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Exhibit 4.2
FIRST SUPPLEMENTAL INDENTURE, dated as of March 28, 1995 (the "First
Supplemental Indenture"), to the Indenture, dated as of August 17, 1993 (the
"Indenture"), among THE HANOVER COMPANIES, a Nevada corporation (the "Company"),
THE HORN & HARDART COMPANY, a Nevada corporation (the "Guarantor"), the
subsidiaries of the Company which have executed the Indenture (the "Guarantor
Subsidiaries"), and FIRST TRUST NATIONAL ASSOCIATION, a national association, as
Trustee (the "Trustee").
WHEREAS, the Company, the Guarantor and the Trustee heretofore entered
into the Indenture;
WHEREAS, the Company and the Guarantor were merged with and into
Hanover Direct, Inc., a Delaware corporation ("HDI"), pursuant to the provisions
of the Agreements and Plans of Merger, dated as of April 15, 1993, between each
of the Company and the Guarantor and HDI, and when the mergers became effective,
HDI became responsible for the obligations of, and succeeded to and was
substituted for, the Company and the Guarantor, respectively, pursuant to
Section 5.2 of the Indenture;
WHEREAS, pursuant to the Indenture, $14,000,000 aggregate principal
amount of HDI's 9.25% Senior Subordinated Notes due August 1, 1998 (the
"Securities") remain outstanding;
WHEREAS, Sun Life Insurance Company of America ("Sun Life") is the sole
Holder of all the outstanding Securities;
WHEREAS, Section 9.2 of the Indenture provides that HDI, the Guarantor
Subsidiaries and the Trustee may amend the Indenture with the written consent of
the Holders of at least a majority in principal amount of the then outstanding
Securities; and
WHEREAS, HDI and the Guarantor Subsidiaries desire to amend the
Indenture as set forth herein and Sun Life has provided its written consent to
the substance of such amendments in consideration of the payment to it of an
amendment fee in the amount of $70,000 (the "Amendment Fee") concurrently with
the execution of this First Supplemental Indenture.
NOW THEREFORE, each party agrees as follows:
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ARTICLE I
AMENDMENTS
1.1 Definitions. The definitions of "CFC Credit Agreement" and
"Permitted Investments" set forth in Section 1.1 of the Indenture are amended
and restated in their entirety to read as follows:
"CFC Credit Agreement" means that certain Revolving Credit and Term
Loan Agreement, dated as of October 12, 1994, by and among HDI, the lenders from
time to time party thereto and NationsBank of North Carolina, National
Association, as Agent, and that certain Credit Facilities and Reimbursement
Agreement, dated as of October 12, 1994, by and among HDI, the lenders from time
to time party thereto and NationsBank of North Carolina, National Association,
as Agent, as the same may be amended, modified or supplemented.
"Permitted Investments" means (i) Cash and Marketable Securities, (ii)
investments in Restricted Subsidiaries that are Consolidated Subsidiaries, (iii)
investments consisting of the acquisition of (a) up to 50.1% of the outstanding
capital stock of Tiger Direct, Inc., in accordance with the terms of the
purchase agreement dated as of February 28, 1995, as amended by an amendment
thereto dated as of March 20, 1995, between Software Investment Corporation and
Tiger Direct, Inc., for which the aggregate of funds invested by way of direct
or indirect equity purchase, loans, advances or other extensions of credit shall
in the aggregate be less than $18,000,000, and (b) up to 67.5% of the
outstanding capital stock of The Xxxxxx Company in accordance with the terms of
the letter of intent dated March 15, 1995 between HDI and The Xxxxxx Company,
for which the aggregate of funds invested by way of direct or indirect equity
purchase, loans, advances or other extensions of credit shall in the aggregate
be less than $8,500,000, (iv) investments in the capital stock or other equity
interests (or equity equivalents) of another Person which, when added to the
equity interests (and equity equivalents) held prior to such investment,
constitute less than 35% of the capital stock or other equity interests (and
equity equivalents), and (v) with the written consent of the Holders of at least
a majority in principal amount of the then outstanding Securities, investments
in the capital stock or other equity interests (or equity equivalents) of
another Person which, when added to the equity interests (and equity
equivalents) held prior to such investment, constitute 35% or more of the
capital stock or other equity interests (and equity equivalents).
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1.2 Indebtedness to Consolidated Earnings Ratio. Section 4.10 of the
Indenture is amended to delete the table therein and substitute the following:
Period Ratio
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December 31, 1993 to December 31, 1994 5.00 to 1.0
January 1, 1995 to April 1, 1995 8.50 to 1.0
April 2, 1995 to July 1, 1995 9.00 to 1.0
July 2, 1995 to September 30, 1995 6.75 to 1.0
October 1, 1995 to December 28, 1996 4.50 to 1.0
December 29, 1996 to August 1, 1998 4.00 to 1.0
1.3 Maintenance of Consolidated Net Worth. Section 4.12 of the
Indenture is amended to delete such section in its entirety and substitute
therefore the following:
"HDI shall not permit Consolidated Net Worth of HDI during the periods
commencing on April 1, 1995 and ending on the last day of the most recently
completed fiscal quarter to be less than the greater of (i) $90,000,000 or (ii)
$90,000,000 plus 85% of HDI's cumulative net income (including 100% of any
losses) as shown on its consolidated statements of income for such periods."
1.4 Fixed Charge Coverage Ratio. Section 4.20 of the Indenture is
amended to delete the table therein and substitute the following:
Minimum
Fixed Charge
Period Coverage Ratio
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July 1, 1993 to December 31, 1993 1.70 to 1.0
January 1, 1994 to December 31, 1994 1.80 to 1.0
January 1, 1995 to April 1, 1995 1.25 to 1.0
April 2, 1995 to July 1, 1995 1.18 to 1.0
July 2, 1995 to September 30, 1995 1.35 to 1.0
October 1, 1995 to December 30, 1995 1.75 to 1.0
December 31, 1995 to December 28, 1996 2.00 to 1.0
December 29, 1996 to August 1, 1998
and at all times thereafter 2.15 to 1.0
1.5 Accounting Changes. Section 4.26(a)(ii) of the Indenture is amended
to add after the words "change its fiscal year" the words "or any fiscal
quarter".
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ARTICLE II
MISCELLANEOUS
2.1 The Guarantor Subsidiaries shall have submitted each and every
Guaranty contemplated by Article 11 of the Indenture and HDI shall have paid the
Amendment Fee to Sun Life prior to the execution of this First Supplemental
Indenture.
2.2 Except as expressly supplemented by this First Supplemental
Indenture, the Indenture is in all respects hereby ratified and confirmed and
shall remain in full force and effect.
2.3 This First Supplemental Indenture is executed and shall constitute
an indenture supplemental to the Indenture and shall be construed in connection
with and as part of the Indenture. This First Supplemental Indenture shall be
governed by and construed in accordance with the laws of the State of New York.
2.4 The recitals contained herein shall be taken as the statements of
HDI and the Guarantor Subsidiaries, and the Trustee assumes no responsibility
for their correctness. The Trustee makes no representations as to the validity
or sufficiency of this First Supplemental Indenture.
2.5 This First Supplemental Indenture may be executed in any number of
counterparts each of which shall be an original, but all such counterparts shall
together constitute but one and the same instrument.
2.6 Capitalized terms used herein but not otherwise defined shall have
the meanings ascribed to them in the Indenture.
2.7 Upon the execution and delivery of this First Supplemental
Indenture, no Event of Default (and no event that, after notice or lapse of
time, or both, would become an Event of Default) shall be created or have
occurred and be continuing.
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IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed and their respective corporate seals
to be hereunto affixed and attested, all as of the day and year first above
written.
HANOVER DIRECT, INC.
By: /s/ Xxxxx Xxxxxx
--------------------------
Xxxxx Xxxxxx
Title: Executive Vice President
[CORPORATE SEAL]
ATTEST:
/s/
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HANOVER DIRECT PENNSYLVANIA,
INC.
BRAWN OF CALIFORNIA, INC.
HANOVER DIRECT NEW JERSEY,
INC.
GUMP'S BY MAIL, INC.
GUMP'S HOLDINGS, INC.
HANOVER LIST MANAGEMENT INC.
HANOVER SYNDICATION CORP.
XXXXXXX ADVERTISING AGENCY,
INC.
YORK FULFILLMENT COMPANY, INC.
COMPANY STORE HOLDINGS, INC.
TWEEDS, INC.
HANOVER CASUALS, INC.
HANOVER DIRECT VIRGINIA INC.
HANOVER FULFILLMENT OF
VIRGINIA, INC.
HANOVER HOLDINGS INC.
HANOVER VENTURES, INC.
LWI HOLDINGS, INC.
HANOVER REALTY, INC.
HANOVER CATALOG HOLDINGS, INC.
By: /s/ Xxxxx Xxxxxx
--------------------------
Xxxxx Xxxxxx
Title: Vice President
[CORPORATE SEAL]
ATTEST:
/s/
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FIRST TRUST NATIONAL
ASSOCIATION, as Trustee
By:
---------------------------
Title:
[CORPORATE SEAL]
ATTEST:
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