the SEC in
connection with the qualification of this Indenture under the
TIA; or
(6) to comply with Section 4.14 hereof.
SECTION 9.02. With Consent of Holders. With the
-----------------------
written consent of the Holders of at least a majority in
aggregate principal amount of the Securities at the time
outstanding, the Company and the Trustee may amend this Indenture
or the Securities or may waive compliance in a particular
instance by the Company with any provisions of this Indenture or
the Securities. However, without the consent of each
Securityholder affected thereby, a waiver or an amendment to this
Indenture or the Securities may not:
(1) reduce the percentage of principal amount of the
Securities whose Holders must consent to an amendment or waiver
of any provision of this Indenture or the Securities; or
(2) make any change to the Stated Maturity of the
principal of, premium, if any, or any interest on the Securities
or any Redemption Price thereof, make any change to the time or
amount of any required sinking fund payment, or impair the right
to institute suit for the enforcement of any such payment or make
any Security payable in money or securities other than that
stated in the Security; or
(3) make any change in Article 10 hereof that
adversely affects the rights of any Securityholder or any change
to any other Section hereof that adversely affects the rights of
any Securityholder under Article 11 hereof; or
(4) waive a default in the payment of the principal
of, premium, if any, or interest on, any Security; or
(5) make any change in the provisions of Sections
4.11, 4.12, 6.04 or 6.07 hereof; or
<PAGE>
(6) make any change to Sections 9.01 or 9.02 hereof.
It shall not be necessary for the consent of the
Holders under this Section 9.02 to approve the particular form of
any proposed amendment, but it shall be sufficient if such
consent approves the substance thereof.
In the event that certain Holders are willing to defer
or waive certain obligations of the Company hereunder with
respect to Securities held by them, such deferral or waiver shall
not be deemed to affect any other Holder who receives the subject
payment or performance in a timely manner.
After an amendment or waiver under this Section 9.02
becomes effective, the Company shall mail to each Holder a notice
briefly describing the amendment or waiver. Any failure of the
Company to mail such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such
amendment or waiver.
SECTION 9.03. Compliance with Trust Indenture Act.
-----------------------------------
Every amendment to this Indenture or the Securities at a time
when this Indenture shall be qualified under the TIA shall be set
forth in a supplement that complies with the TIA as then in
effect.
SECTION 9.04. Revocation and Effect of Consents,
----------------------------------
Waivers and Actions. Until an amendment, waiver or other action
-------------------
by Holders becomes effective, a consent to it or any other action
by a Holder of a Security hereunder is a continuing consent by
the Holder and every subsequent Holder of that Security or
portion of the Security that evidences the same obligation as the
consenting Holder's Security, even if notation of the consent,
waiver or action is not made on the Security. However, any such
Holder or subsequent Holder may revoke the consent, waiver or
action as to such Holder's Security or portion of the Security if
the Trustee receives the notice of revocation before the consent
of the requisite aggregate principal amount of the Securities
then outstanding has been obtained and not revoked. After an
amendment, waiver or action becomes effective, it shall bind
every Securityholder, except as provided in Section 9.02 hereof.
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 amendment or waiver. If a record date is
fixed, then, notwithstanding the first two sentences of the
immediately preceding paragraph, those Persons who were Holders
at such record date (or their duly designated proxies), and only
<PAGE>
those Persons, shall be entitled to consent to such amendment,
supplement 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 ninety (90) days after such record date.
SECTION 9.05. Notation on or Exchange of Securities.
-------------------------------------
Securities authenticated and made available for delivery after
the execution of any supplemental indenture pursuant to this
Article 9 may, and shall, if required by the Trustee, bear a
notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company
shall so determine, new Securities so modified as to conform, in
the opinion of the Trustee and the Board of Directors, to any
such supplemental indenture may be prepared and executed by the
Company and authenticated and made available for delivery by the
Trustee in exchange for outstanding Securities.
SECTION 9.06. Trustee to Sign Supplemental Indentures.
---------------------------------------
The Trustee shall sign any supplemental indenture authorized
pursuant to this Article 9 if the supplemental indenture does not
adversely affect the rights, duties, liabilities or immunities of
the Trustee. If it does adversely affect the rights, duties, liabilities
or immunities of the Trustee, the Trustee may, but need not, sign it.
In signing such amendment the Trustee shall be entitled to
receive, and shall be fully protected in relying upon, an
Officers' Certificate and Opinion of Counsel stating that such
supplemental indenture is authorized or permitted by this
Indenture.
SECTION 9.07. Effect of Supplemental Indentures. Upon
---------------------------------
the execution of any supplemental indenture under this Article 9,
this Indenture shall be modified in accordance therewith, and
such supplemental indenture shall form a part of this Indenture
for all purposes, and every Holder of Securities theretofore or
thereafter authenticated and made available for delivery
hereunder shall be bound thereby.
ARTICLE 10
SUBORDINATION
-------------
SECTION 10.01. Agreement to Subordinate. The Company
------------------------
agrees, and each Securityholder by accepting a Security agrees,
that all Indebtedness and other monetary claims and obligations
evidenced by the Securities (including, without limitation,
principal, premium, if any, and interest) is subordinated in
right of payment, to the extent and in the manner provided in
this Article 10, to the prior payment in full of all Senior
<PAGE>
Indebtedness in cash or, at the sole option of the holders of Senior
Indebtedness, cash equivalents, and that the subordination is for the
benefit of the holders of the Senior Indebtedness.
SECTION 10.02. Liquidation; Dissolution; Bankruptcy.
------------------------------------
Upon any (i) bankruptcy, reorganization, insolvency, receivership or
similar proceeding relating to the Company or its property (whether
voluntary or involuntary), (ii) assignment for the benefit of creditors
or any marshalling of the assets and liabilities of the Company or (iii)
distribution to creditors of the Company in a liquidation or dissolution
of the Company:
(1) the holders of Senior Indebtedness shall first
be entitled to receive payment of all amounts owing in respect of
such Senior Indebtedness in full in cash or, at the sole option of
the holders of the Senior Indebtedness, cash equivalents (including,
without limitation, interest accruing before or after the
commencement of any such proceeding at the applicable rate specified
in such Senior Indebtedness, whether or not a claim therefor is
allowed in any such proceeding) to the date of payment on the Senior
Indebtedness before (a) Securityholders shall be entitled to receive
any payment of principal, premium or interest on the Securities or
any payment of any other monetary claims in respect of the
Securities, including, without limitation, such monetary claims as
may result from rights of repurchase or rescission, under or in
respect of the Securities, (b) any payment is made to acquire the
Securities for cash, property or other securities, or (c) any
distribution is made with respect to the Securities upon any
proceedings described in clause (i), clause (ii) or clause (iii)
hereof; and
(2) until the Senior Indebtedness (as provided in
subsection (1) above) is paid in full in cash or, at the sole option
of the holders of the Senior Indebtedness, cash equivalents, any
distribution to which Securityholders would be entitled but for this
Article 10 shall be paid by the Company or by any receiver, trustee
in bankruptcy, liquidating trustee, agent or other person making
such payment or distribution, or by the Trustee under this Indenture
if received by it, directly to holders of Senior
Indebtedness (pro rata to each such holder on the basis of the
respective amounts of Senior Indebtedness held by such holder), as
their interests may appear, or by the holders of Securities, if
received by any of them, to the Trustee for payment to the holders
of Senior Indebtedness as set forth above, except that
Securityholders may receive securities that are subordinated to
Senior Indebtedness and to any securities issued in exchange for
Senior Indebtedness to at least the same extent as the Securities to
Senior Indebtedness.
For purposes of this Article 10, a "distribution" shall
be defined as any payment or distribution of cash, securities
or other property, by set-off or otherwise.
The consolidation of the Company with, or the merger of
the Company into, another corporation or the liquidation or dissolution
of the Company following the conveyance or transfer of its properties and
assets substantially as an entirety to another Person upon the terms and
conditions set forth in Article 5 hereof shall not be deemed a
dissolution, winding up, liquidation or reorganization for the purposes
of this Section 10.02 if the corporation formed by such consolidation or
into which the Company is merged or the Person which acquires by
conveyance or transfer such properties and assets substantially as an
entirety, as the case may be, shall, as a part of such
<PAGE>
consolidation, merger, conveyance or transfer comply with (a) the
conditions set forth in Article 5 hereof and (b) any and all provisions
with respect to any such merger or other transaction set forth in any
instrument governing or relating to any Senior Indebtedness as in effect
on the date of the initial issuance of the Securities.
SECTION 10.03. Default on Senior Indebtedness. Upon
------------------------------
the final maturity of any Senior Indebtedness by lapse of time,
acceleration or otherwise, all such Senior Indebtedness shall first be
paid in full in cash, or such payment duly provided for in a manner
satisfactory to the holders of such Senior Indebtedness, in their sole and
absolute discretion, before any payment is made by the Company or any
Person acting on behalf of the Company, directly or indirectly, on
account of the principal, premium or interest of the Securities, any
payment is made to any Securityholder in respect of any redemption or
purchase of any Securities or any other distribution is paid or made in
respect of the Securities.
Until all Senior Indebtedness has been paid in full, in cash
or, at the sole option of the holders of Senior Indebtedness, cash
equivalents, the Company may not, directly or indirectly, make any
payment of principal, premium, if any, or interest on the Securities and
may not acquire any Securities for cash or property or make any other
distribution with respect to the Securities if:
(i) a default in the payment of the principal of, or interest
on, or the payment of other amounts due (including, without
limitation, any premium) under or in connection with any Senior
Indebtedness occurs and is continuing (a "Payment Default") unless
and until such default has been cured or waived by the holder of
such Senior Indebtedness; or
(ii) a default, other than a Payment Default, on any Senior
Indebtedness occurs and is continuing that then permits the holders
(or the agent) of such Senior Indebtedness to accelerate its
maturity (a "Non-Payment Default") and either (a) such default is
either (x) the subject of judicial proceedings or (y) the Trustee
and such Paying Agent receive a notice of the default from the
holder or holders of at least 25% in aggregate principal amount of
any Specified Senior Indebtedness, the trustee or a Person who may
give such notice with respect to such Specified Senior Indebtedness
pursuant to Section 10.11 hereof at least two (2) Business Days
prior to the relevant payment date; provided, however, that only one
such notice may be given during any 360-consecutive-day period or
(b) such Non-Payment Default results from the acceleration of the
Securities, (in which case, the foregoing restriction shall
commence upon the date of such acceleration). Notwithstanding the
foregoing, the holders of more than one class of Senior Indebtedness
who collectively meet the $20,000,000 threshold for Specified Senior
<PAGE>
Indebtedness may act in concert to cause a Payment Blockage
Period, as hereafter defined.
The Company shall resume payments on the Securities and may
acquire them upon the earlier of when (a) the default is cured or waived
by the requisite percentage of the holders of Senior Indebtedness
specified in the agreement or agreements relating to such Senior
Indebtedness or (b) in the case of a default referred to in Section
10.03(ii) above, on the earlier of the 179th day after (x) the receipt of
notice by the Trustee or the Paying Agent or (y) if such Non-Payment
Default results from the acceleration of the Securities, the date of such
acceleration (with respect to a Non-Payment Default, such period of time
shall be hereinafter referred to as a "Payment Blockage Period") unless
(x) enforcement proceedings shall have been commenced and be continuing in
respect of such Non-Payment Default (in which event the Payment Blockage
Period shall end at the later to occur of (1) the 179th day after receipt
of notice of commencement of such Payment Blockage Period or (2) the date
the enforcement proceedings terminate) or (y) such Payment Blockage
Period shall have been earlier terminated.
In addition, no default which existed or was continuing
on the date of the commencement of any Payment Blockage Period
with respect to the Specified Senior Indebtedness and which was
known to the holder or holders (or agent) of such Specified Senior
Indebtedness on such date of commencement shall be made the basis
for the commencement of a second Payment Blockage Period by the
holders (or the agent) of such Specified Senior Indebtedness
whether or not within a period of 360 consecutive days unless and
until all scheduled payments of interest, principal and/or
premium then due and payable have been made on the Securities.
SECTION 10.04. No Suspension of Remedies. Nothing
-------------------------
contained in this Article 10 shall limit the right of the Trustee
or the Securityholders to take any action to accelerate the
maturity of the Securities pursuant to Section 6.02 hereof or to
pursue any other rights or remedies hereunder or under applicable
law; provided, however, that all Senior Indebtedness of the
Company then due and payable, or which thereafter is declared to
be, or shall otherwise become, due and payable, pursuant to its
terms (whether by acceleration or otherwise) shall first be paid
in full in cash or, at the sole option of the holders of Senior
Indebtedness, cash equivalents before the Securityholders or the
Trustee are entitled to receive any payment from the Company of
principal, premium and/or interest on the Securities or in respect
of any other monetary claim relating to the Securities (including,
without limitation, any payments in respect of the redemption or
purchase of the Securities). Notwithstanding the foregoing, any
acceleration of the maturity of the Securities due to the default
by the Company to make a payment required by Section 6.01(l) hereof
resulting from the operation of Section 6.02 hereof shall be automatically
rescinded to the extent permitted by applicable law and all Events of
Default which permitted the acceleration of the Securities shall be
deemed to be automatically and permanently cured to the extent permitted
by applicable law if (i) all defaults on Senior Indebtedness are
permanently cured or waived and (ii) the payment or payments, the
omission of which
<PAGE>
gave rise to the Event of Default, is or are made within 179 days
after the date on which the Trustee or the Paying Agent received
notice of the default or defaults on the Senior Indebtedness; and
provided, further, that at the time of such automatic rescission
no other Event of Default or Defaults shall have occurred and be
continuing. Such automatic rescission shall be effective as of
the date both conditions specified in clauses (i) and (ii) above
are satisfied.
SECTION 10.05. When Distribution Must Be Paid Over. In
-----------------------------------
the event that any payment or distribution of assets of the Company
of any kind or character (in each case, whether in cash, property or other
securities) is made to the Trustee on account of the principal or interest
on the Securities at a time when such payment is prohibited by Section
10.02 or 10.03 hereof, such payment shall be held by the Trustee, in trust
for the benefit of, and shall be paid forthwith over and delivered to, the
holders of Senior Indebtedness (pro rata as to each of such holders on the
basis of the respective amounts of Senior Indebtedness held by them) or
their duly authorized representative, as their respective interests may
appear, for application to the payment of all Senior Indebtedness in full
in accordance with their terms in cash, or at their sole option, cash
equivalents, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Indebtedness.
In the event that any payment or distribution of assets of the
Company of any kind or character (in each case, whether in cash, property
or other securities) is made to Securityholders that because of this
Article 10 should not have been made to them, the Securityholders who
receive the distribution shall hold it in trust for the benefit of the
holders of Senior Indebtedness, and shall forthwith pay over and deliver
such distribution to the Trustee, which shall, as provided in the
immediately proceeding paragraph, hold it in trust for the benefit of and
shall forthwith pay over and deliver such distribution to, the holders of
the Senior Indebtedness (pro rata as to each of such holders on the basis
of the respective amounts of Senior Indebtedness held by them) or their
duly authorized representative, as their respective interests may appear,
for application to the payment of all Senior Indebtedness remaining
unpaid to the extent necessary to pay all Senior Indebtedness in full in
cash, or, at the sole option of the holders of Senior Indebtedness, cash
equivalents, in accordance with their terms, after giving effect to any
concurrent payment or distribution to or for the holders of Senior
Indebtedness.
SECTION 10.06. Notice by the Company. The Company
---------------------
shall promptly notify the Trustee and the Paying Agent of any facts known
to the Company that would cause any payment or distribution of property
or assets in respect of the Securities to violate this Article 10, but
failure to give such notice shall not affect the subordination of the
Securities to the Senior Indebtedness provided in this Article 10. Nothing
in this Article 10 shall apply to claims of, or payments to, the Trustee
under or pursuant to Section 7.07 hereof.
SECTION 10.07. Subrogation. After all Senior
-----------
Indebtedness is paid in full in cash or, at the sole option of the
<PAGE>
holders of Senior Indebtedness, cash equivalents and until the
Securities are paid in full, Securityholders shall be subrogated
to the rights of holders of Senior Indebtedness to receive
distributions applicable to Senior Indebtedness to the extent
that distributions otherwise payable to Securityholders have been
applied to the payment of Senior Indebtedness.
If any payment or distribution to which the Holders
would otherwise have been entitled but for the provisions of this
Article 10 shall have been applied pursuant to the provisions of
this Article 10 to the payment of all amounts payable in respect
of the Senior Indebtedness of the Company, then and in such case,
the Securityholders shall be entitled to receive from the holders
of such Senior Indebtedness at the time outstanding any payments
or distributions received by such holders of Senior Indebtedness
in excess of the amount sufficient to pay all amounts payable in
respect of the Senior Indebtedness of the Company in full in cash
or, at the sole option of the holders of Senior Indebtedness, cash
equivalents.
SECTION 10.08. Relative Rights. This Article 10
---------------
defines the relative rights of Securityholders and holders of
Senior Indebtedness. Nothing in this Indenture shall:
(1) impair, as between the Company and Security-
holders, the obligation of the Company, which is absolute
and unconditional, to pay principal of and interest on the
Securities in accordance with their terms;
(2) affect the relative rights of Securityholders and
creditors of the Company other than holders of Senior
Indebtedness; or
(3) prevent the Trustee or any Securityholder from
exercising its available remedies upon a Default or Event of
Default, subject in all respects to the rights of holders of Senior
Indebtedness under this Article 10.
If the Company fails because of this Article 10 to pay
principal of or interest on a Security on the due date, the
failure is still a Default or Event of Default.
The provisions of this Article 10 shall continue to be
effective or be reinstated, as the case may be, if at any time
any payment of any Senior Indebtedness is rescinded or must
otherwise be returned by any holder of Senior Indebtedness upon
the insolvency, bankruptcy or reorganization of the Company or
otherwise, all as though such payment had not been made.
<PAGE>
SECTION 10.09. No Waiver of Subordination Provisions.
-------------------------------------
No right of any holder of Senior Indebtedness to enforce the
subordination of the Indebtedness evidenced by the Securities
shall be prejudiced or impaired by any act or failure to act
by such holder or by any failure by the Company to comply with
this Indenture regardless of any knowledge thereof any such
holder of Senior Indebtedness may have or may otherwise be
charged with.
The holders of Senior Indebtedness may, at any time and
from time to time, without the consent of or notice to the
Trustee or the Holders of the Securities and without incurring
responsibility to the Holders of the Securities and without
impairing or releasing the subordination provided in this Article
10 or the obligations hereunder of the Securityholders to the
holders of Senior Indebtedness, do any one or more of the
following: (1) change the manner, place or terms of payment or
extend the time of payment of, or renew or alter, Senior
Indebtedness or any instrument evidencing the same or any
agreement under which Senior Indebtedness is outstanding;
(2) accept, sell, exchange, release or otherwise deal with any
property pledged, mortgaged or otherwise securing Senior Indebtedness;
(3) release any Person liable in any manner for the collection or
payment of Senior Indebtedness; (4) exercise or refrain from exercising
any rights against the Company or any other Person or (5) apply any
moneys or other property paid by any Person or released in any manner
to the Senior Indebtedness.
SECTION 10.10. Distribution or Notice to Repre
-------------------------------
sentative. Whenever a distribution is to be made or a notice
---------
given to holders of Senior Indebtedness, the distribution may be
made and the notice given to their duly authorized representative.
Upon any payment or distribution of assets of the
Company referred to in this Article 10, the Trustee and the
Securityholders shall be entitled to rely upon any order or
decree made by any court of competent jurisdiction or upon any
certificate of such representative or of the liquidating trustee
or agent or other Person making any distribution to the Trustee
or to the Securityholders for the purpose of ascertaining the
Persons entitled to participate in such distribution, the holders
of the Senior Indebtedness and other Indebtedness of the Company,
the amount thereof or payable thereon, the amount or amounts paid
or distributed thereon and all other facts pertinent thereto or
to this Article 10. In the event that the Trustee determines, in
good faith, that further evidence is required with respect to the
right of any Person, as a holder of Senior Indebtedness, to
participate in any payment or distribution pursuant to this
Section 10.10, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the
amount of such Senior Indebtedness held by such Person, as to the
extent to which such Person is entitled to participate in such
payment or distribution, and as to other facts pertinent to the
<PAGE>
rights of such Person under this Section 10.10, and if such
evidence is not furnished, the Trustee may defer any payment to
such Person pending judicial determination as to the right of
such Person to receive such payment.
SECTION 10.11. Rights of Trustee and Paying Agent. The
----------------------------------
Trustee or Paying Agent shall not at any time be charged with
the knowledge of the existence of any facts which would prohibit
the making of any payment to or by the Trustee unless and until
an officer in the Corporate Trust Department of the Trustee and
each Paying Agent shall have received written notice thereof from
the Company or a holder of (or an agent or trustee of) Senior
Indebtedness (which such holder, agent or trustee shall have delivered
reasonably satisfactory evidence of the capacity of such holder, agent or
trustee); and, prior to the receipt of any such written notice, the
Trustee and each Paying Agent shall be entitled to assume conclusively
that no such facts exist. Unless at least two (2) Business Days prior to
the date on which by the terms of this Indenture any monies are to be
deposited by the Company with the Trustee or any Paying Agent (whether or
not in trust) for any purpose (including, without limitation, the payment
of either the principal of or the interest on any Security), the Trustee
and each Paying Agent shall have received with respect to such monies the
notice provided for in the preceding sentence, the Trustee and each
Paying Agent shall have full power and authority to receive such monies
and to apply the same to the purpose for which they were received, and
shall not be affected by any notice to the contrary which may be received
by it on or after such date. The foregoing shall not apply to the Paying
Agent if the Company is acting as Paying Agent.
The Trustee in its individual or any other capacity may
hold Senior Indebtedness with the same rights it would have if it
were not Trustee.
SECTION 10.12. Authorization to Effect Subordination;
--------------------------------------
Limited Fiduciary Duty to Holders of Senior Indebtedness. Each Holder
--------------------------------------------------------
of a Security by his acceptance thereof authorizes and directs
the Trustee on his behalf to take such action as may be necessary
or appropriate to effectuate the subordination as provided in
this Article 10, and appoints the Trustee as attorney-in-fact for
any and all purposes including, in the event of any dissolution, winding
up, liquidation or reorganization of the Company (whether in bankruptcy,
insolvency, or receivership or similar proceedings or upon an assignment
for the benefit of creditors or otherwise) tending towards liquidation of
the business and assets of the Company, to file a claim for the unpaid
balance of its Securities in the form required in said proceedings and to
cause said claim to be approved. If the Trustee or holders of a majority
in interest of the then outstanding Securities do not file a proper claim
or proof of debt in the form required in such proceeding prior to 30 days
before the expiration of the time to file such claim or proof, then, to
the extent permitted by applicable law, the holders of the Senior
Indebtedness shall have the right to file and are hereby authorized to
file an appropriate claim for and on behalf of the holders of said
Securities, but such right shall not prevent the Trustee or the holders
of a majority in interest of the then outstanding Securities from filing
a proof of claim subsequent to the commencement of such 30-day period.
Notwithstanding anything to the contrary in this Article 10, the Trustee
shall not be deemed to owe any fiduciary duty to the holders of Senior
Indebtedness and shall have no duties to such holders, except for the
Trustee's duty to hold cash, properties or securities in trust for the
benefit of the holders of the Senior Indebtedness and as otherwise
expressly set forth in this Article 10, and no implied covenants or
obligation shall be read into this Indenture against the Trustee.
<PAGE>
SECTION 10.13. Miscellaneous.
-------------
(a) All rights and interests under this Article 10 of
the holders of Senior Indebtedness, and all agreements and
obligations of the Securityholders, the Trustee and the Company
under this Article 10, shall remain in full force and effect
irrespective of:
(i) any lack of validity or enforceability of the
Credit Agreement or the purchase agreement made with respect
to the Senior Securities, the notes or security instruments
issued pursuant thereto or any other agreement or instrument
relating thereto;
(ii) any exchange, release or non-perfection of any
Lien securing Senior Indebtedness or any release or
amendment or waiver of or consent to departure from any
guaranty, for all or any of the Senior Indebtedness; or
(iii) any other circumstance that might otherwise
constitute a defense available to, or a discharge of, the
Company in respect of Senior Indebtedness.
(b) The provisions of this Article 10 constitute a
continuing agreement and shall (i) remain in full force and
effect until the Senior Indebtedness shall have been paid in
full, and (ii) be binding upon the Securityholders and the Trustee,
the Company and their successors and assigns.
(c) Each holder of a Security by its acceptance thereof
acknowledges and agrees that the foregoing subordination provisions
are, and are intended to be, an inducement and a consideration to each
holder of any Senior Indebtedness (by its original terms or amendment
thereof), whether such Senior Indebtedness was created or acquired before
or after the issuance of the Securities, to acquire and continue to hold,
or to continue to hold, such Senior Indebtedness, and such holder of
Senior Indebtedness shall be deemed conclusively to have relied on such
subordination provisions in acquiring and continuing to hold, or in
continuing to hold, such Senior Indebtedness. The subordination provisions
in this Article 10 may be enforced directly, from time to time, by any
holder of Specified Senior Indebtedness or any holder of Senior Securities.
ARTICLE 11
MISCELLANEOUS
-------------
SECTION 11.01. Trust Indenture Act Controls. If any
----------------------------
provision of this Indenture limits, qualifies or conflicts with
the duties imposed by operation of subsection (c) of Section 318
of the TIA, the imposed duties shall control. The provisions of
Sections 310 to 317, inclusive, of the TIA that impose duties on
any Person (including provisions automatically deemed included in
an indenture unless the indenture provides that such provisions
are excluded) are a part of and govern this Indenture, except as,
<PAGE>
and to the extent, expressly excluded from this Indenture, as
permitted by the TIA.
SECTION 11.02. Notices. Any notice or communication
-------
shall be in writing and delivered in Person or mailed by
first-class mail, postage prepaid, or overnight air courier
guaranteeing next day delivery, addressed as follows:
if to the Company:
Waban Inc.
One Mercer Road
Natick, MA 01760
Attention: General Counsel
if to the Trustee:
The First National Bank of Boston
150 Royall Street
Mail Stop 45-02-15
Canton, MA 02021
Attention: Corporate Trust Department
The address of the Trustee for purposes of Section 4.05 hereof
for presentation of Securities for payment or for registration of
transfer, exchange or for redemption is:
The First National Bank of Boston
c/o BancBoston Trust Company of New York
55 Broadway - 3rd Floor
New York, NY 10006
The Company or the Trustee, by notice to the other, may
designate additional or different addresses for subsequent
notices or communications or presentation of Securities.
Any notice or communication given to a Securityholder
shall be mailed to the Securityholder at the Securityholder's
address as it appears on the registration books of the Registrar
and shall be sufficiently given if so mailed within the time
prescribed.
Failure to mail a notice or communication to a
Securityholder or any defect in it shall not affect its
sufficiency with respect to other Securityholders. If a notice
or communication is mailed in the manner provided above, it is
duly given, whether or not received by the addressee, except that
<PAGE>
no notice or communication to the Trustee shall be deemed given
unless actually received by the Trustee.
If the Company mails a notice or communication to the
Securityholders, it shall mail a copy to the Trustee and each
Registrar, Paying Agent or co-registrar.
SECTION 11.03. Communication by Holders with Other
-----------------------------------
Holders. Securityholders may communicate pursuant to Sec
-------
tion 312(b) of the TIA with other Securityholders with respect to
their rights under this Indenture or the Securities. The
Company, the Trustee, the Registrar, the Paying Agent and anyone
else shall have the protection of Section 312(c) of the TIA.
SECTION 11.04. Certificate and Opinion as to Conditions
----------------------------------------
Precedent. Upon any request or application by the Company to the
---------
Trustee to take any action under this Indenture, the Company
shall furnish to the Trustee:
(1) an Officers' Certificate stating that, in the
opinion of the signers, all conditions precedent, if any,
provided for in this Indenture relating to the proposed action
have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion
of such counsel, all such conditions precedent have been complied
with.
SECTION 11.05. Statements Required in Certificate or
-------------------------------------
Opinion. Each Officers' Certificate and Opinion of Counsel with
-------
respect to compliance with a covenant or condition provided for
in this Indenture shall include:
(1) a statement that each Person making such Officers'
Certificate or Opinion of Counsel has read such covenant or
condition;
(2) a brief statement as to the nature and scope of
the examination or investigation upon which the statements or
opinions contained in such Officers' Certificate or Opinion of
Counsel are based;
(3) a statement that, in the opinion of each such
Person, he has made such examination or investigation as is
necessary to enable such Person to express an informed opinion as
to whether or not such covenant or condition has been complied
with; and
<PAGE>
(4) a statement that, in the opinion of such Person,
such covenant or condition has been complied with; provided,
however, that with respect to matters of fact, an Opinion of
Counsel may rely on an Officers' Certificate or certificates of
public officials.
SECTION 11.06. Separability Clause. In case any
-------------------
provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way
be affected or impaired thereby.
SECTION 11.07. Rules by Trustee, Paying Agent and
----------------------------------
Registrar. The Trustee may make reasonable rules for action by
---------
or a meeting of Securityholders. The Registrar and Paying Agent
may make reasonable rules for their functions.
SECTION 11.08. Legal Holidays. A "Legal Holiday" is
--------------
any day other than a Business Day. If any specified date
(including a date for giving notice) is a Legal Holiday, the
action shall be taken on the next succeeding day that is not a
Legal Holiday, and, if the action to be taken on such date is a
payment in respect of the Securities, no principal, premium, if
any, or interest installment shall accrue for the intervening
period.
SECTION 11.09. GOVERNING LAW. THIS INDENTURE AND THE
-------------
SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE
AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAWS.
SECTION 11.10. No Recourse Against Others. A director,
--------------------------
officer, employee or stockholder, as such, of the Company shall
not have any liability for any obligations of the Company under
the Securities or this Indenture or for any claim based on, in
respect of or by reason of such obligations or their creation.
By accepting a Security, each Securityholder shall waive and
release all such liability. The waiver and release shall be part
of the consideration for the issue of the Securities.
SECTION 11.11. Successors. All agreements of the
----------
Company in this Indenture and the Securities shall bind its
successors. All agreements of the Trustee in this Indenture
shall bind its successor.
SECTION 11.12. Multiple Originals. The parties may
------------------
sign any number of copies of this Indenture. Each signed copy
<PAGE>
shall be an original, but all of them together represent the same
agreement. One signed copy is enough to prove this Indenture.
<PAGE>
SIGNATURES
IN WITNESS WHEREOF, the undersigned, being duly
authorized, have executed this Indenture on behalf of the
respective parties hereto as of the date first above written.
WABAN INC.
By:
-------------------------------------
Name:
Title:
THE FIRST NATIONAL BANK OF BOSTON
By:
-------------------------------------
Name:
Title:
<PAGE>
EXHIBIT A
[FORM OF FACE OF SECURITY]
WABAN INC.
_____% Senior Subordinated Note due _________, 2004
CUSIP
No. 929394 AB0 $________
Waban Inc., a Delaware corporation (the "Company,"
which term includes any successor corporation under the Indenture
hereinafter referred to), promises to pay to ________ or
registered assigns, the principal amount of ________ Dollars on
___________, 2004.
Interest Payment Dates: __________ and _________,
commencing ___________, 1994.
Record Dates: ______________ and __________.
Reference is hereby made to the further provisions of
this Security set forth on the reverse hereof which further
provisions shall for all purposes have the same effect as if set
forth at this place.
IN WITNESS WHEREOF, the Company has caused this
Security to be signed manually or by facsimile by its duly
authorized officers and a facsimile of its corporate seal to be
affixed hereto or imprinted hereon and attested by its Secretary
or one of its Assistant Secretaries.
WABAN INC.
By:____________________________
By:____________________________
[SEAL]
Dated:___________________
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities referred
to in the within-mentioned Indenture.
THE FIRST NATIONAL BANK OF BOSTON
By: ______________________
Authorized Officer
<PAGE>
[FORM OF REVERSE SIDE OF SECURITY]
______% Senior Subordinated Note due _________, 2004
1. Interest
--------
Waban Inc., a Delaware corporation (the "Company"),
promises to pay interest on the principal amount of this Security
at the rate per annum shown above. Interest will be payable
semi-annually on each interest payment date referred to on the
face hereof, commencing ____________, 1994. Interest on the
Securities will accrue from the most recent date to which
interest has been paid, or if no interest has been paid, from
___________, 1994; provided that, if there is no existing Event
of Default in the payment of interest and if this Security is
authenticated between a record date referred to on the face
hereof and the next succeeding interest payment date, interest
shall accrue from such interest payment date. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.
The Company shall pay interest on overdue principal and
interest on overdue installments of interest, to the extent
lawful, at the rate per annum borne by the Securities.
2. Method of Payment
-----------------
The Company will pay interest on the Securities (except
defaulted interest) to the Persons who are registered Holders at
the close of business on the record dates referred to on the face
hereof immediately preceding the respective interest payment
dates even if the Security is cancelled on registration of
transfer or registration of exchange (other than with respect to
the purchase of Securities pursuant to an offer to purchase
securities made in connection with Section 4.11 or 4.12 of the
Indenture after such record date). Holders must surrender
Securities to a Paying Agent to collect principal payments. The
Company will pay principal, premium, if any, and interest in
money of the United States that at the time of payment is legal
tender for payment of public and private debts. However, the
Company may pay principal and interest by its check payable in
such money. It may mail an interest payment to a
Securityholder's registered address.
<PAGE>
3. Paying Agent and Registrar
--------------------------
Initially, the Trustee will act as Paying Agent and
Registrar. The Company may appoint and change any Paying Agent
or Registrar without notice, other than notice to the Trustee.
The Company or any Subsidiary or an Affiliate of either of them
may act as Paying Agent, Registrar or co-registrar.
4. Indenture
---------
The Company issued the Securities under an Indenture,
dated as of ____________, 1994 (the "Indenture"), between the
Company and the Trustee. The terms of the Securities include
those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939, as
amended and as in effect on the date of the Indenture (the
"TIA"), and as provided in the Indenture. Capitalized terms used
herein and not defined herein have the meanings ascribed thereto
in the Indenture. The Securities are subject to all such terms,
and Securityholders are referred to the Indenture and the TIA for
a statement of those terms.
The Securities are general obligations of the Company
limited to $100,000,000 aggregate principal amount.
5. Optional Redemption
-------------------
The Securities are not redeemable at the option of the
Company prior to __________, 1999. Thereafter, the Securities
will be subject to redemption at the option of the Company, in
whole or in part, at the redemption prices (expressed as a
percentage of the principal amount) set forth below plus accrued
and unpaid interest thereon to the applicable redemption date, if
redeemed during the twelve (12) month period beginning
________________ of the years indicated below:
Redemption
Year Prices
---- ----------
1999 ____%
2000 ____%
2001 ____%
2002 and thereafter 100.00%
<PAGE>
6. Notice of Redemption
--------------------
Notice of redemption will be mailed at least fifteen
(15) days but not more than sixty (60) days before the Redemption
Date to each Holder of Securities to be redeemed at the Holder's
registered address. Securities in denominations larger than
$1,000 of principal amount may be redeemed in part but only in
integral multiples of $1,000 of principal amount.
7. Requirement that the Company Offer to Purchase Securities
----------
under Certain Circumstances
------------------------------------
Subject to the terms and conditions of the Indenture,
the Company shall become immediately obligated to offer to
purchase the Securities pursuant to Section 4.11 of the Indenture
after the occurrence of a Change of Control of the Company at a
price equal to 101% of aggregate principal amount plus accrued
and unpaid interest, if any, to the date of purchase. In
addition, subject to the terms and conditions of the Indenture,
to the extent that the aggregate amount of Excess Proceeds from
an Asset Sale exceeds 10% of the aggregate book value of the
tangible assets of the Company and its Subsidiaries and the amount of
Excess Proceeds for the fiscal year in which such payment would otherwise
be due exceeds $5 million, the Company will be obligated to offer to
purchase Securities at 100% of principal amount plus accrued and unpaid
interest, if any, in accordance with Section 4.12 of the Indenture.
8. Subordination
-------------
The Securities are subordinated to Senior Indebtedness. To
the extent provided in the Indenture, Senior Indebtedness must be
paid before the Securities may be paid. The Company agrees, and
each Securityholder by accepting a Security agrees, to such
subordination and authorizes the Trustee to give it effect.
9. Denominations; Transfer; Exchange
---------------------------------
The Securities are in registered form, without coupons,
in denominations of $1,000 of principal amount and integral
multiples of $1,000. A Holder may transfer or exchange
Securities in accordance with the Indenture. The Registrar may
require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay any taxes and fees
required by law or permitted by the Indenture. The Registrar
need not transfer or exchange any Securities selected for
redemption (except, in the case of a Security to be redeemed in
part, the portion of the Security not to be redeemed) or any
Securities for a period of fifteen (15) days before a selection
of Securities to be redeemed.
<PAGE>
10. Persons Deemed Owners
---------------------
The registered Holder of this Security may be treated
as the owner of this Security for all purposes.
11. Amendment; Waiver
-----------------
Subject to certain exceptions set forth in the
Indenture, (i) the Indenture or the Securities may be amended
with the written consent of the Holders of at least a majority in
aggregate principal amount of the Securities at the time
outstanding and (ii) certain defaults or noncompliance with
certain provisions may be waived with the written consent of the
Holders of a majority in aggregate principal amount of the
Securities at the time outstanding. Subject to certain
exceptions set forth in the Indenture, without the consent of any
Securityholder, the Company and the Trustee may amend the
Indenture or the Securities to cure any ambiguity, defect or
inconsistency, or to comply with Section 5.01 of the Indenture, or
to provide for uncertificated Securities in addition to
certificated Securities, or to comply with any requirements of
the Securities and Exchange Commission in connection with the
qualification of the Indenture under the TIA, or to make any
change that does not adversely affect the rights of any
Securityholder.
12. Defaults and Remedies
---------------------
Under the Indenture, Events of Default include:
(i) default in payment of the principal amount, premium if any,
or interest, in respect of the Securities when the same becomes
due and payable, subject, in the case of interest, to the grace
period contained in the Indenture; (ii) failure by the Company to
comply with other agreements in the Indenture or the Securities,
subject to notice and lapse of time; (iii) certain events of
acceleration prior to maturity of certain indebtedness;
(iv) certain defaults under any mortgage, indenture or other
instrument evidencing Indebtedness for borrowed money by the
Company or any of its Subsidiaries; (v) certain final judgments
which remain undischarged; or (vi) certain events of bankruptcy
or insolvency. If an Event of Default occurs and is continuing,
the Trustee, or the Holders of at least 25% in aggregate
principal amount of the Securities at the time outstanding, may
declare all the Securities to be due and payable immediately.
Certain events of bankruptcy or insolvency are Events of Default
which will result in the Securities becoming due and payable
immediately upon the occurrence of such Events of Default.
Securityholders may not enforce the Indenture or the
Securities except as provided in the Indenture. The Trustee may
<PAGE>
refuse to enforce the Indenture or the Securities unless it
receives reasonable indemnity or security. Subject to certain
limitations, Holders of a majority in aggregate principal amount
of the Securities at the time outstanding may direct the Trustee
in its exercise of any trust or power. The Trustee may withhold
from Securityholders notice of any continuing Default (except a
Default in payment of amounts specified in clause (i) above) if
it determines that withholding notice is in their interests.
13. Trustee Dealings with the Company
---------------------------------
Subject to certain limitations imposed by the TIA, the
Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of Securities and may
otherwise deal with and collect obligations owed to it by the
Company or its Affiliates and may otherwise deal with the Company
or its Affiliates with the same rights it would have if it were
not Trustee.
14. No Recourse Against Others
--------------------------
A director, officer, employee or stockholder, as such,
of the Company shall not have any liability for any obligations
of the Company under the Securities or the Indenture or for any
claim based on, in respect of or by reason of such obligations or
their creation. By accepting a Security, each Securityholder
waives and releases all such liability. The waiver and release
are part of the consideration for the issue of the Securities.
15. Authentication
--------------
This Security shall not be valid until an authorized
officer of the Trustee manually signs the Trustee's Certificate
of Authentication on the other side of this Security.
16. Abbreviations
-------------
Customary abbreviations may be used in the name of a
Securityholder or an assignee, such as TEN COM (=tenants in
common), TEN ENT (=tenants by the entireties), JT TEN (=joint
tenants with right of survivorship and not as tenants in common),
CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors Act).
17. Unclaimed Money
---------------
If money for the payment of principal or interest
remains unclaimed for two (2) years, the Trustee or Paying Agent
will pay the money back to the Company at its request. After
that, Holders entitled to money must look to the Company for
payment.
<PAGE>
18. Discharge Prior to Maturity
---------------------------
If the Company deposits with the Trustee or Paying
Agent money or U.S. Government Obligations sufficient to pay the
principal of and interest on the Securities to maturity, the
Company will be discharged from the Indenture except for certain
Sections thereof.
19. Governing Law
-------------
THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE
OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
<PAGE>
ASSIGNMENT FORM
To assign this Security, fill in the form below: (I)
or (we) assign and transfer this Security to:
------------------------------------------------------------
(insert assignee's social security or tax I.D. number)
------------------------------------------------------------
------------------------------------------------------------
------------------------------------------------------------
------------------------------------------------------------
(print or type assignee's name, address and zip code)
and irrevocably appoint
---------------------------------------
agent to transfer this Security on the books of the
-----------
Company. The agent may substitute another to act for him.
Dated: Signature:
------------------ -------------------
(Sign exactly as your name
appears on the other side of
this Security)
Signature
Guarantee:
-------------------------------------------------
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to elect to have all or any portion of this
Security purchased by the Company pursuant to Section 4.11
("Change of Control Offer") or Section 4.12 ("Excess Proceeds
Offer") of the Indenture, check the applicable boxes:
<PAGE>
[_] Change of Control Offer: [_] Excess Proceeds Offer:
in whole [_] in whole [_]
in part [_] in part [_]
Amount to be Amount to be
purchased: $ purchased: $
------- --------
Dated: Signature:
--------------- -------------------
(Sign exactly as your name
appears on the other side of
this Security)
Signature
Guarantee:
-------------------------------------------------
Social Security Number or
Taxpayer Identification Number:
----------------------------
<PAGE>
EXHIBIT B
FORM OF SUPPLEMENTAL INDENTURE
TO BE DELIVERED BY SUBSIDIARY GUARANTORS
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"),
dated as of ________________, between ______________ (the
"Subsidiary Guarantor"), a subsidiary of Waban Inc. (or its
successor), a Delaware corporation (the "Company"), and The First
National Bank of Boston, a national banking association, as
trustee under the indenture referred to below (the "Trustee").
W I T N E S S E T H
WHEREAS, the Company has heretofore executed and
delivered to the Trustee an indenture (the "Indenture"), dated as
of May ___, 1994, providing for the issuance of an aggregate
principal amount of $100,000,000 of ____% Senior Subordinated
Notes due 2004 (the "Securities");
WHEREAS, Section 4.14 of the Indenture provides that
under certain circumstances the Company is required to cause the
Subsidiary Guarantor to execute and deliver to the Trustee a
supplemental indenture pursuant to which the Subsidiary Guarantor
shall unconditionally guarantee all of the Company's Obligations
under the Securities pursuant to a Subsidiary Guarantee on the
terms and conditions set forth herein; and
WHEREAS, pursuant to Section 9.06 of the Indenture, the
Trustee is authorized to execute and deliver this Supplemental
Indenture.
NOW THEREFORE, in consideration of the foregoing and
for other good and valuable consideration, the receipt of which
is hereby acknowledged, the Subsidiary Guarantor and the Trustee
mutually covenant and agree for the equal and ratable benefit of
the holders of the Securities as follows:
1. CAPITALIZED TERMS. Capitalized terms used herein
without definition shall have the meanings assigned to them in
the Indenture.
<PAGE>
2. AGREEMENT TO GUARANTEE. The Subsidiary Guarantor
hereby agrees as follows:
(a) The Subsidiary Guarantor, jointly and severally
with all other Subsidiary Guarantors, if any, unconditionally
guarantees to each Holder of a Security authenticated and
delivered by the Trustee and to the Trustee and its successors
and assigns, regardless of the validity and enforceability of the
Indenture, the Securities and the Obligations of the Company
under the Indenture and the Securities, that:
(i) the principal of, premium, if any, and interest on
the Securities will be promptly paid in full when
due, whether at maturity, by acceleration,
redemption or otherwise, and interest on the
overdue principal of, premium, if any, and
interest on the Securities, to the extent lawful,
and all other Obligations of the Company to the
Holders or the Trustee thereunder will be promptly
paid in full, all in accordance with the terms
thereof; and
(ii) in case of any extension of time for payment or
renewal of any Securities or any of such other
obligations, that the same will be promptly paid
in full when due in accordance with the terms of
the extension or renewal, whether at stated
maturity, by acceleration or otherwise.
Notwithstanding the foregoing, in the event that this Subsidiary
Guarantee would constitute or result in a violation of any
applicable fraudulent conveyance or similar law of any relevant
jurisdiction, the liability of the Subsidiary Guarantor under
this Supplemental Indenture and its Subsidiary Guarantee shall be
reduced to the maximum amount permissible under such fraudulent
conveyance or similar law.
3. SUBORDINATION.
3.01. Agreement to Subordinate. The Subsidiary
------------------------
Guarantor agrees, and each Securityholder by accepting the Security
agrees, that all Indebtedness and other monetary claims and obligations
evidenced by the Subsidiary Guarantee (including, without limitation,
principal, premium, if any, and interest) is subordinated in right of
payment, to the extent and in the manner provided in this Section 3, to
the prior payment in full of all Senior Indebtedness in cash or, at the
sole option of the holders of Senior Indebtedness, cash equivalents, and
that the subordination is for the benefit of the holders of the Senior
Indebtedness.
3.02. Liquidation; Dissolution; Bankruptcy.
------------------------------------
Upon any (i) bankruptcy, reorganization, insolvency, receivership or
similar proceeding relating to the Subsidiary Guarantor or its
property (whether voluntary or involuntary), (ii) assignment for the
benefit of creditors or any marshalling of the assets and liabilities
of the Subsidiary Guarantor or (iii) distribution to creditors of the
Subsidiary Guarantor in a liquidation or dissolution of the Subsidiary
Guarantor:
(1) the holders of Senior Indebtedness shall first be
entitled to receive payment of all amounts owing in respect of
such Senior Indebtedness in full in cash or, at the sole option
of the holders of the Senior Indebtedness, cash equivalents
(including, without limitation, interest accruing before or after
the commencement of any such proceeding at the applicable rate
specified in such Senior Indebtedness, whether or not a claim
therefor is allowed in any such proceeding) to the date of
payment on the Senior Indebtedness before (a) Securityholders
shall be entitled to receive any payment of principal, premium or
interest on the Subsidiary Guarantee or any payment of any other
monetary claims in respect of the Subsidiary Guarantee,
including, without limitation, such monetary claims as may result
from rights of repurchase or rescission, under or in respect of
the Subsidiary Guarantee, (b) any payment is made to acquire the
Subsidiary Guarantee for cash, property or other securities, or (c)
any distribution is made with respect to the Securities or the
Subsidiary Guarantee upon any proceedings described in clause (i),
clause (ii) or clause (iii) hereof; and
(2) until the Senior Indebtedness (as provided in
subsection (1) above) is paid in full in cash or, at the sole
option of the holders of the Senior Indebtedness, cash
equivalents, any distribution to which Securityholders would be
entitled but for this Section 3 shall be paid by the Subsidiary
Guarantor or by any receiver, trustee in bankruptcy, liquidating
trustee, agent or other person making such payment or
distribution, or by the Trustee under this Supplemental Indenture
if received by it, directly to holders of Senior Indebtedness
(pro rata to each such holder on the basis of the respective
amounts of Senior Indebtedness held by such holder), as their
interests may appear, or by the holders of Securities, if
received by any of them, to the Trustee for payment to the
holders of Senior Indebtedness as set forth above, except that
Securityholders may receive securities that are subordinated to
Senior Indebtedness and to any securities issued in exchange for
Senior Indebtedness to at least the same extent as the Securities
to Senior Indebtedness.
For purposes of this Section 3, a "distribution" shall
be defined as any payment or distribution of cash, securities
or other property, by set-off or otherwise.
The consolidation of the Subsidiary Guarantor with, or the
merger of the Subsidiary Guarantor into, another corporation or the
liquidation or dissolution of the Subsidiary Guarantor following the
conveyance or transfer of its properties and assets substantially as
an entirety to another Person upon the terms and conditions set forth
in Section 5 hereof shall not be deemed a dissolution, winding up,
liquidation or reorganization for the purposes of this Section 3.02 if
the corporation formed by such consolidation or into which the
Subsidiary Guarantor is merged or the Person which acquires by
conveyance or transfer such properties and assets substantially as an
entirety, as the case may be, shall, as a part of such consolidation,
merger, conveyance or transfer comply with (a) the conditions set
forth in Section 5 hereof and (b) any and all provisions with respect
to any such merger or other transaction set forth in any instrument
governing or relating to any Senior Indebtedness as in effect on the
date of the initial issuance of the Securities.
3.03. Default on Senior Indebtedness. Upon
------------------------------
the final maturity of any Senior Indebtedness by lapse of time,
acceleration or otherwise, all such Senior Indebtedness shall first be
paid in full in cash, or such payment duly provided for in a manner
satisfactory to the holders of such Senior Indebtedness, in their sole
and absolute discretion, before any payment is made by the Subsidiary
Guarantor or any Person acting on behalf of the Subsidiary Guarantor,
directly or indirectly, on account of the principal, premium or
interest of the Securities, any payment is made to any Securityholder
in respect of any redemption or purchase of any Securities or any
other distribution is paid or made in respect of the Securities.
Until all Senior Indebtedness has been paid in full, in cash
or, at the sole option of the holders of Senior Indebtedness, cash
equivalents, the Subsidiary Guarantor may not, directly or indirectly,
make any payment of principal, premium, if any, or interest on the
Securities and may not acquire any Securities for cash or property or
make any other distribution with respect to the Securities if:
(i) a default in the payment of the principal of, or interest
on, or the payment of other amounts due (including, without
limitation, any premium) under or in connection with any Senior
Indebtedness occurs and is continuing (a "Payment Default") unless
and until such default has been cured or waived by the holder of
such Senior Indebtedness; or
(ii) a default, other than a Payment Default, on any Senior
Indebtedness occurs and is continuing that then permits the holders
(or the agent) of such Senior Indebtedness to accelerate its
maturity (a "Non-Payment Default") and either (a) such default is
either (x) the subject of judicial proceedings or (y) the Trustee
and such Paying Agent receive a notice of the default from the
holder or holders of at least 25% in aggregate principal amount of
any Specified Senior Indebtedness, the trustee or a Person who may
give such notice with respect to such Specified Senior Indebtedness
pursuant to Section 3.11 hereof at least two (2) Business Days
prior to the relevant payment date; provided, however, that only one
such notice may be given during any 360-consecutive-day period or
(b) such Non-Payment Default results from the acceleration of the
Securities, (in which case, the foregoing restriction shall
commence upon the date of such acceleration). Notwithstanding the
foregoing, the holders of more than one class of Senior Indebtedness
who collectively meet the $20,000,000 threshold for Specified Senior
Indebtedness may act in concert to cause a Payment Blockage
Period, as hereafter defined.
The Subsidiary Guarantor shall resume payments on the
Securities and may acquire them upon the earlier of when (a) the
default is cured or waived by the requisite percentage of the holders
of Senior Indebtedness specified in the agreement or agreements
relating to such Senior Indebtedness or (b) in the case of a default
referred to in Section 3.03(ii) above, on the earlier of the 179th day
after (x) the receipt of notice by the Trustee or the Paying Agent or
(y) if such Non-Payment Default results from the acceleration of the
Securities, the date of such acceleration (with respect to a Non-
Payment Default, such period of time shall be hereinafter referred to
as a "Payment Blockage Period") unless (x) enforcement proceedings
shall have been commenced and be continuing in respect of such Non-
Payment Default (in which event the Payment Blockage Period shall end
at the later to occur of (1) the 179th day after receipt of notice of
commencement of such Payment Blockage Period or (2) the date the
enforcement proceedings terminate) or (y) such Payment Blockage Period
shall have been earlier terminated.
In addition, no default which existed or was continuing
on the date of the commencement of any Payment Blockage Period
with respect to the Specified Senior Indebtedness and which was
known to the holder or holders (or agent) of such Specified Senior
Indebtedness on such date of commencement shall be made the basis
for the commencement of a second Payment Blockage Period by the
holders (or the agent) of such Specified Senior Indebtedness
whether or not within a period of 360 consecutive days unless and
until all scheduled payments of interest, principal and/or
premium then due and payable have been made on the Securities.
3.04. No Suspension of Remedies. Nothing
-------------------------
contained in this Section 3 shall limit the right of the Trustee or
the Securityholders to take any action to accelerate the maturity of
the Securities pursuant to Section 6.02 of the Indenture or to
pursue any other rights or remedies hereunder or under applicable
law; provided, however, that all Senior Indebtedness of the
Subsidiary Guarantor then due and payable, or which thereafter is
declared to be, or shall otherwise become, due and payable, pursuant
to its terms (whether by acceleration or otherwise) shall first be
paid in full in cash or, at the sole option of the holders of Senior
Indebtedness, cash equivalents before the Securityholders or the
Trustee are entitled to receive any payment from the Subsidiary
Guarantor of principal, premium and/or interest on the Securities or
in respect of any other monetary claim relating to the Securities
(including, without limitation, any payments in respect of the
redemption or purchase of the Securities). Notwithstanding the
foregoing, any acceleration of the maturity of the Securities due to
the default by the Company to make a payment required by Section 6.01(l)
of the Indenture resulting from the operation of Section 6.02 of the
Indenture shall be automatically rescinded to the extent permitted by
applicable law and all Events of Default which permitted the acceleration
of the Securities shall be deemed to be automatically and permanently
cured to the extent permitted by applicable law if (i) all defaults on
Senior Indebtedness are permanently cured or waived and (ii) the payment
or payments, the omission of which gave rise to the Event of Default, is or
are made within 179 days after the date on which the Trustee or the
Paying Agent received notice of the default or defaults on the Senior
Indebtedness; and provided, further, that at the time of such automatic
rescission no other Event of Default or Defaults shall have occurred and
be continuing. Such automatic rescission shall be effective as of the
date both conditions specified in clauses (i) and (ii) above are
satisfied.
3.05. When Distribution Must Be Paid Over. In
-----------------------------------
the event that any payment or distribution of assets of the Subsidiary
Guarantor of any kind or character (in each case, whether in cash,
property or other securities) is made to the Trustee on account of the
principal or interest on the Securities at a time when such payment is
prohibited by Section 3.02 or 3.03 hereof, such payment shall be held
by the Trustee, in trust for the benefit of, and shall be paid
forthwith over and delivered to, the holders of Senior Indebtedness
(pro rata as to each of such holders on the basis of the respective
amounts of Senior Indebtedness held by them) or their duly authorized
representative, as their respective interests may appear, for
application to the payment of all Senior Indebtedness in full in
accordance with their terms in cash, or at their sole option, cash
equivalents, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Indebtedness.
In the event that any payment or distribution of assets of
the Subsidiary Guarantor of any kind or character (in each case,
whether in cash, property or other securities) is made to
Securityholders that because of this Section 3 should not have been
made to them, the Securityholders who receive the distribution shall
hold it in trust for the benefit of the holders of Senior
Indebtedness, and shall forthwith pay over and deliver such
distribution to the Trustee, which shall, as provided in the
immediately preceeding paragraph, hold it in trust for the benefit of
and shall forthwith pay over and deliver such distribution to, the
holders of the Senior Indebtedness (pro rata as to each of such
holders on the basis of the respective amounts of Senior Indebtedness
held by them) or their duly authorized representative, as their
respective interests may appear, for application to the payment of all
Senior Indebtedness remaining unpaid to the extent necessary to pay
all Senior Indebtedness in full in cash, or, at the sole option of the
holders of Senior Indebtedness, cash equivalents, in accordance with
their terms, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Indebtedness.
3.06. Notice by the Subsidiary Guarantor. The
----------------------------------
Subsidiary Guarantor shall promptly notify the Trustee and the Paying
Agent of any facts known to the Subsidiary Guarantor that would cause
any payment or distribution of property or assets in respect of the
Securities to violate this Section 3, but failure to give such notice
shall not affect the subordination of the Securities to the Senior
Indebtedness provided in this Section 3. Nothing in this Section 3
shall apply to claims of, or payments to, the Trustee under or
pursuant to Section 7.07 of the Indenture.
3.07. Subrogation. After all Senior
-----------
Indebtedness is paid in full in cash or, at the sole option of the
holders of Senior Indebtedness, cash equivalents and until the
Securities are paid in full, Securityholders shall be subrogated
to the rights of holders of Senior Indebtedness to receive
distributions applicable to Senior Indebtedness to the extent
that distributions otherwise payable to Securityholders have been
applied to the payment of Senior Indebtedness.
If any payment or distribution to which the Holders would
otherwise have been entitled but for the provisions of this Section 3
shall have been applied pursuant to the provisions of this Section 3
to the payment of all amounts payable in respect of the Senior
Indebtedness, then and in such case, the Securityholders shall be
entitled to receive from the holders of such Senior Indebtedness at
the time outstanding any payments or distributions received by such
holders of Senior Indebtedness in excess of the amount sufficient to
pay all amounts payable in respect of the Senior Indebtedness of the
Company in full in cash or, at the sole option of the holders of
Senior Indebtedness, cash equivalents.
3.08. Relative Rights. This Section 3
---------------
defines the relative rights of Securityholders and holders of
Senior Indebtedness. Nothing in this Supplemental Indenture shall:
(1) impair, as between the Subsidiary Guarantor and Security-
holders, the obligation of the Subsidiary Guarantor, which is
absolute and unconditional, to pay principal of and interest on
the Securities in accordance with their terms;
(2) affect the relative rights of Securityholders and
creditors of the Subsidiary Guarantor other than holders of
Senior Indebtedness; or
(3) prevent the Trustee or any Securityholder from
exercising its available remedies upon a Default or Event of
Default, each as defined in the Indenture, subject in all
respects to the rights of holders of Senior Indebtedness under
this Section 3.
If the Subsidiary Guarantor fails because of this Section 3
to pay principal of or interest on a Security on the due date, the
failure is still a Default or Event of Default, each as defined in the
Indenture.
The provisions of this Section 3 shall continue to be
effective or be reinstated, as the case may be, if at any time
any payment of any Senior Indebtedness is rescinded or must
otherwise be returned by any holder of Senior Indebtedness upon
the insolvency, bankruptcy or reorganization of the Company or
otherwise, all as though such payment had not been made.
3.09. No Waiver of Subordination Provisions.
-------------------------------------
No right of any holder of Senior Indebtedness to enforce the
subordination of the Indebtedness evidenced by the Securities shall be
prejudiced or impaired by any act or failure to act by such holder or by
any failure by the Subsidiary Guarantor to comply with this Supplemental
Indenture regardless of any knowledge thereof any such holder of Senior
Indebtedness may have or may otherwise be charged with.
The holders of Senior Indebtedness may, at any time and from
time to time, without the consent of or notice to the Trustee or the
Holders of the Securities and without incurring responsibility to the
Holders of the Securities and without impairing or releasing the
subordination provided in this Section 3 or the obligations hereunder of
the Securityholders to the holders of Senior Indebtedness, do any one
or more of the following: (1) change the manner, place or terms of
payment or extend the time of payment of, or renew or alter, Senior
Indebtedness or any instrument evidencing the same or any agreement
under which Senior Indebtedness is outstanding; (2) accept, sell,
exchange, release or otherwise deal with any property pledged,
mortgaged or otherwise securing Senior Indebtedness; (3) release any
Person liable in any manner for the collection or payment of Senior
Indebtedness; (4) exercise or refrain from exercising any rights
against the Subsidiary Guarantor or any other Person or (5) apply any
moneys or other property paid by any Person or released in any manner
to the Senior Indebtedness.
3.10. Distribution or Notice to Repre
-------------------------------
sentative. Whenever a distribution is to be made or a notice
---------
given to holders of Senior Indebtedness, the distribution may be
made and the notice given to their duly authorized representative.
Upon any payment or distribution of assets of the Company
referred to in this Section 3, the Trustee and the Securityholders
shall be entitled to rely upon any order or decree made by any court
of competent jurisdiction or upon any certificate of such
representative or of the liquidating trustee or agent or other Person
making any distribution to the Trustee or to the Securityholders for
the purpose of ascertaining the Persons entitled to participate in
such distribution, the holders of the Senior Indebtedness and other
Indebtedness, as defined in the Indenture, of the Subsidiary
Guarantor, the amount thereof or payable thereon, the amount or
amounts paid or distributed thereon and all other facts pertinent
thereto or to this Section 3. In the event that the Trustee
determines, in good faith, that further evidence is required with
respect to the right of any Person, as a holder of Senior
Indebtedness, to participate in any payment or distribution pursuant
to this Section 3.10, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the
amount of such Senior Indebtedness held by such Person, as to the
extent to which such Person is entitled to participate in such payment
or distribution, and as to other facts pertinent to the
rights of such Person under this Section 3.10, and if such
evidence is not furnished, the Trustee may defer any payment to
such Person pending judicial determination as to the right of
such Person to receive such payment.
3.11. Rights of Trustee and Paying Agent. The
----------------------------------
Trustee or Paying Agent shall not at any time be charged with the
knowledge of the existence of any facts which would prohibit the
making of any payment to or by the Trustee unless and until an officer
in the Corporate Trust Department of the Trustee and each Paying Agent
shall have received written notice thereof from the Company, the
Subsidiary Guarantor or a holder of (or an agent or trustee of) Senior
Indebtedness (which such holder, agent or trustee shall have delivered
reasonably satisfactory evidence of the capacity of such holder, agent
or trustee); and, prior to the receipt of any such written notice, the
Trustee and each Paying Agent shall be entitled to assume conclusively
that no such facts exist. Unless at least two (2) Business Days prior
to the date on which by the terms of the Indenture any monies are to
be deposited by the Company with the Trustee or any Paying Agent
(whether or not in trust) for any purpose (including, without
limitation, the payment of either the principal of or the interest on
any Security), the Trustee and each Paying Agent shall have received
with respect to such monies the notice provided for in the preceding
sentence, the Trustee and each Paying Agent shall have full power and
authority to receive such monies and to apply the same to the purpose
for which they were received, and shall not be affected by any notice
to the contrary which may be received by it on or after such date. The
foregoing shall not apply to the Paying Agent if the Company or the
Subsidiary Guarantor is acting as Paying Agent.
The Trustee in its individual or any other capacity may
hold Senior Indebtedness with the same rights it would have if it
were not Trustee.
3.12. Authorization to Effect Subordination;
--------------------------------------
Limited Fiduciary Duty to Holders of Senior Indebtedness. Each Holder
--------------------------------------------------------
of a Security by his acceptance thereof authorizes and directs
the Trustee on his behalf to take such action as may be necessary
or appropriate to effectuate the subordination as provided in
this Section 3, and appoints the Trustee as attorney-in-fact for any
and all purposes including, in the event of any dissolution, winding
up, liquidation or reorganization of the Subsidiary Guarantor (whether
in bankruptcy, insolvency, or receivership or similar proceedings or
upon an assignment for the benefit of creditors or otherwise) tending
towards liquidation of the business and assets of the Subsidiary
Guarantor, to file a claim for the unpaid balance of its Securities in
the form required in said proceedings and to cause said claim to be
approved. If the Trustee or holders of a majority in interest of the
then outstanding Securities do not file a proper claim or proof of
debt in the form required in such proceeding prior to 30 days before
the expiration of the time to file such claim or proof, then, to the
extent permitted by applicable law, the holders of the Senior
Indebtedness shall have the right to file and are hereby authorized to
file an appropriate claim for and on behalf of the holders of said
Securities, but such right shall not prevent the Trustee or the
holders of a majority in interest of the then outstanding Securities
from filing a proof of claim subsequent to the commencement of such 30-
day period. Notwithstanding anything to the contrary in this Section
3, the Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness and shall have no duties to such
holders, except for the Trustee's duty to hold cash, properties or
securities in trust for the benefit of the holders of the Senior
Indebtedness and as otherwise expressly set forth in this Section 3,
and no implied covenants or obligation shall be read into this
Indenture against the Trustee.
3.13. Miscellaneous.
-------------
(a) All rights and interests under this Section 3 of the
holders of Senior Indebtedness, and all agreements and obligations of
the Securityholders, the Trustee and the Subsidiary Guarantor under
this Section 3, shall remain in full force and effect irrespective of:
(i) any lack of validity or enforceability of the
Credit Agreement or the purchase agreement made with respect to
the Senior Securities, the notes or security instruments issued
pursuant thereto or any other agreement or instrument relating
thereto, including any guarantee by the Subsidiary Guarantor
thereof;
(ii) any exchange, release or non-perfection of any
Lien securing Senior Indebtedness or any release or
amendment or waiver of or consent to departure from any
guaranty, for all or any of the Senior Indebtedness; or
(iii) any other circumstance that might otherwise
constitute a defense available to, or a discharge of, the
Subsidiary Guarantor in respect of Senior Indebtedness.
(b) The provisions of this Section 3 constitute a
continuing agreement and shall (i) remain in full force and
effect until the Senior Indebtedness shall have been paid in
full, and (ii) be binding upon the Securityholders and the Trustee,
the Subsidiary Guarantor and their successors and assigns.
(c) Each holder of a Security by its acceptance thereof
acknowledges and agrees that the foregoing subordination provisions
are, and are intended to be, an inducement and a consideration to each
holder of any Senior Indebtedness (by its original terms or amendment
thereof), whether such Senior Indebtedness was created or acquired before
or after the issuance of the Securities, to acquire and continue to hold,
or to continue to hold, such Senior Indebtedness, and such holder of
Senior Indebtedness shall be deemed conclusively to have relied on such
subordination provisions in acquiring and continuing to hold, or in
continuing to hold, such Senior Indebtedness. The subordination provisions
in this Section 3 may be enforced directly, from time to time, by any
holder of Specified Senior Indebtedness or any holder of Senior Securities.
3.14. Definitions.
-----------
For purposes of this Section 3, the following terms shall
have the following meanings and all other defined terms not otherwise
defined herein shall have the meanings ascribed to them in the Indenture:
(a) "Senior Indebtedness" means the principal of, premium,
if any, and interest (including, without limitation, post-petition
interest whether or not allowed as a claim in bankruptcy,
reorganization, insolvency, receivership or a similar proceeding) on
any Indebtedness of the Subsidiary Guarantor, whether outstanding on
the date of the Supplemental Indenture or thereafter created,
incurred, assumed or guaranteed, unless, in the case of any particular
Indebtedness, the instrument under which such Indebtedness is created,
incurred, assumed or guaranteed expressly provides that such
Indebtedness shall not be senior or superior in right of payment to
the Securities. Without limiting the generality of the foregoing,
"Senior Indebtedness" shall include (i) Indebtedness if and when
incurred by the Subsidiary Guarantor on account of the Credit Facility
including the available undrawn amount of any letters of credit issued
under the Credit Facility (together with all interest (including post-
petition interest whether or not allowed as a claim in any bankruptcy,
reorganization, insolvency, receivership or similar proceeding), fees,
reasonable expenses, indemnities and charges payable on or in respect
of such Indebtedness), (ii) Indebtedness if and when incurred by the
Subsidiary Guarantor on account of the Senior Securities (together with
all interest (including, without limitation, post-petition interest
whether or not allowed as a claim in any bankruptcy, reorganization,
insolvency, receivership or similar proceeding), premium, if any, fees,
expenses, indemnities and charges payable on or in respect of such
Indebtedness), and (iii) Indebtedness created, incurred, issued, assumed
or guaranteed in exchange for or the proceeds of which are used to
extend, refinance, renew, replace, substitute or refund Indebtedness
referred to in Clauses (i) and (ii) above. Notwithstanding anything to
the contrary in the foregoing, Senior Indebtedness shall not include a)
any Indebtedness of the Subsidiary Guarantor to the Company or any of its
Subsidiaries or other Affiliates of the Company, (b) any Indebtedness
incurred after the date of the Supplemental Indenture that is
contractually subordinated in right of payment to any Senior
Indebtedness, (c) trade payables and current liabilities for goods,
materials or services purchased or for compensation to employees, in each
case arising in the ordinary course of business, (d) any Indebtedness in
respect of Capital Lease Obligations, unless such Indebtedness expressly
provides that it shall be senior or superior in right of payment to the
Securities, and (e) any obligations in respect of Operating Lease
Obligations.
(b) "Specified Senior Indebtedness" means Indebtedness if
and when incurred by the Subsidiary Guarantor on account of (i) the
Credit Facility, (ii) the Senior Securities and (iii) any other Senior
Indebtedness of the Subsidiary Guarantor, the then outstanding
principal amount of which exceeds $20 million.
4. EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTEES.
(a) To evidence its Subsidiary Guarantee set forth in
this Supplemental Indenture, the Subsidiary Guarantor hereby
agrees that a notation of such Subsidiary Guarantee substantially
in the form of Exhibit C to the Indenture shall be endorsed by an
officer of such Subsidiary Guarantor on each Security
authenticated and delivered by the Trustee after the date hereof.
(b) Notwithstanding the foregoing, the Subsidiary
Guarantor hereby agrees that its Subsidiary Guarantee set forth
<PAGE>
herein shall remain in full force and effect notwithstanding any
failure to endorse on each Security a notation of such Subsidiary
Guarantee.
(c) If an officer whose signature is on this
Supplemental Indenture or on the Subsidiary Guarantee no longer
holds that office at the time the Trustee authenticates the
Security on which a Subsidiary Guarantee is endorsed, the
Subsidiary Guarantee shall be valid nevertheless.
(d) The delivery of any Security by the Trustee, after
the authentication thereof under the Indenture, shall constitute
due delivery of the Subsidiary Guarantee set forth in this
Supplemental Indenture on behalf of the Subsidiary Guarantor.
(e) The Subsidiary Guarantor hereby agrees that its
obligations hereunder shall be unconditional, regardless of the
validity, regularity or enforceability of the Securities or the
Indenture, the absence of any action to enforce the same, any
waiver or consent by any Holder of the Securities with respect to
any provisions hereof or thereof, the recovery of any judgment
against the Company, any action to enforce the same or any other
circumstance which might otherwise constitute a legal or
equitable discharge or defense of a guarantor.
(f) The Subsidiary Guarantor hereby waives 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
Subsidiary Guarantee made pursuant to this Supplemental Indenture
will not be discharged except by complete performance of the
obligations contained in the Securities and the Indenture.
(g) If any Holder or the Trustee is required by any
court or otherwise to return to the Company or the Subsidiary
Guarantors, or any Custodian, Trustee, liquidator or other
similar official acting in relation to either the Company or the
Subsidiary Guarantors, any amount paid by either to the Trustee
or such Holder, the Subsidiary Guarantee made pursuant to this
Supplemental Indenture, to the extent theretofore discharged,
shall be reinstated in full force and effect.
(h) The Subsidiary Guarantor agrees that it shall not
be entitled to any right of subrogation in relation to the
Holders in respect of any obligations guaranteed hereby until
payment in full of all obligations guaranteed hereby. The
Subsidiary Guarantor further agrees that, as between the
<PAGE>
Subsidiary Guarantors, on the one hand, and the Holders and the
Trustee, on the other hand:
(i) the maturity of the obligations guaranteed hereby
may be accelerated as provided in Article 6 of the
Indenture for the purposes of the Subsidiary
Guarantee made pursuant to this Supplemental
Indenture, notwithstanding any stay, injunction or
other prohibition preventing such acceleration in
respect of the obligations guaranteed hereby; and
(ii) in the event of any declaration of acceleration of
such obligations as provided in Article 6, such
obligations (whether or not due and payable) shall
forthwith become due and payable by the Subsidiary
Guarantor for the purpose of the Subsidiary
Guarantee made pursuant to this Supplemental
Indenture.
(i) The Subsidiary Guarantor shall have the right to
seek contribution from any other non-paying Subsidiary Guarantor
so long as the exercise of such right does not impair the rights
of the Holders under the Subsidiary Guarantee made pursuant to
this Supplemental Indenture.
5. SUBSIDIARY GUARANTOR MAY CONSOLIDATE, ETC. ON
CERTAIN TERMS.
(a) Except as set forth in Articles 4 and 5 of the
Indenture, nothing contained in the Indenture, this Supplemental
Indenture or in the Securities shall prevent any consolidation or
merger of the Subsidiary Guarantor with or into the Company or
any other Subsidiary Guarantor or shall prevent any transfer,
sale or conveyance of the property of the Subsidiary Guarantor as
an entirety or substantially as an entirety, to the Company or
any other Subsidiary Guarantor.
(b) Except as set forth in Article 4 of the Indenture,
nothing contained in the Indenture, this Supplemental Indenture
or in the Securities shall prevent any consolidation or merger of
the Subsidiary Guarantor with or into a corporation or
corporations other than the Company or any other Subsidiary
Guarantor (in each case, whether or not affiliated with the
Subsidiary Guarantor), or successive consolidations or mergers in
which a Subsidiary Guarantor or its successor or successors shall
be a party or parties, or shall prevent any sale or conveyance of
the property of a Subsidiary Guarantor as an entirety or
substantially as an entirety, to a corporation other than the
<PAGE>
Company or any other Subsidiary Guarantor (in each case, whether
or not affiliated with the Subsidiary Guarantor) authorized to
acquire and operate the same; provided, however, that the
Subsidiary Guarantor hereby covenants and agrees that, upon any
such consolidation, merger, sale or conveyance, the due and
punctual performance and observance of all of the covenants and
conditions of the Indenture and this Supplemental Indenture to be
performed by such Subsidiary Guarantor, shall be expressly assumed (in
the event that the Subsidiary Guarantor is not the surviving
corporation in the merger), by supplemental indenture reasonably
satisfactory in form to the Trustee, executed and delivered to the
Trustee, by the corporation formed by such consolidation, or into
which the Subsidiary Guarantor shall have been merged, or by the
corporation which shall have acquired such property.
(c) In case of any such consolidation, merger, sale or
conveyance and upon the assumption by the successor corporation, by
supplemental indenture, executed and delivered to the Trustee and
reasonably satisfactory in form to the Trustee, of the Subsidiary
Guarantee made pursuant to this Supplemental Indenture and the due and
punctual performance of all of the covenants and conditions of the
Indenture and this Supplemental Indenture to be performed by the
Subsidiary Guarantor, such successor corporation shall succeed to and
be substituted for the Subsidiary Guarantor with the same effect as if
it had been named herein as the Subsidiary Guarantor. Such successor
corporation thereupon may cause to be signed any or all of the
Subsidiary Guarantees to be endorsed upon the Securities issuable
under the Indenture which theretofore shall not have been signed by
the Company and delivered to the Trustee. All the Subsidiary
Guarantees so issued shall in all respects have the same legal rank
and benefit under the Indenture and this Supplemental Indenture as the
Subsidiary Guarantees theretofore and thereafter issued in accordance
with the terms of the Indenture and this Supplemental Indenture as
though all of such Subsidiary Guarantees had been issued at the date
of the execution hereof.
6. RELEASES FOLLOWING SALE OF ASSETS. Concurrently
with any sale of assets (including, if applicable, all of the
Capital Stock of the Subsidiary Guarantor), all Liens in favor of
the Trustee in the assets sold thereby shall be released;
provided that in the event of an Asset Sale, the Net Proceeds
from such sale or other disposition are treated in accordance
with the provisions of Section 4.12 of the Indenture. If the
assets sold in such sale or other disposition include all or
substantially all of the assets of the Subsidiary Guarantor or
all of the Capital Stock of the Subsidiary Guarantor, then the
Subsidiary Guarantor (in the event of a sale or other disposition
<PAGE>
of all of the Capital Stock of such Subsidiary Guarantor) or the
corporation acquiring the property (in the event of a sale or
other disposition of all or substantially all of the assets of
such Subsidiary Guarantor) shall be released from and relieved of
its obligations under this Supplemental Indenture and its
Subsidiary Guarantee made pursuant hereto or Section 5 of this
Supplemental Indenture, as the case may be; provided that in the
--------
event of an Asset Sale, the Net Proceeds from such sale or other
disposition are treated in accordance with the provisions of
Section 4.12 of the Indenture. Upon delivery by the Company to
the Trustee of an Officers' Certificate to the effect that such
sale or other disposition was made by the Company in accordance
with the provisions of the Indenture and this Supplemental
Indenture, including without limitation, Section 4.12 of the
Indenture, the Trustee shall execute any documents reasonably
required in order to evidence the release of the Subsidiary
Guarantor from its obligations under this Supplemental Indenture
and its Subsidiary Guarantee made pursuant hereto. If the
Subsidiary Guarantor is not released from its obligations under
its Subsidiary Guarantee, it shall remain liable for the full
amount of principal of and interest on the Securities and for the
other obligations of such Subsidiary Guarantor under the
Indenture as provided in this Supplemental Indenture.
7. GOVERNING LAW. THIS SUPPLEMENTAL INDENTURE SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW
YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
8. COUNTERPARTS. The parties may sign any number of
copies of this Supplemental Indenture. Each signed copy shall be
an original, but all of them together represent the same
agreement. One signed copy is enough to prove this Supplemental
Indenture.
9. EFFECT OF HEADINGS. The Section headings herein
are for convenience only and shall not affect the construction
hereof.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Supplemental Indenture to be duly executed and attested, all as
of the date first above written.
Dated: __________ __, ____ [Subsidiary Guarantor]
By: __________________________
Name:
Title:
Dated: __________ __, ____ THE FIRST NATIONAL BANK OF BOSTON
as Trustee
By: __________________________
Name:
Title:
<PAGE>
EXHIBIT C
FORM OF NOTATION ON SENIOR NOTE RELATING TO SUBSIDIARY GUARANTEE
Each Subsidiary Guarantor (as defined in the Indenture
referred to in the Security upon which this notation is endorsed), (i)
has jointly and severally unconditionally guaranteed (a) the due and
punctual payment of the principal of, premium and liquidated damages (if
any) with respect to, and interest on the Securities, whether at maturity
or an interest payment date, by acceleration, call for redemption or
otherwise, (b) the due and punctual payment of interest on the overdue
principal and premium of, and (if lawful) interest on, the Securities,
and (c) in case of any extension of time of payment or renewal of any
Securities or any of such other obligations, the same will be promptly
paid in full when due in accordance with the terms of the extension or
renewal, whether at stated maturity, by acceleration or otherwise and
(ii) has agreed to pay any and all costs and expenses (including
reasonable attorneys' fees) incurred by the Trustee or any Holder in
enforcing any rights under this Subsidiary Guarantee.
Notwithstanding the foregoing, in the event that the
Subsidiary Guarantee of any Subsidiary Guarantor would constitute or
result in a violation of any applicable fraudulent conveyance or
similar law of any relevant jurisdiction, the liability of such
Subsidiary Guarantor under its Subsidiary Guarantee shall be reduced
to the maximum amount permissible under such fraudulent conveyance or
similar law. The obligations of the Subsidiary Guarantor under the
Subsidiary Guarantee are subordinated in right of payment to the prior
payment in full in cash or, at the sole option of the holders of
Senior Indebtedness, cash equivalents, of all Senior Indebtedness, as
defined in the Subsidiary Guarantee.
No director, officer, employee, agent, manager,
stockholder or other Affiliate (other than the other Subsidiary
Guarantors) of the Subsidiary Guarantors, as such, shall have any
liability for any obligations of the Subsidiary Guarantors under
the Indenture, any supplemental indenture delivered pursuant to
Section 4.14 of the Indenture by such Subsidiary Guarantors or
the Subsidiary Guarantees, or for any claim based on, in respect
of or by reason of such obligations or their creation. Each
Holder by accepting a Security waives and releases all such
liability.
This Subsidiary Guarantee shall be binding upon the
Subsidiary Guarantors and their successors and assigns and shall
inure to the benefit of the successors and assigns of the Trustee
and the Holders and, in the event of any transfer or assignment
of rights by any Holder or the Trustee, the rights and privileges
herein conferred upon that party shall automatically extend to
<PAGE>
and be vested in such transferee or assignee, all subject to the
terms and conditions hereof.
This Subsidiary Guarantee shall not be valid or
obligatory for any purpose until the certificate of
authentication on the Security upon which this Subsidiary
Guarantee is noted shall have been executed by the Trustee under
the Indenture by the manual signature of one of its authorized
officers.
[Subsidiary Guarantor]
By: ______________________________
Name:
Title:
<PAGE>
HALE AND DORR
60 State Street
Boston, MA 02109
(617) 526-6000
April 22, 1994
Waban Inc.
One Mercer Road
Natick, MA 01760
Ladies and Gentlemen:
We have assisted in the preparation of a Registration Statement on Form
S-3, File No. 33-52665 (as amended, the "Registration Statement"), filed with
the Securities and Exchange Commission (the "Commission") under the Securities
Act of 1933, as amended, for the registration of $100,000,000 principal amount
of Senior Subordinated Notes due 2004 (the "Notes") of Waban Inc., a Delaware
corporation (the "Company").
We have acted as counsel for the Company in connection with the issuance
and sale by the Company of the Notes. We have examined (i) the Restated
Certificate of Incorporation and the By-Laws of the Company and all amendments
thereto, (ii) the Underwriting Agreement between the Company and Bear, Stearns
& Co. Inc., in the form filed as Exhibit 1.1 to the Registration Statement (as
amended, the "Underwriting Agreement" and (iii) the Indenture between the
Company and The First National Bank of Boston, as trustee, in the form filed
as Exhibit 4.1 to the Registration Statement (as amended, the "Indenture"). We
have also examined and relied on the originals, or copies certified to our
satisfaction, of such records of meetings of the directors and stockholders of
the Company, documents and other instruments as in our judgment are necessary
or appropriate to enable us to render the opinions expressed below .
In our examination of the foregoing documents, we have assumed the
genuineness of all signatures and the authenticity of all documents submitted
to us as originals, the conformity to the originals of all documents submitted
to us as certified or photostatic copies, and the authenticity of the
originals of the latter documents.
We assume that appropriate action will be taken prior to the sale of the
Notes to register and qualify the Notes under all applicable state "Blue Sky"
and securities laws.
<PAGE>
Waban Inc.
April 22, 1994
Page 2
We express no opinion as to the laws of any state or jurisdiction other
than the laws of the Commonwealth of Massachusetts, the General Corporation
Law Statute of the State of Delaware and the federal law of the United States
of America. For purposes of the opinions expressed below, we have assumed,
without independent investigation, that the laws of the State of New York
governing the Indenture and the Notes are the same as those which would govern
the Indenture and the Notes if the Indenture and the Notes were governed by the
internal laws of the Commonwealth of Massachusetts.
With respect to the opinion expressed below as to the validity or
enforceability of the Notes or of any rights granted to you pursuant thereto,
such opinion is qualified to the extent that the Notes may be subject to or
affected by (i) applicable bankruptcy, insolvency, reorganization, fraudulent
conveyance or transfer, moratorium or similar laws affecting the rights and
remedies of creditors generally, (ii) statutory or decisional law concerning
recourse by creditors to security in the absence of notice or hearing and
(iii) duties and standards imposed on creditors and parties to contracts,
including, without limitation, requirements of good faith, reasonableness,
conscionability and fair dealing. Further, we do not express any opinion as
to the availability of the remedy of specific performance or any other
equitable remedy upon breach of any such provision, whether applied by a court
of law or equity. We express no opinion with respect to the validity or
enforceability of any usury waiver contained in the Notes or the Indenture.
Based upon and subject to the foregoing, it is our opinion that the Notes
have been duly authorized and, when duly executed, authenticated, issued and
delivered to and paid for by the underwriter, pursuant to the Underwriting
Agreement to be entered into with respect thereto, will be legally and
validly issued and fully paid, and will constitute valid and binding
obligations of the Company.
We hereby consent to the use of our name in the Registration Statement
and in the related Prospectus under the caption "Legal Matters" and consent to
the filing of this opinion with the Commission as an exhibit to the
Registration Statement.
Very truly yours,
HALE AND DORR
