EXHIBIT 4.3
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SPECIALTY RETAILERS, INC.,
AS ISSUER
STAGE STORES, INC.,
AS GUARANTOR
$100,000,000
9% SENIOR SUBORDINATED NOTES DUE 2007
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INDENTURE
Dated as of June 17, 1997
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STATE STREET BANK AND TRUST COMPANY
Trustee
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CROSS-REFERENCE TABLE
TRUST INDENTURE
ACT SECTION INDENTURE SECTION
310 (a)(1)...................................................... 8.10
(a)(2)...................................................... 8.10
(a)(3)...................................................... N/A
(a)(4)...................................................... N/A
(a)(5)...................................................... 8.10
(b)......................................................... 8.10
(c)......................................................... N/A
311 (a)......................................................... 8.11
(b)......................................................... 8.11
(c)......................................................... N/A
312 (a)......................................................... 2.05
(b)......................................................... 14.03
(c)......................................................... 14.03
313 (a)......................................................... 11.02
(b)(i)...................................................... 11.02
(b)(2)...................................................... 8.06
(c)......................................................... 8.06; 11.02
(d)......................................................... 8.06
314 (a)......................................................... 8.03; 11.02
(b)......................................................... 11.03
(c)(1)...................................................... 14.04
(c)(2)...................................................... 14.04
(c)(3)...................................................... N/A
(d)......................................................... 11.02;11.03
(e)......................................................... 14.05
(f)......................................................... N/A
315 (a)......................................................... 8.01
(b)......................................................... 8.05; 14.02
(c)......................................................... 8.01
(d)......................................................... 8.01
(e)......................................................... 7.11
316 (a)(1)(A)................................................... 7.05
(a)(1)(B)................................................... 7.04
(a)(2)...................................................... N/A
(b)......................................................... 7.07
317 (a)(1)...................................................... 7.08
(a)(2)...................................................... 7.09
(b)......................................................... 2.04
318 (a)......................................................... 14.01
(b)......................................................... N/A
(c)......................................................... 14.01
NOTE: This Cross-Reference Table shall not, for any purpose, be deemed to be
part of the Indenture.
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TABLE OF CONTENTS
PAGE
PARTIES...................................................................... 1
RECITALS OF SRI AND STAGE.................................................... 1
ARTICLE I
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01. Definitions.............................................. 1
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 II
THE NOTES
Section 2.01. Form and Dating.......................................... 18
Section 2.02. Execution and Authentication............................. 19
Section 2.03. Registrar and Paying Agent............................... 20
Section 2.04. Paying Agent to Hold Money In Trust...................... 20
Section 2.05. Lists of Holders of Notes................................ 20
Section 2.06. Transfer and Exchange.................................... 21
Section 2.07. Replacement Notes........................................ 25
Section 2.08. Outstanding Notes........................................ 25
Section 2.09. Temporary Notes and Certificated Notes................... 25
Section 2.10. Cancellation............................................. 26
Section 2.11. Defaulted Interest....................................... 27
Section 2.12. CUSIP Number............................................. 27
ARTICLE III
REDEMPTION
Section 3.01. Notices to Trustee....................................... 27
Section 3.02. Selection of Notes to be Redeemed........................ 27
Section 3.03. Notice of Redemption..................................... 28
Section 3.04. Effect of Notice of Redemption........................... 28
Section 3.05. Deposit of Redemption Price.............................. 29
Section 3.06. Notes Redeemed in Part................................... 29
ARTICLE IV
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NOTE: This Table of Contents shall not, for any reason, be deemed to be part
of the Indenture.
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PAGE
CHANGE OF CONTROL
ARTICLE V
COVENANTS
Section 5.01. Payment of Principal, Premium and Interest............... 30
Section 5.02. Maintenance of Office or Agency.......................... 31
Section 5.03. SEC Reports.............................................. 31
Section 5.04. Limitation On Debt....................................... 31
Section 5.05. Limitation On Restricted Payments........................ 33
Section 5.06. Limitation On Restrictions On Distributions from
Restricted Subsidiaries.................................. 35
Section 5.07. Limitation On Sales of Assets and Subsidiary Stock....... 36
Section 5.08. Limitation On Transactions with Affiliates............... 39
Section 5.09. Limitation On the Sale or Issuance of Capital Stock of
Restricted Subsidiaries.................................. 39
Section 5.10. Limitation on Liens...................................... 40
Section 5.11. Accounts Receivable Subsidiaries......................... 40
Section 5.12. Future Guarantors........................................ 40
Section 5.13. Compliance Certificates.................................. 40
Section 5.14. Further Instruments and Acts............................. 41
ARTICLE VI
SUCCESSORS
Section 6.01. When Stage and SRI May Merge or Transfer Assets.......... 41
Section 6.02. Successor Company Substituted............................ 41
Section 6.03. When Subsidiary Guarantor May Merge or Transfer Assets... 42
ARTICLE VII
DEFAULTS AND REMEDIES
Section 7.01. Events of Default........................................ 42
Section 7.02. Acceleration............................................. 43
Section 7.03. Other Remedies........................................... 44
Section 7.04. Waiver of Past Defaults.................................. 44
Section 7.05. Control by Majority...................................... 44
Section 7.06. Limitation On Suits...................................... 45
Section 7.07. Unconditional Right of Holders of Notes to Receive
Payment.................................................. 45
Section 7.08. Collection Suit by Trustee............................... 45
Section 7.09. Trustee May File Proofs of Claim......................... 45
Section 7.10. Priorities............................................... 46
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PAGE
Section 7.11. Undertaking for Costs.................................... 46
Section 7.12. Waiver of Stay, Extension and Usury Laws................. 46
ARTICLE VIII
TRUSTEE
Section 8.01. Duties of Trustee........................................ 47
Section 8.02. Rights of Trustee........................................ 48
Section 8.03. Individual Rights of Trustee............................. 48
Section 8.04. Trustee's Disclaimer..................................... 48
Section 8.05. Notice of Default........................................ 49
Section 8.06. Reports by Trustee to Holders of Notes................... 49
Section 8.07. Compensation and Indemnity............................... 49
Section 8.08. Replacement of Trustee................................... 50
Section 8.09. Successor Trustee by Merger, Etc......................... 51
Section 8.10. Eligibility; Disqualification............................ 51
Section 8.11. Preferential Collection of Claims Against SRI............ 51
ARTICLE IX
DISCHARGE OF INDENTURE; DEFEASANCE
Section 9.01. Discharge of Liability on Notes; Defeasance.............. 51
Section 9.02. Conditions to Defeasance................................. 52
Section 9.03. Application of Trust Money............................... 53
Section 9.04. Repayment to SRI......................................... 53
Section 9.05. Indemnity for Government Obligations..................... 54
Section 9.06. Reinstatement............................................ 54
ARTICLE X
AMENDMENT, SUPPLEMENT AND WAIVER
Section 10.01.Without Consent of Holders of Notes...................... 54
Section 10.02.With Consent of Holders of Notes......................... 55
Section 10.03.Compliance with Trust Indenture Act...................... 56
Section 10.04.Revocation and Effect of Consents and Waivers............ 56
Section 10.05.Notation On or Exchange of Notes......................... 57
Section 10.06.Trustee to Sign Amendments, Etc.......................... 57
Section 10.07.Payment for Consents..................................... 57
ARTICLE XI
SUBORDINATION OF NOTES
Section 11.01.Notes Subordinate to Senior Debt; Notes PARI PASSU
with Senior Subordinated Debt; Notes Senior to
Subordinated Obligations................................. 57
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PAGE
Section 11.02.Payment Over of Proceeds Upon Dissolution, Etc........... 58
Section 00.00.Xx Payment When Senior Debt in Default................... 59
Section 11.04.Payment Permitted If No Default.......................... 60
Section 11.05.Subrogation to Rights of Holders of Senior Debt.......... 60
Section 11.06.Provisions Solely to Define Relative Rights.............. 60
Section 11.07.Trustee to Effectuate Subordination...................... 61
Section 00.00.Xx Waiver of Subordination Provisions.................... 61
Section 11.09.Notice to Trustee........................................ 61
Section 00.00.Xxxxxxxx on Judicial Order or Certificate of
Liquidating Agent........................................ 62
Section 11.11.Trustee Not Fiduciary for Holders of Senior Debt......... 62
Section 11.12.Rights of Trustee as Holder of Senior Debt; Preservation
of Trustee's Rights...................................... 62
Section 11.13.Article XI Applicable to Paying Agents................... 63
Section 00.00.Xxxxx Moneys Not Subordinated............................ 63
ARTICLE XII
GUARANTIES
Section 12.01.Guaranties............................................... 63
Section 12.02.Limitation on Liability; Contribution.................... 65
Section 12.03.Successors and Assigns................................... 65
Section 00.00.Xx Waiver................................................ 65
Section 12.05.Modification............................................. 65
Section 12.06.Release of Subsidiary Guarantor.......................... 65
ARTICLE XIII
SUBORDINATION OF GUARANTIES
Section 13.01.Guaranties Subordinate to Senior Debt; Guaranties PARI
PASSU with Senior Subordinated Debt; Guaranties Senior
to Subordinated Obligations.............................. 66
Section 13.02.Payment Over of Proceeds Upon Dissolution, Etc........... 66
Section 00.00.Xx Payment When Senior Debt in Default................... 67
Section 13.04.Payment Permitted If No Default.......................... 68
Section 13.05.Subrogation to Rights of Holders of Senior Debt.......... 69
Section 13.06.Provisions Solely to Define Relative Rights.............. 69
Section 13.07.Trustee to Effectuate Subordination...................... 69
Section 00.00.Xx Waiver of Subordination Provisions.................... 70
Section 13.09.Notice to Trustee........................................ 70
Section 00.00.Xxxxxxxx on Judicial Order or Certificate of
Liquidating Agent........................................ 71
Section 13.11.Trustee Not Fiduciary for Holders of Senior Debt......... 71
Section 13.12.Rights of Trustee as Holder of Senior Debt; Preservation
of Trustee's Rights...................................... 71
Section 13.13.Article XIII Applicable to Paying Agents................. 71
Section 00.00.Xxxxx Moneys Not Subordinated............................ 72
ARTICLE XIV
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PAGE
MISCELLANEOUS
Section 00.00.Xxxxx Indenture Act Controls............................. 72
Section 14.02.Notices.................................................. 72
Section 14.03.Communication by Holders of Notes with Other Holders
of Notes................................................. 73
Section 14.04.Certificate and Opinion as to Conditions Precedent....... 73
Section 14.05.Statements Required in Certificate or Opinion............ 74
Section 14.06.Rules by Trustee and Agents.............................. 74
Section 00.00.Xx Personal Liability of Directors, Officers, Employees,
Incorporators and Stockholders........................... 74
Section 14.08.Governing Law............................................ 74
Section 00.00.Xx Adverse Interpretation of Other Agreements............ 74
Section 14.10.Successors............................................... 75
Section 14.11.Severability............................................. 75
Section 14.12.Counterpart Originals.................................... 75
Section 14.13.Table of Contents, Headings, Etc......................... 75
EXHIBIT A--Form of Initial Note
EXHIBIT B--Form of Exchange Note
vi
INDENTURE, dated as of June 17, 1997, among Specialty Retailers,
Inc. ("SRI"), a corporation duly organized and existing under the laws of the
State of Texas, as Issuer, Stage Stores, Inc. ("STAGE"), a corporation duly
organized and existing under the laws of the State of Delaware, as Guarantor,
and State Street Bank and Trust Company, a trust company duly organized and
existing under the laws of the Commonwealth of Massachusetts, as trustee (the
"TRUSTEE").
RECITALS OF SRI AND STAGE
SRI and Stage have duly authorized the execution and delivery of
this Indenture to provide for the issuance of up to $100,000,000 aggregate
principal amount of SRI's 9% Senior Subordinated Notes Due 2007 issuable as
provided in this Indenture. All things necessary to make this Indenture a valid
agreement of SRI and Stage, in accordance with its terms, have been done, and
SRI and Stage have done all things necessary to make the Notes, when executed by
SRI and Stage and authenticated and delivered by the Trustee hereunder and duly
issued by SRI, the valid obligations of SRI and Stage as hereinafter provided.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Notes by the Holders thereof, it is mutually agreed, for the equal and
proportionate benefit of all Holders of the Notes, as follows:
ARTICLE I
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01. DEFINITIONS.
"ACCOUNTS RECEIVABLE FACILITY" means the program and the
transactions in effect on the Issue Date pursuant to the following principal
documents, each as in effect on the Issue Date, pursuant to which SRI
Receivables Purchase Co., Inc. ("SRPC") has acquired and securitized Receivables
originated by SRI: Receivables Purchase Agreement between SRI and SRPC; Pooling
and Servicing Agreement among SRI, as servicer, SRPC, as transferor, and Bankers
Trust (Delaware), as trustee; Series 1993-1 Supplement, Series 1933-2 Supplement
and Series 1995-1 Supplement, each between SRPC, as transferor, and Bankers
Trust (Delaware), as trustee; each related certificate purchase agreement and
placement agent agreement; Indenture between SRPC, as issuer, and Bankers Trust
(Delaware), as trustee and collateral agent; and Purchase Agreement between BT
Securities Corp., SRPC and SRI, pertaining to 12.5% Trust Certificate-Backed
Notes
"ACCOUNTS RECEIVABLE SUBSIDIARY" means a wholly owned Subsidiary of
Stage or a Subsidiary of such wholly owned Subsidiary, in each case which
engages in no activities other than in connection with the financing of
Receivables, including any Banking Subsidiary, and which is designated by the
Board of Directors as an Accounts Receivable Subsidiary pursuant to
a board resolution set forth in an Officers' Certificate and delivered to the
Trustees, (a) no portion of the Debt or any other obligations (contingent or
otherwise) of which (i) is Guaranteed by Stage or any other Subsidiary of Stage,
(ii) is recourse to or obligates Stage or any other Subsidiary of Stage in any
way, other than pursuant to Customary Securitization Undertakings or (iii)
subjects any property or asset of Stage or any other Subsidiary of Stage,
directly or indirectly, contingently or otherwise, to the satisfaction thereof,
other than pursuant to Customary Securitization Undertakings, (b) with which
none of Stage or any other Subsidiary of Stage has any contract, agreement,
arrangement or understanding other than on terms no less favorable to Stage or
such other Subsidiary than those that might be obtained at the time from Persons
who are not Affiliates of Stage, other than sales of Receivables in accordance
with clause (v) of the definition of "Asset Disposition" and fees payable in the
ordinary course of business in connection with servicing Receivables and (c)
with which neither Stage nor any other Subsidiary of Stage or has any obligation
(i) to subscribe for additional shares of Capital Stock therein or (ii) to
maintain or preserve such Subsidiary's financial condition or to cause such
Subsidiary to achieve certain levels of operating results.
"ACQUISITION" means the acquisition by Stage of X.X. Xxxxxxx Company
pursuant to and in accordance with the terms of the Merger Agreement.
"AFFILIATE" means with respect to any specified Person any other
Person, directly or indirectly, controlling or controlled by or under direct or
indirect common control with such specified Person. For the purposes of this
definition, "control" when used with respect to any Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing. For purposes of Section 5.07 and Section 5.08 only, the term
"Affiliate" shall also mean any beneficial owner (as defined in Rules 13d-3 and
13d-5 under the Exchange Act) of Capital Stock representing 10% or more of the
total voting power of the Voting Stock (on a fully diluted basis) of Stage or of
rights or warrants to purchase such Capital Stock (whether or not currently
exercisable) and any Person who would be an Affiliate of any such beneficial
owner in accordance with the first sentence of this definition.
"AGENT" means any Registrar, Paying Agent or co-registrar.
"ASSET DISPOSITION" means any sale, lease, transfer or other
disposition (or series of related sales, leases, transfers or dispositions) of
shares of Capital Stock of a Restricted Subsidiary (other than directors'
qualifying shares), property or other assets (each referred to for the purposes
of this definition as a "disposition") by Stage or any of its Restricted
Subsidiaries, including, without limitation, any disposition by means of a
merger, consolidation or similar transaction, other than (i) a disposition by a
Restricted Subsidiary to Stage or by Stage or a Restricted Subsidiary to a
Wholly Owned Subsidiary, (ii) a disposition of property or assets (other than
shares of Capital Stock of a Restricted Subsidiary and which do not constitute
all or substantially all of the assets of any division or line of business of
Stage or any Restricted Subsidiary) at fair market value in the ordinary course
of business, (iii) for purposes of Section 5.07 only, a disposition that
constitutes a Restricted Payment or a Permitted Investment permitted pursuant to
Section 5.05, (iv) a transaction or series of related transactions for which
Stage or its Restricted Subsidiaries receive aggregate consideration of less
than $250,000, (v) contributions, dispositions or other transfers of Receivables
to an Accounts Receivable Subsidiary that is wholly owned, directly or
indirectly, by Stage in exchange for Capital Stock or an increase in paid-in
capital in such Accounts Receivable Subsidiary or sales of Receivables to an
Accounts Receivable
2
Subsidiary for cash and promissory notes, in each case for consideration having
a value at least equal to 95% of the book value thereof as determined in
accordance with GAAP, and (vi) the disposition of all or substantially all of
the assets of Stage permitted under Article VI.
"ATTRIBUTABLE DEBT" means, in respect of a Sale/Leaseback
Transaction, as at the time of determination, the present value (discounted at
the interest rate borne by the Senior Notes, compounded annually) of the total
obligations of the lessee for rental payments during the remaining term of the
lease included in such Sale/Leaseback Transaction (including any period for
which such lease has been extended).
"AVERAGE LIFE" means, as of the date of determination, with respect
to any Debt or Preferred Stock, the quotient obtained by dividing (i) the sum of
the products of numbers of years from the date of determination to the dates of
each successive scheduled principal payment of such Debt or redemption or
similar payment with respect to such Preferred Stock multiplied by the amount of
such payment, by (ii) the sum of all such payments.
"BANK DEBT" means all obligations pursuant to the New Credit
Agreement including reimbursement obligations in respect of letters of credit
and interest accruing at the contract rate specified therein on or after the
filing of any petition in bankruptcy or for reorganization relating to Stage or
SRI whether or not post-filing interest is an allowed claim in such proceeding.
"BANKING SUBSIDIARY" means a wholly owned Subsidiary of Stage or a
Subsidiary of a wholly owned Subsidiary of Stage, in each case chartered under
the banking laws of the United States or any state thereof, which engages in
activities permitted by applicable banking laws and the primary purpose of which
is to finance the Receivables arising out of sales of goods and services by
Stage and its Subsidiaries.
"BANKRUPTCY LAW" means title 11, U.S. Code, or any similar federal
or state law for the relief of debtors.
"BEALLS HOLDING JUNIOR SUBORDINATED DEBENTURES" means the 7% Junior
Subordinated Debentures Due 2003 of Bealls Holding, Inc.
"BEALLS HOLDING SUBORDINATED NOTES" means the Subordinated Notes Due
2002 of Bealls Holding, Inc.
"BOARD OF DIRECTORS" means the Board of Directors of Stage or any
committee thereof duly authorized to act on behalf of such Board of Directors.
"BUSINESS DAY" means each day which is not a Legal Holiday.
"CAPITAL LEASE OBLIGATIONS" of any Person means any obligation which
is required to be classified and accounted for as a capital lease on the face of
a balance sheet of such Person prepared in accordance with GAAP; the amount of
such obligation shall be the capitalized amount thereof, determined in
accordance with GAAP; and the Stated Maturity thereof shall be the date of the
last payment of rent or any other amount due under such lease prior to the first
date upon which such lease may be terminated by the lessee without payment of a
penalty.
3
"CAPITAL STOCK" of any Person means any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents of or
interests in such Person (however designated), including any Preferred Stock,
but excluding any debt securities convertible into or exchangeable for such
equity.
"CODE" means the U.S. Internal Revenue Code of 1986, as amended.
"CONSOLIDATED EBITDA COVERAGE RATIO" as of any date of determination
means the ratio of (i) the aggregate amount of EBITDA for the period of the most
recent four consecutive fiscal quarters ending at least 45 days prior to the
date of such determination to (ii) Consolidated Interest Expense for such four
fiscal quarters; PROVIDED, HOWEVER, that (1) if Stage or any Restricted
Subsidiary has Incurred any Debt since the beginning of such period that remains
outstanding or if the transaction giving rise to the need to calculate the
Consolidated EBITDA Coverage Ratio is an Incurrence of Debt, or both, EBITDA and
Consolidated Interest Expense for such period shall be calculated after giving
effect on a pro forma basis to such Debt as if such Debt had been Incurred on
the first day of such period and the discharge of any other Debt repaid,
repurchased, defeased or otherwise discharged with the proceeds of such new Debt
as if such discharge had occurred on the first day of such period, (2) if since
the beginning of such period Stage or any Restricted Subsidiary shall have made
any Asset Disposition, the EBITDA for such period shall be reduced by an amount
equal to the EBITDA (if positive) directly attributable to the assets which are
the subject of such Asset Disposition for such period, or increased by an amount
equal to the EBITDA (if negative), directly attributable thereto for such
period, and Consolidated Interest Expense for such period shall be reduced by an
amount equal to the Consolidated Interest Expense directly attributable to any
Debt of Stage or any Restricted Subsidiary repaid, repurchased, defeased or
otherwise discharged with respect to Stage and its continuing Restricted
Subsidiaries in connection with such Asset Dispositions for such period (or, if
the Capital Stock of any Restricted Subsidiary is sold, the Consolidated
Interest Expense for such period directly attributable to the Debt of such
Restricted Subsidiary to the extent Stage and its continuing Restricted
Subsidiaries are no longer liable for such Debt after such sale), (3) if since
the beginning of such period Stage or any Restricted Subsidiary (by merger or
otherwise) shall have made an Investment in any Restricted Subsidiary (or any
Person which becomes a Restricted Subsidiary) or an acquisition of assets,
including any acquisition of assets occurring in connection with a transaction
causing a calculation to be made hereunder, which constitutes all or
substantially all of an operating unit of a business, EBITDA and Consolidated
Interest Expense for such period shall be calculated after giving pro forma
effect thereto (including the Incurrence of any Debt) as if such Investment or
acquisition occurred on the first day of such period, and (4) if since the
beginning of such period any Person (that subsequently became a Restricted
Subsidiary or was merged with or into Stage or any Restricted Subsidiary since
the beginning of such period) shall have made any Asset Disposition or any
Investment that would have required an adjustment pursuant to clause (2) or (3)
above if made by Stage or a Restricted Subsidiary during such period, EBITDA and
Consolidated Interest Expense for such period shall be calculated after giving
pro forma effect thereto as if such Asset Disposition or Investment occurred on
the first day of such period. For purposes of this definition, whenever pro
forma effect is to be given to an acquisition of assets, the amount of income or
earnings relating thereto, and the amount of Consolidated Interest Expense
associated with any Debt Incurred in connection therewith, the pro forma
calculations shall be determined in good faith by a responsible financial or
accounting Officer of Stage. If any Debt bears a floating rate of interest and
is being given pro forma effect, the interest of such Debt shall be calculated
as if the rate in effect on the date of determination had been the applicable
rate for the
4
entire period (taking into account any Interest Rate Agreement applicable to
such Debt if such Interest Rate Agreement has a remaining term in excess of 12
months).
"CONSOLIDATED INTEREST EXPENSE" means, for any period, the total
interest expense of Stage and its consolidated Restricted Subsidiaries
(excluding amortization of deferred financing costs), plus, to the extent not
included in such interest expense, (i) interest expense attributable to Capital
Lease Obligations, (ii) amortization of debt discount, (iii) capitalized
interest, (iv) non-cash interest expense, (v) commissions, discounts and other
fees and charges owed with respect to letters of credit and bankers' acceptance
financing, (vi) net costs under Hedging Obligations (including amortization of
fees), (vii) Preferred Stock dividends in respect of all Redeemable Stock of
Stage and Preferred Stock dividends payable in cash in respect of all Preferred
Stock held by Persons other than Stage or a Wholly Owned Subsidiary, (viii)
interest incurred in connection with Investments in discontinued operations;
(ix) interest accruing on any Debt of any other Person to the extent such Debt
is Guaranteed by Stage or any of its Restricted Subsidiaries and (x) the cash
contributions to any employee stock ownership plan or similar trust to the
extent such contributions are used by such plan or trust to pay interest or fees
to any Person (other than Stage) in connection with Debt Incurred by such plan
or trust.
"CONSOLIDATED NET INCOME" means, for any period, the net income of
Stage and its consolidated Subsidiaries; PROVIDED, HOWEVER, that there shall not
be included in such Consolidated Net Income (i) any net income of any Person if
such Person is not a Restricted Subsidiary, except that subject to the exclusion
contained in clause (iv) below, Stage's equity in the net income of any such
Person for such period shall be included in such Consolidated Net Income up to
the aggregate amount of cash actually distributed by such Person during such
period to Stage or a Restricted Subsidiary as a dividend or other distribution
(subject, in the case of a dividend or other distribution to a Restricted
Subsidiary, to the limitations contained in clause (iii) below); (ii) any net
income of any Person acquired by Stage or a Subsidiary in a pooling of interests
transaction for any period prior to the date of such acquisition; (iii) any net
income of any Restricted Subsidiary if such Restricted Subsidiary is subject to
restrictions, directly or indirectly, on the payment of dividends or the making
of distributions by such Restricted Subsidiary, directly or indirectly, to
Stage, except that (A) subject to the exclusion contained in clause (iv) below,
Stage's equity in the net income of any such Restricted Subsidiary for such
period shall be included in such Consolidated Net Income up to the aggregate
amount of cash actually distributed by such Restricted Subsidiary during such
period to Stage or another Restricted Subsidiary as a dividend or other
distribution (subject, in the case of a dividend or other distribution to
another Restricted Subsidiary, to the limitation contained in this clause), and
(B) Stage's equity in a net loss of any such Restricted Subsidiary for such
period shall be included in determining such Consolidated Net Income; (iv) any
gain or loss realized upon the sale or other disposition of any property, plant
or equipment of Stage or its consolidated Subsidiaries (including pursuant to
any sale-and-leaseback arrangement) which is not sold or otherwise disposed of
in the ordinary course of business and any gain or loss realized upon the sale
or other disposition of any Capital Stock of any Person; (v) extraordinary gains
or losses; and (vi) the cumulative effect of a change in accounting principles.
Notwithstanding the foregoing, for the purposes of Section 5.05 only, there
shall be excluded from Consolidated Net Income any dividends, repayments of
loans or advances or other transfers of assets from Unrestricted Subsidiaries to
Stage or a Restricted Subsidiary to the extent such dividends, repayments or
transfers increase the amount of Restricted Payments permitted pursuant to
Section 5.05(a)(3)(D).
5
"CONSOLIDATED NET WORTH" of any Person means the total of the
amounts shown on the balance sheet of such Person and its consolidated
subsidiaries, determined on a consolidated basis in accordance with GAAP, as of
the end of the most recent fiscal quarter of such Person ending at least 45 days
prior to the taking of any action for the purpose of which the determination is
being made, as (i) the par or stated value of all outstanding Capital Stock of
such Person, plus (ii) paid-in capital or capital surplus relating to such
Capital Stock, plus (iii) any retained earnings or earned surplus, less (A) any
accumulated deficit, (B) any amounts attributable to Redeemable Stock, and (C)
any amounts attributable to Exchangeable Stock.
"CORPORATE TRUST OFFICE OF THE TRUSTEE" shall be at the address of
the Trustee specified in Section 14.02 or such other address as to which the
Trustee may give notice to Stage.
"CURRENCY AGREEMENT" means in respect of a Person any foreign
exchange contract, currency swap agreement or other similar agreement to which
such Person is a party or a beneficiary.
"CUSTODIAN" means any receiver, trustee, assignee, liquidator or
similar official under any Bankruptcy Law.
"CUSTOMARY SECURITIZATION UNDERTAKINGS" means representations,
warranties, covenants and indemnities entered into by Stage or any of its
Restricted Subsidiaries in connection with a Receivables transaction with an
Accounts Receivable Subsidiary and which are reasonably customary in asset
securitization transactions involving accounts, general intangibles or other
rights to payment. All terms and provisions of the Accounts Receivable Facility
shall constitute Customary Securitization Undertakings.
"DEBT" of any Person means, without duplication, (i) the principal
of and premium (if any) in respect of (A) indebtedness of such Person for money
borrowed and (B) indebtedness evidenced by notes, debentures, bonds or other
similar instruments for the payment of which such Person is responsible or
liable; (ii) all Capital Lease Obligations of such Person and all Attributable
Debt in respect of Sale/Leaseback Transactions entered into by such Person;
(iii) all obligations of such Person issued or assumed as the deferred purchase
price of property, all conditional sale obligations of such Person and all
obligations of such Person under any title retention agreement (but excluding
trade accounts payable arising in the ordinary course of business); (iv) all
obligations of such Person for the reimbursement of any obligor on any letter of
credit, banker's acceptance or similar credit transaction (other than
obligations with respect to letters of credit securing obligations (other than
obligations described in (i) through (iii) above) entered into in the ordinary
course of business of such Person to the extent such letters of credit are not
drawn upon or, if and to the extent drawn upon, such drawing is reimbursed no
later than the third Business Day following receipt by such Person of a demand
for reimbursement following payment on the letter of credit); (v) all Redeemable
Stock of such Person and, with respect to any Subsidiary of such Person, all
Preferred Stock (the amount of Debt represented thereby shall equal the greater
of its liquidation preference and the redemption, repayment or other repurchase
obligations with respect thereto, but excluding any accrued dividends); (vi) all
Hedging Obligations of such Person; (vii) all obligations of the type referred
to in clauses (i) through (v) of other Persons and all dividends of other
Persons for the payment of which, in either case, such Person is responsible or
liable, directly or indirectly, as obligor, guarantor or otherwise, including by
means of any Guarantee; and (viii) all obligations of the type referred to in
clauses (i) through (vi) of other Persons secured by any Lien on any property or
asset of such Person (whether or not such obligation is assumed by such Person),
the amount of such
6
obligation being deemed to be the lesser of the value of such property or assets
or the amount of the obligation so secured. The amount of Debt of any Person at
any date shall be the outstanding balance of such date of all unconditional
obligations as described above and the maximum liability upon the occurrence of
the contingency giving rise to the obligation, of any contingent obligations at
such date; PROVIDED, HOWEVER, that the amount outstanding at any time of any
Debt Incurred with original issue discount is the face amount of such Debt less
the remaining unamortized portion of the original issue discount of such Debt at
such time as determined in conformity with GAAP.
"DEEMED ASSET VALUE" means 75% of the fair market value, as
determined in good faith by the Board of Directors of Stage, of assets (other
than cash) received by Stage from the issuance or sale of its Capital Stock.
"DEFAULT" means any event which is, or after notice or passage of
time or both would be, an Event of Default.
"DESIGNATED SENIOR DEBT" of any Person means (i) the Bank Debt and
(ii) any other Senior Debt of such Person which, at the date of determination,
has an aggregate principal amount outstanding of, or under which, at the date of
determination, the holders thereof are committed to lend up to, at least $20
million and is specifically designated by such Person in the instrument
evidencing or governing such Senior Debt as "Designated Senior Debt" for
purposes of this Indenture.
"EBITDA" for any period means the sum of Consolidated Net Income
plus Consolidated Interest Expense plus the following to the extent deducted in
calculating such Consolidated Net Income: (a) all income tax expense of Stage,
(b) depreciation expense, (c) amortization expense and (d) all other non-cash
items reducing such Consolidated Net Income (excluding any non-cash items to the
extent it represents an accrual of, or reserve for, cash disbursements for any
subsequent period) less all non-cash items increasing such Consolidated Net
Income, in each case for such period. Notwithstanding the foregoing, the
provision for taxes based on the income or profits of, and the depreciation and
amortization of, a Subsidiary of Stage shall be added to Consolidated Net Income
to compute EBITDA only to the extent (and in the same proportion) that the net
income of such Subsidiary was included in calculating Consolidated Net Income
and only if a corresponding amount would be permitted at the date of
determination to be divided to Stage by such Subsidiary without prior approval
(that has not been obtained), pursuant to the terms of its charter and all
agreements, instruments, judgments, decrees, orders, statutes, rules and
governmental regulations applicable to such Subsidiary or its stockholders.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"EXCHANGE NOTES" means the 9% Senior Subordinated Notes Due 2007 to
be issued pursuant to this Indenture in connection with a Registered Exchange
Offer pursuant to the Registration Rights Agreement.
"EXCHANGEABLE STOCK" means any Capital Stock which is exchangeable
or convertible into another security (other than Capital Stock of Stage which is
neither Exchangeable Stock nor Redeemable Stock).
7
"EXPANSION REVOLVING CREDIT FACILITY PROVISIONS" means the
provisions of the New Credit Agreement pursuant to which lenders thereunder have
committed to make available to SRI a reducing revolving credit facility.
"FB HOLDINGS SUBORDINATED NOTES" means the 7% Subordinated Notes Due
2000 of FB Holdings, Inc.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect as of the Issue Date, including those set forth
(i) in the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants; (ii) statements and
pronouncements of the Financial Accounting Standards Board; (iii) in such other
statements by such other entity as approved by a significant segment of the
accounting profession; and (iv) the rules and regulations of the SEC governing
the inclusion of financial statements (including pro forma financial statements)
in periodic reports required to be filed pursuant to Section 13 of the Exchange
Act, including opinions and pronouncements in staff accounting bulletins and
similar written statements from the accounting staff of the SEC.
"GUARANTEE" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Debt or other obligation of any
Person and any obligation, direct or indirect, contingent or otherwise, of such
Person (i) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Debt or other obligation of such Person (whether arising by
virtue of partnership arrangements, or by agreement to keep-well, to purchase
assets, goods, securities or services, to take-or-pay, or to maintain financial
statement conditions or otherwise); or (ii) entered into for purposes of
assuring in any other manner the obligee of such Debt or other obligation of the
payment thereof or to protect such obligee against loss in respect thereof (in
whole or in part); PROVIDED, HOWEVER, that the term "Guarantee" shall not
include endorsements for collection or deposit in the ordinary course of
business or guarantees of obligations of a Subsidiary in the ordinary course of
business if such obligations do not constitute Debt of such Subsidiary or
Customary Securitization Undertakings. The term "Guarantee" used as a verb shall
have a corresponding meaning.
"GUARANTOR" means Stage and each other Person that, pursuant to the
terms of this Indenture, Guarantees the Indenture Obligations.
"GUARANTY" means the guarantee by Stage or a Subsidiary Guarantor of
the Indenture Obligations pursuant to the terms of this Indenture.
"GUARANTY AGREEMENT" means a supplemental indenture, in form
satisfactory to the Trustee, pursuant to which a Guarantor becomes subject to
the applicable terms and conditions of this Indenture.
"HEDGING OBLIGATIONS" of any Person means the obligations of such
Person pursuant to any Interest Rate Agreement or Currency Agreement.
"HOLDER" means the Person in whose name a Note is registered on the
Registrar's books.
"INCUR" means issue, assume, Guarantee, incur or otherwise become
liable for; PROVIDED, HOWEVER, that any Debt or Capital Stock of a Person
existing at the time such Person becomes a Subsidiary (whether by merger,
consolidation, acquisition or otherwise) shall be
8
deemed to be Incurred by such Subsidiary at the time it becomes a Subsidiary.
The term "Incurrence" when used as a noun shall have a correlative meaning.
"INDENTURE" means this Indenture, as amended, supplemented or
otherwise modified from time to time in accordance with the terms hereof.
"INITIAL NOTES" means the 9% Senior Subordinated Notes Due 2007
issued under this Indenture on or about the date hereof.
"INTEREST RATE AGREEMENT" means any interest rate swap agreement,
interest rate cap agreement or other financial agreement or arrangement designed
to protect Stage or any Restricted Subsidiary against fluctuations in interest
rates.
"INVESTMENT" in any Person means any loan or advance to, any
acquisition of Capital Stock, equity interest, obligation or other security of,
or capital contribution or other investment in, or any other credit extension to
(including by way of Guarantee of any Debt of), such Person. For purposes of the
definition of "Unrestricted Subsidiary", the definition of "Restricted Payment"
and Section 5.05 of this Indenture, (i) "Investment" shall include the portion
(proportionate to Stage's equity interest in such Subsidiary) of the fair market
value of the net assets of any Subsidiary of Stage at the time that such
Subsidiary is designated an Unrestricted Subsidiary; PROVIDED, HOWEVER, that if
such designation is made in connection with the acquisition of such Subsidiary
or the assets owned by such Subsidiary, the "Investment" in such Subsidiary
shall be deemed to be the consideration paid in connection with such
acquisition; PROVIDED, FURTHER, HOWEVER, that upon a redesignation of such
Subsidiary as a Restricted Subsidiary, Stage shall be deemed to continue to have
a permanent "Investment" in an Unrestricted Subsidiary equal to an amount (if
positive) equal to (x) Stage's "Investment" in such Subsidiary at the time of
such redesignation less (y) the portion (proportionate to Stage's equity
interest in such Subsidiary) of the fair market value of the net assets of such
Subsidiary at the time of such redesignation; and (ii) any property transferred
to or from an Unrestricted Subsidiary shall be valued at its fair market value
at the time of such transfer, in each case as determined in good faith by the
Board of Directors.
"ISSUE DATE" means the date on which the Notes are originally
issued.
"LEGAL HOLIDAY" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York or at a place of payment are authorized by
law, regulation or executive order to remain closed. If a payment date is a
Legal Holiday, 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.
"LIEN" means any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (including any conditional sale or other title
retention agreement or lease in the nature thereof).
"MASTER TRUST" means a trust organized for the purpose securitizing
Receivables held by an Accounts Receivable Subsidiary that does not engage in
any business other than (a) the purchase of Receivables or participation
interests therein, (b) the issuance and distribution of indebtedness and other
interests in such trust to (i) the Accounts Receivable Subsidiary or (ii) to
other parties for cash or cash equivalents on an arms-length basis, (c) the
servicing of Receivables
9
and any indebtedness or interests in such trust and (d) activities ancillary to
the actions described in clauses (a), (b) and (c).
"MERGER AGREEMENT" means the Agreement and Plan of Merger, dated as
of March 5, 1997, by and between Stage and X.X. Xxxxxxx Company.
"NET AVAILABLE CASH" from an Asset Disposition means cash payments
received (including any cash payments received by way of deferred payment of
principal pursuant to a note or installment receivable or otherwise, but only as
and when received, but excluding any other consideration received in the form of
assumption by the acquiring Person of Debt or other obligations relating to such
properties or assets that are the subject of such Asset Disposition or received
in any other noncash form) therefrom, in each case net of (i) all legal, title
and recording tax expenses, commissions and other fees and expenses incurred,
and all Federal, state, provincial, foreign and local taxes required to be
accrued as a liability under GAAP, as a consequence of such Asset Disposition;
(ii) all payments made on any Debt which is secured by any assets subject to
such Asset Disposition, in accordance with the terms of any Lien upon or other
security agreement of any kind with respect to such assets, or which must by its
terms, or in order to obtain a necessary consent to such Asset Disposition, or
by applicable law be repaid out of the proceeds from such Asset Disposition;
(iii) all distributions and other payments required to be made to minority
interest holders in Subsidiaries or joint ventures as a result of such Asset
Disposition; and (iv) the deduction of appropriate amounts provided by the
sellers as a reserve, in accordance with GAAP, against any liabilities
associated with the property or other assets disposed in such Asset Disposition
and retained by Stage or any Restricted Subsidiary after such Asset Disposition.
"NET CASH PROCEEDS" means with respect to any issuance or sale of
Capital Stock, the cash proceeds of such issuance or sale net of attorneys'
fees, accountants' fees, underwriters' or placement agents' fees, discounts or
commissions and brokerage, consultant and other fees actually incurred in
connection with such issuance or sale and net of taxes paid or payable as a
result thereof.
"NEW CREDIT AGREEMENT" means the agreement to be dated June 17, 1997
among SRI, Credit Suisse First Boston, as administrative agent, and the other
lenders party thereto, and their respective successors and assigns, together
with all other instruments, documents and agreements related thereto, as the
same may be amended, supplemented, waived and otherwise modified from time to
time in accordance with the terms thereof, and any agreement (and all other
related instruments, documents and agreements) governing Debt Incurred to
refund, replace or refinance, in whole or in part, the borrowings and
commitments then outstanding or permitted to be outstanding under such New
Credit Agreement or a successor New Credit Agreement, whether by the same or any
other lender or group of lenders.
"NON-CONVERTIBLE CAPITAL STOCK" means, with respect to any
corporation, any non-convertible Capital Stock of such corporation and any
Capital Stock of such corporation convertible solely into non-convertible common
stock of such corporation; PROVIDED, HOWEVER, that Non-Convertible Capital Stock
shall not include any Redeemable Stock or Exchangeable Stock.
"NOTES" means the Initial Notes, the Exchange Notes and the Private
Exchange Notes, treated as a single class.
10
"OFFICER" means with respect to any Person the Chairman of the
Board, the Chief Executive Officer, the President, the Chief Operating Officer,
the Chief Financial Officer, the Treasurer, Controller, Secretary or any
Vice-President of such Person.
"OFFICERS' CERTIFICATE" means a certificate signed on behalf of a
Person by two Officers of such Person, one of whom must be the principal
executive officer, principal financial officer, treasurer or principal
accounting officer of such Person.
"OPINION OF COUNSEL" means a written opinion from legal counsel, who
may be an employee of or counsel to Stage or the Trustee.
"PERMITTED INVESTMENT" means an Investment by Stage or any
Restricted Subsidiary in (i) a Restricted Subsidiary or a Person that will, upon
the making of such Investment, become a Restricted Subsidiary; PROVIDED,
HOWEVER, that the primary business of such Restricted Subsidiary is reasonably
related to the business of Stage; (ii) another Person if as a result of such
Investment such other Person is merged or consolidated with or into, or
transfers or conveys all or substantially all its assets to, Stage or a
Restricted Subsidiary; PROVIDED, HOWEVER, that such Person's primary business is
reasonably related to the business of Stage; (iii) Temporary Cash Investments;
(iv) receivables owing to Stage or any Restricted Subsidiary if created or
acquired in the ordinary course of business and payable or dischargeable in
accordance with customary trade terms; PROVIDED, HOWEVER, that such trade terms
may include such concessionary trade terms as Stage or any such Restricted
Subsidiary deems reasonable under the circumstances; (v) payroll, travel and
similar advances to cover matters that are expected at the time of such advances
ultimately to be treated as expenses for accounting purposes and that are made
in the ordinary course of business; (vi) loans or advances to employees made in
the ordinary course of business consistent with past practices of Stage or such
Restricted Subsidiary; (vii) stock, obligations or securities received in
settlement of debts created in the ordinary course of business and owing to
Stage or any Restricted Subsidiary or in satisfaction of judgments; (viii) other
Investments in an aggregate amount not to exceed $5 million; (ix) Investments in
an Accounts Receivable Subsidiary received in consideration of contributions or
sales of Receivables permitted pursuant to clause (v) of the definition of
"Asset Disposition;" (x) Investments in a Banking Subsidiary in an aggregate
amount not to exceed $10 million; (xi) Investments in an Accounts Receivable
Subsidiary in an aggregate amount not to exceed the amount of dividends and
other distributions made to Stage or any of its Restricted Subsidiaries from
such Accounts Receivable Subsidiary; PROVIDED, HOWEVER, that the amount of such
Investments actually made shall reduce the amount included in the calculation
made pursuant to Section 5.05(a)(3)(D) to the extent that the amount of
dividends and other distributions by the Accounts Receivable Subsidiary to which
such Investments relate shall have otherwise increased the amount included in
the calculation made pursuant to Section 5.05(a)(3)(D); and (xii) any Person to
the extent such Investment represents the non-cash portion of the consideration
received for an Asset Disposition as permitted pursuant to the covenant
described under Section 5.07.
"PERSON" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization,
government or any agency or political subdivision thereof or any other entity.
"PREFERRED STOCK" means, as applied to the Capital Stock of any
corporation, Capital Stock of any class or classes (however designated) which is
preferred as to the payment of dividends, or as to the distribution of assets
upon any voluntary or involuntary liquidation or
11
dissolution of such corporation, over shares of Capital Stock of any other class
of such corporation.
"PRIVATE EXCHANGE" means the offer by SRI, pursuant to the
Registration Rights Agreement, to the Initial Purchasers to issue and deliver to
the Initial Purchasers, in exchange for the Initial Notes held by the Initial
Purchasers as part of their initial distribution, a like aggregate principal
amount of Private Exchange Notes.
"PRIVATE EXCHANGE NOTES" means the 9% Senior Subordinated Notes Due
2007 to be issued pursuant to this Indenture in connection with a Private
Exchange effected pursuant to the Registration Rights Agreement.
"PUBLIC EQUITY OFFERING" means an underwritten primary public
offering of common stock of Stage pursuant to an effective registration
statement under the Securities Act.
"RECEIVABLES" means accounts, general intangibles or other rights to
payment from obligors arising from extension of credit to obligors, together
with any financing charges or other fees or charges related thereto, and any
related assets which are transferred under the Accounts Receivable Facility or
which are customarily transferred in connection with asset securitization
transactions involving accounts, general intangibles or other rights to payment.
"REDEEMABLE STOCK" means any Capital Stock that by its terms or
otherwise is required to be redeemed on or prior to the first anniversary of the
Stated Maturity of the Notes or is redeemable at the option of the holder
thereof at any time on or prior to the first anniversary of the Stated Maturity
of the Notes.
"REFINANCE" means, in respect of any Debt, to refinance, extend,
renew, refund, repay, prepay, redeem, defease, exchange or retire, or to issue
other Debt in exchange or replacement for, such indebtedness. "Refinanced" and
"Refinancing" shall have correlative meanings.
"REFINANCING DEBT" means Debt that Refinances any Debt of Stage or
any Restricted Subsidiary existing on the Issue Date or Incurred in compliance
with the Indentures including Debt that Refinances Refinancing Debt; PROVIDED,
HOWEVER, that (i) such Refinancing Debt has a Stated Maturity no earlier than
the Stated Maturity of the Debt being Refinanced; (ii) such Refinancing Debt has
an Average Life at the time such Refinancing Debt is Incurred that is equal to
or greater than the Average Life of the Debt being Refinanced; (iii) such
Refinancing Debt has an aggregate principal amount (or if Incurred with original
issue discount, an aggregate issue price) that is equal to or less than the
aggregate principal amount (or if Incurred with original issue discount, the
aggregate accredited value) then outstanding or committed (plus fees and
expenses, including any premium and defeasance costs) under the Debt being
Refinanced; and (iv) with respect to any Refinancing Debt of Debt other than
Senior Debt, such Refinancing Debt shall rank no more senior, and shall be at
least as subordinated, in right of payment to the Notes as the Debt being so
extended, renewed, refunded or refinanced; PROVIDED, FURTHER, HOWEVER, that
Refinancing Debt shall not include (x) Debt of a Subsidiary that Refinances Debt
of Stage, or (y) Debt of Stage or a Restricted Subsidiary that Refinances Debt
of an Unrestricted Subsidiary.
"REGISTERED EXCHANGE OFFER" means an offer by SRI, pursuant to the
Registration Rights Agreement, to certain Holders of Initial Notes, to issue and
deliver to such Holders, in
12
exchange for the Initial Notes, a like aggregate principal amount of Exchange
Notes registered under the Securities Act.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement dated June 11, 1997 among SRI, Stage and the Initial Purchasers.
"REPRESENTATIVE" means any trustee, agent or representative (if any)
for an issue of Senior Debt.
"RESPONSIBLE OFFICER" means, when used with respect to the Trustee,
any officer within the Corporate Trust Department of the Trustee (or any
successor group of the Trustee) or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers.
"RESTRICTED SUBSIDIARY" means any Subsidiary of Stage that is not an
Unrestricted Subsidiary, and in all cases shall include SRI.
"SALE/LEASEBACK TRANSACTION" means an arrangement relating to
property now owned or hereafter acquired whereby Stage or a Restricted
Subsidiary transfers such property to a Person and Stage or a Restricted
Subsidiary leases it from such Person.
"SEC" means the Securities and Exchange Commission.
"SECURED DEBT" means any Debt of Stage or any Guarantor secured by a
Lien.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SENIOR DEBT" of any Person means (I) (i) Debt of such Person,
whether outstanding on the Issue Date or thereafter Incurred and (ii) accrued
and unpaid interest (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to such Person to the
extent post-filing interest is allowed in such proceeding) in respect of (A)
indebtedness of such Person for money borrowed and (B) indebtedness evidenced by
notes, debentures, bonds or other similar instruments for the payment of which
such Person is responsible or liable unless, in the instrument creating or
evidencing the same or pursuant to which the same is outstanding, it is provided
that such obligations are subordinate in right of payment to the applicable
Notes; PROVIDED, HOWEVER, that Senior Debt shall not include (1) any obligation
of such Person to any subsidiary of such Person, (2) any liability for Federal,
state, local or other taxes owed or owing by such Person, (3) any accounts
payable or other liability to trade creditors arising in the ordinary course of
business (including guarantees thereof or instruments evidencing such
liabilities), (4) any Debt of such Person (and any accrued and unpaid interest
in respect thereof) which is subordinate or junior in any respect to any other
Debt or other obligation of such Person, (5) that portion of any Debt which at
the time of Incurrence is Incurred in violation of an Indenture, (6) Debt owed
to, due, or guaranteed on behalf of, any director, officer or employee of such
Person or any subsidiary of such Person (including, without limitation, amounts
owed for compensation), and (7) Debt which when Incurred and without respect to
any election under Section 1111(b) of Xxxxx 00 Xxxxxx Xxxxxx Code, is without
recourse to such Person and (II) the Bank Debt.
13
"SENIOR NOTES" means the $200 million aggregate principal amount of
8 1/2% Senior Notes Due 2005 of SRI issued pursuant to the Indenture, dated as
of the date hereof, among SRI, Stage and State Street Bank and Trust Company as
trustee.
"SENIOR SUBORDINATED DEBT" means (i) with respect to SRI, any Debt
of SRI that specifically provides that such Debt is to rank PARI PASSU with the
Notes in right of payment and is not subordinated by its terms in right of
payment to any Debt or other obligation of SRI which is not Senior Debt of SRI
and (ii) with respect to any Guarantor, any Debt of such Person that
specifically provides that such Debt ranks PARI PASSU with the Guaranty of such
Person in right of payment and is not subordinated by its terms in right of
payment to any Debt or other obligation of such Person which is not Senior Debt
of such Person.
"SHELF REGISTRATION STATEMENT" means the registration statement
issued by SRI in connection with the offer and sale of Initial Notes or Private
Exchange Notes, pursuant to the Registration Rights Agreement.
"SIGNIFICANT SUBSIDIARY" of any Person means any Restricted
Subsidiary that would be a "significant subsidiary" of such Person as defined in
Rule 1-02 of Regulation S-X, promulgated by the SEC.
"STATED MATURITY" means with respect to any security the date
specified in such security as the fixed date on which the principal of such
security is due and payable, including pursuant to any mandatory redemption
provision (but excluding any provision providing for the repurchase of such
security at the option of the holder thereof upon the happening of any
contingency unless such contingency has occurred).
"SUBORDINATED OBLIGATION" of any Person means any Debt of such
Person (whether outstanding on Issue Date or hereafter Incurred) which is
subordinate or junior in right of payment to the Notes pursuant to a written
agreement, including, without limitation, the Bealls Holding Subordinated Notes,
the FB Holdings Subordinated Notes and the Bealls Holding Junior Subordinated
Debentures.
"SUBSIDIARY" means any corporation, association, partnership or
other business entity of which more than 50% of the total voting power of shares
of Capital Stock or other interests (including partnership interests) entitled
(without regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by (i) Stage; (ii) Stage and one or more Subsidiaries;
or (iii) one or more Subsidiaries.
"SUBSIDIARY GUARANTOR" means each Subsidiary that becomes a
Guarantor pursuant to the terms of this Indenture.
"TANGIBLE PROPERTY" means all land, buildings, machinery and
equipment and leasehold interests and improvements which would be reflected on a
balance sheet of Stage prepared in accordance with generally accepted accounting
principles, excluding (i) all rights, contracts and other intangible assets of
any nature whatsoever; and (ii) all inventories and other current assets.
"TEMPORARY CASH INVESTMENTS" means any of the following: (i) any
investment in direct obligations of the United States of America or any agency
thereof or obligations guaranteed
14
by the United States of America or any agency thereof or in a money market
mutual fund registered under the Investment Company Act of 1940, the principal
of which is invested solely in such direct or guaranteed obligations, (ii)
investments in time deposit accounts, certificates of deposit and money market
deposits maturing within 180 days of the date of acquisition thereof issued by a
bank or trust company which is organized under the laws of the United States of
America, any state thereof or any foreign country recognized by the United
States, and which bank or trust company has capital, surplus and undivided
profits aggregating in excess of $50,000,000 (or the foreign currency equivalent
thereof) and has outstanding debt which is rated "A" (or such similar equivalent
rating) or higher by at least one nationally recognized statistical rating
organization (as defined in Rule 436 under the Securities Act) or any
money-market fund sponsored by a registered broker dealer or mutual fund
distributor, (iii) repurchase obligations with a term of not more than 30 days
for underlying securities of the types described in clause (i) above entered
into with a bank meeting the qualifications described in clause (ii) above and
(iv) investments in commercial paper, maturing not more than 90 days after the
date of acquisition, issued by a corporation (other than an Affiliate of Stage)
organized and in existence under the laws of the United States of America or any
foreign country recognized by the United States of America with a rating at the
time as of which any investment therein is made of "P-1" (or higher) according
to Xxxxx'x Investor Service, Inc. or "A-1" (or higher) according to Standard &
Poor's Ratings Group.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. xx.xx.
77aaa-77bbbb) as in effect on the date on which this Indenture is qualified
under the TIA.
"TOTAL ASSETS" means the total consolidated assets of Stage and its
Subsidiaries, as shown on the most recent balance sheet of Stage.
"TRANSFER RESTRICTED NOTES" means Notes that bear or are required to
bear the legend set forth in Section 2.06(d).
"TRUSTEE" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture, and
thereafter such term shall mean such successor serving hereunder.
"U.S. GOVERNMENT OBLIGATIONS" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United States of America
is pledged and which are not callable at the issuer's option.
"UNRESTRICTED SUBSIDIARY" means (i) any Subsidiary of Stage that at
the time of determination shall be designated an Unrestricted Subsidiary by the
Board of Directors in the manner provided below; (ii) any Subsidiary of an
Unrestricted Subsidiary and (iii) any Accounts Receivable Subsidiary. The Board
of Directors may designate any Subsidiary of Stage (including any newly acquired
or newly formed Subsidiary), to be an Unrestricted Subsidiary unless such
Subsidiary or any of its Subsidiaries own any Capital Stock or Debt of, or holds
any Lien on any property of, Stage or any other Subsidiary of Stage that is not
a Subsidiary of the Subsidiary to be so designated; PROVIDED, HOWEVER, that
either (A) the Subsidiary to be so designated has total assets of $1,000 or less
or (B) if such Subsidiary has assets of greater than $1,000, such designation
would be permitted pursuant to Section 5.05; and PROVIDED, FURTHER, HOWEVER,
that (1) no Subsidiary of Stage that is a Restricted Subsidiary on the Issue
Date may be designated an Unrestricted Subsidiary and (2) no Subsidiary holding,
directly or indirectly, any assets held by
15
Stage or a Restricted Subsidiary on the Issue Date may be designated an
Unrestricted Subsidiary. The Board of Directors may designate any Unrestricted
Subsidiary to be a Restricted Subsidiary; PROVIDED, HOWEVER, that immediately
after giving effect to such designation (x) Stage could Incur $1.00 of
additional Debt pursuant to Section 5.04(a) and (y) no Default shall have
occurred and be continuing. Any such designation by the Board of Directors shall
be by Stage to the Trustee by promptly filing with the Trustee a copy of the
board resolution giving effect to such designation and an Officer's Certificate
certifying that such designation complied with the foregoing provisions.
"VOTING STOCK" of a corporation means all classes of Capital Stock
of such corporation then outstanding and normally entitled (without regard to
any contingency) to vote in the election of directors.
"WHOLLY OWNED SUBSIDIARY" means a Restricted Subsidiary all the
Capital Stock of which (other than directors' qualifying shares) is owned by
Stage or another Wholly Owned Subsidiary.
"WORKING CAPITAL FACILITY PROVISIONS" means the provisions of the
New Credit Agreement pursuant to which lenders thereunder have committed to make
available to SRI and certain other Subsidiaries a revolving credit and letter of
credit facility.
Section 1.02. OTHER DEFINITIONS.
DEFINED IN
TERM ARTICLE/SECTION
"AFFILIATE TRANSACTION".................... Section 5.08
"AGENT MEMBER"............................. Section 2.01
"BLOCKAGE NOTICE".......................... Section 11.03
"CHANGE OF CONTROL"........................ Article IV
"COVENANT DEFEASANCE"...................... Section 9.01
"DEFAULT AMOUNT"........................... Section 7.02
"EVENT OF DEFAULT"......................... Section 7.01
"GLOBAL NOTE".............................. Section 2.01
"GUARANTOR BLOCKAGE NOTICE"................ Section 13.03
"GUARANTOR OBLIGATIONS".................... Section 13.01
"GUARANTOR PAYMENT BLOCKAGE PERIOD"........ Section 13.03
"GUARANTOR PROCEEDING"..................... Section 13.02
"GUARANTOR SENIOR PAYMENT DEFAULT"......... Section 13.03
"GUARANTOR SENIOR NONMONETARY DEFAULT"..... Section 13.03
"GUARANTY PAYMENT"......................... Section 13.02
"INDENTURE OBLIGATIONS".................... Section 12.01
"INITIAL PURCHASERS"....................... Section 2.01
"LEGAL DEFEASANCE"......................... Section 9.01
"NOTE REGISTER"............................ Section 2.03
"NOTES PAYMENT"............................ Section 11.02
"OFFER".................................... Section 5.07
"OFFER AMOUNT"............................. Section 5.07
"OFFER PERIOD"............................. Section 5.07
"PAYING AGENT"............................. Section 2.03
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"PARENT CORPORATION"....................... Article IV
"PAYMENT BLOCKAGE"......................... Section 11.03
"PAYMENT DEFAULT".......................... Section 7.01
"PROCEEDING"............................... Section 11.02
"PURCHASE AGREEMENT"....................... Section 2.01
"PURCHASE DATE"............................ Section 5.07
"QIB"...................................... Section 2.01
"REGISTRAR"................................ Section 2.03
"REGULATION S"............................. Section 2.01
"RESTRICTED PAYMENT"....................... Section 5.05
"RULE 144A"................................ Section 2.01
"SENIOR NONMONETARY DEFAULT"............... Section 11.03
"SENIOR PAYMENT DEFAULT"................... Section 11.03
"SPECIFIED CORPORATION".................... Article IV
"SUCCESSOR COMPANY"........................ Section 6.01
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.
The following TIA terms used in this Indenture have the following
meanings:
(i) "INDENTURE SECURITIES" means the Notes;
(ii) "INDENTURE SECURITY HOLDER" means a Noteholder;
(iii) "INDENTURE TO BE QUALIFIED" means this Indenture;
(iv) "INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the
Trustee;
(v) "OBLIGOR" upon the Notes means SRI and any successor obligor
upon the Notes.
All other terms used in this Indenture that are (i) defined by the
TIA; (ii) defined by TIA reference to another statute; or (iii) defined by SEC
rule under the TIA have the meanings so assigned to them.
Section 1.04. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(iii) the word "or" shall not be deemed to be exclusive;
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(iv) words in the singular include the plural, and words in the
plural include the singular; and
(v) provisions apply to successive events and transactions.
ARTICLE II
THE NOTES
Section 2.01. FORM AND DATING.
The Notes and the Trustee's certificate of authentication shall be
substantially in the form of EXHIBIT A hereto, the terms of which are
incorporated in and made a part of this Indenture. The Exchange Notes, the
Private Exchange Notes and the Trustee's certificate of authentication shall be
substantially in the form of EXHIBIT B, which is hereby incorporated by
reference and expressly made a part of this Indenture. The Notes may have such
notations, legends or endorsements approved as to form by SRI and required, as
applicable, by law, stock exchange rule, agreements to which SRI is subject
and/or usage. Each Note shall be dated the date of its authentication. The Notes
shall be issuable only in denominations of $1,000 and integral multiples
thereof. The terms of the Notes set forth in EXHIBIT A and EXHIBIT B are part of
the terms of this Indenture.
The Notes are being offered and sold by SRI pursuant to a Purchase
Agreement (the "PURCHASE AGREEMENT"), dated June 11, 1997, among SRI, Stage and
Credit Suisse First Boston Corporation, Bear, Xxxxxxx & Co. Inc. and Xxxxxxxxx,
Lufkin & Xxxxxxxx Securities Corporation as Initial Purchasers (the "INITIAL
PURCHASERS").
(a) GLOBAL NOTES. The Notes offered and sold to a "qualified
institutional buyer" (as defined in Rule 144A under the Securities Act) (a
"QIB") in reliance on Rule 144A under the Securities Act ("Rule 144A") or in
reliance on Regulation S under the Securities Act ("Regulation S"), in each case
as provided in the Purchase Agreement, shall be issued initially in the form of
one permanent global Note in definitive, fully registered form without interest
coupons with the global Note legend and restricted Note legend set forth in
Exhibit A hereto (the "Global Note"), which shall be deposited on behalf of the
purchasers of the Notes represented thereby with the Trustee, as custodian for
the Depository (or with such other custodian as the Depository may direct), and
registered in the name of the Depository or a nominee of the Depository, duly
executed by SRI and Stage and authenticated by the Trustee as hereinafter
provided. The aggregate principal amount of the Global Note may from time to
time be increased or decreased by adjustments made on the records of the Trustee
and the Depository or its nominee as hereinafter provided.
(b) BOOK-ENTRY PROVISIONS. This Section 2.01(b) shall apply only to
the Global Note deposited with or on behalf of the Depository.
SRI and Stage shall execute and the Trustee shall, in accordance
with this Section 2.01(b), authenticate and deliver initially one Global Note
that (a) shall be registered in the name of the Depository or the nominee of the
Depository and (b) shall be delivered by the Trustee to the Depository or
pursuant to the Depository's instructions or held by the Trustee as custodian
for the Depository.
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Members of, or participants in, the Depository ("AGENT MEMBERS")
shall have no rights under this Indenture with respect to the Global Note held
on their behalf by the Depository or by the Trustee as the custodian of the
Depository or under such Global Note, and the Depository may be treated by
Stage, the Trustee and any agent of SRI or the Trustee as the absolute owner of
such Global Note for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent SRI, the Trustee or any agent of SRI or the Trustee
from giving effect to any written certification, proxy or other authorization
furnished by the Depository or impair, as between the Depository and its Agent
Members, the operation of customary practices of such Depository governing the
exercise of the rights of a holder of a beneficial interest in the Global Note.
(c) CERTIFICATED NOTES. Except as provided in Section 2.06 or 2.09,
owners of beneficial interests in the Global Note will not be entitled to
receive physical delivery of certificated Notes. Certificated Notes will bear
the restricted securities legend set forth on EXHIBIT A unless removed in
accordance with Section 2.06(d).
Section 2.02. EXECUTION AND AUTHENTICATION.
Two Officers of SRI shall sign the Notes for SRI by manual or
facsimile signature.
If an Officer whose signature is on a Note no longer holds that
office at the time such Note is authenticated such Note shall be valid
nevertheless.
A Note shall not be valid until authenticated by the manual
signature of the Trustee. The signature of the Trustee shall be conclusive
evidence that a Note has been authenticated in accordance with the terms of this
Indenture.
The Trustee, upon a written order of SRI set forth in an Officers'
Certificate, shall authenticate and deliver (1) Notes for original issue in an
aggregate principal amount of $100,000,000, and (2) Exchange Notes or Private
Exchange Notes for issue only in a Registered Exchange Offer or a Private
Exchange, respectively, pursuant to the Registration Rights Agreement, for a
like principal amount of Notes. Such order shall specify the amount of the Notes
to be authenticated, the date on which the original issue of Notes is to be
authenticated and whether the Notes are to be Initial Notes, Exchange Notes or
Private Exchange Notes. The aggregate principal amount of Notes outstanding at
any time may not exceed $100,000,000 except as provided in Section 2.07 hereof.
The Trustee may appoint an authenticating agent acceptable to SRI to
authenticate the Notes. Unless limited by the terms of such appointment, any
such authenticating agent may authenticate the Notes whenever the Trustee may do
so. Each reference in this Indenture to authentication by the Trustee includes
authentication by such authenticating agent of the Trustee. An authenticating
agent has the same rights as an Agent to deal with SRI or an Affiliate of SRI.
Section 2.03. REGISTRAR AND PAYING AGENT.
SRI shall maintain (i) an office or agency where the Notes may be
presented for registration of transfer or for exchange (including any
co-registrar, the "REGISTRAR"); and (ii) an office or agency where the Notes may
be presented for payment ("PAYING AGENT"). The Registrar shall keep a register
of the Holders of Notes and of the transfer and exchange of such Notes (the
"NOTE REGISTER"). SRI may appoint one or more co-registrars and one or more
additional paying
19
agents. The term "Paying Agent" shall include any such additional paying agent.
SRI may change any Paying Agent, Registrar or co-registrar without prior notice
to any Holder of a Note. SRI shall notify the Trustee and the Trustee shall
notify the Holders of the Notes of the name and address of any Agent not a party
to this Indenture. SRI or any of its domestically incorporated Wholly Owned
Subsidiaries may act as Paying Agent, Registrar or co-registrar. SRI shall enter
into an appropriate agency agreement with any Agent not a party to this
Indenture, which shall incorporate the provisions of the TIA. Any such agency
agreement shall implement the provisions of this Indenture that relate to such
Agent. If SRI fails to maintain a Registrar or Paying Agent, or fails to give
the foregoing notice, the Trustee shall act as such, as appropriate, and shall
be entitled to appropriate compensation in accordance with Section 8.07.
SRI initially appoints the Trustee as Registrar, Paying Agent and
agent for service of notices and demands in connection with the Notes in
accordance with Section 5.02.
Section 2.04PAYING AGENT TO HOLD MONEY IN TRUST.
On or prior to each due date of the principal of, premium, if any,
and interest on any Note, SRI shall deposit with the Paying Agent a sum
sufficient to pay such principal, premium, if any, and interest when so becoming
due. SRI shall require each Paying Agent (other than the Trustee) to agree in
writing that the Paying Agent shall hold in trust for the benefit of the Holders
of the Notes or the Trustee all money held by the Paying Agent for the payment
of principal of, premium, if any, and interest on the Notes, and shall notify
the Trustee of any Default by SRI in making any such payment. While any such
Default continues, the Trustee may require a Paying Agent to pay all money held
by it to the Trustee. SRI at any time may require a Paying Agent to pay all
money held by it to the Trustee. Upon payment over to the Trustee, the Paying
Agent (if other than SRI) shall have no further liability for the money
delivered to the Trustee. If SRI acts as Paying Agent, it shall segregate and
hold in a separate trust fund for the benefit of the Holders of the Notes all
money held by it as Paying Agent.
Section 2.05. LISTS OF HOLDERS OF NOTES.
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
the Holders of Notes. If the Trustee is not the Registrar, SRI shall furnish to
the Trustee at least three Business Days before each interest payment date and
at such other times as the Trustee may request in writing a list in such form
and as of such date as the Trustee may reasonably require of the names and
addresses of the Holders of Notes, including the aggregate principal amount of
Notes held by each such Holder of Notes.
Section 2.06. TRANSFER AND EXCHANGE.
(a) TRANSFER AND EXCHANGE OF CERTIFICATED NOTES. Certificated Notes
shall be issued in registered form and shall be transferable only upon the
surrender of certificated Notes for registration of transfer. When certificated
Notes are presented to the Registrar with a request to register the transfer or
to exchange them for an equal principal amount of certificated Notes of other
denominations, the Registrar shall register the transfer or make the exchange if
its requirements for such transactions are met; PROVIDED, HOWEVER, that any
certificated Notes presented or surrendered for registration of transfer or
exchange:
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(i) shall be duly endorsed or accompanied by a written instruction
of transfer in form satisfactory to the Registrar and the Trustee duly
executed by the Holder thereof or by his attorney duly authorized in
writing; and
(ii) are being transferred or exchanged pursuant to an effective
registration statement under the Securities Act, pursuant to Section
2.06(b) or pursuant to clause (A), (B) or (C) below, and are accompanied
by the following additional information and documents, as applicable:
(A) if such certificated Notes are being delivered to the
Registrar by a Holder for registration in the name of such Holder,
without transfer, a certification from such Holder to that effect
(in the form set forth on the reverse of the Note); or
(B) if such certificated Notes are being transferred to SRI a
certification to that effect (in the form set forth on the reverse
of the Note); or
(C) if such certificated Notes are being transferred pursuant
to an exemption from registration in accordance with Rule 144 or
Regulation S under the Securities Act: (i) a certificate to that
effect (in the form set forth on the reverse of the Note), and (ii)
if SRI or Registrar so requests, evidence reasonably satisfactory to
them as to the compliance with the restrictions set forth in the
legend set forth in Section 2.06(d)(i).
(b) RESTRICTIONS ON TRANSFER OF A CERTIFICATED NOTE FOR A BENEFICIAL
INTEREST IN THE GLOBAL NOTE. A certificated Note may not be exchanged for a
beneficial interest in the Global Note except upon satisfaction of the
requirements set forth below. Upon receipt by the Trustee of a certificated
Note, duly endorsed or accompanied by appropriate instruments of transfer, in
form satisfactory to the Trustee, together with:
(i) certification, in the form set forth on the reverse of the Note,
that such certificated Note is being transferred to a QIB in accordance
with Rule 144A under the Securities Act or to a non-U.S. person in
accordance with Rule 904 under the Securities Act; and
(ii) written instructions directing the Trustee to make, or to
direct the Notes Custodian to make, an adjustment on its books and records
with respect to such Global Note to reflect an increase in the aggregate
principal amount of the Notes represented by the Global Note,
then the Trustee shall cancel such certificated Note and cause, or direct the
Notes Custodian to cause, in accordance with the standing instructions and
procedures existing between the Depository and the Notes Custodian, the
aggregate principal amount of Notes represented by the Global Note to be
increased accordingly. If no Global Note is then outstanding, SRI shall issue
and the Trustee shall authenticate, upon written order of SRI in the form of an
Officers' Certificate, a new Global Note in the appropriate principal amount.
(c) TRANSFER AND EXCHANGE OF GLOBAL NOTES.
21
(i) The transfer and exchange of the Global Note or beneficial
interests therein shall be effected through the Depository, in accordance
with this Indenture (including applicable restrictions on transfer set
forth herein, if any) and the procedures of the Depository therefor, if
applicable.
(ii) Notwithstanding any other provisions of this Indenture (other
than the provisions set forth in Section 2.09), the Global Note may not be
transferred as a whole except by the Depository to a nominee of the
Depository or by a nominee of the Depository to the Depository or another
nominee of the Depository or by the Depository or any such nominee to a
successor Depository or a nominee of such successor Depository.
(iii) In the event that the Global Note is exchanged for Notes in
definitive form pursuant to Section 2.09, prior to the consummation of a
Registered Exchange Offer or the effectiveness of a Shelf Registration
Statement with respect to such Notes, such Notes may be exchanged only in
accordance with such procedures as are substantially consistent with the
provisions of this Section 2.06 (including the certification requirements
set forth on the reverse of the Notes intended to ensure that such
transfers comply with Rule 144A or Regulation S, as the case may be) and
such other procedures as may from time to time be adopted by SRI.
(d) LEGEND.
(i) Except as permitted by the following paragraphs (ii) and (iii)
each Note certificate evidencing the Global Note and any certificated
Notes (and all Notes issued in exchange therefor or substitution thereof)
shall bear a legend in substantially the following form:
"THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND UNDER APPLICABLE STATE
SECURITIES LAWS, AND THIS SECURITY MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE
SELLER OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER.
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF SRI THAT (A)
THIS SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED,
ONLY (i) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN
A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (ii) IN AN OFFSHORE
TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, (iii)
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (iv) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF
CASES (i) THROUGH (iv) IN ACCORDANCE
22
WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND
(B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY
PURCHASER OF THIS SECURITY FROM IT OF THE RESALE RESTRICTIONS REFERRED TO
IN (A) ABOVE."
(ii) Upon any sale or transfer of a Transfer Restricted Note
(including any Transfer Restricted Note represented by the Global Note)
pursuant to Rule 144 under the Securities Act in the case of any Transfer
Restricted Note that is represented by the Global Note, the Registrar
shall permit the Holder thereof to request the issuance of a certificated
Note that does not bear the legend set forth above and rescind any
restrictions on the transfer of such Transfer Restricted Note, if the sale
or exchange was made in reliance on Rule 144 and the Holder certifies to
that effect in writing to the Registrar (such certification to be in the
form set forth on the reverse of the Note).
(iii) After a transfer of any Notes or Private Exchange Notes during
the period of the effectiveness of a Shelf Registration Statement with
respect to such Notes or Private Exchange Notes, as the case may be, all
requirements pertaining to legends on such Note or such Private Exchange
Note will cease to apply, the requirements requiring any such Note or such
Private Exchange Note issued to certain Holders be issued in global form
will cease to apply, and a certificated Note or Private Exchange Note
without legends will be available to the transferee of the Holder of such
Notes or Private Exchange Notes or upon receipt of directions to transfer
such Holder's interest in the Global Note, as applicable.
(iv) Upon the consummation of a Registered Exchange Offer with
respect to the Notes pursuant to which Holders of such Notes are offered
Exchange Notes in exchange for their Notes, all requirements pertaining to
such Notes that Notes issued to certain Holders be issued in global form
will cease to apply and certificated Notes with the restricted securities
legend set forth in Exhibit A hereto will be available to Holders of such
Notes that do not exchange their Notes and Exchange Notes in certificated
form will be available to Holders that exchange such Notes in such
Registered Exchange Offer.
(v) Upon the consummation of a Private Exchange with respect to
the Notes pursuant to which Holders of such Notes are offered Private
Exchange Notes in exchange for their Notes, all requirements pertaining to
such Notes that Notes issued to certain holders be issued in global form
will still apply, and Private Exchange Notes in global form with the
restricted securities legend set forth in Exhibit A hereto will be
available to Holders that exchange such Notes in such Private Exchange.
(e) CANCELLATION OR ADJUSTMENT OF GLOBAL NOTE. At such time as all
beneficial interests in the Global Note have either been exchanged for
certificated Notes, redeemed, repurchased or cancelled, such Global Note shall
be returned to the Depository for cancellation or retained and cancelled by the
Trustee. At any time prior to such cancellation, if any beneficial interest in
the Global Note is exchanged for certificated Notes, redeemed, repurchased or
cancelled, the principal amount of Notes represented by such Global Note shall
be reduced and an adjustment shall be made by the Trustee or the Notes Custodian
to reflect such reduction on the books and records of the Notes Custodian for
such Global Note with respect to such Global Note.
23
(f) OBLIGATIONS WITH RESPECT TO TRANSFERS AND EXCHANGES OF NOTES.
(i) To permit registration of transfers and exchanges, SRI and
Stage shall execute and the Trustee shall authenticate certificated
Notes and the Global Note at the Registrar's or co-registrar's
request.
(ii) SRI may require payment of a sum sufficient to pay all
taxes, assessments or other governmental charges in connection with
any transfer or exchange pursuant to this Section 2.06.
(iii) SRI shall not be required to make and the Registrar or
co-registrar need not register transfers or exchanges of
certificated Notes selected for redemption (except, in the case of
any certificated Note to be redeemed in part, the portion thereof
not to be redeemed), or any Notes for a period of 15 days before a
selection of Notes to be redeemed or 15 days before an interest
payment date.
(iv) Prior to the due presentation for registration of
transfer of any Note, SRI, the Trustee, the Paying Agent, the
Registrar or any co-registrar may deem and treat the person in whose
name a Note is registered as the absolute owner of such Note for the
purpose of receiving payment of principal of and interest on such
Note and for all other purposes whatsoever, whether or not such Note
is overdue, and none of SRI, the Trustee, the Paying Agent, the
Registrar or any co-registrar shall be affected by notice to the
contrary.
(v) All Notes issued upon any transfer or exchange pursuant to
the terms of this Indenture will evidence the same debt and will be
entitled to the same benefits under this Indenture as the Notes
surrendered upon such transfer or exchange.
(g) NO OBLIGATION OF THE TRUSTEE.
(i) The Trustee shall have no responsibility or obligation to
any beneficial owner of the Global Note, a member of, or a
participant in the Depository or other Person with respect to the
accuracy of the records of the Depository or its nominee or of any
participant or member thereof, with respect to any ownership
interest in the Notes or with respect to the delivery to any
participant, member, beneficial owner or other Person (other than
the Depository) of any notice (including any notice of redemption)
or the payment of any amount, under or with respect to such Notes.
All notices and communications to be given to the Holders and all
payments to be made to Holders under the Notes shall be given or
made only to or upon the order of the registered Holders (which
shall be the Depository or its nominee in the case of the Global
Note). The rights of beneficial owners in the Global Note shall be
exercised only through the Depository subject to the applicable
rules and procedures of the Depository. The Trustee may rely and
shall be fully protected in relying upon information furnished by
the Depository with respect to its members, participants and any
beneficial owners.
(ii) The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on
transfer imposed under this Indenture or under applicable law with
respect to any transfer of any interest in
24
any Note (including any transfers between or among Depository
participants, members or beneficial owners in the Global Note) other
than to make any required delivery of such certificates and other
documentation or evidence as are expressly required by, and to do so
if and when expressly required by, the terms of this Indenture, and
to examine the same to determine substantial compliance as to form
with the express requirements hereof.
Section 2.07. REPLACEMENT NOTES.
If any mutilated Note is surrendered to the Trustee, or SRI and the
Trustee receive evidence to their satisfaction of the destruction, loss or theft
of any Note, SRI shall issue, Stage shall execute and the Trustee shall
authenticate a replacement Note if SRI's and the Trustee's reasonable
requirements for the replacements of Notes are met. If required by the Trustee
or SRI, an indemnity bond shall be supplied by the Holder that is sufficient in
the judgment of the Trustee, SRI and Stage to protect SRI, Stage, the Trustee,
any Agent or any authenticating agent from any loss which any of them may suffer
if a Note is replaced.
Every replacement Note shall be an obligation of SRI.
Section 2.08. OUTSTANDING NOTES.
The Notes outstanding at any time are all the Notes authenticated by
the Trustee, except for those cancelled by it, those delivered to it for
cancellation and those described in this Section 2.08 as not outstanding. A Note
does not cease to be outstanding because Stage, a Subsidiary of Stage or an
Affiliate of Stage holds such Note.
If a Note is replaced pursuant to Section 2.07, it shall cease to be
outstanding unless the Trustee receives proof satisfactory to it that such
replaced Note is held by a bona fide purchaser. A mutilated Note ceases to be
outstanding upon surrender of such Note and replacement thereof pursuant to
Section 2.07.
If the Paying Agent segregates and holds in trust, in accordance
with this Indenture, on a redemption date or maturity date money sufficient to
pay all principal and interest payable on that date with respect to the Notes
(or portions thereof) to be redeemed or maturing, as the case may be, and the
Paying Agent is not prohibited from paying such money to the Holders of Notes on
that date pursuant to the terms of this Indenture, then on and after that date
such Notes (or portions thereof) shall cease to be outstanding and interest
thereon shall cease to accrue.
Section 2.09. TEMPORARY NOTES AND CERTIFICATED NOTES.
(a) Until definitive Notes are ready for delivery, SRI may prepare,
SRI shall execute and the Trustee shall authenticate temporary Notes. Temporary
Notes shall be substantially in the form of definitive Notes but may have such
variations as SRI and the Trustee consider appropriate for temporary Notes.
Without unreasonable delay, SRI shall prepare and the Trustee shall authenticate
definitive Notes in exchange for temporary Notes. Until such exchange, temporary
Notes shall be entitled to the same rights, benefits and privileges as
definitive Notes.
25
(b) The Global Note deposited with the Depository or with the
Trustee as custodian for the Depository pursuant to Section 2.01 shall be
transferred to the beneficial owners thereof in the form of certificated Notes
in an aggregate principal amount equal to the principal amount of such Global
Note, in exchange for such Global Note, only if such transfer complies with
Section 2.06 and (i) the Depository notifies SRI that it is unwilling or unable
to continue as Depository for such Global Note or if at any time such Depository
ceases to be a "clearing agency" registered under the Exchange Act and a
successor depository is not appointed by SRI within 90 days of such notice, (ii)
an Event of Default has occurred and is continuing or (iii) SRI, in its sole
discretion, notifies the Trustee in writing that it elects to cause the issuance
of certificated Notes under this Indenture.
(c) Any Global Note that is transferable to the beneficial owners
thereof pursuant to this Section shall be surrendered by the Depository to State
Street Bank and Trust Company, N.A., an Affiliate of the Trustee located in the
Borough of Manhattan, The City of New York, to be so transferred, in whole or
from time to time in part, without charge, and the Trustee shall authenticate
and deliver, upon such transfer of each portion of such Global Note, an equal
aggregate principal amount of Notes of authorized denominations. Any portion of
the Global Note transferred pursuant to this Section shall be executed,
authenticated and delivered only in denominations of $1,000 and any integral
multiple thereof and registered in such names as the Depository shall direct.
Any Note delivered in exchange for an interest in the Global Note shall, except
as otherwise provided by Section 2.06(d), bear the restricted securities legend
set forth in Exhibit A hereto.
(d) Subject to the provisions of Section 2.09(c), the registered
Holder of the Global Note may grant proxies and otherwise authorize any person,
including agent members, participants and persons that may hold interests
through agent members, to take any action which a Holder is entitled to take
under this Indenture or the Notes.
(e) In the event of the occurrence of any of the events specified in
Section 2.09(b), SRI will promptly make available to the Trustee a reasonable
supply of certificated Notes in definitive, fully registered form without
interest coupons.
Section 2.10. CANCELLATION.
SRI at any time may deliver Notes to the Trustee for cancellation.
The Registrar and the Paying Agent shall forward to the Trustee any Notes
surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else shall cancel all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation, and shall destroy such
cancelled Notes (subject to the record retention requirement of the Exchange
Act), and, upon the request of SRI, deliver a certificate of such destruction to
SRI, unless SRI directs cancelled Notes to be returned to them. SRI may not
issue new Notes to replace Notes it has redeemed paid or delivered to the
Trustee for cancellation.
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Section 2.11. DEFAULTED INTEREST.
If SRI defaults in a payment of interest on the Notes, SRI shall pay
such defaulted interest in any lawful manner. SRI may pay such defaulted
interest to the Persons who are Holders of the Notes on a subsequent special
record date, which date shall be at the earliest practicable date but in all
events at least five Business Days prior to the payment date, in each case at
the rate provided in the Notes. SRI shall fix or cause to be fixed any such
special record date and payment date, and, at least 15 days prior to the special
record date, SRI shall mail or cause to be mailed to each Holder of a Note a
notice that states such special record date, such related payment date and the
amount of any such defaulted interest to be paid to Holders of the Notes.
Section 2.12. CUSIP NUMBER.
SRI in issuing the Notes may use a "CUSIP" number, and, if SRI shall
do so, the Trustee shall use such CUSIP number in notices of redemption or
exchange as a convenience to Holders; PROVIDED, HOWEVER, that any such notice
may state that no representation is made as to the correctness or accuracy of
the CUSIP number printed in such notice or on the Notes and that reliance may be
placed only on the other identification numbers printed on the Notes. SRI will
notify the Trustee of any change in a CUSIP number.
ARTICLE III
REDEMPTION
Section 3.01. NOTICES TO TRUSTEE.
If SRI elects to redeem Notes pursuant to paragraph 5 of the Notes,
SRI shall notify the Trustee in writing of the redemption date, the principal
amount of Notes to be redeemed and the paragraph of the Notes pursuant to which
the redemption will occur.
SRI shall give each notice to the Trustee provided for in this
Section 3.01 at least 60 days before the redemption date unless the Trustee
consents to a shorter period. Such notice shall be accompanied by an Officers'
Certificate and an Opinion of Counsel from SRI to the effect that such
redemption will comply with the conditions herein. If fewer than all of the
Notes are to be redeemed, the record date relating to such redemption shall be
selected by SRI and given to the Trustee, which record date shall not be less
than 15 days after the date of notice to the Trustee, unless the Trustee
consents to a shorter period.
Section 3.02. SELECTION OF NOTES TO BE REDEEMED.
If fewer than all the Notes are to be redeemed, the Trustee shall
select the Notes to be redeemed pro rata or by lot or by a method that complies
with applicable legal, securities exchange and Depository Trust Company
requirements, if any, and that the Trustee in its sole discretion considers to
be fair and appropriate. The Trustee shall make the selection from outstanding
Notes not previously called for redemption. The Trustee may select for
redemption portions of the principal of Notes that have denominations larger
than $1,000. Notes and portions of Notes the Trustee selects shall be in amounts
of $1,000 or a whole multiple of $1,000. Provisions of this Indenture that apply
to Notes called for redemption also apply to portions of
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Notes called for redemption. The Trustee shall notify SRI promptly of the Notes
or portions of Notes to be redeemed.
Section 3.03. NOTICE OF REDEMPTION.
SRI shall at least 30 days but not more than 60 days before a
redemption date mail or cause to be mailed, by first class-mail, a notice of
redemption to each Holder of Notes which are to be redeemed.
The notice shall identify the Notes to be redeemed and shall state:
(i) the redemption date;
(ii) the redemption price,
(iii) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed, and that after the redemption date
upon surrender of such Note, a new Note or Notes in principal amount equal to
the unredeemed portion shall be issued;
(iv) the name and address of the Paying Agent;
(v) that Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(vi) that, unless SRI defaults in making such redemption payment or
the Paying Agent is prohibited from making such payment pursuant to the terms of
this Indenture, interest on Notes called for redemption ceases to accrue on and
after the redemption date;
(vii) the paragraph of the Notes and/or the Section of this
Indenture pursuant to which the Notes called for redemption are being redeemed;
and
(viii)that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice or printed on the
Notes.
At SRI's request, at least five Business Days prior to the date upon
which such notice is to be mailed unless the Trustee consents to a shorter
period, the Trustee shall give the notice of redemption in SRI's name and at
SRI's expense. In such event, SRI shall provide the Trustee with the information
required by this Section 3.03.
Section 3.04. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section 3.03,
Notes called for redemption shall become due and payable on the redemption date
and at the redemption price stated in such notice of redemption. Upon surrender
to the Paying Agent, such Notes shall be paid at the redemption price stated in
such notice of redemption, plus accrued interest to the redemption date. Failure
to give notice to a Holder of a Note or any defect in any notice shall not
affect the validity of any notice to any other Holder of a Note.
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Section 3.05. DEPOSIT OF REDEMPTION PRICE.
On or prior to any redemption date, SRI shall deposit with the
Paying Agent (or, if SRI or a Subsidiary is the Paying Agent, shall segregate
and hold in trust) money sufficient to pay the redemption price of and accrued
interest on all Notes to be redeemed on that date. The Trustee or the Paying
Agent shall promptly return to SRI any money deposited with the Trustee or the
Paying Agent by SRI in excess of the amounts necessary to pay the redemption
price of, and accrued interest on, all Notes to be redeemed on that date other
than Notes or portions of Notes called for redemption which have been delivered
by SRI to the Trustee for cancellation.
Section 3.06. NOTES REDEEMED IN PART.
Upon surrender of a Note that is redeemed in part, SRI shall issue
and the Trustee shall authenticate for the Holder of the Notes (at the expense
of SRI) a new Note equal in principal amount to the unredeemed portion of the
Note surrendered.
ARTICLE IV
CHANGE OF CONTROL
(a) Upon the occurrence of a Change of Control (as defined below),
each Holder of a Note shall have the right to require SRI to repurchase such
Holder's Notes at a purchase price in cash equal to 101% of the principal amount
thereof plus accrued and unpaid interest (if any) to the date of repurchase
(subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date).
(b) The occurrence of any of the following events shall constitute a
"CHANGE OF CONTROL" under this Indenture:
(i) any "person" (as such term is used in Sections 13(d) and 14(d)
of the Exchange Act) is or becomes the beneficial owner (as defined in
Rules 13d-3 and 13d-5 under the Exchange Act, except that a Person shall
be deemed to have "beneficial ownership" of all shares that any such
Person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or indirectly, of
more than 35% of the total voting power of the Voting Stock of Stage;
(ii) during any period of two consecutive years, individuals who at
the beginning of such period constituted the Board of Directors of Stage
(together with any new directors whose election by such Board of Directors
or whose nomination for election by the shareholders of Stage was approved
by a majority of the directors of Stage then still in office who were
either directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any reason
to constitute a majority of the Board of Directors of Stage then in
office;
(iii) the merger or consolidation of Stage or SRI with or into
another Person or the merger of another Person with or into Stage or SRI,
as the case may be, or the sale or transfer in one or a series of
transactions of all or substantially all the assets of Stage
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or SRI, as the case may be, to another Person, and, in the case only of
any such merger or consolidation, the securities of Stage or SRI, as the
case may be, that are outstanding immediately prior to such transaction
and which represent 100% of the aggregate voting power of the Voting Stock
of Stage or SRI, as the case may be, are changed into or exchanged for
cash, securities or property, unless pursuant to such transaction such
securities are changed into or exchanged for, in addition to any other
consideration, securities of the surviving corporation that represent
immediately after such transaction, at least a majority of the aggregate
voting power of the Voting Stock of the surviving corporation; PROVIDED,
HOWEVER, that the merger or consolidation of Stage with or into SRI or the
merger or consolidation of SRI with or into Stage shall not be deemed a
Change of Control; or
(iv) Stage shall hold, directly or indirectly, less than 100% of the
Capital Stock of SRI or less than 100% of the Voting Stock of SRI; and
PROVIDED, FURTHER, that a Change of Control shall occur if at any time
that Stage does not directly hold such Capital Stock or Voting Stock of
SRI, the entity holding such Capital Stock or Voting Stock of SRI shall
not be a Restricted Subsidiary and a Subsidiary Guarantor.
(c) Within 30 days following any Change of Control, SRI shall mail a
notice to each Holder with a copy to the Trustee stating: (i) that a Change of
Control has occurred and that such Holder has the right to require SRI to
purchase such Holder's Notes at a purchase price in cash equal to 101% of the
principal amount thereof plus accrued and unpaid interest, if any, to the date
of purchase (subject to the right of holders of record on the relevant record
date to receive interest on the relevant interest payment date); (ii) the
material circumstances and facts regarding such Change of Control (including
information with respect to pro forma historical income, cash flow and
capitalization, each after giving effect to such Change of Control); (iii) the
repurchase date (which shall be no earlier than 30 days nor later than 60 days
from the date such notice is mailed in the event of a Change of Control); and
(iv) the instructions determined by SRI, consistent with the covenant described
hereunder, that a Holder must follow in order to have its Notes purchased.
(d) SRI shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Notes pursuant to this
Article IV. To the extent that the provisions of any securities laws or
regulations conflict with the provisions of this Article IV, SRI shall comply
with the applicable securities laws and regulations and shall not be deemed to
have breached its obligations under this Article IV by virtue thereof.
ARTICLE V
COVENANTS
Section 5.01. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST.
SRI shall duly and punctually pay the principal of (and premium, if
any) and interest on the Notes in accordance with the terms of this Indenture
and the Notes.
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Section 5.02. MAINTENANCE OF OFFICE OR AGENCY.
SRI shall maintain an office or agency (which may be an office of
the Trustee or an affiliate of the Trustee, Registrar or co-registrar) where
notices and demands to or upon SRI or any Guarantor in respect of the Notes and
this Indenture may be served. SRI shall give prompt written notice to the
Trustee of the location, and any change in such location, of such office or
agency. If at any time SRI shall fail to maintain any such required office or
agency or shall fail to furnish the Trustee with the address thereof, such
notices and demands may be made or served at the Corporate Trust Office of the
Trustee.
SRI also from time to time may designate one or more additional
offices or agencies for any or all such purposes and from time to time may
rescind any such designation; PROVIDED, HOWEVER, that no such designation or
rescission shall in any manner relieve SRI of its obligation to maintain an
office or agency pursuant to Section 2.03 or this Section 5.02. SRI shall give
prompt written notice to the Trustee of any such designation or rescission and
of any change in the location of any such other office or agency.
Section 5.03. SEC REPORTS.
So long as any of the Notes remain outstanding, Stage shall cause
copies of all quarterly and annual financial 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 prescribe) which Stage is required to
file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act, including
without limitation, Forms 8-K, 10-Q and 10-K, to be so filed with the SEC and to
be filed with the Trustee and mailed to the Holders at their addresses appearing
in the Note Register maintained by the Registrar, in each case, at the times
specified for such filing with the SEC. If Stage is not subject to the
requirements of such Section 13 or 15(d) of the Exchange Act, Stage shall
nevertheless continue to file with the SEC, in conformity with Section 13 or
Section 15(d) of the Exchange Act, and provide the Trustee and Holders of Notes
with such annual and quarterly reports (without exhibits in the case of
documents provided to the Trustee and Holders of Notes) and such information,
documents and other reports (or copies of such portions of any of the foregoing
as the SEC may by rules and regulations prescribe) which are specified in
Section 13 or Section 15(d) of the Exchange Act, including without limitation,
Forms 8-K, 10-Q and 10-K. SRI and Stage shall also comply with the provisions of
TIA ss. 314(a).
Section 5.04. LIMITATION ON DEBT.
(a) Stage shall not Incur, and shall not permit any Restricted
Subsidiary to Incur, directly or indirectly, any Debt unless the Consolidated
EBITDA Coverage Ratio at the date of such Incurrence exceeds 2.25 to 1.0.
(b) Notwithstanding the foregoing paragraph (a), Stage and its
Restricted Subsidiaries may Incur the following Debt: (1) the Senior Notes and
the Notes; (2) Debt Incurred by Stage and its Restricted Subsidiaries pursuant
to the Working Capital Facility Provisions of the New Credit Agreement or any
other working capital facility which, when taken together with the outstanding
principal amount of all unreimbursed letters of credit and the outstanding
principal amount of all other Debt Incurred pursuant to this clause (2), does
not exceed at any time in an aggregate principal amount the greater of (A) $125
million and (B) the sum of (i) 50% of the book value of the inventory of Stage
and its Restricted Subsidiaries and (ii) 85% of the book value of Receivables
(or interests in a Master Trust comprised of
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Receivables including, without limitation, "Transferor Certificates" under the
Accounts Receivable Facility) of Stage, its Restricted Subsidiaries and any
Accounts Receivable Subsidiary, but only to the extent that such Receivables (or
Master Trust interests) are owned by Stage, any of its Restricted Subsidiaries
or any Accounts Receivable Subsidiary and may be transferred by Stage, any
Restricted Subsidiary or any Accounts Receivable Subsidiary to a third party for
fair value without the consent of existing investors in such Receivables or
Master Trust; (3) Debt Incurred by Stage and its Restricted Subsidiaries
pursuant to the Expansion Revolving Credit Facility Provisions of the New Credit
Agreement or Debt Incurred under any other credit or loan agreement or any
indenture in each case which Refinances Debt Incurred under such Expansion
Revolving Credit Facility provisions or any Debt that previously Refinanced such
Debt in accordance with this clause (3) during the term thereof or concurrent
with the termination thereof, which, when taken together with the principal
amount of all other Debt Incurred pursuant to this clause (3), does not exceed
$100 million outstanding at any one time; (4) Debt of Stage owed to and held by
a Wholly Owned Subsidiary and Debt of a Wholly Owned Subsidiary owed to and held
by Stage or another Wholly Owned Subsidiary; PROVIDED, HOWEVER, that any
subsequent issuance or transfer of any Capital Stock which results in such
Wholly Owned Subsidiary ceasing to be a Wholly Owned Subsidiary or any transfer
of such Debt (other than to a Wholly Owned Subsidiary) shall be deemed, in each
case, to constitute the Incurrence of such Debt by the issuer thereof; (5) Debt
of a Restricted Subsidiary Incurred and outstanding on or prior to the date on
which such Restricted Subsidiary became a Restricted Subsidiary or was acquired
by Stage (other than Debt Incurred in connection with, or to provide all or any
portion of the funds or credit support utilized to consummate, the transaction
or series of related transactions pursuant to which such Restricted Subsidiary
became a Restricted Subsidiary or was acquired by Stage); (6) Debt of Stage and
its Restricted Subsidiaries outstanding on the Issue Date (other than Debt
described in clause (1), (2), (3), (4) or (5)); (7) Refinancing Debt in respect
of Debt Incurred pursuant to paragraph (a) or pursuant to clause (1) or (6) or
this clause (7); (8) Hedging Obligations to the extent directly related to Debt
permitted to be Incurred by Stage pursuant to the Indentures; and (9) Debt in an
aggregate principal amount which, together with all other Debt of Stage and its
Restricted Subsidiaries then outstanding (other than Debt permitted by clauses
(1) through (8) of this paragraph (b) or paragraph (a) above) does not exceed
$25 million.
(c) Notwithstanding the foregoing paragraphs (a) and (b) above,
Stage shall not, and shall not permit any Restricted Subsidiary to, Incur any
Debt if the proceeds thereof are used, directly or indirectly, to Refinance any
Subordinated Obligations unless such Debt shall be subordinated to the
applicable Notes at least to the same extent as the Subordinated Obligations.
(d) Notwithstanding paragraphs (a) and (b) above, Stage shall not,
and shall not permit SRI or any Guarantor to, Incur any Debt if such Debt is
subordinated or junior in ranking to any Senior Debt, unless such Debt is Senior
Subordinated Debt or is expressly subordinated in right of payment to Senior
Subordinated Debt.
(e) For purposes of determining compliance with the foregoing
covenant, (i) in the event that an item of Debt meets the criteria of more than
one of the types of Debt described in paragraph (b), Stage, in its sole
discretion, will classify such item of Debt and only be required to include the
amount and type of such Debt in one of the clauses of paragraph (b), (ii) an
item of Debt may be divided and classified in more than one of the types of debt
in paragraph (b) and (iii) Guarantees of Debt otherwise included in the
determination of particular amounts of Debt of Stage or any Restricted
Subsidiary shall not also be included.
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Section 5.05. LIMITATION ON RESTRICTED PAYMENTS.
(a) Stage shall not, and shall not permit any Restricted Subsidiary,
directly or indirectly, to:
(i) declare or pay any dividend (either in cash or property) or make
any distribution on or in respect of, or redeem, repurchase, retire or
otherwise acquire, its Capital Stock or the Capital Stock of any
Restricted Subsidiary (including any payment in connection with any merger
or consolidation involving Stage) or similar payment to the direct or
indirect holders of its Capital Stock (except dividends or distributions
payable solely in its Non-Convertible Capital Stock or in options,
warrants or other rights to purchase its Non-Convertible Capital Stock and
except dividends or distributions payable to Stage or a Restricted
Subsidiary), and other than pro rata dividends or other distributions made
by a Restricted Subsidiary of Stage that is not a Wholly Owned Subsidiary
to minority shareholders (or owners of an equivalent interest in the case
of a Restricted Subsidiary that is an entity other than a corporation),
(ii) purchase, redeem or otherwise acquire or retire for value any
Capital Stock of Stage or a Restricted Subsidiary (other than such Capital
Stock owned by Stage or any Wholly Owned Subsidiary),
(iii) purchase, repurchase, redeem, defease or otherwise acquire or
retire for value, prior to scheduled maturity, scheduled repayment or
scheduled sinking fund payment any Subordinated Obligations (other than
the purchase, repurchase or other acquisition of Subordinated Obligations
purchased in anticipation of satisfying a sinking fund obligation,
principal installment or final maturity, in each case due within one year
of the date of acquisition);
(iv) make any Investment (other than a Permitted Investment) in any
Person (any such dividend, distribution, purchase, redemption, repurchase,
defeasance or other acquisition, retirement or Investment being herein
referred to as a "Restricted Payment"),
if at the time Stage or such Restricted Subsidiary makes such Restricted Payment
or after giving effect thereto: (1) a Default shall have occurred and be
continuing (or would result therefrom); (2) Stage, after giving pro forma effect
to such Restricted Payment, would not be permitted to Incur at least an
additional $1.00 of Debt pursuant to Section 5.04(a); or (3) the aggregate
amount of such Restricted Payment and all other Restricted Payments since the
Issue Date would exceed the sum of: (A) 50% of the Consolidated Net Income
(excluding any extraordinary or nonrecurring charges in connection with the
Refinancing and the Acquisition) accrued during the period (treated as one
accounting period) from the beginning of the fiscal quarter during which the
Notes were originally issued to the end of the most recent fiscal quarter ending
at least 45 days (or, if less, the number of days after the end of such fiscal
quarter as the consolidated financial statements of Stage shall be provided to
Holders pursuant to the Indentures) prior to the date of such Restricted Payment
(or, in case such Consolidated Net Income shall be a deficit, minus 100% of such
deficit); (B) the aggregate Net Cash Proceeds and aggregate Deemed Asset Value
received by Stage from the issue or sale of its Capital Stock (other than
Redeemable Stock or Exchangeable Stock) subsequent to the Issue Date (other than
an issuance or sale to a Subsidiary or an employee stock ownership plan or
similar trust); (C) the amount by which Debt of Stage is reduced on Stage's
balance sheet upon the conversion or exchange (other than by a Subsidiary)
subsequent to the Issue Date, of any Debt of Stage convertible or exchangeable
for
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Capital Stock (other than Redeemable Stock or Exchangeable Stock) of Stage (less
the amount of any cash, or the fair value of any other property, distributed by
Stage upon such conversion or exchange); (D) an amount equal to the sum of (i)
the net reduction in Investments in Unrestricted Subsidiaries resulting from
dividends, repayments of loans or advances or other transfers of assets, in each
case to Stage or any Restricted Subsidiary from Unrestricted Subsidiaries
(except as provided in clause (xi) of the definition of "Permitted Investment"),
and (ii) the portion (proportionate to the equity interest of Stage in such
Subsidiary) of the fair market value of the net assets of an Unrestricted
Subsidiary at the time such Unrestricted Subsidiary is designated a Restricted
Subsidiary; PROVIDED, HOWEVER, that the foregoing sum shall not exceed, in the
case of an Unrestricted Subsidiary, the amount of Investments previously made
(and treated as a Restricted Payment) by Stage or any Restricted Subsidiary in
such Unrestricted Subsidiary; and (E) $5 million.
(b) The provisions of the foregoing paragraph (a) shall not
prohibit:
(i) any purchase or redemption of Capital Stock or Subordinated
Obligations of Stage made by exchange for, or out of the proceeds of the
substantially concurrent sale of, Capital Stock of Stage (other than
Redeemable Stock or Exchangeable Stock of Stage and other than Capital
Stock issued or sold to a Subsidiary or an employee stock ownership plan);
PROVIDED, HOWEVER, that (A) such purchase or redemption shall be excluded
in the calculation of the amount of Restricted Payments and (B) the Net
Cash Proceeds from such sale shall be excluded from clause (3)(B) of
paragraph (a) above;
(ii) any purchase, redemption, defeasance or other acquisition or
retirement for value of Subordinated Obligations of Stage made by exchange
for, or out of the proceeds of the substantially concurrent sale of, Debt
of Stage which is permitted to be Incurred pursuant to Section 5.04;
PROVIDED, HOWEVER, that such purchase, redemption, defeasance or other
acquisition or retirement for value shall be excluded in the calculation
of the amount of Restricted Payments;
(iii) any purchase or redemption of Subordinated Obligations of
Stage from Net Available Cash to the extent permitted under Section 5.07;
PROVIDED, HOWEVER, that such purchase or redemption shall be excluded in
the calculation of the amount of Restricted Payments;
(iv) dividends paid within 60 days after the date of declaration
thereof if at such date of declaration such dividend would have complied
with this provision; PROVIDED, HOWEVER, that at the time of declaration of
such dividend, no other Default shall have occurred and be continuing (or
would result therefrom); and PROVIDED, FURTHER, HOWEVER, that such
dividend shall be included in the calculation of the amount of Restricted
Payments;
(v) the repurchase of shares of, or options to purchase shares of,
common stock of Stage or any of its Subsidiaries from employees, former
employees, directors or former directors of Stage or any of its
Subsidiaries (or permitted transferees of such employees, former
employees, directors or former directors), pursuant to the terms of the
agreements (including employment agreements) or plans (or amendments
thereto) approved by the Board of Directors under which such individuals
purchase or sell or are granted the option to purchase or sell, shares of
such common stock; PROVIDED, HOWEVER, that the aggregate amount of such
repurchases shall not exceed $5 million in any calendar year; and
34
PROVIDED, FURTHER, HOWEVER, that such repurchases shall be excluded in the
calculation of the amount of Restricted Payments;
(vi) the issuance of securities or payment of cash to consummate the
Acquisition in accordance with the terms of the Merger Agreement;
PROVIDED, HOWEVER, that such issuance or payment shall be excluded in the
calculation of the amount of Restricted Payments; and
(vii) Restricted Payments, in addition to those otherwise permitted
pursuant to this covenant, in an aggregate amount not to exceed $15
million; PROVIDED, HOWEVER, that such payments shall be excluded in the
calculation of the amount of Restricted Payments.
Section 5.06. LIMITATION ON RESTRICTIONS ON DISTRIBUTIONS FROM RESTRICTED
SUBSIDIARIES.
Stage shall not, and shall not permit any Restricted Subsidiary to,
create or otherwise cause or permit to exist or become effective any consensual
encumbrance or restriction on the ability of any Restricted Subsidiary to:
(i) pay dividends or make any other distributions on its Capital
Stock or pay any Debt or other obligation owed to Stage or any Restricted
Subsidiary,
(ii) make any loans or advances to Stage or any Restricted
Subsidiary or
(iii) transfer any of its property or assets to Stage or any
Restricted Subsidiary, except:
(a) any encumbrance or restriction pursuant to the New Credit Agreement or any
agreement in effect on the Issue Date or pursuant to the issuance of the Notes;
(b) any encumbrance or restriction with respect to a Restricted Subsidiary
pursuant to an agreement relating to any Debt Incurred by such Restricted
Subsidiary on or prior to the date on which such Restricted Subsidiary was
acquired by Stage (other than Debt Incurred as consideration in, or to provide
all or any portion of the funds or credit support utilized to consummate, the
transaction or series of related transactions pursuant to which such Restricted
Subsidiary became a Restricted Subsidiary or was acquired by Stage), and
outstanding on such date; (c) any encumbrance or restriction pursuant to an
agreement effecting a Refinancing of Debt Incurred pursuant to an agreement
referred to in clause (a) or (b) or contained in any amendment to an agreement
referred to in clause (a) or (b); PROVIDED, HOWEVER, that the encumbrances and
restrictions contained in any such refinancing agreement or amendment are no
less favorable to the Holders than encumbrances and restrictions with respect to
such Restricted Subsidiary contained in such agreements; (d) any such
encumbrance or restriction consisting of customary nonassignment provisions in
leases governing leasehold interests to the extent such provisions restrict the
transfer of the lease or other customary non-assignment provisions in contracts
(other than contracts that constitute Debt) entered into in the ordinary course
of business to the extent such provisions restrict the transfer of the assets
subject to such contracts; (e) in the case of clause (iii) above, restrictions
contained in security agreements or mortgages securing Debt of a Restricted
Subsidiary to the extent such restrictions restrict the transfer of the property
subject to such security agreements or mortgages; (f) encumbrances or
restrictions imposed by operation of applicable law; (g) any restriction with
respect to a Restricted Subsidiary imposed pursuant to an agreement entered into
for the sale or disposition of all the Capital Stock or assets of such
Restricted Subsidiary pending the closing of such sale or disposition; and (h)
any encumbrance or restriction on the sale of Receivables
35
arising under agreements in connection with such sales between Stage or a
Restricted Subsidiary and an Accounts Receivable Subsidiary.
Section 5.07. LIMITATION ON SALES OF ASSETS AND SUBSIDIARY STOCK.
(a) Stage shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, consummate any Asset Disposition unless:
(i) Stage or such Restricted Subsidiary receives consideration at
the time of such Asset Disposition at least equal to the fair market
value, as determined in good faith by the Board of Directors (including as
to the value of all non-cash consideration), of the shares and assets
subject to such Asset Disposition and at least 75% of the consideration
thereof received by Stage or such Restricted Subsidiary is in the form of
cash or cash equivalents, and
(ii) an amount equal to 100% of the Net Available Cash from such
Asset Disposition is applied by Stage or SRI (or such Restricted
Subsidiary, as the case may be):
(A) FIRST, to the extent Stage or SRI elects (or is required
by the terms of any Senior Debt), to prepay, repay or purchase
Senior Debt (other than Debt owed to Stage or SRI or an Affiliate of
Stage or SRI) within one year from the later of the date of such
Asset Disposition or the receipt of such Net Available Cash;
(B) SECOND, to the extent of the balance of such Net Available
Cash after application in accordance with clause (A), at the
election of Stage to the investment by Stage or any Wholly Owned
Subsidiary in assets to replace the assets that were the subject of
such Asset Disposition or an asset or assets that (as determined by
the Board of Directors) will be used in the business of Stage and
the Wholly Owned Subsidiaries existing on the Issue Date or in
businesses reasonably related thereto, in each case within the later
of one year from the date of such Asset Disposition or the receipt
of such Net Available Cash;
(C) THIRD, to the extent of the balance of such Net Available
Cash after application and in accordance with clauses (A) and (B),
to make an offer to purchase the Notes (and any other Senior
Subordinated Debt of SRI designated by SRI) pursuant to and subject
to the conditions contained in the applicable Indenture (it being
understood that, in all cases, SRI shall be required to make an
offer to purchase the Senior Notes prior to making any offer to
purchase the Notes); and
(D) FOURTH, to the extent of the balance of such Net Available
Cash after application in accordance with clauses (A), (B) and (C),
to (x) the acquisition by Stage or any Wholly Owned Subsidiary of
Tangible Property or (y) the prepayment, repayment or purchase of
Debt (other than any Redeemable Stock) of Stage or SRI (other than
Debt owed to an Affiliate of Stage or SRI) or Debt of any Restricted
Subsidiary (other than Debt owed to Stage or SRI or an Affiliate of
Stage or SRI), in each case within one year from the later of the
receipt of such Net Available Cash and the date the offer described
in paragraph (b) below is
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consummated; PROVIDED, HOWEVER, that in connection with any
prepayment, repayment or purchase of Debt pursuant to clause (A),
(C) or (D) above, Stage, SRI or such Restricted Subsidiary shall
retire such Debt and shall cause the related loan commitment (if
any) to be permanently reduced in an amount equal to the principal
amount so prepaid, repaid or purchased. Notwithstanding the
foregoing provisions of this paragraph, Stage and its Restricted
Subsidiaries shall not be required to apply any Net Available Cash
in accordance with this paragraph except to the extent that the
aggregate Net Available Cash from all Asset Dispositions which are
not applied in accordance with this paragraph exceeds $10 million.
Pending application of Net Available Cash pursuant to this
paragraph, such Net Available Cash shall be invested in Permitted
Investments or to reduce loans outstanding under any working capital
facility.
For the purposes of this Section 5.07, the following are deemed to
be cash or cash equivalents: (x) the express assumption of Debt of Stage or any
Restricted Subsidiary and the release of Stage or such Restricted Subsidiary
from all liability on such Debt in connection with such Asset Disposition and
(y) securities received by Stage or any Restricted Subsidiary from the
transferee that are converted by Stage or such Restricted Subsidiary into cash
within 90 days of the receipt of such securities.
(b) In the event of an Asset Disposition that requires the purchase
of the Notes (and other Senior Subordinated Debt) pursuant to clause (a)(ii)(C)
above, SRI will be required to purchase Notes tendered pursuant to an offer by
SRI for the Notes (and such other Debt) (the "OFFER") at a purchase price of
100% of the principal amount the Notes on the date of such offer (without
premium) plus accrued but unpaid interest (or, in respect of such other Debt,
such lesser price, if any, as may be provided for by the terms of such Debt) in
accordance with the procedures (including prorating in the event of
oversubscription) set forth in Section 5.07(c). If the aggregate purchase price
of Notes (and any such other Debt) tendered pursuant to any such offer is less
than the Net Available Cash allotted to the purchase thereof, SRI will be
required to apply the remaining Net Available Cash in accordance with clause
(a)(ii)(D) above. SRI shall not be required to make any such offers to purchase
Notes (and other Senior Subordinated Debt) pursuant to this covenant if the Net
Available Cash available therefor is less than $10 million (which lesser amount
shall be carried forward for purposes of determining whether any such offer is
required with respect to any subsequent Asset Disposition).
(c) (1) Promptly, and in any event within 10 days after SRI becomes
obligated to make an Offer, SRI shall be obligated to deliver to the Trustee and
send, by first-class mail to each Holder, a written notice stating that the
Holder may elect to have his Notes purchased by SRI either in whole or in part
(subject to prorating as hereinafter described in the event the Offer is
oversubscribed) in integral multiples of $1,000 of principal amount, at the
applicable purchase price. The notice shall specify a purchase date not less
than 30 days nor more than 60 days after the date of such notice (the "PURCHASE
DATE") and shall contain such information concerning the business of Stage and
its Subsidiaries which Stage in good faith believes will enable such Holders to
make an informed decision (which at a minimum will include (i) the most recently
filed Annual Report on Form 10-K (including audited consolidated financial
statements) of Stage, the most recent subsequently filed Quarterly Report on
Form 10-Q and any Current Report on Form 8-K of Stage filed subsequent to such
Quarterly Report, other than Current Reports describing Asset Dispositions
otherwise described in the offering materials (or corresponding successor
reports or, if Stage shall not at such time be subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act, a corresponding report
prepared pursuant to Section 5.03), (ii) a
37
description of material developments in the business of Stage and its
Subsidiaries subsequent to the date of the latest of such Reports, and (iii) if
material, appropriate pro forma financial information) and all instructions and
materials necessary to tender Notes pursuant to the Offer, together with the
information contained in clause (3).
(2) Not later than the date upon which written notice of an Offer is
delivered to the Trustee as provided above, SRI shall deliver to the Trustee an
Officers' Certificate as to (i) the amount of the Offer (the "OFFER AMOUNT"),
(ii) the allocation of the Net Available Cash from the Asset Dispositions
pursuant to which such Offer is being made and (iii) the compliance of such
allocation with the provisions of Section 5.07(a). On such date, SRI shall also
irrevocably deposit with the Trustee or with a paying agent other than SRI in
Temporary Cash Investments, maturing on the last day prior to the Purchase Date
or on the Purchase Date if funds are immediately available by open of business,
an amount equal to the Offer Amount to be held for payment in accordance with
the provisions of this Section. Upon the expiration of the period for which the
Offer remains open (the "OFFER PERIOD"), SRI shall deliver to the Trustee for
cancellation the Notes or portions thereof which have been properly tendered to
and are to be accepted by SRI. The Trustee shall, on the Purchase Date, mail or
deliver payment to each tendering Holder in the amount of the purchase price. In
the event that the aggregate purchase price of the Notes delivered by SRI to the
Trustee is less than the Offer Amount, the Trustee shall deliver the excess to
SRI immediately after the expiration of the Offer Period for application in
accordance with this Section.
(3) Holders electing to have a Note purchased shall be required to
surrender the Note, with an appropriate form duly completed, to SRI at the
address specified in the notice at least three Business Days prior to the
Purchase Date. Holders shall be entitled to withdraw their election if the
Trustee or SRI receives, not later than one Business Day prior to the Purchase
Date, a telegram, telex, facsimile transmission or letter setting forth the name
of the Holder, the principal amount of the Note which was delivered for purchase
by the Holder and a statement that such Holder is withdrawing his election to
have such Note purchased. If at the expiration of the Offer Period the aggregate
principal amount of Notes (and any other Senior Subordinated Debt included in
the Offer) surrendered pursuant to the Offer exceeds the Offer Amount, SRI shall
select the Notes and other Senior Subordinated Debt to be purchased on a pro
rata basis (with such adjustments as may be deemed appropriate by SRI so that
only Notes and other Senior Subordinated Debt in denominations of $1,000, or
integral multiples thereof, shall be purchased). Holders whose Notes are
purchased only in part shall be issued new Notes equal in principal amount to
the unpurchased portion of the Notes surrendered.
(4) At the time SRI delivers Notes to the Trustee which are to be
accepted for purchase, SRI shall also deliver an Officers' Certificate stating
that such Notes are to be accepted by SRI pursuant to and in accordance with the
terms of this Section 5.07. A Note shall be deemed to have been accepted for
purchase at the time the Trustee, directly or through an agent, mails or
delivers payment therefor to the surrendering Holder.
(d) SRI shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Notes pursuant to this
Section 5.07. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section 5.07, SRI shall comply with
the applicable securities laws and regulations and shall not be deemed to have
breached its obligations under this clause by virtue thereof.
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Section 5.08. LIMITATION ON TRANSACTIONS WITH AFFILIATES.
(a) Stage shall not, and shall not permit any Restricted Subsidiary
to, enter into any transaction or series of related transactions (including the
purchase, sale, lease or exchange of any property, employee compensation
arrangements or the rendering of any service) with any Affiliate (including any
Accounts Receivable Subsidiary) of Stage (an "Affiliate Transaction") unless (i)
the terms of such Affiliate Transaction are (A) set forth in writing and (B) as
favorable to Stage or such Restricted Subsidiary as terms that would be
obtainable at the time for a comparable transaction or series of related
transactions in arm's-length dealings with an unrelated third Person, (ii) if
such Affiliate Transaction involves an amount in excess of $3 million, a
majority of the disinterested members of the Board of Directors of Stage have
approved, by resolution, and determined in good faith that such Affiliate
Transaction meets the criteria set forth in (i)(B) above and (iii) if such
Affiliate Transaction involves an amount in excess of $7.5 million (other than a
contribution, disposition or other transfer of Receivables to an Accounts
Receivable Subsidiary as permitted under the Indentures and the related
customary contractual arrangements and Customary Securitization Undertakings),
such Affiliate Transaction is determined by a nationally recognized investment
banking firm to be fair from a financial standpoint to Stage or such Restricted
Subsidiary, as the case may be.
(b) The provisions of the foregoing paragraph (a) shall not prohibit
(i) any Restricted Payment permitted to be paid pursuant to the covenant
described in Section 5.05, (ii) any issuance of securities, or other payments,
awards or grants in cash, securities or otherwise pursuant to, or the funding
of, employment arrangements, stock options and stock ownership plans approved by
the Board of Directors of Stage, (iii) loans or advances to employees in the
ordinary course of business, but in any event not to exceed $5 million in the
aggregate outstanding at any one time, (iv) the payment of reasonable and
customary fees to directors of Stage and its Restricted Subsidiaries, (v) any
transaction between Stage and a Wholly Owned Subsidiary or between Wholly Owned
Subsidiaries, (vi) any written agreement as in effect on the Issue Date and as
amended from time to time, PROVIDED that any such amendment is not less
favorable in any material respect to Stage and its Subsidiaries than the terms
in effect on the Issue Date, and (vii) indemnification payments to directors and
officers of Stage in accordance with applicable state laws.
Section 5.09. LIMITATION ON THE SALE OR ISSUANCE OF CAPITAL STOCK OF RESTRICTED
SUBSIDIARIES.
Stage shall not sell or otherwise dispose of any shares of Capital
Stock of a Restricted Subsidiary, and shall not permit any Restricted
Subsidiary, directly or indirectly, to issue or sell or otherwise dispose of any
shares of its Capital Stock except:
(i) to Stage or a Wholly Owned Subsidiary;
(ii) if, immediately after giving effect to such issuance, sale or
other disposition, such Restricted Subsidiary remains a Restricted
Subsidiary; or
(iii) if, immediately after giving effect to such issuance, sale or
other disposition, such Restricted Subsidiary would no longer constitute a
Restricted Subsidiary and any Investment in such Person remaining after
giving effect thereto would have been permitted to be made under Section
5.05 if made on the date of such issuance, sale or other disposition. In
connection with any such sale or disposition of Capital Stock, Stage
39
or any such Restricted Subsidiary shall comply with Section 5.07. Nothing
herein shall limit or modify SRI's obligations under Article IV above.
Section 5.10. LIMITATION ON LIENS.
Notwithstanding paragraphs (a) and (b) of Section 5.04, Stage shall
not, and shall not permit SRI or any Guarantor to, Incur any Secured Debt which
is not Senior Debt unless contemporaneously therewith effective provision is
made to secure the Notes or the Guaranties equally and ratably with such Secured
Debt for so long as such Secured Debt is secured by a Lien.
Section 5.11. ACCOUNTS RECEIVABLE SUBSIDIARIES.
Stage (a) shall not permit any Accounts Receivable Subsidiary to
sell any Receivables purchased from Stage or any of its Subsidiaries or
participation interests therein to any other Person except on an arms-length
basis and solely for consideration in the form of cash, cash equivalents,
promissory notes of such Person or Debt of or other interests in a Master Trust;
PROVIDED, HOWEVER, that such Accounts Receivable Subsidiary may not sell such
Debt or other interests to any other Person except on an arms-length basis and
solely for consideration in the form of cash or cash equivalents; (b) shall not
permit any Accounts Receivable Subsidiary to incur Debt in an amount in excess
of the book value of such Accounts Receivable Subsidiary's total assets, as
determined in accordance with GAAP; and (c) shall not, and shall not permit any
of its Subsidiaries to, sell Receivables to an Accounts Receivable Subsidiary if
(i) such Accounts Receivable Subsidiary, pursuant to or within the meaning of
Bankruptcy Law, (A) commences a voluntary case, (B) consents to the entry of an
order for relief against it in an involuntary case, (C) consents to the
appointment of a Custodian of it or for all or substantially all of its property
or (D) makes a general assignment for the benefit of its creditors or (ii) a
court of competent jurisdiction enters an order or decree under any Bankruptcy
Law that (A) is for relief against such Accounts Receivable Subsidiary, (B)
appoints a Custodian of such Accounts Receivable Subsidiary or for all or
substantially all of the property of such Accounts Receivable Subsidiary or (C)
orders the liquidation of such Accounts Receivable Subsidiary.
Section 5.12. FUTURE GUARANTORS.
Stage and SRI shall cause each Restricted Subsidiary (other than
SRI) to promptly execute and deliver to the Trustee a Guaranty Agreement
pursuant to which such Restricted Subsidiary will Guarantee the Indenture
Obligations on the terms and conditions set forth in this Indenture including,
without limitation, pursuant to Articles XII and XIII hereof.
Section 5.13. COMPLIANCE CERTIFICATES.
Each of SRI and Stage shall deliver to the Trustee, within 120 days
after the end of each fiscal year, an Officers' Certificate stating that a
review of the activities of SRI or Stage, as applicable, and its Subsidiaries
during the preceding fiscal year has been made under the supervision of the
signing Officers with a view to determining whether SRI or Stage, as applicable,
has kept, observed, performed and fulfilled its obligations under this
Indenture, and further stating, as to each such Officer signing such Officers'
Certificate, that to the best of his or her knowledge SRI or Stage, as
applicable, has kept, observed, performed and fulfilled each covenant contained
in this Indenture and is not in default in the performance or observance of any
of the terms, provisions and conditions of this Indenture (or, if a Default or
Event of Default
40
shall have occurred, describing all such Defaults or Events of Default of which
he or she may have knowledge and what action each is taking or proposes to take
with respect thereto). Each of SRI and Stage shall also comply with TIA ss.
314(a)(4).
Section 5.14. FURTHER INSTRUMENTS AND ACTS.
Upon request of the Trustee, SRI, Stage and any other Guarantors
will execute and deliver such further instruments and do such further acts as
may be reasonably necessary or proper to carry out more effectively the purpose
of this Indenture.
ARTICLE VI
SUCCESSORS
Section 6.01. WHEN STAGE AND SRI MAY MERGE OR TRANSFER ASSETS.
Neither Stage nor SRI shall consolidate with or merge with or into,
or convey, transfer or lease, in one transaction or a series of transactions,
all or substantially all its properties and assets to any Person, unless: (i)
the resulting, surviving or transferee Person (the "Successor Company"), if
other than Stage or SRI, as the case may be, shall be a Person organized and
existing under the laws of the United States of America, any State thereof or
the District of Columbia and the Successor Company expressly assumes, by an
indenture supplemental thereto, executed and delivered to the Trustee, in form
acceptable to the Trustees, all the obligations of Stage or SRI, as the case may
be, under the Notes and this Indenture; (ii) immediately after giving effect to
such transaction, on a pro forma basis (and treating any Debt which becomes an
obligation of the Successor Company or any Subsidiary as a result of such
transaction as having been Incurred by such Successor Company or such Subsidiary
at the time of such transaction), no Default shall have occurred and be
continuing; (iii) immediately after giving effect to such transaction, on a pro
forma basis, the Successor Company would be able to Incur at least a $1.00 of
additional Debt pursuant to Section 5.04(a); (iv) immediately after giving
effect to such transaction, on a pro forma basis, the Successor Company shall
have Consolidated Net Worth in an amount at least equal to the Consolidated Net
Worth of Stage or SRI, as the case may be, prior to such transaction minus any
costs incurred in connection with such transaction; and (v) Stage or SRI, as the
case may be, shall have delivered to the Trustee an Officers' Certificate and an
Opinion of Counsel, each stating that such consolidation, merger or transfer and
such supplemental indenture (if any) comply with this Indenture. The foregoing
shall not prohibit the consummation of the Acquisition by Stage and SRI on the
terms set forth in the Merger Agreement.
Section 6.02. SUCCESSOR COMPANY SUBSTITUTED.
The Successor Company shall be the successor to Stage or SRI, as the
case may be, and shall succeed to, and be substituted for, and may exercise
every right and power of, Stage or SRI, as the case may be, under the
Indentures, but the predecessor Person in the case of a conveyance, transfer or
lease shall not be released from the obligation to pay the principal of and
interest on the Notes, in the case of SRI, or from the obligations under the
Guaranties, in the case of Stage.
41
Section 6.03. WHEN SUBSIDIARY GUARANTOR MAY MERGE OR TRANSFER ASSETS.
No Subsidiary Guarantor shall, and Stage or SRI, as the case may be,
shall not permit any Subsidiary Guarantor to, consolidate with or merge with or
into, or convey, transfer or lease, in one transaction or a series of
transactions, all or substantially all of its assets to any Person unless: (i)
the resulting, surviving or transferee Person (if not such Subsidiary Guarantor)
shall be a Person organized and existing under the laws of the jurisdiction
under which such Subsidiary Guarantor was organized or under the laws of the
United States of America, or any State thereof or the District of Columbia, and
such Person shall expressly assume, by Guaranty Agreement, in a form
satisfactory to the Trustee, all the obligations of such Subsidiary Guarantor,
if any, under its Guaranty; (ii) immediately after giving effect to such
transaction or transactions on a pro forma basis (and treating any Debt which
becomes an obligation of the resulting, surviving or transferee Person as a
result of such transaction as having been issued by such Person at the time of
such transaction), no Default shall have occurred and be continuing; and (iii)
Stage or SRI, as the case may be, delivers to the Trustee an Officers'
Certificate and Opinion of Counsel, each stating that such consolidation, merger
or transfer and such Guaranty Agreement, if any, comply with the Indenture.
ARTICLE VII
DEFAULTS AND REMEDIES
Section 7.01. EVENTS OF DEFAULT.
Each of the following shall constitute an "EVENT OF DEFAULT":
(a) a default in any payment of interest on any Note when the same
becomes due and payable, and such default continues for a period of 30 days;
(b) a default in the payment of the principal of, or premium, if
any, on any Note when the same becomes due and payable at its Stated Maturity,
upon redemption, upon declaration, upon required repurchase or otherwise;
(c) the failure by Stage, SRI or any Guarantor to comply with its
obligations under Article VI.
(d) the failure by Stage or SRI to comply for 30 days after the
notice specified below with any of its obligations in the covenants described
above under Article IV (other than a failure to purchase Notes) or under Section
5.03, 5.04, 5.05, 5.06, 5.07 (other than a failure to purchase Notes), 5.08,
5.09, 5.10, 5.11 or 5.12;
(e) the failure by Stage, SRI or any Guarantor to comply with any of
its agreements in the Notes or the Indentures (other than those referred to in
(a), (b), (c) or (d) above) and such failure continues for 60 days after the
notice specified below;
(f) a default under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or evidenced any Debt
for money borrowed by Stage or any of its Subsidiaries (or the payment of which
is Guaranteed by Stage or any of its Subsidiaries) whether such Debt or
Guarantee now exists, or is created after the date of the
42
Indentures, which default (i) is caused by failure to pay principal of such Debt
at the final maturity thereof ("PAYMENT DEFAULT") or (ii) results in the
acceleration of such Debt prior to its express maturity and, in each case, the
principal amount of any such Debt, together with the principal amount of any
other such Debt under which there has been a Payment Default or the maturity of
which has been so accelerated, aggregates $15 million or more;
(g) Stage, SRI or any Significant Subsidiary of Stage pursuant to or
within the meaning of any Bankruptcy Law: (1) commences a voluntary case, (2)
consents to the entry of an order for relief against it in an involuntary case,
(3) consents to the appointment of a Custodian of it or for all or substantially
all of its property, or (4) makes a general assignment for the benefit of its
creditors;
(h) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that: (1) is for relief against Stage, SRI or any
Significant Subsidiary of Stage in an involuntary case, (2) appoints a Custodian
of Stage, SRI or any Significant Subsidiary of Stage or for all or any
substantial part of the property of Stage, SRI or any Significant Subsidiary of
Stage, or (3) orders the liquidation or winding up of Stage, SRI or any
Significant Subsidiary of Stage, and the order or decree remains unstayed and in
effect for 60 consecutive days;
(i) any final non-appealable judgment or decree in excess of $15
million is rendered against Stage, SRI or a Significant Subsidiary of Stage and
is not discharged and either an enforcement proceeding has been commenced upon
such judgment or decree or such judgment or decree shall remain undischarged for
a period of 60 days; or
(j) any Guaranty ceases to be in effect (other than in accordance
with the terms of the Indentures) or any Guarantor denies or disaffirms its
Guaranty obligations.
A Default under clause (d) or (e) is not an Event of Default until
the relevant Trustee or the Holders of at least 25% in principal amount of the
Notes notify SRI of the Default and SRI does not cure such Default within the
time specified after receipt of such notice.
SRI shall deliver to the Trustee, within 30 days after the
occurrence thereof, written notice in the form of an Officers' Certificate of
any Event of Default pursuant to clause (c), (d), (e), (f), (g), (h), (i) or (j)
and any event which with the giving of notice or the lapse of time would become
any such Event of Default, its status and what action SRI is taking or proposes
to take in respect thereof.
Section 7.02. ACCELERATION.
If an Event of Default (other than an Event of Default specified in
clause (g) or clause (h) of Section 7.01) occurs and is continuing, the Trustee
by notice to SRI, or the Holders of at least 25% in aggregate principal amount
of the then outstanding Notes by written notice to SRI and the Trustee, may
declare the principal of and accrued but unpaid interest on all the Notes to be
due and payable (collectively, the "DEFAULT AMOUNT"). Upon such a declaration,
the Default Amount shall be due and payable immediately; PROVIDED that if any
Bank Debt shall remain outstanding, such declaration shall not become effective
until three Business Days after notice of such declaration has been given to the
Representative of the holders of the Bank Debt. In case of an Event of Default
specified in clause (g) or clause (h) of Section 7.01, all outstanding Notes
shall IPSO FACTO become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any Holders of the Notes.
The Holders of a majority in aggregate
43
principal amount of the then outstanding Notes by written notice to the Trustee
may on behalf of all of the Holders rescind an acceleration and its consequences
if the rescission would not conflict with any judgment or decree and if all
existing Events of Default (except nonpayment of principal, interest or premium
that has become due solely because of the acceleration) have been cured or
waived. No such rescission shall affect any subsequent or other Default or
impair any right consequent thereto.
If the Default Amount becomes due and payable as a result of an
Event of Default, SRI or, if requested by SRI, the Trustee on SRI's behalf,
shall promptly so notify the holders of Designated Senior Debt or the
Representative of such holders.
Section 7.03. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy to collect the payment of principal, premium, if
any, and interest on the Notes or to enforce the performance of any provision of
the Notes and this Indenture.
The Trustee may maintain a proceeding even if it does not possess
any of the Notes or does not produce any such Notes in the proceeding. A delay
or omission by the Trustee or any Holder of a Note in exercising any right or
remedy accruing upon any Event of Default shall not impair the right or remedy
or constitute a waiver of or acquiescence in such Event of Default. No remedy
shall be exclusive of any other remedy. All remedies shall be cumulative to the
extent permitted by law.
Section 7.04. WAIVER OF PAST DEFAULTS.
Holders of a majority in aggregate principal amount of the Notes
then outstanding by notice to the Trustee may on behalf of the Holders of all of
the Notes waive an existing Default and its consequences, except (i) a Default
in the payment of the principal of, premium, if any, or interest on, the Notes;
or (ii) a Default in respect of a provision that under Section 10.02 cannot be
amended without the consent of each Holder affected thereby. 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 thereto.
Section 7.05. CONTROL BY MAJORITY.
Holders of a majority in principal amount of the Notes then
outstanding may direct the time, method and place of conducting any proceeding
for exercising any remedy available to the Trustee or exercising any trust or
power conferred on the Trustee. However, the Trustee may refuse to follow any
direction that conflicts with law or the terms of this Indenture or if, subject
to Section 8.01, the Trustee reasonably determines that such action, if taken,
would be unduly prejudicial to the rights of other Holders of Notes or would
involve the Trustee in personal liability.
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Section 7.06. LIMITATION ON SUITS.
Except to enforce the right to receive payment of principal,
premium, if any, or interest when due, no Holder of a Note may pursue any remedy
with respect to this Indenture or the Notes, unless:
(i) such Holder has previously given the Trustee notice that an
Event of Default is continuing;
(ii) Holders of at least 25% in principal amount of the Notes then
outstanding have requested the Trustee to pursue the remedy;
(iii) such Holders have offered the Trustee reasonable security or
indemnity against any loss, liability or expense;
(iv) the Trustee has not complied with such request within 60 days
after the receipt thereof and the offer of security or indemnity; and
(v) Holders of a majority in principal amount of the Notes then
outstanding have not given the Trustee a direction inconsistent with such
request within such 60-day period.
A Holder of a Note shall not use this Indenture to prejudice the
rights of another Holder of a Note or to obtain a preference or priority over
another Holder of a Note.
Section 7.07. UNCONDITIONAL RIGHT OF HOLDERS OF NOTES TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of
any Holder of a Note to receive payment of principal, premium, if any, and
interest on such Note, on or after the respective due dates expressed in such
Note, 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 any
such Holder of a Note.
Section 7.08. COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 7.01(a) or Section
7.01(b) occurs and is continuing, the Trustee may recover judgment in its own
name and as trustee of an express trust against SRI for the entire amount then
due and owing, plus the amounts provided for in Section 8.07.
Section 7.09. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee and the Holders of the Notes allowed in any judicial proceedings
relative to Stage, Stage's creditors or Stage's property, and, unless prohibited
by law or applicable regulations, may vote on behalf of the Holders of Notes in
any election of a trustee in bankruptcy or other Person performing similar
functions, and any Custodian in any such judicial proceeding is hereby
authorized by each Holder of a Note to make payments to the Trustee, and, in the
event that the Trustee shall consent to the making of such payments directly to
the Holders of Notes, to pay to the Trustee any amount due to it for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and
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counsel, and any other amounts due to Trustee under Section 8.07. Nothing herein
contained shall be deemed to authorize the Trustee to authorize or consent to or
accept or adopt on behalf of any Holder of a Note any plan of reorganization,
arrangement, adjustment or composition affecting the Notes or the rights of any
Holder of a Note thereof, or to authorize the Trustee to vote in respect of the
claim of any Holder of a Note in any such proceeding.
Section 7.10. PRIORITIES.
If the Trustee collects any money pursuant to this Article VII, it
shall pay out the money in the following order:
(i) FIRST: to the Trustee for amounts due to it under Section 8.07;
(ii) SECOND: to holders of Senior Debt to the extent required by
Article XI;
(iii) THIRD: to Holders of Notes for amounts due and unpaid on the
Notes for principal, premium, if any, and interest, ratably, without
preference or priority of any kind, according to the amounts due and
payable on the Notes for principal, premium, if any, and interest,
respectively; and
(iv) FOURTH: to SRI.
The Trustee may fix a record date and payment date for any payment
to Holders of Notes pursuant to this Section 7.10.
Section 7.11. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as 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, 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 7.11 shall not apply to a suit by the Trustee, a suit by a Holder
of a Note pursuant to Section 7.07, or a suit by Holders of more than 10% in
principal amount of the Notes then outstanding.
Section 7.12. WAIVER OF STAY, EXTENSION AND USURY LAWS.
SRI (to the extent that it may lawfully do so) 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 SRI (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and 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 had been enacted.
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ARTICLE VIII
TRUSTEE
Section 8.01. 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.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by
the express provisions of this Indenture and the Trustee need perform only
those duties that are specifically set forth in this Indenture and no
others; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions furnished
to the Trustee and conforming to the requirements of this Indenture.
However, the Trustee shall examine the certificates and opinions to
determine whether or not they conform to the requirements of this
Indenture.
(c) The Trustee shall not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct or bad faith, except that:
(i) this paragraph does not limit the effect of paragraph (b)
of this Section 8.01;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with
a direction received by it pursuant to Section 7.05.
(d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to paragraph
(a), paragraph (b) and paragraph (c) of this Section 8.01.
(e) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if the Trustee shall have reasonable grounds to believe that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with SRI.
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(g) Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.
(h) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section 8.01 and to the provisions of the TIA.
Section 8.02. RIGHTS OF TRUSTEE.
(a) The Trustee may rely upon any document reasonably 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 any such document.
(b) Before the Trustee acts or refrains from taking any act, the
Trustee may require an Officers' Certificate or an Opinion of Counsel or both.
The Trustee shall not be liable for any action taken or omitted to be taken by
it in good faith in reliance on such Officers' Certificate or such Opinion of
Counsel.
(c) The Trustee may act through agents and shall not be responsible
for the misconduct or negligence of any agent; PROVIDED, HOWEVER, that any such
agent is appointed by the Trustee with due care.
(d) The Trustee shall not be liable for any action taken or omitted
to be taken by it in good faith which it reasonably believes to be authorized or
within its rights or powers conferred upon it by this Indenture; PROVIDED,
HOWEVER, that the Trustee's conduct does not constitute negligence, willful
misconduct or bad faith.
(e) The Trustee may consult with counsel, and the advice or opinion
of counsel with respect to legal matters shall be full and complete
authorization and protection from liability in respect to any action taken,
omitted or suffered by the Trustee hereunder in good faith and in accordance
with the advice or opinion of such counsel.
Section 8.03. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may otherwise deal with SRI, Stage or any or their
Affiliates with the same rights as it would have if the Trustee were not the
Trustee hereunder. However, in the event the Trustee acquires any conflicting
interest in accordance with the TIA it must eliminate such conflicting interest
within 90 days, apply to the SEC for permission to continue as Trustee or
resign. Any Paying Agent, Registrar or co-registrar may do the same with like
rights. The Trustee shall at all times remain subject to Section 8.10 and
Section 8.11.
Section 8.04. TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for and makes no representation
as to the validity or adequacy of this Indenture or the Notes, it shall not be
accountable for SRI's use of the proceeds of the Notes and it shall not be
responsible for any statement contained herein or any statement contained in the
Notes or any other document in connection with the sale of the Notes or pursuant
to this Indenture other than the Trustee's certificates of authentication.
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Section 8.05. NOTICE OF DEFAULT.
If a Default occurs and is continuing and if such Default is known
to the Trustee, the Trustee shall mail to each Holder of a Note a notice of such
Default within 90 days (or such shorter period as may be required by applicable
law) after such Default occurs. Except in the case of a Default in payment of
principal of, premium, if any, or interest on any Note, the Trustee may withhold
the notice if and so long as a committee of its Responsible Officers in good
faith determines that withholding the notice is in the interests of the Holders
of the Notes.
Section 8.06. REPORTS BY TRUSTEE TO HOLDERS OF NOTES.
Within 60 days after each July 15, beginning with July 15 following
the date of this Indenture, the Trustee shall mail to Holders of the Notes a
brief report dated as of such reporting date that complies with TIA ss. 313(a)
to the extent such a report is required by TIA ss. 313(a). The Trustee also
shall comply with TIA ss. 313(b).
A copy of each report at the time of its mailing to the Holders of
Notes shall be mailed to Stage and filed with the SEC and each stock exchange on
which the Notes may be listed. Stage shall promptly notify the Trustee upon the
Notes being listed on any stock exchange and any delisting thereof.
Section 8.07. COMPENSATION AND INDEMNITY.
SRI shall pay to the Trustee from time to time reasonable
compensation for the Trustee's acceptance of this Indenture and its services
hereunder. The Trustee's compensation shall not be limited by any law on
compensation of a trustee of an express trust. SRI shall reimburse the Trustee
for all reasonable out-of-pocket expenses incurred or made by it in the course
of its services hereunder. Such expenses shall include the reasonable
compensation and expenses, disbursements and advances of the Trustee's agents,
counsel, accountants and experts.
SRI shall indemnify the Trustee against any and all loss, liability
or reasonable expense incurred by it in connection with the administration of
this trust and the performance of its duties under this Indenture, except any
such loss, liability or expense attributable to the negligence, willful
misconduct or bad faith of the Trustee.
The Trustee shall notify SRI promptly of any claim for which it may
seek indemnity. Failure by the Trustee to so notify SRI shall not relieve SRI of
its obligations hereunder except to the extent that SRI may be materially
prejudiced by such failure. SRI shall defend the claim and the Trustee shall
cooperate in the defense of such claim. The Trustee may have separate counsel
and SRI shall pay the reasonable fees and expenses of such counsel. SRI need not
reimburse any expense or indemnify against any loss, liability or expense
incurred by the Trustee through the Trustee's own negligence, willful misconduct
or bad faith. SRI need not pay for any settlement made without its consent,
which consent shall not be unreasonably withheld.
SRI's payment obligations under this Section 8.07 shall survive the
satisfaction and discharge of this Indenture.
To secure SRI's payment obligations under this Section 8.07, the
Trustee shall have a Lien prior to the Notes on all money or property held or
collected by the Trustee, except
49
such money or property that is held by it in trust for the benefit of Holders of
Notes to pay principal and interest on particular Notes.
If the Trustee shall incur expenses after the occurrence of a
Default specified in Section 7.01(vii) or Section 7.01(viii), such expenses
(including the reasonable fees and expenses of its agents and counsel) are
intended to constitute expenses of administration under Bankruptcy Law.
Section 8.08. REPLACEMENT OF TRUSTEE.
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 8.08.
The Trustee may resign at any time and be discharged from the trust
hereby created by so notifying SRI in writing. The Holders of Notes of not less
than a majority in principal amount of the Notes then outstanding may remove the
Trustee by so notifying the Trustee and SRI in writing. SRI shall remove the
Trustee if:
(i) the Trustee fails to comply with Section 8.10;
(ii) the Trustee is adjudged bankrupt or insolvent;
(iii) a Custodian or other public officer takes charge of the
Trustee or its property; or
(iv) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason (the Trustee in such event being referred to
herein as the retiring Trustee), SRI 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 Notes may appoint a
successor Trustee to replace the successor Trustee appointed by SRI.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, SRI or the Holders
of Notes of at least 10% in principal amount of the then outstanding Notes may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
If the Trustee after written request by any Holder of a Note who has
been a Holder of a Note for at least six months fails to comply with Section
8.10, such Holder of a Note may petition any court of competent jurisdiction for
the removal of the Trustee and the appointment of a successor Trustee.
Any successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to SRI. Thereupon, the resignation or
removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all of the rights, powers and duties of the Trustee under
this Indenture. The successor Trustee shall mail a notice of its succession to
Holders of the Note. 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 8.07.
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Notwithstanding replacement of the Trustee pursuant to this Section 8.08, SRI's
obligations under Section 8.07 shall continue for the benefit of the retiring
Trustee.
Section 8.09. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business or assets to,
another corporation or banking association, the resulting, surviving or
transferee entity without any further act shall constitute the successor
Trustee; PROVIDED, HOWEVER, that such entity shall be otherwise qualified and
eligible under this Article VIII.
In case at the time such successor or successors by merger,
conversion or consolidation to the Trustee shall succeed to the trusts created
by this Indenture any of the Notes shall have been authenticated but not
delivered, any such successor to the Trustee may adopt the certificate of
authentication of any predecessor Trustee, and deliver such Notes so
authenticated, and in case at that time any of the Notes shall not have been
authenticated, any successor to the Trustee may authenticate such Notes either
in the name of any predecessor hereunder or in the name of the successor to the
Trustee; and in all such cases such certificates shall have the full force which
it is anywhere in the Notes or in this Indenture provided that the certificate
of the Trustee shall have.
Section 8.10. ELIGIBILITY; DISQUALIFICATION.
This Indenture at all times shall have a Trustee which satisfies the
requirements of TIA 310(a). Trustee shall be a corporation organized and doing
business under the laws of the United States of America or of any State thereof
authorized under such laws to exercise corporate trustee power, shall be subject
to supervision or examination by federal or state authority and shall have a
combined capital and surplus of at least $50 million as set forth in its most
recently published annual report of condition. The Trustee shall be subject to
TIA ss. 310(b).
Section 8.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST SRI.
The Trustee shall comply with TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee which has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated therein.
ARTICLE IX
DISCHARGE OF INDENTURE; DEFEASANCE
Section 9.01. DISCHARGE OF LIABILITY ON NOTES; DEFEASANCE.
(a) When (i) SRI delivers to the Trustee all outstanding Notes
(other than Notes replaced pursuant to Section 2.07) for cancellation; or (ii)
all outstanding Notes have become due and payable, whether at maturity or as a
result of the mailing of a notice of redemption pursuant to Article III of this
Indenture and SRI irrevocably deposits with the Trustee funds sufficient to pay
at maturity or upon redemption all outstanding Notes including interest thereon
to maturity or such redemption date (other than Notes replaced pursuant to
Section 2.07), and if in either case SRI pays all other sums payable hereunder
by SRI, then this Indenture shall, subject to Section
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9.01(c), cease to be of further effect. The Trustee shall acknowledge
satisfaction and discharge of this Indenture on demand of SRI accompanied by an
Officers' Certificate and an Opinion of Counsel and at the cost and expense of
SRI.
(b) Subject to Section 9.01(c) and Section 9.02, SRI at any time may
terminate (i) all of Stage's and SRI's obligations under the Notes and this
Indenture ("LEGAL DEFEASANCE"); or (ii) Stage's and SRI's obligations under
Article IV, Section 5.03, Section 5.04, Section 5.05, Section 5.06, Section
5.07, Section 5.08, Section 5.09, Section 5.10, Section 5.11, Section 5.12,
Section 6.01(iii), Section 6.01(iv), Section 7.01(d), Section 7.01(f), Section
7.01(g) (with respect only to Significant Subsidiaries of Stage other than SRI),
Section 7.01(h) (with respect only to Significant Subsidiaries of Stage other
than SRI) and Section 7.01(i) ("COVENANT DEFEASANCE"). SRI may exercise its
legal defeasance option notwithstanding its prior exercise of its covenant
defeasance option.
If SRI exercises its legal defeasance option, payment of the Notes
may not be accelerated because of an Event of Default. If SRI exercises its
covenant defeasance option, payment of the Notes may not be accelerated because
of an Event of Default specified in Section 7.01(d), Section 7.01(f), Section
7.01(g) (with respect only to Significant Subsidiaries of Stage other than SRI),
Section 7.01(h) (with respect only to Significant Subsidiaries of Stage other
than SRI), Section 7.01(i) or the failure of SRI to comply with Sections
6.01(iii) and 6.01(iv). If SRI exercises its legal defeasance option or its
covenant defeasance option, each Guarantor will be released from all of its
obligations with respect to its Guaranties.
Upon satisfaction of the conditions set forth herein and at the
request of SRI, the Trustee shall acknowledge in writing the discharge of those
obligations of SRI terminated thereby.
(c) Notwithstanding clause (a) and clause (b) above, Stage's and
SRI's obligations contained in Section 2.03, Section 2.04, Section 2.05, Section
2.06, Section 2.07, Section 8.07, Section 8.08 and this Article IX shall survive
until the Notes have been paid in full. Thereafter, SRI's obligations contained
in Section 8.07, Section 9.04 and Section 9.05 shall survive.
Section 9.02. CONDITIONS TO DEFEASANCE.
SRI may exercise its legal defeasance option or its covenant
defeasance option only if:
(i) SRI irrevocably deposits in trust with the Trustee money or U.S.
Government Obligations for the payment of principal, premium (if any) and
interest on the Notes to maturity or redemption, as the case may be;
(ii) SRI delivers to the Trustee a certificate from a nationally
recognized firm of independent accountants expressing their opinion that
the payments of principal and interest when due and without reinvestment
on the deposited U.S. Government Obligations plus any deposited money
without investment will provide cash at such times and in such amounts as
will be sufficient to pay principal and interest when due on all the Notes
to maturity or redemption, as the case may be;
52
(iii) 91 days pass after the deposit is made and during the 91-day
period no Default specified in Section 7.01(g) or Section 7.01(h) in
either case with respect to Stage or SRI occurs which is continuing at the
end of the period;
(iv) the deposit does not constitute a default under any other
agreement binding on Stage or SRI and is not prohibited by Article XI;
(v) SRI delivers to the Trustee an Opinion of Counsel to the effect
that the trust resulting from the deposit does not constitute, or is
qualified as, a regulated investment company under the U.S. Investment
Company Act of 1940, as amended;
(vi) in the case of the legal defeasance option, SRI shall have
delivered to the Trustee an Opinion of Counsel in the United States
stating that (1) SRI has received from, or there has been published by,
the Internal Revenue Service a ruling, or (2) since the date of this
Indenture there has been a change in the applicable U.S. Federal income
tax law, in either case to the effect that, and based thereon such Opinion
of Counsel shall confirm that, the Holders of Notes will not recognize
income, gain or loss for U.S. Federal income tax purposes as a result of
such defeasance and will be subject to U.S. Federal income tax on the same
amounts, in the same manner and at the same times as would have been the
case if such defeasance had not occurred;
(vii) in the case of the covenant defeasance option, SRI shall have
delivered to the Trustee an Opinion of Counsel in the United States to the
effect that the Holders of Notes will not recognize income, gain or loss
for U.S. Federal income tax purposes as a result of such covenant
defeasance and will be subject to U.S. Federal income tax on the same
amounts, in the same manner and at the same times as would have been the
case if such covenant defeasance had not occurred; and
(viii)SRI delivers to the Trustee an Officers' Certificate and an
Opinion of Counsel, each stating that all conditions precedent to the
defeasance and discharge of the Notes as contemplated by this Article IX
have been complied with.
Before or after a deposit, SRI may make arrangements satisfactory to
the Trustee for the redemption of the Notes at a future date in accordance with
Article III.
Section 9.03. APPLICATION OF TRUST MONEY.
The Trustee shall hold in trust money or U.S. Government Obligations
deposited with it pursuant to this Article IX. The Trustee 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
of, and premium, if any, and interest on the Notes.
Section 9.04. REPAYMENT TO SRI.
The Trustee and the Paying Agent shall promptly turn over to SRI
upon request any excess money or securities held by them at any time.
Subject to any applicable abandoned property law, the Trustee and
the Paying Agent shall pay to SRI upon request any money held by them for the
payment of principal or
53
interest that remains unclaimed for two years, and, thereafter, Holders of Notes
entitled to the money shall look to SRI for payment as general creditors.
Section 9.05. INDEMNITY FOR GOVERNMENT OBLIGATIONS.
SRI shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against deposited U.S. Government
Obligations or the principal and interest received on such U.S. Government
Obligations.
Section 9.06. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations in accordance with this Article IX 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,
Stage's and SRI's obligations under this Indenture and the Notes shall be
revived and reinstated as though no deposit had occurred pursuant to this
Article IX until such time as the Trustee or Paying Agent is permitted to apply
all such money or U.S. Government Obligations in accordance with this Article
IX; PROVIDED, HOWEVER, that, if SRI has made any payment of interest on or
principal of any of the Notes because of the reinstatement of its obligations,
SRI shall be subrogated to the rights of the Holders of such Notes to receive
such payment from the money or U.S. Government Obligations held by the Trustee
or Paying Agent.
ARTICLE X
AMENDMENT, SUPPLEMENT AND WAIVER
Section 10.01. WITHOUT CONSENT OF HOLDERS OF NOTES.
SRI, Stage and the Trustee may amend or supplement this Indenture or
the Notes without the consent of any Holder of a Note:
(i) to cure any ambiguity, omission, defect or inconsistency;
(ii) to provide for the assumption of the obligations of Stage, SRI
or a Guarantor to the Holders of the Notes pursuant to Article VI;
(iii) to provide for uncertificated Notes in addition to or in place
of certificated Notes (provided that the uncertificated Notes are issued
in registered form for purposes of Section 163(f) of the Code, or in a
manner such that the uncertificated Notes are described in Section
163(f)(2)(B) of the Code);
(iv) to add guarantees with respect to the Notes;
(v) to release a Guaranty, when permitted by the Indenture;
(vi) to secure the Notes;
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(vii) to add to the covenants of Stage and its Subsidiaries
hereunder for the benefit of the Holders of Notes or to surrender any
right or power conferred upon Stage, SRI or any Guarantor;
(viii) to make any change that would not adversely affect the rights
hereunder of any Holder of a Note; or
(ix) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA.
No amendment may be made to any provision of Article XI that would
adversely affect the rights of any holder of Senior Debt then outstanding unless
the holders of such Senior Debt (or their Representative) consent to such
change.
Upon the request of SRI accompanied by resolutions of the Boards of
Directors of Stage and SRI authorizing the execution of any such amended or
supplemental Indenture, and upon receipt by the Trustee of the documents
described in Section 10.06, the Trustee shall join with Stage and SRI in the
execution of any amended or supplemental Indenture authorized or permitted by
the terms of this Indenture and to make any further appropriate agreements and
stipulations which may be contained therein, but the Trustee shall not be
obligated to enter into such amended or supplemental Indenture which affects its
own rights, duties or immunities under this Indenture or otherwise.
After an amendment, supplement or waiver under this Section 10.01
becomes effective, SRI shall mail to the Holders of Notes affected thereby a
notice briefly describing any such amendment, supplement or waiver. Any failure
of SRI to mail such notice, or any defect therein, shall not in any way impair
or affect the validity of any such amended or supplemental Indenture or waiver.
Subject to Section 7.04 and Section 7.07, the Holders of a majority in aggregate
principal amount of the Notes then outstanding may waive compliance by Stage or
SRI in any particular instance with any provision of this Indenture or the
Notes.
Section 10.02. WITH CONSENT OF HOLDERS OF NOTES.
SRI, Stage and the Trustee may amend or supplement this Indenture,
the Notes or any amended or supplemental Indenture with the written consent of
the Holders of Notes of at least a majority in aggregate principal amount of the
Notes then outstanding. However, without the consent of each Holder of a Note
affected, any amendment, supplement or waiver may not:
(i) reduce the amount of Notes the Holders of which must consent to
an amendment;
(ii) reduce the rate of or extend the time for payment of interest
on any Note;
(iii) reduce the principal of or extend the Stated Maturity of any
Note;
(iv) reduce the premium payable upon the redemption of any Note or
change the time at which any Note may be redeemed in accordance with
Article III;
(v) make any Notes payable in money other than that stated in the
Note;
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(vi) impair the right of any Holder of a Note to receive payment of,
principal of and interest on such Holder's Notes on or after the due dates
therefor or to institute suit for the enforcement of any payment on or
with respect to such Holder's Notes;
(vii) make any change in Section 7.04 or Section 7.07 or the second
sentence of this Section 10.02; or
(viii) make any change in any provision of Article XI that would
adversely affect the interests of any Holder of a Note.
Upon the request of SRI accompanied by resolutions of the Boards of
Directors of Stage and SRI authorizing the execution of any such amended or
supplemental Indenture, and upon the filing with the Trustee of evidence
satisfactory with the Trustee of the consent of the Holders of Notes as
aforesaid and upon receipt by the Trustee of the documents described in Section
10.06, the Trustee shall join with Stage and SRI in the execution of such
amended or supplemental Indenture unless such amended or supplemental Indenture
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion, but shall not be
obligated to, enter into such amended or supplemental Indenture.
It shall not be necessary for the consent of the Holders of Notes
under this Section 10.02 to approve the particular form of any proposed
amendment, supplement or waiver, but it shall be sufficient if such consent
approves the substance thereof.
After an amendment, supplement or waiver under this Section 10.02
becomes effective, SRI shall mail to the Holders of Notes affected thereby a
notice briefly describing any such amendment, supplement or waiver. Any failure
of SRI to mail such notice, or any defect therein, shall not in any way impair
or affect the validity of any such amended or supplemental Indenture or waiver.
Subject to Section 7.04 and Section 7.07, the Holders of a majority in aggregate
principal amount of the Notes then outstanding may waive compliance by Stage or
SRI in any particular instance with any provision of this Indenture or the
Notes.
Section 10.03. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this Indenture or the Notes shall
be set forth in an amended or supplemental Indenture that complies with the TIA
as then in effect.
Section 10.04. REVOCATION AND EFFECT OF CONSENTS AND WAIVERS.
Until an amendment, supplement or waiver becomes effective, a
consent to such amendment, supplement or waiver by a Holder of a Note is a
continuing and binding consent by the Holder of a Note and every subsequent
Holder of a Note or portion of a Note that evidences the same Debt as the
consenting Holder's Note, even if a notation of the consent or waiver is not
made on any Note. However, any such Holder of a Note or subsequent Holder of a
Note may revoke the consent as to its Note if the Trustee receives written
notice of revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver shall become effective in
accordance with its terms and thereafter shall bind every Holder of a Note.
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SRI may, but shall not be obligated to, fix a record date for the
purpose of determining the Holders of Notes entitled to give their consent or
take any other action described above or required or permitted to be taken
pursuant to this Indenture. If a record date is fixed, then notwithstanding the
immediately preceding paragraph, such Persons which were Holders of Notes at
such record date (or their duly designated proxies), and only such Persons,
shall be entitled to give such consent or to revoke any consent previously given
or to take any such action, whether or not such Persons continue to be Holders
of Notes after such record date. No such consent shall be valid or effective for
more than 120 days after such record date.
Section 10.05. NOTATION ON OR EXCHANGE OF NOTES.
If an amendment or supplement changes the terms of a Note, the
Trustee may require the Holder of such Note to deliver such Note to the Trustee.
The Trustee may place an appropriate notation on the Note regarding the changed
terms and return it to the Holder of such Note. Alternatively, if SRI or the
Trustee so determines, SRI in exchange for such Note shall issue and the Trustee
shall authenticate a new Note that reflects such changed terms. Failure to make
the appropriate notation or to issue a new Note shall not affect the validity of
such amendment or supplement.
Section 10.06. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall sign any amended or supplemental Indenture
authorized pursuant to this Article X if the amendment or supplement does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may but need not sign it. In signing such amendment or
supplement the Trustee shall be entitled to receive, and (subject to Section
8.01) shall be fully protected in relying upon, an Officer's Certificate and an
Opinion of Counsel stating that such amendment or supplement is authorized or
permitted pursuant to this Indenture.
Section 10.07. PAYMENT FOR CONSENTS.
Neither Stage, SRI, any Affiliate of Stage nor any Subsidiary,
directly or indirectly, pay or cause to be paid any consideration, whether by
way of interest, fee or otherwise, to any Holder of any Note for or as an
inducement to any consent, amendment, supplement or waiver with respect to any
term or provision of this Indenture or the Notes, unless such consideration is
offered to be paid or agreed to be paid to all Holders of Notes that consent,
waive or agree to amend or supplement in the time frame set forth in the
solicitation documents relating to any such consent, waiver or agreement to
amend or supplement.
ARTICLE XI
SUBORDINATION OF NOTES
Section 11.01. NOTES SUBORDINATE TO SENIOR DEBT; NOTES PARI PASSU WITH SENIOR
SUBORDINATED DEBT; NOTES SENIOR TO SUBORDINATED OBLIGATIONS.
SRI covenants and agrees, and each Holder of a Note, by its
acceptance thereof, likewise covenants and agrees, that, to the extent and in
the manner hereinafter set forth in this Article XI, the payment of the
principal of and premium, if any, and interest on and all other
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obligations in respect of each and all of the Notes and this Indenture are
hereby expressly made subordinate and subject in right of payment to the prior
payment in full of all Senior Debt of SRI. All provisions of this Article XI
shall be subject to Section 11.14 hereof. The Notes shall rank PARI PASSU in
right of payment with all Senior Subordinated Debt of SRI. The Notes shall rank
senior in right of payment to all Subordinated Obligations of SRI.
Section 11.02. PAYMENT OVER OF PROCEEDS UPON DISSOLUTION, ETC.
In the event of (i) any insolvency or bankruptcy case or proceeding,
or any receivership, liquidation, reorganization or other similar case or
proceeding in connection therewith, relative to SRI or to its creditors, as
such, or to its assets; or (ii) any liquidation, dissolution or other winding up
of SRI, whether voluntary or involuntary and whether or not involving insolvency
or bankruptcy; or (iii) any assignment for the benefit of creditors or any other
marshalling of assets or liabilities of SRI, then and in any such event
specified in clause (i), clause (ii) or clause (iii) above (each such event, if
any, herein sometimes referred to as a "PROCEEDING") the holders of Senior Debt
of SRI will be first entitled to receive payment in full of all amounts due or
to become due on or in respect of all Senior Debt of SRI, or provision shall be
made for such payment, in cash or cash equivalents or otherwise in a manner
satisfactory to the holders of such Senior Debt before the Holders of the Notes
are entitled to receive any payment or distribution of any kind or character, on
account of principal of (or premium, if any) or interest on or other obligations
in respect of the Notes or on account of any purchase or other acquisition of
Notes by or on behalf of SRI (all such payments, distributions, purchases and
acquisitions herein referred to, individually and collectively, as a "NOTES
PAYMENT"), and to that end the holders of Senior Debt of SRI shall be entitled
to receive, for application to the payment thereof, any Notes Payment which may
be payable or deliverable in respect of the Notes in any such Proceeding.
In the event that, notwithstanding the foregoing provisions of this
Section 11.02, the Trustee or any Holder receives payment or distribution of
assets of SRI of any kind or character, before all the Senior Debt of SRI is
paid in full as provided above, then and in such event, such Notes Payment shall
be received and held in trust for the benefit of the holders of such Senior Debt
and paid over or delivered forthwith to the trustee in bankruptcy, receiver,
liquidating trustee, custodian, assignee, agent or other person making payment
or distribution of assets of SRI for application to the payment of all Senior
Debt of SRI remaining unpaid, to the extent necessary to pay the Senior Debt of
SRI in full, after giving effect to any concurrent payment or distribution to or
for the holders of Senior Debt of SRI.
For purposes of this Article XI only, the words "any payment or
distribution of any kind or character" shall not be deemed to include a payment
or distribution of stock or securities of SRI provided for by a plan of
reorganization or readjustment authorized by an order or decree of a court of
competent jurisdiction in a reorganization proceeding under any applicable
bankruptcy law or of any other corporation provided for by such plan of
reorganization or readjustment which stock or securities are (i) subordinated in
right of payment to all then outstanding Senior Debt of SRI, to at least the
same extent as the Notes are so subordinated as provided in this Article XI,
(ii) do not require any payments of interest or distributions greater than that
payable on the Notes, (iii) have no maturity or scheduled required prepayments,
repayments or redemptions earlier than one year after the scheduled final
maturity of the Bank Debt (giving effect to such reorganization or readjustment)
and (iv) are unsecured; PROVIDED that (1) if a new corporation results from such
reorganization or readjustment, such corporation assumes any Senior Debt of SRI
not paid in full in cash or cash equivalents in connection with
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such reorganization or readjustment; and (2) the rights of the holders of such
Senior Debt are not, without the consent of such holders, altered by such
reorganization or readjustment. The consolidation of SRI with, or the merger of
SRI into, another person or the liquidation or dissolution of SRI following the
conveyance or transfer of all or substantially all of its properties and assets
as an entirety to another person upon the terms and conditions set forth in
Article VI shall not be deemed a Proceeding for the purposes of this Section
11.02 if the person formed by such consolidation or into which SRI is merged or
the person which acquires by conveyance or transfer such properties and assets
as an entirety, as the case may be, shall, as part of such consolidation,
merger, conveyance or transfer, comply with the conditions set forth in Article
VI.
Section 11.03. NO PAYMENT WHEN SENIOR DEBT IN DEFAULT.
In the event that any Senior Payment Default (as defined below)
shall have occurred and be continuing, then SRI may not make any Notes Payment
unless and until such Senior Payment Default shall have been cured or waived or
shall have ceased to exist or all amounts then due and payable in respect of
Designated Senior Debt of SRI shall have been paid in full, or provision shall
have been made for such payment, in cash or cash equivalents or otherwise in a
manner satisfactory to the holders of such Designated Senior Debt. The term
"SENIOR PAYMENT DEFAULT" means any default in the payment of principal of (or
premium, if any) or interest on any Designated Senior Debt of SRI when due,
whether at the maturity thereof or by declaration or acceleration, call for
redemption or otherwise.
In the event that any Senior Nonmonetary Default (as defined below)
shall have occurred and be continuing, then, upon the receipt by SRI and the
Trustee of written notice of such Senior Nonmonetary Default from the
representative of holders of the Designated Senior Debt of SRI to which such
default relates, SRI may not make any Notes Payment for a period (the "PAYMENT
BLOCKAGE PERIOD") commencing on the date SRI and Trustee receive such written
notice (a "BLOCKAGE NOTICE") and ending 179 days after the date of such receipt
of such written notice (or earlier if terminated (i) by written notice to the
Trustee and SRI from the Person that gave such Blockage Notice; (ii) because
such Designated Senior Debt has been repaid in full; or (iii) because such
default is no longer continuing). Notwithstanding the provisions of the
immediately preceding sentence, unless the holders of such Designated Senior
Debt or the representative of such holders shall have accelerated the maturity
of such Designated Senior Debt, SRI may resume payments on the Notes after the
termination of such Payment Blockage Period. In any event, not more than one
Payment Blockage Period may be commenced during any period of 360 consecutive
days; PROVIDED, HOWEVER, that if a Blockage Notice is delivered by holders of
Designated Senior Debt other than the Bank Debt, holders of the Bank Debt shall
not be prohibited from delivering a Blockage Notice during the succeeding
360-day period. For all purposes of this paragraph, except as specifically
provided in the immediately preceding proviso, no Senior Nonmonetary Default
that existed or was continuing on the date of commencement of any blockage
period with respect to the Designated Senior Debt initiating such blockage
period will be, or can be, made the basis for the commencement of a subsequent
blockage period unless such default has been cured or waived for a period of not
less than 90 consecutive days. The term "SENIOR NONMONETARY DEFAULT" means the
occurrence or existence and continuance of any event of default, or of any event
which, after notice or lapse of time (or both), would become an event of
default, under the terms of any instrument pursuant to which any Designated
Senior Debt of SRI is outstanding, permitting (after notice or lapse of time or
both) one or more holders of such Designated Senior Debt (or a trustee or agent
on behalf of the holders thereof) to declare such Senior Debt due and payable
prior to the date on which it should otherwise become due and payable, other
than a Senior Payment Default.
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In the event that, notwithstanding the foregoing, SRI shall make any
Notes Payment to the Trustee or SRI or the Trustee shall make any Notes Payment
to any Holder prohibited by the foregoing provisions of this Section 11.03, then
and in such event, such Notes Payment shall be received and held in trust for
the benefit of and paid over and delivered forthwith to, the holders of the
Senior Debt of SRI remaining unpaid, to the extent necessary to pay in full all
the Senior Debt of SRI.
The provisions of this Section 11.03 shall not apply to any Notes
Payment with respect to which Section 11.02 would be applicable.
Section 11.04. PAYMENT PERMITTED IF NO DEFAULT.
Nothing contained in this Article XI or elsewhere in this Indenture
or in any of the Notes shall prevent (i) SRI, at any time except during the
pendency of any Proceeding referred to in Section 11.02 or under the conditions
described in Section 11.03, from making Notes Payments; or (ii) the application
by the Trustee of any money deposited with it hereunder to Notes Payments, if,
at the time of such application by the Trustee, it did not have knowledge that
such Notes Payment would have been prohibited by the provisions of this Article
XI; PROVIDED that notwithstanding the foregoing, such application shall
otherwise be subject to the provisions of Sections 11.02 and 11.03.
Section 11.05. SUBROGATION TO RIGHTS OF HOLDERS OF SENIOR DEBT.
Subject to the payment in full of all amounts due or to become due
on or in respect of Senior Debt of SRI, or the provision for such payment, in
cash or cash equivalents or otherwise in a manner satisfactory to the holders of
Senior Debt of SRI, the Holders of the Notes shall be subrogated (equally and
ratably with the holders of all Debt of SRI, if any, which by its express terms
is subordinated to Senior Debt of SRI to substantially the same extent as the
Notes are subordinated to the Senior Debt of SRI and is entitled to like rights
of subrogation by reason of any payments or distributions made to holders of
such Senior Debt) to the rights of the holders of such Senior Debt of SRI to
receive payments and distributions of cash, property and securities applicable
to the Senior Debt of SRI until the principal of (and premium, if any) and
interest on the Notes shall be paid in full. For purposes of such subrogation,
no payments or distributions to the holders of the Senior Debt of SRI of any
cash, property or securities to which the Holders of the Notes or the Trustee
would be entitled except for the provisions of this Article XI, and no payments
over pursuant to the provisions of this Article XI to the holders of Senior Debt
of SRI by Holders of the Notes or the Trustee, shall, as among SRI, its
creditors other than holders of its Senior Debt and the Holders of the Notes, be
deemed to be a payment or distribution by SRI to or on account of the Senior
Debt of SRI.
Section 11.06. PROVISIONS SOLELY TO DEFINE RELATIVE RIGHTS.
The provisions of this Article XI are and are intended solely for
the purpose of defining the relative rights of the Holders of Notes on the one
hand and the holders of Senior Debt of SRI on the other hand. Nothing contained
in this Article XI or elsewhere in this Indenture or in the Notes is intended to
or shall (i) impair, as among SRI, its creditors other than holders of its
Senior Debt and the Holders of the Notes, the obligation of SRI, which is
absolute and unconditional, to pay to the Holders of the Notes the principal of
(and premium, if any) and interest on the Notes as and when the same shall
become due and payable in accordance with their terms; or (ii) affect the
relative rights against SRI of the Holders of the Notes and creditors
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of SRI other than the holders of Senior Debt of SRI; or (iii) prevent the
Trustee or the Holder of any Note from exercising all remedies otherwise
permitted by applicable law upon default under this Indenture, subject to the
rights, if any, under this Article XI of the holders of Senior Debt of SRI to
receive cash, property and securities otherwise payable or deliverable to the
Trustee or such Holder.
Section 11.07. TRUSTEE TO EFFECTUATE SUBORDINATION.
Each Holder of a Note by such Holder's acceptance thereof authorizes
and directs the Trustee on such Holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination provided in this
Article XI and appoints the Trustee his attorney-in-fact for any and all such
purposes.
Section 11.08. NO WAIVER OF SUBORDINATION PROVISIONS.
No right of any present or future holder of any Senior Debt of SRI
to enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of SRI or by any
act or failure to act, in good faith, by any such holder, or by any
noncompliance by SRI with the terms, provisions and covenants of this Indenture,
regardless of any knowledge thereof any such holder may have or be otherwise
charged with.
Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Debt of SRI may, at any time and from time to
time, without the consent of or notice to the Trustee or the Holders of the
Notes, without incurring responsibility to the Holders of the Notes and without
impairing or releasing the subordination provided in this Article XI or the
obligations hereunder of the Holders of the Notes to the holders of such Senior
Debt, do any one or more of the following: (i) change the manner, place or terms
of payment or extend the time of payment of, or renew, increase or alter, such
Senior Debt, or otherwise amend or supplement in any manner such Senior Debt or
any instrument evidencing the same or any agreement under which such Senior Debt
is outstanding; (ii) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing such Senior Debt; (iii) release any
person liable in any manner for the payment or collection of such Senior Debt;
and (iv) exercise or refrain from exercising any rights against SRI and any
other person.
Section 11.09. NOTICE TO TRUSTEE.
SRI shall give prompt written notice to the Trustee of any fact
known to SRI which would prohibit the making of any payment to or by the Trustee
in respect of the Notes. Notwithstanding the provisions of this Article XI or
any other provision of this Indenture, the Trustee shall not be charged with
knowledge of the existence of any facts which could prohibit the making of any
payment to or by the Trustee in respect of the Notes, unless and until the
Trustee shall have received written notice thereof specifically referencing this
Article XI from SRI or a holder of Senior Debt of SRI or from any trustee
therefor; and, prior to the receipt of any such written notice, the Trustee,
subject to the provisions of Section 8.01, shall be entitled in all respects to
assume that no such facts exist; PROVIDED, HOWEVER, that if the Trustee shall
not have received the notice provided for in this Section 11.09 at least one
Business Day prior to the date upon which by the terms hereof any money may
became payable for any purpose (including, without limitation, the payment of
the principal of (and premium, if any) or interest on any Note), then, anything
herein contained to the contrary notwithstanding, the Trustee shall have full
power
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and authority to receive such money and to apply the same to the purpose for
which such money was received and shall not be affected by any notice to the
contrary which may be received by it within one Business Day prior to such date;
PROVIDED that notwithstanding the foregoing, receipt by the Holders of such
money shall otherwise be subject to the provisions of Sections 11.02 and 11.03.
Subject to the provisions of Section 8.01, the Trustee shall be
entitled to rely on the delivery to it of a written notice by a person
representing himself to be a holder of Senior Debt of SRI (or a trustee
therefor) to establish that such notice has been given by a holder of Senior
Debt of SRI (or a trustee therefor). In the event that the Trustee determines in
good faith that further evidence is required with respect to the right of any
person as a holder of Senior Debt of SRI to participate in any payment or
distribution pursuant to this Article XI, the Trustee may request each person to
furnish evidence to the reasonable satisfaction of the Trustee as to the amount
of Senior Debt of SRI held by such person, the extent to which such person is
entitled to participate in such payment or distribution and any other facts
pertinent to the rights of such person under this Article XI, and if such
evidence is not furnished, the Trustee may defer any payment to such person
pending judicial determination as to the right of such person to receive such
payment.
Section 11.10. RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATING AGENT.
Upon any payment or distribution of assets of SRI referred to in
this Article XI, the Trustee, subject to the provisions of Section 8.01, and the
Holders of the Notes shall be entitled to rely upon any order or decree entered
by any court of competent jurisdiction in which such Proceeding is pending, or a
certificate of the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee for the benefit of creditors, agent or other person making
such payment or distribution, delivered to the Trustee or to the Holders of
Notes, so long as such order, decree or certificate gives effect to the
provisions of this Article XI, for the purpose of ascertaining the persons
entitled to participate in such payment or distribution, the holders of the
Senior Debt of SRI and other Debt of SRI, the amount thereof or payable thereon,
the amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article XI.
Section 11.11. TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR DEBT.
The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt of SRI and shall not be liable to any such holders if it
shall in good faith mistakenly pay over or distribute to Holders of Notes or to
SRI or to any other person cash, property or securities to which any holders of
Senior Debt of SRI shall be entitled by virtue of this Article XI or otherwise.
With respect to the holders of Senior Debt of SRI, the Trustee undertakes to
perform or to observe only such of its covenants or obligations as are
specifically set forth in this Article XI and no implied covenants or
obligations with respect to holders of Senior Debt of SRI shall be read into
this Indenture against the Trustee.
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Section 11.12. RIGHTS OF TRUSTEE AS HOLDER OF SENIOR DEBT; PRESERVATION OF
TRUSTEE'S RIGHTS.
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article XI with respect to any Senior Debt of SRI which
may at any time be held by it, to the same extent as any other holder of Senior
Debt of SRI, and nothing in this Indenture shall deprive the Trustee of any of
its rights as such holder.
Nothing in this Article XI shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 8.07.
Section 11.13. ARTICLE XI APPLICABLE TO PAYING AGENTS.
In case at any time any Paying Agent other than the Trustee shall
have been appointed by SRI and be then acting hereunder, the term "Trustee" as
used in this Article XI shall in such case (unless the context otherwise
requires) be construed as extending to and including such Paying Agent within
its meaning as fully for all intents and purposes as if such Paying Agent were
named in this Article XI in addition to or in place of the Trustee; PROVIDED,
HOWEVER, that Section 11.12 shall not apply to SRI or any Affiliate of SRI if it
or such Affiliate acts as Paying Agent.
Section 11.14. TRUST MONEYS NOT SUBORDINATED.
Notwithstanding anything contained herein to the contrary, payments
from money or the proceeds of U.S. Government Obligations held in trust under
Article IX by the Trustee for the payment of principal of, and premium, if any,
and interest on the Notes shall not be subordinated to the prior payment of any
Senior Debt or subject to the restrictions on this Article XI, and none of the
Trustee or the Holders shall be obligated to pay over any such amount to SRI or
any holder of Senior Debt of SRI or any other creditor of SRI; PROVIDED that the
deposit of such amounts pursuant to Article IX shall not have violated the terms
of any Senior Debt.
ARTICLE XII
GUARANTIES
Section 12.01. GUARANTIES. Each Guarantor hereby unconditionally and irrevocably
guarantees, jointly and severally, to each Holder and to the Trustee and its
successors and assigns (a) the full and punctual payment of principal of and
interest on the Notes when due, whether at maturity, by acceleration, by
redemption or otherwise, and all other monetary obligations of SRI under this
Indenture and the Notes and (b) the full and punctual performance within
applicable grace periods of all other obligations of SRI under this Indenture
and the Notes (all the foregoing being hereinafter collectively called the
"Indenture Obligations"). Each Guarantor further agrees that the Indenture
Obligations may be extended or renewed, in whole or in part, without notice or
further assent from such Guarantor and that such Guarantor will remain bound
under this Article XII notwithstanding any extension or renewal of any Indenture
Obligation.
Each Guarantor waives presentation to, demand of, payment from and
protest to the Company of any of the Indenture Obligations and also waives
notice of protest for nonpayment. Each Guarantor waives notice of any default
under the Notes or the Indenture
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Obligations. The obligations of each Guarantor hereunder shall not be affected
by (a) the failure of any Holder or the Trustee to assert any claim or demand or
to enforce any right or remedy against the Company or any other Person under
this Indenture, the Notes or any other agreement or otherwise; (b) any extension
or renewal of any thereof; (c) any rescission, waiver, amendment or modification
of any of the terms or provisions of this Indenture, the Notes or any other
agreement; (d) the release of any security held by any Holder or the Trustee for
the Indenture Obligations or any of them; (e) the failure of any Holder or the
Trustee to exercise any right or remedy against any other guarantor of the
Indenture Obligations; or (f) any change in the ownership of such Guarantor.
Each Guarantor further agrees that its Guaranty herein constitutes a
guarantee of payment, performance and compliance when due (and not a guarantee
of collection) and waives any right to require that any resort be had by any
Holder or the Trustee to any security held for payment of the Indenture
Obligations.
Each Guaranty is, to the extent and in the manner set forth in
Article XIII, subordinated and subject in right of payment to the prior payment
in full in cash of all Senior Debt of the Guarantor giving such Guaranty and
each Guaranty is made subject to such provisions of this Indenture.
Except as expressly set forth in Sections 9.01(b), 12.02 and 12.06,
the obligations of each Guarantor hereunder shall not be subject to any
reduction, limitation, impairment or termination for any reason, including any
claim of waiver, release, surrender, alteration or compromise, and shall not be
subject to any defense of setoff, counterclaim, recoupment or termination
whatsoever or by reason of the invalidity, illegality or unenforceability of the
Indenture Obligations or otherwise. Without limiting the generality of the
foregoing, the obligations of each Guarantor herein shall not be discharged or
impaired or otherwise affected by the failure of any Holder or the Trustee to
assert any claim or demand or to enforce any remedy under this Indenture, the
Notes or any other agreement, by any waiver or modification of any thereof, by
any default, failure or delay, willful or otherwise, in the performance of the
obligations, or by any other act or thing or omission or delay to do any other
act or thing which may or might in any manner or to any extent vary the risk of
such Guarantor or would otherwise operate as a discharge of such Guarantor as a
matter of law or equity.
Each Guarantor further agrees that its Guaranty herein shall
continue to be effective or be reinstated, as the case may be, if at any time
payment, or any part thereof, of principal of or interest on any Indenture
Obligation is rescinded or must otherwise be restored by any Holder or the
Trustee upon the bankruptcy or reorganization of SRI or otherwise.
In furtherance of the foregoing and not in limitation of any other
right which any Holder or the Trustee has at law or in equity against any
Guarantor by virtue hereof, upon the failure of SRI to pay the principal of or
interest on any Indenture Obligation when and as the same shall become due,
whether at maturity, by acceleration, by redemption or otherwise, or to perform
or comply with any other Indenture Obligation, each Guarantor hereby promises to
and will, upon receipt of written demand by the Trustee, forthwith pay, or cause
to be paid, in cash, to the Holders or the Trustee an amount equal to the sum of
(i) the unpaid amount of such Indenture Obligations, (ii) accrued and unpaid
interest on such Indenture Obligations (but only to the extent not prohibited by
law) and (iii) all other monetary Indenture Obligations of SRI to the Holders
and the Trustee.
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Each Guarantor agrees that it shall not be entitled to any right of
subrogation in respect of any Indenture Obligations guaranteed hereby until
payment in full of all Indenture Obligations guaranteed hereby and all
obligations to which the guarantee of the Indenture Obligations are subordinated
as provided in Article XIII. Each Guarantor further agrees that, as between it,
on the one hand, and the Holders and the Trustee, on the other hand, (x) the
maturity of the Indenture Obligations guaranteed hereby may be accelerated as
provided in Article VII for the purposes of such Guarantor's Guaranty herein,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the Indenture Obligations guaranteed hereby, and (y)
in the event of any declaration of acceleration of such obligations as provided
in Article VII, such Indenture Obligations (whether or not due and payable)
shall forthwith become due and payable by such Guarantor for the purposes of
this Section.
Each Guarantor also agrees to pay any and all costs and expenses
(including attorneys' fees) incurred by the Trustee or any Holder in enforcing
any rights under this Section.
Section 12.02. LIMITATION ON LIABILITY; CONTRIBUTION. Any term or provision of
this Indenture to the contrary notwithstanding, the maximum, aggregate amount of
the Indenture Obligations guaranteed hereunder by any Subsidiary Guarantor shall
not exceed the maximum amount that can be hereby guaranteed without rendering
this Indenture, as it relates to such Subsidiary Guarantor, voidable under
applicable federal, state or foreign law relating to fraudulent conveyance or
fraudulent transfer or similar laws affecting the rights of creditors generally,
after giving effect to all other contingent and fixed liabilities of such
Subsidiary Guarantor and after giving effect to any collections from or payments
made by or on behalf of any other Subsidiary under its Guaranty or pursuant to
its contribution obligations under this Indenture.
Each Subsidiary Guarantor shall have the right to seek contribution
from any non-paying Subsidiary Guarantor so long as the exercise of such right
does not impair the rights of the Holders under its Guaranty.
Section 12.03. SUCCESSORS AND ASSIGNS. This Article XII shall be binding upon
each Guarantor and its successors and assigns and shall inure to the benefit of
the successors and assigns of the Trustee and the Holders and, in the event of
any transfer or assignment of rights by any Holder or the Trustee, the rights
and privileges conferred upon that party in this Indenture and in the Notes
shall automatically extend to and be vested in such transferee or assignee, all
subject to the terms and conditions of this Indenture.
Section 12.04. NO WAIVER. Neither a failure nor a delay on the part of either
the Trustee or the Holders in exercising any right, power or privilege under
this Article XII shall operate as a waiver thereof, nor shall a single or
partial exercise thereof preclude any other or further exercise of any right,
power or privilege. The rights, remedies and benefits of the Trustee and the
Holders herein expressly specified are cumulative and not exclusive of any other
rights, remedies or benefits which either may have under this Article XII at
law, in equity, by statute or otherwise.
Section 12.05. MODIFICATION. No modification, amendment or waiver of any
provision of this Article XII, nor the consent to any departure by any Guarantor
therefrom, shall in any event be effective unless the same shall be in writing
and signed by the Trustee, and then such waiver or consent shall be effective
only in the specific instance and for the purpose for which given. No notice to
or demand on any Guarantor in any case shall entitle such Guarantor to any other
for further notice or demand in the same, similar or other circumstances.
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Section 12.06. RELEASE OF SUBSIDIARY GUARANTOR. Upon the sale or other
disposition (including by way of consolidation or merger) of a Subsidiary
Guarantor or the sale or disposition of all or substantially all the assets of
such Subsidiary Guarantor (in each case other than to Stage or SRI or an
Affiliate of Stage or SRI) permitted by the Indenture, including any sale
pursuant to foreclosure on a pledge of the stock of such Subsidiary Guarantor
securing the Bank Debt in accordance with the applicable provisions of the
Uniform Commercial Code, such Subsidiary Guarantor shall be deemed released from
all obligations under this Article XII without any further action required on
the part of the Trustee or any Holder. At the request of SRI, the Trustee shall
execute and deliver an appropriate instrument evidencing such release.
ARTICLE XIII
SUBORDINATION OF GUARANTIES
Section 13.01. GUARANTIES SUBORDINATE TO SENIOR DEBT; GUARANTIES PARI PASSU WITH
SENIOR SUBORDINATED DEBT; GUARANTIES SENIOR TO SUBORDINATED
OBLIGATIONS.
Each Guarantor covenants and agrees, and each Holder of a Note, by
its acceptance thereof, likewise covenants and agrees, that, to the extent and
in the manner hereinafter set forth in this Article XIII, the obligations of
such Guarantor hereunder and in respect of the Indenture Obligations (the
"Guarantor Obligations") are hereby expressly made subordinate and subject in
right of payment to the prior payment in full of all Senior Debt of such
Guarantor. All provisions of this Article XIII shall be subject to Section 13.14
hereof. The Guarantor Obligations of a Guarantor shall rank PARI PASSU in right
of payment with all Senior Subordinated Debt of such Guarantor. The Guarantor
Obligations of a Guarantor shall rank senior in right of payment to all
Subordinated Obligations of such Guarantor.
Section 13.02. PAYMENT OVER OF PROCEEDS UPON DISSOLUTION, ETC.
In the event of (i) any insolvency or bankruptcy case or proceeding,
or any receivership, liquidation, reorganization or other similar case or
proceeding in connection therewith, relative to a Guarantor or SRI or to its
creditors, as such, or to its assets; or (ii) any liquidation, dissolution or
other winding up of a Guarantor or SRI, whether voluntary or involuntary and
whether or not involving insolvency or bankruptcy; or (iii) any assignment for
the benefit of creditors or any other marshalling of assets or liabilities of a
Guarantor or SRI, then and in any such event specified in clause (i), clause
(ii) or clause (iii) above (each such event, if any, herein sometimes referred
to as a "GUARANTOR PROCEEDING") the holders of Senior Debt of SRI or such
Guarantor will be first entitled to receive payment in full of all amounts due
or to become due on or in respect of all Senior Debt of SRI and such Guarantor,
or provision shall be made for such payment, in cash or cash equivalents or
otherwise in a manner satisfactory to the holders of such Senior Debt, before
the Holders of the Notes are entitled to receive any payment or distribution of
any kind or character, on account of principal of (or premium, if any) or
interest on or other obligations in respect of the Notes or such Guarantor's
Guarantor Obligations or on account of any purchase or other acquisition of
Notes by or on behalf of such Guarantor (all such payments, distributions,
purchases and acquisitions herein referred to, individually and collectively, as
a "GUARANTY PAYMENT"), and to that end the holders of Senior Debt of SRI and
such Guarantor shall be entitled to receive, for application to the payment
thereof, any Guaranty Payment which may be payable or deliverable in respect of
the Notes in any such Guarantor Proceeding.
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In the event that, notwithstanding the foregoing provisions of this
Section 13.02, the Trustee or any Holder receives payment or distribution of
assets of a Guarantor of any kind or character, before all the Senior Debt of
SRI and such Guarantor is paid in full as provided above, then and in such
event, such Guaranty Payment shall be received and held in trust for the benefit
of the holders of such Senior Debt and paid over or delivered forthwith to the
trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee, agent
or other person making payment or distribution of assets of such Guarantor for
application to the payment of all Senior Debt of such Guarantor remaining
unpaid, to the extent necessary to pay the Senior Debt of SRI and such Guarantor
in full, after giving effect to any concurrent payment or distribution to or for
the holders of Senior Debt of such Guarantor.
For purposes of this Article XIII only, the words "any payment or
distribution of any kind or character" shall not be deemed to include a payment
or distribution of stock or securities of a Guarantor provided for by a plan of
reorganization or readjustment authorized by an order or decree of a court of
competent jurisdiction in a reorganization proceeding under any applicable
bankruptcy law or of any other corporation provided for by such plan of
reorganization or readjustment which stock or securities are (i) subordinated in
right of payment to all then outstanding Senior Debt of such Guarantor, to at
least the same extent as the Guarantor Obligations of such Guarantor are so
subordinated as provided in this Article XIII, (ii) do not require any payments
of interest or distributions greater than that payable on the Notes, (iii) have
no maturity or scheduled required prepayments, repayments or redemptions earlier
than one year after the scheduled final maturity of the Bank Debt (giving effect
to such reorganization or readjustment) and (iv) are unsecured; PROVIDED that
(1) if a new corporation results from such reorganization or readjustment, such
corporation assumes any Senior Debt of such Guarantor not paid in full in cash
or cash equivalents in connection with such reorganization or readjustment; and
(2) the rights of the holders of such Senior Debt are not, without the consent
of such holders, altered by such reorganization or readjustment. The
consolidation of a Guarantor with, or the merger of a Guarantor into, another
person or the liquidation or dissolution of such Guarantor following the
conveyance or transfer of all or substantially all of its properties and assets
as an entirety to another person upon the terms and conditions set forth in
Article VI shall not be deemed a Guarantor Proceeding for the purposes of this
Section 13.02 if the person formed by such consolidation or into which such
Guarantor is merged or the person which acquires by conveyance or transfer such
properties and assets as an entirety, as the case may be, shall, as part of such
consolidation, merger, conveyance or transfer, comply with the conditions set
forth in Article VI.
Section 13.03. NO PAYMENT WHEN SENIOR DEBT IN DEFAULT.
In the event that any Guarantor Senior Payment Default (as defined
below) shall have occurred and be continuing, then the applicable Guarantor may
not make any Guaranty Payment unless and until such Guarantor Senior Payment
Default shall have been cured or waived or shall have ceased to exist or all
amounts then due and payable in respect of Designated Senior Debt of such
Guarantor shall have been paid in full, or provision shall have been made for
such payment, in cash or cash equivalents or otherwise in a manner satisfactory
to the holders of such Designated Senior Debt. The term "GUARANTOR SENIOR
PAYMENT DEFAULT" means any default in the payment of principal of (or premium,
if any) or interest on any Designated Senior Debt of SRI or a Guarantor when
due, whether at the maturity thereof or by declaration or acceleration, call for
redemption or otherwise.
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In the event that any Guarantor Senior Nonmonetary Default (as
defined below) shall have occurred and be continuing, then, upon the receipt by
the applicable Guarantor and the Trustee of written notice of such Guarantor
Senior Nonmonetary Default from the representative of holders of the Designated
Senior Debt to which such default relates, such Guarantor may not make any
Guaranty Payment for a period (the "GUARANTOR PAYMENT BLOCKAGE PERIOD")
commencing on the date the applicable Guarantor and Trustee receive such written
notice (a "GUARANTOR BLOCKAGE NOTICE") and ending 179 days after the date of
such receipt of such written notice (or earlier if terminated (i) by written
notice to the Trustee and the applicable Guarantor from the Person that gave
such Blockage Notice; (ii) because such Designated Senior Debt has been repaid
in full; or (iii) because such default is no longer continuing). Notwithstanding
the provisions of the immediately preceding sentence, unless the holders of such
Designated Senior Debt or the representative of such holders shall have
accelerated the maturity of such Designated Senior Debt, such Guarantor may
resume payments on its Guarantor Obligations after the termination of such
Guarantor Payment Blockage Period. In any event, not more than one Guarantor
Payment Blockage Period may be commenced during any period of 360 consecutive
days; PROVIDED, HOWEVER, that if a Guarantor Blockage Notice is delivered by
holders of Designated Senior Debt other than the Bank Debt, holders of the Bank
Debt shall not be prohibited from delivering a Guarantor Blockage Notice during
the succeeding 360-day period. For all purposes of this paragraph, except as
specifically provided in the immediately preceding proviso, no Senior
Nonmonetary Default that existed or was continuing on the date of commencement
of any blockage period with respect to the Designated Senior Debt initiating
such blockage period will be, or can be, made the basis for the commencement of
a subsequent blockage period unless such default has been cured or waived for a
period of not less than 90 consecutive days. The term "GUARANTOR SENIOR
NONMONETARY DEFAULT" means the occurrence or existence and continuance of any
event of default, or of any event which, after notice or lapse of time (or
both), would become an event of default, under the terms of any instrument
pursuant to which any Designated Senior Debt of SRI or a Guarantor is
outstanding, permitting (after notice or lapse of time or both) one or more
holders of such Designated Senior Debt (or a trustee or agent on behalf of the
holders thereof) to declare such Senior Debt due and payable prior to the date
on which it should otherwise become due and payable, other than a Guarantor
Senior Payment Default.
In the event that, notwithstanding the foregoing, a Guarantor shall
make any Guaranty Payment to the Trustee or a Guarantor or the Trustee shall
make any Guaranty Payment to any Holder prohibited by the foregoing provisions
of this Section 13.03, then and in such event, such Guaranty Payment shall be
received and held in trust for the benefit of and paid over and delivered
forthwith to, the holders of the Senior Debt of such Guarantor remaining unpaid,
to the extent necessary to pay in full all the Senior Debt of such Guarantor.
The provisions of this Section 13.03 shall not apply to any Guaranty
Payment with respect to which Section 13.02 would be applicable.
Section 13.04. PAYMENT PERMITTED IF NO DEFAULT.
Nothing contained in this Article XIII or elsewhere in this
Indenture or in any of the Notes shall prevent (i) a Guarantor, at any time
except during the pendency of any Guarantor Proceeding referred to in Section
13.02 or under the conditions described in Section 13.03, from making Guaranty
Payments; or (ii) the application by the Trustee of any money deposited with it
hereunder to Guaranty Payments, if, at the time of such application by the
Trustee, it did not have knowledge that such Guaranty Payment would have been
prohibited by the provisions of
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this Article XIII; PROVIDED that notwithstanding the foregoing, such application
shall otherwise be subject to the provisions of Sections 13.02 and 13.03.
Section 13.05. SUBROGATION TO RIGHTS OF HOLDERS OF SENIOR DEBT.
Subject to the payment in full of all amounts due or to become due
on or in respect of Senior Debt of a Guarantor, or the provision for such
payment, in cash or cash equivalents or otherwise in a manner satisfactory to
the holders of Senior Debt of such Guarantor, the Holders of the Notes shall be
subrogated (equally and ratably with the holders of all Debt of such Guarantor,
if any, which by its express terms is subordinated to Senior Debt of such
Guarantor to substantially the same extent as the Notes are subordinated to the
Senior Debt of such Guarantor and is entitled to like rights of subrogation by
reason of any payments or distributions made to holders of such Senior Debt) to
the rights of the holders of such Senior Debt of such Guarantor to receive
payments and distributions of cash, property and securities applicable to the
Senior Debt of such Guarantor until the principal of (and premium, if any) and
interest on the Notes shall be paid in full. For purposes of such subrogation,
no payments or distributions to the holders of the Senior Debt of a Guarantor of
any cash, property or securities to which the Holders of the Notes or the
Trustee would be entitled except for the provisions of this Article XIII, and no
payments over pursuant to the provisions of this Article XIII to the holders of
Senior Debt of a Guarantor by Holders of the Notes or the Trustee, shall, as
among such Guarantor, its creditors other than holders of its Senior Debt and
the Holders of the Notes, be deemed to be a payment or distribution by such
Guarantor to or on account of the Senior Debt of such Guarantor.
Section 13.06. PROVISIONS SOLELY TO DEFINE RELATIVE RIGHTS.
The provisions of this Article XIII are and are intended solely for
the purpose of defining the relative rights of the Holders of Notes on the one
hand and the holders of Senior Debt of the Guarantors on the other hand. Nothing
contained in this Article XIII or elsewhere in this Indenture or in the Notes is
intended to or shall (i) impair, as among a Guarantor, its creditors other than
holders of its Senior Debt and the Holders of the Notes, the obligation of such
Guarantor, which is absolute and unconditional, to pay to the Holders of the
Notes its Guarantor Obligations as and when the same shall become due and
payable in accordance with the terms of this Indenture; or (ii) affect the
relative rights against a Guarantor of the Holders of the Notes and creditors of
such Guarantor other than the holders of Senior Debt of such Guarantor; or (iii)
prevent the Trustee or the Holder of any Note from exercising all remedies
otherwise permitted by applicable law upon default under this Indenture, subject
to the rights, if any, under this Article XIII of the holders of Senior Debt of
a Guarantor to receive cash, property and securities otherwise payable or
deliverable to the Trustee or such Holder.
Section 13.07. TRUSTEE TO EFFECTUATE SUBORDINATION.
Each Holder of a Note by such Holder's acceptance thereof authorizes
and directs the Trustee on such Holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination provided in this
Article XIII and appoints the Trustee his attorney-in-fact for any and all such
purposes.
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Section 13.08. NO WAIVER OF SUBORDINATION PROVISIONS.
No right of any present or future holder of any Senior Debt of a
Guarantor to enforce subordination as herein provided shall at any time in any
way be prejudiced or impaired by any act or failure to act on the part of such
Guarantor or by any act or failure to act, in good faith, by any such holder, or
by any noncompliance by such Guarantor with the terms, provisions and covenants
of this Indenture, regardless of any knowledge thereof any such holder may have
or be otherwise charged with.
Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Debt of a Guarantor may, at any time and from
time to time, without the consent of or notice to the Trustee or the Holders of
the Notes, without incurring responsibility to the Holders of the Notes and
without impairing or releasing the subordination provided in this Article XIII
or the obligations hereunder of the Holders of the Notes to the holders of such
Senior Debt, do any one or more of the following: (i) change the manner, place
or terms of payment or extend the time of payment of, or renew, increase or
alter, such Senior Debt, or otherwise amend or supplement in any manner such
Senior Debt or any instrument evidencing the same or any agreement under which
such Senior Debt is outstanding; (ii) sell, exchange, release or otherwise deal
with any property pledged, mortgaged or otherwise securing such Senior Debt;
(iii) release any person liable in any manner for the payment or collection of
such Senior Debt; and (iv) exercise or refrain from exercising any rights
against such Guarantor and any other person.
Section 13.09. NOTICE TO TRUSTEE.
Each Guarantor shall give prompt written notice to the Trustee of
any fact known to such Guarantor which would prohibit the making of any payment
to or by the Trustee in respect of the Notes. Notwithstanding the provisions of
this Article XIII or any other provision of this Indenture, the Trustee shall
not be charged with knowledge of the existence of any facts which could prohibit
the making of any payment to or by the Trustee in respect of the Notes, unless
and until the Trustee shall have received written notice thereof specifically
referencing this Article XIII from a Guarantor or a holder of Senior Debt of
such Guarantor or from any trustee therefor; and, prior to the receipt of any
such written notice, the Trustee, subject to the provisions of Section 8.01,
shall be entitled in all respects to assume that no such facts exist; PROVIDED,
HOWEVER, that if the Trustee shall not have received the notice provided for in
this Section 13.09 at least one Business Day prior to the date upon which by the
terms hereof any money may became payable for any purpose (including, without
limitation, the payment of the principal of (and premium, if any) or interest on
any Note), then, anything herein contained to the contrary notwithstanding, the
Trustee shall have full power and authority to receive such money and to apply
the same to the purpose for which such money was received and shall not be
affected by any notice to the contrary which may be received by it within one
Business Day prior to such date; PROVIDED that notwithstanding the foregoing,
receipt by the Holders of such money shall otherwise be subject to the
provisions of Sections 13.02 and 13.03.
Subject to the provisions of Section 8.01, the Trustee shall be
entitled to rely on the delivery to it of a written notice by a person
representing himself to be a holder of Senior Debt of a Guarantor (or a trustee
therefor) to establish that such notice has been given by a holder of Senior
Debt of such Guarantor (or a trustee therefor). In the event that the Trustee
determines in good faith that further evidence is required with respect to the
right of any person as a holder of Senior Debt of such Guarantor to participate
in any payment or distribution pursuant to this Article XIII, the Trustee may
request each person to furnish evidence to the
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reasonable satisfaction of the Trustee as to the amount of Senior Debt of such
Guarantor held by such person, the extent to which such person is entitled to
participate in such payment or distribution and any other facts pertinent to the
rights of such person under this Article XIII, and if such evidence is not
furnished, the Trustee may defer any payment to such person pending judicial
determination as to the right of such person to receive such payment.
Section 13.10. RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATING AGENT.
Upon any payment or distribution of assets of a Guarantor referred
to in this Article XIII, the Trustee, subject to the provisions of Section 8.01,
and the Holders of the Notes shall be entitled to rely upon any order or decree
entered by any court of competent jurisdiction in which such Guarantor
Proceeding is pending, or a certificate of the trustee in bankruptcy, receiver,
liquidating trustee, custodian, assignee for the benefit of creditors, agent or
other person making such payment or distribution, delivered to the Trustee or to
the Holders of Notes so long as such order, decree or certificate gives effect
to the provisions of this Article XIII, for the purpose of ascertaining the
persons entitled to participate in such payment or distribution, the holders of
the Senior Debt of such Guarantor and other Debt of such Guarantor, the amount
thereof or payable thereon, the amount or amounts paid or distributed thereon
and all other facts pertinent thereto or to this Article XIII.
Section 13.11. TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR DEBT.
The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt of a Guarantor and shall not be liable to any such
holders if it shall in good faith mistakenly pay over or distribute to Holders
of Notes or to such Guarantor or to any other person cash, property or
securities to which any holders of Senior Debt of such Guarantor shall be
entitled by virtue of this Article XIII or otherwise. With respect to the
holders of Senior Debt of such Guarantor, the Trustee undertakes to perform or
to observe only such of its covenants or obligations as are specifically set
forth in this Article XIII and no implied covenants or obligations with respect
to holders of Senior Debt of a Guarantor shall be read into this Indenture
against the Trustee.
Section 13.12. RIGHTS OF TRUSTEE AS HOLDER OF SENIOR DEBT; PRESERVATION OF
TRUSTEE'S RIGHTS.
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article XIII with respect to any Senior Debt of a
Guarantor which may at any time be held by it, to the same extent as any other
holder of Senior Debt of a Guarantor, and nothing in this Indenture shall
deprive the Trustee of any of its rights as such holder.
Nothing in this Article XIII shall apply to claims of, or payments
to, the Trustee under or pursuant to Section 8.07.
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Section 13.13. ARTICLE XIII APPLICABLE TO PAYING AGENTS.
In case at any time any Paying Agent other than the Trustee shall
have been appointed by SRI and be then acting hereunder, the term "Trustee" as
used in this Article XIII shall in such case (unless the context otherwise
requires) be construed as extending to and including such Paying Agent within
its meaning as fully for all intents and purposes as if such Paying Agent were
named in this Article XIII in addition to or in place of the Trustee; PROVIDED,
HOWEVER, that Section 13.12 shall not apply to SRI or any Affiliate of SRI if it
or such Affiliate acts as Paying Agent.
Section 13.14. TRUST MONEYS NOT SUBORDINATED.
Notwithstanding anything contained herein to the contrary, payments
from money or the proceeds of U.S. Government Obligations held in trust under
Article IX by the Trustee for the payment of principal of, and premium, if any,
and interest on the Notes shall not be subordinated to the prior payment of any
Senior Debt or subject to the restrictions on this Article XIII, and none of the
Trustee or the Holders shall be obligated to pay over any such amount to SRI,
any Guarantor or any holder of Senior Debt of a Guarantor or any other creditor
of SRI or a Guarantor; PROVIDED that the deposit of such amounts pursuant to
Article IX shall not have violated the terms of any Senior Debt.
ARTICLE XIV
MISCELLANEOUS
Section 14.01. TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies or conflicts
with the duties imposed by TIA ss. 318(c), such imposed duties shall control.
Section 14.02. NOTICES.
Any notice or communication by SRI, Stage, any Subsidiary Guarantor
or the Trustee to the other is duly given if in writing and delivered in person
or mailed by first class mail (registered or certified, return receipt
requested), telecopier or overnight air courier guaranteeing next day delivery,
to the other's address:
If to SRI or Stage or any Subsidiary Guarantor:
c/o Stage Stores, Inc.
00000 Xxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxx Xxxxxx
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If to the Trustee:
State Street Bank and Trust Company
Two International Place (4th Floor)
Xxxxxx, Xxxxxxxxxxxxx 00000
Telecopier No: (000) 000-0000
Attention: Corporate Trust Department
(Specialty Retailers, Inc.
9% Senior Subordinated
Notes Due 2007)
SRI or the Trustee, by notice each to the other may designate
additional or different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders of
Notes) shall be deemed to have been duly given: at the time delivered by hand,
if personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when answered back, if telexed; when receipt
acknowledged, if telecopied; and the next Business Day after timely delivery to
the courier, if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder of a Note shall be mailed by
first class mail, certified or registered, return receipt requested, or by
overnight air courier guaranteeing next day delivery to its address shown on the
Note Register. Any notice or communication shall also be so mailed to any Person
described in TIA ss. 313(c), to the extent required by the TIA. Failure to mail
a notice or communication to a Holder of a Note or any defect in such notice
shall not affect its sufficiency with respect to other Holders of Notes.
If a notice or communication is mailed in the manner set forth above
within the time prescribed, such notice or communication shall be deemed to be
duly given whether or not the addressee receives it.
If SRI mails a notice or communication to Holders of Notes, it shall
mail a copy to the Trustee and each Agent at the same time.
Section 14.03. COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF NOTES.
Holders of Notes pursuant to TIA ss. 312(b) may communicate with
other Holders of Notes with respect to their rights under this Indenture or the
Notes. SRI and Stage, the Trustee, the Registrar, the Paying Agent and any other
Person shall have the protection of TIA ss. 312(c).
Section 14.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by Stage, SRI or a Guarantor to the
Trustee to take any action under this Indenture, Stage, SRI or such Guarantor,
as the case may be, shall furnish to the Trustee:
(i) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of the signers,
all conditions and covenants, if any, provided for in this Indenture
relating to the proposed action have been satisfied; and
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(ii) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of such counsel,
all conditions and covenants have been satisfied.
Section 14.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a
condition or covenant contained in this Indenture shall include:
(i) a statement that the Person making such certificate or opinion
has read such condition or covenant;
(ii) a statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(iii) a statement that, in the opinion of such Person, he or she has
made such examination or investigation as is necessary to enable him or
her to express an informed opinion as to whether such condition or
covenant has been satisfied; and
(iv) a statement as to whether, in the opinion of such Person. such
condition or covenant has been satisfied.
Section 14.06. RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or at a meeting
of Holders of Notes. The Registrar and Paying Agent may make reasonable rules
and set reasonable requirements for their functions.
Section 14.07. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES,
INCORPORATORS AND STOCKHOLDERS.
No director, officer, employee, incorporator or stockholder of
Stage, SRI or any Guarantor, as such, shall have any liability for any
obligations of Stage, SRI or such Guarantor under the Notes or this Indenture or
for any claim based on, in respect of, or by reason of, such obligations. Each
Holder of a Note by accepting a Note waives and releases all such liability.
Such waiver and release form a part of the consideration for issuance of the
Notes.
Section 14.08. GOVERNING LAW.
THIS INDENTURE AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO
APPLICABLE PRINCIPLES OF CONFLICT OF LAW TO THE EXTENT THAT THE APPLICATION OF
THE LAW OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
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Section 14.09. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret another indenture, loan
or debt agreement of Stage or its Subsidiaries. Any such indenture, loan or debt
agreement may not be used to interpret this Indenture.
Section 14.10. SUCCESSORS.
All agreements of Stage, SRI and the Guarantors contained in this
Indenture and the Notes shall bind such entities and their respective
successors. All agreements of the Trustee in this Indenture shall bind the
Trustee and its successors.
Section 14.11. SEVERABILITY.
In case any provision of this Indenture or the Notes shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
Section 14.12. COUNTERPART ORIGINALS.
The parties may sign any number of copies of this Indenture. Each
such signed copy shall be deemed to be an original, and all of such signed
copies together shall represent one and the same agreement.
Section 14.13. 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 convenience only,
and shall not, for any reason, be deemed to be part of this Indenture and shall
in no way modify or restrict any of the terms or provisions hereof.
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SIGNATURES
SPECIALTY RETAILERS, INC.,
as Issuer
By: /S/ XXXXX XXXXXX
Name: Xxxxx Xxxxxx
Title: Executive Vice President &
Chief Financial Officer
Attest:
/S/ XXXX XXXX
Name: Xxxx Xxxx
Title: Vice President, Financial Planning
STAGE STORES, INC.,
as Guarantor
By: /S/ XXXXX XXXXXX
Name: Xxxxx Xxxxxx
Title: Executive Vice President &
Chief Financial Officer
Attest:
/S/ XXXX XXXX
Name: Xxxx Xxxx
Title: Vice President, Financial Planning
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By: /S/ XXXX XXXXX
Name: Xxxx Xxxxx
Title: Assistant Vice President
Attest:
/S/ XXXXXXXXXX XXXXXX
Name: Xxxxxxxxxx River
Title: Assistant Secretary
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EXHIBIT A
[FORM OF FACE OF NOTE]
SPECIALTY RETAILERS, INC.
[Global Notes Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW
YORK, TO SRI OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND
ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.*
[Restricted Notes Legend]
"THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND UNDER APPLICABLE STATE
SECURITIES LAWS, AND THIS NOTE MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT THE SELLER
OF THIS NOTE MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF
SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF SRI THAT (A) THIS
SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY
(i) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN
A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (ii) IN AN OFFSHORE
TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, (iii)
PURSUANT
--------
* This legend should only be added if the Note is issued in global form.
A-1
TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY
RULE 144 THEREUNDER (IF AVAILABLE) OR (iv) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (i)
THROUGH (iv) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT
HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS NOTE FROM IT OF THE
RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE."
A-2
No. Principal Amount $
CUSIP No. 000000XX0
9% Senior Subordinated Notes Due 2007
SPECIALTY RETAILERS, INC., a Texas corporation, promises to pay to
, or registered assigns, the principal sum of
Dollars on July 15, 2007.
Interest Payment Dates: January 15 and July 15.
Record Dates: January 1 and July 1.
Additional provisions of this Note are set forth on the reverse side
of this Note.
Dated: June 17, 1997
[SEAL] SPECIALTY RETAILERS, INC.
By
Title:
By
Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
STATE STREET BANK AND
TRUST COMPANY,
as Trustee, certifies
that this is one of the
Notes referred to in the
Indenture.
By
Authorized Signatory
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[FORM OF REVERSE SIDE OF NOTE]
9% Senior Subordinated Notes Due 2007
1. INTEREST
SPECIALTY RETAILERS, INC., a Texas corporation (such corporation,
and its successors and assigns under the Indenture hereinafter referred to,
being herein called "SRI"), promises to pay interest on the principal amount of
this Note at the rate per annum shown above; PROVIDED, HOWEVER, that if a
Registration Default (as defined in the Registration Rights Agreement) occurs,
interest will accrue on this security at a rate of 9 1/2% per annum from and
including the date on which any such Registration Default shall occur but
excluding the date on which all Registration Defaults have been cured.
SRI will pay interest semi-annually on January 15 and July 15 of
each year, commencing January 15, 1998. Interest on the Notes will accrue from
the most recent date to which interest has been paid, or, if no interest has
been paid, from June 17, 1997. Interest will be computed on the basis of a
360-day year of twelve 30-day months. SRI shall pay interest on overdue
principal at the rate borne by the Notes.
2. METHOD OF PAYMENT
SRI will pay interest on the Notes (except defaulted interest) to
the Persons who are registered Holders of Notes at the close of business on the
January 1 or July 1 next preceding the interest payment date even if Notes are
cancelled after the record date and on or before the interest payment date.
Holders must surrender Notes to a Paying Agent to collect principal payments.
SRI 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, SRI may pay principal 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, State Street Bank and Trust Company, a Massachusetts
trust company (the "TRUSTEE"), will act as Paying Agent and Registrar. SRI may
appoint and change any Paying Agent, Registrar or co-registrar without notice.
SRI or any of its domestically incorporated Wholly Owned Subsidiaries may act as
Paying Agent, Registrar or co-registrar.
4. INDENTURE
SRI issued the Notes under an Indenture dated as of June 17, 1997
(the "INDENTURE"), between SRI, Stage Stores, Inc. ("Stage") as Guarantor and
the Trustee. The terms of the Notes include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of 1939
(15 U.S.C. xx.xx. 77aaa-77bbbb) as in effect on the date of the Indenture (the
"TIA"). Terms defined in the Indenture and not defined herein have the meanings
ascribed thereto in the Indenture. The Notes are subject to all such terms, and
Holders of Notes are referred to the Indenture and the TIA for a statement of
those terms.
A-4
The Notes are unsecured senior subordinated obligations of SRI
limited to $100,000,000 aggregate principal amount (subject to Section 2.07 of
the Indenture). The Indenture imposes certain limitations on the incurrence of
additional indebtedness by Stage and certain of its Subsidiaries, the payment of
dividends on, and the redemption of, capital stock of Stage and certain of its
Subsidiaries, the making of Investments, restrictions on distributions from
certain Subsidiaries, the use of proceeds from the sale of assets and Subsidiary
stock, transactions with affiliates and certain matters regarding Accounts
Receivable Subsidiaries. The Indenture also restricts the ability of Stage, SRI
and certain of the Subsidiaries of Stage to consolidate or merge with or into,
or to transfer all or substantially all its assets to, another person. All of
these limitations, however, are subject to a number of important qualifications
contained in the Indenture.
5. OPTIONAL REDEMPTION
The Notes will be redeemable, at SRI's option, in whole or in part,
at any time and from time to time on or after July 15, 2002, upon not less than
30 nor more than 60 days' prior notice mailed by first-class mail to each
Holder's registered address, appearing in the Note Register, at the following
redemption prices (expressed in percentages of principal amount at maturity),
plus accrued and unpaid interest to the redemption date (subject to the right of
Holders of record on the relevant record date to receive interest due on the
relevant interest payment date), if redeemed during the 12- month period
commencing on or after July 15 of the years set forth below:
REDEMPTION
YEAR PRICE
2002..............................104.500%
2003..............................103.000%
2004..............................101.500%
2005 and thereafter...............100.000%
In addition, at any time and from time to time prior to July 15,
2000, SRI may redeem in the aggregate up to 35% of the original principal amount
of the Notes with the net cash proceeds of one or more Public Equity Offerings ,
at a redemption price (expressed as a percentage of principal amount) of
109.00%, plus accrued interest to the redemption date (subject to the right of
Holders of record on the relevant record date to receive interest due on the
relevant interest payment date); PROVIDED, HOWEVER, that at least $65,000,000
aggregate principal amount at maturity of the Notes must remain outstanding
after each such redemption.
6. NOTICE OF REDEMPTION
Notice of redemption shall be mailed at least 30 days but not more
than 60 days before the redemption date to each Holder of Notes to be redeemed
at its registered address. Notes in denominations larger than $1,000 may be
redeemed in part but only in whole multiples of $1,000. If money sufficient to
pay the redemption price of and accrued interest on all Notes (or portions
thereof) to be redeemed on the redemption date is deposited with the Paying
Agent on or before the redemption date and certain other conditions are
satisfied, on and after such date interest ceases to accrue on such Notes (or
such portions thereof) called for redemption.
A-5
7. PUT PROVISIONS
Upon a Change of Control, any Holder of Notes will have the right to
require SRI to repurchase all or any part of the Notes of such Holder at a
purchase price in cash equal to 101% of the principal amount of the Notes to be
repurchased plus accrued and unpaid interest (if any) to the date of repurchase
(subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date) as provided in, and
subject to the terms of, the Indenture.
8. SENIOR SUBORDINATED NOTE GUARANTIES
As provided in the Indenture and subject to certain limitations
therein set forth, the obligations of SRI under the Indenture and this Note are
guaranteed on a senior subordinated basis by Stage and may in the future be
guaranteed on a senior subordinated basis by certain Subsidiaries of Stage.
9. SUBORDINATION
The Notes and the Guaranties are subordinated to Senior Debt. To the
extent provided in the Indenture, Senior Debt must be paid before the Notes may
be paid. SRI and each Guarantor agrees, and each Holder of a Note by accepting a
Note agrees, to the subordination provisions contained in the Indenture and
authorizes the Trustee to give effect to such subordination provisions and
appoints the Trustee as attorney-in-fact for such purpose.
10. DENOMINATIONS; TRANSFER; EXCHANGE
The Notes are in registered form without coupons in denominations of
$1,000 and integral multiples of $1,000. Holders of Notes may transfer or
exchange Notes in accordance with the Indenture. The Registrar may require a
Holder of a Note, among other things, to furnish appropriate endorsements or
transfer documents and to pay any taxes and fees required by law or permitted by
the Indenture. The Registrar need not register the transfer of or exchange any
Note selected for redemption (except, in the case of a Note to be redeemed in
part, the portion of the Note not to be redeemed) or any Notes for a period of
15 days before a selection of Notes to be redeemed or 15 days before an interest
payment date.
11. PERSONS DEEMED OWNERS
The registered Holder of this Note may be treated as the sole owner
of such Note for all purposes.
12. UNCLAIMED MONEY
Subject to applicable abandoned property law, if money for the
payment of principal or interest remains unclaimed for two years, the Trustee or
Paying Agent shall pay the money back to SRI at its request. After any such
payment, Holders entitled to the money must look only to SRI and not to the
Trustee or Paying Agent for payment.
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13. DISCHARGE AND DEFEASANCE
Subject to certain conditions, SRI at any time may terminate some or
all of its obligations under the Notes and the Indenture if SRI deposits with
the Trustee money or U.S. Government Obligations for the payment of principal
and interest on the Notes to redemption or maturity, as the case may be.
14. AMENDMENT; WAIVER
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Notes may be amended with the written consent of the Holders of
at least a majority in principal amount outstanding of the Notes; and (ii) any
default or compliance with any provision may be waived with the written consent
of the Holders of a majority in principal amount of the Notes then outstanding.
Subject to certain exceptions set forth in the Indenture, without the consent of
any Holder of a Note, SRI, Stage and the Trustee may amend the Indenture or the
Notes to cure any ambiguity, omission, defect or inconsistency, or to comply
with Article VI of the Indenture, or to provide for uncertificated Notes in
addition to or in place of certificated Notes, or to add guarantees with respect
to the Notes or add additional covenants or surrender rights and powers
conferred on Stage, SRI or any Guarantor, or to release a Guaranty, when
permitted by the Indenture, or to secure the Notes, or to make any change that
would not adversely affect the rights of any Holder of a Note or to comply with
requirements of the SEC in connection with the qualification of the Indenture
under the TIA.
15. DEFAULTS AND REMEDIES
Under the Indenture, Events of Default include (i) default for 30
days in payment of interest; (ii) default in payment of principal or premium, if
any, on the Notes at maturity, upon redemption, upon declaration, upon required
repurchase or otherwise; (iii) failure by Stage, SRI or any Guarantor to comply
with other covenants in the Indenture or the Notes, in certain cases subject to
notice and lapse of time; (iv) certain accelerations (including failure to pay
at final maturity) of other Debt of Stage or any of its Subsidiaries if the
amount accelerated (or so unpaid) aggregates $15 million or more; (v) certain
events of bankruptcy or insolvency with respect to Stage, SRI or any Significant
Subsidiary of Stage; (vi) certain judgments or decrees for the payment of money
in excess of $15 million; and (vii) certain events with respect to the
Guaranties of the Notes by Stage and certain Subsidiaries of Stage. If an Event
of Default occurs and is continuing, the Trustee or the Holders of at least 25%
in aggregate principal amount of the Notes then outstanding may declare the
principal of and accrued but unpaid interest on all the Notes to be due and
payable immediately; PROVIDED that if any Bank Debt remains outstanding, such
declaration will not become effective until three Business Days after notice
thereof has been given to the representative of the holders of the Bank Debt.
Certain events of bankruptcy or insolvency are Events of Default which will
result in the Notes being due and payable immediately upon the occurrence of
such Events of Default.
Holders of Notes may not enforce the Indenture or the Notes except
as provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Notes unless it receives reasonable indemnity or security. Subject to
certain limitations, Holders of a majority in principal amount of the Notes may
direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Holders of Notes notice of any
A-7
continuing Default (except a Default in payment of principal or interest) if it
determines that withholding such notice is in the interest of the Holders of
Notes.
16. TRUSTEE DEALINGS WITH SRI, STAGE AND THEIR AFFILIATES
Subject to certain limitations imposed by the TIA, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Notes and may otherwise deal with and collect obligations owed to it
by SRI or their Affiliates and may otherwise deal with SRI, Stage or their
Affiliates with the same rights it would have if it were not Trustee.
17. NO RECOURSE AGAINST OTHERS
A director, officer, employee or stockholder, as such, of SRI, Stage
or any Guarantor or the Trustee shall not have any liability for any obligations
of SRI, Stage or any Guarantor under the Notes or the Indenture or for any claim
based on, in respect of or by reason of such obligations. By accepting a Note,
each Holder of a Note waives and releases all such liability. The waiver and
release are part of the consideration for the issue of the Notes.
18. AUTHENTICATION
This Note shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent) manually signs the certificate of
authentication on the face of this Note.
19. ABBREVIATIONS
Customary abbreviations may be used in the name of a Holder of a
Note or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by
the entireties), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
20. HOLDERS' COMPLIANCE WITH REGISTRATION RIGHTS AGREEMENT
Each Holder of a Note, by acceptance hereof, acknowledges and agrees
to the provisions of the Registration Rights Agreement, including, without
limitation, the obligations of the Holders with respect to a registration and
the indemnification of the Company to the extent provided therein.
21. GOVERNING LAW
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES
OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION WOULD BE REQUIRED THEREBY.
22. CUSIP NUMBERS
A-8
Pursuant to the recommendation promulgated by the Committee on
Uniform Security Identification Procedures SRI has caused CUSIP numbers to be
printed on the Notes and has directed the Trustee to use such CUSIP numbers in
notices of redemption as a convenience to Holders of Notes. No representation is
made as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
--------------------------
SRI will furnish to any Holder of a Note upon written request and
without charge to such Holder of a Note a copy of the Indenture which contains
the text of this Note in larger type. Requests may be made to:
Specialty Retailers, Inc.
c/o Stage Stores, Inc.
00000 Xxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxxx Xxxxxx
A-9
================================================================================
ASSIGNMENT FORM
To assign this Note, complete the form below:
I or we assign and transfer this Note to:
[PRINT OR TYPE ASSIGNEE'S NAME, ADDRESS AND ZIP CODE]
[INSERT ASSIGNEE'S SOC. SEC. OR TAX I.D. NO. ]
and irrevocably appoint ___________________ agent to transfer this Note on
the books of SRI. The agent may substitute another to act for him.
================================================================================
Date: Your Signature:
================================================================================
Sign exactly as your name appears on the face of this Note.
Signature Guarantee:
________________________________________________
[Signature must be guaranteed by an Eligible Guarantor
Institution (bank, stockbroker, savings and loan
association or credit union) with membership in an
approved signature guarantee medallion program pursuant
to Securities and Exchange Commission Rule 17Ad-15.]
A-10
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION
OF TRANSFER OF RESTRICTED NOTES
This certificate relates to $_________ principal amount of Notes held in (check
applicable space) ____ book-entry or _____ definitive form by the undersigned.
The undersigned (check one box below):
| | has requested the Trustee by written order to deliver in exchange for its
beneficial interest in the Global Note held by the Depository a Note or
Notes in definitive, registered form of authorized denominations and an
aggregate principal amount equal to its beneficial interest in such Global
Note (or the portion thereof indicated above); or
| | has requested the Trustee by written order to exchange or register the
transfer of a Note or Notes.
The undersigned confirms that such Notes are being:
CHECK ONE BOX BELOW:
(1) | | acquired for the undersigned's own account, without
Transfer (in satisfaction of Section 2.06(a)(ii)(A) of the
Indenture); or
(2) | | transferred to SRI; or
(3) | | transferred pursuant to and in compliance with Rule 144A
under the Securities Act of 1933, as amended; or
(4) | | transferred pursuant to and in compliance with Regulation
S under the Securities Act of 1933, as amended; or
(5) | | transferred pursuant to and in compliance with Rule 144
under the Securities Act of 1933, as amended; or
(6) | | transferred pursuant to an effective registration
statement under the Securities Act of 1933, as amended.
Unless one of the boxes is checked, the Trustee will refuse to register any of
the Notes evidenced by this certificate in the name of any person other than the
registered holder thereof; PROVIDED, HOWEVER, that if box (2), (3) or (4) is
checked, SRI or the Trustee may require evidence reasonably satisfactory to them
as to the compliance with the restrictions set forth in the legend on the face
of this Note.
----------------------------
Signature
A-11
Signature Guarantee:
----------------------------------------------
[Signature must be guaranteed by an Eligible Guarantor
Institution (bank, stockbroker, savings and loan
association or credit union) with membership in an
approved signature guarantee medallion program
pursuant to Securities and Exchange Commission Rule
17Ad-15.]
A-12
OPTION OF HOLDER OF NOTE TO ELECT PURCHASE
If you elect to have this Note purchased by SRI pursuant to Article
IV or Section 5.07 of the Indenture, check the box:
[ ]
If you elect to have only part of this Note purchased by SRI
pursuant to Article IV or Section 5.07 of the Indenture, state the amount:
$
Date: Your Signature:
(Sign exactly as your name
appears on the face of the
Note)
Signature Guarantee:
[Signature must be guaranteed by an Eligible Guarantor
Institution (bank, stockbroker, savings and loan association
or credit union) with membership in an approved signature
guarantee medallion program pursuant to Securities and
Exchange Commission Rule 17Ad-15.]
A-13
[TO BE ATTACHED TO GLOBAL NOTES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE
The following increases or decreases in this Global Note have been
made:
AMOUNT OF DECREASE IN AMOUNT OF INCREASE IN PRINCIPAL AMOUNT OF THIS SIGNATURE OF AUTHORIZED
DATE OF PRINCIPAL AMOUNT OF THIS PRINCIPAL AMOUNT OF THIS GLOBAL NOTE FOLLOWING SIGNATORY OF TRUSTEE OR NOTES
EXCHANGE GLOBAL NOTE GLOBAL NOTE SUCH DECREASE OR INCREASE CUSTODIAN
A-14
EXHIBIT B
[FORM OF FACE OF EXCHANGE NOTE AND
PRIVATE EXCHANGE NOTE]
*
**
SPECIALTY RETAILERS, INC.
No. $
CUSIP:
9% Senior Subordinated Notes Due 2007
Specialty Retailers, Inc., a Texas corporation, promises to pay to
or registered assigns, the principal sum of Dollars on
July 15, 2007.
Interest Payment Dates: January 15 and July 15.
Record Dates: January 1 and July 1.
Additional provisions of this Note are set forth on the other side
of this Note.
SPECIALTY RETAILERS, INC.
by
Dated: _________________
[Seal]
----------------------------
Title:
----------------------------
Title
------------------------
* If the Note is to be issued in global form add the Global Notes Legend
from Exhibit A and the attachment to Exhibit A captioned "[TO BE ATTACHED TO
GLOBAL NOTES] - SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE".
** If the Note is a Private Exchange Note issued in a Private Exchange to
the Initial Purchasers holding an unsold portion of its initial allotment, add
the restricted securities legend from Exhibit A and include the "Certificate to
be Delivered upon Exchange or Registration of Transfer of Restricted Notes" from
Exhibit A.
B-1
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
STATE STREET BANK AND
TRUST COMPANY,
as Trustee, certifies
that this is one of the
Notes referred to
in the Indenture.
by
--------------------
Authorized Signatory
B-2
[FORM OF REVERSE SIDE OF NOTE]
9% Senior Subordinated Notes Due 2007
1. INTEREST
SPECIALTY RETAILERS, INC., a Texas corporation (such
corporation, and its successors and assigns under the Indenture hereinafter
referred to, being herein called "SRI"), promises to pay interest on the
principal amount of this Note at the rate per annum shown above PROVIDED,
HOWEVER, that if a Registration Default (as defined in the Registration Rights
Agreement) occurs, interest will accrue on this security at a rate of 9 1/2% per
annum form and including the date on which any such Registration Default shall
occur but excluding the date on which all Registration Defaults have been cured.
SRI will pay interest semi-annually on January 15 and July 15 of
each year, commencing January 15, 1998. Interest on the Notes will accrue from
the most recent date to which interest has been paid, or, if no interest has
been paid, from June 17, 1997. Interest will be computed on the basis of a
360-day year of twelve 30-day months. SRI shall pay interest on overdue
principal at the rate borne by the Notes.
2. METHOD OF PAYMENT
SRI will pay interest on the Notes (except defaulted interest) to
the Persons who are registered Holders of Notes at the close of business on the
January 1 or July 1 next preceding the interest payment date even if Notes are
cancelled after the record date and on or before the interest payment date.
Holders must surrender Notes to a Paying Agent to collect principal payments.
SRI 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, SRI may pay principal 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, State Street Bank and Trust Company, a Massachusetts
trust company (the "TRUSTEE"), will act as Paying Agent and Registrar. SRI may
appoint and change any Paying Agent, Registrar or co-registrar without notice.
SRI or any of its domestically incorporated Wholly Owned Subsidiaries may act as
Paying Agent, Registrar or co-registrar.
4. INDENTURE
SRI issued the Notes under an Indenture dated as of June 17, 1997
(the "INDENTURE"), between SRI, Stage Stores, Inc. ("Stage") as Guarantor and
the Trustee. The terms of the Notes include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of 1939
(15 U.S.C. xx.xx. 77aaa- 77bbbb) as in effect on the date of the Indenture (the
"TIA"). Terms defined in the Indenture and not defined herein have the meanings
ascribed thereto in the
B-3
Indenture. The Notes are subject to all such terms, and Holders of Notes are
referred to the Indenture and the TIA for a statement of those terms.
The Notes are unsecured senior subordinated obligations of SRI
limited to $100,000,000 aggregate principal amount (subject to Section 2.07 of
the Indenture). The Indenture imposes certain limitations on the incurrence of
additional indebtedness by Stage and certain of its subsidiaries, the payment of
dividends on, and the redemption of, capital stock of Stage and certain of its
Subsidiaries, the making of Investments, restrictions on distributions from
certain Subsidiaries, the use of proceeds from the sale of assets and Subsidiary
stock, transactions with affiliates and certain matters regarding Accounts
Receivable Subsidiaries. The Indenture also restricts the ability of Stage, SRI
and certain of the Subsidiaries of Stage to consolidate or merge with or into,
or to transfer all or substantially all its assets to, another person. All of
these limitations, however, are subject to a number of important qualifications
contained in the Indenture.
5. OPTIONAL REDEMPTION
The Notes will be redeemable, at SRI's option, in whole or in part,
at any time and from time to time on or after July 15, 2002, upon not less than
30 nor more than 60 days' prior notice mailed by first-class mail to each
Holder's registered address appearing in the Note Register, at the following
redemption prices (expressed in percentages of principal amount at maturity),
plus accrued and unpaid interest to the redemption date (subject to the right of
Holders of record on the relevant record date to receive interest due on the
relevant interest payment date), if redeemed during the 12-month period
commencing on or after July 15 of the years set forth below:
REDEMPTION
YEAR PRICE
---- -----
2002.............................. 104.500%
2003.............................. 103.000%
2004.............................. 101.500%
2005 and thereafter............... 100.000%
In addition, at any time and from time to time prior to July 15,
2000, SRI may redeem in the aggregate up to 35% of the original principal amount
of the Notes with the net cash proceeds of one or more Public Equity Offerings,
at a redemption price (expressed as a percentage of principal amount) of
109.00%, plus accrued and unpaid interest, if any, to the redemption date
(subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date); PROVIDED, HOWEVER,
that at least $65,000,000 aggregate principal amount at maturity of the Notes
must remain outstanding after each such redemption.
6. NOTICE OF REDEMPTION
Notice of redemption shall be mailed at least 30 days but not more
than 60 days before the redemption date to each Holder of Notes to be redeemed
at its registered address. Notes in denominations larger than $1,000 may be
redeemed in
B-4
part but only in whole multiples of $1,000. If money sufficient to pay the
redemption price of and accrued interest on all Notes (or portions thereof) to
be redeemed on the redemption date is deposited with the Paying Agent on or
before the redemption date and certain other conditions are satisfied, on and
after such date interest ceases to accrue on such Notes (or such portions
thereof) called for redemption.
7. PUT PROVISIONS
Upon a Change of Control, any Holder of Notes will have the right to
require SRI to repurchase all or any part of the Notes of such Holder at a
purchase price in cash equal to 101% of the principal amount of the Notes to be
repurchased plus accrued and unpaid interest (if any) to the date of repurchase
(subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date) as provided in, and
subject to the terms of, the Indenture.
8. SENIOR SUBORDINATED NOTE GUARANTIES
As provided in the Indenture and subject to certain limitations
therein set forth, the obligations of SRI under the Indenture and this Note are
guaranteed on a senior subordinated basis by Stage and may in the future be
guaranteed on a senior subordinated basis by certain Subsidiaries of Stage.
9. SUBORDINATION
The Notes and the Guaranties are subordinated to Senior Debt. To the
extent provided in the Indenture, Senior Debt must be paid before the Notes may
be paid. SRI and each Guarantor agrees, and each Holder of a Note by accepting a
Note agrees, to the subordination provisions contained in the Indenture and
authorizes the Trustee to give effect to such subordination provisions and
appoints the Trustee as attorney-in-fact for such purpose.
10. DENOMINATIONS; TRANSFER; EXCHANGE
The Notes are in registered form without coupons in denominations of
$1,000 and integral multiples of $1,000. Holders of Notes may transfer or
exchange Notes in accordance with the Indenture. The Registrar may require a
Holder of a Note, among other things, to furnish appropriate endorsements or
transfer documents and to pay any taxes and fees required by law or permitted by
the Indenture. The Registrar need not register the transfer of or exchange any
Note selected for redemption (except, in the case of a Note to be redeemed in
part, the portion of the Note not to be redeemed) or any Notes for a period of
15 days before a selection of Notes to be redeemed or 15 days before an interest
payment date.
11. PERSONS DEEMED OWNERS
The registered Holder of this Note may be treated as the sole owner
of such Note for all purposes.
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12. UNCLAIMED MONEY
Subject to applicable abandoned property law, if money for the
payment of principal or interest remains unclaimed for two years, the Trustee or
Paying Agent shall pay the money back to SRI at its request. After any such
payment, Holders entitled to the money must look only to SRI and not to the
Trustee or Paying Agent for payment.
13. DISCHARGE AND DEFEASANCE
Subject to certain conditions, SRI at any time may terminate some or
all of its obligations under the Notes and the Indenture if SRI deposits with
the Trustee money or U.S. Government Obligations for the payment of principal
and interest on the Notes to redemption or maturity, as the case may be.
14. AMENDMENT; WAIVER
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Notes may be amended with the written consent of the Holders of
at least a majority in principal amount outstanding of the Notes; and (ii) any
default or compliance with any provision may be waived with the written consent
of the Holders of a majority in principal amount of the Notes then outstanding.
Subject to certain exceptions set forth in the Indenture, without the consent of
any Holder of a Note, SRI, Stage and the Trustee may amend the Indenture or the
Notes to cure any ambiguity, omission, defect or inconsistency, or to comply
with Article VI of the Indenture, or to provide for uncertificated Notes in
addition to or in place of certificated Notes, or to add guarantees with respect
to the Notes or add additional covenants or surrender rights and powers
conferred on Stage, SRI or any Guarantor, or to release a Guaranty, when
permitted by the Indenture, or to secure the Notes, or to make any change that
would not adversely affect the rights of any Holder of a Note or to comply with
requirements of the SEC in connection with the qualification of the Indenture
under the TIA.
15. DEFAULTS AND REMEDIES
Under the Indenture, Events of Default include (i) default for 30
days in payment of interest; (ii) default in payment of principal or premium, if
any, on the Notes at maturity, upon redemption, upon declaration, upon required
repurchase or otherwise; (iii) failure by SRI to comply with other covenants in
the Indenture or the Notes, in certain cases subject to notice and lapse of
time; (iv) certain accelerations (including failure to pay final maturity) of
other Debt of Stage or any of its Subsidiaries if the amount accelerated (or so
unpaid) aggregates $15 million or more; (v) certain events of bankruptcy or
insolvency with respect to Stage, SRI or any Significant Subsidiary of Stage;
(vi) certain judgments or decrees for the payment of money in excess of $15
million; and (vii) certain events with respect to the Guaranties of the Notes by
Stage and certain Subsidiaries of Stage. If an Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in aggregate principal
amount of the Notes then outstanding may declare the principal of and accrued
but unpaid interest on all the Notes to be due and payable immediately; PROVIDED
that if any Bank Debt remains outstanding, such declaration will not become
effective until
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three Business Days after notice thereof has been given to the representative of
the holders of the Bank Debt. Certain events of bankruptcy or insolvency are
Events of Default which will result in the Notes being due and payable
immediately upon the occurrence of such Events of Default.
Holders of Notes may not enforce the Indenture or the Notes except
as provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Notes unless it receives reasonable indemnity or security. Subject to
certain limitations, Holders of a majority in principal amount of the Notes may
direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Holders of Notes notice of any continuing Default (except a
Default in payment of principal or interest) if it determines that withholding
such notice is in the interest of the Holders of Notes.
16. TRUSTEE DEALINGS WITH SRI, STAGE AND THEIR AFFILIATE
Subject to certain limitations imposed by the TIA, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Notes and may otherwise deal with and collect obligations owed to it
by SRI, Stage or their Affiliates and may otherwise deal with SRI, Stage or
their Affiliates with the same rights it would have if it were not Trustee.
17. NO RECOURSE AGAINST OTHERS
A director, officer, employee or stockholder, as such, of SRI, Stage
or any Guarantor or the Trustee shall not have any liability for any obligations
of SRI, Stage or any Guarantor under the Notes or the Indenture or for any claim
based on, in respect of or by reason of such obligations. By accepting a Note,
each Holder of a Note waives and releases all such liability. The waiver and
release are part of the consideration for the issue of the Notes.
18. AUTHENTICATION
This Note shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent) manually signs the certificate of
authentication on the face of this Note.
19. ABBREVIATIONS
Customary abbreviations may be used in the name of a Holder of a
Note or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by
the entireties), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
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20. HOLDERS' COMPLIANCE WITH REGISTRATION RIGHTS AGREEMENT
Each Holder of a Note, by acceptance hereof, acknowledges and agrees
to the provisions of the Registration Rights Agreement, including, without
limitation, the obligations of the Holders with respect to a registration and
the indemnification of the Company to the extent provided therein.
21. GOVERNING LAW
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES
OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION WOULD BE REQUIRED THEREBY.
22. CUSIP NUMBERS
Pursuant to the recommendation promulgated by the Committee on
Uniform Security Identification Procedures SRI has caused CUSIP numbers to be
printed on the Notes and has directed the Trustee to use such CUSIP numbers in
notices of redemption as a convenience to Holders of Notes. No representation is
made as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
--------------------------
SRI will furnish to any Holder of a Note upon written request and
without charge to such Holder of a Note a copy of the Indenture which contains
the text of this Note in larger type. Requests may be made to:
Specialty Retailers, Inc.
c/o Stage Stores, Inc.
00000 Xxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxxx Xxxxxx
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================================================================================
ASSIGNMENT FORM
To assign this Note, complete the form below:
I or we assign and transfer this Note to:
[PRINT OR TYPE ASSIGNEE'S NAME, ADDRESS AND ZIP CODE]
[INSERT ASSIGNEE'S SOC. SEC. OR TAX I.D. NO. ]
and irremovably appoint ___________________ agent to transfer this Note on
the books of SRI. The agent may substitute another to act for him.
================================================================================
Date: Your Signature:
================================================================================
Sign exactly as your name appears on the face of this Note.
Signature Guarantee:
[Signature must be guaranteed by an Eligible Guarantor
Institution (bank, stockbroker, savings and loan association
or credit union) with membership in an approved signature
guarantee medallion program pursuant to Securities and
Exchange Commission Rule 17Ad-15.]
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OPTION OF HOLDER OF NOTE TO ELECT PURCHASE
If you elect to have this Note purchased by SRI pursuant to Article
IV or Section 5.07 of the Indenture, check the box:
[ ]
If you elect to have only part of this Note purchased by SRI
pursuant to Article IV or Section 5.07 of the Indenture, state the amount:
$
Date: Your Signature:
(Sign exactly as your name
appears on the face of the
Note)
Signature Guarantee:
[Signature must be guaranteed by an Eligible Guarantor
Institution (bank, stockbroker, savings and loan association or
credit union) with membership in an approved signature guarantee
medallion program pursuant to Securities and Exchange Commission
Rule 17Ad- 15.]
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