-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, NE4foIXKuOWHwCPJtsj0wfJJh/+mWwWlOdJWezgPoVbL7nbT3vmEqOWg8/S1iLeJ 7XdIQLeT0lypAliNXKv6DA== 0000912057-95-004327.txt : 19950602 0000912057-95-004327.hdr.sgml : 19950602 ACCESSION NUMBER: 0000912057-95-004327 CONFORMED SUBMISSION TYPE: T-3/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 19950601 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: GRAND UNION CO /DE/ CENTRAL INDEX KEY: 0000316236 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-GROCERY STORES [5411] IRS NUMBER: 251518276 STATE OF INCORPORATION: DE FISCAL YEAR END: 0325 FILING VALUES: FORM TYPE: T-3/A SEC ACT: 1939 Act SEC FILE NUMBER: 022-22205 FILM NUMBER: 95544187 BUSINESS ADDRESS: STREET 1: 201 WILLOWBROOK BLVD CITY: WAYNE STATE: NJ ZIP: 07470-0966 BUSINESS PHONE: 2018906000 MAIL ADDRESS: STREET 1: 201 WILLOWBROOK BLVD CITY: WAYNE STATE: NJ ZIP: 07470 FORMER COMPANY: FORMER CONFORMED NAME: SUCCESSOR TO GRAND UNION CO/VA/ DATE OF NAME CHANGE: 19600201 T-3/A 1 FORM T-3 AMENDMENT NO. 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ----------- AMENDMENT NO. 1 TO FORM T-3 FOR APPLICATIONS FOR QUALIFICATION OF INDENTURES UNDER THE TRUST INDENTURE ACT OF 1939 ---------- THE GRAND UNION COMPANY (Name of applicant) 201 Willowbrook Boulevard Wayne, New Jersey 07470-0966 (Address of principal executive offices) ------------ SECURITIES TO BE ISSUED UNDER THE INDENTURE TO BE QUALIFIED ----------------------------------------------------------- TITLE OF CLASS AMOUNT 12% Senior Notes $595,475,922 due September 1, 2004 Approximate date of proposed public offering: On or promptly after the Effective Date (as defined in the Second Amended Chapter 11 Plan of Reorganization of The Grand Union Company, dated April 19, 1995). Name and address of agent for service: Joseph J. McCaig President and Chief Executive Officer The Grand Union Company 201 Willowbrook Boulevard Wayne, New Jersey 07470-0966 The applicant hereby amends this application for qualification on such date or dates as may be necessary to delay its effectiveness until (i) the 20th day after the filing of a further amendment which specifically states that it shall supersede this amendment, or (ii) such date as the Commission, acting pursuant to Section 307(c) of the Act, may determine upon the written request of the applicant. GENERAL 1. GENERAL INFORMATION. FURNISH THE FOLLOWING AS TO THE APPLICANT: a. Form of organization: A corporation. b. State or other sovereign power under the laws of which organized: Delaware 2. SECURITIES ACT EXEMPTION APPLICABLE. STATE BRIEFLY THE FACTS RELIED UPON BY THE APPLICANT AS A BASIS FOR THE CLAIM THAT REGISTRATION OF THE INDENTURE SECURITIES UNDER THE SECURITIES ACT OF 1933 IS NOT REQUIRED. On January 25, 1995 (the "Filing Date"), the applicant, The Grand Union Company (the "Company" or the "Debtor"), commenced a case under Chapter 11 of the United States Bankruptcy Code, 11 U.S.C. section 101 et seq. (the "Bankruptcy Code"), in the United States Bankruptcy Court for the District of Delaware (the "Bankruptcy Court"). Since the Filing Date, the Debtor has continued to operate as a debtor-in-possession subject to the supervision of the Bankruptcy Court in accordance with the Bankruptcy Code. The Company proposes to issue, as part of its Second Amended Chapter 11 Plan of Reorganization dated April 19, 1995 (the "Plan"), pursuant to section 1121(a) of the Bankruptcy Code, up to $595,475,922 of its 12% Senior Notes due September 1, 2004 (the "Senior Notes"). The Senior Notes will be issued to discharge in part claims of existing creditors in the bankruptcy proceedings described below. The Senior Notes are proposed to be issued in reliance upon the exemption from registration under the Securities Act of 1933, as amended (the "Securities Act"), set forth in section 1145(a)(1) of the Bankruptcy Code. Section 1145 of the Bankruptcy Code exempts the offer or sale of securities under a plan of reorganization from registration under the Securities Act and state law. Under section 1145, the issuance of securities is exempt from registration if three principal requirements are satisfied: (1) the securities are issued by a debtor, its successor, or an affiliate participating in a joint plan with the debtor (provided that such entity is not an underwriter as defined in section 1145(b) of the Bankruptcy Code) under a plan of reorganization; (2) the recipients of the securities hold a claim against the debtor or such affiliate, an interest in the debtor or such affiliate, or a claim for an administrative expense against the debtor or such affiliate; and (3) the securities are issued entirely in exchange for the recipients' claim against or interest in the debtor or such affiliate, or "principally" in such exchange and "partly" for cash or property. -2- The applicant believes that the issuance of the Senior Notes under the indenture to be entered into by the Company and IBJ Schroder Bank & Trust Company, as Trustee (the "Indenture") to holders of prepetition senior secured notes under the Plan will satisfy all three conditions of section 1145 of the Bankruptcy Code because (a) the issuances are expressly contemplated under the Plan as part of the reorganization; (b) the recipients are holders of "claims" against the Debtor; and (c) the recipients would obtain such Senior Notes in exchange for their claims. -3- AFFILIATIONS 3. AFFILIATES. FURNISH A LIST OR DIAGRAM OF ALL AFFILIATES OF THE APPLICANT AND INDICATE THE RESPECTIVE PERCENTAGES OF VOTING SECURITIES OR OTHER BASES OF CONTROL. AS OF MAY 8, 1995 ---------------------------------------- GAC HOLDINGS PARTNERS, INC. (general partner of GAC Holdings, L.P.) ------------------------------------------ | | ------------------ GAC HOLDINGS, L.P. ------------------ | | 37.680 % * | | -------------------------------- GRAND UNION HOLDINGS CORPORATION -------------------------------- | | 100.000 % | | ------------------------------- GRAND UNION CAPITAL CORPORATION ------------------------------- | | 100.000 % | | ----------------------- THE GRAND UNION COMPANY ----------------------- - -------------------------- * Percentage indicates voting power of, in each case, entity named above percentage in entity named below percentage, on a fully diluted basis. AS OF EFFECTIVE DATE The holders of prepetition subordinated debt of The Grand Union Company on the Effective Date will own all of the originally issued shares of common stock of the reorganized company. -4- MANAGEMENT AND CONTROL 4. DIRECTORS AND EXECUTIVE OFFICERS. LIST THE NAMES AND COMPLETE MAILING ADDRESSES OF ALL DIRECTORS AND EXECUTIVE OFFICERS OF THE APPLICANT AND ALL PERSONS CHOSEN TO BECOME DIRECTORS OR EXECUTIVE OFFICERS. INDICATE ALL OFFICES WITH THE APPLICANT HELD OR TO BE HELD BY EACH PERSON NAMED. AS OF MAY 8, 1995
Name Address Office ---- ------- ------- Gary D. Hirsch The Grand Union Company Director and 201 Willowbrook Boulevard Chairman Wayne, New Jersey 07470-0966 Martin A. Fox The Grand Union Company Director, Vice President 201 Willowbrook Boulevard and Assistant Secretary Wayne, New Jersey 07470-0966 Joseph J. McCaig The Grand Union Company Director, President and 201 Willowbrook Boulevard Chief Executive Officer Wayne, New Jersey 07470-0966 William A. Louttit The Grand Union Company Director, Executive Vice 201 Willowbrook Boulevard President and Chief Operating Wayne, New Jersey 07470-0966 Officer Kenneth R. Baum The Grand Union Company Director, Senior Vice President, 201 Willowbrook Boulevard Chief Financial Officer and Wayne, New Jersey 07470-0966 Secretary Darrell W. Stine The Grand Union Company Executive Vice President 201 Willowbrook Boulevard - New York Region Wayne, New Jersey 07470-0966 John S. McLaughlin The Grand Union Company Vice President - Northern 201 Willowbrook Boulevard Region Wayne, New Jersey 07470-0966 Raymond H. Ayers The Grand Union Company Vice President - Real Estate 201 Willowbrook Boulevard Wayne, New Jersey 07470-0966 Francis E. Nicastro The Grand Union Company Vice President and Treasurer 201 Willowbrook Boulevard Wayne, New Jersey 07470-0966 Glenn L. Goldberg The Grand Union Company Vice President and Assistant 201 Willowbrook Boulevard Secretary Wayne, New Jersey 07470-0966 -5- Name Address Office ---- ------- ------- John Hinkel The Grand Union Company Vice President - Distribution 201 Willowbrook Boulevard Wayne, New Jersey 07470-0966 William E. Kinslow The Grand Union Company Vice President - Management 201 Willowbrook Boulevard Information Systems Wayne, New Jersey 07470-0966 Donald C. Vaillancourt The Grand Union Company Vice President - Corporate 201 Willowbrook Boulevard Communications Wayne, New Jersey 07470-0966 Gilbert Vuolo The Grand Union Company Vice President - Personnel 201 Willowbrook Boulevard Wayne, New Jersey 07470-0966 Louis Andrew DePaolis The Grand Union Company Vice President - Advertising 201 Willowbrook Boulevard and Sales Promotion Wayne, New Jersey 07470-0966 Alfred T. Rossi The Grand Union Company Vice President - Facilities 201 Willowbrook Boulevard Management Wayne, New Jersey 07470-0966 Alan Dudish The Grand Union Company Vice President - Nonperishables 201 Willowbrook Boulevard Merchandising and Wayne, New Jersey 07470-0966 Distribution
AS OF EFFECTIVE DATE The Company anticipates that, as of the Effective Date, the following persons will constitute the Board of Directors of the Company: Roger E. Stangeland (Chairman of the Board), Joseph J. McCaig, William A. Louttit, Daniel E. Josephs, William G. Kagler, Douglas T. McClure, Jr. and David Y. Ying. Their addresses will be The Grand Union Company, 201 Willowbrook Boulevard, Wayne, New Jersey 07470-0966. With the exception of Mr. Hirsch, Mr. Fox and Mr. Goldberg, who will not continue to be employed by the Company, the executive officers are expected to continue. -6- 5. PRINCIPAL OWNERS OF VOTING SECURITIES. FURNISH THE FOLLOWING INFORMATION AS TO EACH PERSON OWNING 10 PERCENT OR MORE OF THE VOTING SECURITIES OF THE APPLICANT. AS OF MAY 8, 1995 Name and Complete Title of Class Amount Percentage of Mailing Address Owned Owned Voting Securities Owned Grand Union Capital Corporation Common Stock 801.5 100% shares AS OF EFFECTIVE DATE The holders of prepetition subordinated debt of The Grand Union Company on the Effective Date will own all of the originally issued shares of common stock of the reorganized company. UNDERWRITERS 6. UNDERWRITERS. GIVE THE NAME AND COMPLETE MAILING ADDRESS OF (A) EACH PERSON WHO, WITHIN THREE YEARS PRIOR TO THE DATE OF FILING THE APPLICATION, ACTED AS AN UNDERWRITER OF ANY SECURITIES OF THE OBLIGOR WHICH WERE OUTSTANDING ON THE DATE OF FILING THE APPLICATION, AND (B) EACH PROPOSED PRINCIPAL UNDERWRITER OF THE SECURITIES PROPOSED TO BE OFFERED. AS TO EACH PERSON SPECIFIED IN (A), GIVE THE TITLE OF EACH CLASS OF SECURITIES UNDERWRITTEN. a. Goldman, Sachs & Co. 85 Broad Street New York, New York 10004 and BT Securities Corporation 130 Liberty Street New York, New York 10006 Goldman, Sachs & Co. and BT Securities Corporation each served as underwriter for the Company's issuances of 11-1/4% Senior Notes due 2000 and 12-1/4% Senior Subordinated Notes due 2002. b. None -7- CAPITAL SECURITIES 7. CAPITALIZATION. (A) FURNISH THE FOLLOWING INFORMATION AS TO EACH AUTHORIZED CLASS OF SECURITIES OF THE APPLICANT. AS OF MAY 8, 1995
AMOUNT AMOUNT TITLE OF CLASS AUTHORIZED OUTSTANDING Common Stock, 900 shares 801.5 shares $50,000 par value 13% Senior Subordinated $200,000,000 $ 16,150,000 Notes Due 1998 11-1/4% Senior Notes $350,000,000 $350,000,000 Due 2000 12-1/4% Senior $500,000,000 $500,000,000 Subordinated Notes Due 2002 11-3/8% Senior Notes $175,000,000 $175,000,000 Due 1999 12-1/4% Senior $ 50,000,000 $ 50,000,000 Subordinated Notes Due 2002, Series A
AS OF EFFECTIVE DATE
AMOUNT AMOUNT TITLE OF CLASS AUTHORIZED OUTSTANDING 12% Senior Notes $595,475,922 Up to $595,475,922 Due 2004 Common Stock, $1.00 par value 30 million shares Up to 10 million shares Preferred Stock, $1.00 par value 10 million shares none
(B) GIVE A BRIEF OUTLINE OF THE VOTING RIGHTS OF EACH CLASS OF VOTING SECURITIES REFERRED TO IN PARAGRAPH (A) ABOVE. -8- AS OF MAY 8, 1995 With respect to the voting rights of the common stock of the Company, each holder of a share of such common stock is entitled to one vote on all matters on which such shareholders are entitled to vote. AS OF EFFECTIVE DATE With respect to the voting rights of the common stock of the Company, each holder of a share of such common stock will be entitled to one vote on all matters on which such shareholders are entitled to vote. INDENTURE SECURITIES 8. ANALYSIS OF INDENTURE PROVISIONS. INSERT AT THIS POINT THE ANALYSIS OF INDENTURE PROVISIONS REQUIRED UNDER SECTION 305(A)(2) OF THE ACT. (a) Definition of Default: Events of Default under the Indenture include the following: (i) the failure by the Company to pay interest on any Senior Note for a period of 30 days after such interest becomes due and payable; (ii) the failure by the Company to pay the principal of (or premium, if any, on) any Senior Note when such principal becomes due and payable, whether at the stated maturity or upon acceleration, redemption or otherwise; (iii) a default in the observance of any other covenant contained in the Indenture that continues for 30 days after the Company has been given notice of the default by the Trustee or the holders of 25% in principal amount of the Senior Notes then outstanding; (iv) a default or defaults on other Indebtedness (as defined in the Indenture) of the Company or any subsidiary, which Indebtedness has an outstanding principal amount of more than $15,000,000 individually or in the aggregate if such Indebtedness has attained final maturity or if the holders of such Indebtedness have accelerated payment thereof under the terms of the instrument under which such Indebtedness is or may be outstanding and, in each case, it remains unpaid; -9- (v) one or more judgments or decrees is entered against the Company or any subsidiary involving a liability (not paid or fully covered by insurance) of $5,000,000 or more in the case of any one such judgment or decree or $10,000,000 or more in the aggregate for all such judgments and decrees for the Company and all its subsidiaries and all such judgments and decrees have not been vacated, discharged or stayed or bonded pending appeal within 30 days from the date of entry thereof; (vi) the Company or any Material Subsidiary (as defined in the Indenture) pursuant to or within the meaning of the Bankruptcy Code (as defined in the Indenture): (1) commences a voluntary case in bankruptcy or any other action or proceeding for any other relief under any law affecting creditors' rights that is similar to the Bankruptcy Code; (2) consents by answer or otherwise to the commencement against it of an involuntary case or proceeding of bankruptcy or insolvency; (3) seeks or consents to the appointment of a receiver, trustee, assignee, liquidator, custodian or similar official (collectively, a "Custodian") of it or for all or substantially all of its Property (as defined in the Indenture); (4) makes a general assignment for the benefit of its creditors; or (5) consents to the entry of a judgment, decree or order for relief against it in an involuntary case; and (vii) a court of competent jurisdiction enters a judgment, order or decree under any Bankruptcy Code (as defined in the Indenture) that is for relief against the Company or any Material Subsidiary in an involuntary case or proceeding which shall: (1) approve a petition seeking reorganization, arrangement, adjustment or composition in respect of the Company or any Material Subsidiary of the Company, (2) appoint a Custodian for the Company or any Material Subsidiary or for all or substantially all of the Property of any of them; or (3) order the winding up or liquidation of the Company or any Material Subsidiary, -10- and in each case the judgment, order or decree remains unstayed and in effect for 60 days, or any dismissal, stay, rescission or termination ceases to remain in effect. (Section 5.01) Within 90 days after the occurrence of a Default or an Event of Default that is continuing and known to a Trust Officer of the Trustee, the Trustee shall mail notice thereof to the Holders. Except in the case of a default in payment on the Senior Notes, the Trustee may withhold such notice if and as long as a committee of Trust Officers in good faith determines that such withholding is in the interests of the Holders. (Section 6.05) (b) Authentication and Delivery; Application of Proceeds. The Indenture provides that, upon a written order of the Company signed by two officers, the Trustee shall authenticate Senior Notes for original issue up to $595,475,922. The Senior Notes will be signed for the Company by the Company's President or a Vice President and shall be attested by the Company's Secretary or an Assistant Secretary. A Senior Note shall not be valid until authenticated by the manual signature of the Trustee. The signature shall be conclusive evidence that the Senior Note has been authenticated under the Indenture. The Trustee may appoint an Authenticating Agent acceptable to the Company to authenticate Senior Notes. An Authenticating Agent may authenticate Senior Notes whenever the Trustee may do so. Each reference in the Indenture to authentication by the Trustee includes authentication by such agent. An Authenticating Agent has the same rights as an Agent (as defined in the Indenture) to deal with the Company or an Affiliate (as defined in the Indenture). (Section 2.02) The Senior Notes will be issued in exchange for claims against the Company or its affiliates as provided in the Plan, and accordingly, the issuance of the Senior Notes will not result in proceeds to the Company. (c) Release and Substitution of Property Subject to the Lien of the Indenture: Not Applicable. (d) Satisfaction and Discharge. The Indenture shall cease to be of further effect (except that the Company's obligations under Sections 6.07 and 7.04 of the Indenture and the Trustee's and Paying Agents obligations under Section 7.03 of the Indenture shall survive) when all outstanding Senior Notes theretofore authenticated and issued have been delivered to the Trustee for cancellation, the Company has paid all sums payable by it under the Indenture and the Company has delivered an Opinion of Counsel and Officers' Certificate to the Trustee. In addition, the Company may elect to either (i) terminate its obligations under the Indenture and the outstanding Senior Notes or (ii) be released and discharged from its obligations under any covenant contained in Sections 3.02, 3.03, 3.04, 3.05, 3.06, 3.08, 3.09, 3.10, 3.11, 3.14 and 4.01 of the Indenture and the omission to comply with any such covenant shall not constitute a Default or an Event of Default, if, in either case, -11- the Company irrevocably deposits with the Trustee (or, at the option of the Trustee, a trustee satisfactory to the Trustee and the Company) in trust money or U.S. Government Obligations (as defined in the Indenture) sufficient (without reinvestment thereof) to pay principal and interest on the Senior Notes to maturity and to pay all other sums then payable by it to the Trustee under Section 6.07 of the Indenture and if the Company satisfies certain other conditions. If the Company so terminates its obligations under the Indenture and the Senior Notes pursuant to clause (i) above, the Company's obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07, 3.17, 6.07, 6.08 and 7.04 and the Trustee's and Paying Agent's obligations in Section 7.02 and 7.03 shall survive until the Senior Notes are no longer outstanding. Thereafter, only the Company's obligations in Section 6.07 and 7.04 and the Trustee's and Paying Agent's obligations in Section 7.03 shall survive. In the case of the Company's being released and discharged from the covenants set forth in clause (ii) above, all of the remaining provisions of the Indenture shall survive until the Senior Notes are no longer outstanding. Thereafter, only the Company's obligations in Section 6.07 and 7.04, and the Trustee's and Paying Agent's obligations in Section 7.03 shall survive. (Section 7.01) (e) Evidence of Compliance. The Company shall deliver to the Trustee, within 120 days after the end of each Fiscal Year of the Company, a certificate signed by two officers of the Company (one of whom must be the Chairman of the Board of Directors, the Chief Executive Officer, the President, any Vice President or the Treasurer of the Company), stating that a review of the activities of the Company and its subsidiaries during the preceding Fiscal Year has been made and, as to each such officer signing such certificate, that to the best of his or her knowledge the Company has kept, observed, performed and fulfilled each and every covenant contained in the Indenture and is not in default in the performance or observance of any of the terms, provisions and conditions thereof (or, if a Default or Event of Default shall have occurred, describing all such Defaults or Events of Defaults of which he or she may have knowledge and the status thereof). The Company shall, as long as any of the Senior Notes are outstanding, deliver to the Trustee, promptly, but in any case within 10 Business Days (as defined in the Indenture) of any Officer becoming aware of any Default, Event of Default or default in the performance of any covenant, agreement or condition contained in the Indenture, a certificate signed by two officers of the Company (one of whom must be the Chairman of the Board of Directors, the Chief Executive Officer, the President, any Vice President or the Treasurer of the Company) specifying such Default or Event of Default and the status thereof. Upon payment in full of all outstanding Indebtedness under the Bank Credit Agreement (as defined in the Indenture), the Company shall deliver a certificate signed by two officers of the Company (one of whom must be the Chairman of the Board of Directors, the Chief Executive Officer, the President, any Vice President or the Treasurer of the Company) to the Trustee stating that such Indebtedness has been paid in full and discharged. (Section 3.18) 9. OTHER OBLIGORS. GIVE THE NAME AND COMPLETE MAILING ADDRESS OF ANY PERSON, OTHER THAN THE APPLICANT, WHO IS AN OBLIGOR UPON THE INDENTURE SECURITIES. There are no other obligors with respect to the Senior Notes. -12- CONTENTS OF APPLICATION FOR QUALIFICATION. This application for qualification comprises: a. Pages numbered 1 to 15, consecutively. b. The statement of eligibility and qualification of the trustee under the Indenture to be qualified. * c. The following exhibits in addition to those filed as a part of the statement of eligibility and qualification of the trustee. Exhibit T3A1. Certificate of Incorporation of the Company, as amended, incorporated by reference to Exhibit No. 3.1 to the Registration Statement on Form S-1 of the Company, Grand Union Capital Corporation and Grand Union Holdings Corporation (Registration No. 33-48282 (the "1992 Grand Union Registration Statement") Exhibit T3A2. Proposed Restated Certificate of Incorporation of the Company (included in Exhibit T3E1 hereof) Exhibit T3B1. By-Laws of the Company, incorporated by reference to Exhibit No. 3.4 to the 1992 Grand Union Registration Statement Exhibit T3B2. Proposed Restated By-Laws of the Company (included in Exhibit T3E1 hereof) Exhibit T3C. Form of Indenture Exhibit T3E1. Disclosure Statement for Second Amended Chapter 11 Plan of Reorganization of The Grand Union Company dated April 19, 1995, including Plan as an exhibit thereto, as filed with the United States Bankruptcy Court for the District of Delaware * Exhibit T3E2. Order approving disclosure statement, establishing voting procedures and setting confirmation hearing * Exhibit T3E3. Notice of hearing to consider confirmation of and time fixed for voting on the Second Amended Chapter 11 Plan of Reorganization filed by The Grand Union Company * Exhibit T3E4. Ballots for voting on Second Amended Plan of Reorganization, dated April 19, 1995, submitted by The Grand Union Company, Class 4-Senior Note Claims * Exhibit T3E5. Summary ballots for voting on Second Amended Plan of Reorganization, dated April 19, 1995, submitted by The Grand Union Company, Class 4-Senior Note Claims * -13- - ------------------------ * Previously filed Exhibit T3F. Cross Reference Sheet showing the location in the Indenture of the provisions inserted therein pursuant to Section 310 through 318(a), inclusive, of the Trust Indenture Act of 1939 (included in Exhibit T3C hereof) -14- SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939, the applicant, The Grand Union Company, a corporation organized and existing under the laws of the State of Delaware, has duly caused this application to be signed on its behalf by the undersigned, thereunto duly authorized, and its seal to be hereunto affixed and attested, all in the City of Wayne, and State of New Jersey, on the 31st day of May, 1995. THE GRAND UNION COMPANY [SEAL] By: /s/ Kenneth R. Baum _________________________________ Name: Kenneth R. Baum Title: Senior Vice President, Chief Financial Officer and Secretary Attest: /s/ Stephen H. Maier ______________________________ Name: Stephen H. Maier Title: Assistant Secretary -15- EX-99.T3C 2 FORM OF INDENTURE Exhibit T3C DRAFT 5/26/95 THE GRAND UNION COMPANY, as Issuer and IBJ SCHRODER BANK & TRUST COMPANY, as Trustee $595,475,922 - ------------------------------------------------------------------------------- INDENTURE Dated as of _______________, 1995 - ------------------------------------------------------------------------------- 12% Senior Notes due September 1, 2004 CROSS REFERENCE TABLE(1) [SUBJECT TO FURTHER REVIEW] Trust Indenture Reference Act Section Section - --------------- --------- 310(a)(1) 6.10 (a)(2) 6.10 (a)(3) N.A. (a)(4) N.A. (a)(5) 6.10 (b) 6.10, 6.08(c) (c) N.A. 311(a) 6.11 (b) 6.11 (c) N.A. 312(a) 2.05 (b) 10.03 (c) 10.03 313(a) 6.06 (b)(1) N.A. (b)(2) 6.06 (c) 6.06, 10.02 (d) 6.06 314(a) 3.07(a), 3.18(a), 10.05 (b) N.A. (c)(1) 10.04 (c)(2) 10.04 (c)(3) N.A. (d) N.A. (e) 10.05 315(a) 6.01(b) (b) 6.05, 10.02 (c) 6.01(a) (d) 6.01(c), 6.02 (e) 5.11 316(a) 2.09 (a)(1)(A) 5.05 (a)(1)(B) 5.04 (a)(2) N.A. (b) 5.07 (c) 8.04(b) 317(a)(1) 5.08 (a)(2) 5.09 (b) 2.04 318(a) 10.01 N.A. means not applicable - -------------------- 1 This Cross-Reference Table is not part of the Indenture TABLE OF CONTENTS Page ---- ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE . . . . . . . . . . . . . . . 1 SECTION 1.01. (a) DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . 1 (b) ACCOUNTING TERMS. . . . . . . . . . . . . . . . . . . . . . . 16 SECTION 1.02. OTHER DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . 16 SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.. . . . . . . . . . . . . . . . . . . . . 17 SECTION 1.04. RULES OF CONSTRUCTION . . . . . . . . . . . . . . . . . . . . 17 ARTICLE 2 THE SECURITIES. . . . . . . . . . . . . . . 18 SECTION 2.01. FORM AND DATING . . . . . . . . . . . . . . . . . . . . . . . 18 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. HOLDER LISTS. . . . . . . . . . . . . . . . . . . . . . . . . 20 SECTION 2.06. TRANSFER AND EXCHANGE . . . . . . . . . . . . . . . . . . . . 20 SECTION 2.07. REPLACEMENT SECURITIES. . . . . . . . . . . . . . . . . . . . 21 SECTION 2.08. OUTSTANDING SECURITIES. . . . . . . . . . . . . . . . . . . . 21 SECTION 2.09. TREASURY SECURITIES . . . . . . . . . . . . . . . . . . . . . 22 SECTION 2.10. TEMPORARY SECURITIES. . . . . . . . . . . . . . . . . . . . . 22 SECTION 2.11. CANCELLATION. . . . . . . . . . . . . . . . . . . . . . . . . 22 SECTION 2.12. DEFAULTED INTEREST. . . . . . . . . . . . . . . . . . . . . . 22 ARTICLE 3 -i- Page ---- COVENANTS. . . . . . . . . . . . . . . . 23 SECTION 3.01. PAYMENT OF SECURITIES . . . . . . . . . . . . . . . . . . . . 23 SECTION 3.02. LIMITATION ON RESTRICTED PAYMENTS . . . . . . . . . . . . . . 23 SECTION 3.03. LIMITATION ON INDEBTEDNESS. . . . . . . . . . . . . . . . . . 25 SECTION 3.04. LIMITATION ON LIENS . . . . . . . . . . . . . . . . . . . . . 29 SECTION 3.05. LIMITATION ON SALE AND LEASEBACK TRANSACTIONS. . . . . . . . . . . . . . . . . . . . . . . . . 30 SECTION 3.06. LIMITATION ON ASSET SALES . . . . . . . . . . . . . . . . . . 31 SECTION 3.07. SEC REPORTS . . . . . . . . . . . . . . . . . . . . . . . . . 34 SECTION 3.08. LIMITATION ON PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES. . . . . . . . . . . . . . . . . . . . 35 SECTION 3.09. LIMITATION ON INDEBTEDNESS AND PREFERRED STOCK OF SUBSIDIARIES (OTHER THAN NON-BORROWING SUBSIDIARIES) . . . . . . . . . . . . . . . . . 36 SECTION 3.10. LIMITATION ON INDEBTEDNESS OF NON-BORROWING SUBSIDIARIES. . . . . . . . . . . . . . . . . . . . . . . . . 39 SECTION 3.11. TRANSACTIONS WITH AFFILIATES. . . . . . . . . . . . . . . . . 39 SECTION 3.12. RESTRICTIONS ON BECOMING AN INVESTMENT COMPANY. . . . . . . . . . . . . . . . . . . . . . 40 SECTION 3.13. CONTINUED EXISTENCE AND RIGHTS. . . . . . . . . . . . . . . . 40 SECTION 3.14. MAINTENANCE OF PROPERTIES AND OTHER MATTERS . . . . . . . . . . . . . . . . . . . . . . . . 40 SECTION 3.15. TAXES AND CLAIMS. . . . . . . . . . . . . . . . . . . . . . . 41 SECTION 3.16. STAY, EXTENSION AND USURY LAWS. . . . . . . . . . . . . . . . 42 SECTION 3.17. MONEY FOR SECURITY PAYMENTS TO BE HELD IN TRUST . . . . . . . . . . . . . . . . . . . . . 42 SECTION 3.18. COMPLIANCE CERTIFICATE. . . . . . . . . . . . . . . . . . . . 43 ARTICLE 4 SUCCESSORS; CHANGE OF CONTROL; OPTIONAL PREPAYMENT. . . . . . 44 -ii- Page ---- SECTION 4.01. WHEN COMPANY MAY MERGE, ETC.; CHANGE OF CONTROL; HOLDERS' RIGHT OF OPTIONAL PREPAYMENT. . . . . . . . . . . . . . . . . 44 ARTICLE 5 DEFAULTS AND REMEDIES. . . . . . . . . . . . . 46 SECTION 5.01. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . 46 SECTION 5.02. ACCELERATION. . . . . . . . . . . . . . . . . . . . . . . . . 48 SECTION 5.03. OTHER REMEDIES. . . . . . . . . . . . . . . . . . . . . . . . 49 SECTION 5.04. WAIVER OF DEFAULTS. . . . . . . . . . . . . . . . . . . . . . 49 SECTION 5.05. CONTROL BY MAJORITY . . . . . . . . . . . . . . . . . . . . . 49 SECTION 5.06. LIMITATION ON SUITS . . . . . . . . . . . . . . . . . . . . . 50 SECTION 5.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT. . . . . . . . . . . . . 50 SECTION 5.08. COLLECTION SUIT BY TRUSTEE. . . . . . . . . . . . . . . . . . 50 SECTION 5.09. TRUSTEE MAY FILE PROOFS OF CLAIM. . . . . . . . . . . . . . . 51 SECTION 5.10. PRIORITIES. . . . . . . . . . . . . . . . . . . . . . . . . . 52 SECTION 5.11. UNDERTAKING FOR COSTS . . . . . . . . . . . . . . . . . . . . 52 ARTICLE 6 TRUSTEE . . . . . . . . . . . . . . . . 52 SECTION 6.01. DUTIES OF TRUSTEE . . . . . . . . . . . . . . . . . . . . . . 52 SECTION 6.02. RIGHTS OF TRUSTEE . . . . . . . . . . . . . . . . . . . . . . 54 SECTION 6.03. INDIVIDUAL RIGHTS OF TRUSTEE. . . . . . . . . . . . . . . . . 54 SECTION 6.04. TRUSTEE'S DISCLAIMER. . . . . . . . . . . . . . . . . . . . . 54 SECTION 6.05. NOTICE OF DEFAULTS. . . . . . . . . . . . . . . . . . . . . . 55 SECTION 6.06. REPORTS BY TRUSTEE TO HOLDERS . . . . . . . . . . . . . . . . 55 SECTION 6.07. COMPENSATION AND INDEMNITY. . . . . . . . . . . . . . . . . . 55 SECTION 6.08. REPLACEMENT OF TRUSTEE. . . . . . . . . . . . . . . . . . . . 56 -iii- Page ---- SECTION 6.09. SUCCESSOR TRUSTEE BY MERGER, ETC. . . . . . . . . . . . . . . 57 SECTION 6.10. ELIGIBILITY; DISQUALIFICATION . . . . . . . . . . . . . . . . 57 SECTION 6.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY. . . . . . . . . . . . . . . . . . . . 58 SECTION 6.12. AUTHENTICATING AGENT. . . . . . . . . . . . . . . . . . . . . 58 ARTICLE 7 DISCHARGE OF INDENTURE. . . . . . . . . . . . . 59 SECTION 7.01. TERMINATION OF COMPANY'S OBLIGATIONS. . . . . . . . . . . . . 59 SECTION 7.02. APPLICATION OF TRUST MONEY. . . . . . . . . . . . . . . . . . 62 SECTION 7.03. REPAYMENT TO COMPANY. . . . . . . . . . . . . . . . . . . . . 62 SECTION 7.04. REINSTATEMENT . . . . . . . . . . . . . . . . . . . . . . . . 63 ARTICLE 8 AMENDMENTS. . . . . . . . . . . . . . . . 63 SECTION 8.01. WITHOUT CONSENT OF HOLDERS. . . . . . . . . . . . . . . . . . 63 SECTION 8.02. WITH CONSENT OF HOLDERS . . . . . . . . . . . . . . . . . . . 64 SECTION 8.03. COMPLIANCE WITH TRUST INDENTURE ACT . . . . . . . . . . . . . 64 SECTION 8.04. REVOCATION AND EFFECT OF CONSENTS . . . . . . . . . . . . . . 65 SECTION 8.05. NOTATION ON EXCHANGE OF SECURITIES. . . . . . . . . . . . . . 65 SECTION 8.06. TRUSTEE PROTECTED . . . . . . . . . . . . . . . . . . . . . . 65 ARTICLE 9 REDEMPTIONS . . . . . . . . . . . . . . . 66 SECTION 9.01. NOTICE TO TRUSTEE . . . . . . . . . . . . . . . . . . . . . . 66 SECTION 9.02. SELECTION OF THE SECURITIES TO BE REDEEMED. . . . . . . . . . 66 SECTION 9.03. NOTICE OF REDEMPTION. . . . . . . . . . . . . . . . . . . . . 67 SECTION 9.04. EFFECT OF NOTICE OF REDEMPTION. . . . . . . . . . . . . . . . 67 SECTION 9.05. DEPOSIT OF REDEMPTION PRICE ON -iv- Page ---- OPTIONAL REDEMPTION. . . . . . . . . . . . . . . . . . . . . 68 SECTION 9.06. SECURITIES REDEEMED IN PART . . . . . . . . . . . . . . . . . 68 ARTICLE 10 MISCELLANEOUS. . . . . . . . . . . . . . . 68 SECTION 10.01. TRUST INDENTURE ACT CONTROLS. . . . . . . . . . . . . . . . . 68 SECTION 10.02. NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . 68 SECTION 10.03. COMMUNICATION BY HOLDERS WITH OTHER HOLDERS. . . . . . . . . . . . . . . . . . . . . . 70 SECTION 10.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . 70 SECTION 10.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION. . . . . . . . . . . . . . . . . . . . 70 SECTION 10.06. RULES BY TRUSTEE AND AGENTS . . . . . . . . . . . . . . . . . 71 SECTION 10.07. LEGAL HOLIDAYS. . . . . . . . . . . . . . . . . . . . . . . . 71 SECTION 10.08. NO RECOURSE AGAINST OTHERS. . . . . . . . . . . . . . . . . . 71 SECTION 10.09. DUPLICATE ORIGINALS . . . . . . . . . . . . . . . . . . . . . 71 SECTION 10.10. GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . 71 SECTION 10.11. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS . . . . . . . . . . . . . . . . . . . . . 71 SECTION 10.12. SUCCESSORS. . . . . . . . . . . . . . . . . . . . . . . . . . 72 SECTION 10.13. SEVERABILITY. . . . . . . . . . . . . . . . . . . . . . . . . 72 SECTION 10.14. TABLE OF CONTENTS, HEADINGS, ETC. . . . . . . . . . . . . . . 72 SECTION 10.15. BENEFITS OF INDENTURE . . . . . . . . . . . . . . . . . . . . 73 -v- INDENTURE dated as of _______, 1995 between THE GRAND UNION COMPANY, a Delaware corporation (the "Company"), and IBJ SCHRODER BANK & TRUST COMPANY, a banking company organized under the laws of the State of New York, as trustee (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 12% Senior Notes due September 1, 2004 (the "Securities"). ARTICLE 1. DEFINITIONS AND INCORPORATION BY REFERENCE SECTION 1.01. (a) DEFINITIONS. "ADDITIONAL ASSETS" means any Property or assets substantially related to the Company's primary business. "AFFILIATE" means, with respect to any referenced Person, a Person (i) which directly or indirectly through one or more intermediaries controls, or is controlled by, or is under direct or indirect common control with, such referenced Person, (ii) which directly or indirectly through one or more intermediaries beneficially owns or holds 5% or more of the combined voting power of the total Voting Stock of such referenced Person or (iii) of which 5% or more of the combined voting power of the total Voting Stock (or in the case of a Person which is not a corporation, 5% or more of the equity interest) directly or indirectly through one or more intermediaries is beneficially owned or held by such referenced Person, or a Subsidiary of such referenced Person. For purposes of this definition, "control" (including, with correlative meanings, the terms "controlling," "controlled by" and "under common control with"), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise; PROVIDED, HOWEVER, that beneficial ownership of 5% or more of the voting securities of another Person, shall be deemed to be control. When used herein without reference to any Person, Affiliate means an Affiliate of the Company. "AGENT" means any Registrar, Paying Agent or co-Registrar. "ASSET SALE" means the sale or other disposition, in a transaction which is not a Sale and Leaseback Transaction permitted under the terms of this Indenture, by the Company or any of its Subsidiaries to any Person other than the Company or another of its Subsidiaries of (i) any of the Capital Stock of any of the Subsidiaries of the Company or (ii) any other assets of the Company or any other assets of its Subsidiaries outside the ordinary course of business of the Company or such Subsidiary. "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 (x) the numbers of years from the date of determination to the dates of each successive scheduled principal payment of such debt security multiplied by (y) the amount of such principal payment by (ii) the sum of all such principal payments. "BANK CREDIT AGREEMENT" means either (i) the Bankers Trust Bank Credit Agreement, (ii) the Alternative Credit Documents (as defined in the Plan), if the Company has made the election provided for in Section 6.01(a) (ii) of the Plan, or (iii) any successor agreement, together with documents related thereto, including, without limitation, any security agreements, pledge agreements, mortgages or guarantees, in the case of each of clause (i), (ii) or (iii) hereof as such agreements may be amended, restated, supplemented or otherwise modified from time to time and includes any agreement renewing, extending the maturity of, refinancing (including by way of placement or issuance of notes) or restructuring (including the inclusion of additional borrowers, guarantors or lenders) all or any portion of the Indebtedness under such agreements. "BANKERS TRUST BANK CREDIT AGREEMENT" means the Amended and Restated Credit Agreement dated as of ________, 1995 among the Company, Bankers Trust Company, for itself and as agent, and the other parties thereto. "BANKRUPTCY CODE" means Title 11 of the United States Code, as from time to time in effect. For purposes of Sections 5.01, 6.07 and 6.08 hereof, the term "Bankruptcy Code" also includes any similar federal, state or foreign law relating to bankruptcy, insolvency, receivership, winding-up, liquidation, reorganization or relief of debtors or any amendment to, succession to or change in any such law. "BOARD OF DIRECTORS" means the Board of Directors of the Company or any duly authorized committee of such board. "BORROWING SUBSIDIARY" means any direct or indirect wholly-owned Subsidiary of the Company which is permitted to -2- incur Indebtedness under the terms of this Indenture pursuant to Section 3.09 hereof and which is primarily engaged in any business in which a supermarket chain is at the time engaged or any related business or in any business in which the Company is engaged on the Issue Date. "BUSINESS DAY" means any day which is not a Legal Holiday. "CAPITAL STOCK" means, with respect to any Person, any and all shares, interests, participations, rights in or other equivalents (however designated) of such Person's capital stock, including, without limitation, preferred or preference stock, and any rights (other than debt securities convertible into capital stock), warrants or options exchangeable for or convertible into such capital stock. "CAPITALIZED LEASE OBLIGATIONS" means, at the time any determination thereof is made, as to any Person, the obligation of such Person to pay rent or other amounts under a lease of (or other agreement conveying the right to use) real or personal Property which obligation is required to be classified and accounted for as a capital lease obligation on a balance sheet of such Person under GAAP and, for purposes of this Indenture, the amount of such obligation at any date shall be the outstanding amount thereof at such date, determined in accordance with GAAP. "CHANGE OF CONTROL" means the occurrence of any of the following events: (a) any Person or Persons acting together which would constitute a "group" (a "Group") for purposes of Section 13(d) of the Exchange Act, or any successor provision thereto, together with any Affiliates thereof (other than a Permitted Holder or Permitted Holders), is or becomes the beneficial owner of more than 50% of the total Voting Stock of the Company; (b) the Company consolidates with, or merges into, another Person or sells, assigns, conveys, transfers, leases or otherwise disposes of all or substantially all of its assets to any Person in one transaction or a series of related transactions, or any Person consolidates with, or merges with or into, the Company, in any such event pursuant to a transaction in which the outstanding Voting Stock of the Company is converted into or exchanged for cash, securities (other than Voting Stock) or other property with the effect that any Person or Group (other than a Permitted Holder or Permitted Holders) becomes the beneficial owner of more than 50% of the total Voting Stock of the Company or any successor -3- corporation or securities representing more than 50% of the total Voting Stock of the Company or any successor corporation; (c) during any consecutive two-year period, commencing as of the date of this Indenture, individuals who at the beginning of such period constituted the Board of Directors of the Company (together with any new directors whose election by such Board or whose nomination for election by the stockholders of the Company was approved by a vote of 66 2/3% of the directors then still in office who were either directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason (other than death or disability) to constitute a majority of the Board of Directors of the Company then in office; or (d) any order, judgment or decree shall be entered against the Company decreeing the dissolution or split-up of the Company and such order shall remain undischarged or unstayed for a period in excess of 60 days; PROVIDED, HOWEVER, that none of the events described in the foregoing clauses (a) through (d) shall constitute a "Change of Control" unless Standard & Poor's Corporation or Moody's Investors Service, Inc. or, if both of the two named rating agencies cease publishing ratings of investments, another nationally recognized rating service which publicly rates investments shall within 180 days after the occurrence of such event (such 180-day period to be extended by that number of days, not exceeding 45 days, during which the Securities shall have been placed after the date of such event on credit watch with negative implications status) have downgraded the rating assigned by such agency to the Securities on the date of such event. "COMPANY" means the Person designated as the "Company" in the first paragraph of this instrument until any successor corporation shall have become such Person pursuant to the terms of this Indenture, and thereafter means any such successor. "CONSOLIDATED INTEREST COVERAGE RATIO" means, with respect to the Company for any period, the ratio of: (i) the aggregate amount of Consolidated Operating Income of the Company for the four consecutive fiscal quarters for which financial information in respect thereof is available immediately prior to the Transaction Date -4- to (ii) the aggregate amount of Consolidated Interest Expense of the Company for the four consecutive fiscal quarters for which financial information in respect thereof is available immediately prior to the Transaction Date; PROVIDED, HOWEVER, that, for purposes of calculating the Consolidated Interest Coverage Ratio of the Company, (a) Consolidated Operating Income shall be calculated on the basis of the first-in, first-out method of inventory valuation, as determined in accordance with GAAP, (b) the Consolidated Operating Income and Consolidated Interest Expense of the Company shall include the Consolidated Operating Income and Consolidated Interest Expense of any Person to be acquired by the Company or any of its Subsidiaries in connection with the transaction giving rise to the need to calculate the Consolidated Interest Coverage Ratio, on a pro forma basis for the four consecutive fiscal quarters for which financial information in respect thereof is available immediately prior to the Transaction Date and shall also include the Consolidated Operating Income and Consolidated Interest Expense of any other Person which has been acquired during such four consecutive fiscal quarters, on a pro forma basis from the beginning of such four consecutive fiscal quarters through the date first included in the Company's Consolidated Operating Income and Consolidated Interest Expenses, such pro forma Consolidated Operating Income and Consolidated Interest Expense to be determined on the same basis as used in determining such items for the Company, and (c) Consolidated Interest Expense and Redeemable Dividends shall be calculated as if (i) any Indebtedness incurred or proposed to be incurred or issued since the beginning of the four consecutive fiscal quarters for which financial information in respect thereof is available immediately prior to the Transaction Date, or to be incurred or issued at or prior to the time of the transaction giving rise to the need to calculate the Consolidated Interest Coverage Ratio is effected (the "Transaction Time"), had been incurred or issued as of the beginning of such four quarter period, and (ii) any Indebtedness repaid since the beginning of such four quarter period or to be repaid with the proceeds of such Indebtedness or equity incurred or issued or to be incurred or issued at or prior to the Transaction Time, had been repaid as of the beginning of such four quarter period. For purposes of determining the Consolidated Interest Coverage Ratio of the Company for any period, (i) any Indebtedness incurred or proposed to be incurred or Redeemable Stock issued or proposed to be issued which for purposes of clause (c) above is deemed to have been -5- incurred or issued as of the beginning of the four quarter period described in clause (c) which bearsinterest at a fluctuating rate will be deemed to have borne interest during such four quarter period at the rate in effect on the Transaction Date and (ii) "Subsidiary" shall mean any Subsidiary of the Company other than any Subsidiary (and Subsidiaries of such Subsidiary) of which the Company does not own or control, directly or indirectly, a sufficient amount of Voting Stock in order to cause a merger of such Subsidiary into the Company or another Subsidiary without the approval of any other holder of Voting Stock of such Subsidiary. "CONSOLIDATED INTEREST EXPENSE" means, for any period, without duplication (A) the sum of (i) the aggregate amount of interest recognized by the Company and its Subsidiaries during such period in respect of Indebtedness of the Company and its Subsidiaries (including, without limitation, all interest capitalized by the Company or any of its Subsidiaries during such period and all commissions, discounts and other fees and charges owed by the Company and its Subsidiaries with respect to letters of credit and bankers' acceptance financing and the net costs associated with Interest Swap Obligations of the Company and its Subsidiaries), (ii) to the extent any Indebtedness of any Person is guaranteed by the Company or any of its Subsidiaries, the aggregate amount of interest paid or accrued by such Person during such period attributable to any such Indebtedness, and (iii) any cash [Redeemable Dividend] accrued and payable, and less (B) amortization or write-off of deferred financing costs of the Company and its Subsidiaries during such period and, to the extent included in (A) above, any charge related to any premium or penalty paid in connection with redeeming or retiring any Indebtedness prior to its stated maturity, and in the case of both (A) and (B) above, elimination of intercompany accounts among the Company and its Subsidiaries and as determined in accordance with GAAP. "CONSOLIDATED NET INCOME" means, for any period, the aggregate net income of the Company and its Subsidiaries for such period on a consolidated basis, determined in accordance with GAAP but excluding for such purpose the impact of any Fresh Start Accounting adjustment; PROVIDED, HOWEVER, that there shall be excluded therefrom, after giving effect to any related tax effect, (i) gains and losses from Asset Sales or reserves relating thereto, (ii) items classified as extraordinary or nonrecurring, including without limitation income relating to the cancellation of Indebtedness resulting from the Restructuring, (iii) the income (or loss) of any Joint Venture, except to the extent of the amount of cash dividends or other distributions in respect of its -6- capital stock or interest in the Joint Venture actually paid to, and received by, the Company or any of its Subsidiariesduring such period by such Joint Venture out of funds legally available therefor, (iv) except to the extent includable pursuant to clause (iii), the income (or loss) of any Person accrued or attributable to any period prior to the date it becomes a Subsidiary of the Company or is merged into or consolidated with the Company or any of its Subsidiaries or that Person's assets (or a portion thereof) are acquired by the Company or any of its Subsidiaries and (v) the cumulative effect of changes in accounting principles in the year of adoption of such change. "CONSOLIDATED OPERATING INCOME" means, with respect to the Company for any period, the Consolidated Net Income of the Company and its Subsidiaries for such period (A) increased by the sum of (i) Consolidated Interest Expense of the Company for such period, (ii) income tax expense of the Company and its Subsidiaries, on a consolidated basis, for such period (after giving effect to any income tax expense adjustments made in arriving at Consolidated Net Income), (iii) depreciation expense of the Company and its Subsidiaries, on a consolidated basis, for such period, (iv) amortization expense of the Company and its Subsidiaries, on a consolidated basis, for such period, (v) amortization or write-off of deferred financing costs of the Company and its Subsidiaries, on a consolidated basis, for such period and (vi) other non cash items, but only to the extent the items referred to in subclauses (i) through (vi) of this clause (A) reduced such Consolidated Net Income and (B) decreased by the sum of (i) non cash items increasing such Consolidated Net Income and (ii) any revenues received or accrued by the Company or any of its Subsidiaries from any Person (other than the Company or any of its Subsidiaries) in respect of any Investment for such period (other than revenue from any Qualified Investment), but only to the extent that subclauses (i) and (ii) of this clause (B) increased such Consolidated Net Income, all as determined in accordance with GAAP. "DEFAULT" means an event or condition that is, or, with the lapse of time or the giving of notice or both, would become, an Event of Default as defined in Section 5.01. "FAIR MARKET VALUE" means, with respect to any Asset Sale or any non-cash consideration received by or transferred to any Person, the sale value that would be obtained in an arm's-length transaction between an informed and willing seller under no compulsion to sell and an informed and willing buyer, as determined in good faith by the Board of Directors of the Company. -7- "FISCAL YEAR" means the Company's fiscal year ended the Saturday closest to the last day of March in any calendar year or such other date as the Company shall designate for use in connection with its obligations under the federal taxing laws of the United States and relevant accounting standards. "FRESH START ACCOUNTING" means Fresh Start Accounting as described in Statement of Position 90-7, "Financial Reporting by Entities in Reorganization Under the Bankruptcy Code" (Am. Inst. of Certified Public Accountants 1990), as then in effect, or such comparable statement then in effect. "GAAP" means, at any particular time, generally accepted accounting principles as in effect in the United States of America at such time. "GUARANTEE" means any direct or indirect obligation, contingent or otherwise, of a Person guaranteeing or having the economic effect of guaranteeing any Indebtedness of any other Person in any manner. "HOLDER" means a Person in whose name a Security is registered. "INDEBTEDNESS," as applied to any Person, means, without duplication, (i) any obligation, contingent or otherwise, for borrowed money (whether or not the recourse of the lender is to the whole of the assets of such Person or only to a portion thereof), (ii) any obligation owed for all or any part of the purchase price of Property or other assets or for the cost of Property or other assets constructed or of improvements thereto (including any obligation under or in connection with any letter of credit related thereto), other than accounts payable included in current liabilities incurred in respect of Property and services purchased in the ordinary course of business which are not overdue by more than 90 days, according to the terms of sale, unless being contested or negotiated in good faith, (iii) any obligation, contingent or otherwise, of a Person under or in connection with any letter of credit issued for the account of such Person, and all drafts drawn, or demands for payment honored, thereunder, (iv) any obligation, contingent or otherwise, as set forth in subclauses (i) and (ii) of this definition, secured by any Lien in respect of Property even though the Person owning the Property has not assumed or become liable for payment of such obligation, (v) any Capitalized Lease Obligation, (vi) any note payable, bond, debenture, draft accepted or similar instrument representing an extension of credit (other than extensions of credit for Property and services purchased in the ordinary course of business which are not overdue by more than 90 days, according to the terms of sale, unless being -8- contested or negotiated in good faith), whether or not representing an obligation for borrowed money, (vii) the maximum fixed repurchase price of any Redeemable Stock, (viii) any obligations of such Person in respect of Interest Swap Obligations and (ix) any Guarantees and any obligation which is in economic effect a Guarantee, regardless of its characterization, with respect to Indebtedness (of a kind otherwise described in this definition) of another Person. For purposes of the preceding sentence, the maximum fixed repurchase price of any Redeemable Stock which does not have a fixed repurchase price shall be calculated in accordance with the terms of such Redeemable Stock as if such Redeemable Stock were repurchased on any date on which Indebtedness shall be required to be determined pursuant to the Indenture. The amount of Indebtedness of any Person at any date shall be the outstanding balance at such date of all unconditional obligations as described above and the maximum liability of any such contingent obligations at such date. "INDENTURE" means this Indenture, as amended, modified or supplemented from time to time, together with any exhibits, schedules or other attachments hereto. "INTEREST SWAP OBLIGATIONS" means the obligations of any Person pursuant to any interest rate swap agreement, interest rate cap, collar or floor agreement or other similar agreement or arrangement. "INVESTMENT" means, with respect to any Person (such Person being referred to in this definition as the "Investor"), (i) any amount paid by the Investor, directly or indirectly, or any transfer of Property by the Investor, directly or indirectly (such amount to be the Fair Market Value of such Property at the time of transfer by the Investor), to any other Person for Capital Stock of, or as a capital contribution to, any other Person; (ii) any direct or indirect loan or advance to any other Person (other than accounts receivable of such Investor arising in the ordinary course of business); and (iii) Guarantees of the Indebtedness of another Person. "ISSUE DATE" means ___________, 1995, the date on which the Securities are first to be issued under this Indenture. "JOINT VENTURE" means any Person (other than a Subsidiary of the Company) in which any Person other than the Company or any of its Subsidiaries has a joint or shared equity interest with the Company or any of its Subsidiaries. "LIEN" means any mortgage, lien (statutory or other), charge, pledge, hypothecation, conditional sales -9- agreement, adverse claim, title retention agreement or other security interest, encumbrance or title defect in or on, or any interest or title of any vendor, lessor, lender or other secured party to or of such Person under any conditional sale, trust receipt or other title retention agreement with respect to, any Property or asset of such Person. "MATERIAL ACQUISITION" means any merger, consolidation, acquisition or lease of assets, acquisition of securities or other business combination or acquisition, or any two or more such transactions if part of a common plan to acquire a business or group of businesses, if the assets thus acquired in the aggregate would have constituted a Material Subsidiary if they had been acquired as a Subsidiary, based upon the consolidated financial statements of the Company and its Subsidiaries for the most recent Fiscal Year for which financial statements are available. "MATERIAL SUBSIDIARY" means, with respect to the Company, at any time, each existing Subsidiary and each Subsidiary hereafter acquired or formed which (i) for the most recent Fiscal Year of the Company for which financial statements are available accounted for more than 10% of the consolidated revenues of the Company and its Subsidiaries or (ii) as of the end of such Fiscal Year, was the owner (beneficial or otherwise) of more than 10% of the consolidated assets of the Company and its Subsidiaries, all as shown on the consolidated financial statements of the Company and its Subsidiaries for such Fiscal Year. "NET PROCEEDS" means, with respect to an Asset Sale by the Company or any of its Subsidiaries, (i) the gross proceeds received by the Company or its Subsidiary in connection with such Asset Sale (the amount of any non-cash consideration received as proceeds to be the Fair Market Value of such consideration, provided that liabilities assumed by the buyer shall not be deemed proceeds received by the Company or its Subsidiary), minus (ii) the sum of (a) reasonable fees and expenses incurred by the Company or such Subsidiary in connection with such Asset Sale, including any tax on income resulting from the gain realized from such Asset Sale, (b) payments made with respect to liabilities associated with the assets which are the subject of the Asset Sale, including without limitation, trade payables and other accrued liabilities, and payments made to retire Indebtedness where the assets disposed of in such Asset Sale constituted security for or had been pledged to secure such Indebtedness and payment of such Indebtedness is required in connection with such Asset Sale and (c) appropriate amounts to be provided by the Company or any Subsidiary thereof, as the case may be, as a reserve, in accordance with GAAP, against any liabilities associated with such assets and retained by the Company or any -10- Subsidiary thereof, as the case may be, after such Asset Sale, including, without limitation, liabilities under any indemnification obligations and severance and other employee termination costs associated with such Asset Sale. "NON-BORROWING SUBSIDIARY" means any direct or indirect wholly-owned Subsidiary of the Company which (i) is not permitted to incur Indebtedness and does not at any time, in the present or future, have outstanding Indebtedness and (ii) is not permitted to issue preferred or preference stock, pursuant to its certificate of incorporation or otherwise, and does not at any time, in the present or the future, have outstanding preferred or preference stock. "OFFICER" means the Chairman of the Board of Directors, the Chief Executive Officer, the President, any Vice President, the Treasurer, the Secretary, any Assistant Treasurer or any Assistant Secretary of the Company. "OFFICERS' CERTIFICATE" means a certificate signed by two Officers of the Company, one of whom must be the Chairman of the Board of Directors, the Chief Executive Officer, the President, any Vice President or the Treasurer of the Company. "OPINION OF COUNSEL" means a written opinion from legal counsel who is acceptable to the Trustee. The counsel may be an employee of or counsel to the Company or the Trustee. "PERMITTED HOLDERS" means any Person which directly or indirectly through one or more intermediaries beneficially owns or holds or is entitled to receive on the Issue Date 20% or more of the combined voting power of the Voting Stock of the Company, or any Affiliate of any such Person. "PERSON" means any individual, corporation, limited or general partnership, joint venture, association, joint stock company, trust, unincorporated organization or government or any agency or political subdivision thereof. "PLAN" means the plan of reorganization of the Company, as confirmed by the United States Bankruptcy Court for the District of Delaware on _________, 1995. "PRINCIPAL", or "PRINCIPAL" of a debt security means the principal amount of a debt security plus the premium, if any, on such debt security. "PROPERTY" means any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible. -11- "QUALIFIED INVESTMENT" means the following kinds of instruments if, on the date of purchase or other acquisition of any such instrument by the Company or any Subsidiary the remaining term to maturity thereof is not more than one year: (i) obligations issued or unconditionally guaranteed as to principal and interest by the United States of America or by any agency or authority controlled or supervised by and acting as an instrumentality of the United States of America; (ii) obligations (including, but not limited to, demand or time deposits, bankers' acceptances and certificates of deposit) issued by (a) a depository institution or trust company incorporated under the laws of the United States of America, any state thereof or the District of Columbia or (b) a branch office or agency located in the United States of any foreign depository institution and guaranteed by such a U.S. trust company or depository, provided that, in the case of both clause (a) and clause (b), such U.S. trust company or depository has, at the time of the Company's or any Subsidiary's investment therein or contractual commitment providing for such investment, capital, surplus and undivided profits (as of the date of such institution's most recently published financial statements) in excess of $100 million and the long-term unsecured debt obligations (other than such obligations rated on the basis of the credit of a person or entity other than such institution) of such institution, at the time of the Company's or any Subsidiary's investment therein or contractual commitment providing for such investment, is rated at least A-1 by Standard & Poor's Corporation or A3 by Moody's Investors Service, Inc. or carries an equivalent rating from a nationally recognized rating agency, if both these two named rating agencies cease publishing ratings of investments; and (iii) debt obligations (including, but not limited to, commercial paper and medium-term notes) issued or unconditionally guaranteed as to principal and interest by any corporation, state or municipal government or agency or instrumentality thereof, or foreign sovereignty if the commercial paper of such corporation, state or municipal government or foreign sovereignty has, at the time of the Company's or any Subsidiary's investment therein or contractual commitment providing for such investment, credit ratings of A-1 by Standard & Poor's Corporation, or P-1 by Moody's Investors Service, Inc. or carries an equivalent rating from a nationally recognized rating agency, if both these two named rating agencies cease publishing ratings of investments, or the debt obligations of such corporation, state or municipal government or foreign sovereignty, at the time of the Company's or any Subsidiary's investment therein or contractual commitment providing for such investment, have credit ratings of at least A-1 by Standard & Poor's Corporation or A3 by Moody's Investors Service, Inc. or carry an equivalent rating from a nationally recognized rating -12- agency, if both these two named rating agencies cease publishing ratings of investments. "REDEEMABLE DIVIDEND" means, for any dividend payable with regard to Redeemable Stock, the quotient of the dividend divided by the difference between one and the maximum statutory federal income tax rate (expressed as a decimal number between 1 and 0) then applicable to the issuer of such Redeemable Stock. "REDEEMABLE STOCK" means, with respect to any Person, any equity security that by its terms or otherwise is required to be redeemed or is redeemable at the option of the holder thereof at any time prior to the maturity of the Securities. "REDEMPTION DATE" means, when used with respect to any Security to be redeemed, the date fixed for such redemption pursuant to this Indenture and the Securities. "REDEMPTION PRICE" means, when used with respect to any Security to be redeemed, the price fixed for such redemption pursuant to this Indenture and the Securities as set forth in Article 9 of this Indenture and paragraph 6 of the Securities. "RESTRICTED PAYMENT" means (i) a dividend or other distribution declared and paid on the Capital Stock of the Company to its stockholders (in their capacity as such), other than dividends or distributions consisting of shares of the Company's Capital Stock (or rights or warrants to subscribe for or purchase shares of such Capital Stock), (ii) a payment made by the Company or any Subsidiary to purchase, redeem, acquire or retire any Capital Stock of the Company (or rights or warrants to subscribe for or purchase shares of such Capital Stock), (iii) a payment made by the Company or any Subsidiary to acquire, retire or redeem any debt of or equity interest in any Affiliate of the Company or any of its Subsidiaries, (iv) any other Investment in any Affiliate of the Company or any of its Subsidiaries (other than in any Non-Borrowing Subsidiary) or (v) a payment made in purchase, redemption, defeasance or other acquisition or retirement for value of Subordinated Debt. For purposes of this Indenture, a guarantee of Indebtedness of the Company by a Subsidiary of the Company required by the Bank Credit Agreement shall not be deemed a Restricted Payment. "RESTRUCTURING" means the restructuring of the Company's debt and equity capitalization pursuant to the Plan. "REVOLVING CREDIT FACILITY" means the revolving credit facility (or any similar facility) available under the Bank Credit Agreement, including any related letters of credit. -13- "SALE AND LEASEBACK TRANSACTION" means any direct or indirect arrangement with any Person or to which such Person is a party, providing for the leasing to the Company or a Subsidiary of any Property, whether owned at the date of this Indenture or thereafter acquired, which has been or is to be sold or transferred by the Company or such Subsidiary to such Person, or to any other Person to whom funds have been or are to be advanced by such Person, on the security of such Property. "SEC" means the Securities and Exchange Commission or any successor thereto. "SECURITIES" has the meaning set forth in the second paragraph of this Indenture. "SENIOR INDEBTEDNESS" means, at any date, (i) Indebtedness under the Bank Credit Agreement and the Securities including, in each case, interest thereon accruing at the contract rate, whether or not an allowed claim in a case under the Bankruptcy Code, and all other obligations and indemnities owing thereunder; (ii) any renewals, extensions, modifications, amendments or refundings of Indebtedness under the Securities; (iii) Indebtedness arising as a result of Interest Swap Obligations of the Company or any Subsidiary; and (iv) any other Indebtedness of the Company for money borrowed or under letters of credit, in either case entered into in compliance with the Indenture, unless the instrument under which such Indebtedness is created, incurred, assumed or guaranteed expressly provides that such Indebtedness is subordinated in right of payment to any Indebtedness. "SUBORDINATED DEBT" means, at any date, any Indebtedness of the Company that is expressly subordinated in any respect in right of payment to the Securities, Indebtedness under the Bank Credit Agreement or to any other Senior Indebtedness, including, without limitation, principal, premium, interest, fees, indemnities and amounts in respect of claims and rights of rescission. "SUBSIDIARY" means, with respect to any Person, any corporation, association or other business entity of which securities representing more than 50% of the combined voting power of the total Voting Stock (or in the case of an association or other business entity which is not a corporation, more than 50% of the equity interest) is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof. When used herein without reference to any Person, Subsidiary means a Subsidiary of the Company. -14- "SURVIVING CORPORATION" means the corporation formed by or surviving any consolidation or merger involving the Company or to which a transfer, sale or lease of all or substantially all of the Company's Property is made. "TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa- 77bbbb), as amended by the Trust Indenture Reform Act of 1990, as in effect on the date of execution of this Indenture, except as provided in Section 8.03. "TRANSACTION DATE" means the date of the transaction giving rise to the need to calculate the Consolidated Interest Coverage Ratio; PROVIDED that if such transaction is related to or in connection with any acquisition of any Person, the Transaction Date shall be the earlier of (i) the date on which the Company or any of its Subsidiaries enters into an agreement with such Person to effect such acquisition, (ii) the date on which the Company or any of its Subsidiaries first makes a public announcement of any offer or proposal to effect such acquisition, (iii) the date on which the Company or any of its Subsidiaries first makes a filing with the SEC or the Federal Trade Commission in connection with any proposed acquisition, and (iv) the date such acquisition is consummated, PROVIDED, HOWEVER, that if subsequent to the occurrence of an event described in clause (i), (ii) or (iii) above or clause (A), (B) or (C) below the Company or any of its Subsidiaries shall amend the terms of such acquisition with respect to the consideration payable by the Company or any of its Subsidiaries in connection with such acquisition, the Transaction Date shall be the earlier of (A) the date on which the Company or any of its Subsidiaries enters into a binding written agreement with such Person to effect such acquisition on such amended terms, (B) the date on which the Company or any of its Subsidiaries makes a public announcement of any offer or proposal to effect such acquisition on such amended terms and (C) the date on which the Company or any of its Subsidiaries first makes a filing disclosing such amended terms with the SEC or the Federal Trade Commission in connection with any proposed acquisition. "TRUSTEE" means the party named as such above unless and until a successor replaces it in accordance with the terms of this Indenture and thereafter means such successor. "TRUST OFFICER," when used with respect to the Trustee, means any officer within the Corporate Trust Department (or any successor group) of the Trustee, including without limitation any Vice President, Assistant Vice President, Secretary or any other officer customarily performing functions similar to those performed by any of the above-designated officers who shall, in any case, be responsible for the administration of this Indenture or have -15- familiarity with it, and also means, with respect to a particular corporate trust matter, any other officer of the Trustee to whom such matter is referred because of his knowledge of and familiarity with the particular subject. "VOTING STOCK" means any class or classes of Capital Stock pursuant to which the holders thereof have the general voting power under ordinary circumstances to vote for the election of directors, managers or trustees of any Person (irrespective of whether or not at the time stock of any class or classes will have or might have voting power by the reason of the happening of any contingency). (b) ACCOUNTING TERMS. Unless otherwise specified herein, all accounting terms herein shall be interpreted, all accounting determinations shall be made, and all financial statements required to be delivered hereunder shall be prepared in accordance with GAAP. SECTION 1.02. OTHER DEFINITIONS. Term Defined in Section "Authenticating Agent" 6.12 "Custodian" 5.01 "Discharged" 7.01 "Event of Default" 5.01 "Exchange Act" 3.07 "Legal Holiday" 10.07 "Paying Agent" 2.03 "Registrar" 2.03 "Repayment Date" 4.01 "Repurchase Date" 3.06 "U.S. Government Obligations" 7.01 SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT. Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture. -16- The following TIA terms used in this Indenture have the following meanings: "indenture securities" means the Securities; "indenture security holder" means a Holder; "indenture to be qualified" means this Indenture; "indenture trustee" or "institutional trustee" means the Trustee; "obligor" on the Securities means the Company. All other terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule under the TIA have the meanings assigned to them thereby. SECTION 1.04. RULES OF CONSTRUCTION. Unless the context otherwise requires: (a) a term has the meaning assigned to it; (b) an accounting term not otherwise defined has the meaning assigned to it in accordance with generally accepted accounting principles in effect on the date of the construction of such term; (c) "OR" is not exclusive; (d) words in the singular include the plural, and in the plural include the singular; and (e) provisions apply to successive events and transactions. ARTICLE 2. THE SECURITIES SECTION 2.01. FORM AND DATING. The Securities shall be substantially in the form of Exhibit A, which is part of this Indenture. The Securities may have notations, legends or endorsements required by law, stock exchange rule or usage. If determined to be necessary by the Company or its counsel, the Company may require that a legend be placed on the Securities relating to original issue discount or other applicable tax matters or as required by any -17- securities exchange on which the Securities may be listed. The Company shall furnish any such legend in writing to the Trustee. Each Security shall be dated the date of its authentication. SECTION 2.02. EXECUTION AND AUTHENTICATION. The Securities shall be signed for the Company by the Company's President or a Vice President and shall be attested by the Company's Secretary or an Assistant Secretary, in each case by manual or facsimile signature. The Company's seal shall be reproduced on the Securities. If an Officer whose signature is on a Security no longer holds that office at the time the Security is authenticated, the Security shall nevertheless be valid. A Security shall not be valid until authenticated by the manual signature of the Trustee. The signature shall be conclusive evidence that the Security has been authenticated under this Indenture. The Trustee shall authenticate Securities for original issue up to $595,475,922 upon a written order of the Company signed by two Officers. The aggregate principal amount of Securities outstanding at any time may not exceed the amount of $595,475,922 except as provided in Section 2.07. Such order shall specify the amount of the Securities to be authorized and the date or dates upon which the original issue of Securities is to be authenticated. The Trustee may appoint an Authenticating Agent 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 an Agent to deal with the Company or an Affiliate. The Securities shall be issuable in denominations of $1,000 and any integral multiples thereof. SECTION 2.03. REGISTRAR AND PAYING AGENT. The Company shall maintain an office or agency where Securities may be presented for registration of transfer or for exchange ("Registrar") and an office or agency where Securities may be presented for payment ("Paying Agent"). The Registrar shall keep a register of the Securities and of their transfer and exchange. The Company may appoint one or more co-Registrars and one or more additional Paying Agents. The term Paying Agent includes any additional Paying Agent. The -18- Company or any of its Subsidiaries may act as Paying Agent, Registrar or co-Registrar. Upon any bankruptcy or reorganization proceeding relative to the Company, the Trustee shall serve as the Paying Agent. The Company shall enter into an appropriate agency agreement with any Agent not a party to this Indenture that shall implement the provisions of this Indenture that relate to such Agent. The Company shall give prompt written notice to the Trustee of the name and address of any such Agent and any change in the address of such Agent. If the Company fails to maintain a Registrar or Paying Agent, the Trustee shall act as such. The Company initially appoints the Trustee as Paying Agent and Registrar. SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST. The Company shall require each Paying Agent other than the Trustee to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree that such Paying Agent will: (a) hold all sums held by it for the payment of the principal of, premium, if any, or interest on the Securities in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided; (b) give the Trustee notice of any default by the Company (or any other obligor upon the Securities) in the making of any payment of principal, premium, if any, or interest; and (c) at any time during the continuance of any such default, upon the written request of the Trustee, forthwith pay to the Trustee all sums so held in trust by such Paying Agent. Upon such payment over to the Trustee, the Paying Agent shall have no further liability for such money. If the Company or any of its Subsidiaries acts as Paying Agent, it shall comply with the requirements of Section 3.17 of this Indenture. SECTION 2.05. HOLDER 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 Holders. If the Trustee is not the Registrar, the Company shall furnish to the Trustee not less than ten days before each interest payment date and at -19- such other times as the Trustee may request in writing all information in the possession or control of the Company or any Paying Agent as to the names and addresses of the Holders, in such form and as of such date as the Trustee may reasonably require. SECTION 2.06. TRANSFER AND EXCHANGE. When Securities are presented to the Registrar or a co-Registrar with a request to register the transfer of, or to exchange them for an equal principal amount of Securities of other authorized denominations, the Registrar shall register the transfer or make the exchange provided that every Security presented or surrendered for registration of transfer or exchange shall be duly endorsed, or be accompanied by a written instruction of transfer in form acceptable to the Registrar duly executed by the Holder thereof or his attorney duly authorized in writing and its requirements for such transactions are met. To permit registrations of transfer and exchanges, the Company shall issue and the Trustee shall authenticate Securities at the Registrar's request. No service charge shall be made for any registration of transfer or exchange of Securities, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange. The Company shall not be required (i) to issue, register the transfer of or exchange Securities during a period beginning at the opening of business 15 days before the day of any selection of Securities for redemption under Section 9.02 and ending at the close of business on the day of such day of selection, or (ii) to register the transfer of or exchange any Security so selected for redemption in whole or in part, except the unredeemed portion of any Security being redeemed in part. SECTION 2.07. REPLACEMENT SECURITIES. If any mutilated Security is surrendered to the Trustee, the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a new Security of like tenor and principal amount and bearing a number not contemporaneously outstanding. If the Holder of a Security claims that the Security has been lost, destroyed or wrongfully taken, the Company shall issue and the Trustee shall authenticate a replacement Security if the Trustee's requirements are met, provided that the Trustee shall not be required to authenticate or replace any such Security which has been called for redemption. If -20- required by the Trustee or the Company, such Holder shall provide an indemnity bond sufficient in the judgment of both the Company and the Trustee to protect the Company, the Trustee, any Agent or any Authenticating Agent from any loss which any of them may suffer if a Security is replaced. The Company may charge the Holder for its expenses in replacing a Security. Every replacement Security issued pursuant to the provisions of this Section 2.07 by virtue of the fact that any Security is destroyed, lost or stolen shall constitute an additional contractual obligation of the Company, whether or not the destroyed, lost or stolen Security shall be found at any time, and shall be entitled to all the benefits of this Indenture equally and proportionally with any and all other Securities duly issued hereunder. SECTION 2.08. OUTSTANDING SECURITIES. The Securities outstanding at any time are all the Securities authenticated by the Trustee except for (a) those canceled by it, (b) those delivered to it for cancellation and (c) those described in this Section as not outstanding. 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 Securities are considered paid under Section 3.01, they cease to be outstanding and interest on them ceases to accrue. Except as provided in Section 2.09, a Security does not cease to be outstanding because the Company or an Affiliate holds the Security. SECTION 2.09. TREASURY SECURITIES. In determining whether the Holders of the required principal amount of Securities have concurred in any direction, waiver or consent, Securities owned by the Company or an Affiliate shall be considered as though they are not outstanding, except that for the purposes of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Securities which the Trustee actually knows are so owned shall be so considered. SECTION 2.10. TEMPORARY SECURITIES. Until definitive Securities are ready for delivery, the Company may prepare and the Trustee shall authenticate -21- temporary Securities. Temporary Securities shall be substantially in the form of definitive Securities but may have variations that the Company considers appropriate for temporary Securities. Without unreasonable delay, the Company shall prepare and deliver to the Trustee, and the Trustee shall authenticate, definitive Securities in exchange for temporary Securities. SECTION 2.11. CANCELLATION. The Company at any time may deliver Securities to the Trustee for cancellation. The Registrar and the Paying Agent shall forward to the Trustee any Securities surrendered to them for registration of transfer, exchange or payment. The Trustee shall cancel all Securities surrendered for registration of transfer, exchange, payment, replacement or cancellation and shall, upon the request of the Company, destroy canceled Securities and deliver a certificate of such destruction to the Company. Subject to Section 2.07, the Company may not issue new Securities to replace Securities that it has paid or that have been delivered to the Trustee for cancellation. SECTION 2.12. DEFAULTED INTEREST. If the Company fails to make a payment of interest on the Securities, it shall pay such interest thereafter in any lawful manner. It may pay such interest, plus any interest payable on such interest, to the Persons who are Holders on a subsequent special record date. The Company shall fix in a manner satisfactory to the Trustee such special record date and payment date, except for a payment of interest made within the 30-day period referred to in paragraph (i) of Section 5.01 of this Indenture which may be paid to the holders of the Securities on the regular record date for such interest payment. Such special record date shall not be less than 10 days prior to the payment date of such defaulted interest. The Company shall notify the Trustee, in a writing delivered to the Trustee, of the amount of defaulted interest proposed to be paid on each Security and the date of the proposed payment, and at the same time, the Company shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such defaulted interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money, when deposited, to be held in trust for the benefit of the Person entitled to such defaulted interest as provided in this section. At least 5 days before such -22- special record date, the Company shall deliver to the Trustee and mail to Holders a notice that states the special record date, payment date, and amount of such interest to be paid. ARTICLE 3 . COVENANTS SECTION 3.01. PAYMENT OF SECURITIES. The Company shall punctually pay the principal of and interest on the Securities on the dates and in the manner provided in the Securities. Principal, premium, if any, and interest shall be considered paid on the date due if the Paying Agent has received by 10:00 a.m. New York City time on that date immediately available funds designated for and sufficient to pay all principal and interest then due. The Company shall pay interest on overdue principal and premium, if any, at the rate borne by the Securities; it shall pay interest on overdue installments of interest at the same rate to the extent permitted by law. SECTION 3.02. LIMITATION ON RESTRICTED PAYMENTS. (a) The Company shall not, nor shall it permit any of its Subsidiaries to, make any Restricted Payment (other than Investments in (i) Affiliates which are not wholly-owned Subsidiaries in an aggregate amount not to exceed $20 million at any time outstanding and (ii) Borrowing Subsidiaries in an aggregate amount at any time outstanding not to exceed the sum of (x) $30 million less (y) the aggregate amount of outstanding Investments in Affiliates which are not wholly-owned Subsidiaries permitted by clause (i) hereof) if, after giving effect thereto: (A) any Default shall have occurred and be continuing, or (B) the Company could not incur at least $1.00 of additional Indebtedness pursuant to Section 3.03(a) of this Indenture, or (C) the aggregate amount of Restricted Payments made subsequent to the date of this Indenture by the Company and its Subsidiaries (other than (i) Investments in Affiliates which are not wholly-owned Subsidiaries in an amount not to exceed $20 million in the aggregate and (ii) Investments in Borrowing Subsidiaries in an aggregate amount not to exceed the sum of (x) $30 million less (y) the aggregate amount of outstanding Investments in Affiliates which are not -23- wholly-owned Subsidiaries permitted by clause (i) of the first paragraph of this Section 3.02(a)) would exceed the sum of (a) 50% (or minus 100% in the event of a deficit) of aggregate Consolidated Net Income (which is defined to exclude the impact of any Fresh Start Accounting adjustment and any extraordinary income, including income relating to cancellation of indebtedness resulting from the Restructuring) of the Company for the period commencing on April 2, 1995 and ending on the last day of the fiscal quarter immediately preceding the date of such payment, and (b) the aggregate Net Proceeds, including cash and the Fair Market Value of Property other than cash, received by the Company subsequent to the Issue Date from capital contributions from any of its stockholders or from the issuance or sale (other than to a Subsidiary) subsequent to the Issue Date of shares of its Capital Stock (other than Redeemable Stock) of any class (or rights or warrants to subscribe for or purchase shares of such capital stock) or of any convertible securities or debt obligations which have been converted into, exchanged for or satisfied by the issuance of shares of the Company's Capital Stock (other than Redeemable Stock). (b) The provisions of this Section 3.02 shall not prevent the Company from (i) paying a dividend on Capital Stock within 60 days after the declaration thereof if, on the date on which the dividend was declared, the Company could have paid such dividend in accordance with the provisions of this Indenture, or (ii) repurchasing shares of its Capital Stock (X) solely in exchange for other shares of its Capital Stock (other than Redeemable Stock) or (Y) pursuant to a court order. (c) The provisions of this Section 3.02 shall not prevent redemptions or repurchases of the Company's common stock in connection with repurchase provisions under employee stock option or stock purchase agreements or other agreements to compensate management employees, PROVIDED that such redemptions or purchases shall not exceed $2,000,000 in any Fiscal Year or $5,000,000 in the aggregate subsequent to the date hereof. (d) Payments made in purchase, redemption, defeasance or other acquisition or retirement for value of Subordinated Debt must meet the tests set forth in paragraph (a) of this Section 3.02 except to the extent that any such purchase, redemption, defeasance or other acquisition or retirement for value is made out of the proceeds of the issuance of (i) Subordinated Debt having a final maturity no earlier than the final maturity of, and an Average Life equal to or longer than, the Indebtedness being retired or repurchased or (ii) Capital Stock (other than Redeemable Stock) of the Company. -24- SECTION 3.03. LIMITATION ON INDEBTEDNESS. (a) The Company shall not create, incur, assume, guarantee or otherwise become liable with respect to, or become responsible for the payment of, any Indebtedness, unless, after giving effect thereto, the Consolidated Interest Coverage Ratio of the Company on a pro forma basis for the four consecutive fiscal quarters for which financial information in respect thereof is available immediately prior to any Transaction Date that is prior to September 1, 1997 would be greater than 1.85:1 and for any Transaction Date thereafter would be greater than 2.0:1. (b) Notwithstanding the foregoing, the Company may incur, create, assume, guarantee or otherwise become liable with respect to, any or all of the following Indebtedness: (i) Indebtedness evidenced by the Securities, and Indebtedness under the Bank Credit Agreement (including any refinancings thereof permitted by clause (ii) of this Section 3.03(b)) in a maximum principal amount at any time outstanding not to exceed the greater of (x) $250 million or (y) the sum of $100 million plus 65% of the total inventory of the Company and its Subsidiaries (calculated on a "first-in" "first-out" basis) plus 85% of the total accounts receivable of the Company and its Subsidiaries, subject to one or more permanent reductions of both (x) and (y) as provided in clause (iii) of Section 3.05 and the proviso set forth in the second paragraph of Section 3.06(a); (ii) Indebtedness the proceeds of which are used to refinance (x) all or a portion of the Indebtedness evidenced by the Securities, or (y) Indebtedness under the Bank Credit Agreement (as limited by clause (i) of this Section 3.03(b)) or (z) other Indebtedness of the Company and of its Subsidiaries, in each case in a principal amount not to exceed the principal amount so refinanced (or, if such Indebtedness provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration of the maturity thereof, in an amount not greater than such lesser amount) plus any prepayment penalties and premiums, accrued and unpaid interest on the Indebtedness so refinanced, plus customary fees, expenses and costs related to the incurrence of such refinancing Indebtedness, PROVIDED that, in the case of this clause (ii), (1) if the Securities are refinanced in part, such new Indebtedness is expressly made pari passu or subordinate in right of payment to the remaining Securities, -25- (2) if the Indebtedness to be refinanced is subordinate in right of payment to the Securities, such new Indebtedness is subordinate in right of payment to the Securities at least to the extent that the Indebtedness to be refinanced is subordinate in right of payment to the Securities, (3) if the Indebtedness to be refinanced is pari passu in right of payment to the Securities, such new Indebtedness is expressly made pari passu or subordinate in right of payment to the Securities, and (4) if the Securities are refinanced in part or if the Indebtedness to be refinanced is pari passu or subordinate in right of payment to the Securities and scheduled to mature after the maturity date of the Securities, such new Indebtedness as of the date of incurrence does not mature prior to the final scheduled maturity date of the Securities and has an Average Life equal to or greater than the remaining Average Life of the Securities; (iii) Indebtedness of the Company remaining outstanding immediately after the issuance of the Securities; (iv) Indebtedness to a Subsidiary of the Company; (v) Indebtedness incurred in connection with the refurbishment, improvement, construction or acquisition (whether by acquisition of stock, assets or otherwise) of any Property or Properties of the Company or of any Subsidiary that constitute a part of the then present business of the Company or of any Subsidiary (or incurred within twelve months of any such acquisition or the completion of such refurbishment, improvement or construction), PROVIDED THAT at the time of the incurrence thereof: (a)(1) such Indebtedness, together with any other then outstanding Indebtedness incurred during the most recently completed four consecutive fiscal quarter period in reliance upon either this clause (v) or clause (vi) of Section 3.09 hereof does not exceed, in the aggregate, 3% of consolidated net sales of the Company and its Subsidiaries during the four consecutive fiscal quarter period ended immediately prior to the date of calculation; provided, that for purposes of this clause (a)(1), such Indebtedness shall include, without limitation, an -26- amount equal to (x) the aggregate outstanding principal amount of any mortgages that the Company or any Subsidiary is deemed to have entered into in connection with any Sale and Leaseback Transaction that the Company or any Subsidiary has entered into during the four consecutive fiscal quarter period ended immediately prior to the date of calculation, less (y) the aggregate principal amount of any Senior Indebtedness that has been repaid with the Net Proceeds of any Sale and Leaseback Transaction that the Company or any Subsidiary has entered into within twelve months of the acquisition, or completion of construction or refurbishment, of the Property that is the subject of any such transaction; and (2) such Indebtedness, together with all then outstanding Indebtedness incurred in reliance upon either this clause (v) or clause (vi) of Section 3.09 hereof does not exceed, in the aggregate, 3% of the consolidated net sales of the Company and its Subsidiaries during the most recently completed twelve consecutive fiscal quarter period; provided that, for purposes of this clause (a)(2), such Indebtedness shall include, without limitation, an amount equal to (x) the aggregate outstanding principal amount of any mortgages that the Company or any Subsidiary is deemed to have entered into in connection with any Sale and Leaseback Transactions to which the Company or any Subsidiary is then a party less (y) the aggregate principal amount of any Senior Indebtedness that has been repaid with the Net Proceeds of any Sale and Leaseback Transaction that the Company or any Subsidiary has entered into within twelve months of the acquisition, or completion of construction or refurbishment, of the Property that is the subject of any such transaction; except that, for purposes of calculating the limitation set forth in clause (a)(2) the seven Sale and Leaseback Transactions identified in clause (ii) of Section 3.05 hereof shall not be included; or (b) such Indebtedness (including an amount equal to the sum of (x) the aggregate outstanding principal amount of any mortgages that the Company or any Subsidiary is deemed to have entered into in connection with any Sale and Leaseback -27- Transaction to which the Company or any Subsidiary is then a party less (y) the aggregate principal amount of any Senior Indebtedness that has been repaid with the Net Proceeds of any Sale and Leaseback Transaction) does not exceed the amount of proceeds received by the Company or any of its Subsidiaries from insurance policies maintained by the Company or any Subsidiary in respect of such Property or Properties; (vi) Indebtedness consisting of Guarantees by the Company of Indebtedness of any Subsidiary, provided that such Indebtedness is otherwise permitted under this Indenture; (vii) Indebtedness under Interest Swap Obligations, PROVIDED that such Interest Swap Obligations are related to payment obligations on Indebtedness otherwise permitted under this Section 3.03; (viii) commercial letters of credit and standby letters of credit incurred in the ordinary course of business by the Company; (ix) Indebtedness represented by industrial revenue or development bonds, provided that the aggregate amount of Indebtedness incurred in reliance upon the exception of this clause (ix) or of clause (x) of Section 3.09 shall not exceed at any one time an aggregate principal amount outstanding of $25,000,000; (x) Capitalized Lease Obligations relating to Property used in the business of the Company; (xi) Indebtedness incurred in respect of performance bonds and performance and completion Guarantees incurred in the ordinary course of business; (xii) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, PROVIDED that such Indebtedness is extinguished within five Business Days from the date of its incurrence; and (xiii) other Indebtedness for borrowed money in an amount not to exceed $75,000,000 in the aggregate. -28- SECTION 3.04. LIMITATION ON LIENS. Neither the Company nor any Subsidiary shall create, incur, assume or permit to exist any Lien on or with respect to any Property or assets of the Company or of any Subsidiary or any interest therein or any income or profits therefrom, other than: (i) any Lien existing as of the date of this Indenture and any Lien securing Indebtedness under the Bank Credit Agreement pursuant to the terms of such Bank Credit Agreement as in effect on the Issue Date; (ii) any Lien arising in the ordinary course of business, other than in connection with Indebtedness for borrowed money; (iii) any Lien on the Company's or a Subsidiary's accounts receivable, inventories, and proceeds thereof securing Indebtedness incurred pursuant to the provisions of the Revolving Credit Facility; (iv) any Lien on Property acquired by the Company or by any Subsidiary after the date of this Indenture created solely to secure Indebtedness incurred to finance such acquisition or assumed in connection with such acquisition, whether by acquisition of stock, assets or otherwise (or entered into in connection with Indebtedness that is permitted under clause (v) of Section 3.03(b) or clause (vi) of Section 3.09), PROVIDED that in each case such acquisition does not constitute a Material Acquisition; (v) any Lien on Property acquired by the Company or any Subsidiary which constitutes a Material Acquisition created solely to secure Indebtedness incurred to finance such Material Acquisition or assumed in connection with such Material Acquisition, PROVIDED that after giving effect to such Indebtedness the Consolidated Interest Coverage Ratio would be greater than the then applicable Consolidated Interest Coverage Ratio described in Section 3.03(a) above; (vi) any Lien on any asset of the Company or any Subsidiary created solely to secure Indebtedness incurred to finance the refurbishment, improvement, construction or acquisition (whether by acquisition of stock, assets or otherwise) of such asset (or created within twelve months of any such acquisition or the completion of such refurbishment, improvement or construction) or relating to Indebtedness assumed in connection with any such acquisition, PROVIDED that such Lien secures Indebtedness -29- permitted under clause (v) of Section 3.03(b), or clause (vi) of Section 3.09; (vii) any Lien created in connection with a Capitalized Lease Obligation that the Company or a Subsidiary is permitted to enter into under the terms of this Indenture; (viii) any Lien relating to judgments or awards that the Company or any Subsidiary is contesting in good faith; (ix) any Lien for taxes that are not yet due or that the Company or any Subsidiary is contesting in good faith; and (x) any Lien extending, renewing or replacing any Liens permitted by clauses (i), (iv), (v), (vi) or (vii). In the case of Liens permitted under clauses (i), (iv), (v), (vi), (vii) and (x), such Liens may relate solely to the Property (including any improvements thereon) subject thereto as of the date of this Indenture or the date such Lien was incurred, as the case may be (and, in the case of Indebtedness under the Bank Credit Agreement, any after acquired Property), and may secure the payment only of the Indebtedness so secured as of such date. SECTION 3.05. Limitation on Sale and Leaseback TRANSACTIONS. The Company shall not, and shall not permit any Subsidiary to, enter into, assume, guarantee or otherwise become liable with respect to any Sale and Leaseback Transaction, PROVIDED, that the Company may enter into: (i) a Sale and Leaseback Transaction that, had such Sale and Leaseback Transaction been structured as a mortgage rather than as a Sale and Leaseback Transaction, the Company would have been permitted to enter into such transaction pursuant to clause (v) of Section 3.03(b), clause (vi) of Section 3.04 and clause (vi) of Section 3.09, PROVIDED, HOWEVER, that such Sale and Leaseback Transaction is entered into within twelve months of the acquisition, or completion of construction or refurbishment, of the Property that is the subject of any such transactions; (ii) a Sale and Leaseback Transaction with respect to the Company's Property located in New Fairfield, Connecticut, Dumont, New Jersey, Valatie, New York, -30- Morrisville, Vermont, Corinth, New York, Tannersville, New York and Manchester Center, Vermont; and (iii) a Sale and Leaseback Transaction if within 90 days of entering into such arrangement either (1) the Company applies the Net Proceeds of the sale of the Property leased pursuant to such Sale and Leaseback Transaction to the payment of Senior Indebtedness other than Indebtedness incurred under the Bank Credit Agreement (except that Indebtedness under the Bank Credit Agreement may be repaid from such Net Proceeds to the extent the principal amount of Indebtedness under the Bank Credit Agreement permitted by Section 3.03(b) is permanently reduced by an amount equal to the principal amount of the Indebtedness under the Bank Credit Agreement so repaid from Net Proceeds) or (2)(a) if such arrangement is entered into prior to September 1, 2000, the Company makes a pro rata offer to all Holders of Securities to repurchase Securities at 104% of their principal amount, plus accrued and unpaid interest through the date of repurchase, or (b) if such arrangement is entered into on or after September 1, 2000, the Company redeems the Securities, in either case at par plus the then applicable premium, if any, and in an aggregate amount equal to the greater of the Net Proceeds of the sale of the Property leased pursuant to such Sale and Leaseback Transaction or the Fair Market Value of the Property so leased at the time of entering into such Sale and Leaseback Transaction. SECTION 3.06. LIMITATION ON ASSET SALES. (a) The Company shall not consummate, and shall not permit any Subsidiary to consummate, any Asset Sale unless (i) such sale is for Fair Market Value and (ii) at least 75% of the Net Proceeds thereof received by the Company or such Subsidiary is in the form of cash; PROVIDED, that for purposes of this covenant securities received by the Company or any Subsidiary from such transferee that are promptly converted by the Company or such Subsidiary into cash shall be deemed to be cash, and provided further, that notwithstanding any other provision in this paragraph, the Company or any Subsidiary may consummate Asset Sales for which it receives, in a single transaction or in a series of related transactions, aggregate Net Proceeds in an amount not to exceed $25,000,000 without regard to the foregoing limitation on receiving a specified percentage of the Net Proceeds in cash. To the extent the Company or such Subsidiary has not reinvested such Net Proceeds in Additional Assets or used such Net Proceeds to repay Senior Indebtedness (other than the Securities) within twelve months following the consummation of -31- the Asset Sale (or in the case of Net Proceeds received in the form of securities, within twelve months after such securities are converted into cash), the Company shall, not later than ten (10) days after the expiration of such twelve months, either apply such Net Proceeds (or any portion thereof) to the repayment of such Senior Indebtedness or commence an offer to repurchase the Securities to which such Net Proceeds (or the remaining portion thereof) shall be applied (such offer to repurchase to be made on the terms described in the following paragraph); PROVIDED, HOWEVER, that if Net Proceeds of Asset Sales are applied to reduce the Indebtedness under the Bank Credit Agreement (or any refinancing or renewal thereof), the principal amount of Indebtedness under the Bank Credit Agreement permitted by Section 3.03(b) shall be reduced permanently by an amount equal to the principal amount of the Indebtedness under the Bank Credit Agreement so repaid from Net Proceeds. If (1) no Senior Indebtedness other than the Securities is outstanding at such time or the Company does not apply any or applies only a portion of such Net Proceeds to the repayment of Senior Indebtedness other than the Securities or (2) the application of such Net Proceeds results in the payment of all outstanding Senior Indebtedness other than the Securities, then such Net Proceeds or any remaining portion thereof, in each case not so applied to the reinvestment in Additional Assets or the payment of Senior Indebtedness other than the Securities, shall, except as otherwise provided in this Indenture, be applied to a pro rata offer to all Holders of Securities to repurchase the Securities at a purchase price in cash equal to 102% of their principal amount plus accrued and unpaid interest through the Repurchase Date. Not less than twenty (20) nor more than sixty (60) Business Days prior to the Repurchase Date, the Company shall give Holders prior written notice of such right of repurchase, mailed by first class mail to the Holders' last addresses as they appear upon the register. Such notice shall state: (i) that Holders are entitled to have their Securities repurchased in whole or in part at 102% of their principal amount plus accrued and unpaid interest through the Repurchase Date, (ii) the date of repurchase (the "Repurchase Date"), (iii) the name and address of the Paying Agent, (iv) that the Securities must be tendered to the Paying Agent by five Business Days prior to the Repurchase Date to collect the principal, premium and accrued interest thereon, (v) that any Security not tendered by five Business Days prior to the Repurchase Date shall continue to accrue interest at the applicable rate borne by the Security, (vi) that any Security accepted for payment shall cease to accrue interest after the Repurchase Date, (vii) that Holders electing to have a Security repurchased shall be required to surrender the Security, with the form entitled "Option of -32- Holder to Elect Repurchase" on the reverse of the Security completed, to the Paying Agent at the address specified in the notice on or prior to the close of business on the fifth Business Day preceding the Repurchase Date, (viii) that Holders shall be entitled to withdraw their election if the Paying Agent receives, not later than the close of business on the fifth Business Day preceding the Repurchase Date, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of Securities the Holder delivered for repurchase, the certificate number(s) of the Securities the Holder delivered for repurchase and a statement that such Holder is withdrawing his election to have such Securities repurchased, (ix) that, if the aggregate repurchase price of the Securities surrendered exceeds the available Net Proceeds, the Company shall select the Securities to be purchased on pro rata basis (with such adjustment as may be deemed appropriate by the Company so that only Securities in denominations of $1,000 or multiples thereof shall be purchased); (x) that Holders whose Securities are purchased in part shall be issued new Securities equal in principal amount to the unpurchased portion of the Securities surrendered; and (xi) any other information necessary to enable Holders to tender Securities and have such Securities repurchased pursuant to this Section. Notwithstanding the foregoing, in the event the Net Proceeds resulting from any Asset Sale, after giving effect to any related repayment of Senior Indebtedness other than Securities and any reinvestment in Additional Assets are less than $25,000,000, the Company may defer extending such pro rata offer to repurchase Securities until such time as such Net Proceeds, plus the aggregate amount of Net Proceeds resulting from any subsequent Asset Sale or Asset Sales not otherwise reinvested in Additional Assets or applied to repay Senior Indebtedness other than Securities, are equal to at least $25,000,000, at which time the Company shall apply the aggregate amount of such Net Proceeds to a pro rata offer to repurchase the Securities at a purchase price in cash equal to 102% of their principal amount, plus accrued and unpaid interest through the date of repurchase. (b) Pending the application thereof in accordance with paragraph (a) of this Section, the Company shall either apply the Net Proceeds of any Asset Sale to repay temporarily any Senior Indebtedness other than the Securities or invest such Net Proceeds in Qualified Investments. SECTION 3.07. SEC REPORTS. (a) The Company shall deliver to the Trustee within 5 days after filed with the SEC, copies of the annual, quarterly and periodic reports and of the information, documents and other reports (or copies of such portions of any of the foregoing as the SEC may by rules and regulations -33- prescribe) which the Company files with the SEC pursuant to Sections 13 and 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Whether or not required by the rules and regulations of the SEC, as long as any Securities are outstanding, the Company shall continue to file with the SEC for public availability (unless the SEC will not accept such a filing) and the Trustee on the same timely basis such reports, information and other documents as the Company would be required to file with the SEC if the Company were subject to the requirements of such Section 13 or 15(d) of the Exchange Act and had a class of securities listed on a national securities exchange. The Company also will make such information available to Holders who request it in writing and shall comply with the other provisions of TIA Section 314(a). (b) So long as any of the Securities remain outstanding, the Company shall cause any annual report to stockholders and any quarterly or other financial reports furnished by it to stockholders, excluding internal management reports and distributions to stockholders in their capacity as directors or officers of the Company, to be filed with the Trustee and mailed to the Holders at their addresses appearing in the register of Securities maintained by the Registrar within 5 days after having been provided 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 consolidated financial statements, including any notes thereto, and with respect to the annual information only, a report thereon by the Company's certified independent accountants, and a "Management's Discussion and Analysis of Financial Condition and Results of Operations," comparable to that which would have been required to appear in annual or quarterly reports filed under Section 13 or 15(d) of the Exchange Act if the Company had a class of securities listed on a national securities exchange, to be so filed with the Trustee and mailed to the Holders at their addresses appearing in the register of Securities maintained by the Registrar within 100 days after the end of each Fiscal Year and within 60 days after the end of each of the Company's first three fiscal quarters in each Fiscal Year. The Company shall advise the Trustee promptly in writing of any change of its Fiscal Year, provided that a failure by the Company to advise the Trustee of such change shall not affect the effectiveness of such change. (c) The Company shall furnish to Holders and to beneficial owners of Securities and to prospective purchasers of Securities that are designated by Holders, upon their request, the information required to be delivered pursuant to Rule 144(A)(d)(4) under the Securities Act of 1933, as amended. -34- SECTION 3.08. LIMITATION ON PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES. The Company shall not, and shall not permit any Subsidiary to, create or otherwise cause or suffer to exist or become effective any consensual encumbrance or restriction that by its terms expressly restricts the ability of any Subsidiary to: (a) pay dividends or make any other distributions on such Subsidiary's capital stock or pay any Indebtedness owed to the Company or any Subsidiary, (b) make any loans or advances to the Company or any Subsidiary, or (c) transfer any of its Property to the Company or any Subsidiary, other than, with respect to clauses (b) and (c) of this Section, encumbrances or restrictions specifically: (i) permitted under the terms of any instrument or agreement relating to any Indebtedness of the Company or any Subsidiary existing on the date of this Indenture, including, without limitation, this Indenture or the Bank Credit Agreement; (ii) relating to any Property acquired by the Company or any of its Subsidiaries after the date of this Indenture, provided that such encumbrance or restriction relates only to the Property which is acquired, and, in the case of any encumbrance or restriction that constitutes a Lien, the Company or such Subsidiary would be permitted to incur the Lien under Section 3.04 of this Indenture; (iii) relating to (x) any industrial revenue or development bonds, (y) any obligation of the Company or any Subsidiary incurred in the ordinary course of business to pay the purchase price of Property acquired by the Company or such Subsidiary, or (z) any lease of Property by the Company or such Subsidiary in the ordinary course of business, provided that such encumbrance or restriction relates only to the Property which is the subject of such industrial revenue or development bond, such Property purchased or such Property leased and any such lease, as the case may be; (iv) relating to any Indebtedness of any Subsidiary at the date of acquisition of such Subsidiary by the Company or any Subsidiary of the Company, provided that -35- such Indebtedness was not incurred in connection with or in anticipation of such acquisition and, provided further that the Company or Subsidiary would be permitted to incur any Lien securing such Indebtedness under Section 3.04 of this Indenture; or (v) under any replacement or refinancing agreements of instruments referred to in clauses (i), (ii) and (iii), provided that the provisions relating to such encumbrance or restriction contained in any such replacement or refinancing agreement or instrument are no more restrictive than the provisions relating to such encumbrance or restriction contained in such original agreement or instrument. SECTION 3.09. LIMITATION ON INDEBTEDNESS AND PREFERRED STOCK OF SUBSIDIARIES (OTHER THAN NON-BORROWING SUBSIDIARIES). The Company shall not permit any Subsidiary to create, incur, guarantee, assume or issue any Indebtedness or issue any preferred or preference stock, except for: (i) Indebtedness or preferred stock outstanding on the date of this Indenture; (ii) Indebtedness or preferred stock issued to and held by the Company or a wholly-owned Subsidiary (but only as long as held or owned by the Company or a wholly-owned Subsidiary); (iii) Indebtedness or preferred stock issued by a Person prior to the time (a) such Person becomes a Subsidiary, (b) such Person merges with or into a Subsidiary or (c) a Subsidiary merges with or into such Person, provided that such Indebtedness or preferred stock was not issued or incurred by such Person in anticipation of the type of transaction contemplated by subclauses (a), (b) or (c); (iv) Indebtedness under the Bank Credit Agreement; (v) Indebtedness the proceeds of which are used to refinance any other Indebtedness of any Subsidiary, in each case in a principal amount not to exceed the principal amount so refinanced (or, if such Indebtedness provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration of the maturity thereof, in an amount not greater than such lesser amount), plus any prepayment penalties and premiums, accrued and unpaid interest on the Indebtedness so refinanced, plus customary fees, -36- expenses and costs related to the incurrence of such refinancing Indebtedness; (vi) Indebtedness incurred in connection with the refurbishment, improvement, construction or acquisition (whether by acquisition of stock, assets or otherwise) of any Property or Properties of a Subsidiary of the Company that constitute a part of the then present business of the Company or any Subsidiary of the Company (or incurred within twelve months of any such acquisition or the completion of such refurbishment, improvement or construction), provided that either: (a) (1) such Indebtedness, together with any other then outstanding Indebtedness incurred during the most recently completed four consecutive fiscal quarter period in reliance upon either this clause (vi) or clause (v) of Section 3.03(b) hereof does not exceed in the aggregate 3% of consolidated net sales of the Company and its Subsidiaries during the four consecutive fiscal quarter period ended immediately prior to the date of calculation; provided that for purposes of this subclause (a)(1), such Indebtedness shall include, without limitation, an amount equal to (x) the aggregate outstanding principal amount of any mortgages that the Company or any Subsidiary is deemed to have entered into in connection with any Sale and Leaseback Transaction that the Company or any Subsidiary has entered into during the four consecutive fiscal quarter period ended immediately prior to the date of calculation, less (y) the aggregate principal amount of any Senior Indebtedness that has been repaid with the Net Proceeds of any Sale and Leaseback Transaction that the Company or any Subsidiary has entered into within twelve months of the acquisition, or completion of construction or refurbishment, of the Property that is the subject of any such transaction; and (2) such Indebtedness, together with all then outstanding Indebtedness incurred in reliance upon either this clause (vi) or clause (v) under Section 3.03(b) hereof does not exceed in the aggregate 3% of the consolidated net sales of the Company and its Subsidiaries during the most recently completed twelve consecutive fiscal quarter period; provided that, for purposes of this SUBCLAUSE (a)(2), such Indebtedness shall include, without limitation, an amount equal to (x) the aggregate outstanding principal amount of any mortgages that the Company -37- or any Subsidiary is deemed to have entered into in connection with any Sale and Leaseback Transactions to which the Company or any Subsidiary is then a party less (y) the aggregate principal amount of any Senior Indebtedness that has been repaid with the Net Proceeds of any Sale and Leaseback Transaction that the Company or any Subsidiary has entered into within twelve months of the acquisition, or completion of construction or refurbishment, of the Property that is the subject of any such transaction; except that, for purposes of calculating the limitation set forth in SUBCLAUSE (a)(2), the seven Sale and Leaseback Transactions identified in clause (ii) of Section 3.05 shall not be included; or (b) such Indebtedness (including an amount equal to the sum of (x) the aggregate outstanding principal amount of any mortgages that the Company or any Subsidiary is deemed to have entered into in connection with any Sale and Leaseback Transaction to which the Company or any Subsidiary is then a party less (y) the aggregate principal amount of any Senior Indebtedness that has been repaid with the Net Proceeds of any Sale and Leaseback Transaction) does not exceed the amount of proceeds received by the Company or any of its Subsidiaries from insurance maintained by the Company or any Subsidiary in respect of such Property or Properties; (vii) Indebtedness consisting of Guarantees by a Subsidiary of Indebtedness of the Company or any other Subsidiary, provided that such Indebtedness is otherwise permitted under this Indenture; (viii) Indebtedness under Interest Swap Obligations, provided that such Interest Swap Obligations are related to payment obligations on Indebtedness otherwise permitted under this Section 3.09; (ix) commercial letters of credit and standby letters of credit incurred in the ordinary course of business by a Subsidiary; (x) Indebtedness represented by industrial revenue or development bonds, provided that the aggregate amount of Indebtedness incurred in reliance upon this clause (x) -38- or clause (ix) of Section 3.03(b) shall not exceed at any one time an aggregate principal amount outstanding of $25,000,000; (xi) Capitalized Lease Obligations relating to Property used in the business of a Subsidiary; (xii) Indebtedness incurred in respect of performance bonds and performance and completion Guarantees incurred in the ordinary course of business; and (xiii) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five Business Days of its incurrence. SECTION 3.10. LIMITATION ON INDEBTEDNESS OF NON-BORROWING SUBSIDIARIES. Notwithstanding Section 3.09, the Company shall not permit any Non-Borrowing Subsidiary to create, incur, assume, issue or guarantee any Indebtedness or issue any preferred or preference stock, or to engage in any Sale and Leaseback Transaction. SECTION 3.11. TRANSACTIONS WITH AFFILIATES. (a) The Company shall not, and shall not permit any Subsidiary to, enter into any transaction after the Issue Date of the Securities with any Affiliate (other than the Company or a Subsidiary) unless (i) the Board of Directors of the Company determines, in its reasonable good faith judgment, that such transaction is in the best interests of the Company or such Subsidiary, based on full disclosure of all relevant facts and circumstances, (ii) such transaction is on terms no less favorable to the Company or such Subsidiary than those that could be obtained in a comparable arm's-length transaction with an entity that is not an Affiliate, and (iii) the transaction is otherwise permissible under this Indenture. (b) This covenant does not apply to redemptions or repurchases of common stock in connection with repurchase provisions under employee stock option or stock purchase agreements or other agreements to compensate management employees, PROVIDED that such redemptions or purchases shall not exceed $2,000,000 in any Fiscal Year or $5,000,000 in the aggregate subsequent to the date of this Indenture. -39- (c) The provisions of this Section 3.11 shall not prevent the Company from (i) paying a dividend on Capital Stock within 60 days after the declaration thereof if, on the date on which the dividend was declared, the Company could have paid such dividend in accordance with the provisions of this Indenture, or (ii) repurchasing shares of its Capital Stock (x) solely in exchange for other shares of its Capital Stock (other than Redeemable Stock) or (y) pursuant to a court order. SECTION 3.12. RESTRICTIONS ON BECOMING AN INVESTMENT COMPANY. Neither the Company nor any Subsidiary shall become an investment company within the meaning of the Investment Company Act of 1940, as such statute and the regulations thereunder and any successor statute or regulations thereto may from time to time be in effect. SECTION 3.13. CONTINUED EXISTENCE AND RIGHTS. Subject to Article 4, the Company shall do or cause to be done all things necessary to preserve and keep in full force and effect (i) its existence as a corporation, and the corporate, partnership or other existence of each of its Subsidiaries, in accordance with the respective organizational documents (as the same may be amended from time to time) of the Company or any such Subsidiary and (ii) the licenses, rights (charter and statutory) and franchises of the Company and its Subsidiaries; PROVIDED, HOWEVER, that the Company 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 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. SECTION 3.14. MAINTENANCE OF PROPERTIES AND OTHER MATTERS. (a) The Company shall, and shall cause each of its Subsidiaries to, maintain its Properties in good working order and condition to the extent material to the operations of the Company and make all necessary repairs, renewals, replacements, additions, betterments and improvements thereto, ordinary wear and tear excepted, to the extent and in the manner customary for similar types of business; PROVIDED, HOWEVER, that nothing in this Section shall prevent the Company or any of its Subsidiaries from discontinuing the operation and maintenance of any of its Properties, if such discontinuance is, in the judgment of the Company or the Subsidiary, as the case may be, desirable in the conduct of -40- its respective business and not disadvantageous in any material respect to the Holders. (b) The Company shall insure and keep insured, and shall cause each Subsidiary to insure and keep insured, with financially sound and reputable insurers, so much of their respective Properties and in such amounts as is usually and customarily insured by companies engaged in a similar business with respect to Properties of a similar character against loss by fire and the extended coverage perils. The Trustee shall not be required to see that such insurance is effected or maintained. (c) The Company shall keep, and shall cause each Subsidiary to keep, proper books of record and account in which full and correct entries shall be made of all its business transactions, and shall reflect in its financial statements adequate accruals and appropriations to reserves. The Company shall cause its books of record and account and those of each of its Subsidiaries to be examined, either on a consolidated or an individual basis, by one or more firms of independent public accountants not less frequently than annually and shall not make any change in the accounting principles applied to its financial statements not concurred in by such firm or firms. The Company shall prepare its financial statements in accordance with GAAP. (d) The Company shall, and shall cause each of its Subsidiaries to, comply with all applicable statutes, laws, orders, ordinances and all rules, regulations and restrictions of any governmental department, commission, board, regulatory authority, bureau, agency and instrumentality of the foregoing and to obtain all licenses, permits, franchises and other governmental authorizations necessary to the ownership or operation of its Properties and to the conduct of its business, except such as are being contested in good faith and by appropriate proceedings and except if such non-compliance or failure to obtain does not materially adversely affect, and as far the Company can at the time foresee, is not reasonably likely to materially and adversely affect, the business, earnings, Properties, prospects or condition, financial or other, of the Company and its Subsidiaries taken as a whole. SECTION 3.15. TAXES AND CLAIMS. The Company shall pay, and shall cause each of its Subsidiaries to, pay (or, if appropriate, withhold and pay over) prior to delinquency: (i) all material taxes, assessments and governmental charges or levies imposed upon it or its Property (or required by it to withhold and pay over), and -41- (ii) all material claims or demands of materialmen, mechanics, carriers, warehousemen, landlords and other like Persons which if unpaid might result in the creation of a Lien upon its Properties; PROVIDED that items of the foregoing description need not be paid while being contested in good faith (and by appropriate proceedings in the opinion of the Company's independent counsel in any case involving more than $1,000,000); and PROVIDED FURTHER that adequate book reserves (in the opinion of the Company's independent accountants) have been established with respect thereto; and PROVIDED FURTHER that the owning company's title to, and its right to use, its Property is not materially adversely affected thereby. SECTION 3.16. STAY, EXTENSION AND USURY LAWS. The Company covenants (to the extent that it may lawfully do so) that it shall 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, that may affect the covenants, or the performance, of this Indenture; and the Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it shall not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Trustee, but shall suffer and permit the execution of every such power as though no such law has been enacted. SECTION 3.17. MONEY FOR SECURITY PAYMENTS TO BE HELD IN TRUST. (a) If the Company or any of its Subsidiaries shall at any time act as the Paying Agent, it shall, on or before each due date of the principal of, premium, if any, and interest on the Securities, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to pay the principal, premium, if any, and interest so becoming due until such sum shall be paid to such Persons or otherwise disposed of as herein provided, and shall promptly notify the Trustee of its action or failure so to act. (b) Whenever the Company shall have one or more Paying Agents, it shall, prior to or by 10:00 a.m. New York City time on each date for the payment of the principal of or interest on the Securities, deposit immediately available funds with a Paying Agent a sum sufficient to pay the principal, premium, if any, and interest so becoming due, such sum to be held in trust for the benefit of the Persons entitled to such payments; and, unless such Paying Agent is the Trustee, -42- the Company shall promptly notify the Trustee of its action or failure so to act. (c) For the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, the Company may at any time pay, or direct any Paying Agent to pay, to the Trustee all sums held in trust by the Company or by such Paying Agent, such sums to be held by the Trustee upon the same trusts as those upon which such sums were held by the Company or such Paying Agent; and, upon such payment by the Company or any Paying Agent to the Trustee, the Company or such Paying Agent, as the case may be, shall be released from all further liability with respect to such money. SECTION 3.18. COMPLIANCE CERTIFICATE. 1. The Company shall deliver to the Trustee, within 120 days after the end of each Fiscal Year of the Company, an Officers' Certificate, complying with Section 314(a)(4) of the TIA, stating that a review of the activities of the Company and its Subsidiaries during the preceding Fiscal Year has been made under the supervision of the signing Officers with a view to determining whether the Company has kept, observed, performed and fulfilled its obligations under this Indenture, and further stating, as to each such Officer signing such certificate, that to the best of his or her knowledge the Company has kept, observed, performed and fulfilled each and every covenant contained in this Indenture and is not in default in the performance or observance of any of the terms, provisions and conditions hereof (or, if a Default or Event of Default shall have occurred, describing all such Defaults or Events of Defaults of which he or she may have knowledge and the status thereof). (b) The Company shall, as long as any of the Securities are outstanding, deliver to the Trustee, promptly, but in any case within 10 Business Days of any Officer becoming aware of any Default, Event of Default or default in the performance of any covenant, agreement or condition contained in this Indenture, an Officers' Certificate specifying such Default or Event of Default and the status thereof. (c) Upon payment in full of all outstanding Indebtedness under the Bank Credit Agreement, the Company shall deliver an Officers' Certificate to the Trustee stating that such Indebtedness has been paid in full and discharged. -43- ARTICLE 4 SUCCESSORS; CHANGE OF CONTROL; OPTIONAL PREPAYMENT SECTION 4.01. WHEN COMPANY MAY MERGE, ETC.; CHANGE OF CONTROL; HOLDERS' RIGHT OF OPTIONAL PREPAYMENT. (a) The Company shall not consolidate with or merge into, or transfer, sell or lease all or substantially all of its Property to, another Person unless (i) the Surviving Corporation is a United States corporation, (ii) the Surviving Corporation is bound by all the terms of this Indenture, (iii) immediately after giving effect to such transaction no Default or Event of Default exists, (iv) the consolidated net worth (determined in accordance with GAAP) of the Surviving Corporation is equal to or greater than the consolidated net worth of the Company immediately prior to such transaction and (v) in the case of any such consolidation, merger, transfer, sale or lease other than into or to a wholly-owned Subsidiary of the Company, immediately after and giving effect to any such consolidation, merger, transfer, sale or lease and any financings or other transactions in connection therewith the Consolidated Interest Coverage Ratio of the Surviving Corporation would be greater than the then applicable Consolidated Interest Coverage Ratio described under paragraph (a) of Section 3.03 of this Indenture. (b) In the event of a Change of Control, the Company shall be obligated to make an offer to purchase all of the then outstanding Securities at a purchase price in cash equal to 101% of its principal amount plus accrued interest, after the occurrence of such Change of Control. (c) Not less than 20 nor more than 60 Business Days prior to the consummation of a merger, consolidation, transfer, sale or lease that would constitute a Change of Control and not more than 45 Business Days following the occurrence of any other event constituting a Change of Control, the Company shall give Holders notice of such right of prepayment, mailed by first class mail to the Holders' last addresses as they appear upon the register. Such notice shall state: (i) that Holders are entitled to have their Securities prepaid in whole but not in part at 101% of their principal amount plus accrued interest through the payment date pursuant to this Section 4.01; (ii) if a Change of Control has occurred, that a Change of Control has occurred, or, if a proposed merger, consolidation, transfer, sale or lease would constitute a Change of Control, the proposed date of the consummation of the merger, consolidation, transfer, sale or lease; (iii) that Holders shall be entitled to tender their Securities for repayment, specifying the repayment price and -44- the repayment date (the "Repayment Date") (which, in the case of a merger, consolidation, transfer, sale or lease that would constitute a Change of Control shall not be later than the consummation date of the merger, consolidation, transfer, sale or lease, and, in the case of any other Change of Control, shall be no earlier than 30 days and no later than 60 days after the date such notice is mailed) and that Holders shall be entitled to tender their Securities for repayment until five Business Days prior to the Repayment Date, (iv) the name and address of the Paying Agent, (v) that the Securities must be tendered to the Paying Agent by five Business Days prior to the Repayment Date to collect the principal, premium and accrued interest thereon, (vi) that any Security not tendered by five Business Days prior to the Repayment Date shall continue to accrue interest at the applicable rate borne by the Security, (vii) that any Security accepted for payment shall cease to accrue interest after the Repayment Date, (viii) that Holders electing to have a Security repurchased shall be required to surrender the Security, with the form entitled "Option of Holder to Elect Repurchase" on the reverse of the Security completed, to the Paying Agent at the address specified in the notice on or prior to the close of business on the fifth Business Day preceding the Repayment Date, (ix) that Holders shall be entitled to withdraw their election if the Paying Agent receives, not later than the close of business on the fifth Business Day preceding the Repayment Date, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of Securities the Holder delivered for repurchase, the certificate number(s) of the Securities the Holder delivered for repurchase and a statement that such Holder is withdrawing his election to have such Securities repurchased, (x) that Holders electing to have their Securities repurchased must tender all Securities which they hold, (xi) that the Company shall have no obligation to consummate a merger, consolidation, transfer, sale or lease that would constitute a Change of Control that is the subject of any such notice, provided that the Company shall mail a notice to Holders and the Trustee, stating that the proposed merger, consolidation, transfer, sale or lease was not consummated within the specified period and (xii) any other information necessary to enable Holders to tender Securities and have such Securities repurchased pursuant to this Section. Notwithstanding that the Company shall have given any such notice pursuant to this paragraph, the Company shall have no obligation to consummate a merger, consolidation, transfer, sale or lease that would constitute a Change of Control that is the subject of any such notice, provided that the Company shall mail a notice to Holders and the Trustee, stating that the proposed merger, consolidation, transfer, sale or lease was not consummated and that Holders shall not have the right to require the Company to prepay their Securities, not later than two Business Days after the -45- Company determines that such proposed merger, consolidation, transfer, sale or lease shall not be consummated, and the Company shall promptly return any Securities tendered for prepayment to their respective Holders. (d) The Company shall deliver to the Trustee, contemporaneously with the mailing of the notice specified in paragraph (c) of this Section informing Holders of their right to tender their Securities for prepayment, (i) an Officers' Certificate to the foregoing effect stating that the Holders are entitled to have their Securities repaid and (ii) an Opinion of Counsel stating that the proposed transaction complies with this Indenture and that all conditions precedent to the consummation of the transaction under this Indenture have been met. The Company shall also deliver to the Trustee an Officers' Certificate and an Opinion of Counsel in connection with any Supplemental Indenture upon the execution thereof, as specified in Section 8.06 of this Indenture. ARTICLE 5 DEFAULTS AND REMEDIES SECTION 5.01. EVENTS OF DEFAULT. Each of the following events is an "EVENT OF DEFAULT": (i) the failure by the Company to pay interest on any Security for a period of 30 days after such interest becomes due and payable; (ii) the failure by the Company to pay the principal of (or premium, if any, on) any Security when such principal becomes due and payable, whether at the stated maturity or upon acceleration, redemption or otherwise; (iii) a default in the observance of any other covenant contained in this Indenture that continues for 30 days after the Company has been given notice of the default by the Trustee or the Holders of 25% in principal amount of the Securities then outstanding; (iv) a default or defaults on other Indebtedness of the Company or any Subsidiary, which Indebtedness has an outstanding principal amount of more than $15,000,000 individually or in the aggregate if such Indebtedness has attained final maturity or if the holders of such Indebtedness have accelerated payment thereof under the terms of the instrument under which such Indebtedness is or may be outstanding and, in each case, it remains unpaid; -46- (v) one or more judgments or decrees is entered against the Company or any Subsidiary involving a liability (not paid or fully covered by insurance) of $5,000,000 or more in the case of any one such judgment or decree or $10,000,000 or more in the aggregate for all such judgments and decrees for the Company and all its Subsidiaries and all such judgments and decrees have not been vacated, discharged or stayed or bonded pending appeal within 30 days from the date of entry thereof; (vi) the Company or any Material Subsidiary pursuant to or within the meaning of the Bankruptcy Code: (1) commences a voluntary case in bankruptcy or any other action or proceeding for any other relief under any law affecting creditors' rights that is similar to the Bankruptcy Code; (2) consents by answer or otherwise to the commencement against it of an involuntary case or proceeding of bankruptcy or insolvency; (3) seeks or consents to the appointment of a receiver, trustee, assignee, liquidator, custodian or similar official (collectively, a "Custodian") of it or for all or substantially all of its Property; (4) makes a general assignment for the benefit of its creditors; or (5) consents to the entry of a judgment, decree or order for relief against it in an involuntary case; and (vii) a court of competent jurisdiction enters a judgment, order or decree under any Bankruptcy Code that is for relief against the Company or any Material Subsidiary in an involuntary case OR proceeding which shall: (1) approve a petition seeking reorganization, arrangement, adjustment or composition in respect of the Company or any Material Subsidiary of the Company, (2) appoint a Custodian for the Company or any Material Subsidiary or for all or substantially all of the Property of any of them; or (3) order the winding up or liquidation of the Company or any Material Subsidiary, -47- and in each case the judgment, order or decree remains unstayed and in effect for 60 days, or any dismissal, stay, rescission or termination ceases to remain in effect. SECTION 5.02. ACCELERATION. If an Event of Default (other than an Event of Default relating to the Company or a Material Subsidiary described in paragraphs (vi) or (vii) of Section 5.01 of this Indenture) shall have occurred and be continuing, the Trustee by written notice to the Company, or the Holders of at least 25% in principal amount of the Securities by written notice to the Company and the Trustee, may declare to be due and payable the principal amount of the Securities, plus accrued interest, and such amounts shall become due and payable upon the earlier of (x) five days from the date of such notice, so long as the Event of Default giving rise to such notice has not been cured or waived and (y) the acceleration of the Indebtedness under the Bank Credit Agreement (or any renewal or refinancing thereof). If an Event of Default relating to the Company or a Material Subsidiary of the kind described in paragraphs (vi) or (vii) of Section 5.01 of this Indenture shall occur, such amount shall IPSO FACTO become immediately due and payable without any declaration or other act on the part of the Trustee or any Holder. Subject to Sections 5.07 and 8.02, the Holders of not less than a majority in principal amount of the then outstanding Securities by written notice to the Trustee, on behalf of the Holders of all the Securities, may rescind an acceleration and its consequences, including any related payment default that resulted from such acceleration, (a) if the rescission would not conflict with any judgment or decree, (b) if all existing Events of Default have been cured or waived except nonpayment of principal or interest that has become due solely because of acceleration, (c) to the extent the payment of such interest is lawful, interest on overdue installments of interest and overdue principal, which has become due otherwise than by the declaration of acceleration, has been paid, and (d) in the event of the cure or waiver of a Default or Event of Default under Section 5.01(iv), the Trustee shall have received an Officers' Certificate and an Opinion of Counsel that such Default or Event of Default has been cured or waived. Upon any such rescission, such Default shall cease to exist and any Event of Default arising therefrom shall be deemed to have been cured for every purpose of this Indenture; but no rescission shall extend to any subsequent or other Default or impair any right consequent thereon. -48- SECTION 5.03. OTHER REMEDIES. (a) If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy by an action at law, suit in equity or other appropriate proceeding to collect the payment of principal of or interest on the Securities or to enforce the performance of any provision of the Securities or this Indenture. (b) The Trustee may maintain a proceeding even if it does not possess any of the Securities or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder in exercising any right or remedy accruing upon an Event of Default or a Default shall not impair the right or remedy or constitute a waiver of or acquiescence in such Event of Default or a Default. All remedies are cumulative to the extent permitted by law. SECTION 5.04. WAIVER OF DEFAULTS. Subject to Sections 5.07 and 8.02, the Holders of not less than a majority in principal amount of the then outstanding Securities by written notice to the Trustee may waive any existing Default or Event of Default and its consequences except a continuing Default or Event of Default (i) in the payment of the principal, premium, if any, or interest on any Security as specified in paragraphs (i) or (ii) of Section 5.01 or (ii) in respect of a covenant or provision hereof which under Article 8 cannot be modified or amended without the consent of each Holder affected. Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereon. SECTION 5.05. CONTROL BY MAJORITY. The Holders of a majority in principal amount of the then outstanding Securities may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on it. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture or is unduly prejudicial to the rights of other Holders or would subject the Trustee to personal liability. The Company may, but shall not be obligated to, pursuant to the procedures of paragraph (b) of Section 8.04 of this Indenture, fix a record date for the purpose of determining the Holders entitled to vote on the direction of any such proceeding. -49- SECTION 5.06. LIMITATION ON SUITS. (a) Except to enforce the right to receive payment of principal, premium (if any) or interest when due (including in connection with an offer to purchase or call), no Holder may institute any proceeding with respect to this Indenture or for any remedy hereunder unless such Holder has previously given to the Trustee written notice of a continuing Event of Default and unless the Holders of at least 25% in principal amount of the Securities have requested the Trustee in writing to pursue remedies in respect of such Event of Default and have offered the Trustee indemnity satisfactory to the Trustee against loss, liability, or expense to be thereby incurred and the Trustee has failed so to act for 60 days after receipt of the same and during which 60 days no contrary instruction has been received by the Trustee from the Holders of a majority in principal amount of the then outstanding Securities. (b) A Holder may not use this Indenture to prejudice the rights of another Holder or to obtain a preference or priority over another Holder. SECTION 5.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT. Notwithstanding any other provision of this Indenture, the right of any Holder of a Security to receive payment of principal, premium (if any) and interest on the Securities on or after the respective due dates expressed in the Securities (including in connection with an offer to purchase or call), or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of the Holder. SECTION 5.08. COLLECTION SUIT BY TRUSTEE. If an Event of Default specified in paragraphs (i) or (ii) of Section 5.01 of this Indenture occurs and is continuing, the Trustee is authorized to recover, in any proceeding that it deems, in its sole discretion, most effective to protect the interests of the Holders, judgment in its own name and as trustee of an express trust against the Company for the whole amount of principal, premium (if any) and interest remaining unpaid on the Securities and interest on overdue principal and to the extent lawful, interest and such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel and any other amounts due to the Trustee pursuant to Section 6.07 hereof. -50- SECTION 5.09. TRUSTEE MAY FILE PROOFS OF CLAIM. (a) In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to the Company or any other obligor upon the Securities or the property of the Company or of such other obligor or their creditors, the Trustee (irrespective of whether the principal of the Securities shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand on the Company for the payment of overdue principal or interest) shall be entitled and empowered, by intervention in such proceeding or otherwise, (i) to file and prove a claim for the whole amount of principal (and premium, if any) and interest owing and unpaid in respect of the 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 (ii) to collect and receive any moneys or other securities or property payable or deliverable upon the conversion or exchange of the Securities or upon any such claims and to distribute the same; and any receiver, assignee, trustee, liquidator, sequestrator (or other similar official) in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee, and in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 6.07 of this Indenture. (b) 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 of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding. -51- SECTION 5.10. PRIORITIES. Any money collected by the Trustee pursuant to this Article shall be paid and applied in the following order: First: to the Trustee, its agents and attorneys for amounts due under Section 6.07 of this Indenture; Second: to Holders for amounts due and unpaid on the Securities for principal, premium, if any, and interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Securities for principal, premium, if any, and interest, respectively; and Third: to the Company or to such party as a court of competent jurisdiction shall direct. The Trustee may fix a record date and payment date for any payment to Holders under this Section. SECTION 5.11. 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 to be taken by it as a Trustee, a court in its discretion may require the filing by any party litigant 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 disbursements, 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 does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 5.06 of this Indenture, or a suit by Holders of more than 10% in principal amount of the then outstanding Securities. ARTICLE 6 TRUSTEE SECTION 6.01. DUTIES OF TRUSTEE. (a) If an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs. -52- (b) Except during the continuance of an Event of Default: (1) the Trustee need perform only those duties that are specifically set forth in this Indenture and no others and no implied covenants or obligations shall be read into this Indenture against the Trustee; and (2) the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, in the absence of bad faith on its part, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. The Trustee, however, shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture. (c) The Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act, or its own wilful misconduct, except that: (1) this paragraph does not limit the effect of paragraph (b) of this Section; (2) the Trustee shall not be liable for any error of judgment made in good faith by a Trust Officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and (3) 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 5.05 of this Indenture or any other direction of the Holders permitted under this Indenture. (d) Every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b) and (c) of this Section. (e) The Trustee may refuse to perform any duty or exercise any right or power unless it receives indemnity satisfactory to it against any loss, liability or expense. (f) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree with the Company in writing. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law. (g) No provision of this Indenture shall require the Trustee to expend or risk any of its own funds or incur any liability. -53- SECTION 6.02. RIGHTS OF TRUSTEE. (a) 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. The Trustee may conclusively rely as to the identity and addresses of Holders and other matters contained therein on the register of the Securities maintained by the Registrar pursuant to Section 2.03 of this Indenture and shall not be affected by notice to the contrary. (b) 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 Certificate or Opinion or both. The Trustee may consult with counsel and the written advice of such counsel or any opinion of counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted to be taken by it hereunder in good faith and reliance thereon. (c) The Trustee may act through agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care. (d) 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. SECTION 6.03. 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 any Affiliate with the same rights it would have as if it were not Trustee. Any Agent may do the same with like rights. The Trustee, however, is subject to Sections 6.10 and 6.11 of this Indenture. SECTION 6.04. TRUSTEE'S DISCLAIMER. The Trustee makes no representation as to the validity or adequacy of this Indenture or the Securities; it shall not be accountable for the Company's use of the proceeds from the Securities, or any money paid to the Company or upon the Company's direction under any provision hereof; it shall not be responsible for the use or application of any money received by any Paying Agent other than the Trustee; and it shall not be responsible for any statement in the Securities other than its certificate of authentication or for any statement of the Company in this Indenture. -54- SECTION 6.05. NOTICE OF DEFAULTS. If a Default or Event of Default occurs and is continuing and if it is known to a Trust Officer of the Trustee, the Trustee shall mail the Holders a notice of the Default or Event of Default within 90 days after it occurs. Except in the case of a Default or Event of Default in payment on any Security, the Trustee may withhold notice if and so long as a committee of Trust Officers in good faith determines that withholding the notice is in the interest of Holders. SECTION 6.06. REPORTS BY TRUSTEE TO HOLDERS. If required by the TIA, within 60 days after each February 15 following the date of this Indenture, the Trustee shall mail to Holders and the Company a brief report dated as of such February 15 that complies with TIA Section 313(a). The Trustee shall also comply with TIA Section 313(b)(2) and transmit all reports in accordance with TIA Section 313(c). A copy of each such report shall be filed, at the time of its mailing to Holders, with the SEC and each stock exchange, if any, on which the Securities are listed. The Company shall notify the Trustee in writing when the Securities are listed or delisted on or from any stock exchange. SECTION 6.07. COMPENSATION AND INDEMNITY. (a) The Company shall pay to the Trustee from time to time reasonable compensation for its services. The Trustee's compensation shall not be limited by any law on compensation of a trustee of an express trust. The Company shall reimburse the Trustee upon request for all reasonable out-of-pocket expenses incurred by it. Such expenses shall include the reasonable compensation and out-of-pocket expenses of the Trustee's agents and counsel. (b) The Company shall defend and indemnify the Trustee, its officers, directors, employees and agents, against any loss or liability incurred by any of them in connection with the Trustee's duties hereunder except as set forth in the next paragraph. The Trustee shall notify the Company promptly of any claim for which it may seek indemnity; PROVIDED that the failure to give prompt notice shall not release the Company from any liability to the Trustee to the extent the Company is not prejudiced thereby. The Company shall defend such claim and the Trustee shall cooperate in such defense. (c) The Company need not reimburse any expense or indemnify against any loss or liability incurred by the Trustee through negligence, bad faith or wilful misconduct. -55- (d) The Trustee may have separate counsel, and the Company shall pay the reasonable fees and expenses of such counsel. (e) To secure the Company's payment obligations in this Section, the Trustee shall have a lien prior to the Securities on all money or Property held or collected by the Trustee, except that held in trust to pay principal and interest on particular Securities. Such lien shall survive the satisfaction and discharge of this Indenture or any other termination under the Bankruptcy Code. (f) When the Trustee incurs expenses or renders services after an Event of Default specified in paragraph (vi) or (vii) of Section 5.01 of this Indenture occurs, such expenses and the compensation for such services are intended to constitute expenses of administration under the Bankruptcy Code. (g) The Company's payment obligations under this Section 6.07 shall survive the discharge of this Indenture. SECTION 6.08. REPLACEMENT OF TRUSTEE. (a) A resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon the successor Trustee's acceptance of appointment as provided in this Section. (b) The Trustee may resign by so notifying the Company. The Holders of a majority in principal amount of the then outstanding Securities 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 6.10; (2) the Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Trustee under the Bankruptcy Code; (3) a Custodian or public officer takes charge of the Trustee or its Property; or (4) the Trustee becomes incapable of acting. (c) 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 a successor Trustee. Within one year after the successor Trustee takes office, the Holders of a majority in principal amount of the then outstanding -56- Securities may appoint a successor Trustee to replace the successor Trustee appointed by the Company. (d) If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Company or the Holders of at least 10% in principal amount of the then outstanding Securities may petition any court of competent jurisdiction for the appointment of a successor Trustee. (e) If the Trustee fails to comply with Section 6.10, any Holder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee. (f) 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 Holders. The retiring Trustee shall promptly transfer all Property held by it as Trustee to the successor Trustee, subject to the lien provided for in Section 6.07 of this Indenture. (g) Notwithstanding the replacement of the Trustee pursuant to this Section 6.08, the Company's obligations under Section 6.07 of this Indenture hereof shall continue for the benefit of the retiring Trustee in connection with the rights and duties hereunder prior to such replacement. SECTION 6.09. SUCCESSOR TRUSTEE BY MERGER, ETC. If the Trustee consolidates, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation, the successor corporation without any further act shall be the successor Trustee. SECTION 6.10. ELIGIBILITY; DISQUALIFICATION. This Indenture shall always have a Trustee who satisfies the requirements of TIA Section 310(a). The Trustee shall always have a combined capital and surplus of at least $50,000,000 as set forth in its most recent published annual report of condition. Neither the Company nor any Person directly or indirectly controlling, controlled by, or under common control with the Company shall serve as trustee. The Trustee is subject to TIA Section 310(b). -57- SECTION 6.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY. The Trustee is subject to TIA Section 311(a). A Trustee who has resigned or been removed shall be subject to TIA Section 311(a) to the extent indicated therein. SECTION 6.12. AUTHENTICATING AGENT. (a) Each Authenticating Agent appointed by the Trustee pursuant to Section 2.02 of this Indenture (an "Authenticating Agent") shall at all times be a corporation organized and doing business under the laws of the United States, any State thereof or the District of Columbia, authorized under such laws to act as Authenticating Agent, having a combined capital and surplus of not less than $5,000,000 and subject to supervision or examination by federal or state authority. If such Authenticating Agent publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such Authenticating Agent shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time an Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, such Authenticating Agent shall resign immediately in the manner and with the effect specified in this Section. (b) Any corporation into which an Authenticating Agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which such Authenticating Agent shall be a party, or any corporation succeeding to the corporate agency or corporate trust business of an Authenticating Agent, shall continue to be an Authenticating Agent, PROVIDED such corporation shall be otherwise eligible under this Section, without the execution or filing of any paper or any further act on the part of the Company, the Trustee or the Authenticating Agent. (c) An Authenticating Agent may resign at any time by giving written notice thereof to the Trustee and to the Company. The Trustee may at any time terminate the agency of an Authenticating Agent by giving written notice thereof to such Authenticating Agent and to the Company. Upon receiving such a notice of resignation or upon such a termination, or in case at any time such Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section 6.12, the Trustee may appoint a successor Authenticating Agent which shall be acceptable to the Company and shall mail written notice of such appointment to all Holders of the Se- -58- curities. Any successor Authenticating Agent, upon acceptance of its appointment hereunder, shall become vested with all the rights, powers and duties of its predecessor hereunder, with like effect as if originally named as an Authenticating Agent. No successor Authenticating Agent shall be appointed unless eligible under the provisions of this Section. (d) The Company agrees to pay each Authenticating Agent from time to time reasonable compensation for its services under Section 2.02 of this Indenture and this Section 6.12 and the Trustee shall be entitled to be reimbursed for any such payments made by it. (e) If an appointment is made pursuant to Section 2.02 of this Indenture or this Section 6.12, the Securities may have endorsed thereon, in addition to the Trustee's certificate of authentication, an alternate certificate of authentication in the following form: "This is one of the 12% Senior Notes due September 1, 2004 issued under the within-mentioned Indenture. Dated: IBJ SCHRODER BANK & TRUST COMPANY, as Trustee By:______________________________ as Authenticating Agent By:______________________________ Authorized Signatory" ARTICLE 7. DISCHARGE OF INDENTURE SECTION 7.01. TERMINATION OF COMPANY'S OBLIGATIONS. This Indenture shall cease to be of further effect (except that the Company's obligations under Sections 6.07 and 7.04 and the Trustee's and Paying Agent's obligations under Section 7.03 shall survive) when all outstanding Securities theretofore authenticated and issued have been -59- delivered (other than mutilated, destroyed, lost or stolen Securities which have been replaced or paid) to the Trustee for cancellation, the Company has paid all sums payable by it hereunder, and the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent specified herein relating to the Indenture ceasing to be of further effect have been complied with. In addition, subject to the remaining provisions of this Section 7.01, the Company may, by resolution of its Board of Directors filed with the Trustee, elect to either (i) terminate its obligations under this Indenture and the outstanding Securities or (ii) be released and discharged from its obligations under any covenant contained in Sections 3.02, 3.03, 3.04, 3.05, 3.06, 3.08, 3.09, 3.10, 3.11, 3.14 and 4.01 and the omission to comply with any such covenant shall not constitute a Default or an Event of Default, if, in either case: (1) the Company has irrevocably deposited in trust with the Trustee or, at the option of the Trustee, with a trustee satisfactory to the Trustee and the Company under the terms of an irrevocable trust agreement in form and substance satisfactory to the Trustee, money or U.S. Government Obligations sufficient (without reinvestment thereof) in the opinion of a nationally recognized accounting firm to pay principal and interest on the Securities to maturity, and to pay all other sums then payable by it to the Trustee under Section 6.07 of this Indenture, provided that (i) the trustee of the irrevocable trust shall have been irrevocably instructed to pay such money or the proceeds of such U.S. Government Obligations to the Trustee and (ii) the Trustee shall have been irrevocably instructed to apply such money or the proceeds of such U.S. Government Obligations to the payment of said principal and interest with respect to the Securities; PROVIDED, however, that the Trustee shall have received an Opinion of Counsel stating that after the passage of 90 days following the deposit of the trust funds (except, with respect to any trust funds for the account of any Holder who may be deemed to be an "insider" for purposes of the Bankruptcy Code, after one year following the deposit) such funds will not be subject to any bankruptcy laws affecting creditors' rights generally; (2) the Company delivers to the Trustee an Officers' Certificate stating that all conditions precedent to (i) the termination of the Company's obligations under this Indenture and the outstanding Securities or (ii) the Company's release and discharge from the covenants set forth in clause (ii) of the second -60- sentence of this Section 7.01, have been complied with, and an Opinion of Counsel to the same effect; (3) the Company shall have delivered to the Trustee (x) in the case of the Company terminating its obligations under the Indenture and the Securities pursuant to clause (i) of the second sentence of this Section 7.01, an Opinion of Counsel (which shall be accompanied by a ruling from the Internal Revenue Service), which Opinion of Counsel provides that the Holders will not recognize income, gain or loss for Federal income tax purposes as a result of the Company's exercise of its option under clause (i) of the second sentence of this Section 7.01 and will be subject to Federal income tax on the same amount and in the same manner and at the same times as would have been the case if such option had not been exercised or (y) in the case of the Company being released and discharged from the covenants set forth in clause (ii) of the second sentence of this Section 7.01, an Opinion of Counsel to the effect that the Holders will not recognize income, gain or loss for Federal income tax purposes as a result of the Company's exercise of its option under clause (ii) of the second sentence of this Section 7.01 and will be subject to Federal income tax on the same amount and in the same manner and at the same times as would have been the case if such option had not been exercised; and (4) the Company has delivered to the Trustee an Opinion of Counsel to the effect that such deposit will not cause the Trustee or the trust so created to be subject to the Investment Company Act of 1940, as amended; and, in each case, the Trustee shall have received such other documents and assurances as the Trustee may reasonably request. Then, this Indenture or such covenants, as the case may be, shall cease to be of further effect (except as provided below), and the Trustee, on demand of the Company, shall execute proper instruments acknowledging confirmation of and discharge under this Indenture or such covenants, as the case may be. However, in the case of the Company terminating its obligations under the Indenture and the Securities pursuant to clause (i) of the second sentence of this Section 7.01, the Company's obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07, 3.17, 6.07, 6.08 and 7.04 and the Trustee's and Paying Agent's obligations in Section 7.02 and 7.03 shall survive until the Securities are no longer outstanding. Thereafter, only the Company's obligations in Section 6.07 and 7.04 and the Trustee's and Paying Agent's obligations in Section 7.03 shall survive. In the case of the Company's being released and discharged from the covenants set -61- forth in clause (ii) of the second sentence of this Section 7.01, all of the remaining provisions of the Indenture shall survive until the Securities are no longer outstanding. Thereafter, only the Company's obligations in Section 6.07 and 7.04, and the Trustee's and Paying Agent's obligations in Section 7.03 shall survive. In order to have money available on a payment date to pay principal or interest on the Securities, the U.S. Government Obligations shall be payable as to principal or interest on or before such payment date in such amounts as will provide the necessary money. U.S. Government Obligations shall not be callable at the issuer's option. "U.S. Government Obligations" means direct obligations of, or obligations guaranteed by, the United States of America for the payment of which the full faith and credit of the United States of America is pledged. SECTION 7.02. APPLICATION OF TRUST MONEY. The Trustee or a trustee satisfactory to the Trustee and the Company shall hold in trust money or U.S. Government Obligations deposited with it pursuant to Section 7.01 of this Indenture. It shall apply the deposited money and the money from U.S. Government Obligations through the Paying Agent and in accordance with this Indenture to the payment of principal and interest on the Securities. SECTION 7.03. REPAYMENT TO COMPANY. (a) The Trustee and the Paying Agent shall promptly pay to the Company upon written request any excess money or securities held by them at any time. (b) The Trustee and the Paying Agent shall pay to the Company upon written request any money held by them for the payment of principal, premium, if any, or interest that remains unclaimed for two years after the date upon which such payment shall have come due; PROVIDED, HOWEVER, that the Trustee or such Paying Agent, shall, upon the written request and at the expense of the Company, cause to be published once in a newspaper of general circulation in The City of New York or mailed to each such Holder, notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such publication or mailing, any unclaimed balance of such money then remaining shall be repaid to the Company. After payment to the Company, Holders entitled to the money must look to the Company for payment as general creditors unless an applicable abandoned property law designates another Person. -62- SECTION 7.04. REINSTATEMENT. If the Trustee or Paying Agent is unable to apply any money or U.S. Government Obligations in accordance with Sections 7.01 and 7.02 of this Indenture 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 7.01 of this Indenture until such time as the Trustee or Paying Agent is permitted to apply such money or U.S. Government Obligations in accordance with Section 7.01 of this Indenture; PROVIDED, HOWEVER, that if the Company has made any payment of interest on or principal of 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 such payment from the money or U.S. Government Obligations held by the Trustee or Paying Agent. ARTICLE 8. AMENDMENTS SECTION 8.01. WITHOUT CONSENT OF HOLDERS. The Company, when duly authorized by resolution of its Board of Directors, and the Trustee may amend this Indenture or the Securities without the consent of any Holder: (a) to cure any ambiguity, defect or inconsistency with any other provision herein; (b) to comply with Section 4.01 of this Indenture; (c) to secure the Securities; (d) to make any change that does not adversely affect the legal rights hereunder of any Holder; or (e) to comply with the requirements of the SEC in order to effect or maintain the qualification of this Indenture under the TIA. After an amendment under this Section becomes effective, the Company shall mail to Holders a notice briefly describing the amendment. -63- SECTION 8.02. WITH CONSENT OF HOLDERS. The Company, when duly authorized by resolution of its Board of Directors, and the Trustee may amend this Indenture or the Securities with the written consent of the Holders of at least a majority in principal amount of the then outstanding Securities. However, without the consent of each Holder affected, an amendment under this Section may not: (a) reduce the amount of Securities whose Holders must consent to an amendment; (b) reduce the rate of or change the time for payment of interest, including defaulted interest, on any Security; (c) reduce the principal of or change the fixed maturity of any Security, or change the date on which any Security may be subject to redemption or reduce the Redemption Price therefor; (d) make any Security payable in currency other than that stated in the Security; (e) make any change in Section 5.04 or 5.07 or this Section 8.02 of this Indenture; (f) make any change in the ranking of the Securities with respect to any other obligation of the Company in a way that adversely affects the rights of any Holder; or (g) waive a Default in the payment of the principal of, and interest on, any Security. After an amendment under this Section becomes effective, the Company shall mail to Holders a notice briefly describing the amendment. SECTION 8.03. COMPLIANCE WITH TRUST INDENTURE ACT. Every amendment to this Indenture or the Securities shall be set forth in a supplemental indenture that complies with the TIA as then in effect. -64- SECTION 8.04. REVOCATION AND EFFECT OF CONSENTS. (a) Until an amendment or waiver becomes effective, a consent to it by a Holder of a Security is a continuing consent by the Holder and every subsequent Holder of a Security or portion of a Security that evidences the same debt as the consenting Holder's Security, even if notation of the consent is not made on any Security. However, any such Holder or subsequent Holder may revoke the consent as to his Security or portion of a Security if the Trustee receives written notice of revocation before the date on which the Trustee receives an Officers' Certificate certifying that the Holders of the requisite principal amount of Securities have consented to such amendment or waiver. An amendment or waiver becomes effective upon receipt by the Trustee of such Officers' Certificate and the written consents from the Holders of the requisite percentage in principal amount of Securities. (b) 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, which record date shall be at least 5 Business Days prior to the first solicitation of such consent. If a record date is fixed, then notwithstanding the second and third sentence of paragraph (a) of this Section, those persons who were Holders at such record date (or their duly designated proxies), and only those persons, shall be entitled to consent to such amendment 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 120 days after such record date. (c) After an amendment or waiver becomes effective, it shall bind every Holder. SECTION 8.05. NOTATION ON EXCHANGE OF SECURITIES. Upon the Company's written request, the Trustee shall place an appropriate notation (to be provided by the Company) about an amendment or waiver on any Security thereafter authenticated. The Company in exchange for all Securities may issue and the Trustee shall authenticate new Securities that reflect the amendment or waiver. SECTION 8.06. TRUSTEE PROTECTED. The Trustee shall sign all supplemental indentures, except that the Trustee need not sign any supplemental indenture that adversely affects its rights. In signing or refusing to sign such amendment or supplemental indenture, the Trustee shall be entitled to receive and, subject to Section 6.01 of this Indenture, shall be fully protected in relying -65- upon, an Officers' Certificate and an Opinion of Counsel as conclusive evidence that such amendment or supplemental indenture is authorized or permitted by this Indenture, that it is not inconsistent herewith, that all conditions precedent to the execution thereof have been met, that it will be valid and binding upon the Company in accordance with its terms and that, after the execution thereof, the Company will not be in Default and no Event of Default will have occurred and be continuing. ARTICLE 9. REDEMPTIONS SECTION 9.01. NOTICE TO TRUSTEE. If the Company elects to redeem Securities pursuant to the optional redemption provisions of paragraph 6 of the Securities and Section 9.03 hereof, the Company shall notify the Trustee in writing of the Redemption Date, the principal amount of Securities to be redeemed, and the Redemption Price and shall deliver to the Trustee an Officers' Certificate certifying resolutions of the Board of Directors authorizing the redemption and an Opinion of Counsel with respect to the due authorization of such redemption and that such redemption is being made in accordance with this Indenture and the Securities and does not violate any other agreement binding on the Company. The Company shall give the notice to the Trustee provided for in this Section at least 45 days (unless such shorter period shall be satisfactory to the Trustee) but not more than 60 days before a Redemption Date. SECTION 9.02. SELECTION OF THE SECURITIES TO BE REDEEMED. If less than all of the Securities are to be redeemed, the Trustee, PRO RATA or by lot, or by any manner that is acceptable to the Trustee, shall select, subject to the remainder of this Section, the Securities to be redeemed. The Trustee shall make the selection not more than 60 days and not less than 30 days before each Redemption Date from Securities outstanding not previously called for redemption. The Trustee may select for redemption portions of the principal of Securities that have denominations larger than $1,000. Securities and portions of them it selects shall be in amounts of $1,000 or integral multiples of $1,000. Provisions of this Indenture that apply to Securities called for redemption shall also apply to portions of Securities called for redemption. The Trustee shall notify the Company -66- promptly in writing of the Securities or portions of Securities to be called for redemption. SECTION 9.03. NOTICE OF REDEMPTION. (a) At least 30 but not more than 60 days before a Redemption Date, the Company shall mail a notice of redemption by first-class mail to each Holder whose Securities are to be redeemed at the Holder's last address as it appears upon the register. (b) The notice shall identify the Securities to be redeemed and shall state: (i) the Redemption Date; (ii) the Redemption Price and the amount of accrued interest to be paid; (iii) the name and address of the Paying Agent; (iv) that the Securities called for redemption must be surrendered to the Paying Agent to collect the Redemption Price and accrued interest, if any; (v) that, unless the Company defaults in making the redemption payment, interest on the Securities called for redemption ceases to accrue on and after the specified Redemption Date; and (vi) if any Security is being redeemed in part, the portion of the principal amount (equal to $1,000 or any integral multiple thereof) of such Security to be redeemed and that, on or after the Redemption Date, upon surrender of such Security, a new Security or Securities in principal amount equal to the unredeemed portion thereof will be issued. At the Company's request, the Trustee shall give the notice of redemption in the Company's name and at the Company's expense. SECTION 9.04. EFFECT OF NOTICE OF REDEMPTION. Once notice of redemption is mailed pursuant to paragraph 6 of the Securities and in accordance with Section 9.03 hereof, the Securities called for redemption become irrevocably due and payable on the specified Redemption Date at the Redemption Price. A notice of redemption may not be conditional. -67- Notice of redemption shall be deemed to be given when mailed, whether or not the Holder receives such 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 9.05. DEPOSIT OF REDEMPTION PRICE ON OPTIONAL REDEMPTION. On or before each Redemption Date the Company shall deposit with the Trustee or the Paying Agent money (which shall be immediately available funds if deposited on the Redemption Date and which must be received by such Paying Agent prior to 10:00 a.m. New York City time) sufficient to pay the Redemption Price of and accrued interest on all Securities to be redeemed on that date. The Paying Agent shall return to the Company any money not required for that purpose. SECTION 9.06. SECURITIES REDEEMED IN PART. Upon surrender of a Security that is redeemed in part, the Company shall issue and the Trustee shall authenticate a new Security equal in principal amount to the unredeemed portion of the Security surrendered. ARTICLE 10. MISCELLANEOUS SECTION 10.01. TRUST INDENTURE ACT CONTROLS. If any provision of this Indenture limits, qualifies, or conflicts with another provision which is required to be included in this Indenture by the TIA, the required provision shall control. SECTION 10.02. NOTICES. Any notice or communication to the Company or the Trustee is duly given if in writing and (a) delivered in Person, (b) mailed by first-class mail or (c) transmitted by facsimile transmission (confirmed by guaranteed overnight courier) to the following addresses: -68- The Company's address is: 201 Willowbrook Boulevard Wayne, New Jersey 07470 Attn: Kenneth R. Baum Telephone number: (201) 890-6000 Facsimile number: (201) 890-6540 The Trustee's address is: One State Street New York, New York 10004 Attn: Corporate Trust Department Telephone number: (212) 858-2000 Facsimile number: (212) 858-2952 At the date of execution hereof, the Paying Agent's and Registrar's address is: One State Street New York, New York 10004 Attn: Corporate Trust Department Telephone number: (212) 858-2000 Facsimile number: (212) 858-2952 The Company or the Trustee by written notice to the other may designate additional or different addresses for subsequent notices or communications. Any notice or communication to a Holder shall be mailed by first-class mail (registered or certified, return receipt requested) or overnight air courier guaranteeing next day delivery, to his address shown on the register kept by the Registrar; PROVIDED that items required under the TIA to be sent to Holders in compliance with TIA Section 313(c) shall be mailed to Holders in compliance with such section. Failure to mail a notice or a communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders. If a notice or communication is delivered, mailed or transmitted in the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it. If the Company mails a notice or communication to Holders, it shall mail a copy to the Trustee and each Agent at the same time. -69- SECTION 10.03. COMMUNICATION BY HOLDERS WITH OTHER HOLDERS. Holders may communicate pursuant to TIA Section 312(b) with other Holders with respect to their rights under this Indenture or the Securities. The Trustee shall comply with the provisions of TIA Section 312(b). The Company, the Trustee, the Registrar and any agent of any of them shall have the protection of TIA Section 312(c). SECTION 10.04. 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: (a) 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 (b) an Opinion of Counsel stating that, in the opinion of such counsel, all such conditions precedent have been complied with and that any such action or inaction does not conflict with the terms of this Indenture. SECTION 10.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION. Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include: (a) a statement that the Person making such certificate or opinion has read such covenant or condition; (b) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (c) a statement that, in the opinion of such Person, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and (d) a statement as to whether or not, in the opinion of such Person, such condition or covenant has been complied with. -70- SECTION 10.06. RULES BY TRUSTEE AND AGENTS. The Trustee may make reasonable rules for action by or a meeting of Holders. The Registrar or Paying Agent may make reasonable rules and set reasonable requirements for its functions. SECTION 10.07. LEGAL HOLIDAYS. A "Legal Holiday" is a Saturday, a Sunday or a day on which banking institutions in the State of New York are not required to be open. If a payment date is a Legal Holiday at a place of payment, payment may be made at that place on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period. SECTION 10.08. NO RECOURSE AGAINST OTHERS. The Securities and the obligations of the Company under this Indenture are solely obligations of the Company and no officer, director, employee or stockholder, as such, shall be liable for any failure by the Company to pay amounts on the Securities when due or perform any such obligation. SECTION 10.09. DUPLICATE ORIGINALS. The parties may sign any number of copies or counterparts of this Indenture. One signed copy is enough to prove this Indenture. SECTION 10.10. GOVERNING LAW. THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN THIS INDENTURE AND THE SECURITIES, WITHOUT REGARD TO THE CONFLICTS OF LAWS RULES THEREOF. SECTION 10.11. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS. This Indenture may not be used to interpret another indenture, loan or debt agreement of the Company or a Subsidiary. Any such indenture, loan or debt agreement may not be used to interpret this Indenture. -71- SECTION 10.12. SUCCESSORS. All agreements of the Company in this Indenture and the Securities shall bind its successor. All agreements of the Trustee in this Indenture shall bind its successor. SECTION 10.13. SEVERABILITY. 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 10.14. TABLE OF CONTENTS, HEADINGS, ETC. The Table of Contents, Cross-Reference Table, and headings of the Articles and Sections of this Indenture have been inserted for the convenience of reference only, are not to be considered a part hereof, and shall in no way modify or restrict any of the terms or provisions hereof. -72- SECTION 10.15. BENEFITS OF INDENTURE. Nothing in this Indenture or in the Securities, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder and the Holders, any benefit or any legal or equitable right, remedy or claim under this Indenture. SIGNATURES Dated: , 1995 THE GRAND UNION COMPANY ---------------- By: ------------------------ Name: Title: Attest: (SEAL) - --------------------------- Dated: , 1995 IBJ SCHRODER BANK & TRUST ------------- COMPANY, Trustee By: ------------------------ Name: Title: Attest: (SEAL) - --------------------------- -73- Exhibit A No. $________ THE GRAND UNION COMPANY Incorporated under the laws of the State of Delaware 12% Senior Notes due September 1, 2004 THE GRAND UNION COMPANY promises to pay to __________________ or registered assigns, the principal sum of _______ Dollars on September 1, 2004 and to pay interest thereon semiannually in arrears from September 1, 1995 (notwithstanding that the date of issue is prior thereto) at the rate of 12% per annum on March 1 and September 1 of each year commencing March 1, 1996 until the principal hereof is paid or made available for payment. Payment of principal and premium, if any, and interest shall be made in the manner and subject to the terms set forth in provisions appearing on the reverse hereof, which provisions, in their entirety, shall for all purposes have the same effect as if set forth at this place. IN WITNESS WHEREOF, THE GRAND UNION COMPANY has caused this instrument to be executed in its corporate name by the manual or facsimile signature of its President or a Vice President and attested by its Secretary or an Assistant Secretary. THE GRAND UNION COMPANY By --------------------------- Name: Title: Attest: -------------------- Name: Title: SEAL A-1 Exhibit A FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION This is one of the 12% Senior Notes due September 1, 2004 issued under the within-mentioned Indenture. Dated: IBJ SCHRODER BANK & TRUST COMPANY, as Trustee By: ----------------------------- Authorized Signatory A-2 Exhibit A (Back of Security) THE GRAND UNION COMPANY 12% Senior Notes due September 1, 2004 1. INTEREST. THE GRAND UNION COMPANY (the "Company"), a Delaware corporation, promises to pay interest on the principal amount of this Security at the rate per annum shown above from September 1, 1995. The Company will pay interest semiannually in arrears on March 1 and September 1 of each year, commencing March 1, 1996. Interest on the Securities will accrue from the most recent date on which interest has been paid or, if no interest has been paid, from September 1, 1995. Interest will be computed on the basis of a 360-day year of twelve 30-day months. 2. METHOD OF PAYMENT. The Company will pay interest on the Securities (except defaulted interest) to the Persons who are registered Holders of Securities at the close of business on the regular record date, which shall be the February 15 and August 15, as the case may be, next preceding the interest payment date even though Securities are canceled after the record date and on or before the interest payment date. Any such interest not so punctually paid or duly provided for or paid within the 30-day period in paragraph (i) of Section 5.01 of the Indenture, and any interest payable on such defaulted interest (to the extent lawful), will forthwith cease to be payable to the Holder on such regular record date and shall be payable to the Person in whose name this Security is registered at the close of business on a special record date for the payment of such defaulted interest to be fixed by the Company, notice of which shall be given to Holders not less than 5 days prior to such special record date. Holders must surrender Securities to a Paying Agent to collect principal payments. The Company will pay principal 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, premium, if any, and interest by check payable in such money. It may mail an interest check to a Holder's registered address. 3. PAYING AGENT AND REGISTRAR. Initially, IBJ Schroder Bank & Trust Company, a banking company organized under the laws of the State of New York (the "Trustee"), will act as Paying Agent and Registrar. The Company may change any Paying Agent, Registrar or co-Registrar without notice to any Holder. The Company may act in any such capacity. 4. INDENTURE. The Company has issued the Securities under an Indenture dated as of _______, 1995 (the A-3 Exhibit A "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 (15 U.S.C. Sections 77aaa-77bbbb), as amended by the Trust Indenture Reform Act of 1990, as in effect on the date of the Indenture ("TIA"). The Securities are subject to all such terms, and Holders are referred to the Indenture and the TIA for a statement of such terms. The Securities are obligations of the Company limited to $595,475,922 in aggregate principal amount. The Securities are unsecured general obligations of the Company. Unless otherwise defined herein, all capitalized terms shall have the meanings assigned to them in the Indenture. 5. DENOMINATIONS, TRANSFER, EXCHANGE. The Securities are in registered form without coupons in denominations of $1,000 and integral multiples thereof. The transfer of Securities may be registered and Securities may be exchanged as provided in 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 exchange or register the transfer of any Security or portion of a Security selected for redemption. Also, it need not exchange or register the transfer of any Securities for a period of 15 days before a selection of Securities to be redeemed. 6. OPTIONAL REDEMPTION. The Securities may not be redeemed at the option of the Company prior to September 1, 2000, except as set forth below. On or after such date, the Securities may be redeemed at the election of the Company as a whole at any time or in part from time to time at the Redemption Prices (expressed in percentages of principal amount) set forth below plus accrued interest to the Redemption Date, if redeemed during the 12-month period beginning on September 1 of the years indicated below: Year Percentage 2000 104% 2001 102 2002 and thereafter 100 Notwithstanding the foregoing, the Securities may be redeemed at the election of the Company on or after September 1, 1995 and prior to September 1, 1998 with the proceeds of one or more issuances of equity securities, so long as such redemption, when aggregated with all prior such redemptions, shall not result in more than 33 1/3% of the principal amount of the Securities originally issued having been so redeemed, at the Redemption Prices (expressed in percentages of A-4 Exhibit A principal amount) set forth below plus accrued interest to the Redemption Date, if redeemed during the 12-month period beginning September 1 of the years indicated below: Year Percentage 1995 103% 1996 106 1997 106 Notice of redemption will be mailed by first-class mail at least 30 days but not more than 60 days before the Redemption Date to each Holder of Securities to be redeemed, at his registered address. Securities in denominations larger than $1,000 may be redeemed in part but only in whole multiples of $1,000. On and after the Redemption Date interest ceases to accrue on Securities or portions of them called for redemption. The Securities will not have the benefit of any sinking fund obligation. 7. PERSONS DEEMED OWNERS. The registered Holder of a Security may be treated as its owner for all purposes. 8. AMENDMENTS AND WAIVERS. Subject to certain exceptions, the Indenture or the Securities may be amended with the consent of the Holders of at least a majority in principal amount of the then outstanding Securities. Without the consent of any Holder, the Indenture or the Securities may be amended to cure any ambiguity, defect or inconsistency, to comply with Section 4.01 of the Indenture, to secure the Securities, to make any change that does not adversely affect the legal rights of any Holder or to comply with the requirements of the SEC to maintain qualification of the Indenture under the TIA. 9. RESTRICTIVE COVENANTS. The Indenture imposes certain limitations on the ability of the Company and its Subsidiaries to, among other things, pay dividends or make certain other Restricted Payments, incur additional Indebtedness or Liens, enter into transactions with Affiliates, merge or consolidate with any other person or sell, lease, transfer or otherwise dispose of substantially all of its properties or assets or enter into sale and leaseback transactions. The limitations are subject to certain qualifications and exceptions. 10. DEFAULTS AND REMEDIES. An Event of Default, as defined in the Indenture, is: a. the failure to pay interest on the Securities for a period of 30 days after such interest becomes due and payable; (ii) the failure to pay the principal or premium, if any, on the Securities when such principal becomes due and payable, whether at the stated A-5 Exhibit A maturity or upon acceleration, redemption or otherwise; (iii) a default in the observance of any other covenant contained in the Indenture that continues for 30 days after the Company has been given notice of the default by the Trustee or the Holders of 25% in principal amount of the Securities then outstanding, (iv) a default or defaults on other Indebtedness of the Company or any Subsidiary, which Indebtedness has an outstanding principal amount of more than $15,000,000 individually or in the aggregate if such Indebtedness has attained final maturity or if the holders of such Indebtedness have accelerated payment thereof under the terms of the instrument under which such Indebtedness is or may be outstanding and it remains unpaid; (v) one or more judgments or decrees is entered against the Company or any Subsidiary involving a liability (not paid or fully covered by insurance) of $5,000,000 or more in the case of any one such judgment or decree or $10,000,000 or more in the aggregate for all such judgments and decrees for the Company and all its Subsidiaries and all such judgments and decrees have not been vacated, discharged or stayed or bonded pending appeal within 30 days from the entry thereof; or (vi) certain events of bankruptcy, insolvency or reorganization affecting the Company or any Material Subsidiary as provided in the Indenture. In case an Event of Default (other than an Event of Default resulting from bankruptcy, insolvency, or reorganization of the Company or a Material Subsidiary) shall have occurred and be continuing, the Trustee by written notice to the Company, or the Holders of at least 25% in principal amount of the Securities by written notice to the Company and the Trustee, may declare to be due and payable the principal amount of the Securities, plus accrued interest, and such amounts shall become due and payable upon the earlier of (i) five days from the date of such notice, so long as the Event of Default giving rise to such notice has not been cured or waived and (ii) the acceleration of the Indebtedness under the Bank Credit Agreement (or any renewal or refinancing thereof). In case an Event of Default resulting from bankruptcy, insolvency, or reorganization of the Company or a Material Subsidiary shall occur, such amount shall ipso facto become immediately due and payable without any declaration or other act on the part of the Trustee or any Holder. Such declaration or acceleration by the Trustee or the Holders may be rescinded and past defaults may be waived (except, unless theretofore cured, a default in payment of principal of or interest on the Securities issued under the Indenture) by the Holders of a majority in principal amount of the Securities upon conditions provided in the Indenture. Except to enforce the right to receive payment of principal, premium (if any) or interest when due, no Holder may institute any proceeding with respect to the Indenture or for any remedy thereunder except as provided in the Indenture. Subject to certain A-6 Exhibit A restrictions, the Holders of a majority in principal amount of the Securities have the right to direct the time, method, and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on the Trustee. The Trustee, however, may refuse to follow any direction that conflicts with law or the Indenture, that is unduly prejudicial to the rights of any Holder, or that would subject the Trustee to personal liability. The Company must furnish an annual compliance certificate to the Trustee. 11. PREPAYMENT AT HOLDER'S OPTION UPON CHANGE OF CONTROL EVENTS. In the event of a Change of Control, the Company shall be obligated to make an offer to purchase this Security at a purchase price in cash equal to 101% of its principal amount plus accrued interest, after the occurrence of such Change of Control. Holders of Securities which are the subject of such an offer to repurchase shall receive an offer to repurchase and may elect to have such Securities repurchased in accordance with the provisions of the Indenture. The Company shall give the Holder of this Security notice of such right of repurchase not less than 20 nor more than 60 Business Days prior to the consummation of a merger, consolidation, transfer, sale or lease that would constitute a Change of Control and not more than 45 Business Days following any other event constituting a Change of Control, mailed by first-class mail to the Holder's last address as it appears upon the register. The Holder shall have the right to have this Security repurchased if, among other things, the Security is tendered for repurchase no later than five Business Days prior to the applicable repurchase date. The Company shall have no obligation to consummate any merger, consolidation, transfer, sale or lease that would constitute a Change of Control, and, if any such merger, consolidation, transfer, sale or lease that was the subject of any notice described above is not consummated, the Holder will not be entitled to have this Security prepaid, and any Securities tendered for prepayment will be returned. 12. TRUSTEE DEALINGS WITH THE COMPANY. 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 any Affiliate with the same rights it would have as if it were not the Trustee. 13. OFFERS TO PURCHASE. Under certain circumstances, if the Company or any Subsidiary consummates an Asset Sale, the Company will be required to make an offer to purchase a portion of the Securities pursuant to the provisions of Section 3.06 of the Indenture. A-7 Exhibit A 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. Each Holder by accepting a Security waives and releases all such liability. The waiver and release are part of the consideration for the issue of the Securities. 15. UNCLAIMED MONEY. If money for the payment of principal of or interest on any Security remains unclaimed for two years after the date on which such payment shall have come due, the Trustee or Paying Agent will pay the money back to the Company at the Company's written request. After that, Holders entitled to this money must look to the Company for payment, unless a law governing abandoned property designates another Person. 16. DISCHARGE UPON REDEMPTION OR MATURITY. Subject to the terms of the Indenture, the Indenture will be discharged and canceled upon the payment of all Securities. The Indenture contains provisions for defeasance at any time of certain restrictive covenants with respect to this Security (in each case upon compliance with certain conditions set forth therein). 17. AUTHENTICATION. This Security shall not be valid until authenticated by the manual signature of the Trustee or an Authenticating Agent. 18. GOVERNING LAW. The laws of the State of New York shall govern this Security and the Indenture, without regard to the conflicts of laws rules thereof. 19. ABBREVIATIONS. Customary abbreviations may be used in the name of a Holder 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 UNIF GIFT MIN ACT (= Uniform Gifts to Minors Act). The Company will furnish to any Holder upon written request and without charge a copy of the Indenture, which contains, in larger type, the text of this Security. Requests may be made to The Grand Union Company, 201 Willowbrook Boulevard, Wayne, New Jersey 07470, Attention: Kenneth R. Baum. A-8 Exhibit A OPTION OF HOLDER TO ELECT REPURCHASE If you want to elect to have this Security purchased by the Company pursuant to Section 3.06 or 4.01 of the Indenture, check the box below*: / / Section 3.06 / / Section 4.01 If you want to elect to have only part of this Security purchased by the Company pursuant to Section 3.06 of the Indenture, state the amount you elect to have purchased: $___________ Date: Your signature ------------- --------------------------- (Sign exactly as your name appears on the other side of this Security) Tax Identification No.: ---------- Signature Guarantee: ---------------------- (Signature must be guaranteed by an eligible institution within the meaning of Rule 17(A)(d)-15 under the Securities Exchange Act of 1934, as amended) - ------------------------- * Check applicable box. A-9 Exhibit A ASSIGNMENT FORM To assign this Security, fill in the form below: I or we assign and transfer this Security to _______________________________________________________________________________ (Insert assignee's soc. sec. or tax I.D. no.) _______________________________________________________________________________ _______________________________________________________________________________ _______________________________________________________________________________ _______________________________________________________________________________ (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. _______________________________________________________________________________ Date: Your signature ----------------- ------------------- (Sign exactly as your name appears on the other side of this Security) Signature Guarantee: -------------------------------------- (Signature must be guaranteed by an eligible institution within the meaning of Rule 17(A)(d)-15 under the Securities Exchange Act of 1934, as amended) A-10 -----END PRIVACY-ENHANCED MESSAGE-----