Use of Proceeds
We will not receive cash proceeds from the issuance of the exchange notes under the exchange offer. In consideration for issuing the
exchange notes in exchange for old notes as described in this prospectus, we will receive old notes of equal principal amount. The old notes surrendered in exchange for the exchange notes will be
retired and cancelled.
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Description of 2023 exchange notes
The terms of the notes and guarantees will include those set forth in the indenture (as defined below) and
those required to be made a part of the indenture by the Trust Indenture Act of 1939, upon registration of the notes. You should carefully read the summary below and the provisions of the indenture
that may be important to you before investing in the notes. This summary is not complete and is qualified in its entirety by reference to the indenture. We urge you to read the indenture because the
indenture, not this description, defines your rights as holders of the notes.
General
Capitalized terms used in this "Description of 2023 exchange notes" section and not otherwise defined have the meanings set forth in
the section "Certain definitions."
In
this "Description of 2023 exchange notes" section, (i) the terms "Dollar Tree," "Issuer," "we" and "us" refer only to Dollar Tree, Inc., a Virginia corporation and not
to any of its subsidiaries, (ii) the term "2023 exchange notes" refers to the 5.750% Senior Notes due 2023 being offered by Dollar Tree in this exchange offer, (iii) the term "2023 old
notes" refers to Dollar Tree's currently outstanding 5.750% Senior Notes due 2023 that may be exchanged for the 2023 exchange notes, (iv) the term "notes" refers to the 2023 old notes and the
2023 exchange notes, collectively, and (v) the term "Indenture" refers to the indenture that applies to both the 2023 old notes and the 2023 exchange notes.
Dollar
Tree issued the 2023 old notes under the Indenture, dated as of February 23, 2015, among Dollar Tree (as successor to Family Tree Escrow, LLC), the guarantors party
thereto and U.S. Bank National Association, as trustee (the "Trustee"). The terms of the 2023 exchange notes are identical in all material respects to the 2023 old notes, except that (1) the
2023 exchange notes will have been registered under the Securities Act and therefore will not be subject to certain restrictions on transfer applicable to the 2023 old notes and (2) holders of
the 2023 exchange notes will not be entitled to certain rights of holders of 2023 old notes under the Registration Rights Agreement. The terms of the 2023 old notes include, and the terms of the 2023
exchange note will include, those stated in the Indenture and those made a part of the Indenture by reference to the TIA. The 2023 exchange notes are subject to all such terms, and holders of the 2023
exchange notes should refer to the Indenture and the TIA for a complete statement of applicable terms.
The
Issuer may issue additional notes from time to time. Any offering of additional notes is subject to the covenant described below under the caption "Certain
covenantsLimitation on incurrence of indebtedness and issuance of disqualified stock and preferred stock." The notes and any additional notes subsequently issued under the indenture will
be treated as a single class for all purposes under the indenture, including, without limitation, waivers, amendments, redemptions and offers to purchase;
provided
that if the additional notes are not
fungible with the notes for U.S. federal income tax purposes, the additional notes will have a separate
CUSIP number, if applicable. Unless the context otherwise requires, for all purposes of the indenture and this "Description of 2023 exchange notes," references to the notes include any additional
notes actually issued.
Principal
of, premium, if any, interest and additional interest, if any, on the notes will be payable, and the notes may be exchanged or transferred, at the office or agency designated
by the Issuer (which initially shall be the designated office or agency of the Trustee).
The
notes will be issued only in fully registered form, without coupons, in minimum denominations of $2,000 and any integral multiple of $1,000 in excess thereof;
provided
that notes may be issued in
denominations of less than $2,000 solely to accommodate book-entry positions that have been created by a DTC
participant in denominations of less than $2,000. No service charge will be made for any
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registration
of transfer or exchange of notes, but the Issuer may require payment of a sum sufficient to cover any transfer tax or other similar governmental charge payable in connection therewith.
Terms of the notes
The notes will mature on March 1, 2023. Each note will bear interest at a rate of 5.750% per annum from March 1, 2016, or
from the most recent date to which interest has been paid or provided for, payable semiannually to holders of record at the close of business on the February 15 or August 15 immediately
preceding the interest payment date on March 1 and September 1 of each year, commencing September 1, 2016. Interest will be computed on the basis of a 360-day year comprised of
twelve 30-day months.
Optional redemption
On or after March 1, 2018, the Issuer may redeem the notes at its option, in whole at any time or in part from time to time,
upon not less than 30 days' nor more than 60 days' prior notice mailed by the Issuer by first-class mail, or delivered electronically if the notes are held by DTC, to each holder's
registered address and upon not less than 30 days' nor more than 60 days' prior written notice to the Trustee (or such shorter period as may be agreed by the Trustee), at the following
redemption prices (expressed as a percentage of principal amount), plus accrued and unpaid interest and additional interest, if any, to, but excluding, 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 March 1 of the years set forth below:
|
|
|
|
|
Period
|
|
Redemption
price
|
|
2018
|
|
|
104.313
|
%
|
2019
|
|
|
102.875
|
%
|
2020
|
|
|
101.438
|
%
|
2021 and thereafter
|
|
|
100.000
|
%
|
In
addition, prior to March 1, 2018, the Issuer may redeem the notes at its option, in whole at any time or in part from time to time, upon not less than 30 days' nor more
than 60 days' prior notice mailed by the Issuer by first-class mail, or delivered electronically if the notes are held by DTC, to each holder's registered address and upon not less than
30 days' nor more than 60 days' prior written notice to the Trustee (or such shorter period as may be agreed by the Trustee), at a redemption price equal to 100% of the principal amount
of the notes redeemed plus the Applicable Premium as of, and accrued and unpaid interest and additional interest, if any, to, but excluding, the applicable 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).
Notwithstanding
the foregoing, at any time and from time to time on or prior to March 1, 2018, the Issuer may redeem in the aggregate up to 40% of the original aggregate principal
amount of the notes (calculated after giving effect to any issuance of additional notes) with the net cash proceeds of one or more Equity Offerings (1) by the Issuer or (2) by any direct
or indirect parent of the Issuer to the extent the net cash proceeds thereof are contributed to the common equity capital of the Issuer or used to purchase Capital Stock (other than Disqualified
Stock) of the Issuer, at a redemption price of 105.750% of the principal amount of the notes, plus accrued and unpaid interest and additional interest, if any, to, but excluding, 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 60% of the original aggregate principal amount of the notes (calculated after giving effect to any issuance of additional notes)
must remain outstanding after each such redemption;
provided
,
further
, that such redemption shall occur
within 90 days after the date on which any such Equity
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Offering
is consummated upon not less than 30 days' nor more than 60 days' prior notice mailed, or delivered electronically if the notes are held by DTC, by the Issuer to each holder of
notes and upon not less than 30 days' nor more than 60 days' prior written notice to the Trustee (or such shorter period as may be agreed by the Trustee) and otherwise in accordance with
the procedures set forth in the indenture.
Notice
of any redemption upon any Equity Offering may be given prior to the completion thereof. In addition, any redemption described above or notice thereof may, at the Issuer's
discretion, be subject to one or more conditions precedent, including, but not limited to, completion of the related Equity Offering in the case of a redemption upon completion of an Equity Offering.
The Issuer may provide in such notice that payment of the redemption price and the performance of the Issuer's obligations with respect to such redemption may be performed by another Person.
Selection
In the case of any partial redemption, selection of notes for redemption will be made by the Trustee on a pro rata basis or by lot or
by such other method as the Trustee shall deem fair and appropriate (and in such manner that complies with the requirements of DTC, if applicable);
provided
that no notes of $2,000 or less shall be
redeemed in part. If any note is to be redeemed in part only, the notice of redemption relating to
such note shall state the portion of the principal amount thereof to be redeemed. A new note in principal amount equal to the unredeemed portion thereof will be issued in the name of the holder
thereof upon cancellation of the original note. On and after the redemption date, interest will cease to accrue on notes or portions thereof called for redemption so long as the Issuer has deposited
with the paying agent funds sufficient to pay the principal of, plus accrued and unpaid interest and additional interest (if any) on, the notes to be redeemed.
Mandatory redemption; offers to purchase; open market purchases
The Issuer is not required to make any mandatory redemption or sinking fund payments with respect to the notes. However, under certain
circumstances, the Issuer may be required to offer to purchase notes as described under the captions "Change of control" and "Certain covenantsAsset sales."
Dollar Tree may at any time, and from time to time, purchase notes in the open market or otherwise.
Ranking
The Indebtedness evidenced by the notes and the Guarantees, respectively, will be unsecured, unsubordinated obligations of the Issuer
and the Guarantors, respectively, will rank pari passu in right of payment with all existing and future unsubordinated Indebtedness of the Issuer and the Guarantors, respectively, will be senior in
right of payment to all existing and future Subordinated Indebtedness of the Issuer and the Guarantors, respectively, and will be effectively subordinated to all existing and future secured
Indebtedness of the Issuer and the Guarantors, respectively, including any Indebtedness under the credit agreement described in clause (i) of the definition of the term "Credit Agreement," to
the extent of the value of the assets securing such Indebtedness.
As
of January 30, 2016, the outstanding total consolidated indebtedness of Dollar Tree was approximately $7,465.5 million, of which approximately $4,208.5 million
was secured. As of January 30, 2016, Dollar Tree's non-Guarantor Subsidiaries had an aggregate of approximately $395.8 million of total liabilities (excluding intercompany transactions),
all of which would have been structurally senior to the notes and the related guarantees.
Although
the indenture limits the Incurrence of Indebtedness and the issuance of Disqualified Stock by the Issuer and its Restricted Subsidiaries, and the issuance of Preferred Stock by
the Restricted Subsidiaries that are not Guarantors, such limitation is subject to a number of significant
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qualifications
and exceptions. The Issuer and its Subsidiaries are able to incur additional amounts of Indebtedness. Under certain circumstances the amount of such Indebtedness could be substantial
and, subject to certain limitations, such Indebtedness may be Secured Indebtedness. See "Certain covenantsLimitation on incurrence of indebtedness and issuance of
disqualified stock and preferred stock" and "Certain covenantsLiens."
Unless
a Subsidiary of the Issuer is a Guarantor, claims of creditors of such Subsidiary, including trade creditors, and claims of preferred stockholders (if any) of such Subsidiary,
generally will have priority with respect to the assets and earnings of such Subsidiary over the claims of creditors of the Issuer, including holders of the notes. The notes, therefore, will be
effectively subordinated to holders of indebtedness and other creditors (including trade creditors) and preferred stockholders (if any) of any Subsidiary of the Issuer that is not a Guarantor. The
only Subsidiaries of the Issuer that are not Guarantors are Dollar Tree International Sarl, Five & Dime International Sarl, Dollar Tree Stores Canada, Inc., DTD Sourcing HK, Ltd.,
Tarheel Trading International Sarl, FDO Trading International Hong Kong, Ltd., Tarheel Trading International Hong Kong Ltd., Tar Heel Trading International Holding Ltd., Shenzhen
Tar Heel Information Consultancy Limited, and Family Dollar Insurance, Inc.
See
"Risk factorsRisks related to the notes and other indebtednessThe notes will be structurally subordinated to all indebtedness of the Issuer's existing and
future subsidiaries that do not guarantee the notes."
Guarantees
Each of the Restricted Subsidiaries of Dollar Tree that are guarantors under the credit agreement described in clause (i) of the
definition of the term "Credit Agreement" and each of the Wholly Owned Domestic Subsidiaries of the Issuer that is required to guarantee payment of the notes in accordance with the covenant described
under "Certain covenantsFuture guarantors" will jointly and severally guarantee on an unsecured, unsubordinated basis the performance and punctual payment when due, whether
at Stated Maturity, by acceleration or otherwise, of all obligations of the Issuer under the indenture and the notes, whether for payment of principal of, premium, if any, interest or additional
interest, if any, on the notes, expenses, indemnification or otherwise (all such obligations guaranteed by such Guarantors being herein called the "Guaranteed Obligations"). Such Guarantors will agree
to pay, in addition to the amount stated above, any and all expenses (including out-of-pocket counsel fees and expenses) incurred by the Trustee in enforcing any rights under the Guarantees.
Each
Guarantee will be limited to an amount not to exceed the maximum amount that can be guaranteed by the applicable Guarantor without rendering the Guarantee, as it relates to such
Guarantor, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally. See "Risk factorsRisks
related to the notes and other indebtednessFederal and state fraudulent transfer laws may permit a court to void the notes and the guarantees, subordinate claims in respect of the notes
and the guarantees and require noteholders to return payments received and, if that occurs, you may not receive any payments on the notes."
Each
Guarantor's Guarantee will be automatically released upon:
(1) the
issuance, sale, exchange, transfer or other disposition (including through merger, consolidation, amalgamation or otherwise) of the Capital Stock of the applicable
Guarantor (including any issuance, sale, exchange, transfer or other disposition following which the applicable Guarantor is no longer a Restricted Subsidiary) if such issuance, sale, exchange,
transfer or other disposition is made in a manner not in violation of the indenture;
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(2) the
designation of such Guarantor as an Unrestricted Subsidiary in accordance with the covenant described under "Certain covenantsLimitation on
restricted payments" and the definition of "Unrestricted Subsidiary";
(3) the
release or discharge of the guarantee by such Guarantor of the Indebtedness under (i) the Credit Agreement and (ii) any Capital Markets Indebtedness of
the Issuer or any of the Guarantors which created the obligation to guarantee the notes; or
(4) the
Issuer's exercise of its legal defeasance option or covenant defeasance option as described under "Defeasance" or if the Issuer's obligations under the
indenture are discharged in accordance with the terms of the indenture.
Change of control
Upon the occurrence of a Change of Control, each holder will have the right to require the Issuer to repurchase all or any part of 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, but excluding, 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), except to the extent the Issuer has previously or concurrently elected to redeem notes as
described under "Optional redemption."
Within
30 days following any Change of Control, except to the extent that the Issuer has exercised its right to redeem the notes by delivery of a notice of redemption as described
under "Optional redemption," the Issuer shall mail, or deliver electronically if the notes are held by DTC, a notice (a "Change of Control Offer") to each holder with a copy to the
Trustee:
(1) stating
that a Change of Control has occurred and that such holder has the right to require the Issuer to repurchase such holder's notes at a repurchase price in cash
equal to 101% of the principal amount thereof, plus accrued and unpaid interest and additional interest, if any, to, but excluding, the date of repurchase (subject to the right of holders of record on
a record date to receive interest on the relevant interest payment date);
(2) describing
the transaction or transactions that constitute(s) such Change of Control;
(3) specifying
the repurchase date (which shall be no earlier than 30 days nor later than 60 days from the date such notice is mailed or delivered
electronically); and
(4) providing
instructions, determined by the Issuer consistent with this covenant, that a holder must follow in order to have its notes purchased.
A
Change of Control Offer may be made in advance of a Change of Control, and conditioned upon such Change of Control, if a definitive agreement is in place for the Change of Control at
the time of making of the Change of Control Offer.
In
addition, the Issuer will not be required to make a Change of Control Offer upon a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and
otherwise in compliance with the requirements set forth in the indenture applicable to a Change of Control Offer made by the Issuer and purchases all notes properly tendered and not withdrawn under
such Change of Control Offer.
If
holders of not less than 90% in aggregate principal amount of the outstanding notes validly tender and do not withdraw such notes in a Change of Control Offer and the Issuer, or any
third party making a Change of Control Offer in lieu of the Issuer as described above, purchases all of the notes validly tendered and not withdrawn by such holders, the Issuer or such third party
will have the right, upon not less than 30 days' nor more than 60 days' prior notice, given not more than 30 days following such purchase pursuant to the Change of Control Offer
described above, to redeem all notes that remain outstanding following such purchase at a price in cash equal to 101% of the principal amount thereof plus accrued and unpaid interest to but excluding
the date of redemption.
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Notes repurchased by the Issuer pursuant to a Change of Control Offer will have the status of notes issued but not outstanding or will be retired and canceled at
the option of the Issuer. Notes purchased by a third party pursuant to the preceding paragraphs will have the status of notes issued and outstanding.
The
Issuer will 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 covenant. To the extent that the provisions of any securities laws or regulations conflict with provisions of this covenant, the Issuer will comply with the
applicable securities laws and regulations and will not be deemed to have breached its obligations under this covenant by virtue thereof. This Change of Control repurchase provision is a result of
negotiations between the Issuer and the initial purchasers. Subject to the limitations discussed below, the Issuer could, in the future, enter into certain transactions, including acquisitions,
refinancings or other recapitalizations, that would not constitute a Change of Control under the indenture, but that could increase the amount of indebtedness outstanding at such time or otherwise
affect the Issuer's capital structure or credit rating.
The
occurrence of events which would constitute a Change of Control could constitute a default under the Credit Agreement. Future Bank Indebtedness of the Issuer may contain prohibitions
on certain events which would constitute a Change of Control or require such Bank Indebtedness to be repaid upon a Change of Control. Moreover, the exercise by the holders of their right to require
the Issuer to repurchase the notes upon a Change of Control could cause a default under such Bank Indebtedness, even if the Change of Control itself does not, due to the financial effect of such
repurchase on the Issuer. Finally, the Issuer's ability to pay cash to the holders upon a repurchase may be limited by the Issuer's then existing financial resources. There can be no assurance that
sufficient funds will be available when necessary to make any required repurchases. See "Risk factorsRisks related to the notes and other indebtednessThe Issuer may not be
able to repurchase the notes upon a change of control."
The
definition of "Change of Control" includes a phrase relating to the sale, lease or transfer of "all or substantially all" of the assets of the Issuer and its Subsidiaries taken as a
whole. Although there is a developing body of case law interpreting the phrase "substantially all," under New York law, which governs the indenture, there is no precise established definition of the
phrase. Accordingly, the ability of a holder of notes to require the Issuer to repurchase such notes as a result of a sale, lease or transfer of less than all of the assets of the Issuer and its
Subsidiaries taken as a whole to another Person or group may be uncertain.
The
provisions under the indenture relating to the Issuer's obligation to make an offer to repurchase the notes as a result of a Change of Control may be waived or modified with the
written consent of the holders of a majority in principal amount of the notes.
Certain covenants
Set forth below are summaries of certain covenants that will be contained in the indenture.
Suspension of covenants upon achieving investment grade ratings
If on any date (i) the notes have Investment Grade Ratings from both Rating Agencies, and (ii) no Default has occurred
and is continuing under the indenture then, beginning on that day (the occurrence of the events described in the foregoing clauses (i) and (ii) being collectively
referred to as a "Covenant Suspension Event"), the covenants specifically listed under the following captions in this
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"Description
of 2023 exchange notes" section will not be applicable to the notes (collectively, the "Suspended Covenants"):
(1) "Limitation
on incurrence of indebtedness and issuance of disqualified stock and preferred stock";
(2) "Limitation
on restricted payments";
(3) "Dividend
and other payment restrictions affecting subsidiaries";
(4) "Asset
sales";
(5) "Transactions
with affiliates";
(6) "Future
guarantors";
(7) clause (4)
of the first paragraph of "Merger, amalgamation, consolidation or sale of all or substantially all assets"; and
(8) the
third and fourth paragraphs of "Merger, amalgamation, consolidation or sale of all or substantially all assets".
If
and while the Issuer and its Restricted Subsidiaries are not subject to the Suspended Covenants, the notes will be entitled to substantially less covenant protection. In the event
that the Issuer and its Restricted Subsidiaries are not subject to the Suspended Covenants under the indenture for any period
of time as a result of the foregoing, and on any subsequent date (the "Reversion Date") one or both of the Rating Agencies withdraw their Investment Grade Rating or downgrade the rating assigned to
the notes below an Investment Grade Rating, then the Issuer and its Restricted Subsidiaries will thereafter again be subject to the Suspended Covenants under the indenture with respect to future
events. The period of time between the Covenant Suspension Event and the Reversion Date is referred to in this description as the "Suspension Period." The Issuer will provide the Trustee with written
notice of each Covenant Suspension Event or Reversion Date within five Business Days of the occurrence thereof.
Additionally,
during a Suspension Period the Issuer will no longer be permitted to designate any Restricted Subsidiary as an Unrestricted Subsidiary unless the Issuer would have been
permitted to designate such Subsidiary as an Unrestricted Subsidiary if a Suspension Period had not been in effect for any period and, following the Reversion Date, such designation shall be deemed to
have created an Investment pursuant to the final paragraph of the covenant described under the heading "Limitation on restricted payments" at the time of such designation.
On
each Reversion Date, all Indebtedness Incurred, or Disqualified Stock or Preferred Stock issued, during the Suspension Period will be classified as having been Incurred or issued
pursuant to the first paragraph of "Limitation on incurrence of indebtedness and issuance of disqualified stock and preferred stock" below or one of the clauses set forth in the second
paragraph of "Limitation on incurrence of indebtedness and issuance of disqualified stock and preferred stock" below (to the extent such Indebtedness or Disqualified Stock or Preferred
Stock would be permitted to be Incurred or issued thereunder as of the Reversion Date and after giving effect to Indebtedness or Disqualified Stock or Preferred Stock Incurred or issued prior to the
Suspension Period and outstanding on the Reversion Date). To the extent such Indebtedness or Disqualified Stock or Preferred Stock would not be so permitted to be Incurred or issued pursuant to the
first or second paragraph of "Limitation on incurrence of indebtedness and issuance of disqualified stock and preferred stock," such Indebtedness or Disqualified Stock or Preferred Stock
will be deemed to have been outstanding on the Issue Date or Acquisition Date, as applicable, so that it is classified as permitted under clause (c) of the second paragraph under
"Limitation on incurrence of indebtedness and issuance of disqualified stock and preferred stock." Calculations made after the Reversion Date of the amount available to be made as
Restricted Payments under "Limitation on restricted payments" will be made as though the covenant
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described
under "Limitation on restricted payments" had been in effect since the Acquisition Date and prior to, but not during, the Suspension Period (except to the extent expressly set
forth in the immediately preceding paragraph). Accordingly, Restricted Payments made during the Suspension Period will not reduce the amount available to be made as Restricted Payments under the first
paragraph of "Limitation on restricted payments" (except to the extent expressly set forth in the immediately preceding paragraph). As described above, no Default or Event of Default will
be deemed to have occurred on the Reversion Date as a result of any actions taken by the Issuer or the Restricted Subsidiaries during the Suspension Period or any actions taken at any time pursuant to
any contractual obligation arising prior to the Reversion Date, regardless of whether such actions or
events would have been permitted if the applicable Suspended Covenants remained in effect during such period. Within 30 days of such Reversion Date, the Issuer must comply with the terms of the
covenant described under "Future guarantors."
For
purposes of the "Dividend and other payment restrictions affecting restricted subsidiaries" covenant, on the Reversion Date, any consensual encumbrances or consensual
restrictions of the type specified in clause (a) or (b) of the first paragraph of that covenant entered into during the Suspension Period will be deemed to have been in effect on the
Issue Date or Acquisition Date, as applicable, so that they are permitted under clause (1)(i) of the first paragraph under "Dividend and other payment restrictions affecting
restricted subsidiaries."
For
purposes of the "Transactions with affiliates" covenant, any Affiliate Transaction entered into after the Reversion Date pursuant to a contract, agreement, loan, advance
or guaranty with, or for the benefit of, any Affiliate of the Issuer entered into during the Suspension Period will be deemed to have been in effect as of the Issue Date or Acquisition Date, as
applicable, for purposes of clause (6) of the second paragraph under "Transactions with affiliates."
For
purposes of the "Asset sales" covenant, on the Reversion Date, the unutilized Excess Proceeds amount will be reset to zero.
There
can be no assurance that the notes will ever achieve or maintain Investment Grade Ratings.
Limitation on incurrence of indebtedness and issuance of disqualified stock and preferred
stock
The indenture provides that:
(1) the
Issuer will not, and will not permit any of the Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue
any shares of Disqualified Stock; and
(2) the
Issuer will not permit any of the Restricted Subsidiaries (other than any Guarantor) to issue any shares of Preferred Stock;
provided
,
however
, that the Issuer and any Guarantor may Incur Indebtedness (including Acquired
Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary that is not a Guarantor may Incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock
or issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio of the Issuer for the most recently ended four full fiscal quarters for which internal financial statements are
available immediately preceding the date on which such additional Indebtedness is Incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 determined on a
pro forma
basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been Incurred, or the
Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period;
provided
,
further
, that the aggregate principal amount of Indebtedness incurred, and shares of
Disqualified Stock and Preferred Stock issued, by Restricted Subsidiaries that are not Guarantors pursuant to this paragraph, together with any Refinancing Indebtedness thereof pursuant to
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clause (o)
below, shall not exceed, the greater of $500 million and 3.5% of Total Assets at the time of Incurrence (plus, in the case of any Refinancing Indebtedness in respect thereof
Incurred pursuant to clause (o) below, the Additional Refinancing Amount).
The
foregoing limitations will not apply to:
(a) the
Incurrence by the Issuer or any Restricted Subsidiary of Indebtedness (including under any Credit Agreement and the issuance and creation of letters of credit and
bankers' acceptances thereunder) up to an aggregate principal amount outstanding at the time of Incurrence that does not exceed the greater of (x) $7,950 million and (y) the
aggregate principal amount of Consolidated Total Indebtedness that at the time of Incurrence does not cause the Secured Leverage Ratio for the Issuer for the most recently ended four full fiscal
quarters for which internal financial statements are available, determined on a pro forma basis, to exceed 3.00 to 1.00;
provided
, that for purposes of
determining the amount of Indebtedness that may be incurred under clause (a)(y) and for purposes of any subsequent calculation of the Secured Leverage Ratio, all Indebtedness incurred and
outstanding under this clause (a) shall be treated as Secured Indebtedness;
(b) the
Incurrence by the Issuer and the Guarantors of Indebtedness represented by the notes issued on the Issue Date and the Guarantees thereof (including any exchange
notes and the related Guarantees thereof);
(c) (i)
the Incurrence of Indebtedness represented by the Initial 2020 Notes; and (ii) Indebtedness (other than Indebtedness described in clauses (a) and (b))
(x) of Dollar Tree or any Subsidiary of Dollar Tree in
effect on the Issue Date or (y) of Family Dollar or any Subsidiary of Family Dollar in effect on the Acquisition Date, including, without limitation, the Existing Family Dollar Notes;
(d) (i)
Indebtedness (including Capitalized Lease Obligations) Incurred by the Issuer or any Restricted Subsidiary, Disqualified Stock issued by the Issuer or any Restricted
Subsidiary and Preferred Stock issued by any Restricted Subsidiary to finance (whether prior to or within 360 days after) the acquisition, lease, construction, repair, replacement or
improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) and Attributable Debt in respect of any
Sale/Leaseback Transaction (other than any Permitted Sale/Leaseback Transaction) in an aggregate principal amount that, when aggregated with the principal amount or liquidation preference of all other
Indebtedness, Disqualified Stock or Preferred Stock then outstanding and Incurred pursuant to this clause (d), together with any Refinancing Indebtedness in respect thereof Incurred pursuant to
clause (o) below, does not exceed the greater of $300 million and 2.25% of Total Assets at the time of Incurrence (plus, in the case of any Refinancing Indebtedness, the Additional
Refinancing Amount) and (ii) Attributable Debt in respect of any Permitted Sale/Leaseback Transaction;
(e) Indebtedness
Incurred by the Issuer or any Restricted Subsidiary constituting reimbursement obligations with respect to letters of credit, bank guarantees and similar
instruments issued in the ordinary course of business, including without limitation letters of credit in respect of workers' compensation claims, health, disability or other benefits to employees or
former employees or their families or property, casualty or liability insurance or self-insurance, and letters of credit in connection with the maintenance of, or pursuant to the requirements of,
environmental law or permits or licenses from Governmental Authorities, or other Indebtedness with respect to reimbursement type obligations regarding workers' compensation claims;
(f) Indebtedness
arising from agreements of the Issuer or any Restricted Subsidiary providing for indemnification, adjustment of acquisition or purchase price or similar
obligations (including earn-outs), in each case, Incurred or assumed in connection with the Transactions, any Investments
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or
any acquisition or disposition of any business, assets or a Subsidiary not prohibited by the indenture, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of
such business, assets or Subsidiary for the purpose of financing such acquisition;
(g) Indebtedness
of the Issuer to a Restricted Subsidiary or Disqualified Stock of the Issuer issued to a Restricted Subsidiary;
provided
that (except in respect of intercompany current liabilities incurred in the
ordinary course of business in connection with the cash management,
Tax and accounting operations of the Issuer and its Subsidiaries) any such Indebtedness owed to a Restricted Subsidiary that is not a Guarantor is subordinated in right of payment to the obligations
of the Issuer;
provided
,
further
, that any subsequent issuance or transfer of any Capital Stock or any
other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Issuer or another Restricted
Subsidiary or any pledge of such Indebtedness constituting a Permitted Lien but not the transfer thereof upon foreclosure) or shares of Disqualified Stock shall be deemed, in each case, to be an
Incurrence of such Indebtedness or issuance of shares of Disqualified Stock, as applicable, not permitted by this clause (g);
(h) shares
of Preferred Stock or Disqualified Stock of a Restricted Subsidiary issued to the Issuer or another Restricted Subsidiary;
provided
that any subsequent issuance or transfer of any Capital Stock or any
other event which results in any Restricted Subsidiary that holds such
shares of Preferred Stock or Disqualified Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to
the Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock or Disqualified Stock not permitted by this clause (h);
(i) Indebtedness
of a Restricted Subsidiary to the Issuer or another Restricted Subsidiary;
provided
that if a Guarantor
incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (except in respect of intercompany current liabilities incurred in the ordinary course of business in connection with the
cash management, Tax and accounting operations of the Issuer and its Subsidiaries), such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor;
provided
,
further
, that any subsequent issuance or transfer of any Capital Stock or any other event
which results in any Restricted Subsidiary holding such Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Issuer or another
Restricted Subsidiary or any pledge of such Indebtedness constituting a Permitted Lien but not the transfer thereof upon foreclosure) shall be deemed, in each case, to be an Incurrence of such
Indebtedness not permitted by this clause (i);
(j) Hedging
Obligations that are not incurred for speculative purposes;
(k) obligations
(including reimbursement obligations with respect to letters of credit, bank guarantees, warehouse receipts and similar instruments) in respect of
performance, bid, appeal and surety bonds, completion guarantees and similar obligations provided by the Issuer or any Restricted Subsidiary in the ordinary course of business or consistent with past
practice or industry practice;
(l) Indebtedness
or Disqualified Stock of the Issuer or Indebtedness, Disqualified Stock or Preferred Stock of any Restricted Subsidiary in an aggregate principal amount or
liquidation preference, which when aggregated with the principal amount or liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and Incurred
pursuant to this clause (l), together with any Refinancing Indebtedness in respect thereof incurred pursuant to clause (o) below,
does not exceed the greater of $750 million and 5.50% of Total Assets at the time of Incurrence (plus, in the case of any Refinancing Indebtedness in respect thereof Incurred pursuant to
clause (o) below, the Additional Refinancing Amount); it being understood that any Indebtedness Incurred pursuant to this clause (l) shall cease to be deemed Incurred or outstanding
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for
purposes of this clause (l) but shall be deemed Incurred for purposes of the first paragraph of this covenant from and after the first date on which the Issuer or the Restricted Subsidiary,
as the case may be, could have Incurred such Indebtedness under the first paragraph of this covenant without reliance upon this clause (l);
(m) Indebtedness
or Disqualified Stock of the Issuer or any Restricted Subsidiary and Preferred Stock of any Restricted Subsidiary in an aggregate principal amount or
liquidation preference at any time outstanding, together with Refinancing Indebtedness in respect thereof incurred pursuant to clause (o) hereof, not greater than 100.0% of the net cash
proceeds received by the Issuer and its Restricted Subsidiaries since immediately after the Issue Date from the issue or sale of Equity Interests of the Issuer or any direct or indirect parent entity
of the Issuer (which proceeds are retained by the Issuer or contributed to the Issuer or a Restricted Subsidiary) or cash contributed to the capital of the Issuer (in each case other than proceeds of
Disqualified Stock or sales of Equity Interests to, or contributions received from the Issuer or any of its Subsidiaries), to the extent such net cash proceeds or cash have not been applied to make
Restricted Payments or to make other Investments, payments or exchanges pursuant to the third paragraph of "Limitation on restricted payments" or to make Permitted Investments (other than
Permitted Investments specified in clauses (1), (2) and (3) of the definition thereof) (plus, in the case of any Refinancing Indebtedness in respect thereof Incurred pursuant to
clause (o) below, the Additional Refinancing Amount) (it being understood that any Indebtedness incurred pursuant to this clause (m) shall cease to be deemed incurred or outstanding for
purposes of this clause (m) but shall be deemed incurred for the purposes of the first paragraph of this covenant from and after the first date on which the Issuer or such Restricted
Subsidiary, as the case may be, could have incurred such Indebtedness under the first paragraph of this covenant without reliance upon this clause (m));
(n) any
guarantee by the Issuer or any Restricted Subsidiary of Indebtedness or other obligations of the Issuer or any Restricted Subsidiary so long as the Incurrence of
such Indebtedness Incurred by the Issuer or such Restricted Subsidiary is permitted under the terms of the indenture;
provided
that (i) if such
Indebtedness is by its terms subordinated in right of payment to the notes or the Guarantee of such Restricted Subsidiary, as applicable, any such guarantee with respect to such Indebtedness shall be
subordinated in right of payment to the notes or such Guarantee, as applicable, substantially to the same extent as such Indebtedness is subordinated to the notes or the Guarantee, as applicable, and
(ii) if such guarantee is of Indebtedness of the Issuer or any Guarantor, such guarantee is Incurred in
accordance with, or not in contravention of, the covenant described under "Future guarantors" solely to the extent such covenant is applicable;
(o) the
Incurrence by the Issuer or any of the Restricted Subsidiaries of Indebtedness or Disqualified Stock, or by any Restricted Subsidiary of Preferred Stock, that serves
to refund, refinance or defease any Indebtedness Incurred or Disqualified Stock or Preferred Stock issued as permitted under the first paragraph of this covenant and clauses (a)(y), (b), (c),
(d), (l), (m), (o), (p) and (t) of this paragraph up to the outstanding principal amount (or, if applicable, the liquidation preference, face amount, or the like) or, if greater,
committed amount (only to the extent the committed amount could have been Incurred on the date of initial Incurrence and was deemed Incurred at such time for the purposes of this covenant) of such
Indebtedness or Disqualified Stock or Preferred Stock, in each case at the time such Indebtedness was Incurred or Disqualified Stock or Preferred Stock was issued pursuant to the first paragraph of
this covenant or clauses (a)(y), (b), (c), (d), (l), (m), (o), (p) and (t) of this paragraph, or any Indebtedness, Disqualified Stock or Preferred Stock Incurred to so refund or
refinance such Indebtedness, Disqualified Stock or Preferred Stock, plus any additional Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay premiums (including tender premiums),
accrued and unpaid
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interest,
expenses, underwriting discounts, commissions, defeasance costs and fees in connection therewith (subject to the following proviso, "Refinancing Indebtedness") prior to its respective
maturity;
provided
,
however
, that such Refinancing Indebtedness:
(1) has
a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is Incurred which is not less than the shorter of (x) the remaining Weighted
Average Life to Maturity of the Indebtedness, Disqualified Stock or Preferred Stock being refunded, refinanced or defeased and (y) the Weighted Average Life to Maturity that would result if all
payments of principal on the Indebtedness, Disqualified Stock and Preferred Stock being refunded or refinanced that were due on or after the date that is one year following the last maturity date of
any notes then outstanding were instead due on such date (provided that this subclause (1) will not apply to any refunding or refinancing of any Secured Indebtedness);
(2) to
the extent such Refinancing Indebtedness refinances (a) Indebtedness that by its terms is subordinated in right of payment to the notes or a Guarantee, as
applicable, such Refinancing Indebtedness is by its terms subordinated in right of payment to the notes or the Guarantee, as applicable, or (b) Disqualified Stock or Preferred Stock, such
Refinancing Indebtedness is Disqualified Stock or Preferred Stock; and
(3) shall
not include (x) Indebtedness of a Restricted Subsidiary that is not a Guarantor that refinances Indebtedness of the Issuer or a Guarantor, or
(y) Indebtedness of the Issuer or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary;
(p) Indebtedness,
Disqualified Stock or Preferred Stock of (x) the Issuer or any Restricted Subsidiary Incurred to finance an acquisition or (y) Persons that
are acquired by the Issuer or any Restricted Subsidiary or are merged, consolidated or amalgamated with or into the Issuer or any Restricted Subsidiary in accordance with the terms of the indenture
(so long as such Indebtedness, Disqualified Stock or Preferred Stock is not Incurred in contemplation of such acquisition, merger, consolidation or amalgamation);
provided
that after giving effect to
such acquisition or merger, consolidation or amalgamation, either:
(1) the
Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of
this covenant; or
(2) the
Fixed Charge Coverage Ratio of the Issuer would be no less than immediately prior to such acquisition or merger, consolidation or amalgamation;
(q) Indebtedness
Incurred in connection with a Securitization Financing that is not recourse to the Issuer or any Restricted Subsidiary other than a Securitization
Subsidiary (except for Standard Securitization Undertakings);
(r) Indebtedness
arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary
course of business;
provided
that such Indebtedness is extinguished within five Business Days of its Incurrence;
(s) Indebtedness
of the Issuer or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to Bank Indebtedness, in a principal amount not
in excess of the stated amount of such letter of credit;
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(t) Indebtedness
of Restricted Subsidiaries that are not Guarantors;
provided
,
however
, that the aggregate principal amount for all such Indebtedness that, when aggregated
with the principal amount of all other Indebtedness then
outstanding and Incurred pursuant to this clause (t), together with any Refinancing Indebtedness in respect thereof incurred pursuant to clause (o) above, does not exceed the greater of
$500 million and 3.5% of Total Assets at the time of Incurrence (plus, in the case of any Refinancing Indebtedness in respect thereof Incurred pursuant to clause (o) above, the
Additional Refinancing Amount) (it being understood that any Indebtedness incurred pursuant to this clause (t) shall cease to be deemed Incurred or outstanding for purposes of this
clause (t) but shall be deemed Incurred for the purposes of the first paragraph of this covenant from and after the first date on which such Restricted Subsidiary could have Incurred such
Indebtedness under the first paragraph of this covenant without reliance upon this clause (t));
(u) Indebtedness
of the Issuer or any Restricted Subsidiary consisting of (1) the financing of insurance premiums or (2) take-or-pay obligations contained in
supply arrangements, in each case, in the ordinary course of business;
(v) Indebtedness
consisting of Indebtedness of the Issuer or a Restricted Subsidiary to current or former officers, directors and employees of the Issuer, any direct or
indirect parent of the Issuer or any of either's Subsidiaries, their respective estates, spouses or former spouses, in each case to finance the purchase or redemption of Equity Interests of the Issuer
or any direct or indirect parent of the Issuer to the extent described in clause (4) of the third paragraph of the covenant described under "Limitation on restricted payments";
(w) Indebtedness
in respect of Obligations of the Issuer or any Restricted Subsidiary to pay the deferred purchase price of goods or services or progress payments in
connection with such goods and services;
provided
that such obligations are incurred in connection with open accounts extended by suppliers on customary
trade terms in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(x) Indebtedness
of, incurred on behalf of, or representing guarantees of Indebtedness of joint ventures, subject to compliance with the covenant described under
"Limitation on restricted payments"; and
(y) Indebtedness
of the Issuer or any Restricted Subsidiary to or on behalf of any joint venture (regardless of the form of legal entity) that is not a Restricted Subsidiary
arising in the ordinary course of business in connection with the cash management operations (including with respect to intercompany self-insurance arrangements) of the Issuer and its Restricted
Subsidiaries.
For purposes of determining compliance with this covenant,
(1) in
the event that an item of Indebtedness, Disqualified Stock or Preferred Stock (or any portion thereof) meets the criteria of more than one of the categories of
permitted Indebtedness described in clauses (a) through (y) above or is entitled to be Incurred pursuant to the first paragraph of this covenant, then the Issuer may, in its sole
discretion, classify or reclassify, or later divide, classify or reclassify (as if Incurred at such later time), such item of Indebtedness, Disqualified Stock or Preferred Stock (or any portion
thereof) in any manner that complies with this covenant, provided that Indebtedness outstanding under a Credit Agreement entered into on or prior to the Acquisition Date (and any secured Indebtedness
representing a refinancing of such Indebtedness) shall be incurred under clause (a) above and may not be reclassified; and
(2) (A)
in connection with any Limited Condition Acquisition, at the option of the Issuer by written notice to the Trustee, any Indebtedness and/or Lien Incurred to finance
such Limited Condition Acquisition shall be deemed to have been Incurred on the date the definitive acquisition agreement relating to such Limited Condition Acquisition was entered into (and not at
the time
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such
Limited Condition Acquisition is consummated) and the Fixed Charge Coverage Ratio and/or the Secured Leverage Ratio shall be tested (x) in connection with such Incurrence, as of the date
the definitive acquisition agreement relating to such Limited Condition Acquisition was entered into, giving
pro forma
effect to such Limited Condition
Acquisition, to any such Indebtedness or Lien, and to all transactions in connection therewith and (y) in connection with any other Incurrence after the date the definitive acquisition
agreement relating to such Limited Condition Acquisition was entered into and prior to the earlier of the consummation of such Limited Condition Acquisition or the termination of such definitive
agreement prior to the Incurrence, both (i) on the basis set forth in clause (x) above and (ii) without giving effect to such Limited Condition Acquisition or the Incurrence of
any such Indebtedness or Liens or the other transactions in connection therewith, and
(B) in
connection with obtaining any commitment with respect to any Indebtedness to be incurred under clause (a)(y) of the second paragraph of this covenant, the
Issuer may, by written notice to the Trustee at any time prior to the actual Incurrence of such Indebtedness, designate such commitment (any such commitment so designated, a "Designated Commitment")
as being Indebtedness Incurred on the date of such notice in an amount equal to such Designated Commitment (or, at the Issuer's option, if such Designated Commitment has been permanently reduced other
than as a result of the Incurrence of funded Indebtedness thereunder, such reduced amount), in which case Indebtedness in such amount shall be deemed to have been Incurred on the date of such notice
and shall thereafter be deemed to be outstanding Secured Indebtedness for purposes of any subsequent calculation of the Secured Leverage Ratio, and subsequent borrowings and prepayments under such
Designated Commitment shall be disregarded for all purposes of the covenant described above and the covenant set forth under "Certain covenantsLiens" below until the date
such Designated Commitment is terminated.
Accrual
of interest, the accretion of accreted value, the payment of interest or dividends in the form of additional Indebtedness, Disqualified Stock or Preferred Stock, as applicable,
amortization of original issue discount, the accretion of liquidation preference and increases in the amount of Indebtedness outstanding solely as a result of fluctuations in the exchange rate of
currencies will not be deemed to be an Incurrence of Indebtedness, Disqualified Stock or Preferred Stock for purposes of this covenant. Where any Indebtedness of any Person other than the Issuer and
its Restricted Subsidiaries is guaranteed by one or more of the Issuer and its Restricted Subsidiaries, the aggregate amount of Indebtedness of the Issuer and its Restricted Subsidiaries deemed to be
Incurred or outstanding as a result of all such guarantees shall not exceed the amount of such guaranteed Indebtedness. Guarantees of, or obligations in respect of letters of credit relating to,
Indebtedness which is otherwise included in the determination of a particular amount of Indebtedness shall not be included in the determination of such amount of Indebtedness;
provided
that the
Incurrence of the Indebtedness represented by such guarantee or letter of credit, as the case may be, was in compliance with this
covenant.
For
purposes of determining compliance with any U.S. dollar-denominated restriction on the Incurrence of Indebtedness, the U.S. dollar-equivalent principal amount (or, if applicable, the
liquidation preference, face amount, or the like) of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such
Indebtedness was Incurred, in the case of term debt, or first committed or first Incurred (whichever yields the lower U.S. dollar equivalent), in the case of revolving credit debt. However, if the
Indebtedness is Incurred to refinance other Indebtedness denominated in a foreign currency, and the refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if
calculated at the relevant currency exchange rate in effect on the date of the refinancing, the U.S. dollar-denominated restriction will be deemed not to have been exceeded so long as the principal
amount (or, if applicable, the liquidation preference, face amount, or the like) of the refinancing Indebtedness does
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not
exceed the principal amount (or, if applicable, the liquidation preference, face amount, or the like) of the Indebtedness being refinanced, plus any additional Indebtedness Incurred to pay
premiums (including tender premiums), accrued and unpaid interest, expenses, underwriting discounts, commissions, defeasance costs and fees in connection therewith.
Notwithstanding
any other provision of this covenant, the maximum amount of Indebtedness that the Issuer and its Restricted Subsidiaries may Incur pursuant to this covenant shall not be
deemed to be exceeded, with respect to any outstanding Indebtedness, solely as a result of fluctuations in the exchange rate of currencies. The principal amount (or, if applicable, the liquidation
preference, face amount, or the like) of any Indebtedness Incurred to refinance other Indebtedness, if Incurred in a different currency from the Indebtedness being refinanced, will be calculated based
on the currency exchange rate applicable to the currencies in which the respective Indebtedness is denominated that is in effect on the date of the refinancing.
Limitation on restricted payments
The indenture provides that, from and after the consummation of the Acquisition on the Acquisition Date, the Issuer will not, and will
not permit any of its Restricted Subsidiaries to, directly or indirectly:
(1) declare
or pay any dividend or make any distribution on account of any of the Issuer's or any of its Restricted Subsidiaries' Equity Interests, including any payment
made in connection with any merger,
amalgamation or consolidation involving the Issuer (other than (A) dividends or distributions payable solely in Equity Interests (other than Disqualified Stock) of the Issuer; or
(B) dividends or distributions by a Restricted Subsidiary so long as, in the case of any dividend or distribution payable on or in respect of any class or series of securities issued by a
Restricted Subsidiary that is not a Wholly Owned Restricted Subsidiary, the Issuer or a Restricted Subsidiary receives at least its pro rata share of such dividend or distribution in accordance with
its Equity Interests in such class or series of securities);
(2) purchase
or otherwise acquire or retire for value any Equity Interests of the Issuer or any direct or indirect parent of the Issuer;
(3) make
any principal payment on, or redeem, repurchase, defease or otherwise acquire or retire for value, in each case prior to any scheduled repayment or scheduled
maturity, any Subordinated Indebtedness of the Issuer or any Guarantor (other than the payment, redemption, repurchase, defeasance, acquisition or retirement of (A) Subordinated Indebtedness in
anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case due within one year of the date of such payment, redemption, repurchase, defeasance,
acquisition or retirement and (B) Indebtedness permitted under clauses (g) and (i) of the second paragraph of the covenant described under
"
Limitation on incurrence of indebtedness and issuance of disqualified stock and preferred stock
"); or
(4) make
any Restricted Investment;
(all
such payments and other actions set forth in clauses (1) through (4) above being collectively referred to as "Restricted Payments"), unless, at the time of such Restricted Payment:
(a) no
Default shall have occurred and be continuing or would occur as a consequence thereof;
(b) immediately
after giving effect to such transaction on a pro forma basis, the Issuer could Incur $1.00 of additional Indebtedness under the provisions of the first
paragraph of the covenant described under "Limitation on incurrence of indebtedness and issuance of disqualified stock and preferred stock"; and
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(c) such
Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Issuer and its Restricted Subsidiaries after the Acquisition
Date (including Restricted Payments permitted by clauses (1) (to the extent that such Restricted Payment would have reduced the Cumulative Credit if made at the date of the declaration or
giving of notice referred to therein and without duplication of any such reduction), (2)(c) (to the extent that the reference to clause (6) therein operates by reference to
clause (6)(b)), (6)(b) and (8) of the next succeeding paragraph, but excluding all other Restricted Payments permitted by the next succeeding paragraph), is less than the amount equal to
the Cumulative Credit.
"Cumulative
Credit" means the sum of (without duplication):
(1) (a)
$250 million
plus
(b) 50% of the Consolidated Net Income of the Issuer for the period (taken as one
accounting period) from February 1, 2015 to the end of the Issuer's most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted
Payment (or, in the case such Consolidated Net Income for such period is a deficit,
minus
100% of such deficit),
plus
(2) 100%
of the aggregate net proceeds, including cash and the Fair Market Value (as determined in good faith by the Issuer) of property other than cash, received by the
Issuer after the Issue Date (other than net proceeds to the extent such net proceeds have been used to Incur Indebtedness, Disqualified Stock, or Preferred Stock pursuant to clause (m) of the
second paragraph of the covenant described under "Limitation on incurrence of indebtedness and issuance of disqualified stock and preferred stock") from the issue or sale of Equity
Interests of the Issuer or any direct or indirect parent entity of the Issuer (excluding Refunding Capital Stock, Designated Preferred Stock, Excluded Contributions, Disqualified Stock and Equity
Interests issued pursuant to the Acquisition Agreement), including Equity Interests issued upon exercise of warrants or options (other than an issuance or sale to the Issuer or a Restricted
Subsidiary),
plus
(3) 100%
of the aggregate amount of contributions to the capital of the Issuer received in cash and the Fair Market Value (as determined in good faith by the Issuer) of
property other than cash received by the Issuer after the Issue Date (other than Excluded Contributions, Refunding Capital Stock, Designated Preferred Stock, Disqualified Stock and Equity Interests
issued pursuant to the Acquisition Agreement and other than contributions to the extent such contributions have been used to incur Indebtedness, Disqualified Stock, or Preferred Stock pursuant to
clause (m) of the second paragraph of the covenant described under "Limitation on incurrence of indebtedness and issuance of disqualified stock and preferred stock"),
plus
(4) 100%
of the principal amount of any Indebtedness, or the liquidation preference or maximum fixed repurchase price, as the case may be, of any Disqualified Stock of the
Issuer or any Restricted Subsidiary issued after the Issue Date (other than Indebtedness or Disqualified Stock issued to a Restricted Subsidiary) which has been converted into or exchanged for Equity
Interests in the Issuer (other than Disqualified Stock) or any direct or indirect parent of the Issuer (
provided
, in the case of any such parent, such
Indebtedness or Disqualified Stock is retired or extinguished),
plus
(5) 100%
of the aggregate amount received by the Issuer or any Restricted Subsidiary in cash and the Fair Market Value (as determined in good faith by the Issuer) of
property other than cash received by the Issuer or any Restricted Subsidiary (and 100% of the amount of the reduction in the amount of any guarantee by the Issuer or any Restricted Subsidiary to the
extent the provision of such guarantee constituted a Restricted Payment) from:
(A) the
sale or other disposition (other than to the Issuer or a Restricted Subsidiary) of Restricted Investments made by the Issuer and its Restricted Subsidiaries and from
repurchases and redemptions of such Restricted Investments from the Issuer and its Restricted
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Subsidiaries
by any Person (other than the Issuer or any Restricted Subsidiary) and from repayments of loans or advances, and releases of guarantees, which constituted Restricted Investments,
(B) the
sale (other than to the Issuer or a Restricted Subsidiary) of the Capital Stock of an Unrestricted Subsidiary, or
(C) a
distribution or dividend from an Unrestricted Subsidiary,
in
the case of each of subclauses (A), (B), and (C), other than to the extent that the ability of the Issuer and its Restricted Subsidiaries to make Restricted Payments or Permitted Investments
would otherwise be increased by the receipt of such amount of cash or property or the release of such guarantee,
plus
(6) in
the event any Unrestricted Subsidiary has been redesignated as a Restricted Subsidiary or has been merged, consolidated or amalgamated with or into, or transfers or
conveys its assets to, or is liquidated into the Issuer or a Restricted Subsidiary, the Fair Market Value (as determined in good faith by the Issuer) of the Investment of the Issuer or the Restricted
Subsidiaries in such Unrestricted Subsidiary (which, if the Fair Market Value of such Investment shall exceed $50 million, shall be determined by the Board of Directors of the Issuer) at the
time of such redesignation, combination or transfer (or of the assets transferred or conveyed, as applicable) (other than in each case to the extent that the ability of the Issuer and its Restricted
Subsidiaries to make Restricted Payments or Permitted Investments would otherwise be increased by such redesignation).
The
foregoing provisions will not prohibit:
(1) the
payment of any dividend or distribution or the consummation of any irrevocable redemption within 60 days after the date of declaration or giving notice
thereof, if at the date of declaration or the giving notice of such irrevocable redemption, as applicable, such payment would have complied with the provisions of the indenture;
(2) (a)
the redemption, repurchase, retirement or other acquisition of any Equity Interests ("Retired Capital Stock") or Subordinated Indebtedness of the Issuer, or any
direct or indirect parent of the Issuer or any Guarantor in exchange for, or out of the proceeds of, the substantially concurrent sale of, Equity Interests of the Issuer or any direct or indirect
parent of the Issuer or contributions to the equity capital of the Issuer (other than any Disqualified Stock or any Equity Interests sold to a Subsidiary of the Issuer) (collectively, including any
such contributions, "Refunding Capital Stock");
(b) the
declaration and payment of dividends on the Retired Capital Stock out of the proceeds of the substantially concurrent sale (other than to a Subsidiary of the Issuer)
of Refunding Capital Stock; and
(c) if
immediately prior to the retirement of Retired Capital Stock, the declaration and payment of dividends thereon was permitted under clause (6) of this paragraph
and not made pursuant to clause (2)(b), the declaration and payment of dividends on the Refunding Capital Stock in an aggregate amount per year no greater than the aggregate amount of dividends
per annum that were declarable and payable on such Retired Capital Stock immediately prior to such retirement;
(3) the
redemption, repurchase, defeasance, or other acquisition or retirement of Subordinated Indebtedness of the Issuer or any Guarantor made by exchange for, or out of
the proceeds of the substantially concurrent sale of, new Indebtedness of the Issuer or a Guarantor,
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which
is Incurred in accordance with the covenant described under "Limitation on incurrence of indebtedness and issuance of disqualified stock and preferred stock" so long as:
(a) the
principal amount (or accreted value, if applicable) of such new Indebtedness does not exceed the principal amount (or accreted value, if applicable), plus any
accrued and unpaid interest, of the Subordinated Indebtedness being so redeemed, repurchased, defeased, acquired or retired for value (
plus
the amount
of any premium required to be paid under the terms of the instrument governing the Subordinated Indebtedness being so redeemed, repurchased, defeased, acquired or retired,
plus
any tender premiums,
plus
any defeasance costs, fees, underwriting discounts, commissions and
expenses incurred in connection therewith),
(b) such
Indebtedness is subordinated to the notes or the related Guarantee of such Guarantor, as the case may be, at least to the same extent as such Subordinated
Indebtedness so purchased, exchanged, redeemed, repurchased, defeased, acquired or retired for value,
(c) such
Indebtedness has a final scheduled maturity date equal to or later than the earlier of (x) the final scheduled maturity date of the Subordinated Indebtedness
being so redeemed, repurchased, acquired or retired and (y) 91 days following the last maturity date of any notes then outstanding, and
(d) such
Indebtedness has a Weighted Average Life to Maturity at the time Incurred which is not less than the shorter of (x) the remaining Weighted Average Life to
Maturity of the Subordinated Indebtedness being so redeemed, repurchased, defeased, acquired or retired and (y) the Weighted Average Life to Maturity that would result if all payments of
principal on the Subordinated Indebtedness being redeemed, repurchased, defeased, acquired or retired that were due on or after the date that is one year following the last maturity date of any notes
then outstanding were instead due on such date;
(4) a
Restricted Payment to pay for the repurchase, retirement or other acquisition for value of Equity Interests of the Issuer or any direct or indirect parent of the
Issuer held by any future, present or former employee, director, officer or consultant of the Issuer, any Subsidiary of the Issuer or any direct or indirect parent of the Issuer pursuant to any
management equity plan or stock option plan or any other management or employee benefit plan or other agreement or arrangement;
provided
,
however
, that the
aggregate Restricted Payments made under this clause (4) do not exceed $25 million in any calendar year, with unused
amounts in any calendar year being permitted to be carried over to the immediately succeeding calendar year;
provided
,
further
,
however
, that such amount in any calendar year may be increased by an amount not to exceed:
(a) the
cash proceeds received by the Issuer or any of the Restricted Subsidiaries from the sale of Equity Interests (other than Disqualified Stock) of the Issuer or any
direct or indirect parent of the Issuer (to the extent contributed to the Issuer) to employees, directors, officers or consultants of the Issuer, any Restricted Subsidiary or any direct or indirect
parent of the Issuer that occurs after the Acquisition Date (
provided
that the amount of such cash proceeds utilized for any such repurchase,
retirement, other acquisition or dividend will not increase the amount available for Restricted Payments under clause (3) of the first paragraph under "Limitation on Restricted
Payments"),
plus
(b) the
cash proceeds of key man life insurance policies received by the Issuer or any direct or indirect parent of the Issuer (to the extent contributed to the Issuer) or
the Restricted Subsidiaries after the Acquisition Date;
provided
that the Issuer may elect to apply all or any portion of the aggregate increase contemplated by clauses (a) and (b) above in any
calendar year;
provided
,
further
, that cancellation of Indebtedness owing to the Issuer or any
Restricted Subsidiary from any present or former
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employees,
directors, officers or consultants of the Issuer, or any Restricted Subsidiary or any direct or indirect parent of the Issuer in connection with a repurchase of Equity Interests of the
Issuer or any direct or indirect parent of the Issuer will not be deemed to constitute a Restricted Payment for purposes of this covenant or any other provision of the indenture;
(5) the
declaration and payment of dividends or distributions to holders of any class or series of Disqualified Stock of the Issuer or any Restricted Subsidiary issued or
incurred in accordance with the covenant described under "Limitation on incurrence of indebtedness and issuance of disqualified stock and preferred stock";
(6) (a)
the declaration and payment of dividends or distributions to holders of any class or series of Designated Preferred Stock (other than Disqualified Stock) issued
after the Acquisition Date; and
(b) the
declaration and payment of dividends on Refunding Capital Stock that is Preferred Stock in excess of the dividends declarable and payable thereon pursuant to
clause (2) of this paragraph;
provided
,
however
, in the case of each of (a) and (b) above of this clause (6),
that for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of issuance of such Designated Preferred Stock or
Refunding Capital Stock, after giving effect to such issuance (and the payment of dividends or distributions and treating such Designated Preferred Stock or Refunding Capital Stock as Indebtedness for
borrowed money for such purpose) on a
pro forma
basis (including a
pro forma
application of the net
proceeds therefrom), the Issuer would have had a Fixed Charge Coverage Ratio of at least 2.00 to 1.00;
(7) [reserved];
(8) the
payment of dividends on the Issuer's Capital Stock of up to 3% per annum of Market Capitalization;
(9) Restricted
Payments that are made with (or in an aggregate amount that does not exceed the aggregate amount of) Excluded Contributions;
(10) other
Restricted Payments in an aggregate amount, when taken together with all other Restricted Payments made pursuant to this clause (10) that are at that time
outstanding, not to exceed the greater of $750 million and 5.50% of Total Assets as of the date such Restricted Payment is made;
(11) the
distribution, as a dividend or otherwise, of shares of Capital Stock of, or Indebtedness owed to the Issuer or a Restricted Subsidiary by, Unrestricted
Subsidiaries;
(12) [reserved];
(13) [reserved];
(14) repurchases
of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such
options or warrants;
(15) purchases
of Securitization Assets pursuant to a Securitization Repurchase Obligation in connection with a Securitization Financing and the payment or distribution of
Securitization Fees;
(16) Restricted
Payments by the Issuer or any Restricted Subsidiary to allow the payment of cash in lieu of the issuance of fractional shares upon the exercise of options or
warrants or upon the conversion or exchange of Capital Stock of any such Person;
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(17) the
repurchase, redemption or other acquisition or retirement for value of any Subordinated Indebtedness pursuant to the provisions similar to those described under the
captions "Change of control" and "Asset sales";
provided
that all notes tendered by holders of the notes in connection with a
Change of Control Offer or Asset Sale Offer, as applicable, have been repurchased, redeemed or acquired for value;
(18) payments
or distributions to dissenting stockholders pursuant to applicable law, pursuant to or in connection with a consolidation, amalgamation, merger or transfer of
all or substantially all of the assets of the Issuer and its Restricted Subsidiaries, taken as a whole, that complies with the covenant described under "Merger, amalgamation,
consolidation or sale of all or substantially all assets";
provided
that as a result of such consolidation, amalgamation, merger or transfer of assets,
the Issuer shall have made a Change of Control Offer (if required by the indenture) and that all notes tendered by holders in connection with such Change of Control Offer have been repurchased,
redeemed or acquired for value;
(19) any
Restricted Payment used to fund the Transactions and the payment of fees and expenses incurred in connection with the Transactions or owed by the Issuer or any
direct or indirect parent of the Issuer or the Restricted Subsidiaries to Affiliates, and any other payments made in connection with the consummation of the Transactions, whether payable on the Issue
Date or thereafter, in each case to the extent permitted by the covenant described under "Transactions with affiliates";
(20) any
Restricted Payment made under the Acquisition Documents as in effect on the Issue Date, together with such amendments, modifications and waivers that are
(i) not materially adverse to the holders of the notes in their capacities as such, as determined in good faith by the Issuer or (ii) consented to by the holders of a majority in
principal amount of the notes outstanding; and
(21) other
Restricted Payments;
provided
that the Consolidated Total Net Leverage Ratio of the Issuer for the most recently
ended four full fiscal quarters for which internal financial statements are available, determined on a pro forma basis, is less than 3.50 to 1.00;
provided
,
however
, that at the time of, and after giving effect to, any Restricted Payment permitted
under clauses (8), (10), (11) and (21), no Default shall have occurred and be continuing or would occur as a consequence thereof;
provided
,
further
, that any Restricted Payments made with property other than cash shall be calculated
using the Fair Market Value (as determined in good faith by the Issuer) of such property.
As
of the Acquisition Date, all of the Subsidiaries of the Issuer will be Restricted Subsidiaries. The Issuer will not permit any Unrestricted Subsidiary to become a Restricted
Subsidiary except pursuant to the definition of "Unrestricted Subsidiary." For purposes of designating any Restricted Subsidiary as an Unrestricted Subsidiary, all outstanding Investments by the
Issuer and its Restricted Subsidiaries (except to the extent repaid) in the Subsidiary so designated will be deemed to be Investments in an amount determined as set forth in the last sentence of the
definition of "Investments." Such designation will only be permitted if a Restricted Payment or Permitted Investment in such amount would be permitted at such time and if such Subsidiary otherwise
meets the definition of an Unrestricted Subsidiary.
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Dividend and other payment restrictions affecting subsidiaries
The indenture provides that the Issuer will not, and will not permit any Material Subsidiary to, directly or indirectly, create or
otherwise cause or suffer to exist or become effective any consensual encumbrance or consensual restriction on the ability of any Material Subsidiary to:
(a) pay
dividends or make any other distributions to the Issuer or any Restricted Subsidiary (1) on its Capital Stock, or (2) with respect to any other
interest or participation in, or measured by, its profits; or
(b) make
loans or advances to the Issuer or any Restricted Subsidiary that is a direct or indirect parent of such Material Subsidiary;
except
in each case for such encumbrances or restrictions existing under or by reason of:
(1) (i)
contractual encumbrances or restrictions (x) of Dollar Tree or any Subsidiary of Dollar Tree in effect on the Issue Date or (y) of Family Dollar or any
Subsidiary of Family Dollar in effect on the Acquisition Date, (ii) contractual encumbrances or restrictions pursuant to the Existing Family Dollar Notes Indenture, the notes issued pursuant
thereto and the guarantees thereof, or the 2020 Notes Indenture, the notes issued pursuant thereto (including the Initial 2020 Notes) and the guarantees thereof and (iii) contractual
encumbrances or restrictions pursuant to the Credit Agreement, the other
Credit Agreement Documents and, in each case, any similar contractual encumbrances effected by any amendments, modifications, restatements, renewals, supplements, refundings, replacements or
refinancings of such agreements or instruments;
(2) the
indenture, the notes (and any exchange notes) or the Guarantees;
(3) applicable
law or any applicable rule, regulation or order;
(4) any
agreement or other instrument of a Person acquired by the Issuer or any Restricted Subsidiary which was in existence at the time of such acquisition (but not created
in contemplation thereof or to provide all or any portion of the funds or credit support utilized to consummate such acquisition), which encumbrance or restriction is not applicable to any Person, or
the properties or assets of any Person, other than the Person and its Subsidiaries, or the property or assets of the Person and its Subsidiaries, so acquired;
(5) contracts
or agreements for the sale of assets, including any restriction with respect to a Restricted Subsidiary imposed pursuant to an agreement entered into for the
sale or disposition of the Capital Stock or assets of such Restricted Subsidiary;
(6) Secured
Indebtedness otherwise permitted to be Incurred pursuant to the covenants described under "Limitation on incurrence of indebtedness and issuance of
disqualified stock and preferred stock" and "Liens" that limit the right of the debtor to dispose of the assets securing such Indebtedness;
(7) restrictions
on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business;
(8) customary
provisions in joint venture agreements and other similar agreements entered into in the ordinary course of business;
(9) purchase
money obligations for property acquired and Capitalized Lease Obligations in the ordinary course of business;
(10) customary
provisions contained in leases, licenses and other similar agreements entered into in the ordinary course of business;
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(11) any
encumbrance or restriction that restricts in a customary manner the subletting, assignment or transfer of any property or asset that is subject to a lease, license
or similar contract, or the assignment or transfer of any such lease, license (including, without limitation, licenses of intellectual property) or other contracts;
(12) any
encumbrance or restriction of a Securitization Subsidiary effected in connection with a Securitization Financing;
(13) other
Indebtedness, Disqualified Stock or Preferred Stock of the Issuer or any Restricted Subsidiary so long as such encumbrances and restrictions contained in any
agreement or instrument will not materially affect the Issuer's ability to make anticipated principal or interest payments on the notes (as determined in good faith by the Issuer),
provided
that in each
case such Indebtedness, Disqualified Stock or Preferred Stock is permitted to be Incurred by the covenant described under
"Limitation on incurrence of indebtedness and issuance of disqualified stock and preferred stock";
(14) any
Restricted Investment not prohibited by the covenant described under "Limitation on restricted payments" and any Permitted Investment; or
(15) any
encumbrances or restrictions of the type referred to in clauses (a) or (b) above imposed by any amendments, modifications, restatements, renewals,
increases, supplements, refundings, replacements or refinancings of the contracts, instruments or obligations referred to in clauses (1) through (14) above;
provided
that such amendments,
modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings are, in the good
faith judgment of the Issuer, no more restrictive with respect to such dividend and other payment restrictions than those contained in the dividend or other payment restrictions prior to such
amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing.
For
purposes of determining compliance with this covenant, (1) the priority of any Preferred Stock in receiving dividends or liquidating distributions prior to dividends or
liquidating distributions being paid on other Capital Stock shall not be deemed a restriction on the ability to make distributions on Capital Stock and (2) the subordination of loans or
advances made to the Issuer or a Restricted Subsidiary to other Indebtedness Incurred by the Issuer or any such Restricted Subsidiary shall not be deemed a restriction on the ability to make loans or
advances.
Asset sales
The indenture provides that the Issuer will not, and will not permit any of the Restricted Subsidiaries to, cause or make an Asset Sale
(other than any Permitted Regulatory Sale), unless (x) the Issuer or such Restricted Subsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the
Fair Market Value (as determined in good faith by the Issuer) of the assets sold or otherwise disposed of, and (y), at least 75% of the consideration therefor received by the Issuer or such Restricted
Subsidiary, as the case may be, is in the form of Cash Equivalents;
provided
that the amount of each of the following shall be deemed to be Cash
Equivalents for purposes of this provision:
(a) any
liabilities (as shown on the Issuer or a Restricted Subsidiary's most recent balance sheet or in the notes thereto) of the Issuer or a Restricted Subsidiary (other
than liabilities that are by their terms subordinated to the notes or any Guarantee) that are assumed by the transferee of any such assets or that are otherwise canceled or terminated in connection
with the transaction with such transferee,
(b) any
notes or other obligations or other securities or assets received by the Issuer or such Restricted Subsidiary from such transferee that are converted by the Issuer
or such Restricted Subsidiary into cash or Cash Equivalents within 180 days of the receipt thereof (to the extent of the cash received),
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(c) Indebtedness
of any Restricted Subsidiary that is no longer a Restricted Subsidiary as a result of such Asset Sale, to the extent that the Issuer and each Restricted
Subsidiary are released from any guarantee of payment of such Indebtedness in connection with the Asset Sale,
(d) consideration
consisting of Indebtedness of the Issuer or any Restricted Subsidiary (other than Subordinated Indebtedness) received after the Acquisition Date from
Persons who are not the Issuer or any Restricted Subsidiary, and
(e) any
Designated Non-cash Consideration received by the Issuer or any Restricted Subsidiary in such Asset Sale having an aggregate Fair Market Value (as determined in good
faith by the Issuer), taken together with all other Designated Non-cash Consideration received pursuant to this clause (e) that is at that time outstanding, not to exceed the greater of
$300 million and 2.0% of Total Assets at the time of the receipt of such Designated Non-cash Consideration (with the Fair Market Value of each item of Designated Non-cash Consideration being
measured at the time received and without giving effect to subsequent changes in value).
Within 365 days after the Issuer or any Restricted Subsidiary's receipt of the Net Proceeds of any Asset Sale, the Issuer or such Restricted Subsidiary may
apply the Net Proceeds from such Asset Sale, at its option:
(1) to
repay, repurchase or redeem (i) Indebtedness constituting Bank Indebtedness and other Pari Passu Indebtedness that is secured by a Lien permitted under the
indenture (and, if the Indebtedness repaid is revolving credit Indebtedness, to correspondingly reduce commitments with respect thereto), (ii) Indebtedness of a Restricted Subsidiary that is
not a Guarantor, (iii) Obligations under the notes as provided under "Optional redemption," through open-market purchases (
provided
that such purchases are at or above 100% of the principal amount thereof or, in the event that the notes were issued with significant original issue discount, 100% of the accreted value thereof) or by
making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all holders to purchase at a purchase price equal to 100% of the principal amount thereof (or, in the
event that the notes were issued with significant original issue discount, 100% of the accreted value thereof) or (iv) other Pari Passu Indebtedness
(
provided
that if the Issuer or any Guarantor shall so reduce Obligations under unsecured Pari Passu Indebtedness under this clause (iv), the
Issuer will reduce the Notes Obligations as provided under clause (iii) pro rata based on the total principal amount of notes and other Pari Passu Indebtedness outstanding), in each case other
than Indebtedness owed to the Issuer or an Affiliate of the Issuer; or
(2) to
make an investment in any one or more businesses (
provided
that if such investment is in the form of the acquisition
of Capital Stock of a Person, such acquisition results in such Person becoming a Restricted Subsidiary of the Issuer), assets, or property or capital expenditures, in each case (a) used or
useful in a Similar Business or (b) that replace the properties and assets that are the subject of such Asset Sale or to reimburse the cost of any of the foregoing incurred on or after the date
on which the Asset Sale giving rise to such Net Proceeds was contractually committed.
In
the case of clause (2) above, a binding commitment shall be treated as a permitted application of the Net Proceeds from the date of such commitment until the 12-month
anniversary of the date of the receipt of such Net Proceeds;
provided
that in the event such binding commitment is later canceled or terminated for any
reason before such Net Proceeds are so applied, then such Net Proceeds shall constitute Excess Proceeds unless the Issuer or such Restricted Subsidiary enters into another binding commitment (a
"Second Commitment") within six months of such cancellation or termination of the prior binding commitment;
provided
,
further
, that the Issuer or such
Restricted Subsidiary may only enter into a Second Commitment under the foregoing provision one time with respect to
each Asset Sale and to the extent such Second Commitment is later canceled or terminated for any reason before
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such
Net Proceeds are applied or are not applied within 180 days of such Second Commitment, then such Net Proceeds shall constitute Excess Proceeds.
Pending
the final application of any such Net Proceeds, the Issuer or such Restricted Subsidiary may temporarily reduce Indebtedness under a revolving credit facility, if any, or invest
such Net Proceeds in any manner not prohibited by the indenture. Any Net Proceeds from any Asset Sale that are not applied as provided and within the time period set forth in the second paragraph of
this covenant (it being understood that any portion of such Net Proceeds used to make an offer to purchase notes, as described in clause (1) above, shall be deemed to have been so applied
whether or not such offer is accepted) will be deemed to constitute "Excess Proceeds." When the aggregate amount of Excess Proceeds exceeds $150 million, the Issuer shall make an offer to all
holders of notes (and, at the option of the Issuer, to holders of any other Pari Passu Indebtedness) (an "Asset Sale Offer") to purchase the maximum principal amount of notes (and such other Pari
Passu Indebtedness) that is at least $2,000 and an integral multiple of $1,000 in excess thereof that may be purchased out of the Excess Proceeds at an offer price in cash in an amount equal to 100%
of the principal amount thereof (or, in the event the notes or other Pari Passu Indebtedness were issued with significant original issue discount, 100% of the accreted value thereof), plus accrued and
unpaid interest and additional interest, if any (or, in respect of such other Pari Passu Indebtedness, such lesser price, if any, as may be provided for by the terms of such other Pari Passu
Indebtedness), to, but excluding, the date fixed for the closing of such offer, in accordance with the procedures set forth in the indenture. The Issuer will commence an Asset Sale Offer with respect
to Excess Proceeds within ten (10) Business Days after the date that Excess Proceeds exceeds $150 million by mailing, or delivering electronically if the notes are held by DTC, the
notice required pursuant to the terms of the indenture, with a copy to the Trustee. To the extent that the aggregate amount of notes (and such other Pari Passu Indebtedness) tendered pursuant to an
Asset Sale Offer is less than the Excess Proceeds, the Issuer may use any remaining Excess Proceeds for any purpose that is not prohibited by the indenture. If the aggregate principal amount of notes
(and such other Pari Passu Indebtedness) surrendered by holders thereof exceeds the amount of Excess Proceeds, the Trustee, upon receipt of written notice from the Issuer of the aggregate principal
amount to be selected, shall select the notes (but not such other Pari Passu Indebtedness) to be purchased in the manner described below. Upon completion of any such Asset Sale Offer, the amount of
Excess Proceeds shall be reset at zero.
The
Issuer will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations to the extent such laws or regulations are
applicable in connection with the repurchase of the notes pursuant to an Asset Sale Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions of the
indenture, the Issuer will comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations described in the indenture by virtue thereof.
If
more notes (and such other Pari Passu Indebtedness) are tendered pursuant to an Asset Sale Offer than the Issuer is required to purchase, selection of such notes (but not such other
Pari Passu Indebtedness) for purchase will be made by the Trustee on a pro rata basis or by lot or by such other method as the Trustee shall deem fair and appropriate (and in such manner as complies
with the requirements of DTC, if applicable);
provided
that no notes of $2,000 or less shall be purchased in part. Selection of such other Pari Passu
Indebtedness will be made pursuant to the terms of such other Pari Passu Indebtedness.
Notices
of an Asset Sale Offer shall be mailed by the Issuer by first class mail, postage prepaid, or delivered electronically if the notes are held by DTC, at least 30 days but
not more than 60 days before
the purchase date to each holder of notes at such holder's registered address. If any note is to be purchased in part only, any notice of purchase that relates to such note shall state the portion of
the principal amount thereof that has been or is to be purchased.
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Transactions with affiliates
The indenture provides that the Issuer will not, and will not permit any of the Restricted Subsidiaries to, directly or indirectly,
make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction or
series of transactions, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate of the Issuer (each of the foregoing, an "Affiliate Transaction")
involving aggregate consideration in excess of $25 million, unless:
(a) such
Affiliate Transaction is on terms that are not materially less favorable to the Issuer or the relevant Restricted Subsidiary than those that could have been
obtained in a comparable transaction by the Issuer or such Restricted Subsidiary with an unrelated Person; and
(b) with
respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $50 million, the Issuer
delivers to the Trustee a resolution adopted in good faith by the majority of the Board of Directors of the Issuer, approving such Affiliate Transaction and set forth in an Officers' Certificate
certifying that such Affiliate Transaction complies with clause (a) above.
The
foregoing provisions will not apply to the following:
(1) transactions
between or among the Issuer and/or any of the Restricted Subsidiaries (or an entity that becomes the Issuer or a Restricted Subsidiary as a result of such
transaction) and any merger, consolidation or amalgamation of the Issuer and any direct parent of the Issuer;
provided
that such parent shall have no
material liabilities and no material assets other than cash, Cash Equivalents and the Capital Stock of the Issuer and such merger, consolidation or amalgamation is otherwise in compliance with the
terms of the indenture and effected for a bona fide business purpose;
(2) Restricted
Payments permitted by the provisions of the indenture described above under the covenant "Limitation on restricted payments" and Permitted
Investments;
(3) the
payment of reasonable and customary fees and reimbursement of expenses paid to, and indemnity provided on behalf of, officers, directors, employees or consultants of
the Issuer, any Restricted Subsidiary, or any direct or indirect parent of the Issuer;
(4) transactions
in which the Issuer or any Restricted Subsidiary, as the case may be, delivers to the Trustee a letter from an Independent Financial Advisor stating that
such transaction is fair to the Issuer or such Restricted Subsidiary from a financial point of view or meets the requirements of clause (a) of the preceding paragraph;
(5) payments
or loans (or cancellation of loans) to officers, directors, employees or consultants which are approved by a majority of the Board of Directors of the Issuer in
good faith;
(6) any
agreement (x) of Dollar Tree or any Subsidiary of Dollar Tree as in effect on the Issue Date or (y) of Family Dollar or any Subsidiary of Family Dollar
as in effect on the Acquisition Date, in each case, or any amendment thereto (so long as any such agreement together with all amendments thereto, taken as a whole, is not more disadvantageous to the
holders of the notes in any material respect than the original agreement as in effect on the Issue Date or Acquisition Date, as applicable) or any transaction contemplated thereby as determined in
good faith by the Issuer;
(7) the
existence of, or the performance by the Issuer or any Restricted Subsidiary of its obligations under the terms of any stockholders or limited liability company
agreement (including any registration rights agreement or purchase agreement related thereto) to which Dollar Tree or any Subsidiary of Dollar Tree is a party as of the Issue Date or Family Dollar or
any Subsidiary of
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Family
Dollar is a party as of the Acquisition Date, and any transaction, agreement or arrangement described in the Offering Memorandum and, in each case, any amendment thereto or similar
transactions, agreements or arrangements which it may enter into thereafter;
provided
,
however
, that the
existence of, or the performance by the Issuer or any Restricted Subsidiary of its obligations under, any
future amendment to any such existing transaction, agreement or arrangement or under any similar transaction, agreement or arrangement entered into after the Issue Date or Acquisition Date, as
applicable, shall only be permitted by this clause (7) to the extent that the terms of any such existing transaction, agreement or arrangement together with all amendments thereto, taken as a
whole, or new transaction, agreement or arrangement are not otherwise more disadvantageous to the holders of the notes in any material respect than the original transaction, agreement or arrangement
as in effect on the Issue Date or Acquisition Date, as applicable, as determined in good faith by the Issuer;
(8) the
execution of the Transactions, and the payment of all fees, expenses, bonuses and awards related to the Transactions;
(9) (a)
transactions with customers, clients, suppliers or purchasers or sellers of goods or services, or transactions otherwise relating to the purchase or sale of goods or
services, in each case in the ordinary course of business and otherwise in compliance with the terms of the indenture, which are fair to the Issuer and its Restricted Subsidiaries in the reasonable
determination of the Issuer, or are on terms at least as favorable as might reasonably have been obtained at such time from an unaffiliated party or (b) transactions with joint ventures or
Unrestricted Subsidiaries entered into in the ordinary course of business and consistent with past practice or industry norm;
(10) any
transaction effected as part of a Securitization Financing;
(11) the
issuance of Equity Interests (other than Disqualified Stock) of the Issuer to any Person;
(12) the
issuances of securities or other payments, awards or grants in cash, securities or otherwise pursuant to, or the funding of, employment arrangements, stock option
and stock ownership plans or similar employee benefit plans approved by the Board of Directors of the Issuer or any direct or indirect parent of the Issuer, or the Board of Directors of a Restricted
Subsidiary, as appropriate, in good faith;
(13) [reserved];
(14) any
contribution to the capital of the Issuer;
(15) transactions
permitted by, and complying with, the provisions of the covenant described under "Merger, amalgamation, consolidation or sale of all or
substantially all assets";
(16) transactions
between the Issuer or any Restricted Subsidiary and any Person, a director of which is also a director of the Issuer, any Restricted Subsidiary or any
direct or indirect parent of the Issuer;
provided
,
however
, that such Person abstains from voting as a
director of the Issuer, such Restricted Subsidiary or such direct or indirect parent of the Issuer, as the case may be, on any matter involving such Person;
(17) pledges
of Equity Interests of Unrestricted Subsidiaries;
(18) the
formation and maintenance of any consolidated group or subgroup for Tax, accounting or cash pooling or management purposes in the ordinary course of business;
(19) any
employment agreements entered into by the Issuer or any Restricted Subsidiary in the ordinary course of business;
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(20) transactions
undertaken in good faith (as certified by a responsible financial or accounting officer of the Issuer in an Officers' Certificate) for the purpose of
improving the consolidated Tax efficiency of the Issuer and its Subsidiaries and not for the purpose of circumventing any covenant set forth in the indenture;
(21) [reserved];
and
(22) any
purchase by the Issuer or its Affiliates of Indebtedness, Disqualified Stock or Preferred Stock of the Issuer or any of the Restricted Subsidiaries;
provided
that such purchases are on the same terms as
such purchases by such Persons who are not the Issuer's Affiliates.
Liens
The indenture provides that the Issuer will not, and will not permit any of the Restricted Subsidiaries to, directly or indirectly,
create, Incur or suffer to exist any Lien (except
Permitted Liens) on any asset or property of the Issuer or any Restricted Subsidiary securing Indebtedness of the Issuer or a Restricted Subsidiary unless the notes and the Guarantees are equally and
ratably secured with (or, at the Issuer's election, on a senior basis to) the obligations so secured until such time as such obligations are no longer secured by a Lien;
provided
that any such security
shall be on a senior basis to any such Indebtedness that is by its terms subordinated in right of payment to the notes.
Any
Lien that is granted to secure the notes or any Guarantee under the preceding paragraph shall be automatically released and discharged at the same time as the release of the Lien
that gave rise to the obligation to secure the notes or such Guarantee.
For
purposes of determining compliance with this covenant, (A) a Lien securing an item of Indebtedness need not be permitted solely by reference to one category of Permitted Liens
(or any portion thereof) described in the definition of "Permitted Liens" or pursuant to the first paragraph of this covenant but may be permitted in part under any combination thereof and
(B) in the event that a Lien securing an item of Indebtedness (or any portion thereof) meets the criteria of one or more of the categories of permitted Liens (or any portion thereof) described
in the definition of "Permitted Liens" or pursuant to the first paragraph of this covenant, the Issuer may, in its sole discretion, classify or reclassify, or later divide, classify or reclassify (as
if Incurred at such later time), such Lien securing such item of Indebtedness (or any portion thereof) in any manner that complies with this covenant and will be entitled to only include the amount
and type of such Lien or such item of Indebtedness secured by such Lien (or any portion thereof) in one of the categories of permitted Liens (or any portion thereof) described in the definition of
"Permitted Liens" or pursuant to the first paragraph of this covenant and, in such event, such Lien securing such item of Indebtedness (or any portion thereof) will be treated as being Incurred or
existing pursuant to only such clause or clauses (or any portion thereof) or pursuant to the first paragraph hereof.
With
respect to any Lien securing Indebtedness that was permitted to secure such Indebtedness at the time of the Incurrence of such Indebtedness, such Lien shall also be permitted to
secure any increases in the amount of Indebtedness outstanding solely as a result of fluctuations in the exchange rate of currencies or increases in the value of property securing Indebtedness
described in clause (11) of the definition of "Indebtedness."
Reports and other information
The indenture provides that so long as any notes are outstanding thereunder the Issuer will file with the SEC (and furnish to the
Trustee and holders with copies thereof, without cost to each holder) the following:
(1) within
the time periods specified in the SEC's rules and regulations, an annual report with the SEC on Form 10-K (or any successor comparable form);
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(2) within
the time periods specified in the SEC's rules and regulations, a quarterly report with the SEC on Form 10-Q (or any successor comparable form); and
(3) promptly
from time to time after the occurrence of an event required to be therein reported (and in any event within the time periods specified in the SEC's rules and
regulations), current reports with the SEC on Form 8- K (or any successor comparable form).
If
the Issuer is no longer subject to the periodic reporting requirements of the Exchange Act for any reason, the Issuer will nevertheless continue filing the reports specified in the
preceding paragraphs of this covenant with the SEC within the time periods specified above unless the SEC will not accept such a filing. If the SEC will not accept the Issuer's filings for any reason,
the Issuer will furnish the reports referred to in the preceding paragraphs to the Trustee within the time periods that would apply if the Issuer were required to file those reports with the SEC. The
Issuer will not take any action for the purpose of causing the SEC not to accept any such filings. In addition to providing such information to the Trustee, the Issuer shall make available the
information required to be provided pursuant to clauses (1) through (3) of this paragraph, by posting such information to its website or on IntraLinks or any comparable online data
system or website.
If
the Issuer has designated any of its Subsidiaries as an Unrestricted Subsidiary and if any such Unrestricted Subsidiary or group of Unrestricted Subsidiaries, if taken together as one
Subsidiary, would constitute a Significant Subsidiary of the Issuer, then the annual and quarterly information required by clause (1) of the first paragraph of this covenant shall include a
reasonably detailed presentation, either on the face of the financial statements or in the footnotes thereto, of the financial condition and results of operations of the Issuer and its Restricted
Subsidiaries separate from the financial condition and results of operations of such Unrestricted Subsidiaries.
In
the event that the rules and regulations of the SEC permit the Issuer and any direct or indirect parent of the Issuer to report at such parent entity's level on a consolidated basis,
the indenture permits the Issuer to satisfy its obligations in this covenant with respect to financial information relating to the Issuer by furnishing financial information relating to such direct or
indirect parent;
provided
that such financial information is accompanied by consolidating information that explains in a reasonable level of detail, the
differences between the information relating to such direct or indirect parent and any of its Subsidiaries other than the Issuer and its Subsidiaries, on the one hand, and the information
relating to the Issuer, the Guarantors and the other Subsidiaries of the Issuer on a standalone basis, on the other hand.
In
addition, the Issuer has agreed that, for so long as any notes remain outstanding during any period when it is not subject to Section 13 or 15(d) of the Exchange Act, it will
furnish to the holders of the notes and to prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.
Notwithstanding
the foregoing, the Issuer will be deemed to have furnished such reports referred to above to the Trustee and the holders if the Issuer has filed such reports with (or
furnished such reports to) the SEC via the EDGAR filing system and such reports are publicly available.
Delivery
of any reports, information and documents to the Trustee will be for informational purposes only and the Trustee's receipt of such shall not constitute constructive notice of
any information contained therein or determinable from information contained therein, including the Issuer's compliance with any of its covenants hereunder (as to which the Trustee will be entitled to
rely exclusively on Officers' Certificates).
Future Guarantors
The indenture provides that the Issuer will cause each of its Wholly Owned Domestic Subsidiaries that is not an Excluded Subsidiary and
that guarantees or becomes a borrower under the credit
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agreement
described in clause (i) of the definition of "Credit Agreement" (or any refinancing thereof) or that guarantees any other Capital Markets Indebtedness of the Issuer or any of the
Guarantors to execute and deliver to the Trustee a supplemental indenture pursuant to which such Subsidiary will guarantee the Guaranteed Obligations.
Each
Guarantee shall be released in accordance with the provisions of the indenture described under "
Guarantees
."
Merger, amalgamation, consolidation or sale of all or substantially all assets
The indenture provides that the Issuer may not, directly or indirectly, consolidate, amalgamate or merge with or into or wind up into
(whether or not the Issuer is the surviving Person), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets in one or more related
transactions to, any Person unless:
(1) the
Issuer is the surviving Person or the Person formed by or surviving any such consolidation, amalgamation, merger or winding up (if other than the Issuer) or to which
such sale, assignment, transfer, lease, conveyance or other disposition will have been made is a corporation, partnership or limited liability company or similar entity organized or existing under the
laws of the United States, any state thereof, the District of Columbia, or any territory thereof (collectively, the "Permitted Jurisdictions", and the Issuer or such Person, as the case may be, being
herein called the "Successor Company");
provided
that in the event that the Successor Company is not a corporation or limited liability company, a
co-obligor of the notes is a corporation or limited liability company;
(2) the
Successor Company (if other than the Issuer) expressly assumes all the obligations of the Issuer under the indenture, the notes and the Registration Rights Agreement
(to the extent any obligations of the Issuer thereunder remain outstanding) pursuant to supplemental indentures or other applicable documents or instruments in form reasonably satisfactory to the
Trustee;
(3) immediately
after giving effect to such transaction (and treating any Indebtedness which becomes an obligation of the Successor Company or any of its Restricted
Subsidiaries as a result of such transaction as having been Incurred by the Successor Company or such Restricted Subsidiary at the time of such transaction), no Default shall have occurred and be
continuing;
(4) immediately
after giving
pro forma
effect to such transaction, as if such transaction had occurred at the beginning of
the applicable four-quarter period (and treating any Indebtedness which becomes an obligation of the Successor Company or any of the Restricted Subsidiaries as a result of such transaction as having
been Incurred by the Successor Company or such Restricted Subsidiary at the time of such transaction), either
(A) the
Successor Company would be permitted to Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first
sentence of the covenant described under "Certain covenantsLimitation on incurrence of indebtedness and issuance of disqualified stock and preferred stock"; or
(B) the
Fixed Charge Coverage Ratio of the Issuer would be no less than such ratio immediately prior to such transaction;
(5) if
the Issuer is not the Successor Company, each Guarantor, unless it is the other party to the transactions described above, shall have by supplemental indenture
confirmed that its Guarantee shall apply to such Person's obligations under the indenture and the notes; and
(6) the
Successor Company shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation, merger, amalgamation
or transfer and such supplemental indentures (if any) comply with the indenture.
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The
Successor Company (if other than the Issuer) will succeed to, and be substituted for, the Issuer under the indenture and the notes, and in such event (other than in connection with a
lease) the Issuer will automatically be released and discharged from its obligations under the indenture and the notes. Notwithstanding the foregoing clauses (3) and (4), (a) the Issuer
may merge, consolidate or amalgamate with or transfer all or part of its properties and assets to a Restricted Subsidiary,
provided
that
(x) after giving effect to such transaction, no Default shall have occurred and be continuing and (y) the Issuer is the Successor Company, and (b) the Issuer may merge,
consolidate or amalgamate with an Affiliate incorporated or organized solely for the purpose of reincorporating or reorganizing the Issuer in any Permitted Jurisdiction, so long as the amount of
Indebtedness of the Issuer and its Restricted Subsidiaries is not increased thereby. This "Merger, amalgamation, consolidation or sale of all or substantially all assets" will not
restrict a sale, assignment, transfer, conveyance or other disposition of assets between or among the Issuer and its Restricted Subsidiaries.
The
indenture further provides that, except in connection with the Acquisition Merger, subject to certain limitations in the indenture governing release of a Guarantee, no Guarantor
will, and the Issuer will not permit any such Guarantor to, consolidate, amalgamate or merge with or into or wind up into (whether or not such Guarantor is the surviving Person), or sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets in one or more related transactions to, any Person unless:
(1) either
(a) such Guarantor is the surviving Person or the Person formed by or surviving any such consolidation, amalgamation, merger or winding up (if other than
such Guarantor) or to which such sale, assignment, transfer, lease, conveyance or other disposition will have been made is a company, corporation, partnership or limited liability company or similar
entity organized or existing under the
laws of the United States, any state thereof, the District of Columbia or any territory thereof) (such Guarantor or such Person, as the case may be, being herein called the "Successor Person") and the
Successor Person (if other than such Guarantor) expressly assumes all the obligations of such Guarantor under the indenture, the Registration Rights Agreement (to the extent any obligations of such
Guarantor thereunder remain outstanding), and its Guarantee pursuant to a supplemental indenture or other applicable documents or instruments in form reasonably satisfactory to the Trustee, or
(b) such sale, assignment, transfer, lease, conveyance or other disposition or consolidation, amalgamation or merger is not in violation of the covenant described above under the caption
"Certain covenantsAsset sales"; and
(2) the
Successor Person (if other than such Guarantor) shall have delivered or caused to be delivered to the Trustee an Officers' Certificate and an Opinion of Counsel,
each stating that such consolidation, amalgamation, merger or transfer and such supplemental indenture (if any) comply with the indenture.
Subject
to certain limitations described in the indenture, the Successor Person (if other than such Guarantor) will succeed to, and be substituted for, such Guarantor under the indenture
and its Guarantee, and such Guarantor will automatically be released and discharged from its obligations under the indenture and its Guarantee. Notwithstanding the foregoing, (1) a Guarantor
may merge, amalgamate or consolidate with an Affiliate incorporated or organized solely for the purpose of reincorporating or reorganizing such Guarantor in a Permitted Jurisdiction so long as the
amount of Indebtedness of such Guarantor is not increased thereby and (2) a Guarantor may consolidate, amalgamate or merge with or into or wind up into, liquidate, dissolve, or sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets to, the Issuer or any Guarantor.
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Defaults
An "Event of Default" is defined in the indenture as:
(1) a
default in any payment of interest (including any additional interest) on any note when due, continued for 30 days;
(2) a
default in the payment of principal or premium, if any, of any note when due at its Stated Maturity, upon redemption (including on a Special Mandatory Redemption
Date), required repurchase or otherwise;
(3) failure
by the Issuer for 90 days after receipt of written notice given by the Trustee or the holders of not less than 25% in aggregate principal amount of the
notes then outstanding (with a copy to the Trustee) to comply with any of its obligations, covenants or agreements contained in the provisions of the indenture described in "Certain
covenantsReports and other information";
(4) the
failure by the Issuer or any Restricted Subsidiary for 60 days after written notice given by the Trustee or the holders of not less than 25% in principal
amount of the notes then outstanding (with a copy to the Trustee) to comply with its other obligations, covenants or agreements (other than a default referred to in clauses (1), (2) and
(3) above) contained in the notes or the indenture;
(5) the
failure by the Issuer or any Significant Subsidiary (or any group of Subsidiaries that together would constitute a Significant Subsidiary) to pay any Indebtedness
(other than Indebtedness owing to the Issuer or a Restricted Subsidiary) within any applicable grace period after final maturity or the acceleration of any such Indebtedness by the holders thereof
because of a default, in each case, if the total amount of such Indebtedness unpaid or accelerated exceeds $100 million or its foreign currency equivalent (the "cross-acceleration provision");
(6) certain
events of bankruptcy, insolvency or reorganization of the Issuer or a Significant Subsidiary (or any group of Subsidiaries that together would constitute a
Significant Subsidiary) (the "bankruptcy provisions");
(7) failure
by the Issuer or any Significant Subsidiary (or any group of Subsidiaries that together would constitute a Significant Subsidiary) to pay final judgments
aggregating in excess of $100 million or its foreign currency equivalent (net of any amounts which are covered by enforceable insurance policies issued by solvent carriers), which judgments are
not discharged, waived or stayed for a period of 60 days (the "judgment default provision"); or
(8) the
Guarantee of a Significant Subsidiary (or any group of Subsidiaries that together would constitute a Significant Subsidiary) with respect to the notes ceases to be
in full force and effect (except as contemplated by the terms thereof) or any Guarantor that qualifies as a Significant Subsidiary (or any group of Guarantors that together would constitute a
Significant Subsidiary) denies or disaffirms its obligations under the indenture or any Guarantee with respect to the notes and such Default continues for 10 days.
The
foregoing will constitute Events of Default whatever the reason for any such Event of Default and whether it is voluntary or involuntary or is effected by operation of law or
pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body.
However,
a default under clause (3) or (4) will not constitute an Event of Default until the Trustee or the holders of at least 25% in principal amount of outstanding notes
notify the Issuer, with a copy to the Trustee, of the default and the Issuer fails to cure such default within the time specified in clause (3) or (4) hereof, as applicable, after
receipt of such notice.
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If
an Event of Default (other than an Event of Default relating to certain events of bankruptcy, insolvency or reorganization of the Issuer) occurs and is continuing, the Trustee by
notice to the Issuer or the holders of at least 25% in principal amount of outstanding notes by notice to the Issuer, with a copy to the Trustee, may declare the principal of, premium, if any, and
accrued but unpaid interest on all the notes to be due and payable. Upon such a declaration, such principal and interest will be due and payable immediately. If an Event of Default relating to certain
events of bankruptcy, insolvency or reorganization of the Issuer occurs, the principal of, premium, if any, and interest on all the notes will become immediately due and payable without any
declaration or other act on the part of the Trustee or any holders. Under certain circumstances, the holders of a majority in principal amount of outstanding notes may rescind any such acceleration
with respect to the notes and its consequences.
In
the event of any Event of Default specified in clause (5) of the first paragraph above, such Event of Default and all consequences thereof (excluding, however, any resulting
payment default) will be annulled, waived and rescinded, automatically and without any action by the Trustee or the holders of the notes, if within 20 days after such Event of Default arose the
Issuer delivers an Officers' Certificate to the Trustee stating that (x) the Indebtedness or guarantee that is the basis for such Event of Default has been discharged, (y) the holders
thereof have rescinded or waived the acceleration, notice or action (as the case may be) giving rise to such Event of Default or (z) the default that is the basis for such Event of Default has
been cured, it being understood that in no event shall an acceleration of the principal amount of the notes as described above be annulled, waived or rescinded upon the happening of any such events.
In
case an Event of Default occurs and is continuing, the Trustee will be under no obligation to exercise any of the rights or powers under the indenture at the request or direction of
any of the holders unless such holders have offered to the Trustee indemnity or security satisfactory to it against any loss, liability or expense. Except to enforce the right to receive payment of
principal, premium (if any) or interest when due, no holder may pursue any remedy with respect to the indenture or the notes unless:
(1) such
holder has previously given the Trustee written notice that an Event of Default is continuing,
(2) holders
of at least 25% in principal amount of the outstanding notes have requested the Trustee to pursue the remedy,
(3) such
holders have offered the Trustee security or indemnity satisfactory to it against any loss, liability or expense,
(4) the
Trustee has not complied with such request within 60 days after the receipt of the request and the offer of security or indemnity, and
(5) the
holders of a majority in principal amount of the outstanding notes have not given the Trustee a direction inconsistent with such request within such 60-day period.
Subject
to certain restrictions, the holders of a majority in principal amount of outstanding notes are given the right to direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee. The Trustee, however, may refuse to follow any direction that conflicts with law or the indenture
or that the Trustee determines is unduly prejudicial to the rights of any other holder or that would involve the Trustee in personal liability. Prior to taking any action under the indenture, the
Trustee will be entitled to indemnification satisfactory to it against all losses and expenses caused by taking or not taking such action.
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The indenture provides that if a Default occurs and is continuing and is actually known to a Trust Officer of the Trustee, the Trustee must mail, or deliver
electronically if the notes are held by DTC, to each holder of the notes notice of the Default within the earlier of 90 days after it occurs or 30 days after it is actually known to a
Trust Officer or written notice of it is received by the Trustee. Except in the case of a Default in the payment of principal of, premium (if any) or interest on any note, the Trustee may withhold
notice if and so long as it determines that withholding notice is in the interests of the noteholders. In addition, the Issuer is required to deliver to the Trustee, annually, a certificate indicating
whether the signers thereof know of any Default that occurred during the previous year. The Issuer also is required to deliver to the Trustee, within 30 days after the occurrence thereof,
written notice of any event which would constitute certain Defaults, their status and what action the Issuer is taking or proposes to take in respect thereof.
Amendments and waivers
Subject to certain exceptions, the indenture, the notes and the Guarantees may be amended with the consent of the holders of a majority
in principal amount of the notes then outstanding and any past default or compliance with any provisions may be waived with the consent of the holders of a majority in principal amount of the notes
then outstanding. However, without the consent of each holder of an outstanding note affected, no amendment may:
(1) reduce
the amount of notes whose holders must consent to an amendment;
(2) reduce
the rate of or extend the time for payment of interest on any note;
(3) reduce
the principal of or change the Stated Maturity of any note;
(4) reduce
the premium payable upon the redemption of any note or change the time at which any note may be redeemed as described under "Optional redemption"
above;
(5) make
any note payable in money other than that stated in such note;
(6) expressly
subordinate the notes or any Guarantee to any other Indebtedness of the Issuer or any Guarantor;
(7) impair
the right of any holder to receive payment of principal of, premium, if any, 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;
(8) make
any change in the amendment provisions which require each holder's consent or in the waiver provisions;
(9) amend
or waive the Issuer's obligation to redeem the notes through the special mandatory redemption in a manner that would materially adversely affect the holders of the
notes; or
(10) except
for any release contemplated by the third paragraph of "Guarantees", release all or substantially all of the Guarantors from their respective
Guarantees.
Without
the consent of any holder, the Issuer and the Trustee may amend the indenture, the notes or the Guarantees to cure any ambiguity, omission, mistake, defect or inconsistency, to
provide for the assumption by a Successor Company (with respect to the Issuer) of the obligations of the Issuer under the indenture and the notes, to provide for the assumption by a Successor Person
(with respect to any Guarantor) of the obligations of a Guarantor under the indenture and its Guarantee, 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), to add a Guarantee or collateral with respect to the notes, to release the Guarantee of a Guarantor as provided in the
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indenture,
to secure the notes, to add to the covenants of the Issuer for the benefit of the holders or to surrender any right or power conferred upon the Issuer, to make any change that does not
adversely affect the rights of any holder in any material respect, to conform the text of the indenture, Guarantees or the notes to any provision of the section entitled "Description of 2023 notes" in
the Offering Memorandum to the extent that such provision in such "Description of 2023 notes" was intended by the Issuer to be a verbatim recitation of a provision of the indenture, Guarantees or the
notes, as applicable, as stated in an Officers' Certificate of the Issuer, to comply with any requirement of the SEC in connection with the qualification of the indenture under the TIA or to effect
any provision of the indenture or to make changes to the indenture to provide for the issuance of additional notes.
The
consent of the noteholders is not necessary under the indenture to approve the particular form of any proposed amendment. It is sufficient if such consent approves the substance of
the proposed amendment.
No personal liability of directors, officers, employees, managers and stockholders
No director, officer, employee, manager or incorporator of the Issuer, any Guarantor or any direct or indirect parent company of the
Issuer or any Guarantor and no holder of any Equity Interests in the Issuer, any Guarantor or any direct or indirect parent company of the Issuer or any Guarantor, as such, will have any liability for
any obligations of the Issuer or any Guarantor under the notes, the indenture or the Guarantees, as applicable, or for any claim based on, in respect of, or by reason of, such obligations or their
creation. Each holder of notes by accepting a note waives and releases all such liability. The waiver and release are part of the consideration for the issuance of the notes. The waiver may not be
effective to waive liabilities under the federal securities laws.
Transfer and exchange
A noteholder may transfer or exchange notes in accordance with the indenture. Upon any transfer or exchange, the registrar and the
Trustee may require a noteholder, among other things, to furnish appropriate endorsements and transfer documents and the Issuer may require a noteholder to pay any taxes payable on transfer that are
required by law and permitted by the indenture. The Issuer is not required to transfer or exchange any notes selected for redemption or to transfer or exchange any notes for a period of 15 days
prior to the mailing of a notice of redemption of notes to be redeemed. The notes will be issued in registered form and the registered holder of a note will be treated as the owner of such note for
all purposes.
The
Issuer will keep a register of holders of its notes at its registered office (the "Register"). Ownership in respect of notes issued by the Issuer passes solely upon registration of
the transfer of notes in the Register. In the case of a conflict between a register of notes held by an agent of the Issuer and the Register, the Register will prevail.
Satisfaction and discharge
The indenture will be discharged and will cease to be of further effect (except as to surviving rights and immunities of the Trustee
and rights of registration or transfer or exchange of notes, as expressly provided for in the indenture) as to all outstanding notes when:
(1) either
(a) all the notes theretofore authenticated and delivered (except lost, stolen or destroyed notes which have been replaced or paid and notes for whose
payment money has theretofore been deposited in trust or segregated and held in trust by the Issuer and thereafter repaid to the Issuer or discharged from such trust) have been delivered to the
Trustee for cancellation or (b) all of the notes (i) have become due and payable, (ii) will become due and payable at their Stated Maturity within one year or (iii) if
redeemable at the option of the Issuer, are to be called for redemption within one year under arrangements satisfactory to the Trustee for
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the
giving of notice of redemption by the Trustee in the name, and at the expense, of the Issuer, and the Issuer has irrevocably deposited or caused to be deposited with the Trustee funds in an amount
sufficient to pay and discharge the entire Indebtedness on the notes not theretofore delivered to the Trustee for cancellation, for principal of, premium, if any, and interest on the notes to, but
excluding, the date of deposit together with irrevocable instructions from the Issuer directing the Trustee to apply such funds to the payment thereof at maturity or redemption, as the case may be;
(2) the
Issuer and/or the Guarantors have paid all other sums payable under the indenture; and
(3) the
Issuer has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel stating that all conditions precedent under the indenture relating to the
satisfaction and discharge of the indenture have been complied with.
Defeasance
The Issuer at any time may terminate all of its obligations under the notes and the indenture with respect to the holders of the notes
("legal defeasance"), except for certain obligations, including those respecting the defeasance trust (as defined below) and obligations to register the transfer or exchange of the notes, to replace
mutilated, destroyed, lost or stolen notes and to maintain a registrar and paying agent in respect of the notes. The Issuer at any time may terminate its obligations under the covenants described
under "Certain covenants" for the benefit of the holders of the notes, the operation of the cross-acceleration provision, the bankruptcy provisions with respect to Significant
Subsidiaries, the judgment default provision described under "Defaults" (but only to the extent that those provisions relate to the Defaults with respect to the notes) and the
undertakings and covenants contained under "Change of control" and "Merger, amalgamation, consolidation or sale of all or substantially all assets" ("covenant defeasance")
for the benefit of the holders of the notes. If the Issuer exercises its legal defeasance option or its covenant defeasance option, each Guarantor will be released from all of its obligations with
respect to its Guarantee.
The
Issuer may exercise its legal defeasance option notwithstanding its prior exercise of the covenant defeasance option. If the Issuer exercises its legal defeasance option, payment of
the notes may not be accelerated because of an Event of Default with respect thereto. If the Issuer exercises its covenant defeasance option, payment of the notes may not be accelerated because of an
Event of Default specified in clause (3), (4), (5), (6) (with respect only to Significant Subsidiaries), (7) or (8) under "Defaults" or because of the failure
of the Issuer to comply with clause (4) under "Merger, amalgamation, consolidation or sale of all or substantially all assets."
In
order to exercise the defeasance option, the Issuer must irrevocably deposit in trust (the "defeasance trust") with the Trustee money or U.S. Government Obligations for the payment of
principal, premium (if any) and interest on the notes to redemption or maturity, as the case may be, and must comply with certain other conditions, including delivery to the Trustee of (a) an
Opinion of Counsel to the effect that holders of the notes will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such deposit and defeasance and will be subject
to U.S. federal income tax on the same amount and in the same manner and at the same times as would have been the case if such deposit and defeasance had not occurred (and, in the case of legal
defeasance only, such Opinion of Counsel must be based on a ruling of the Internal Revenue Service or change in applicable U.S. federal income tax law) and (b) with respect to U.S. Government
Obligations or a combination of money and U.S. Government Obligations, a certificate from a nationally recognized firm of independent accountants, a nationally recognized investment bank or a
nationally recognized appraisal or valuation firm 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
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without
investment will provide cash at such times and in such amounts as will be sufficient to pay principal, premium (if any) and interest on the notes to redemption or maturity, as the case may be;
provided
that upon any redemption that requires the payment of the Applicable Premium, the amount deposited shall be sufficient for purposes of the
indenture to the extent that an amount is deposited with the Trustee equal to the Applicable Premium calculated as of the earlier of the date on which arrangements referred to in the succeeding
sentence are entered into and the date of the notice of redemption, with any deficit as of the date of the redemption only required to be deposited with the Trustee on or prior to the date of the
redemption. Notwithstanding the foregoing, the Opinion of Counsel required by the immediately preceding sentence with respect to a legal defeasance need not be delivered if all of the notes not
theretofore delivered to the Trustee for cancellation (x) have become due and payable or (y) will become due and payable at their Stated Maturity within one year under arrangements
satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Issuer.
Concerning the trustee
U.S. Bank National Association is the Trustee under the indenture and will initially act as registrar and paying agent with regard to
the notes.
Governing law
The indenture and the notes are governed by, and construed in accordance with, the laws of the State of New York.
Certain definitions
"2020 Notes Indenture" means the indenture for the Initial 2020 Notes, dated as of February 23, 2015, between the Issuer and
U.S. Bank National Association, as trustee, as amended, restated, supplemented or otherwise modified from time to time in accordance with the requirements thereof.
"Acquired
Indebtedness" means, with respect to any specified Person:
(1) Indebtedness
of any other Person existing at the time such other Person is merged, consolidated or amalgamated with or into or became a Restricted Subsidiary of such
specified Person, and
(2) Indebtedness
secured by a Lien encumbering any asset acquired by such specified Person.
Acquired
Indebtedness will be deemed to have been Incurred, with respect to clause (1) of the preceding sentence, on the date such Person becomes a Restricted Subsidiary and, with
respect to clause (2) of the preceding sentence, on the date of consummation of such acquisition of such assets.
"Acquisition"
means the acquisition by Dollar Tree of Family Dollar pursuant to the Acquisition Agreement.
"Acquisition
Agreement" means the Agreement and Plan of Merger, dated as of July 27, 2014, by and among Family Dollar, Dollar Tree and Dime Merger Sub, Inc., as amended,
restated, supplemented or otherwise modified from time to time.
"Acquisition
Date" means the date of the consummation of the Acquisition.
"Acquisition
Documents" means the Acquisition Agreement and any other agreements or instruments contemplated thereby, in each case, as amended, restated, supplemented or otherwise
modified from time to time.
"Acquisition
Merger" means the merger of Dime Merger Sub, Inc. with and into Family Dollar pursuant to the Acquisition Agreement.
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"Additional
Refinancing Amount" means, in connection with the Incurrence of any Refinancing Indebtedness, the aggregate principal amount of additional Indebtedness, Disqualified Stock or
Preferred Stock Incurred to pay accrued and unpaid interest, premiums (including tender premiums), expenses, underwriting discounts, commissions, defeasance costs and fees in respect thereof.
"Affiliate"
of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For
purposes of this definition, "control" (including, with correlative meanings, the terms "controlling," "controlled by" and "under common control with"), as used with respect to any Person, means the
possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or
otherwise.
"Applicable
Premium" means, with respect to any note on any applicable redemption date, as determined by the Issuer, the greater of:
(1) 1%
of the then outstanding principal amount of the note; and
(2) the
excess, if any, of:
(a) the
present value at such redemption date of (i) the redemption price of the note, at March 1, 2018 (such redemption price being set forth in the
applicable table appearing above under "
Optional redemption
")
plus
(ii) all required
interest payments due on the note through March 1, 2018 (excluding accrued but unpaid interest), computed using a discount rate equal to the Treasury Rate as of such redemption date plus 50
basis points; over
(b) the
then outstanding principal amount of the note.
"Asset
Sale" means:
(1) the
sale, conveyance, transfer or other disposition (whether in a single transaction or a series of related transactions) of property or assets (including by way of
Sale/Leaseback Transactions) of the Issuer or any Restricted Subsidiary outside the ordinary course of business (each referred to in this definition as a "disposition"); or
(2) the
issuance or sale of Equity Interests (other than directors' qualifying shares and shares issued to foreign nationals or other third parties to the extent required by
applicable law) of any Restricted Subsidiary (other than to the Issuer or another Restricted Subsidiary) (whether in a single transaction or a series of related transactions),
in
each case other than:
(a) a
disposition of Cash Equivalents or obsolete, damaged or worn out property or equipment in the ordinary course of business;
(b) the
disposition of all or substantially all of the assets of the Issuer or any Guarantor in a manner permitted pursuant to the provisions described above under
"Merger, amalgamation, consolidation or sale of all or substantially all assets" or any disposition that constitutes a Change of Control;
(c) any
Restricted Payment or Permitted Investment that is permitted to be made, and is made, under the covenant described above under "Certain
covenantsLimitation on restricted payments";
(d) any
disposition of assets of the Issuer or any Restricted Subsidiary or issuance or sale of Equity Interests of any Restricted Subsidiary, which assets or Equity
Interests so disposed or issued in any single transaction or series of related transactions have an aggregate Fair Market Value (as determined in good faith by the Issuer) of less than
$25 million;
(e) any
disposition of property or assets, or the issuance of securities, by the Issuer or a Restricted Subsidiary to the Issuer or a Restricted Subsidiary;
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(f) any
exchange of assets (including a combination of assets and Cash Equivalents) for assets related to a Similar Business of comparable or greater market value or
usefulness to the business of the Issuer and its Restricted Subsidiaries as a whole, as determined in good faith by the Issuer;
(g) foreclosure
or any similar action with respect to any property or other asset of the Issuer or any of the Restricted Subsidiaries;
(h) any
disposition of Equity Interests in, or Indebtedness or other securities of, an Unrestricted Subsidiary;
(i) the
lease, assignment or sublease of any real or personal property in the ordinary course of business;
(j) any
sale of inventory or other assets in the ordinary course of business;
(k) any
grant in the ordinary course of business of any license of patents, trademarks, know-how or any other intellectual property;
(l) any
swap of assets, or lease, assignment or sublease of any real or personal property, in exchange for services (including in connection with any outsourcing
arrangements) of comparable or greater value or usefulness to the business of the Issuer and its Restricted Subsidiaries as a whole, as determined in good faith by the Issuer;
(m) a
transfer of assets of the type specified in the definition of "Securitization Financing" (or a fractional undivided interest therein), including by a Securitization
Subsidiary in a Securitization Financing, or any other disposition (including by capital contribution) of Permitted Securitization Facility Assets;
(n) [reserved];
(o) dispositions
in connection with Permitted Liens;
(p) any
disposition of Capital Stock of a Restricted Subsidiary pursuant to an agreement or other obligation with or to a Person (other than the Issuer or a Restricted
Subsidiary) from whom such Restricted Subsidiary was acquired or from whom such Restricted Subsidiary acquired its business and assets (having been newly formed in connection with such acquisition),
made as part of such acquisition and in each case comprising all or a portion of the consideration in respect of such sale or acquisition;
(q) the
disposition of any property in a Permitted Sale/Leaseback Transaction described in clause (i), (ii) or (iii) of the definition thereof;
(r) dispositions
of receivables in connection with the compromise, settlement or collection thereof in the ordinary course of business or in bankruptcy or similar
proceedings and exclusive of factoring or similar arrangements;
(s) any
surrender, expiration or waiver of contract rights or the settlement, release, recovery on or surrender of contract, tort or other claims of any kind; or
(t) dispositions
by the Issuer or any of the Restricted Subsidiaries to charitable foundations, not-for-profits or other similar organizations with an aggregate Fair Market
Value not to exceed $10 million in any calendar year.
"Attributable
Debt" means, as of any date of determination, as to Sale/Leaseback Transactions, the total obligation (discounted to present value at the rate of interest implicit in the
lease included in such transaction) of the lessee for rental payments (other than amounts required to be paid on account of property Taxes, maintenance, repairs, insurance, assessments, utilities,
operating and labor costs and
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other
items which do not constitute payments for property rights) during the remaining portion of the term (including extensions which are at the sole option of the lessor) of the lease included in
such transaction.
"Attributable
Receivables Indebtedness" shall mean the principal amount of Indebtedness (other than any Indebtedness subordinated in right of payment owing by a Securitization Subsidiary
to a receivables seller or a receivables seller to another receivables seller in connection with the transfer, sale and/or pledge of Securitization Assets) which (i) if a Securitization
Financing is structured as a secured lending agreement or other similar agreement, constitutes the principal amount of such Indebtedness or (ii) if a Securitization Financing is structured as a
purchase agreement or other similar agreement, would be outstanding at such time under such Securitization Financing if the same were structured as a secured lending agreement rather than a purchase
agreement or such other similar agreement.
"Bank
Indebtedness" means any and all amounts payable under or in respect of (a) the Credit Agreement and the other Credit Agreement Documents, as amended, restated, supplemented,
waived, replaced (whether or not upon termination, and whether with the original lenders or otherwise), restructured, repaid, refunded, refinanced or otherwise modified in whole or in part from time
to time (including after termination of the Credit Agreement), including any agreement or indenture extending the maturity thereof, refinancing, replacing or otherwise restructuring all or any portion
of the Indebtedness under such agreement or agreements or indenture or indentures or any successor or replacement agreement or agreements or indenture or indentures or increasing the amount loaned or
issued thereunder or altering the maturity thereof, including principal, premium (if any), interest (including interest accruing on or after the filing of any petition in bankruptcy or for
reorganization relating to the Issuer whether or not a claim for post-filing interest is allowed in such proceedings), fees, charges, expenses, reimbursement obligations, guarantees and all other
amounts payable thereunder or in respect thereof and (b) whether or not the Indebtedness referred to in clause (a) remains outstanding, if designated by the Issuer to be included in this
definition, one or more (A) debt facilities or commercial paper facilities, providing for revolving credit loans, term loans, reserve-based loans, securitization or receivables financing
(including through the sale of receivables to lenders or to special purpose entities formed to borrow from lenders against such receivables) or letters of credit, (B) debt securities,
indentures or other forms of debt financing (including convertible or exchangeable debt instruments or bank guarantees or bankers' acceptances), or (C) instruments or agreements evidencing any
other Indebtedness, in each case, with the same or different borrowers or issuers and, in each case, as amended, supplemented, modified, extended, restructured, renewed, refinanced, restated, replaced
or refunded in whole or in part from time to time.
"Board
of Directors" means, as to any Person, the board of directors or managers, as applicable, of such Person or any direct or indirect parent of such Person (or, if such Person is a
partnership, the board of directors or other governing body of the general partner of such Person) or any duly authorized committee thereof.
"Business
Day" means a day other than a Saturday, Sunday or other day on which banking institutions are authorized or required by law to close in New York City.
"Capital
Markets Indebtedness" means any Indebtedness consisting of bonds, debentures, notes or other similar debt securities issued in (a) a public offering registered under the
Securities Act or (b) a private placement to institutional investors that is resold in accordance with Rule 144A or Regulation S of the Securities Act, whether or not it includes
registration rights entitling the holders of such debt securities to registration thereof with the SEC. The term "Capital Markets Indebtedness" (i) shall not include the notes (including, for
the avoidance of doubt any additional notes) and (ii) for the avoidance
of doubt, shall not be construed to include any Indebtedness under the Credit Agreement or similar Indebtedness, Capitalized Lease Obligation or recourse transfer of any financial asset or any other
type of Indebtedness incurred in a manner not customarily viewed as a "securities offering."
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"Capital Stock" means:
(1) in
the case of a corporation, corporate stock or shares;
(2) in
the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock;
(3) in
the case of a partnership or limited liability company, partnership or membership interests (whether general or limited); and
(4) any
other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing
Person.
"Capitalized
Lease Obligation" means, at the time any determination thereof is to be made, the amount of the liability in respect of a capital lease that would at such time be required
to be capitalized and reflected as a liability on a balance sheet (excluding the footnotes thereto) in accordance with GAAP;
provided
that all
obligations of any person that are or would be characterized as operating lease obligations in accordance with GAAP on July 27, 2014 (whether or not such operating lease obligations were in
effect on such date) shall continue to be accounted for as operating lease obligations (and not as Capitalized Lease Obligations) for purposes of the indenture regardless of any change in GAAP
following the Issue Date that would otherwise require such obligations to be recharacterized (on a prospective or retroactive basis or otherwise) as Capitalized Lease Obligations.
"Cash
Equivalents" means:
(1) U.S.
dollars, pounds sterling, euros, or the national currency of any member state in the European Union or such local currencies held from time to time in the ordinary
course of business;
(2) direct
obligations of the United States or any member of the European Union or any agency thereof or obligations guaranteed by the United States or any member of the
European Union or any agency thereof, in each case with maturities not exceeding two years from the date of acquisition thereof;
(3) time
deposit accounts, certificates of deposit, money market deposits, banker's acceptances and other bank deposits maturing within 180 days of the date of
acquisition thereof issued by a bank or trust company having capital, surplus and undivided profits in excess of $250 million and whose long-term debt, or whose parent holding company's
long-term debt, is rated at least A by S&P or A2 by Moody's (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));
(4) repurchase
obligations with a term of not more than 180 days for underlying securities of the types described in clause (2) above entered into with a bank
meeting the qualifications described in clause (3) above;
(5) commercial
paper, maturing not more than one year after the date of acquisition, issued by a corporation (other than an Affiliate of the Issuer) with a rating at the
time as of which any investment therein is made of P-1 (or higher) according to Moody's, or A-1 (or higher) according to S&P (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));
(6) securities
with maturities of two years or less from the date of acquisition, issued or fully guaranteed by any State, commonwealth or territory of the United States, or
by any political subdivision or taxing authority thereof, and rated at least A by S&P or A by Moody's (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));
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(7) shares
of mutual funds whose investment guidelines restrict 95% of such funds' investments to those satisfying the provisions of clauses (2) through (6);
(8) money
market funds that (i) comply with the criteria set forth in Rule 2a-7 under the Investment Company Act of 1940, (ii) are rated AAA by S&P or
Aaa by Moody's and (iii) have portfolio assets of at least $1,000 million;
(9) time
deposit accounts, certificates of deposit, money market deposits, banker's acceptances and other bank deposits in an aggregate face amount not in excess of 0.5% of
the total assets of the Issuer and its Restricted Subsidiaries, on a consolidated basis, as of the end of the Issuer's most recently completed fiscal year; and
(10) instruments
equivalent to those referred to in clauses (2) through (9) above denominated in any foreign currency comparable in credit quality and tenor to
those referred to above and commonly used by corporations for cash management purposes in any jurisdiction outside the United States to the extent reasonably required in connection with any business
conducted by the Issuer or any Restricted Subsidiary organized in such jurisdiction.
"cash
management services" means cash management services for collections, treasury management services (including controlled disbursement, overdraft, automated clearing house fund
transfer services, return items and interstate depository network services), any demand deposit, payroll, trust or operating account relationships, commercial credit cards, merchant card, purchase or
debit cards, non-card e-payables services, and other cash management services, including electronic funds transfer services, lockbox services, stop payment services and wire transfer services.
"CFC"
means a "controlled foreign corporation" under section 957 of the Code.
"Change
of Control" means the occurrence of any of the following:
(1) the
sale, lease or transfer (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all the assets of the
Issuer and its Subsidiaries, taken as a whole, to any Person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision) other
than to the Issuer or any of its Subsidiaries; or
(2) the
Issuer becomes aware (by way of a report or any other filing pursuant to Section 13(d) of the Exchange Act, proxy, vote, written notice or otherwise) of the
acquisition by any Person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision), including any group acting for the
purpose of acquiring, holding or disposing of securities (within the meaning of Rule 13d-5(b)(1) under the Exchange Act), in a single transaction or in a related series of transactions, by way
of merger, consolidation, amalgamation or other business combination or purchase of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act, or any successor provision),
of more than 50% of the total voting power of the Voting Stock of the Issuer, in each case, other than an acquisition where the holders of the Voting Stock of the Issuer as of immediately prior to
such acquisition hold 50% or more of the Voting Stock of the ultimate parent of the Issuer or successor thereto immediately after such acquisition
(
provided
no holder of the Voting Stock of the Issuer as of immediately prior to such acquisition owns, directly or indirectly, more than 50% of the
voting power of the Voting Stock of the Issuer immediately after such acquisition (other than any Person who previously acquired Equity Interests of the Issuer in a transaction constituting a Change
of Control as to which a Change of Control Offer was consummated)), in which case, upon the consummation of any such transaction, "Change of Control" shall thereafter include any Change of Control of
such ultimate parent of the Issuer or successor thereto.
"Code"
means the Internal Revenue Code of 1986, as amended.
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"consolidated"
means, with respect to any Person, such Person consolidated with its Restricted Subsidiaries, and shall not include any Unrestricted Subsidiary, but the interest of such
Person in an Unrestricted Subsidiary will be accounted for as an Investment.
"Consolidated
Interest Expense" means, with respect to any Person for any period, the sum, without duplication, of:
(1) gross
interest expense of such Person for such period on a consolidated basis, including (a) the amortization of debt discounts, (b) the amortization of
all fees (including fees with respect to Hedging Agreements) payable in connection with the Incurrence of Indebtedness to the extent included in interest expense, (c) the portion of any
payments or accruals with respect to Capitalized Lease
Obligations allocable to interest expense and (d) net payments and receipts (if any) pursuant to interest rate Hedging Obligations, and excluding unrealized mark-to-market gains and losses
attributable to such Hedging Obligations, additional interest (if any) in respect of the notes, amortization of deferred financing fees and expensing of any bridge or other financing fees;
plus
(2) capitalized
interest of such Person, whether paid or accrued;
plus
(3) commissions,
discounts, yield and other fees and charges incurred for such period, including any losses on sales of receivables and related assets, in connection with
any receivables financing of such Person or any of its Restricted Subsidiaries that are payable to Persons other than the Issuer and its Restricted Subsidiaries.
"Consolidated
Net Income" means, with respect to any Person for any period, the aggregate Net Income of such Person and its Subsidiaries for such period, on a consolidated basis, in
accordance with GAAP;
provided
,
however
, that, without duplication:
(1) any
net after-Tax extraordinary, nonrecurring or unusual gains or losses (less all fees and expenses relating thereto) or expenses or charges shall be excluded;
(2) effects
of purchase accounting adjustments (including the effects of such adjustments pushed down to such Person and such Subsidiaries) in amounts required or permitted
by GAAP, resulting from the application of purchase accounting in relation to any consummated acquisition or the amortization or write-off of any amounts thereof, net of Taxes, shall be excluded;
(3) the
cumulative effect of a change in accounting principles (which shall in no case include any change in the comprehensive basis of accounting) during such period shall
be excluded;
(4) (a)
any net after-Tax income or loss from disposed, abandoned, transferred, closed or discontinued operations, (b) any net after-Tax gain or loss on disposal of
disposed, abandoned, transferred, closed or discontinued operations and (c) any net after-Tax gains or losses (less all fees and expenses or charges relating thereto) attributable to business
dispositions or asset dispositions other than in the ordinary course of business (as determined in good faith by the Issuer) shall be excluded;
(5) any
net after-Tax gains or losses, or any subsequent charges or expenses (less all fees and expenses or charges relating thereto), attributable to the early
extinguishment of Indebtedness, Hedging Obligations or other derivative instruments shall be excluded;
(6) the
Net Income for such period of any Person that is not a Subsidiary of such Person, or is an Unrestricted Subsidiary, or that is accounted for by the equity method of
accounting, shall be included only to the extent of the amount of dividends or distributions or other payments actually paid in cash or Cash Equivalents (or to the extent converted into cash or Cash
Equivalents) to the referent Person or a Restricted Subsidiary thereof in respect of such period;
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(7) solely
for the purpose of calculating the Cumulative Credit, the Net Income for such period of any Subsidiary of such Person shall be excluded to the extent that the
declaration or payment of dividends or similar distributions by such Subsidiary of its Net Income is not at the date of determination permitted without any prior governmental approval (which has not
been obtained) or, directly or indirectly, by the operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to
such subsidiary or its equityholders, unless such restrictions with respect to the payment of dividends or similar distributions have been legally waived;
provided
that the Consolidated Net Income of
such Person shall be increased by the amount of dividends or other distributions or other payments actually
paid in cash (or converted into cash) by any such Subsidiary to such Person or a Subsidiary of such Person (subject to the provisions of this clause (7)), to the extent not already included
therein;
(8) any
impairment charge or asset write-off and amortization of intangibles, in each case pursuant to GAAP, shall be excluded;
(9) any
non-cash expense realized or resulting from stock option plans, employee benefit plans or post-employment benefit plans, or grants or sales of stock, stock
appreciation or similar rights, stock options, restricted stock, Preferred Stock or other rights shall be excluded;
(10) any
(a) non-cash compensation charges or (b) non-cash costs or expenses realized in connection with or resulting from stock appreciation or similar
rights, stock options or other rights existing on the Acquisition Date of officers, directors and employees, in each case of such Person or any of its Subsidiaries, shall be excluded;
(11) accruals
and reserves that are established or adjusted within 12 months after the Acquisition Date (excluding any such accruals or reserves to the extent that
they represent an accrual of or reserve for cash expenses in any future period or amortization of a prepaid cash expense that was paid in a prior period) and that are so required to be established or
adjusted in accordance with GAAP or as a result of adoption or modification of accounting policies shall be excluded;
(12) the
Net Income of any person and its Subsidiaries shall be calculated by deducting the income attributable to, or adding the losses attributable to, the minority equity
interests of third parties in any non-Wholly Owned Subsidiary;
(13) any
unrealized gains and losses related to currency remeasurements of Indebtedness, and any unrealized net loss or gain resulting from hedging transactions for interest
rates, commodities or currency exchange risk, shall be excluded;
(14) to
the extent covered by insurance and actually reimbursed, or, so long as such Person has made a determination that there exists reasonable evidence that such amount
will in fact be reimbursed by the insurer and only to the extent that such amount is (a) not denied by the applicable carrier in writing within 180 days and (b) in fact reimbursed
within 365 days of the date of such evidence (with a deduction for any amount so excluded to the extent not so reimbursed within 365 days), expenses with respect to liability or casualty
events or business interruption shall be excluded; and
(15) non-cash
charges for deferred Tax asset valuation allowances shall be excluded (except to the extent reversing a previously recognized increase to Consolidated Net
Income).
"Consolidated
Total Indebtedness" means, as of any date of determination, the sum of (without duplication) (i) all Indebtedness of the type set forth in clauses (1), (2),
(5) (to the extent related to any Indebtedness that would otherwise constitute Consolidated Total Indebtedness), (6), (8) (other than letters of credit, to the extent undrawn), (9),
(11) (to the extent related to any Indebtedness that would
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otherwise
constitute Consolidated Total Indebtedness) and (12) of the definition of "Indebtedness" and (ii) the amount of all obligations with respect to the redemption, repayment or
other repurchase of (x) any Disqualified Stock (excluding accrued dividends that have not increased the liquidation preference of such Disqualified Stock) of the Issuer and its Restricted
Subsidiaries or (y) any Preferred Stock of any Restricted Subsidiary that is not a Guarantor, in each case determined on a consolidated basis on such date;
provided
that the amount of any
Indebtedness with respect to which the applicable obligors have entered into currency hedging arrangements shall be
calculated giving effect to such currency hedging arrangements.
"Consolidated
Total Net Leverage Ratio" means, with respect to any Person, at any date, the ratio of (i) Consolidated Total Indebtedness of such Person and its Restricted
Subsidiaries as of such date of calculation (determined on a consolidated basis in accordance with GAAP) less the Unrestricted Cash
Amount as of such date of determination to (ii) EBITDA of such Person for the four full fiscal quarters for which internal financial statements are available immediately preceding such date.
In
the event that the Issuer or any such Subsidiary Incurs, repays, repurchases or redeems any Indebtedness or issues, repurchases or redeems any Disqualified Stock or Preferred Stock
subsequent to the commencement of the period for which the Consolidated Total Net Leverage Ratio is being calculated but prior to the event for which the calculation of the Consolidated Total Net
Leverage Ratio is made (the "Consolidated Total Net Leverage Calculation Date"), then the Consolidated Total Net Leverage Ratio shall be calculated giving
pro
forma
effect to such Incurrence, repayment, repurchase or redemption of Indebtedness, or such issuance, repurchase or redemption of Disqualified Stock or Preferred Stock, as if
the same had occurred at the beginning of the applicable four-quarter period.
For
purposes of making the computation referred to above, Investments (or series of related Investments) in excess of $25 million, acquisitions, dispositions, mergers,
amalgamations, consolidations and discontinued operations (as determined in accordance with GAAP), in each case with respect to an operating unit of a business, and any operational changes, business
realignment projects or initiatives, restructurings or reorganizations that the Issuer or any Restricted Subsidiary has determined to make and/or made during the four-quarter reference period or
subsequent to such reference period and on or prior to or simultaneously with the Consolidated Total Net Leverage Calculation Date (each, for purposes of this definition, a "pro forma event") shall be
calculated on a
pro forma
basis assuming that all such Investments, acquisitions, dispositions, mergers, amalgamations, consolidations, discontinued
operations and other operational changes, business realignment projects or initiatives, restructurings or reorganizations (and the change of any associated fixed charge obligations and the change in
EBITDA resulting therefrom) had occurred on the first day of the four-quarter reference period. If since the beginning of such period any Person that subsequently became a Restricted Subsidiary or was
merged with or into the Issuer or any Restricted Subsidiary since the beginning of such period shall have made any Investment, acquisition, disposition, merger, consolidation, amalgamation,
discontinued operation, operational change, business realignment project or initiative, restructuring or reorganization, in each case with respect to an operating unit of a business, that would have
required adjustment pursuant to this definition, then the Consolidated Total Net Leverage Ratio shall be calculated giving
pro forma
effect thereto for
such period as if such Investment, acquisition, disposition, discontinued operation, merger, amalgamation, consolidation, operational change, business realignment project or initiative, restructuring
or reorganization had occurred at the beginning of the applicable four-quarter period. If since the beginning of such period any Restricted Subsidiary is designated an Unrestricted Subsidiary or any
Unrestricted Subsidiary is designated a Restricted Subsidiary, then the Consolidated Total Net Leverage Ratio shall be calculated giving
pro forma
effect thereto for such period as if such designation had occurred at the beginning of the applicable four-quarter period.
For
purposes of this definition, whenever
pro forma
effect is to be given to any
pro forma
event, the
pro forma
calculations shall be made in good faith by a responsible financial or accounting officer
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of
the Issuer. Any such
pro forma
calculation may include adjustments appropriate, in the reasonable good faith determination of the Issuer as set forth
in an Officers' Certificate, to reflect operating expense reductions and other operating improvements or synergies reasonably expected to result from the applicable event within 12 months of
the date the applicable event is consummated and which are expected to have a continuing impact and are factually supportable;
provided
that the
aggregate amount of adjustments in respect of pro forma operating improvements or synergies that do not comply with Article 11 of Regulation S-X for any four quarter period (the "Non-S-X
Adjustment Amount") shall not exceed 20% of EBITDA for such period prior to giving effect to the Non-S-X Adjustment Amount for such period.
For
purposes of this definition, any amount in a currency other than U.S. dollars will be converted to U.S. dollars based on the average exchange rate for such currency for the most
recent twelve month period immediately prior to the date of determination in a manner consistent with that used in calculating EBITDA for the applicable period.
"Credit
Agreement" means (i) the Credit Agreement, entered into in connection with the Acquisition, among the Issuer and the agents, lenders or other parties thereto from time to
time, as amended, restated, supplemented, waived, replaced (whether or not upon termination, and whether with the original lenders or otherwise), restructured, repaid, refunded, refinanced or
otherwise modified in whole or in part from time to time, including any agreement or indenture extending the maturity thereof, refinancing, replacing or otherwise restructuring all or any portion of
the Indebtedness under such agreement or agreements or indenture or indentures or any successor or replacement agreement or agreements or indenture or indentures or increasing the amount loaned or
issued thereunder or altering the maturity thereof (except to the extent any such refinancing, replacement or restructuring is designated by the Issuer to not be included in the definition of "Credit
Agreement") and (ii) whether or not any credit agreement referred to in clause (i) remains outstanding, if designated by the Issuer to be included in the definition of "Credit
Agreement," one or more (A) debt facilities or commercial paper facilities, providing for revolving credit loans, term loans, securitization or receivables financing (including through the sale
of receivables to lenders or to special purpose entities formed to borrow from lenders against such receivables) or letters of credit, (B) debt securities, indentures or other forms of debt
financing (including convertible or exchangeable debt instruments or bank guarantees or bankers' acceptances), or (C) instruments or agreements evidencing any other Indebtedness, in each case,
with the same or different borrowers or issuers and, in each case, as amended, supplemented, modified, waived, extended, restructured, repaid, renewed, refinanced, restated, replaced (whether or not
upon termination, and whether with the original lenders or otherwise) or refunded in whole or in part from time to time.
"Credit
Agreement Documents" means the collective reference to any Credit Agreement, any notes issued pursuant thereto and the guarantees thereof, and the collateral documents
(including, without limitation, intercreditor agreements) relating thereto, as amended, supplemented, restated, renewed, refunded, replaced (whether or not upon termination, and whether with the
original lenders or otherwise), restructured, repaid, refinanced or otherwise modified, in whole or in part, from time to time.
"Default"
means any event which is, or after notice or passage of time or both would be, an Event of Default.
"Designated
Non-cash Consideration" means the Fair Market Value (as determined in good faith by the Issuer) of non-cash consideration received by the Issuer or a Restricted Subsidiary in
connection with an Asset Sale that is so designated as Designated Non-cash Consideration pursuant to an Officers' Certificate of the Issuer, setting forth such valuation, less the amount of cash or
Cash Equivalents received in connection with a subsequent disposition of such Designated Non-cash Consideration.
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"Designated
Preferred Stock" means Preferred Stock of the Issuer or any direct or indirect parent of the Issuer (other than Disqualified Stock), that is issued for cash (other than to
the Issuer or any of its Subsidiaries or an employee stock ownership plan or trust established by the Issuer or any of its Subsidiaries) and is so designated as Designated Preferred Stock, pursuant to
an Officers' Certificate, on the issuance date thereof.
"Disqualified
Stock" means, with respect to any Person, any Equity Interests of such Person which, by its terms (or by the terms of any security into which it is convertible or for which
it is redeemable or exchangeable), or upon the happening of any event:
(1) matures
or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise,
(2) is
convertible or exchangeable for Indebtedness or Disqualified Stock of such Person or any of its Restricted Subsidiaries, or
(3) is
redeemable at the option of the holder thereof, in whole or in part,
in
each case prior to 91 days after the earlier of the maturity date of the notes or the date the notes are no longer outstanding and other than as a result of a change of control or asset
sale;
provided
,
however
, that only the portion of Equity Interests which so matures or is mandatorily
redeemable, is so convertible or exchangeable or is so redeemable at the option of the holder thereof prior to such date shall be deemed to be Disqualified Stock;
provided
,
further
,
however,
that if such Equity
Interests are
issued to any employee or to any plan for the benefit of employees of the Issuer or its Subsidiaries or direct or indirect parent entity or by any such plan to such employees, such Equity Interests
shall not constitute Disqualified Stock solely because they may be required to be repurchased by such Person in order to satisfy applicable statutory or regulatory obligations or as a result of such
employee's termination, death or disability;
provided
,
further
, that any class of Equity Interests of
such Person that by its terms authorizes such Person to satisfy its obligations thereunder by delivery of Equity Interests that are not Disqualified Stock shall not be deemed to be Disqualified Stock.
"Domestic
Subsidiary" means a Restricted Subsidiary that is not a Foreign Subsidiary.
"EBITDA"
means, with respect to any Person for any period, the Consolidated Net Income of such Person and its Restricted Subsidiaries for such period
plus
:
(1) the
sum of, without duplication, in each case, to the extent deducted in calculating or otherwise reducing Consolidated Net Income for such period:
(a) provision
for Taxes based on income, profits or capital of such Person and its Restricted Subsidiaries for such period, without duplication, including, without
limitation, state franchise and similar Taxes, and foreign withholding Taxes (including penalties and interest related to Taxes or arising from Tax examination);
plus
(b) (x)
Consolidated Interest Expense of such Person and its Restricted Subsidiaries for such period and (y) all cash dividend payments (excluding items eliminated in
consolidation) on any series of preferred stock of any Restricted Subsidiary of such Person or any Disqualified Stock of such Person and its Restricted Subsidiaries;
plus
(c) depreciation,
amortization (including amortization of intangibles, deferred financing fees and actuarial gains and losses related to pensions and other post-employment
benefits, but excluding amortization of prepaid cash expenses that were paid in a prior period) and other non-cash expenses (excluding any such non-cash charges or expenses to the extent that it
represents an accrual of or reserve for cash expenses in any future period or amortization of a prepaid cash expense that was paid in a prior period) of such Person and its Restricted Subsidiaries for
such period;
plus
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(d) any
costs or expenses incurred pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement or any stock
subscription or shareholder agreement, to the extent that such costs or expenses are funded with cash proceeds contributed to the capital of such Person or net cash proceeds of an issuance of Equity
Interests of the Issuer (other than Disqualified Stock) solely to the extent that such net cash proceeds are excluded from the calculation of the Cumulative Credit;
plus
(e) any
non-cash losses related to non-operational hedging, including, without limitation, resulting from hedging transactions for interest rate or currency exchange risks
associated with the notes, the Credit Agreement or the Existing Family Dollar Notes;
minus
(2) the
sum of, without duplication, in each case, to the extent added back in or otherwise increasing Consolidated Net Income for such period:
(a) non-cash
items increasing such Consolidated Net Income for such period (excluding the recognition of deferred revenue or any non-cash items which represent the reversal
of any accrual of, or reserve for, anticipated cash charges in any prior period and any items for which cash was received in any prior period);
plus
(b) any
non-cash gains related to non-operational hedging, including, without limitation, resulting from hedging transactions for interest rate or currency exchange risks
associated with the notes, the Credit Agreement or the Existing Family Dollar Notes.
Notwithstanding
the preceding, the provision for Taxes based on the income or profits of, the Consolidated Interest Expense of, the depreciation and amortization and other non-cash
expenses or non-cash items of and the restructuring charges or expenses of, a Restricted Subsidiary (other than any Wholly Owned Subsidiary) of such Person will be added to (or subtracted from, in the
case of non-cash items described in clause (b) above) Consolidated Net Income to compute EBITDA (A) in the same proportion that the Net Income of such Restricted Subsidiary was added to
compute such Consolidated Net Income of such Person, and (B) only to the extent that a corresponding amount of the Net Income of such Restricted Subsidiary would be permitted at the date of
determination to be dividended or distributed to such Person by such Restricted Subsidiary without prior governmental approval (that has not been obtained), and without direct or indirect restriction
pursuant to the terms of its charter and all agreements, instruments, judgments, decrees, orders, statutes, rules and governmental regulations applicable to that Restricted Subsidiary or its
stockholders.
"Equity
Interests" means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for,
Capital Stock).
"Equity
Offering" means any public or private sale after the Issue Date of common Capital Stock or Preferred Stock of the Issuer or any direct or indirect parent of the Issuer, as
applicable (other than Disqualified Stock), other than:
(1) public
offerings with respect to the Issuer's or such direct or indirect parent's Capital Stock registered on Form F-4, S-4 or Form S-8;
(2) issuances
to any Subsidiary of the Issuer; and
(3) any
such public or private sale that constitutes an Excluded Contribution.
"Exchange
Act" means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.
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"Excluded
Contributions" means the Cash Equivalents or other assets (valued at their Fair Market Value as determined in good faith by the Issuer) received by the Issuer after the
Acquisition Date from:
(1) contributions
to its common equity capital, and
(2) the
sale (other than to a Subsidiary of the Issuer or to any Subsidiary management equity plan or stock option plan or any other management or employee benefit plan or
agreement) of Capital Stock (other than Disqualified Stock and Designated Preferred Stock) of the Issuer, in each case designated as Excluded Contributions pursuant to an Officers' Certificate.
"Excluded
Subsidiary" means (a) each Unrestricted Subsidiary, (b) each Subsidiary that is prohibited from guaranteeing the notes by any requirement of law or that would
require consent, approval, license or authorization of a Governmental Authority to guarantee the notes (unless such consent, approval, license or authorization has been received), (c) each
Subsidiary that is prohibited by any applicable contractual requirement from guaranteeing the notes on the Acquisition Date or at the time such Subsidiary becomes a Subsidiary (to the extent not
incurred in connection with becoming a Subsidiary
and in each case for so long as such restriction or any replacement or renewal thereof is in effect), (d) any Securitization Subsidiary, (e) any Insurance Subsidiary, (f) any
direct or indirect Domestic Subsidiary of any Foreign Subsidiary, (g) any Domestic Subsidiary that owns no material assets (directly or through its Subsidiaries) other than Equity Interests of
one or more Foreign Subsidiaries that are CFCs (a "FSHCO") and (h) any Domestic Subsidiary that owns no material assets (directly or through its Subsidiaries) other than Equity Interests of one
or more FSHCOs.
"Existing
Dollar Tree Notes" means the 4.03% Series A Senior Notes due September 16, 2020, 4.63% Series B Senior Notes due September 16, 2023 and 4.78%
Series C Senior Notes due September 16, 2025 of Dollar Tree Stores, Inc., each issued pursuant to the Existing Dollar Tree Notes Purchase Agreement.
"Existing
Dollar Tree Notes Purchase Agreement" means the Note Purchase Agreement, dated as of September 16, 2013, among Dollar Tree Stores, Inc., Dollar Tree, and the
purchasers named therein, as amended, modified or supplemented from time to time.
"Existing
Family Dollar Notes" means the 5.00% Senior Notes due 2021 of Family Dollar issued pursuant to the Existing Family Dollar Notes Indenture.
"Existing
Family Dollar Notes Indenture" means the Indenture, dated as of January 28, 2011, among Family Dollar and U.S. Bank National Association, as trustee, as amended,
modified or supplemented from time to time (including by, without limitation, the First Supplemental Indenture thereto, dated as of January 28, 2011).
"Fair
Market Value" means, with respect to any asset or property, the price which could be negotiated in an arm's-length transaction, for cash, between a willing seller and a willing and
able buyer, neither of whom is under undue pressure or compulsion to complete the transaction.
"Family
Dollar" means Family Dollar Stores, Inc. and any successors thereto.
"Financial
Officer" of any Person shall mean the Chief Financial Officer, principal accounting officer, Treasurer, Assistant Treasurer, Controller or any Director or other executive
responsible for the financial affairs of such Person.
"Fixed
Charge Coverage Ratio" means, with respect to any Person for any period, the ratio of EBITDA of such Person for such period to the Fixed Charges of such Person for such period.
In
the event that the Issuer or any of the Restricted Subsidiaries Incurs, repays, repurchases or redeems any Indebtedness (other than in the case of any Securitization Financing, in
which case interest expense shall be computed based upon the average daily balance of such Indebtedness during
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the
applicable period) or issues, repurchases or redeems Disqualified Stock or Preferred Stock subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being
calculated but prior to the event for which the calculation of the Fixed Charge Coverage Ratio is made (the "Fixed Charge Calculation Date"), then the Fixed Charge Coverage Ratio shall be calculated
giving
pro forma
effect to such Incurrence, repayment, repurchase or redemption of Indebtedness, or such issuance, repurchase or redemption of
Disqualified Stock or Preferred Stock, as if the same had occurred at the beginning of the applicable four-quarter period;
provided
that the Issuer may
elect pursuant to an Officers' Certificate delivered to the Trustee to treat all or any portion of the commitment under any Indebtedness as being Incurred at such time, in which case any subsequent
Incurrence of Indebtedness under such commitment shall not be deemed, for purposes of this calculation, to be an Incurrence at such subsequent time.
The
Fixed Charge Coverage Ratio shall also be subject to the adjustments described in clause (2)(A) of the third paragraph of the covenant described under "Certain
covenantsLimitation on incurrence of indebtedness and issuance of disqualified stock and preferred stock" and, for purposes of the first paragraph of "Limitation on
incurrence of indebtedness and issuance of disqualified stock and preferred stock" only, clause (2)(B) of the third paragraph of the covenant described under "Certain
covenantsLimitation on incurrence of indebtedness and issuance of disqualified stock and preferred stock."
For
purposes of making the computation referred to above, Investments (or series of related Investments) in excess of $25 million, acquisitions, dispositions, mergers,
amalgamations, consolidations and discontinued operations (as determined in accordance with GAAP), in each case with respect to an operating unit of a business, and any operational changes, business
realignment projects or initiatives, restructurings or reorganizations that the Issuer or any Restricted Subsidiary has determined to make and/or made during the four-quarter reference period or
subsequent to such reference period and on or prior to or simultaneously with the Fixed Charge Calculation Date (each, for purposes of this definition, a "pro forma event") shall be calculated on a
pro forma
basis assuming that all such Investments, acquisitions, dispositions, mergers, amalgamations, consolidations, discontinued operations and
other operational changes, business realignment projects or initiatives, restructurings or reorganizations (and the change of any associated fixed charge obligations and the change in EBITDA resulting
therefrom) had occurred on the first day of the four-quarter reference period. If since the beginning of such period any Person that subsequently became a Restricted Subsidiary or was merged with or
into the Issuer or any Restricted Subsidiary since the beginning of such period shall have made any Investment, acquisition, disposition, merger, consolidation, amalgamation, discontinued operation,
operational change, business realignment project or initiative, restructuring or reorganization, in each case with respect to an operating unit of a business, that would have required adjustment
pursuant to
this definition, then the Fixed Charge Coverage Ratio shall be calculated giving
pro forma
effect thereto for such period as if such Investment,
acquisition, disposition, discontinued operation, merger, amalgamation, consolidation, operational change, business realignment project or initiative, restructuring or reorganization had occurred at
the beginning of the applicable four-quarter period. If since the beginning of such period any Restricted Subsidiary is designated an Unrestricted Subsidiary or any Unrestricted Subsidiary is
designated a Restricted Subsidiary, then the Fixed Charge Coverage Ratio shall be calculated giving
pro forma
effect thereto for such period as if such
designation had occurred at the beginning of the applicable four-quarter period.
For
purposes of this definition, whenever
pro forma
effect is to be given to any
pro forma
event, the
pro forma
calculations shall be made in good faith by a responsible financial or accounting officer of the Issuer. Any such
pro forma
calculation may include adjustments appropriate, in the reasonable good faith determination of the Issuer as set forth in an Officers'
Certificate, to reflect operating expense reductions and other operating improvements or synergies reasonably expected to result from the applicable event within 12 months of the date the
applicable event is consummated and which are
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expected
to have a continuing impact and are factually supportable;
provided
that the Non-S-X Adjustment Amount shall not exceed 20% of EBITDA for such
period prior to giving effect to the Non- S-X Adjustment Amount for such period.
If
any Indebtedness bears a floating rate of interest and is being given
pro forma
effect, the interest on such Indebtedness shall be
calculated as if the rate in effect on the Fixed Charge Calculation Date had been the applicable rate for the entire period (taking into account any Hedging Obligations applicable to such Indebtedness
if such Hedging Obligation has a remaining term in excess of 12 months). Interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by a
responsible financial or accounting officer of the Issuer to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP. For purposes of making the computation
referred to above, interest on any Indebtedness under a revolving credit facility computed on a
pro forma
basis shall be computed based upon the average
daily balance of such Indebtedness during the applicable period. Interest on Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a
Eurocurrency interbank offered rate, or other rate, shall be deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Issuer may
designate.
For
purposes of this definition, any amount in a currency other than U.S. dollars will be converted to U.S. dollars based on the average exchange rate for such currency for the most
recent twelve month period immediately prior to the date of determination in a manner consistent with that used in calculating EBITDA for the applicable period.
"Fixed
Charges" means, with respect to any Person for any period, the sum, without duplication, of: (1) Consolidated Interest Expense (excluding amortization or write-off of
deferred financing costs) of such Person and its Restricted Subsidiaries for such period and (2) all cash dividend payments (excluding items eliminated in consolidation) on any series of
Preferred Stock or Disqualified Stock of such Person and its Restricted Subsidiaries.
"Foreign
Subsidiary" means a Restricted Subsidiary not organized or existing under the laws of the United States of America or any state thereof or the District of Columbia.
"GAAP"
means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been approved by a significant
segment of the accounting profession, which are in effect from time to time, it being understood that, for purposes of the indenture, all references to codified accounting standards specifically named
in the indenture shall be deemed to include any successor, replacement, amended or updated accounting standard under GAAP.
"Governmental
Authority" means any federal, state, local or foreign court or governmental agency, authority, instrumentality or regulatory or legislative body.
"guarantee"
means a guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business), direct or indirect, in any manner (including,
without limitation, letters of credit and reimbursement agreements in respect thereof), of all or any part of any Indebtedness or other obligations. The amount of any guarantee shall be deemed to be
an amount equal to the stated or determinable amount of the Indebtedness in respect of which such guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in
respect thereof as determined by such person in good faith.
"Guarantee"
means any guarantee of the obligations of the Issuer under the indenture and the notes by any Guarantor in accordance with the provisions of the indenture.
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"Guarantor" means (x) each Subsidiary of the Issuer that provides a Guarantee as of the Acquisition Date and (y) any Subsidiary of the Issuer that
Incurs a Guarantee;
provided
that upon the release or discharge of such Person from its Guarantee in accordance with the indenture, such Person shall
cease to be a Guarantor.
"Hedging
Agreement" shall mean any agreement with respect to any swap, forward, future or derivative transaction, or option or similar agreement involving, or settled by reference to,
one or more rates, currencies, commodities, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value, or credit
spread transaction, repurchase transaction, reserve repurchase transaction, securities lending transaction, weather index transaction, spot contracts, fixed price physical delivery contracts, or any
similar transaction or any combination of these transactions, in each case of the foregoing, whether or not exchange traded;
provided
, that no phantom
stock or similar plan providing for payments only on account of services provided by current or former directors, officers, employees or consultants of the Issuer or any direct or indirect parent
thereof or any of the Restricted Subsidiaries shall be a Hedging Agreement.
"Hedging
Obligations" means obligations in respect of any Hedging Agreement.
"holder"
or "noteholder" means the Person in whose name a note is registered on the registrar's books.
"Immaterial
Subsidiary" means any Subsidiary of the Issuer that, as of the last day of the fiscal quarter of the Issuer most recently ended, (a) did not have assets with a value
in excess of 5.0% of Total Assets or revenues representing in excess of 5.0% of total revenues of the Issuer and its Restricted Subsidiaries on a consolidated basis as of such date and
(b) taken together with all such Subsidiaries as of such date, did not have assets with a value in excess of 7.5% of Total Assets or revenues representing in excess of 7.5% of total revenues of
the Issuer and its Restricted Subsidiaries on a consolidated basis as of such date.
"Incur"
means issue, assume, guarantee, incur or otherwise become liable for;
provided
,
however
, that any Indebtedness or Capital Stock of a Person existing at the
time such Person becomes a Subsidiary (whether by merger, amalgamation,
consolidation, acquisition or otherwise) shall be deemed to be Incurred by such Person at the time it becomes a Subsidiary.
"Indebtedness"
of any Person means, without duplication, (1) all obligations of such Person for borrowed money, (2) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments (except any such obligation issued in the ordinary course of business with a maturity date of no more than six months in a transaction intended to extend
payment terms of trade payables or similar obligations to trade creditors Incurred in the ordinary course of business), (3) all obligations of such Person under conditional sale or other title
retention agreements relating to property or assets purchased by such Person (except any such obligation that constitutes a trade payable or similar obligation to a trade creditor Incurred in the
ordinary course of business), (4) all obligations of such Person issued or assumed as the deferred purchase price of property or services (except any such balance that (a) constitutes a
trade payable or similar obligation to a trade creditor Incurred in the ordinary course of business, (b) any earn-out obligations until such obligation becomes a liability on the balance sheet
of such Person in accordance with GAAP and (c) liabilities accrued in the ordinary course of business) which purchase price is due more than six months after the date of placing the property in
service or taking delivery and title thereto, (5) all guarantees by such Person of Indebtedness of others, (6) all Capitalized Lease Obligations of such Person, (7) Hedging
Obligations, to the extent the foregoing would appear on a balance sheet of such Person as a liability, (8) the principal component of all obligations, contingent or otherwise, of such Person
as an account party in respect of letters of credit, (9) the principal component of all obligations of such Person in respect of bankers' acceptances,
(10) [reserved], (11) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be
secured by) any Lien
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on
property owned or acquired by such Person (other than Liens on Equity Interests of Unrestricted Subsidiaries securing Indebtedness of such Unrestricted Subsidiaries), whether or not the
Indebtedness secured thereby has been assumed and (12) all Attributable Receivables Indebtedness with respect to Securitization Financings. The amount of Indebtedness of any Person for purposes
of clause (11) above shall (unless such Indebtedness has been assumed by such Person) be deemed to be equal to the lesser of (i) the aggregate unpaid amount of such Indebtedness and
(ii) the Fair Market Value of the property encumbered thereby. Notwithstanding anything in this description to the contrary, Indebtedness shall not include, and shall be calculated without
giving effect to, (x) the effects of Financial Accounting Standards Board Accounting Standards Codification 825 and related interpretations to the extent such effects would otherwise increase
or decrease an amount of Indebtedness for any purpose under the indenture as a result of accounting for any embedded derivatives created by the terms of such Indebtedness and (y) obligations
under the Acquisition Documents, and any such amounts that would have constituted Indebtedness under the indenture but for the application of clause (x) or (y) of this sentence shall not
be deemed an Incurrence of Indebtedness under the indenture.
"Independent
Financial Advisor" means an accounting, appraisal or investment banking firm or consultant, in each case of nationally recognized standing, that is, in the good faith
determination of the Issuer, qualified to perform the task for which it has been engaged.
"Initial
2020 Notes" means the 5.250% Senior Notes due 2020 issued by the Issuer on the Issue Date, any guarantees thereof, any exchange notes in respect thereof, and any guarantees of
any such exchange notes.
"Initial
Purchasers" means the financial institutions listed on the cover page of the Offering Memorandum.
"Insurance
Subsidiary" means any Subsidiary that is a so-called "captive" insurance company, including, without limitation, Family Dollar Insurance, Inc.
"Investment
Grade Rating" means a rating equal to or higher than "Baa3" (or the equivalent) by Moody's or "BBB" (or the equivalent) by S&P, or an equivalent rating by
any other Rating Agency in the event that either Moody's and/or S&P has not then rated the notes.
"Investments"
means, with respect to any Person, all investments by such Person in other Persons (including Affiliates) in the form of loans (including guarantees), advances or capital
contributions (excluding accounts receivable, trade credit and advances to customers and commission, travel and similar advances to officers, employees and consultants made in the ordinary course of
business and
any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any
prepayments and other credits to suppliers made in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities issued by
any other Person and investments that are required by GAAP to be classified on the balance sheet of such Person in the same manner as the other investments included in this definition to the extent
such transactions involve the transfer of cash or other property. For purposes of the definition of "Unrestricted Subsidiary" and the covenant described under "Certain
covenantsLimitation on restricted payments":
(1) "Investments"
shall include the portion (proportionate to the Issuer's equity interest in such Subsidiary) of the Fair Market Value (as determined in good faith by the
Issuer) of the net assets of such Subsidiary at the time that such Subsidiary is designated an Unrestricted Subsidiary;
provided
,
however
, that upon a
redesignation of such Subsidiary as a Restricted Subsidiary, the Issuer shall be deemed to continue to have an "Investment" in an
Unrestricted Subsidiary equal to an amount (if positive) equal to:
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(b) the
portion (proportionate to its equity interest in such Subsidiary) of the Fair Market Value (as determined in good faith by the Issuer) of the net assets of such
Subsidiary at the time of such redesignation; and
(2) any
property transferred to or from an Unrestricted Subsidiary shall be valued at its Fair Market Value (as determined in good faith by the Issuer) at the time of such
transfer.
"Issue
Date" means February 23, 2015.
"Lien"
means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or similar encumbrance of any kind in respect of such asset, whether or not filed, recorded
or otherwise perfected under applicable law (including any conditional sale or other title retention agreement or any lease in the nature thereof);
provided
that in no event shall an operating lease or
an agreement to sell be deemed to constitute a Lien.
"Limited
Condition Acquisition" means any acquisition, including by means of a merger, amalgamation or consolidation, by the Issuer or one or more of its Restricted Subsidiaries, the
consummation of which is not conditioned upon the availability of, or on obtaining, third party financing or in connection with which any fee or expense would be payable by Issuer or its Subsidiaries
to the seller or target in the event financing to consummate the acquisition is not obtained as contemplated by the definitive acquisition agreement.
"Market
Capitalization" means an amount equal to (i) the total number of issued and outstanding shares of Capital Stock of the Issuer or any direct or indirect parent of the
Issuer on the date of the declaration of the relevant dividend multiplied by (ii) the arithmetic mean of the closing prices per share of such Capital Stock for the 30 consecutive trading days
immediately preceding the date of declaration of such dividend.
"Material
Subsidiary" means each Wholly-Owned Domestic Subsidiary that is not an Immaterial Subsidiary.
"Moody's"
means Moody's Investors Service, Inc. or any successor to the rating agency business thereof.
"Net
Income" means, with respect to any Person, the net income (loss) of such Person, determined in accordance with GAAP and before any reduction in respect of Preferred Stock dividends.
"Net
Proceeds" means the aggregate cash proceeds received by the Issuer or any Restricted Subsidiary in respect of any Asset Sale (including, without limitation, any cash received in
respect of or upon the sale or other disposition of any Designated Non-cash Consideration received in any Asset Sale and 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 the assumption by the acquiring Person of Indebtedness relating to the disposed assets or other
consideration received in any other non-cash form), net of the direct costs relating to such Asset Sale and the sale or disposition of such Designated Non-cash Consideration (including, without
limitation, legal, accounting and investment banking fees, and brokerage and sales commissions), and any relocation expenses Incurred as a result thereof, Taxes paid or payable as a result thereof
(after taking into account any available Tax credits or deductions and any Tax sharing arrangements related solely to such disposition), amounts required to be applied to the repayment of principal,
premium (if any) and interest on Indebtedness secured by a Lien on the assets subject to such Asset Sale required (other than pursuant to the second paragraph of the covenant described under
"Certain covenantsAsset sales") to be paid as a result of such transaction, and any deduction of appropriate amounts to be provided by the Issuer and its Restricted
Subsidiaries as a reserve in accordance with GAAP against any liabilities associated with the asset disposed of in such transaction and retained by the Issuer and its Restricted Subsidiaries after
such sale or other disposition thereof, including, without limitation, pension and other post-employment
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benefit
liabilities and liabilities related to environmental matters or against any indemnification obligations associated with such transaction.
"Notes
Obligations" means Obligations in respect of the notes, the indenture and the Guarantees.
"Obligations"
means any principal, interest, penalties, fees, indemnifications, reimbursements (including, without limitation, reimbursement obligations with respect to letters of credit
and bankers' acceptances), damages and other liabilities payable under the documentation governing any Indebtedness;
provided
that Obligations with
respect to the notes shall not include fees or indemnifications in favor of third parties other than the Trustee and the holders of the notes.
"Offering
Memorandum" means the Issuer's offering memorandum, dated February 6, 2015, relating to the issuance of the Initial 2023 Notes.
"Officer"
means, with respect to any Person, as applicable, (i) the Chairman of the Board, Chief Executive Officer, President, any Executive Vice President, Senior Vice President
or Vice President, the Treasurer, or the Secretary of such Person or (ii) any other duly authorized employee or signatory of such Person.
"Officers'
Certificate" means, with respect to any Person, a certificate signed on behalf of such Person by two Officers of such Person, one of whom must be, to the extent such Person
has an Officer meeting such description, the principal executive officer, the principal financial officer, the treasurer or the principal accounting officer of such Person, which meets the
requirements set forth in the indenture.
"Opinion
of Counsel" means, with respect to any Person, a written opinion from legal counsel who is acceptable to the Trustee. The counsel may be an employee of or counsel to such
Person.
"Pari
Passu Indebtedness" means: (a) with respect to the Issuer, the notes and any Indebtedness which ranks
pari passu
in right of
payment to the notes; and (b) with respect to any Guarantor, its Guarantee and any Indebtedness which ranks
pari passu
in right of payment to
such Guarantor's Guarantee.
"Permitted
Investments" means:
(1) any
Investment in the Issuer or any Restricted Subsidiary;
(2) any
Investment in Cash Equivalents;
(3) any
Investment by the Issuer or any Restricted Subsidiary in a Person if as a result of such Investment (a) such Person becomes a Restricted Subsidiary, or
(b) such Person, in one transaction or a series of related transactions, is merged, consolidated or amalgamated with or into, or transfers or conveys all or substantially all of its assets to,
or is liquidated into, the Issuer or a Restricted Subsidiary;
(4) any
Investment in securities or other assets not constituting Cash Equivalents and received in connection with an Asset Sale made pursuant to the provisions of
"
Certain covenants
Asset sales
" or any other disposition of assets not
constituting an Asset Sale;
(5) any
Investment of Dollar Tree or any Subsidiary of Dollar Tree existing on, or made pursuant to binding commitments existing on, the Issue Date, or of Family Dollar or
any Subsidiary of Family Dollar existing on, or made pursuant to binding commitments existing on, the Acquisition Date, or in each case, any extension, modification or renewal of any such Investment;
provided
that the amount of any such Investment may be increased (x) as required by the terms of such Investment as in existence on the Issue
Date or Acquisition Date, as applicable, or (y) as otherwise permitted under the indenture;
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(6) loans
and advances to officers, directors, employees or consultants of the Issuer or any of its Subsidiaries (i) in the ordinary course of business in an
aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any write-downs or write-offs thereof) not to exceed $15 million at the time of Incurrence,
(ii) in respect of payroll payments and expenses in the ordinary course of business and (iii) in connection with such Person's purchase of Equity Interests of the Issuer or any direct or
indirect parent of the Issuer solely to the extent that the amount of such loans and advances shall be contributed to the Issuer in cash as common equity;
(7) any
Investment acquired by the Issuer or any Restricted Subsidiary (a) in exchange for any other Investment or accounts receivable held by the Issuer or such
Restricted Subsidiary in connection with
or as a result of a bankruptcy, workout, reorganization or recapitalization of the Issuer of such other Investment or accounts receivable, or (b) as a result of a foreclosure by the Issuer or
any Restricted Subsidiary with respect to any secured Investment or other transfer of title with respect to any secured Investment in default;
(8) Hedging
Obligations permitted under clause (j) of the second paragraph of the covenant described under "Certain covenantsLimitation on
incurrence of indebtedness and issuance of disqualified stock and preferred stock";
(9) [reserved];
(10) additional
Investments by the Issuer or any Restricted Subsidiary having an aggregate Fair Market Value (as determined in good faith by the Issuer), taken together with
all other Investments made pursuant to this clause (10) that are at that time outstanding, not to exceed the sum of (x) the greater of $1,750 million and 13% of Total Assets as of
the date of such Investment
plus
(y) an amount equal to any returns (including dividends, interest, distributions, returns of principal, profits
on sale, repayments, income and similar amounts) actually received in respect of any such Investment (with the Fair Market Value of each Investment being measured at the time made and without giving
effect to subsequent changes in value);
provided
,
however
, that if any Investment pursuant to this
clause (10) is made in any Person that is not the Issuer or a Restricted Subsidiary at the date of the making of such Investment and such Person becomes the Issuer or a Restricted Subsidiary
after such date, such Investment shall thereafter be deemed to have been made pursuant to clause (1) above and shall cease to have been made pursuant to this clause (10) for so long as
such Person continues to be the Issuer or a Restricted Subsidiary;
(11) loans
and advances to officers, directors or employees for business-related travel expenses, moving expenses and other similar expenses, in each case Incurred in the
ordinary course of business or consistent with past practice or to fund such Person's purchase of Equity Interests of the Issuer or any direct or indirect parent of the Issuer;
(12) Investments
the payment for which consists of Equity Interests of the Issuer (other than Disqualified Stock);
provided
,
however
, that such Equity Interests will not
increase the amount available for Restricted Payments under clause (3) of the definition of
Cumulative Credit contained in "Certain covenantsLimitation on restricted payments";
(13) any
transaction to the extent it constitutes an Investment that is permitted by and made in accordance with the provisions of the second paragraph of the covenant
described under "Certain covenantsTransactions with affiliates" (except transactions described in clauses (2), (4), (6), (9)(b) and (16) of such paragraph);
(14) guarantees
issued in accordance with the covenants described under "Certain covenantsLimitation on incurrence of indebtedness and issuance of
disqualified stock and preferred stock" and "Certain covenantsFuture guarantors," including, without limitation, any guarantee or other obligation issued or incurred under
any Credit Agreement in connection with
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any
letter of credit issued for the account of the Issuer or any of its Subsidiaries (including with respect to the issuance of, or payments in respect of drawings under, such letters of credit);
(15) Investments
consisting of or to finance purchases and acquisitions of inventory, supplies, materials, services or equipment or purchases of contract rights or licenses
or leases of intellectual property;
(16) any
Investment in a Securitization Subsidiary or any Investment by a Securitization Subsidiary in any other Person in connection with a Securitization Financing,
including Investments of funds held in accounts permitted or required by the arrangements governing such Securitization Financing or any related Indebtedness;
(17) Investments
consisting of Permitted Securitization Facility Assets or arising as a result of a Securitization Financing;
(18) Investments
of a Restricted Subsidiary acquired after the Issue Date or of an entity merged into, amalgamated with, or consolidated with the Issuer or a Restricted
Subsidiary in a transaction that is not prohibited by the covenant described under "Merger, amalgamation, consolidation or sale of all or substantially all assets" after the Issue Date to
the extent that such Investments were not made in contemplation of such acquisition, merger, amalgamation or consolidation and were in existence on the date of such acquisition, merger, amalgamation
or consolidation;
(19) Investments
in the ordinary course of business consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code
Article 4 customary trade arrangements with customers;
(20) advances
in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Issuer or the Restricted
Subsidiaries;
(21) any
Investment in any Subsidiary of the Issuer or any joint venture in connection with intercompany cash management arrangements or related activities arising in the
ordinary course of business;
(22) Investments
consisting of the licensing or contribution of intellectual property pursuant to joint marketing or other arrangements with other Persons, in each case in
the ordinary course of business;
(23) additional
Investments in joint ventures and Unrestricted Subsidiaries not to exceed the sum of (A) the greater of $500 million and 3.75% of Total Assets
when made,
plus
(B) an aggregate amount equal to any returns (including dividends, interest, distributions, returns of principal, profits on
sale, repayments, income and similar amounts) actually received in respect of any such Investment with the Fair Market Value of each Investment being measured at the time such Investment is made and
without giving effect to subsequent changes in value);
provided
,
however
, that if any Investment
pursuant to this clause (23) is made in any Person that is not a Restricted Subsidiary at the date of the making of such Investment and such Person becomes a Restricted Subsidiary after such
date, such Investment shall thereafter be deemed to have been made pursuant to clause (1) above and shall cease to have been made pursuant to this clause (23) for so long as such Person
continues to be a Restricted Subsidiary;
(24) any
Investment in fixed income or other assets by any Insurance Subsidiary consistent with customary practices of portfolio management; and
(25) any
Investment in Insurance Subsidiaries that is (i) required by law or applicable regulators or (ii) in an amount, taken together with all other
Investments made pursuant to this
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subclause (ii)
that are at the time outstanding, not to exceed the greater of $50 million and 0.5% of Total Assets.
"Permitted
Liens" means, with respect to any Person:
(1) pledges
or deposits and other Liens granted by such Person under workmens' compensation laws, unemployment insurance laws or similar legislation, or good faith deposits
in connection with bids, tenders, contracts (other than for the payment of Indebtedness) or leases to which such Person is a party, or deposits to secure public or statutory obligations of such Person
or deposits of cash or U.S. government bonds to secure surety or appeal bonds, performance and return of money bonds, or deposits as security for contested Taxes or import duties or for the payment of
rent, in each case Incurred in the ordinary course of business;
(2) Liens
imposed by law, such as landlord's, carriers', warehousemen's, mechanics', materialmen's, repairmen's, construction or other like Liens securing obligations that
are not overdue by more than 30 days or that are being contested in good faith by appropriate proceedings or other Liens arising out of judgments or awards against such Person with respect to
which such Person shall then be proceeding with an appeal or other proceedings for review;
(3) Liens
for Taxes, assessments or other governmental charges not yet overdue by more than 30 days or that are being contested in good faith by appropriate
proceedings;
(4) Liens
in favor of issuers of performance and surety bonds or bid bonds or with respect to other regulatory requirements or letters of credit, bankers' acceptances or
similar obligations issued pursuant to the request of and for the account of such Person in the ordinary course of its business;
(5) minor
survey exceptions, minor encumbrances, trackage rights, special assessments, easements or reservations of, or rights of others for, licenses, rights-of-way,
sewers, electric lines, telegraph and telephone lines and other similar purposes, servicing agreements, development agreements, site plan agreements and other similar encumbrances incurred in the
ordinary course of business or zoning or other restrictions as to the use of real properties or Liens incidental to the conduct of the business of such Person or to the ownership of its properties
which were not Incurred in connection with Indebtedness and which do not in the aggregate materially adversely affect the value of said properties or materially impair their use in the operation of
the business of such Person;
(6) (A)
Liens on assets of a Subsidiary that is not a Guarantor securing Indebtedness of a Subsidiary that is not a Guarantor permitted to be Incurred pursuant to the
covenant described under "Certain covenantsLimitation on incurrence of indebtedness and issuance of disqualified stock and preferred stock";
(B) Liens
securing (x) Indebtedness Incurred pursuant to clause (a) of the second paragraph of the covenant described under
"
Certain covenantsLimitation on incurrence
of indebtedness and issuance of disqualified stock and preferred stock" and (y) any other Indebtedness permitted to be Incurred under the indenture if, as of the date such Indebtedness was
Incurred, and after giving
pro forma
effect thereto and the application of the net proceeds therefrom, the Secured Leverage Ratio of the Issuer does not
exceed 3.00 to 1.00; and
(C) Liens
securing Obligations in respect of Indebtedness permitted to be Incurred pursuant to clause (d), (n) (to the extent such guarantees are issued in
respect of any such Indebtedness) or (p) (to the extent the Secured Leverage Ratio of the Issuer, after giving
pro forma
effect thereto, does not
exceed 3.00 to 1.00 or is no more than such ratio immediately prior to such incurrence) of the second paragraph of the covenant described under "Certain
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covenantsLimitation
on incurrence of indebtedness and issuance of disqualified stock and preferred stock";
(D) on
and after the Acquisition Date, Liens securing all obligations in respect of the Existing Family Dollar Notes and any guarantees thereof and the Existing Family
Dollar Notes Indenture;
(7) Liens
existing (x) on the assets or property of Dollar Tree or any Subsidiary of Dollar Tree on the Issue date or (y) on the assets or property of Family
Dollar or any Subsidiary of Family Dollar on the Acquisition Date (other than Liens in favor of the lenders under the Credit Agreement and Liens securing the Existing Family Dollar Notes and any
guarantees thereof);
(8) Liens
on assets, property or Equity Interests of a Person at the time such Person becomes a Subsidiary;
provided
,
however
, that such Liens are not created or
Incurred in connection with, or in contemplation of, such other Person becoming such a Subsidiary;
provided
,
further
,
however
, that such Liens may not
extend to any other property owned by the Issuer or any Restricted Subsidiary (other than pursuant to after-acquired property clauses in effect with respect to such Lien at the time of acquisition on
property of the type that would have been subject to such Lien notwithstanding the occurrence of such acquisition);
(9) Liens
on assets or property at the time the Issuer or a Restricted Subsidiary acquired the assets or property, including any acquisition by means of a merger,
amalgamation or consolidation with or into
the Issuer or any Restricted Subsidiary;
provided
,
however
, that such Liens are not created or Incurred
in connection with, or in contemplation of, such acquisition;
provided
,
further
,
however
, that the Liens may
not extend to any other property owned by the Issuer or any Restricted Subsidiary (other than pursuant to after-acquired
property clauses in effect with respect to such Lien at the time of acquisition on property of the type that would have been subject to such Lien notwithstanding the occurrence of such acquisition);
(10) Liens
securing Indebtedness or other obligations of the Issuer or a Restricted Subsidiary owing to the Issuer or another Restricted Subsidiary permitted to be Incurred
in accordance with the covenant described under "Certain covenantsLimitation on incurrence of indebtedness and issuance of disqualified stock and preferred stock";
(11) Liens
securing Hedging Obligations not Incurred in violation of the indenture;
provided
that with respect to Hedging
Obligations relating to Indebtedness, such Lien extends only to the property, if any, securing such Indebtedness, property securing other Indebtedness or cash and Cash Equivalents;
(12) Liens
on inventory or other goods and proceeds of any Person securing such Person's obligations in respect of documentary letters of credit, bank guarantees or bankers'
acceptances issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods;
(13) leases
and subleases of real property which do not materially interfere with the ordinary conduct of the business of the Issuer or any of the Restricted Subsidiaries;
(14) Liens
arising from Uniform Commercial Code financing statement filings regarding operating leases or other obligations not constituting Indebtedness;
(15) Liens
in favor of the Issuer or any Guarantor;
(16) Liens
on Permitted Securitization Facility Assets or the Equity Interests of any Securitization Subsidiary Incurred in connection with a Securitization Financing;
(17) pledges
and deposits and other Liens made in the ordinary course of business to secure liability to insurance carriers;
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(18) Liens
on the Equity Interests of Unrestricted Subsidiaries;
(19) leases
or subleases, and licenses or sublicenses (including with respect to intellectual property) granted to others in the ordinary course of business;
(20) Liens
to secure any refinancing, refunding, extension, renewal or replacement (or successive refinancings, refundings, extensions, renewals or replacements) as a whole,
or in part, of any Indebtedness secured by any Lien referred to in clauses (6), (7), (8), (9), (15) and (25) of this definition;
provided
,
however
, that (x) such new Lien shall be limited to all or part of the same property
(including any after acquired property to the extent it would have been subject to the original Lien) that secured the original Lien (plus improvements on and accessions to such property, proceeds and
products thereof, customary security deposits and any other assets pursuant to the after-acquired property clauses to the extent such assets secured (or would have secured) the Indebtedness being
refinanced, refunded, extended, renewed or replaced), and (y) the Indebtedness secured by such Lien at such time is not increased to any amount greater than the sum of (A) the
outstanding principal amount (or accreted value, if applicable) or, if greater, committed amount (but only to the extent the undrawn portion of such commitment was deemed to be Secured Indebtedness on
such date in accordance with the definition of Secured Leverage Ratio) of the applicable Indebtedness described under clauses (6), (7), (8), (9), (15) and (25) at the time the
original Lien became a Permitted Lien under the indenture, (B) unpaid accrued interest and premiums (including tender premiums), and (C) an amount necessary to pay any underwriting
discounts, defeasance costs, commissions, fees and expenses related to such refinancing, refunding, extension, renewal or replacement;
provided
,
further
,
however
, that in the case of any Liens to secure any refinancing, refunding, extension or
renewal of Indebtedness secured by a Lien referred to in clause (6)(B) or (6)(C), the principal amount of any Indebtedness Incurred for such refinancing, refunding, extension or renewal shall
be deemed secured by a Lien under clause (6)(B) or (6)(C) and not this clause (20) for purposes of determining the principal amount of Indebtedness outstanding under clause (6)(B)
or (6)(C);
(21) Liens
on equipment of the Issuer or any Restricted Subsidiary granted in the ordinary course of business to the Issuer's or such Restricted Subsidiary's client at which
such equipment is located;
(22) judgment
and attachment Liens not giving rise to an Event of Default and notices of lis pendens and associated rights related to litigation being contested in good
faith by appropriate proceedings and for which adequate reserves have been made;
(23) Liens
arising out of conditional sale, title retention, consignment or similar arrangements for the sale or purchase of goods entered into in the ordinary course of
business;
(24) Liens
Incurred to secure cash management services or to implement cash pooling arrangements in the ordinary course of business;
(25) other
Liens securing obligations the outstanding principal amount of which does not, taken together with the principal amount of all other obligations secured by Liens
incurred under this clause (25) (and by any Liens incurred under clause (20) hereof with respect to any refinancing, refunding, extension, renewal or replacement of any Indebtedness
secured by any Lien referred to in this clause (25)) that are at that time outstanding, exceed the greater of $600 million and 4.50% of Total Assets at the time of Incurrence;
(26) any
encumbrance or restriction (including put and call arrangements) with respect to Capital Stock of any joint venture or similar arrangement securing obligations of
such joint venture or pursuant to any joint venture or similar agreement;
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(27) Liens
on any amounts held by a trustee (i) in the funds and accounts under an indenture securing any revenue bonds issued for the benefit of the Issuer or any
Restricted Subsidiary, (ii) under any indenture or other debt agreement issued in escrow pursuant to customary escrow arrangements pending the release thereof, or (iii) under any
indenture pursuant to customary discharge, redemption or defeasance provisions;
(28) Liens
(i) arising by virtue of any statutory or common law provisions relating to banker's Liens, rights of set-off or similar rights and remedies as to deposit
accounts or other funds maintained with a depository or financial institution, (ii) attaching to commodity trading accounts or other commodity brokerage accounts incurred in the ordinary course
of business or (iii) encumbering reasonable customary initial deposits and margin deposits and similar Liens attaching to brokerage accounts incurred in the ordinary course of business and not
for speculative purposes;
(29) Liens
(i) in favor of credit card companies pursuant to agreements therewith and (ii) in favor of customers;
(30) Liens
disclosed by the title insurance policies delivered pursuant to the Credit Agreement and any replacement, extension or renewal of any such Lien;
provided
that such replacement, extension or renewal Lien
shall not cover any property other than the property that was subject to such Lien prior to
such replacement, extension or renewal;
provided
,
further
, that the Indebtedness and other obligations
secured by such replacement, extension or renewal Lien are permitted under the indenture;
(31) Liens
that are contractual rights of set-off relating to purchase orders and other agreements entered into with customers, suppliers or service providers of the Issuer
or any Restricted Subsidiary in the ordinary course of business;
(32) in
the case of real property that constitutes a leasehold interest, any Lien to which the fee simple interest (or any superior leasehold interest) is subject;
(33) agreements
to subordinate any interest of the Issuer or any Restricted Subsidiary in any accounts receivable or other prices arising from inventory consigned by the
Issuer or any such Restricted Subsidiary pursuant to an agreement entered into in the ordinary course of business;
(34) Liens
on securities that are the subject of repurchase agreements constituting Cash Equivalents under clause (4) of the definition thereof; and
(35) Liens
securing insurance premium financing arrangements;
provided
that such Liens are limited to the applicable unearned
insurance premiums.
"Permitted
Regulatory Sale" means the sale, divestiture, license, conveyance, transfer or other disposition (whether in a single transaction or a series of related transactions) of
stores and other assets, properties and rights of the Issuer and/or its Subsidiaries to the extent necessary or advisable (as determined in good faith by the Issuer) to permit the satisfaction of
Section 6.1(b) and Section 6.1(e) of the Acquisition Agreement.
"Permitted
Sale/LeaseBack Transaction" means (i) any Sale/Leaseback Transaction entered into prior to the Acquisition Date, (ii) any Sale/Leaseback Transaction by the
Issuer or any of its Subsidiaries (including Family Dollar and its Subsidiaries) with respect to store properties, (iii) a Sale/Leaseback Transaction by the Issuer or any of its Subsidiaries
(including Family Dollar and its Subsidiaries) with respect to one distribution center property per fiscal year, with aggregate net proceeds in any fiscal year not to exceed $75 million (with
one year carry-forward of any unused amount of such base amount), and (iv) any other Sale/Leaseback Transaction, the proceeds of which shall constitute Net Proceeds.
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"Permitted
Securitization Facility Assets" means (i) Securitization Assets, (ii) Related Assets and (iii) loans to the Issuer or any of its Subsidiaries secured by
Securitization Assets (whether now existing or arising in the future) and Related Assets which are made pursuant to a Securitization Financing.
"Person"
means any individual, corporation, company, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization,
government or any agency or political subdivision thereof or any other entity.
"Preferred
Stock" means any Equity Interest with a preferential right of payment of dividends or upon liquidation, dissolution, or winding up.
"Rating
Agency" means (1) each of Moody's and S&P and (2) if Moody's or S&P ceases to rate the notes for reasons outside of the Issuer's control, a "nationally recognized
statistical rating organization" within the meaning of Section 3(a)(62) under the Exchange Act selected by the Issuer or any direct or indirect parent of the Issuer as a replacement agency for
Moody's or S&P, as the case may be.
"Refinancing"
means:
(1) the
repayment in full of all obligations and termination of all commitments under the Credit Agreement, dated as of June 6, 2012, among Dollar Tree
Stores, Inc., Dollar Tree, the guarantors parties thereto, the lenders and other financial institutions parties thereto, and Wells Fargo Bank, National Association, as administrative agent, as
amended, modified or supplemented from time to time;
(2) the
repayment in full of all obligations and termination of all commitments under the Amended and Restated 5-Year Credit Agreement, dated as of November 13, 2013,
among Family Dollar, the lenders and other financial institutions parties thereto, and Wells Fargo Bank, National Association, as administrative agent, as amended, modified or supplemented from time
to time;
(3) the
repayment in full of all obligations and termination of all commitments under the Amended and Restated 4-Year Credit Agreement, dated as of November 13, 2013,
among Family Dollar, the lenders and other financial institutions parties thereto, and Wells Fargo Bank, National Association, as administrative agent, as amended, modified or supplemented from time
to time;
(4) the
redemption, repurchase, defeasance and/or discharge of the Existing Dollar Tree Notes;
(5) the
redemption, repurchase, defeasance and/or discharge of the 5.41% Series 2005-A Senior Notes, Tranche A due September 27, 2015 and the 5.24%
Series 2005-A Senior Notes, Tranche B due September 27, 2015 of Family Dollar and Family Dollar, Inc.; and
(6) the
making of effective provision to secure all of the Existing Family Dollar Notes, equally and ratably with any and all Indebtedness under the credit agreement
described in clause (i) of the definition of the term "Credit Agreement," as required pursuant to the Existing Family Dollar Notes Indenture.
"Registration
Rights Agreement" means (a) with respect to the initial notes issued on the Issue Date, the Registration Rights Agreement dated the Issue Date, among Family Tree
Escrow, LLC, Dollar Tree and the Initial Purchasers, and (b) with respect to each issuance of additional notes issued in a transaction exempt from the registration requirements of the
Securities Act, the registration rights agreement, if any, among the Issuer, any Guarantors and the Persons purchasing such Additional Notes under the related purchase agreement, each as amended,
modified or supplemented from time to time.
"Related
Assets" means any assets related to any Securitization Assets including, without limitation, all collateral securing such Securitization Assets, all contracts and all guarantees
or other obligations in respect of such Securitization Assets, proceeds of such Securitization Assets and other
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assets
which are customarily transferred, sold and/or pledged or in respect of which security interests are customarily granted in connection with asset securitization transactions involving
Securitization Assets, any Hedging Obligations entered into by the Issuer or any such Subsidiary in connection with such Securitization Assets and any collections or proceeds of any of the foregoing
(including, without limitation, lock-boxes, deposit accounts, records in respect of Securitization Assets or such Hedging Obligations and collections in respect of Securitization Assets or such
Hedging Obligations).
"Restricted
Cash" means cash and Cash Equivalents held by the Issuer and its Restricted Subsidiaries that would appear as "restricted" on a consolidated balance sheet of the Issuer or
any of the Restricted Subsidiaries.
"Restricted
Investment" means an Investment other than a Permitted Investment.
"Restricted
Subsidiary" means, with respect to any Person, any Subsidiary of such Person other than an Unrestricted Subsidiary of such Person. Unless otherwise indicated in this
"Description of 2023 exchange notes," all references to Restricted Subsidiaries shall mean Restricted Subsidiaries of the Issuer.
"Sale/Leaseback
Transaction" means an arrangement relating to property now owned or hereafter acquired by the Issuer or a Restricted Subsidiary whereby the Issuer or such Restricted
Subsidiary transfers such property to a Person and the Issuer or such Restricted Subsidiary leases it from such Person, other than leases between any of the Issuer and a Restricted Subsidiary or
between Restricted Subsidiaries.
"S&P"
means Standard & Poor's Ratings Group or any successor to the rating agency business thereof.
"SEC"
means the Securities and Exchange Commission.
"Secured
Indebtedness" means any Consolidated Total Indebtedness secured by a Lien.
"Secured
Leverage Ratio" means, with respect to any Person, at any date, the ratio of (i) Secured Indebtedness of such Person and its Restricted Subsidiaries as of such date of
calculation (determined on a consolidated basis in accordance with GAAP) less the Unrestricted Cash Amount as of such date of determination to (ii) EBITDA of such Person for the four full
fiscal quarters for which internal financial statements are available immediately preceding such date on which such additional Indebtedness is Incurred.
In
the event that the Issuer or any such Subsidiary Incurs, repays, repurchases or redeems any Indebtedness or issues, repurchases or redeems any Disqualified Stock or Preferred Stock
subsequent to the commencement of the period for which the Secured Leverage Ratio is being calculated but prior to the event for which the calculation of the Secured Leverage Ratio is made (the
"Secured Leverage Calculation Date"), then the Secured Leverage Ratio shall be calculated giving
pro forma
effect to such Incurrence, repayment,
repurchase or redemption of Indebtedness, or such issuance, repurchase or redemption of Disqualified Stock or Preferred Stock, as if the same had occurred at the beginning of the applicable
four-quarter period;
provided
that, the Issuer may elect pursuant to an Officers' Certificate delivered to the Trustee to treat all or any portion of
the commitment under any Indebtedness as being Incurred at such time, in which case any subsequent Incurrence of Indebtedness under such commitment shall not be deemed, for purposes of this
calculation, to be an Incurrence at such subsequent time.
The
Secured Leverage Ratio shall also be subject to the adjustments described in clause (2) of the third paragraph of the covenant described under "Certain
covenantsLimitation on incurrence of indebtedness and issuance of disqualified stock and preferred stock."
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For purposes of making the computation referred to above, Investments (or series of related Investments) in excess of $25 million, acquisitions,
dispositions, mergers, amalgamations, consolidations and discontinued operations (as determined in accordance with GAAP), in each case with respect to an operating unit of a business, and any
operational changes, business realignment projects or initiatives, restructurings or reorganizations that the Issuer or any Restricted Subsidiary has determined to make and/or made during the
four-quarter reference period or subsequent to such reference period and on or prior to or simultaneously with the Secured Leverage Calculation Date (each, for purposes of this definition, a "pro
forma event") shall be calculated on a
pro forma
basis assuming that all such Investments, acquisitions, dispositions, mergers, amalgamations,
consolidations, discontinued operations and other operational changes, business realignment projects or initiatives, restructurings or reorganizations (and the change of any associated fixed charge
obligations and the change in EBITDA resulting therefrom) had occurred on the first day of the four-quarter reference period. If since the beginning of such period any Person that subsequently became
a Restricted Subsidiary or was merged with or into the Issuer or any Restricted Subsidiary since the beginning of such period shall have made any Investment, acquisition, disposition, merger,
consolidation, amalgamation, discontinued operation, operational change, business realignment project or initiative, restructuring or reorganization, in each case with respect to an operating unit of
a business, that would have required adjustment pursuant to this definition, then the Secured Leverage Ratio shall be calculated giving
pro forma
effect
thereto for such period as if such Investment, acquisition, disposition, discontinued operation, merger, amalgamation, consolidation, operational change, business realignment project or initiative,
restructuring or reorganization had occurred at the beginning of the applicable four-quarter period. If
since the beginning of such period any Restricted Subsidiary is designated an Unrestricted Subsidiary or any Unrestricted Subsidiary is designated a Restricted Subsidiary, then the Secured Leverage
Ratio shall be calculated giving
pro forma
effect thereto for such period as if such designation had occurred at the beginning of the applicable
four-quarter period.
For
purposes of this definition, whenever
pro forma
effect is to be given to any
pro forma
event, the
pro forma
calculations shall be made in good faith by a responsible financial or accounting officer of the Issuer. Any such
pro forma
calculation may include adjustments appropriate, in the reasonable good faith determination of the Issuer as set forth in an Officers'
Certificate, to reflect operating expense reductions and other operating improvements or synergies reasonably expected to result from the applicable event within 12 months of the date the
applicable event is consummated and which are expected to have a continuing impact and are factually supportable;
provided
that the Non-S-X Adjustment
Amount shall not exceed 20% of EBITDA for such period prior to giving effect to the Non- S-X Adjustment Amount for such period.
For
purposes of this definition, any amount in a currency other than U.S. dollars will be converted to U.S. dollars based on the average exchange rate for such currency for the most
recent twelve month period immediately prior to the date of determination in a manner consistent with that used in calculating EBITDA for the applicable period.
"Securities
Act" means the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder.
"Securitization
Assets" means any of the following assets (or interests therein) from time to time originated, acquired or otherwise owned by the Issuer or any Restricted Subsidiary or
in which the Issuer or any Restricted Subsidiary has any rights or interests, in each case, without regard to where such assets or interests are located: (1) accounts receivable (including any
bills of exchange), (2) royalty and other similar payments made related to the use of trade names and other intellectual property, business support, training and other services,
(3) revenues related to distribution and merchandising of the products of the Issuer and its Restricted Subsidiaries, (4) intellectual property rights relating to the generation of any
of the foregoing types of assets, (5) parcels of or interests in real property, together with all easements, hereditaments and appurtenances thereto, all improvements and appurtenant
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fixtures
and equipment, incidental to the ownership, lease or operation thereof and (6) any other assets and property to the extent customarily included in securitization transactions of the
relevant type in the applicable jurisdictions (as determined by the Issuer in good faith).
"Securitization
Fees" means distributions or payments made directly or by means of discounts with respect to any participation interests issued or sold in connection with, and all other
fees paid to a Person that is not a Restricted Subsidiary in connection with, any Securitization Financing.
"Securitization
Financing" means any transaction or series of transactions that may be entered into by the Issuer or any of its Subsidiaries pursuant to which the Issuer or any of its
Subsidiaries may sell, convey, transfer and/or pledge (either directly or through any other of the Issuer and its Subsidiaries) of Permitted Securitization Facility Assets to (a) a
Securitization Subsidiary, which in turn shall sell, convey, transfer and/or pledge interests in the respective Permitted Securitization Facility Assets to any other Person in return for the cash used
by such Securitization Subsidiary to acquire such Permitted Securitization Facility Assets; or (b) a bank or other financial institution, which in turn shall finance the acquisition of the
Permitted Securitization Facility Assets through a commercial paper conduit or other conduit facility, or directly to a commercial paper conduit or other conduit facility established and maintained by
a bank or other financial institution that will finance the acquisition of the Permitted Securitization Facility Assets through the commercial paper conduit or other conduit facility, so long as no
portion of the Indebtedness or any other obligations (contingent or otherwise) under such securitization facility or facilities (i) is guaranteed by the Issuer or any Restricted Subsidiary
other than a Securitization Subsidiary (excluding guarantees of obligations pursuant to Standard Securitization Undertakings), (ii) is recourse to or obligates the Issuer or any Restricted
Subsidiary other than a Securitization Subsidiary in any way other than pursuant to Standard Securitization Undertakings, or (iii) subjects any property or asset (other than Permitted
Securitization Facility Assets or the Equity Interests of any Securitization Subsidiary) of the Issuer or any Restricted Subsidiary other than a Securitization Subsidiary, directly or indirectly,
contingently or otherwise, to the satisfaction thereof, in each case other than pursuant to Standard Securitization Undertakings.
"Securitization
Repurchase Obligation" means any obligation of a seller of Securitization Assets in a Securitization Financing to repurchase Securitization Assets arising as a result of
a breach of a representation, warranty or covenant or otherwise, including as a result of a Securitization Asset or portion thereof becoming subject to any asserted defense, dispute, off-set or
counterclaim of any kind as a result of any action taken by, any failure to take action by or any other event relating to the seller.
"Securitization
Subsidiary" means a Wholly Owned Restricted Subsidiary (or another Person formed for the purposes of engaging in Securitization Financing with the Issuer or any of its
Subsidiaries in which the Issuer or any of its Subsidiaries makes an Investment and to which the Issuer or any of its Subsidiaries transfers Securitization Assets and Related Assets) which engages in
no activities other than in connection with the financing of Securitization Assets or Related Assets of the Issuer and its Subsidiaries, all proceeds thereof and all rights (contractual or other),
collateral and other assets relating thereto, and any business or activities incidental or related to such business, and which is designated by the Issuer (as provided below) as a Securitization
Subsidiary and:
(a) with
which neither the Issuer nor any Restricted Subsidiary has any material contract, agreement, arrangement or understanding other than on terms which the Issuer
determines in good faith to be no less favorable to the Issuer or such Restricted Subsidiary than those that might be obtained at the time from Persons that are not Affiliates of the Issuer (other
than pursuant to Standard Securitization Undertakings); and
(b) to
which neither the Issuer nor any Restricted Subsidiary has any obligation to maintain or preserve such entity's financial condition or cause such entity to achieve
certain levels of operating results (other than pursuant to Standard Securitization Undertakings).
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Any
such designation by the Issuer shall be evidenced to the Trustee by filing with the Trustee an Officers' Certificate of the Issuer certifying that, to the best of such officers'
knowledge and belief after consultation with counsel, such designation complied with the foregoing conditions.
"Significant
Subsidiary" means any Restricted Subsidiary that would be a "Significant Subsidiary" of the Issuer within the meaning of Rule 1-02 under Regulation S-X
promulgated by the SEC (or any successor provisions).
"Similar
Business" means any business the majority of whose revenues are derived from (x) business or activities conducted by the Issuer and its Subsidiaries on the Acquisition
Date, (y) any business that is a natural outgrowth or reasonable extension, development or expansion of any business or activities conducted by the Issuer and its Subsidiaries on the
Acquisition Date or any business similar, reasonably related, incidental, complementary or ancillary to any of the foregoing or (z) any business that in the Issuer's good faith business
judgment constitutes a reasonable diversification of businesses conducted by the Issuer and its Subsidiaries.
"Standard
Securitization Undertakings" means representations, warranties, covenants, indemnities and guarantees of performance entered into by the Issuer or any of its Subsidiaries which
the Issuer has determined in good faith to be reasonably customary in a securitization financing transaction, including, without limitation, those relating to the servicing of the assets of a
Securitization Subsidiary, it being understood that any Securitization Repurchase Obligation shall be deemed to be a Standard Securitization Undertaking.
"Stated
Maturity" means, with respect to any note, the date specified in such note as the fixed date on which the final payment of principal of such note is due and payable, including
pursuant to any mandatory redemption provision (but excluding any provision providing for the repurchase of such note at the option of the holder thereof upon the happening of any contingency beyond
the control of the Issuer unless such contingency has occurred).
"Subordinated
Indebtedness" means (a) with respect to the Issuer, any Indebtedness of the Issuer which is by its terms subordinated in right of payment to the notes, and
(b) with respect to any Guarantor, any Indebtedness of such Guarantor which is by its terms subordinated in right of payment to its Guarantee;
provided
,
however
, that no guarantee of Indebtedness which Indebtedness does not itself constitute
Subordinated Indebtedness shall constitute Subordinated Indebtedness.
"Subsidiary"
means, with respect to any Person, (1) any corporation, association or other business entity (other than a partnership, joint venture or limited liability company) of
which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees
thereof is at the time of determination owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof, and (2) any
partnership, joint venture or limited liability company of which (x) more than 50% of the capital accounts, distribution rights, total equity and voting interests or general and limited
partnership interests, as applicable, are owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof, whether in the
form of membership, general, special or limited partnership interests or otherwise, and (y) such Person or any Subsidiary of such Person is a controlling general partner or otherwise controls
such entity.
"Taxes"
means any and all present or future taxes, duties, levies, imposts, assessments, deductions, withholdings or other similar charges imposed by any Governmental Authority, whether
computed on a separate, consolidated, unitary, combined or other basis and any interest, fines, penalties or additions to tax with respect to the foregoing.
"TIA"
means the Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb) as in effect on the date of the indenture.
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"Total
Assets" means the total consolidated assets of the Issuer and its Restricted Subsidiaries, as shown on the most recent balance sheet of the Issuer, calculated on a
pro forma
basis after giving effect to
any subsequent acquisition or disposition of a Person or business.
"Transactions"
means (a) the issuance and sale of the notes pursuant to the Offering Memorandum, (b) the entry into the Escrow Agreement and the transactions related
thereto, (c) the Incurrence of Indebtedness to finance the Acquisition, the Refinancing and related costs and expenses, (d) the Refinancing and (e) the Acquisition.
"Treasury
Rate" means, as of the applicable redemption date, as determined by the Issuer, the yield to maturity as of such redemption date of United States Treasury securities with a
constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H. 15 (519) that has become publicly available at least two Business Days prior
to such redemption date (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from such redemption date to
March 1, 2018;
provided
,
however
, that if the period from such redemption date to March 1,
2018, as applicable, is less than one year, the weekly average yield on actively traded United States Treasury securities adjusted to a constant maturity of one year will be used.
"Trust
Officer" means any officer within the corporate trust department of the Trustee, including any director, vice president, assistant vice president, associate or any other officer
of the Trustee who customarily performs functions similar to those performed by the Persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred
because of such person's knowledge of and familiarity with the particular subject, in each case, who shall have direct responsibility for the administration of the indenture.
"Trustee"
means the party named as such in the indenture until a successor replaces it and, thereafter, means the successor.
"Unrestricted
Cash Amount" means, on any date, the lesser of (i) $400 million and (ii) the aggregate amount of unrestricted cash and Cash Equivalents of the Issuer
and its Restricted Subsidiaries on such date in excess of $100 million.
"Unrestricted
Subsidiary" means:
(1) any
Subsidiary of the Issuer that at the time of determination shall be designated an Unrestricted Subsidiary by the Board of Directors of the Issuer in the manner
provided below; and
(2) any
Subsidiary of an Unrestricted Subsidiary.
The
Issuer may designate any Subsidiary of the Issuer (including any newly acquired or newly formed Subsidiary of the Issuer) to be an Unrestricted Subsidiary unless at the time of such
designation such Subsidiary or any of its Subsidiaries owns any Equity Interests or Indebtedness of, or owns or holds any Lien on any property of, the Issuer or any Restricted Subsidiary that is not a
Subsidiary of the Subsidiary to be so designated, in each case at the time of such designation;
provided
,
however
, that the Subsidiary to be so designated
and its Subsidiaries do not at the time of designation have and do not thereafter Incur any
Indebtedness pursuant to which the lender has recourse to any of the assets of the Issuer or any of the Restricted Subsidiaries other than Permitted Liens described in clause (18) of the
definition thereof unless otherwise permitted under the covenant described under "Certain covenantsLimitation on restricted payments";
provided
,
further
,
however
that either (a) the
Subsidiary to be so designated has total consolidated assets of $1,000 or less or (b) if such Subsidiary has consolidated assets greater than $1,000, then such designation would be permitted
under the covenant described under "Certain covenantsLimitation on restricted payments."
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The
Issuer may designate any Unrestricted Subsidiary to be a Restricted Subsidiary;
provided
,
however
, that immediately after giving effect to such
designation:
(x) (1)
the Issuer could Incur $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test described under "Certain
covenantsLimitation on incurrence of indebtedness and issuance of disqualified stock and preferred stock," or (2) the Fixed Charge Coverage Ratio of the Issuer would be no less
than such ratio immediately prior to such designation, in each case on a
pro forma
basis taking into account such designation, and
(y) no
Event of Default shall have occurred and be continuing.
Any
such designation by the Issuer shall be evidenced to the Trustee by promptly filing with the Trustee a copy of the resolution of the Board of Directors of the Issuer, giving effect
to such designation and an Officers' Certificate certifying that such designation complied with the foregoing provisions.
"U.S.
Government Obligations" means securities that are:
(1) direct
obligations of the United States of America for the timely payment of which its full faith and credit is pledged, or
(2) obligations
of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America, the timely payment of which is
unconditionally guaranteed as a full faith and credit obligation by the United States of America,
which,
in each case, are not callable or redeemable at the option of the issuer thereof, and shall also include a depository receipt issued by a bank (as defined in Section 3(a)(2) of the
Securities Act) as custodian with respect to any such U.S. Government Obligations or a specific payment of principal of or interest on any such U.S. Government Obligations held by such custodian for
the account of the holder of such depository receipt;
provided
that (except as required by law) such custodian is not authorized to make any deduction
from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the U.S. Government Obligations or the specific payment of principal of or
interest on the U.S. Government Obligations evidenced by such depository receipt.
"Voting
Stock" of any Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person.
"Weighted
Average Life to Maturity" means, when applied to any Indebtedness or Disqualified Stock or Preferred Stock, as the case may be, at any date, the quotient obtained by dividing
(1) the sum of the products of the number of years from the date of determination to the date of each successive scheduled principal payment of such Indebtedness or redemption or similar
payment with respect to such Disqualified Stock or Preferred Stock multiplied by the amount of such payment, by (2) the sum of all such payments.
"Wholly
Owned Domestic Subsidiary" means any Wholly Owned Restricted Subsidiary that is a Domestic Subsidiary.
"Wholly
Owned Restricted Subsidiary" means any Wholly Owned Subsidiary that is a Restricted Subsidiary.
"Wholly
Owned Subsidiary" of any Person means a Subsidiary of such Person 100% of the outstanding Capital Stock or other ownership interests of which (other than directors' qualifying
shares or shares required pursuant to applicable law) shall at the time be owned by such Person or by one or more Wholly Owned Subsidiaries of such Person.
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Description of 2020 exchange notes
The terms of the notes and guarantees will include those set forth in the indenture (as defined below) and
those required to be made a part of the indenture by the Trust Indenture Act of 1939, upon registration of the notes. You should carefully read the summary below and the provisions of the indenture
that may be important to you before investing in the notes. This summary is not complete and is qualified in its entirety by reference to the indenture. We urge you to read the indenture because the
indenture, not this description, defines your rights as holders of the notes.
General
Capitalized terms used in this "Description of 2020 exchange notes" section and not otherwise defined have the meanings set forth in
the section "Certain definitions."
In
this "Description of 2020 exchange notes" section, (i) the terms "Dollar Tree," "Issuer," "we" and "us" refer only to Dollar Tree, Inc., a Virginia corporation and not
to any of its subsidiaries, (ii) the term "2020 exchange notes" refers to the 5.250% Senior Notes due 2020 being offered by Dollar Tree in this exchange offer, (iii) the term "2020 old
notes" refers to Dollar Tree's currently outstanding 5.250% Senior Notes due 2020 that may be exchanged for the 2020 exchange notes, (iv) the term "notes" refers to the 2020 old notes and the
2020 exchange notes, collectively, and (v) the term "Indenture" refers to the indenture that applies to both the 2020 old notes and the 2020 exchange notes.
Dollar
Tree issued the 2020 old notes under the Indenture, dated as of February 23, 2015, among Dollar Tree (as successor to Family Tree Escrow, LLC), the guarantors party
thereto and U.S. Bank National Association, as trustee (the "Trustee"). The terms of the 2020 exchange notes are identical in all material respects to the 2020 old notes, except that (1) the
2020 exchange notes will have been registered under the Securities Act and therefore will not be subject to certain restrictions on transfer applicable to the 2020 old notes and (2) holders of
the 2020 exchange notes will not be entitled to certain rights of holders of 2020 old notes under the Registration Rights Agreement. The terms of the 2020 old notes include, and the terms of the 2020
exchange note will include, those stated in the Indenture and those made a part of the Indenture by reference to the TIA. The 2020 exchange notes are subject to all such terms, and holders of the 2020
exchange notes should refer to the Indenture and the TIA for a complete statement of applicable terms.
The
Issuer may issue additional notes from time to time. Any offering of additional notes is subject to the covenant described below under the caption "Certain
covenantsLimitation on incurrence of indebtedness and issuance of disqualified stock and preferred stock." The notes and any additional notes subsequently issued under the indenture will
be treated as a single class for all purposes under the indenture, including, without limitation, waivers, amendments, redemptions and offers to purchase;
provided
that if the additional notes are not
fungible with the notes for U.S. federal income tax purposes, the additional notes will have a separate
CUSIP number, if applicable. Unless the context otherwise requires, for all purposes of the indenture and this "Description of 2020 exchange notes," references to the notes include any additional
notes actually issued.
Principal
of, premium, if any, interest and additional interest, if any, on the notes will be payable, and the notes may be exchanged or transferred, at the office or agency designated
by the Issuer (which initially shall be the designated office or agency of the Trustee).
The
notes will be issued only in fully registered form, without coupons, in minimum denominations of $2,000 and any integral multiple of $1,000 in excess thereof;
provided
that notes may be issued in
denominations of less than $2,000 solely to accommodate book-entry positions that have been created by a DTC
participant in denominations of less than $2,000. No service charge will be made for any registration of transfer or exchange of notes, but the Issuer may require payment of a sum sufficient to cover
any transfer tax or other similar governmental charge payable in connection therewith.
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Terms of the notes
The notes will mature on March 1, 2020. Each note will bear interest at a rate of 5.250% per annum from March 1, 2016 or
from the most recent date to which interest has been paid or provided for, payable semiannually to holders of record at the close of business on the February 15 or August 15 immediately
preceding the interest payment date on March 1 and September 1 of each year, commencing September 1, 2016. Interest will be computed on the basis of a 360-day year comprised of
twelve 30-day months.
Optional redemption
On or after March 1, 2017, the Issuer may redeem the notes at its option, in whole at any time or in part from time to time,
upon not less than 30 days' nor more than 60 days' prior notice mailed by the Issuer by first-class mail, or delivered electronically if the notes are held by DTC, to each holder's
registered address and upon not less than 30 days' nor more than 60 days' prior written notice to the Trustee (or such shorter period as may be agreed by the Trustee), at the following
redemption prices (expressed as a percentage of principal amount), plus accrued and unpaid interest and additional interest, if any, to, but excluding, 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 March 1 of the years set forth
below:
|
|
|
|
|
Period
|
|
Redemption
price
|
|
2017
|
|
|
102.625
|
%
|
2018
|
|
|
101.313
|
%
|
2019 and thereafter
|
|
|
100.000
|
%
|
In
addition, prior to March 1 , 2017, the Issuer may redeem the notes at its option, in whole at any time or in part from time to time, upon not less than 30 days' nor more
than 60 days' prior notice mailed by the Issuer by first-class mail, or delivered electronically if the notes are held by DTC, to each holder's registered address and upon not less than
30 days' nor more than 60 days' prior written notice to the Trustee (or such shorter period as may be agreed by the Trustee), at a redemption price equal to 100% of the principal amount
of the notes redeemed plus the Applicable Premium as of, and accrued and unpaid interest and additional interest, if any, to, but excluding, the applicable 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).
Notwithstanding
the foregoing, at any time and from time to time on or prior to March 1, 2017, the Issuer may redeem in the aggregate up to 40% of the original aggregate principal
amount of the notes (calculated after giving effect to any issuance of additional notes) with the net cash proceeds of one or more Equity Offerings (1) by the Issuer or (2) by any direct
or indirect parent of the Issuer to the extent the net cash proceeds thereof are contributed to the common equity capital of the Issuer or used to purchase Capital Stock (other than Disqualified
Stock) of the Issuer, at a redemption price of 105.250% of the principal amount of the notes, plus accrued and unpaid interest and additional interest, if any, to, but excluding, 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 60% of the original aggregate principal amount of the notes (calculated after giving effect to any issuance of additional notes)
must remain outstanding after each such redemption;
provided
,
further
, that such redemption shall occur
within 90 days after the date on which any such Equity Offering is consummated upon not less than 30 days' nor more than 60 days' prior notice mailed, or delivered electronically
if the notes are held by DTC, by the Issuer to each holder of notes and upon not less than 30 days' nor more than 60 days' prior written notice to the Trustee (or such shorter period as
may be agreed by the Trustee) and otherwise in accordance with the procedures set forth in the indenture.
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Notice
of any redemption upon any Equity Offering may be given prior to the completion thereof. In addition, any redemption described above or notice thereof may, at the Issuer's
discretion, be subject to one or more conditions precedent, including, but not limited to, completion of the related Equity Offering in the case of a redemption upon completion of an Equity Offering.
The Issuer may provide in such notice that payment of the redemption price and the performance of the Issuer's obligations with respect to such redemption may be performed by another Person.
Selection
In the case of any partial redemption, selection of notes for redemption will be made by the Trustee on a pro rata basis or by lot or
by such other method as the Trustee shall deem fair and appropriate (and in such manner that complies with the requirements of DTC, if applicable);
provided
that no notes of $2,000 or less shall be
redeemed in part. If any note is to be redeemed in part only, the notice of redemption relating to
such note shall state the portion of the principal amount thereof to be redeemed. A new note in principal amount equal to the unredeemed portion thereof will be issued in the name of the holder
thereof upon cancellation of the original note. On and after the redemption date, interest will cease to accrue on notes or portions thereof called for redemption so long as the Issuer has deposited
with the paying agent funds sufficient to pay the principal of, plus accrued and unpaid interest and additional interest (if any) on, the notes to be redeemed.
Mandatory redemption; offers to purchase; open market purchases
The Issuer is not required to make any mandatory redemption or sinking fund payments with respect to the notes. However, under certain
circumstances, the Issuer may be required to offer to purchase notes as described under the captions "
Change of control" and
"
Certain covenantsAsset sales." Dollar Tree may at any time, and from time to time, purchase notes in the open market or
otherwise.
Ranking
The Indebtedness evidenced by the notes and the Guarantees, respectively, will be unsecured, unsubordinated obligations of the Issuer
and the Guarantors, respectively, will rank pari passu in right of payment with all existing and future unsubordinated Indebtedness of the Issuer and the Guarantors, respectively, will be senior in
right of payment to all existing and future Subordinated Indebtedness of the Issuer and the Guarantors, respectively, and will be effectively subordinated to all existing and future secured
Indebtedness of the Issuer and the Guarantors, respectively, including any Indebtedness under the credit agreement described in clause (i)
of the definition of the term "Credit Agreement," to the extent of the value of the assets securing such Indebtedness.
As
of January 30, 2016, the outstanding total consolidated indebtedness of Dollar Tree was approximately $7,465.5 million, of which approximately $4,208.5 million
was secured. As of January 30, 2016, Dollar Tree's non-Guarantor Subsidiaries had an aggregate of approximately $395.8 million of total liabilities (excluding intercompany transactions),
all of which would have been structurally senior to the notes and the related guarantees.
Although
the indenture limits the Incurrence of Indebtedness and the issuance of Disqualified Stock by the Issuer and its Restricted Subsidiaries, and the issuance of Preferred Stock by
the Restricted Subsidiaries that are not Guarantors, such limitation is subject to a number of significant qualifications and exceptions. The Issuer and its Subsidiaries are able to incur additional
amounts of Indebtedness. Under certain circumstances the amount of such Indebtedness could be substantial and, subject to certain limitations, such Indebtedness may be Secured Indebtedness. See
"
Certain covenantsLimitation on incurrence of indebtedness and issuance of disqualified stock and preferred stock" and
"
Certain covenantsLiens."
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Unless
a Subsidiary of the Issuer is a Guarantor, claims of creditors of such Subsidiary, including trade creditors, and claims of preferred stockholders (if any) of such Subsidiary,
generally will have priority with respect to the assets and earnings of such Subsidiary over the claims of creditors of the Issuer, including holders of the notes. The notes, therefore, will be
effectively subordinated to holders of indebtedness and other creditors (including trade creditors) and preferred stockholders (if any) of any Subsidiary of the Issuer that is not a Guarantor. The
only Subsidiaries of the Issuer that are not Guarantors are Dollar Tree International Sarl, Five & Dime International Sarl, Dollar Tree Stores Canada, Inc., DTD Sourcing HK, Ltd.,
Tarheel Trading International Sarl, FDO Trading International Hong Kong, Ltd., Tarheel Trading International Hong Kong Ltd., Tar Heel Trading International Holding Ltd., Shenzhen
Tar Heel Information Consultancy Limited, and Family Dollar Insurance, Inc.
See
"Risk factorsRisks related to the notes and other indebtednessThe notes will be structurally subordinated to all indebtedness of the Issuer's existing and
future subsidiaries that do not guarantee the notes."
Guarantees
Each of the Restricted Subsidiaries of Dollar Tree that are guarantors under the credit agreement described in clause (i) of the
definition of the term "Credit Agreement" and each of the Wholly Owned Domestic Subsidiaries of the Issuer that is required to guarantee payment of the notes in accordance with the covenant described
under "Certain covenantsFuture guarantors" will jointly and severally guarantee on an unsecured, unsubordinated basis the performance and punctual payment when due, whether
at Stated Maturity, by acceleration or otherwise, of all obligations of the Issuer under the indenture and the notes, whether for payment of principal of, premium, if any, interest or additional
interest, if any, on the notes, expenses, indemnification or otherwise (all such obligations guaranteed by such Guarantors being herein called the "Guaranteed Obligations"). Such Guarantors will agree
to pay, in addition to the amount stated above, any and all expenses (including out-of-pocket counsel fees and expenses) incurred by the Trustee in enforcing any rights under the Guarantees.
Each
Guarantee will be limited to an amount not to exceed the maximum amount that can be guaranteed by the applicable Guarantor without rendering the Guarantee, as it relates to such
Guarantor, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally. See "Risk factorsRisks
related to the notes and other indebtednessFederal and state fraudulent transfer laws may permit a court to void the notes and the guarantees, subordinate claims in respect of the notes
and the guarantees and require noteholders to return payments received and, if that occurs, you may not receive any payments on the notes."
Each
Guarantor's Guarantee will be automatically released upon:
(1) the
issuance, sale, exchange, transfer or other disposition (including through merger, consolidation, amalgamation or otherwise) of the Capital Stock of the applicable
Guarantor (including any issuance, sale, exchange, transfer or other disposition following which the applicable Guarantor is no longer a Restricted Subsidiary) if such issuance, sale, exchange,
transfer or other disposition is made in a manner not in violation of the indenture;
(2) the
designation of such Guarantor as an Unrestricted Subsidiary in accordance with the covenant described under
"
Certain covenantsLimitation on restricted payments" and the definition of "Unrestricted Subsidiary";
(3) the
release or discharge of the guarantee by such Guarantor of the Indebtedness under (i) the Credit Agreement and (ii) any Capital Markets Indebtedness of
the Issuer or any of the Guarantors which created the obligation to guarantee the notes; or
(4) the
Issuer's exercise of its legal defeasance option or covenant defeasance option as described under
"
Defeasance" or if the Issuer's obligations under the indenture are discharged in accordance with the terms of the indenture.
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Change of control
Upon the occurrence of a Change of Control, each holder will have the right to require the Issuer to repurchase all or any part of 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, but excluding, 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), except to the extent the Issuer has previously or concurrently elected to redeem notes as
described under "Optional redemption."
Within
30 days following any Change of Control, except to the extent that the Issuer has exercised its right to redeem the notes by delivery of a notice of redemption as described
under
"Optional redemption," the Issuer shall mail, or deliver electronically if the notes are held by DTC, a notice (a "Change of Control Offer") to each holder with a copy to the
Trustee:
(1) stating
that a Change of Control has occurred and that such holder has the right to require the Issuer to repurchase such holder's notes at a repurchase price in cash
equal to 101% of the principal amount thereof, plus accrued and unpaid interest and additional interest, if any, to, but excluding, the date of repurchase (subject to the right of holders of record on
a record date to receive interest on the relevant interest payment date);
(2) describing
the transaction or transactions that constitute(s) such Change of Control;
(3) specifying
the repurchase date (which shall be no earlier than 30 days nor later than 60 days from the date such notice is mailed or delivered
electronically); and
(4) providing
instructions, determined by the Issuer consistent with this covenant, that a holder must follow in order to have its notes purchased.
A
Change of Control Offer may be made in advance of a Change of Control, and conditioned upon such Change of Control, if a definitive agreement is in place for the Change of Control at
the time of making of the Change of Control Offer.
In
addition, the Issuer will not be required to make a Change of Control Offer upon a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and
otherwise in compliance with the requirements set forth in the indenture applicable to a Change of Control Offer made by the Issuer and purchases all notes properly tendered and not withdrawn under
such Change of Control Offer.
If
holders of not less than 90% in aggregate principal amount of the outstanding notes validly tender and do not withdraw such notes in a Change of Control Offer and the Issuer, or any
third party making a Change of Control Offer in lieu of the Issuer as described above, purchases all of the notes validly tendered and not withdrawn by such holders, the Issuer or such third party
will have the right, upon not less than 30 days' nor more than 60 days' prior notice, given not more than 30 days following such purchase pursuant to the Change of Control Offer
described above, to redeem all notes that remain outstanding following such purchase at a price in cash equal to 101% of the principal amount thereof plus accrued and unpaid interest to but excluding
the date of redemption.
Notes
repurchased by the Issuer pursuant to a Change of Control Offer will have the status of notes issued but not outstanding or will be retired and canceled at the option of the
Issuer. Notes purchased
by a third party pursuant to the preceding paragraphs will have the status of notes issued and outstanding.
The
Issuer will 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 covenant. To the extent that the provisions of any securities laws or regulations conflict with provisions of this covenant, the Issuer will comply with the
applicable securities laws and
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regulations
and will not be deemed to have breached its obligations under this covenant by virtue thereof. This Change of Control repurchase provision is a result of negotiations between the Issuer
and the initial purchasers. Subject to the limitations discussed below, the Issuer could, in the future, enter into certain transactions, including acquisitions, refinancings or other
recapitalizations, that would not constitute a Change of Control under the indenture, but that could increase the amount of indebtedness outstanding at such time or otherwise affect the Issuer's
capital structure or credit rating.
The
occurrence of events which would constitute a Change of Control could constitute a default under the Credit Agreement. Future Bank Indebtedness of the Issuer may contain prohibitions
on certain events which would constitute a Change of Control or require such Bank Indebtedness to be repaid upon a Change of Control. Moreover, the exercise by the holders of their right to require
the Issuer to repurchase the notes upon a Change of Control could cause a default under such Bank Indebtedness, even if the Change of Control itself does not, due to the financial effect of such
repurchase on the Issuer. Finally, the Issuer's ability to pay cash to the holders upon a repurchase may be limited by the Issuer's then existing financial resources. There can be no assurance that
sufficient funds will be available when necessary to make any required repurchases. See "Risk factorsRisks related to the notes and other indebtednessThe Issuer may not be
able to repurchase the notes upon a change of control."
The
definition of "Change of Control" includes a phrase relating to the sale, lease or transfer of "all or substantially all" of the assets of the Issuer and its Subsidiaries taken as a
whole. Although there is a developing body of case law interpreting the phrase "substantially all," under New York law, which governs the indenture, there is no precise established definition of the
phrase. Accordingly, the ability of a holder of notes to require the Issuer to repurchase such notes as a result of a sale, lease or transfer of less than all of the assets of the Issuer and its
Subsidiaries taken as a whole to another Person or group may be uncertain.
The
provisions under the indenture relating to the Issuer's obligation to make an offer to repurchase the notes as a result of a Change of Control may be waived or modified with the
written consent of the holders of a majority in principal amount of the notes.
Certain covenants
Set forth below are summaries of certain covenants that will be contained in the indenture.
Suspension of covenants upon achieving investment grade ratings
If on any date, (i) the notes have Investment Grade Ratings from both Rating Agencies, and (ii) no Default has occurred
and is continuing under the indenture then, beginning on that day (the occurrence of the events described in the foregoing clauses (i) and (ii) being collectively referred to as a
"Covenant Suspension Event"), the covenants specifically listed under the following captions in this "Description of 2020 exchange notes" section will not be applicable to the notes (collectively, the
"Suspended Covenants"):
(1) "Limitation
on incurrence of indebtedness and issuance of disqualified stock and preferred stock";
(2) "Limitation
on restricted payments";
(3) "Dividend
and other payment restrictions affecting subsidiaries";
(4) "Asset
sales";
(5) "Transactions
with affiliates";
(6) "Future
guarantors";
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(7) clause (4)
of the first paragraph of "Merger, amalgamation, consolidation or sale of all or substantially all assets"; and
(8) the
third and fourth paragraphs of "Merger, amalgamation, consolidation or sale of all or substantially all assets".
If
and while the Issuer and its Restricted Subsidiaries are not subject to the Suspended Covenants, the notes will be entitled to substantially less covenant protection. In the event
that the Issuer and its Restricted Subsidiaries are not subject to the Suspended Covenants under the indenture for any period of time as a result of the foregoing, and on any subsequent date (the
"Reversion Date") one or both of the Rating Agencies withdraw their Investment Grade Rating or downgrade the rating assigned to the notes below an Investment Grade Rating, then the Issuer and its
Restricted Subsidiaries will thereafter again be subject to the Suspended Covenants under the indenture with respect to future events. The period of time between the Covenant Suspension Event and the
Reversion Date is referred to in this description as the "Suspension Period." The Issuer will provide the Trustee with written notice of each Covenant Suspension Event or Reversion Date within five
Business Days of the occurrence thereof.
Additionally,
during a Suspension Period the Issuer will no longer be permitted to designate any Restricted Subsidiary as an Unrestricted Subsidiary unless the Issuer would have been
permitted to designate such Subsidiary as an Unrestricted Subsidiary if a Suspension Period had not been in effect for any period and, following the Reversion Date, such designation shall be deemed to
have created an Investment pursuant to the final paragraph of the covenant described under the heading "Limitation on restricted payments" at the time of such designation.
On
each Reversion Date, all Indebtedness Incurred, or Disqualified Stock or Preferred Stock issued, during the Suspension Period will be classified as having been Incurred or issued
pursuant to the first paragraph of "Limitation on incurrence of indebtedness and issuance of disqualified stock and preferred stock" below or one of the clauses set forth in the second
paragraph of "Limitation on incurrence of indebtedness and issuance of disqualified stock and preferred stock" below (to the extent such Indebtedness or Disqualified Stock or Preferred
Stock would be permitted to be Incurred or issued thereunder as of the Reversion Date and after giving effect to Indebtedness or Disqualified Stock or Preferred Stock Incurred or issued prior to the
Suspension Period and outstanding on the Reversion Date). To the extent such Indebtedness or Disqualified Stock or Preferred Stock would not be so permitted to be Incurred or issued pursuant to the
first or second paragraph of "Limitation on incurrence of indebtedness and issuance of disqualified stock and preferred stock," such Indebtedness or Disqualified Stock or Preferred Stock
will be deemed to have been outstanding on the Issue Date or Acquisition Date, as applicable, so that it is classified as permitted under clause (c) of the second paragraph under
"Limitation on incurrence of
indebtedness and issuance of disqualified stock and preferred stock." Calculations made after the Reversion Date of the amount available to be made as Restricted Payments under
"Limitation on restricted payments" will be made as though the covenant described under "Limitation on restricted payments" had been in effect since the Acquisition Date and
prior to, but not during, the Suspension Period (except to the extent expressly set forth in the immediately preceding paragraph). Accordingly, Restricted Payments made during the Suspension Period
will not reduce the amount available to be made as Restricted Payments under the first paragraph of "Limitation on restricted payments" (except to the extent expressly set forth in the
immediately preceding paragraph). As described above, no Default or Event of Default will be deemed to have occurred on the Reversion Date as a result of any actions taken by the Issuer or the
Restricted Subsidiaries during the Suspension Period or any actions taken at any time pursuant to any contractual obligation arising prior to the Reversion Date, regardless of whether such actions or
events would have been permitted if the applicable Suspended Covenants remained in effect during such period. Within 30 days of such Reversion Date, the Issuer must comply with the terms of the
covenant described under "Future guarantors."
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For
purposes of the "Dividend and other payment restrictions affecting restricted subsidiaries" covenant, on the Reversion Date, any consensual encumbrances or consensual
restrictions of the type specified in clause (a) or (b) of the first paragraph of that covenant entered into during the Suspension Period will be deemed to have been in effect on the
Issue Date or Acquisition Date, as applicable, so that they are permitted under clause (1)(i) of the first paragraph under "Dividend and other payment restrictions affecting
restricted subsidiaries."
For
purposes of the "Transactions with affiliates" covenant, any Affiliate Transaction entered into after the Reversion Date pursuant to a contract, agreement, loan, advance
or guaranty with, or for the benefit of, any Affiliate of the Issuer entered into during the Suspension Period will be deemed to have been in effect as of the Issue Date or Acquisition Date, as
applicable, for purposes of clause (6) of the second paragraph under "Transactions with affiliates."
For
purposes of the "Asset sales" covenant, on the Reversion Date, the unutilized Excess Proceeds amount will be reset to zero.
There
can be no assurance that the notes will ever achieve or maintain Investment Grade Ratings.
Limitation on incurrence of indebtedness and issuance of disqualified stock and preferred
stock
The indenture provides that:
(1) the
Issuer will not, and will not permit any of the Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue
any shares of Disqualified Stock; and
(2) the
Issuer will not permit any of the Restricted Subsidiaries (other than any Guarantor) to issue any shares of Preferred Stock;
provided
,
however
, that the Issuer and any Guarantor may Incur Indebtedness (including Acquired
Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary that is not a Guarantor may Incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock
or issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio of the Issuer for the most recently ended four full fiscal quarters for which internal financial statements are
available immediately preceding the date on which such additional Indebtedness is Incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 determined on a
pro forma
basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been Incurred, or the
Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period;
provided
,
further
, that the aggregate principal amount of Indebtedness incurred, and shares of
Disqualified Stock and Preferred Stock issued, by Restricted Subsidiaries that are not Guarantors pursuant to this paragraph, together with any Refinancing Indebtedness thereof pursuant to
clause (o) below, shall not exceed, the greater of $500 million and 3.5% of Total Assets at the time of Incurrence (plus, in the case of any Refinancing Indebtedness in respect thereof
Incurred pursuant to clause (o) below, the Additional Refinancing Amount).
The
foregoing limitations will not apply to:
(a) the
Incurrence by the Issuer or any Restricted Subsidiary of Indebtedness (including under any Credit Agreement and the issuance and creation of letters of credit and
bankers' acceptances thereunder) up to an aggregate principal amount outstanding at the time of Incurrence that does not exceed the greater of (x) $7,950 million and (y) the
aggregate principal amount of Consolidated Total Indebtedness that at the time of Incurrence does not cause the Secured Leverage Ratio for the Issuer for the most recently ended four full fiscal
quarters for which internal financial statements are available, determined on a pro forma basis, to exceed
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3.00 to 1.00;
provided
, that for purposes of determining the amount of Indebtedness that may be incurred under clause (a)(y) and
for purposes of any subsequent calculation of the Secured Leverage Ratio, all Indebtedness incurred and outstanding under this clause (a) shall be treated as Secured Indebtedness;
(b) the
Incurrence by the Issuer and the Guarantors of Indebtedness represented by the notes issued on the Issue Date and the Guarantees thereof (including any exchange
notes and the related Guarantees thereof);
(c) (i)
the Incurrence of Indebtedness represented by the Initial 2023 Notes; and (ii) Indebtedness (other than Indebtedness described in clauses (a) and (b))
(x) of Dollar Tree or any Subsidiary of Dollar Tree in effect on the Issue Date or (y) of Family Dollar or any Subsidiary of Family Dollar in effect on the Acquisition Date, including,
without limitation, the Existing Family Dollar Notes;
(d) (i)
Indebtedness (including Capitalized Lease Obligations) Incurred by the Issuer or any Restricted Subsidiary, Disqualified Stock issued by the Issuer or any Restricted
Subsidiary and Preferred Stock issued by any Restricted Subsidiary to finance (whether prior to or within 360 days after) the acquisition, lease, construction, repair, replacement or
improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) and Attributable Debt in respect of any
Sale/Leaseback Transaction (other than any Permitted Sale/Leaseback Transaction) in an aggregate principal amount that, when aggregated with the principal amount or liquidation preference of all other
Indebtedness, Disqualified Stock or Preferred Stock then outstanding and Incurred pursuant to this clause (d), together with any Refinancing Indebtedness in respect thereof Incurred pursuant to
clause (o) below, does not exceed the greater of $300 million and 2.25% of Total Assets at the time of Incurrence (plus, in the case of any Refinancing Indebtedness, the Additional
Refinancing Amount) and (ii) Attributable Debt in respect of any Permitted Sale/Leaseback Transaction;
(e) Indebtedness
Incurred by the Issuer or any Restricted Subsidiary constituting reimbursement obligations with respect to letters of credit, bank guarantees and similar
instruments issued in the ordinary course of business, including without limitation letters of credit in respect of workers' compensation claims, health, disability or other benefits to employees or
former employees or their families or property, casualty or liability insurance or self-insurance, and letters of credit in connection with the maintenance of, or pursuant to the requirements of,
environmental law or permits or licenses from Governmental Authorities, or other Indebtedness with respect to reimbursement type obligations regarding workers' compensation claims;
(f) Indebtedness
arising from agreements of the Issuer or any Restricted Subsidiary providing for indemnification, adjustment of acquisition or purchase price or similar
obligations (including earn-outs), in each case, Incurred or assumed in connection with the Transactions, any Investments or any acquisition or disposition of any business, assets or a Subsidiary not
prohibited by the indenture, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such
acquisition;
(g) Indebtedness
of the Issuer to a Restricted Subsidiary or Disqualified Stock of the Issuer issued to a Restricted Subsidiary;
provided
that (except in respect of intercompany current liabilities incurred in the
ordinary course of business in connection with the cash management,
Tax and accounting operations of the Issuer and its Subsidiaries) any such Indebtedness owed to a Restricted Subsidiary that is not a Guarantor is subordinated in right of payment to the obligations
of the Issuer;
provided
,
further
, that any subsequent issuance or transfer of any Capital Stock or any
other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Issuer or another Restricted
Subsidiary or any pledge of such Indebtedness constituting a Permitted Lien but not the transfer
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thereof
upon foreclosure) or shares of Disqualified Stock shall be deemed, in each case, to be an Incurrence of such Indebtedness or issuance of shares of Disqualified Stock, as applicable, not
permitted by this clause (g);
(h) shares
of Preferred Stock or Disqualified Stock of a Restricted Subsidiary issued to the Issuer or another Restricted Subsidiary;
provided
that any subsequent issuance or transfer of any Capital Stock or any
other event which results in any Restricted Subsidiary that holds such
shares of Preferred Stock or Disqualified Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to
the Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock or Disqualified Stock not permitted by this clause (h);
(i) Indebtedness
of a Restricted Subsidiary to the Issuer or another Restricted Subsidiary;
provided
that if a Guarantor
incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (except in respect of intercompany current liabilities incurred in the ordinary course of business in connection with the
cash management, Tax and accounting operations of the Issuer and its Subsidiaries), such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor;
provided
,
further
,
that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary holding such Indebtedness ceasing to be a Restricted Subsidiary or any other
subsequent transfer of any such Indebtedness (except to the Issuer or another Restricted Subsidiary or any pledge of such Indebtedness constituting a Permitted Lien but not the transfer thereof upon
foreclosure) shall be deemed, in each case, to be an Incurrence of such Indebtedness not permitted by this clause (i);
(j) Hedging
Obligations that are not incurred for speculative purposes;
(k) obligations
(including reimbursement obligations with respect to letters of credit, bank guarantees, warehouse receipts and similar instruments) in respect of
performance, bid, appeal and surety bonds, completion guarantees and similar obligations provided by the Issuer or any Restricted Subsidiary in the ordinary course of business or consistent with past
practice or industry practice;
(l) Indebtedness
or Disqualified Stock of the Issuer or Indebtedness, Disqualified Stock or Preferred Stock of any Restricted Subsidiary in an aggregate principal amount or
liquidation preference, which when aggregated with the principal amount or liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and Incurred
pursuant to this clause (l), together with any Refinancing Indebtedness in respect thereof incurred pursuant to clause (o) below, does not exceed the greater of $750 million and
5.50% of Total Assets at the time of Incurrence (plus, in the case of any Refinancing Indebtedness in respect thereof Incurred pursuant to clause (o) below, the Additional Refinancing Amount);
it being understood that any Indebtedness Incurred pursuant to this clause (l) shall cease to be deemed Incurred or outstanding for purposes of this clause (l) but shall be deemed
Incurred for purposes of the first paragraph of this covenant from and after the first date on which the Issuer or the Restricted Subsidiary, as the case may be, could have Incurred such Indebtedness
under the first paragraph of this covenant without reliance upon this clause (l);
(m) Indebtedness
or Disqualified Stock of the Issuer or any Restricted Subsidiary and Preferred Stock of any Restricted Subsidiary in an aggregate principal amount or
liquidation preference at any time outstanding, together with Refinancing Indebtedness in respect thereof incurred pursuant to clause (o) hereof, not greater than 100.0% of the net cash
proceeds received by the Issuer and its Restricted Subsidiaries since immediately after the Issue Date from the issue or sale of Equity Interests of the Issuer or any direct or indirect parent entity
of the Issuer (which proceeds are retained by the Issuer or contributed to the Issuer or a Restricted Subsidiary) or cash contributed to the capital of the Issuer (in each case other than proceeds of
Disqualified Stock or
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sales
of Equity Interests to, or contributions received from the Issuer or any of its Subsidiaries), to the extent such net cash proceeds or cash have not been applied to make Restricted Payments or
to make other Investments, payments or exchanges pursuant to the third paragraph of "Limitation on restricted payments" or to make Permitted Investments (other than Permitted Investments
specified in clauses (1), (2) and (3) of the definition thereof) (plus, in the case of any Refinancing Indebtedness in respect thereof Incurred pursuant to clause (o)
below, the Additional Refinancing Amount) (it being understood that any Indebtedness incurred pursuant to this clause (m) shall cease to be deemed incurred or outstanding for purposes of this
clause (m) but shall be deemed incurred for the purposes of the first paragraph of this covenant from and after the first date on which the Issuer or such Restricted Subsidiary, as the case may
be, could have incurred such Indebtedness under the first paragraph of this covenant without reliance upon this clause (m));
(n) any
guarantee by the Issuer or any Restricted Subsidiary of Indebtedness or other obligations of the Issuer or any Restricted Subsidiary so long as the Incurrence of
such Indebtedness Incurred by the Issuer or such Restricted Subsidiary is permitted under the terms of the indenture;
provided
that (i) if such
Indebtedness is by its terms subordinated in right of payment to the notes or the Guarantee of such Restricted Subsidiary, as applicable, any such guarantee with respect to such Indebtedness shall be
subordinated in right of payment to the notes or such Guarantee, as applicable, substantially to the same extent as such Indebtedness is subordinated to the notes or the Guarantee, as applicable, and
(ii) if such guarantee is of Indebtedness of the Issuer or any Guarantor, such guarantee is Incurred in accordance with, or not in contravention of, the covenant described under
"Future guarantors" solely to the extent such covenant is applicable;
(o) the
Incurrence by the Issuer or any of the Restricted Subsidiaries of Indebtedness or Disqualified Stock, or by any Restricted Subsidiary of Preferred Stock, that serves
to refund, refinance or defease any Indebtedness Incurred or Disqualified Stock or Preferred Stock issued as permitted under the first paragraph of this covenant and clauses (a)(y), (b), (c),
(d), (l), (m), (o), (p) and (t) of this paragraph up to the outstanding principal amount (or, if applicable, the liquidation preference, face amount, or the like) or, if greater,
committed amount (only to the extent the committed amount could have been Incurred on the date of initial Incurrence and was deemed Incurred at such time for the purposes of this covenant) of such
Indebtedness or Disqualified Stock or Preferred Stock, in each case at the time such Indebtedness was Incurred or Disqualified Stock or Preferred Stock was issued pursuant to the first paragraph of
this covenant or clauses (a)(y), (b), (c), (d), (l), (m), (o), (p) and (t) of this paragraph, or any Indebtedness, Disqualified Stock or Preferred Stock Incurred to so refund or
refinance such Indebtedness, Disqualified Stock or Preferred Stock, plus any additional Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay premiums (including tender premiums),
accrued and unpaid interest, expenses, underwriting discounts, commissions, defeasance costs and fees in connection therewith (subject to the following proviso, "Refinancing Indebtedness") prior to
its respective maturity;
provided
,
however
, that such Refinancing Indebtedness:
(1) has
a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is Incurred which is not less than the shorter of (x) the remaining Weighted
Average Life to Maturity of the Indebtedness, Disqualified Stock or Preferred Stock being refunded, refinanced or defeased and (y) the Weighted Average Life to Maturity that would result if all
payments of principal on the Indebtedness, Disqualified Stock and Preferred Stock being refunded or refinanced that were due on or after the date that is one year following the last maturity date of
any notes then outstanding were instead due on such date (provided that this subclause (1) will not apply to any refunding or refinancing of any Secured Indebtedness);
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(2) to
the extent such Refinancing Indebtedness refinances (a) Indebtedness that by its terms is subordinated in right of payment to the notes or a Guarantee, as
applicable, such Refinancing Indebtedness is by its terms subordinated in right of payment to the notes or the Guarantee, as applicable, or (b) Disqualified Stock or Preferred Stock, such
Refinancing Indebtedness is Disqualified Stock or Preferred Stock; and
(3) shall
not include (x) Indebtedness of a Restricted Subsidiary that is not a Guarantor that refinances Indebtedness of the Issuer or a Guarantor, or
(y) Indebtedness of the Issuer or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary;
(p) Indebtedness,
Disqualified Stock or Preferred Stock of (x) the Issuer or any Restricted Subsidiary Incurred to finance an acquisition or (y) Persons that
are acquired by the Issuer or any Restricted Subsidiary or are merged, consolidated or amalgamated with or into the Issuer or any Restricted Subsidiary in accordance with the terms of the indenture
(so long as such Indebtedness, Disqualified Stock or Preferred Stock is not Incurred in contemplation of such acquisition, merger, consolidation or amalgamation);
provided
that after giving effect to
such acquisition or merger, consolidation or amalgamation, either:
(1) the
Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of
this covenant; or
(2) the
Fixed Charge Coverage Ratio of the Issuer would be no less than immediately prior to such acquisition or merger, consolidation or amalgamation;
(q) Indebtedness
Incurred in connection with a Securitization Financing that is not recourse to the Issuer or any Restricted Subsidiary other than a Securitization
Subsidiary (except for Standard Securitization Undertakings);
(r) Indebtedness
arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary
course of business;
provided
that such Indebtedness is extinguished within five Business Days of its Incurrence;
(s) Indebtedness
of the Issuer or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to Bank Indebtedness, in a principal amount not
in excess of the stated amount of such letter of credit;
(t) Indebtedness
of Restricted Subsidiaries that are not Guarantors;
provided
,
however
, that the aggregate principal amount for all such Indebtedness that, when aggregated
with the principal amount of all other Indebtedness then
outstanding and Incurred pursuant to this clause (t), together with any Refinancing Indebtedness in respect thereof incurred pursuant to clause (o) above, does not exceed the greater of
$500 million and 3.5% of Total Assets at the time of Incurrence (plus, in the case of any Refinancing Indebtedness in respect thereof Incurred pursuant to clause (o) above, the
Additional Refinancing Amount) (it being understood that any Indebtedness incurred pursuant to this clause (t) shall cease to be deemed Incurred or outstanding for purposes of this
clause (t) but shall be deemed Incurred for the purposes of the first paragraph of this covenant from and after the first date on which such Restricted Subsidiary could have Incurred such
Indebtedness under the first paragraph of this covenant without reliance upon this clause (t));
(u) Indebtedness
of the Issuer or any Restricted Subsidiary consisting of (1) the financing of insurance premiums or (2) take-or-pay obligations contained in
supply arrangements, in each case, in the ordinary course of business;
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(v) Indebtedness
consisting of Indebtedness of the Issuer or a Restricted Subsidiary to current or former officers, directors and employees of the Issuer, any direct or
indirect parent of the Issuer or any of either's Subsidiaries, their respective estates, spouses or former spouses, in each case to finance the purchase or redemption of Equity Interests of the Issuer
or any direct or indirect parent of the Issuer to the extent described in clause (4) of the third paragraph of the covenant described under
"
Limitation on restricted payments";
(w) Indebtedness
in respect of Obligations of the Issuer or any Restricted Subsidiary to pay the deferred purchase price of goods or services or progress payments in
connection with such goods and services;
provided
that such obligations are incurred in connection with open accounts extended by suppliers on customary
trade terms in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(x) Indebtedness
of, incurred on behalf of, or representing guarantees of Indebtedness of joint ventures, subject to compliance with the covenant described under
"
Limitation on restricted payments"; and
(y) Indebtedness
of the Issuer or any Restricted Subsidiary to or on behalf of any joint venture (regardless of the form of legal entity) that is not a Restricted Subsidiary
arising in the ordinary course of business in connection with the cash management operations (including with respect to intercompany self-insurance arrangements) of the Issuer and its Restricted
Subsidiaries.
For purposes of determining compliance with this covenant,
(1) in
the event that an item of Indebtedness, Disqualified Stock or Preferred Stock (or any portion thereof) meets the criteria of more than one of the categories of
permitted Indebtedness described in clauses (a) through (y) above or is entitled to be Incurred pursuant to the first paragraph of this covenant, then the Issuer may, in its sole
discretion, classify or reclassify, or later divide, classify or reclassify (as if Incurred at such later time), such item of Indebtedness, Disqualified Stock or Preferred Stock (or any portion
thereof) in any manner that complies with this covenant, provided that Indebtedness outstanding under a Credit Agreement entered into on or prior to the Acquisition Date (and any secured Indebtedness
representing a refinancing of such Indebtedness) shall be incurred under clause (a) above and may not be reclassified; and
(2) (A)
in connection with any Limited Condition Acquisition, at the option of the Issuer by written notice to the Trustee, any Indebtedness and/or Lien Incurred to finance
such Limited Condition Acquisition shall be deemed to have been Incurred on the date the definitive acquisition agreement relating to such Limited Condition Acquisition was entered into (and not at
the time such Limited Condition Acquisition is consummated) and the Fixed Charge Coverage Ratio and/or the Secured Leverage Ratio shall be tested (x) in connection with such Incurrence, as of
the date the definitive acquisition agreement relating to such Limited Condition Acquisition was entered into, giving
pro forma
effect to such Limited
Condition Acquisition, to any such Indebtedness or Lien, and to all transactions in connection therewith and (y) in connection with any other Incurrence after the date the definitive
acquisition agreement relating to such Limited Condition Acquisition was entered into and prior to the earlier of the consummation of such Limited Condition Acquisition or the termination of such
definitive agreement prior to the Incurrence, both (i) on the basis set forth in clause (x) above and (ii) without giving effect to such Limited Condition Acquisition or the
Incurrence of any such Indebtedness or Liens or the other transactions in connection therewith, and
(B) in
connection with obtaining any commitment with respect to any Indebtedness to be incurred under clause (a)(y) of the second paragraph of this covenant, the
Issuer may, by written notice to the Trustee at any time prior to the actual Incurrence of such Indebtedness, designate such commitment (any such commitment so designated, a "Designated Commitment")
as being Indebtedness Incurred on the date of such notice in an amount equal to such Designated
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Commitment
(or, at the Issuer's option, if such Designated Commitment has been permanently reduced other than as a result of the Incurrence of funded Indebtedness thereunder, such reduced amount), in
which case Indebtedness in such amount shall be deemed to have been Incurred on the date of such notice and shall thereafter be deemed to be outstanding Secured Indebtedness for purposes of any
subsequent calculation of the Secured Leverage Ratio, and subsequent borrowings and prepayments under such Designated Commitment shall be disregarded for all purposes of the covenant described above
and the covenant set forth under "Certain covenantsLiens" below until the date such Designated Commitment is terminated.
Accrual
of interest, the accretion of accreted value, the payment of interest or dividends in the form of additional Indebtedness, Disqualified Stock or Preferred Stock, as applicable,
amortization of original issue discount, the accretion of liquidation preference and increases in the amount of Indebtedness outstanding solely as a result of fluctuations in the exchange rate of
currencies will not be deemed to be an Incurrence of Indebtedness, Disqualified Stock or Preferred Stock for purposes of this covenant. Where any Indebtedness of any Person other than the Issuer and
its Restricted Subsidiaries is guaranteed by one or more of the Issuer and its Restricted Subsidiaries, the aggregate amount of Indebtedness of the Issuer and its Restricted Subsidiaries deemed to be
Incurred or outstanding as a result of all such guarantees shall not exceed the amount of such guaranteed Indebtedness. Guarantees of, or obligations in respect of letters of credit relating to,
Indebtedness which is otherwise included in the determination of a particular amount of Indebtedness shall not be included in the determination of such amount of Indebtedness;
provided
that the
Incurrence of the Indebtedness represented by such guarantee or letter of credit, as the case may be, was in compliance with this
covenant.
For
purposes of determining compliance with any U.S. dollar-denominated restriction on the Incurrence of Indebtedness, the U.S. dollar-equivalent principal amount (or, if applicable, the
liquidation preference, face amount, or the like) of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such
Indebtedness was Incurred, in the case of term debt, or first committed or first Incurred (whichever yields the lower U.S. dollar equivalent), in the case of revolving credit debt. However, if the
Indebtedness is Incurred to refinance other Indebtedness denominated in a foreign currency, and the refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if
calculated at the relevant currency exchange rate in effect on the date of the refinancing, the U.S. dollar-denominated restriction will be deemed not to have been exceeded so long as the principal
amount (or, if applicable, the liquidation preference, face amount, or the like) of the refinancing Indebtedness does not exceed the principal amount (or, if applicable, the liquidation preference,
face amount, or the like) of the Indebtedness being refinanced, plus any additional Indebtedness Incurred to pay premiums (including tender premiums), accrued and unpaid interest, expenses,
underwriting discounts, commissions, defeasance costs and fees in connection therewith.
Notwithstanding
any other provision of this covenant, the maximum amount of Indebtedness that the Issuer and its Restricted Subsidiaries may Incur pursuant to this covenant shall not be
deemed to be exceeded, with respect to any outstanding Indebtedness, solely as a result of fluctuations in the exchange rate of currencies. The principal amount (or, if applicable, the liquidation
preference, face amount, or the like) of any Indebtedness Incurred to refinance other Indebtedness, if Incurred in a different currency from the Indebtedness being refinanced, will be calculated based
on the currency exchange rate applicable to the currencies in which the respective Indebtedness is denominated that is in effect on the date of the refinancing.
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Limitation on restricted payments
The indenture provides that, from and after the consummation of the Acquisition on the Acquisition Date, the Issuer will not, and will
not permit any of its Restricted Subsidiaries to, directly or indirectly:
(1) declare
or pay any dividend or make any distribution on account of any of the Issuer's or any of its Restricted Subsidiaries' Equity Interests, including any payment
made in connection with any merger, amalgamation or consolidation involving the Issuer (other than (A) dividends or distributions payable solely in Equity Interests (other than Disqualified
Stock) of the Issuer; or (B) dividends or distributions by a Restricted Subsidiary so long as, in the case of any dividend or distribution payable on or in respect of any class or series of
securities issued by a Restricted Subsidiary that is not a Wholly Owned Restricted Subsidiary, the Issuer or a Restricted Subsidiary receives at least its pro rata share of such dividend or
distribution in accordance with its Equity Interests in such class or series of securities);
(2) purchase
or otherwise acquire or retire for value any Equity Interests of the Issuer or any direct or indirect parent of the Issuer;
(3) make
any principal payment on, or redeem, repurchase, defease or otherwise acquire or retire for value, in each case prior to any scheduled repayment or scheduled
maturity, any Subordinated Indebtedness of the Issuer or any Guarantor (other than the payment, redemption, repurchase, defeasance, acquisition or retirement of (A) Subordinated Indebtedness in
anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case due within one year of the date of such payment, redemption, repurchase, defeasance,
acquisition or retirement and (B) Indebtedness permitted under clauses (g) and (i) of the second paragraph of the covenant described
under "Limitation on incurrence of indebtedness and issuance of disqualified stock and preferred stock"); or
(4) make
any Restricted Investment;
(all
such payments and other actions set forth in clauses (1) through (4) above being collectively referred to as "Restricted Payments"), unless, at the time of such Restricted Payment:
(a) no
Default shall have occurred and be continuing or would occur as a consequence thereof;
(b) immediately
after giving effect to such transaction on a pro forma basis, the Issuer could Incur $1.00 of additional Indebtedness under the provisions of the first
paragraph of the covenant described under "
Limitation on incurrence of indebtedness and issuance of disqualified stock and preferred
stock"; and
(c) such
Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Issuer and its Restricted Subsidiaries after the Acquisition
Date (including Restricted Payments permitted by clauses (1) (to the extent that such Restricted Payment would have reduced the Cumulative Credit if made at the date of the declaration or
giving of notice referred to therein and without duplication of any such reduction), (2)(c) (to the extent that the reference to clause (6) therein operates by reference to
clause (6)(b)), (6)(b) and (8) of the next succeeding paragraph, but excluding all other Restricted Payments permitted by the next succeeding paragraph), is less than the amount equal to
the Cumulative Credit.
"Cumulative
Credit" means the sum of (without duplication):
(1) (a)
$250 million
plus
(b) 50% of the Consolidated Net Income of the Issuer for the period (taken as one
accounting period) from February 1, 2015 to the end of the Issuer's most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted
Payment (or, in the case such Consolidated Net Income for such period is a deficit,
minus
100% of such deficit),
plus
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(2) 100%
of the aggregate net proceeds, including cash and the Fair Market Value (as determined in good faith by the Issuer) of property other than cash, received by the
Issuer after the Issue Date (other than net proceeds to the extent such net proceeds have been used to Incur Indebtedness, Disqualified Stock, or Preferred Stock pursuant to clause (m) of the
second paragraph of the covenant described under "
Limitation on incurrence of indebtedness and issuance of disqualified stock and preferred
stock") from the issue or sale of Equity Interests of the Issuer or any direct or indirect parent entity of the Issuer (excluding Refunding Capital Stock, Designated Preferred Stock, Excluded
Contributions, Disqualified Stock and Equity Interests issued pursuant to the Acquisition Agreement), including Equity Interests issued upon exercise of warrants or options (other than an issuance or
sale to the Issuer or a Restricted Subsidiary),
plus
(3) 100%
of the aggregate amount of contributions to the capital of the Issuer received in cash and the Fair Market Value (as determined in good faith by the Issuer) of
property other than cash received by the Issuer after the Issue Date (other than Excluded Contributions, Refunding Capital Stock, Designated Preferred Stock, Disqualified Stock and Equity Interests
issued pursuant to the Acquisition Agreement and other than contributions to the extent such contributions have been used to incur Indebtedness, Disqualified Stock, or Preferred Stock pursuant to
clause (m) of the second paragraph of the covenant described under "
Limitation on incurrence of indebtedness and issuance of
disqualified stock and preferred stock"),
plus
(4) 100%
of the principal amount of any Indebtedness, or the liquidation preference or maximum fixed repurchase price, as the case may be, of any Disqualified Stock of the
Issuer or any Restricted Subsidiary issued after the Issue Date (other than Indebtedness or Disqualified Stock issued to a Restricted Subsidiary) which has been converted into or exchanged for Equity
Interests in the Issuer (other than Disqualified Stock) or any direct or indirect parent of the Issuer (
provided
, in the case of any such parent, such
Indebtedness or Disqualified Stock is retired or extinguished),
plus
(5) 100%
of the aggregate amount received by the Issuer or any Restricted Subsidiary in cash and the Fair Market Value (as determined in good faith by the Issuer) of
property other than cash received by the Issuer or any Restricted Subsidiary (and 100% of the amount of the reduction in the amount of any guarantee by the Issuer or any Restricted Subsidiary to the
extent the provision of such guarantee constituted a Restricted Payment) from:
(A) the
sale or other disposition (other than to the Issuer or a Restricted Subsidiary) of Restricted Investments made by the Issuer and its Restricted Subsidiaries and from
repurchases and redemptions of such Restricted Investments from the Issuer and its Restricted Subsidiaries by any Person (other than the Issuer or any Restricted Subsidiary) and from repayments of
loans or advances, and releases of guarantees, which constituted Restricted Investments,
(B) the
sale (other than to the Issuer or a Restricted Subsidiary) of the Capital Stock of an Unrestricted Subsidiary, or
(C) a
distribution or dividend from an Unrestricted Subsidiary,
in
the case of each of subclauses (A), (B), and (C), other than to the extent that the ability of the Issuer and its Restricted Subsidiaries to make Restricted Payments or Permitted Investments
would otherwise be increased by the receipt of such amount of cash or property or the release of such guarantee,
plus
(6) in
the event any Unrestricted Subsidiary has been redesignated as a Restricted Subsidiary or has been merged, consolidated or amalgamated with or into, or transfers or
conveys its assets to, or is liquidated into the Issuer or a Restricted Subsidiary, the Fair Market Value (as determined in good faith by the Issuer) of the Investment of the Issuer or the Restricted
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Subsidiaries
in such Unrestricted Subsidiary (which, if the Fair Market Value of such Investment shall exceed $50 million, shall be determined by the Board of Directors of the Issuer) at the
time of such redesignation, combination or transfer (or of the assets transferred or conveyed, as applicable) (other than in each case to the extent that the ability of the Issuer and its Restricted
Subsidiaries to make Restricted Payments or Permitted Investments would otherwise be increased by such redesignation).
The
foregoing provisions will not prohibit:
(1) the
payment of any dividend or distribution or the consummation of any irrevocable redemption within 60 days after the date of declaration or giving notice
thereof, if at the date of declaration or the giving notice of such irrevocable redemption, as applicable, such payment would have complied with the provisions of the indenture;
(2) (a)
the redemption, repurchase, retirement or other acquisition of any Equity Interests ("Retired Capital Stock") or Subordinated Indebtedness of the Issuer, or any
direct or indirect parent of the Issuer or any Guarantor in exchange for, or out of the proceeds of, the substantially concurrent sale of, Equity Interests of the Issuer or any direct or indirect
parent of the Issuer or contributions to the equity capital of the Issuer (other than any Disqualified Stock or any Equity Interests sold to a Subsidiary of the Issuer) (collectively, including any
such contributions, "Refunding Capital Stock");
(b) the
declaration and payment of dividends on the Retired Capital Stock out of the proceeds of the substantially concurrent sale (other than to a Subsidiary of the Issuer)
of Refunding Capital Stock; and
(c) if
immediately prior to the retirement of Retired Capital Stock, the declaration and payment of dividends thereon was permitted under clause (6) of this paragraph
and not made pursuant to clause (2)(b), the declaration and payment of dividends on the Refunding Capital Stock in an aggregate amount per year no greater than the aggregate amount of dividends
per annum that were declarable and payable on such Retired Capital Stock immediately prior to such retirement;
(3) the
redemption, repurchase, defeasance, or other acquisition or retirement of Subordinated Indebtedness of the Issuer or any Guarantor made by exchange for, or out of
the proceeds of the substantially concurrent sale of, new Indebtedness of the Issuer or a Guarantor, which is Incurred in accordance with the covenant described under
"
Limitation on incurrence of indebtedness and issuance of disqualified stock and preferred stock" so long as:
(a) the
principal amount (or accreted value, if applicable) of such new Indebtedness does not exceed the principal amount (or accreted value, if applicable), plus any
accrued and unpaid interest, of the Subordinated Indebtedness being so redeemed, repurchased, defeased, acquired or retired for value (
plus
the amount
of any premium required to be paid under the terms of the instrument governing the Subordinated Indebtedness being so redeemed, repurchased, defeased, acquired or retired,
plus
any tender premiums,
plus
any defeasance costs, fees, underwriting discounts, commissions and
expenses incurred in connection therewith),
(b) such
Indebtedness is subordinated to the notes or the related Guarantee of such Guarantor, as the case may be, at least to the same extent as such Subordinated
Indebtedness so purchased, exchanged, redeemed, repurchased, defeased, acquired or retired for value,
(c) such
Indebtedness has a final scheduled maturity date equal to or later than the earlier of (x) the final scheduled maturity date of the Subordinated Indebtedness
being so
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redeemed,
repurchased, acquired or retired and (y) 91 days following the last maturity date of any notes then outstanding, and
(d) such
Indebtedness has a Weighted Average Life to Maturity at the time Incurred which is not less than the shorter of (x) the remaining Weighted Average Life to
Maturity of the Subordinated Indebtedness being so redeemed, repurchased, defeased, acquired or retired and (y) the Weighted Average Life to Maturity that would result if all payments of
principal on the Subordinated Indebtedness being redeemed, repurchased, defeased, acquired or retired that were due on or after the date that is one year following the last maturity date of any notes
then outstanding were instead due on such date;
(4) a
Restricted Payment to pay for the repurchase, retirement or other acquisition for value of Equity Interests of the Issuer or any direct or indirect parent of the
Issuer held by any future, present or former employee, director, officer or consultant of the Issuer, any Subsidiary of the Issuer or any direct or indirect parent of the Issuer pursuant to any
management equity plan or stock option plan or any other management or employee benefit plan or other agreement or arrangement;
provided
,
however
, that the
aggregate Restricted Payments made under this clause (4) do not exceed $25 million in any calendar year, with unused
amounts in any calendar year being permitted to be carried over to the immediately succeeding calendar year;
provided
,
further
,
however
, that such amount in any calendar year may be increased by an amount not to exceed:
(a) the
cash proceeds received by the Issuer or any of the Restricted Subsidiaries from the sale of Equity Interests (other than Disqualified Stock) of the Issuer or any
direct or indirect parent of the Issuer (to the extent contributed to the Issuer) to employees, directors, officers or consultants of the Issuer, any Restricted Subsidiary or any direct or indirect
parent of the Issuer that occurs after the Acquisition Date (
provided
that the amount of such cash proceeds utilized for any such repurchase,
retirement, other acquisition or dividend will not increase the amount available for Restricted Payments under clause (3) of the first paragraph under
"
Limitation on Restricted Payments"),
plus
(b) the
cash proceeds of key man life insurance policies received by the Issuer or any direct or indirect parent of the Issuer (to the extent contributed to the Issuer) or
the Restricted Subsidiaries after the Acquisition Date;
provided
that the Issuer may elect to apply all or any portion of the aggregate increase contemplated by clauses (a) and (b) above in any
calendar year;
provided
,
further
, that cancellation of Indebtedness owing to the Issuer or any
Restricted Subsidiary from any present or former employees, directors, officers or consultants of the Issuer, or any Restricted Subsidiary or any direct or indirect parent of the Issuer in connection
with a repurchase of Equity Interests of the Issuer or any direct or indirect parent of the Issuer will not be deemed to constitute a Restricted Payment for purposes of this covenant or any other
provision of the indenture;
(5) the
declaration and payment of dividends or distributions to holders of any class or series of Disqualified Stock of the Issuer or any Restricted Subsidiary issued or
incurred in accordance with the covenant described under "
Limitation on incurrence of indebtedness and issuance of disqualified stock and
preferred stock";
(6) (a)
the declaration and payment of dividends or distributions to holders of any class or series of Designated Preferred Stock (other than Disqualified Stock) issued
after the Acquisition Date; and
(b) the
declaration and payment of dividends on Refunding Capital Stock that is Preferred Stock in excess of the dividends declarable and payable thereon pursuant to
clause (2) of this paragraph;
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provided
,
however
, in the case of each of (a) and (b) above of this clause (6),
that for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of issuance of such Designated Preferred Stock or
Refunding Capital Stock, after giving effect to such issuance (and the payment of dividends or distributions and treating such Designated Preferred Stock or Refunding Capital Stock as Indebtedness for
borrowed money for such purpose) on a
pro forma
basis (including a
pro forma
application of the net
proceeds therefrom), the Issuer would have had a Fixed Charge Coverage Ratio of at least 2.00 to 1.00;
(7) [reserved];
(8) the
payment of dividends on the Issuer's Capital Stock of up to 3% per annum of Market Capitalization;
(9) Restricted
Payments that are made with (or in an aggregate amount that does not exceed the aggregate amount of) Excluded Contributions;
(10) other
Restricted Payments in an aggregate amount, when taken together with all other Restricted Payments made pursuant to this clause (10) that are at that time
outstanding, not to exceed the greater of $750 million and 5.50% of Total Assets as of the date such Restricted Payment is made;
(11) the
distribution, as a dividend or otherwise, of shares of Capital Stock of, or Indebtedness owed to the Issuer or a Restricted Subsidiary by, Unrestricted
Subsidiaries;
(12) [reserved];
(13) [reserved];
(14) repurchases
of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such
options or warrants;
(15) purchases
of Securitization Assets pursuant to a Securitization Repurchase Obligation in connection with a Securitization Financing and the payment or distribution of
Securitization Fees;
(16) Restricted
Payments by the Issuer or any Restricted Subsidiary to allow the payment of cash in lieu of the issuance of fractional shares upon the exercise of options or
warrants or upon the conversion or exchange of Capital Stock of any such Person;
(17) the
repurchase, redemption or other acquisition or retirement for value of any Subordinated Indebtedness pursuant to the provisions similar to those described under the
captions "
Change of control" and "
Asset sales";
provided
that all notes tendered by holders of
the notes in connection with a Change of Control Offer or Asset Sale Offer, as applicable, have been
repurchased, redeemed or acquired for value;
(18) payments
or distributions to dissenting stockholders pursuant to applicable law, pursuant to or in connection with a consolidation, amalgamation, merger or transfer of
all or substantially all of the assets of the Issuer and its Restricted Subsidiaries, taken as a whole, that complies with the covenant described under
"
Merger, amalgamation, consolidation or sale of all or substantially all assets";
provided
that as a result of such consolidation, amalgamation, merger or transfer of assets, the Issuer shall have made a Change of Control Offer (if required by the indenture) and that all notes
tendered by holders in connection with such Change of Control Offer have been repurchased, redeemed or acquired for value;
(19) any
Restricted Payment used to fund the Transactions and the payment of fees and expenses incurred in connection with the Transactions or owed by the Issuer or any
direct or
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indirect
parent of the Issuer or the Restricted Subsidiaries to Affiliates, and any other payments made in connection with the consummation of the Transactions, whether payable on the Issue Date or
thereafter, in each case to the extent permitted by the covenant described under "Transactions with affiliates";
(20) any
Restricted Payment made under the Acquisition Documents as in effect on the Issue Date, together with such amendments, modifications and waivers that are
(i) not materially adverse to the holders of the notes in their capacities as such, as determined in good faith by the Issuer or (ii) consented to by the holders of a majority in
principal amount of the notes outstanding; and
(21) other
Restricted Payments;
provided
that the Consolidated Total Net Leverage Ratio of the Issuer for the most recently
ended four full fiscal quarters for which internal financial statements are available, determined on a pro forma basis, is less than 3.50 to 1.00;
provided
,
however
, that at the time of, and after giving effect to, any Restricted Payment permitted
under clauses (8), (10), (11) and (21), no Default shall have occurred and be continuing or would occur as a consequence thereof;
provided
,
further
, that any Restricted Payments made with property other than cash shall be calculated
using the Fair Market Value (as determined in good faith by the Issuer) of such property.
As
of the Acquisition Date, all of the Subsidiaries of the Issuer will be Restricted Subsidiaries. The Issuer will not permit any Unrestricted Subsidiary to become a Restricted
Subsidiary except pursuant to the definition of "Unrestricted Subsidiary." For purposes of designating any Restricted Subsidiary as an Unrestricted Subsidiary, all outstanding Investments by the
Issuer and its Restricted Subsidiaries (except to the extent repaid) in the Subsidiary so designated will be deemed to be Investments in an amount determined as set forth in the last sentence of the
definition of "Investments." Such
designation will only be permitted if a Restricted Payment or Permitted Investment in such amount would be permitted at such time and if such Subsidiary otherwise meets the definition of an
Unrestricted Subsidiary.
Dividend and other payment restrictions affecting subsidiaries
The indenture provides that the Issuer will not, and will not permit any Material Subsidiary to, directly or indirectly, create or
otherwise cause or suffer to exist or become effective any consensual encumbrance or consensual restriction on the ability of any Material Subsidiary to:
(a) pay
dividends or make any other distributions to the Issuer or any Restricted Subsidiary (1) on its Capital Stock, or (2) with respect to any other
interest or participation in, or measured by, its profits; or
(b) make
loans or advances to the Issuer or any Restricted Subsidiary that is a direct or indirect parent of such Material Subsidiary;
except
in each case for such encumbrances or restrictions existing under or by reason of:
(1) (i)
contractual encumbrances or restrictions (x) of Dollar Tree or any Subsidiary of Dollar Tree in effect on the Issue Date or (y) of Family Dollar or any
Subsidiary of Family Dollar in effect on the Acquisition Date, (ii) contractual encumbrances or restrictions pursuant to the Existing Family Dollar Notes Indenture, the notes issued pursuant
thereto and the guarantees thereof, or the 2023 Notes Indenture, the notes issued pursuant thereto (including the Initial 2023 Notes) and the guarantees thereof and (iii) contractual
encumbrances or restrictions pursuant to the Credit Agreement, the other Credit Agreement Documents and, in each case, any similar contractual encumbrances effected by any amendments, modifications,
restatements, renewals, supplements, refundings, replacements or refinancings of such agreements or instruments;
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(2) the
indenture, the notes (and any exchange notes) or the Guarantees;
(3) applicable
law or any applicable rule, regulation or order;
(4) any
agreement or other instrument of a Person acquired by the Issuer or any Restricted Subsidiary which was in existence at the time of such acquisition (but not created
in contemplation thereof or to provide all or any portion of the funds or credit support utilized to consummate such acquisition), which encumbrance or restriction is not applicable to any Person, or
the properties or assets of any Person, other than the Person and its Subsidiaries, or the property or assets of the Person and its Subsidiaries, so acquired;
(5) contracts
or agreements for the sale of assets, including any restriction with respect to a Restricted Subsidiary imposed pursuant to an agreement entered into for the
sale or disposition of the Capital Stock or assets of such Restricted Subsidiary;
(6) Secured
Indebtedness otherwise permitted to be Incurred pursuant to the covenants described under
"
Limitation on incurrence of indebtedness and issuance of disqualified stock and preferred stock" and
"
Liens" that limit the right of the debtor to dispose of the assets securing such Indebtedness;
(7) restrictions
on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business;
(8) customary
provisions in joint venture agreements and other similar agreements entered into in the ordinary course of business;
(9) purchase
money obligations for property acquired and Capitalized Lease Obligations in the ordinary course of business;
(10) customary
provisions contained in leases, licenses and other similar agreements entered into in the ordinary course of business;
(11) any
encumbrance or restriction that restricts in a customary manner the subletting, assignment or transfer of any property or asset that is subject to a lease, license
or similar contract, or the assignment or transfer of any such lease, license (including, without limitation, licenses of intellectual property) or other contracts;
(12) any
encumbrance or restriction of a Securitization Subsidiary effected in connection with a Securitization Financing;
(13) other
Indebtedness, Disqualified Stock or Preferred Stock of the Issuer or any Restricted Subsidiary so long as such encumbrances and restrictions contained in any
agreement or instrument will not materially affect the Issuer's ability to make anticipated principal or interest payments on the notes (as determined in good faith by the Issuer),
provided
that in each
case such Indebtedness, Disqualified Stock or Preferred Stock is permitted to be Incurred by the covenant described under
"
Limitation on incurrence of indebtedness and issuance of disqualified stock and preferred stock";
(14) any
Restricted Investment not prohibited by the covenant described under "Limitation on restricted payments" and any Permitted Investment; or
(15) any
encumbrances or restrictions of the type referred to in clauses (a) or (b) above imposed by any amendments, modifications, restatements, renewals,
increases, supplements, refundings, replacements or refinancings of the contracts, instruments or obligations referred to in clauses (1) through (14) above;
provided
that such amendments,
modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings are, in the good
faith judgment of the Issuer, no more restrictive with respect to such dividend and other payment
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restrictions
than those contained in the dividend or other payment restrictions prior to such amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or
refinancing.
For purposes of determining compliance with this covenant, (1) the priority of any Preferred Stock in receiving dividends or liquidating distributions
prior to dividends or liquidating distributions being paid on other Capital Stock shall not be deemed a restriction on the ability to make distributions on Capital Stock and (2) the
subordination of loans or advances made to the Issuer or a Restricted Subsidiary to other Indebtedness Incurred by the Issuer or any such Restricted Subsidiary shall not be deemed a restriction on the
ability to make loans or advances.
Asset sales
The indenture provides that the Issuer will not, and will not permit any of the Restricted Subsidiaries to, cause or make an Asset Sale
(other than any Permitted Regulatory Sale), unless (x) the Issuer or such Restricted Subsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the
Fair Market Value (as determined in good faith by the Issuer) of the assets sold or otherwise disposed of, and (y), at least 75% of the consideration therefor received by the Issuer or such Restricted
Subsidiary, as the case may be, is in the form of Cash Equivalents;
provided
that the amount of each of the following shall be deemed to be Cash
Equivalents for purposes of this provision:
(a) any
liabilities (as shown on the Issuer or a Restricted Subsidiary's most recent balance sheet or in the notes thereto) of the Issuer or a Restricted Subsidiary (other
than liabilities that are by their terms
subordinated to the notes or any Guarantee) that are assumed by the transferee of any such assets or that are otherwise canceled or terminated in connection with the transaction with such transferee,
(b) any
notes or other obligations or other securities or assets received by the Issuer or such Restricted Subsidiary from such transferee that are converted by the Issuer
or such Restricted Subsidiary into cash or Cash Equivalents within 180 days of the receipt thereof (to the extent of the cash received),
(c) Indebtedness
of any Restricted Subsidiary that is no longer a Restricted Subsidiary as a result of such Asset Sale, to the extent that the Issuer and each Restricted
Subsidiary are released from any guarantee of payment of such Indebtedness in connection with the Asset Sale,
(d) consideration
consisting of Indebtedness of the Issuer or any Restricted Subsidiary (other than Subordinated Indebtedness) received after the Acquisition Date from
Persons who are not the Issuer or any Restricted Subsidiary, and
(e) any
Designated Non-cash Consideration received by the Issuer or any Restricted Subsidiary in such Asset Sale having an aggregate Fair Market Value (as determined in good
faith by the Issuer), taken together with all other Designated Non-cash Consideration received pursuant to this clause (e) that is at that time outstanding, not to exceed the greater of
$300 million and 2.0% of Total Assets at the time of the receipt of such Designated Non-cash Consideration (with the Fair Market Value of each item of Designated Non-cash Consideration being
measured at the time received and without giving effect to subsequent changes in value).
Within
365 days after the Issuer or any Restricted Subsidiary's receipt of the Net Proceeds of any Asset Sale, the Issuer or such Restricted Subsidiary may apply the Net Proceeds
from such Asset Sale, at its option:
(1) to
repay, repurchase or redeem (i) Indebtedness constituting Bank Indebtedness and other Pari Passu Indebtedness that is secured by a Lien permitted under the
indenture (and, if the
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Indebtedness
repaid is revolving credit Indebtedness, to correspondingly reduce commitments with respect thereto), (ii) Indebtedness of a Restricted Subsidiary that is not a Guarantor,
(iii) Obligations under the notes as provided under "
Optional redemption," through open-market purchases
(
provided
that such purchases are at or above 100% of the principal amount thereof or, in the event that the notes were issued with significant original
issue discount, 100% of the accreted value thereof) or by making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all holders to purchase at a purchase price
equal to 100% of the principal amount thereof (or, in the event that the notes were issued with significant original issue discount, 100% of the accreted value thereof) or (iv) other Pari Passu
Indebtedness (
provided
that if the Issuer or any Guarantor shall so reduce Obligations under unsecured Pari Passu Indebtedness under this
clause (iv), the Issuer will reduce the Notes Obligations as provided under clause (iii) pro rata based on the total principal amount of notes and other Pari Passu Indebtedness
outstanding), in each case other than Indebtedness owed to the Issuer or an Affiliate of the Issuer; or
(2) to
make an investment in any one or more businesses (
provided
that if such investment is in the form of the acquisition
of Capital Stock of a Person, such acquisition results in such Person becoming a Restricted Subsidiary of the Issuer), assets, or property or capital expenditures, in each case (a) used or
useful in a Similar Business or (b) that replace the properties and assets that are the subject of such Asset Sale or to reimburse the cost of any of the foregoing incurred on or after the date
on which the Asset Sale giving rise to such Net Proceeds was contractually committed.
In
the case of clause (2) above, a binding commitment shall be treated as a permitted application of the Net Proceeds from the date of such commitment until the 12-month
anniversary of the date of the receipt of such Net Proceeds;
provided
that in the event such binding commitment is later canceled or terminated for any
reason before such Net Proceeds are so applied, then such Net Proceeds shall constitute Excess Proceeds unless the Issuer or such Restricted Subsidiary enters into another binding commitment (a
"Second Commitment") within six months of such cancellation or termination of the prior binding commitment;
provided
,
further
, that the Issuer or such
Restricted Subsidiary may only enter into a Second Commitment under the foregoing provision one time with respect to
each Asset Sale and to the extent such Second Commitment is later canceled or terminated for any reason before such Net Proceeds are applied or are not applied within 180 days of such Second
Commitment, then such Net Proceeds shall constitute Excess Proceeds.
Pending
the final application of any such Net Proceeds, the Issuer or such Restricted Subsidiary may temporarily reduce Indebtedness under a revolving credit facility, if any, or invest
such Net Proceeds in any manner not prohibited by the indenture. Any Net Proceeds from any Asset Sale that are not applied as provided and within the time period set forth in the second paragraph of
this covenant (it being understood that any portion of such Net Proceeds used to make an offer to purchase notes, as described in clause (1) above, shall be deemed to have been so applied
whether or not such offer is
accepted) will be deemed to constitute "Excess Proceeds." When the aggregate amount of Excess Proceeds exceeds $150 million, the Issuer shall make an offer to all holders of notes (and, at the
option of the Issuer, to holders of any other Pari Passu Indebtedness) (an "Asset Sale Offer") to purchase the maximum principal amount of notes (and such other Pari Passu Indebtedness) that is at
least $2,000 and an integral multiple of $1,000 in excess thereof that may be purchased out of the Excess Proceeds at an offer price in cash in an amount equal to 100% of the principal amount thereof
(or, in the event the notes or other Pari Passu Indebtedness were issued with significant original issue discount, 100% of the accreted value thereof), plus accrued and unpaid interest and additional
interest, if any (or, in respect of such other Pari Passu Indebtedness, such lesser price, if any, as may be provided for by the terms of such other Pari Passu Indebtedness), to, but excluding, the
date fixed for the closing of such offer, in accordance with the procedures set forth in the indenture. The Issuer will commence an Asset Sale Offer with respect to Excess Proceeds within ten
(10) Business Days after the
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date
that Excess Proceeds exceeds $150 million by mailing, or delivering electronically if the notes are held by DTC, the notice required pursuant to the terms of the indenture, with a copy to
the Trustee. To the extent that the aggregate amount of notes (and such other Pari Passu Indebtedness) tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Issuer may use any
remaining Excess Proceeds for any purpose that is not prohibited by the indenture. If the aggregate principal amount of notes (and such other Pari Passu Indebtedness) surrendered by holders thereof
exceeds the amount of Excess Proceeds, the Trustee, upon receipt of written notice from the Issuer of the aggregate principal amount to be selected, shall select the notes (but not such other Pari
Passu Indebtedness) to be purchased in the manner described below. Upon completion of any such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.
The
Issuer will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations to the extent such laws or regulations are
applicable in connection with the repurchase of the notes pursuant to an Asset Sale Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions of the
indenture, the Issuer will comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations described in the indenture by virtue thereof.
If
more notes (and such other Pari Passu Indebtedness) are tendered pursuant to an Asset Sale Offer than the Issuer is required to purchase, selection of such notes (but not such other
Pari Passu Indebtedness) for purchase will be made by the Trustee on a pro rata basis or by lot or by such other method as the Trustee shall deem fair and appropriate (and in such manner as complies
with the requirements of DTC, if applicable);
provided
that no notes of $2,000 or less shall be purchased in part. Selection of such other Pari Passu
Indebtedness will be made pursuant to the terms of such other Pari Passu Indebtedness.
Notices
of an Asset Sale Offer shall be mailed by the Issuer by first class mail, postage prepaid, or delivered electronically if the notes are held by DTC, at least 30 days but
not more than 60 days before the purchase date to each holder of notes at such holder's registered address. If any note is to be purchased in part only, any notice of purchase that relates to
such note shall state the portion of the principal amount thereof that has been or is to be purchased.
Transactions with affiliates
The indenture provides that the Issuer will not, and will not permit any of the Restricted Subsidiaries to, directly or indirectly,
make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction or
series of transactions, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate of the Issuer (each of the foregoing, an "Affiliate Transaction")
involving aggregate consideration in excess of $25 million, unless:
(a) such
Affiliate Transaction is on terms that are not materially less favorable to the Issuer or the relevant Restricted Subsidiary than those that could have been
obtained in a comparable transaction by the Issuer or such Restricted Subsidiary with an unrelated Person; and
(b) with
respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $50 million, the Issuer
delivers to the Trustee a resolution adopted in good faith by the majority of the Board of Directors of the Issuer, approving such Affiliate Transaction and set forth in an Officers' Certificate
certifying that such Affiliate Transaction complies with clause (a) above.
The
foregoing provisions will not apply to the following:
(1) transactions
between or among the Issuer and/or any of the Restricted Subsidiaries (or an entity that becomes the Issuer or a Restricted Subsidiary as a result of such
transaction) and any
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merger,
consolidation or amalgamation of the Issuer and any direct parent of the Issuer;
provided
that such parent shall have no material liabilities
and no material assets other than cash, Cash Equivalents and the Capital Stock of the Issuer and such merger, consolidation or amalgamation is otherwise in compliance with the terms of the indenture
and effected for a bona fide business purpose;
(2) Restricted
Payments permitted by the provisions of the indenture described above under the covenant
"
Limitation on restricted payments" and Permitted Investments;
(3) the
payment of reasonable and customary fees and reimbursement of expenses paid to, and indemnity provided on behalf of, officers, directors, employees or consultants of
the Issuer, any Restricted Subsidiary, or any direct or indirect parent of the Issuer;
(4) transactions
in which the Issuer or any Restricted Subsidiary, as the case may be, delivers to the Trustee a letter from an Independent Financial Advisor stating that
such transaction is fair to the Issuer or such Restricted Subsidiary from a financial point of view or meets the requirements of clause (a) of the preceding paragraph;
(5) payments
or loans (or cancellation of loans) to officers, directors, employees or consultants which are approved by a majority of the Board of Directors of the Issuer in
good faith;
(6) any
agreement (x) of Dollar Tree or any Subsidiary of Dollar Tree as in effect on the Issue Date or (y) of Family Dollar or any Subsidiary of Family Dollar
as in effect on the Acquisition Date, in each case, or any amendment thereto (so long as any such agreement together with all amendments thereto, taken as a whole, is not more disadvantageous to the
holders of the notes in any material respect than the original agreement as in effect on the Issue Date or Acquisition Date, as applicable) or any transaction contemplated thereby as determined in
good faith by the Issuer;
(7) the
existence of, or the performance by the Issuer or any Restricted Subsidiary of its obligations under the terms of any stockholders or limited liability company
agreement (including any registration rights agreement or purchase agreement related thereto) to which Dollar Tree or any Subsidiary of Dollar Tree is a party as of the Issue Date or Family Dollar or
any Subsidiary of Family Dollar is a party as of the Acquisition Date, and any transaction, agreement or arrangement described in the Offering Memorandum and, in each case, any amendment thereto or
similar transactions, agreements
or arrangements which it may enter into thereafter;
provided
,
however
, that the existence of, or the
performance by the Issuer or any Restricted Subsidiary of its obligations under, any future amendment to any such existing transaction, agreement or arrangement or under any similar transaction,
agreement or arrangement entered into after the Issue Date or Acquisition Date, as applicable, shall only be permitted by this clause (7) to the extent that the terms of any such existing
transaction, agreement or arrangement together with all amendments thereto, taken as a whole, or new transaction, agreement or arrangement are not otherwise more disadvantageous to the holders of the
notes in any material respect than the original transaction, agreement or arrangement as in effect on the Issue Date or Acquisition Date, as applicable, as determined in good faith by the Issuer;
(8) the
execution of the Transactions, and the payment of all fees, expenses, bonuses and awards related to the Transactions;
(9) (a)
transactions with customers, clients, suppliers or purchasers or sellers of goods or services, or transactions otherwise relating to the purchase or sale of goods or
services, in each case in the ordinary course of business and otherwise in compliance with the terms of the indenture, which are fair to the Issuer and its Restricted Subsidiaries in the reasonable
determination of the Issuer, or are on terms at least as favorable as might reasonably have been obtained at such time from an unaffiliated party or (b) transactions with joint ventures or
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Unrestricted
Subsidiaries entered into in the ordinary course of business and consistent with past practice or industry norm;
(10) any
transaction effected as part of a Securitization Financing;
(11) the
issuance of Equity Interests (other than Disqualified Stock) of the Issuer to any Person;
(12) the
issuances of securities or other payments, awards or grants in cash, securities or otherwise pursuant to, or the funding of, employment arrangements, stock option
and stock ownership plans or similar employee benefit plans approved by the Board of Directors of the Issuer or any direct or indirect parent of the Issuer, or the Board of Directors of a Restricted
Subsidiary, as appropriate, in good faith;
(13) [reserved];
(14) any
contribution to the capital of the Issuer;
(15) transactions
permitted by, and complying with, the provisions of the covenant described under "
Merger,
amalgamation, consolidation or sale of all or substantially all assets";
(16) transactions
between the Issuer or any Restricted Subsidiary and any Person, a director of which is also a director of the Issuer, any Restricted Subsidiary or any
direct or indirect parent of the Issuer;
provided
,
however
, that such Person abstains from voting as a
director of the Issuer, such Restricted Subsidiary or such direct or indirect parent of the Issuer, as the case may be, on any matter involving such Person;
(17) pledges
of Equity Interests of Unrestricted Subsidiaries;
(18) the
formation and maintenance of any consolidated group or subgroup for Tax, accounting or cash pooling or management purposes in the ordinary course of business;
(19) any
employment agreements entered into by the Issuer or any Restricted Subsidiary in the ordinary course of business;
(20) transactions
undertaken in good faith (as certified by a responsible financial or accounting officer of the Issuer in an Officers' Certificate) for the purpose of
improving the consolidated Tax efficiency of the Issuer and its Subsidiaries and not for the purpose of circumventing any covenant set forth in the indenture;
(21) [reserved];
and
(22) any
purchase by the Issuer or its Affiliates of Indebtedness, Disqualified Stock or Preferred Stock of the Issuer or any of the Restricted Subsidiaries;
provided
that such purchases are on the same terms as
such purchases by such Persons who are not the Issuer's Affiliates.
Liens
The indenture provides that the Issuer will not, and will not permit any of the Restricted Subsidiaries to, directly or indirectly,
create, Incur or suffer to exist any Lien (except Permitted Liens) on any asset or property of the Issuer or any Restricted Subsidiary securing Indebtedness of the Issuer or a Restricted Subsidiary
unless the notes and the Guarantees are equally and ratably secured with (or, at the Issuer's election, on a senior basis to) the obligations so secured until such time as such obligations are no
longer secured by a Lien;
provided
that any such security shall be on a senior basis to any such Indebtedness that is by its terms subordinated in right
of payment to the notes.
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Any
Lien that is granted to secure the notes or any Guarantee under the preceding paragraph shall be automatically released and discharged at the same time as the release of the Lien
that gave rise to the obligation to secure the notes or such Guarantee.
For
purposes of determining compliance with this covenant, (A) a Lien securing an item of Indebtedness need not be permitted solely by reference to one category of Permitted Liens
(or any portion thereof) described in the definition of "Permitted Liens" or pursuant to the first paragraph of this covenant but may be permitted in part under any combination thereof and
(B) in the event that a Lien securing an item of Indebtedness (or any portion thereof) meets the criteria of one or more of the categories of permitted Liens (or any portion thereof) described
in the definition of "Permitted Liens" or pursuant to the first paragraph of this covenant, the Issuer may, in its sole discretion, classify or reclassify, or later divide, classify or reclassify (as
if Incurred at such later time), such Lien securing such item of Indebtedness (or any portion thereof) in any manner that complies with this covenant and will be entitled to only include the amount
and type of such Lien or such item of Indebtedness secured by such Lien (or any portion thereof) in one of the categories of permitted Liens (or any portion thereof) described in the definition of
"Permitted Liens" or pursuant to the first paragraph of this covenant and, in such event, such Lien securing such item of Indebtedness (or any portion thereof) will be treated as being Incurred or
existing pursuant to only such clause or clauses (or any portion thereof) or pursuant to the first paragraph hereof.
With
respect to any Lien securing Indebtedness that was permitted to secure such Indebtedness at the time of the Incurrence of such Indebtedness, such Lien shall also be permitted to
secure any increases in the amount of Indebtedness outstanding solely as a result of fluctuations in the exchange rate of currencies or increases in the value of property securing Indebtedness
described in clause (11) of the definition of "Indebtedness."
Reports and other information
The indenture provides that so long as any notes are outstanding thereunder the Issuer will file with the SEC (and furnish to the
Trustee and holders with copies thereof, without cost to each holder) the following:
(1) within
the time periods specified in the SEC's rules and regulations, an annual report with the SEC on Form 10-K (or any successor comparable form);
(2) within
the time periods specified in the SEC's rules and regulations, a quarterly report with the SEC on Form 10-Q (or any successor comparable form); and
(3) promptly
from time to time after the occurrence of an event required to be therein reported (and in any event within the time periods specified in the SEC's rules and
regulations), current reports with the SEC on Form 8- K (or any successor comparable form).
If
the Issuer is no longer subject to the periodic reporting requirements of the Exchange Act for any reason, the Issuer will nevertheless continue filing the reports specified in the
preceding paragraphs of this covenant with the SEC within the time periods specified above unless the SEC will not accept such a filing. If the SEC will not accept the Issuer's filings for any reason,
the Issuer will furnish the reports referred to in the preceding paragraphs to the Trustee within the time periods that would apply if the Issuer were required to file those reports with the SEC. The
Issuer will not take any action for the purpose of causing the SEC not to accept any such filings. In addition to providing such information to the Trustee, the Issuer shall make available the
information required to be provided pursuant to clauses (1) through (3) of this paragraph, by posting such information to its website or on IntraLinks or any comparable online data
system or website.
If
the Issuer has designated any of its Subsidiaries as an Unrestricted Subsidiary and if any such Unrestricted Subsidiary or group of Unrestricted Subsidiaries, if taken together as one
Subsidiary,
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would
constitute a Significant Subsidiary of the Issuer, then the annual and quarterly information required by clause (1) of the first paragraph of this covenant shall include a reasonably
detailed presentation, either on the face of the financial statements or in the footnotes thereto, of the financial condition and results of operations of the Issuer and its Restricted Subsidiaries
separate from the financial condition and results of operations of such Unrestricted Subsidiaries.
In
the event that the rules and regulations of the SEC permit the Issuer and any direct or indirect parent of the Issuer to report at such parent entity's level on a consolidated basis,
the indenture permits the Issuer to satisfy its obligations in this covenant with respect to financial information relating to the Issuer by furnishing financial information relating to such direct or
indirect parent;
provided
that such financial information is accompanied by consolidating information that explains in a reasonable level of detail, the
differences between the information relating to such direct or indirect parent and any of its Subsidiaries other than the Issuer and its Subsidiaries, on the one hand, and the information relating to
the Issuer, the Guarantors and the other Subsidiaries of the Issuer on a standalone basis, on the other hand.
In
addition, the Issuer has agreed that for so long as any notes remain outstanding during any period when it is not subject to Section 13 or 15(d) of the Exchange Act, it will
furnish to the holders of the notes and to prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.
Notwithstanding
the foregoing, the Issuer will be deemed to have furnished such reports referred to above to the Trustee and the holders if the Issuer has filed such reports with (or
furnished such reports to) the SEC via the EDGAR filing system and such reports are publicly available.
Delivery
of any reports, information and documents to the Trustee will be for informational purposes only and the Trustee's receipt of such shall not constitute constructive notice of
any information contained therein or determinable from information contained therein, including the Issuer's compliance with any of its covenants hereunder (as to which the Trustee will be entitled to
rely exclusively on Officers' Certificates).
Future Guarantors
The indenture provides that the Issuer will cause each of its Wholly Owned Domestic Subsidiaries that is not an Excluded Subsidiary and
that guarantees or becomes a borrower under the credit agreement described in clause (i) of the definition of "Credit Agreement" (or any refinancing thereof) or that guarantees any other
Capital Markets Indebtedness of the Issuer or any of the Guarantors to execute and deliver to the Trustee a supplemental indenture pursuant to which such Subsidiary will guarantee the Guaranteed
Obligations.
Each
Guarantee shall be released in accordance with the provisions of the indenture described under "Guarantees."
Merger, amalgamation, consolidation or sale of all or substantially all assets
The indenture provides that the Issuer may not, directly or indirectly, consolidate, amalgamate or merge with or into or wind up into
(whether or not the Issuer is the surviving Person), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets in one or more related
transactions to, any Person unless:
(1) the
Issuer is the surviving Person or the Person formed by or surviving any such consolidation, amalgamation, merger or winding up (if other than the Issuer) or to which
such sale, assignment, transfer, lease, conveyance or other disposition will have been made is a corporation, partnership or limited liability company or similar entity organized or existing under the
laws of the United States, any state thereof, the District of Columbia, or any territory thereof
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(collectively,
the "Permitted Jurisdictions", and the Issuer or such Person, as the case may be, being herein called the "Successor Company");
provided
that in the event that the Successor Company is not a corporation or limited liability company, a co-obligor of the notes is a corporation or limited liability company;
(2) the
Successor Company (if other than the Issuer) expressly assumes all the obligations of the Issuer under the indenture, the notes and the Registration Rights Agreement
(to the extent any obligations of the Issuer thereunder remain outstanding) pursuant to supplemental indentures or other applicable documents or instruments in form reasonably satisfactory to the
Trustee;
(3) immediately
after giving effect to such transaction (and treating any Indebtedness which becomes an obligation of the Successor Company or any of its Restricted
Subsidiaries as a result of such transaction as having been Incurred by the Successor Company or such Restricted Subsidiary at the time of such transaction), no Default shall have occurred and be
continuing;
(4) immediately
after giving
pro forma
effect to such transaction, as if such transaction had occurred at the beginning of
the applicable four-quarter period (and treating any Indebtedness which becomes an obligation of the Successor Company or any of the Restricted Subsidiaries as a result of such transaction as having
been Incurred by the Successor Company or such Restricted Subsidiary at the time of such transaction), either
(A) the
Successor Company would be permitted to Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first
sentence of the covenant described under "
Certain covenantsLimitation on incurrence of indebtedness and issuance of
disqualified stock and preferred stock"; or
(B) the
Fixed Charge Coverage Ratio of the Issuer would be no less than such ratio immediately prior to such transaction;
(5) if
the Issuer is not the Successor Company, each Guarantor, unless it is the other party to the transactions described above, shall have by supplemental indenture
confirmed that its Guarantee shall apply to such Person's obligations under the indenture and the notes; and
(6) the
Successor Company shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation, merger, amalgamation
or transfer and such supplemental indentures (if any) comply with the indenture.
The
Successor Company (if other than the Issuer) will succeed to, and be substituted for, the Issuer under the indenture and the notes, and in such event (other than in connection with a
lease) the Issuer will automatically be released and discharged from its obligations under the indenture and the notes. Notwithstanding the foregoing clauses (3) and (4), (a) the Issuer
may merge, consolidate or amalgamate with or transfer all or part of its properties and assets to a Restricted Subsidiary,
provided
that
(x) after giving effect to such transaction, no Default shall have occurred and be continuing and (y) the Issuer is the Successor Company, and (b) the Issuer may merge,
consolidate or amalgamate with an Affiliate incorporated or organized solely for the purpose of reincorporating or reorganizing the Issuer in any Permitted Jurisdiction, so long as the amount of
Indebtedness of the Issuer and its Restricted Subsidiaries is not increased thereby. This "
Merger, amalgamation, consolidation or sale of
all or substantially all assets" will not restrict a sale, assignment, transfer, conveyance or other disposition of assets between or among the Issuer and its Restricted Subsidiaries.
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The indenture further provides that, except in connection with the Acquisition Merger, subject to certain limitations in the indenture governing release of a
Guarantee, no Guarantor will, and the Issuer will not permit any such Guarantor to, consolidate, amalgamate or merge with or into or wind up into (whether or not such Guarantor is the surviving
Person), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets in one or more related transactions to, any Person unless:
(1) either
(a) such Guarantor is the surviving Person or the Person formed by or surviving any such consolidation, amalgamation, merger or winding up (if other than
such Guarantor) or to which such sale, assignment, transfer, lease, conveyance or other disposition will have been made is a company, corporation, partnership or limited liability company or similar
entity organized or existing under the laws of the United States, any state thereof, the District of Columbia or any territory thereof) (such Guarantor or such Person, as the case may be, being herein
called the "Successor Person") and the Successor Person (if other than such Guarantor) expressly assumes all the obligations of such Guarantor under the indenture, the Registration Rights Agreement
(to the extent any obligations of such Guarantor thereunder remain outstanding), and its Guarantee pursuant to a supplemental indenture or other applicable documents or instruments in form reasonably
satisfactory to the Trustee, or (b) such sale, assignment, transfer, lease, conveyance or other disposition or consolidation,
amalgamation or merger is not in violation of the covenant described above under the caption "
Certain covenantsAsset sales";
and
(2) the
Successor Person (if other than such Guarantor) shall have delivered or caused to be delivered to the Trustee an Officers' Certificate and an Opinion of Counsel,
each stating that such consolidation, amalgamation, merger or transfer and such supplemental indenture (if any) comply with the indenture.
Subject
to certain limitations described in the indenture, the Successor Person (if other than such Guarantor) will succeed to, and be substituted for, such Guarantor under the indenture
and its Guarantee, and such Guarantor will automatically be released and discharged from its obligations under the indenture and its Guarantee. Notwithstanding the foregoing, (1) a Guarantor
may merge, amalgamate or consolidate with an Affiliate incorporated or organized solely for the purpose of reincorporating or reorganizing such Guarantor in a Permitted Jurisdiction so long as the
amount of Indebtedness of such Guarantor is not increased thereby and (2) a Guarantor may consolidate, amalgamate or merge with or into or wind up into, liquidate, dissolve, or sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets to, the Issuer or any Guarantor.
Defaults
An "Event of Default" is defined in the indenture as:
(1) a
default in any payment of interest (including any additional interest) on any note when due, continued for 30 days;
(2) a
default in the payment of principal or premium, if any, of any note when due at its Stated Maturity, upon redemption (including on a Special Mandatory Redemption
Date), required repurchase or otherwise;
(3) failure
by the Issuer for 90 days after receipt of written notice given by the Trustee or the holders of not less than 25% in aggregate principal amount of the
notes then outstanding (with a copy to the Trustee) to comply with any of its obligations, covenants or agreements contained in the provisions of the indenture described in
"
Certain covenantsReports and other information";
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(4) the
failure by the Issuer or any Restricted Subsidiary for 60 days after written notice given by the Trustee or the holders of not less than 25% in principal
amount of the notes then outstanding (with a copy to the Trustee) to comply with its other obligations, covenants or agreements (other than a default referred to in clauses (1), (2) and
(3) above) contained in the notes or the indenture;
(5) the
failure by the Issuer or any Significant Subsidiary (or any group of Subsidiaries that together would constitute a Significant Subsidiary) to pay any Indebtedness
(other than Indebtedness owing to the Issuer or a Restricted Subsidiary) within any applicable grace period after final maturity or the acceleration of any such Indebtedness by the holders thereof
because of a default, in each case, if the total amount of such Indebtedness unpaid or accelerated exceeds $100 million or its foreign currency equivalent (the "cross-acceleration provision");
(6) certain
events of bankruptcy, insolvency or reorganization of the Issuer or a Significant Subsidiary (or any group of Subsidiaries that together would constitute a
Significant Subsidiary) (the "bankruptcy provisions");
(7) failure
by the Issuer or any Significant Subsidiary (or any group of Subsidiaries that together would constitute a Significant Subsidiary) to pay final judgments
aggregating in excess of $100 million or its foreign currency equivalent (net of any amounts which are covered by enforceable insurance policies issued by solvent carriers), which judgments are
not discharged, waived or stayed for a period of 60 days (the "judgment default provision"); or
(8) the
Guarantee of a Significant Subsidiary (or any group of Subsidiaries that together would constitute a Significant Subsidiary) with respect to the notes ceases to be
in full force and effect (except as contemplated by the terms thereof) or any Guarantor that qualifies as a Significant Subsidiary (or any group of Guarantors that together would constitute a
Significant Subsidiary) denies or disaffirms its obligations under the indenture or any Guarantee with respect to the notes and such Default continues for 10 days.
The
foregoing will constitute Events of Default whatever the reason for any such Event of Default and whether it is voluntary or involuntary or is effected by operation of law or
pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body.
However,
a default under clause (3) or (4) will not constitute an Event of Default until the Trustee or the holders of at least 25% in principal amount of outstanding notes
notify the Issuer, with a copy to the Trustee, of the default and the Issuer fails to cure such default within the time specified in clause (3) or (4) hereof, as applicable, after
receipt of such notice.
If
an Event of Default (other than an Event of Default relating to certain events of bankruptcy, insolvency or reorganization of the Issuer) occurs and is continuing, the Trustee by
notice to the Issuer or the holders of at least 25% in principal amount of outstanding notes by notice to the Issuer, with a copy to the Trustee, may declare the principal of, premium, if any, and
accrued but unpaid interest on all the notes to be due and payable. Upon such a declaration, such principal and interest will be due and payable immediately. If an Event of Default relating to certain
events of bankruptcy, insolvency or reorganization of the Issuer occurs, the principal of, premium, if any, and interest on all the notes will become immediately due and payable without any
declaration or other act on the part of the Trustee or any holders. Under certain circumstances, the holders of a majority in principal amount of outstanding notes may rescind any such acceleration
with respect to the notes and its consequences.
In
the event of any Event of Default specified in clause (5) of the first paragraph above, such Event of Default and all consequences thereof (excluding, however, any resulting
payment default) will be annulled, waived and rescinded, automatically and without any action by the Trustee or the holders of the notes, if within 20 days after such Event of Default arose the
Issuer delivers an Officers'
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Certificate
to the Trustee stating that (x) the Indebtedness or guarantee that is the basis for such Event of Default has been discharged, (y) the holders thereof have rescinded or
waived the acceleration, notice or action (as the case may be) giving rise to such Event of Default or (z) the default that is the basis for such Event of Default has been cured, it being
understood that in no event shall an acceleration of the principal amount of the notes as described above be annulled, waived or rescinded upon the happening of any such events.
In
case an Event of Default occurs and is continuing, the Trustee will be under no obligation to exercise any of the rights or powers under the indenture at the request or direction of
any of the holders unless such holders have offered to the Trustee indemnity or security satisfactory to it against any loss, liability or expense. Except to enforce the right to receive payment of
principal, premium (if any) or interest when due, no holder may pursue any remedy with respect to the indenture or the notes unless:
(1) such
holder has previously given the Trustee written notice that an Event of Default is continuing,
(2) holders
of at least 25% in principal amount of the outstanding notes have requested the Trustee to pursue the remedy,
(3) such
holders have offered the Trustee security or indemnity satisfactory to it against any loss, liability or expense,
(4) the
Trustee has not complied with such request within 60 days after the receipt of the request and the offer of security or indemnity, and
(5) the
holders of a majority in principal amount of the outstanding notes have not given the Trustee a direction inconsistent with such request within such 60-day period.
Subject
to certain restrictions, the holders of a majority in principal amount of outstanding notes are given the right to direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee. The Trustee, however, may refuse to follow any direction that conflicts with law or the indenture
or that the Trustee determines is unduly prejudicial to the rights of any other holder or that would involve the Trustee in personal liability. Prior to taking any action under the indenture, the
Trustee will be entitled to indemnification satisfactory to it against all losses and expenses caused by taking or not taking such action.
The
indenture provides that if a Default occurs and is continuing and is actually known to a Trust Officer of the Trustee, the Trustee must mail, or deliver electronically if the notes
are held by DTC, to each holder of the notes notice of the Default within the earlier of 90 days after it occurs or 30 days after it is actually known to a Trust Officer or written
notice of it is received by the Trustee. Except in the case of a Default in the payment of principal of, premium (if any) or interest on any note, the Trustee may withhold notice if and so long as it
determines that withholding notice is in the interests of the noteholders. In addition, the Issuer is required to deliver to the Trustee, annually, a certificate indicating whether the signers thereof
know of any Default that occurred during the previous year. The Issuer also is required to deliver to the Trustee, within 30 days after the occurrence thereof, written notice of any event which
would constitute certain Defaults, their status and what action the Issuer is taking or proposes to take in respect thereof.
Amendments and waivers
Subject to certain exceptions, the indenture, the notes and the Guarantees may be amended with the consent of the holders of a majority
in principal amount of the notes then outstanding and any past default or compliance with any provisions may be waived with the consent of the holders of a majority
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in
principal amount of the notes then outstanding. However, without the consent of each holder of an outstanding note affected, no amendment may:
(1) reduce
the amount of notes whose holders must consent to an amendment;
(2) reduce
the rate of or extend the time for payment of interest on any note;
(3) reduce
the principal of or change the Stated Maturity of any note;
(4) reduce
the premium payable upon the redemption of any note or change the time at which any note may be redeemed as described under
"
Optional redemption" above;
(5) make
any note payable in money other than that stated in such note;
(6) expressly
subordinate the notes or any Guarantee to any other Indebtedness of the Issuer or any Guarantor;
(7) impair
the right of any holder to receive payment of principal of, premium, if any, 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;
(8) make
any change in the amendment provisions which require each holder's consent or in the waiver provisions;
(9) amend
or waive the Issuer's obligation to redeem the notes through the special mandatory redemption in a manner that would materially adversely affect the holders of the
notes; or
(10) except
for any release contemplated by the third paragraph of "Guarantees", release all or substantially all of the Guarantors from their respective
Guarantees.
Without
the consent of any holder, the Issuer and the Trustee may amend the indenture, the notes or the Guarantees to cure any ambiguity, omission, mistake, defect or inconsistency, to
provide for the assumption by a Successor Company (with respect to the Issuer) of the obligations of the Issuer under the indenture and the notes, to provide for the assumption by a Successor Person
(with respect to any Guarantor) of the obligations of a Guarantor under the indenture and its Guarantee, 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), to add a Guarantee or collateral with respect to the notes, to release the Guarantee of a Guarantor as provided in the
indenture, to secure the notes, to add to the covenants of the Issuer for the benefit of the holders or to surrender any right or power conferred upon the Issuer, to make any change that does not
adversely affect the rights of any holder in any material respect, to conform the text of the indenture, Guarantees or the notes to any provision of the section entitled "Description of 2020 notes" in
the Offering Memorandum to the extent that such provision in such "Description of 2020 notes" was intended by the Issuer to be a verbatim recitation of a provision of the indenture, Guarantees or the
notes, as applicable, as stated in an Officers' Certificate of the Issuer, to comply with any requirement of the SEC in connection with the qualification of the indenture under the TIA or to effect
any provision of the indenture or to make changes to the indenture to provide for the issuance of additional notes.
The
consent of the noteholders is not necessary under the indenture to approve the particular form of any proposed amendment. It is sufficient if such consent approves the substance of
the proposed amendment.
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No personal liability of directors, officers, employees, managers and stockholders
No director, officer, employee, manager or incorporator of the Issuer, any Guarantor or any direct or indirect parent company of the
Issuer or any Guarantor and no holder of any Equity Interests in the Issuer, any Guarantor or any direct or indirect parent company of the Issuer or any Guarantor, as such, will have any liability for
any obligations of the Issuer or any Guarantor under the notes, the indenture or the Guarantees, as applicable, or for any claim based on, in respect of, or by reason of, such obligations or their
creation. Each holder of notes by accepting a note waives and releases all such liability. The waiver and release are part of the consideration for the issuance of the notes. The waiver may not be
effective to waive liabilities under the federal securities laws.
Transfer and exchange
A noteholder may transfer or exchange notes in accordance with the indenture. Upon any transfer or exchange, the registrar and the
Trustee may require a noteholder, among other things, to furnish appropriate endorsements and transfer documents and the Issuer may require a noteholder to pay any taxes payable on transfer that are
required by law and permitted by the indenture. The Issuer is not required to transfer or exchange any notes selected for redemption or to transfer or exchange any notes for a period of 15 days
prior to the mailing of a notice of redemption of notes to be redeemed. The notes will be issued in registered form and the registered holder of a note will be treated as the owner of such note for
all purposes.
The
Issuer will keep a register of holders of its notes at its registered office (the "Register"). Ownership in respect of notes issued by the Issuer passes solely upon registration of
the transfer of notes in the Register. In the case of a conflict between a register of notes held by an agent of the Issuer and the Register, the Register will prevail.
Satisfaction and discharge
The indenture will be discharged and will cease to be of further effect (except as to surviving rights and immunities of the Trustee
and rights of registration or transfer or exchange of notes, as expressly provided for in the indenture) as to all outstanding notes when:
(1) either
(a) all the notes theretofore authenticated and delivered (except lost, stolen or destroyed notes which have been replaced or paid and notes for whose
payment money has theretofore been deposited in trust or segregated and held in trust by the Issuer and thereafter repaid to the Issuer or discharged from such trust) have been delivered to the
Trustee for cancellation or (b) all of the notes (i) have become due and payable, (ii) will become due and payable at their Stated Maturity within one year or (iii) if
redeemable at the option of the Issuer, are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the
name, and at the expense, of the Issuer, and the Issuer has irrevocably deposited or caused to be deposited with the Trustee funds in an amount sufficient to pay and discharge the entire Indebtedness
on the notes not theretofore delivered to the Trustee for cancellation, for principal of, premium, if any, and interest on the notes to, but excluding, the date of deposit together with irrevocable
instructions from the Issuer directing the Trustee to apply such funds to the payment thereof at maturity or redemption, as the case may be;
(2) the
Issuer and/or the Guarantors have paid all other sums payable under the indenture; and
(3) the
Issuer has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel stating that all conditions precedent under the indenture relating to the
satisfaction and discharge of the indenture have been complied with.
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Defeasance
The Issuer at any time may terminate all of its obligations under the notes and the indenture with respect to the holders of the notes
("legal defeasance"), except for certain obligations, including those respecting the defeasance trust (as defined below) and obligations to register the transfer or exchange of the notes, to replace
mutilated, destroyed, lost or stolen notes and to maintain a registrar and paying agent in respect of the notes. The Issuer at any time may terminate its obligations under the covenants described
under "
Certain covenants" for the benefit of the holders of the notes, the operation of the cross-acceleration provision, the bankruptcy
provisions with respect to Significant Subsidiaries, the judgment default provision described under "
Defaults" (but only to the extent that
those provisions relate to the Defaults with respect to the notes) and the undertakings and covenants contained under "
Change of control"
and "
Merger, amalgamation, consolidation or sale of all or substantially all assets" ("covenant defeasance") for the benefit of the holders
of the notes. If the Issuer exercises its legal defeasance option or its covenant defeasance option, each Guarantor will be released from all of its obligations with respect to its Guarantee.
The
Issuer may exercise its legal defeasance option notwithstanding its prior exercise of the covenant defeasance option. If the Issuer exercises its legal defeasance option, payment of
the notes may not be accelerated because of an Event of Default with respect thereto. If the Issuer exercises its covenant defeasance option, payment of the notes may not be accelerated because of an
Event of Default specified in clause (3), (4), (5), (6) (with respect only to Significant Subsidiaries), (7) or (8) under
"
Defaults" or because of the failure of the Issuer to comply with clause (4) under
"
Merger, amalgamation, consolidation or sale of all or substantially all assets."
In
order to exercise the defeasance option, the Issuer must irrevocably deposit in trust (the "defeasance trust") with the Trustee money or U.S. Government Obligations for the payment of
principal, premium (if any) and interest on the notes to redemption or maturity, as the case may be, and must comply with certain other conditions, including delivery to the Trustee of (a) an
Opinion of Counsel to the effect that holders of the notes will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such deposit and defeasance and will be subject
to U.S. federal income tax on the same amount and in the same manner and at the same times as would have been the case if such deposit and defeasance had not occurred (and, in the case of legal
defeasance only, such Opinion of Counsel must be based on a ruling of the Internal Revenue Service or change in applicable U.S. federal income tax law) and (b) with respect to U.S. Government
Obligations or a combination of money and U.S. Government Obligations, a certificate from a nationally recognized firm of independent accountants, a nationally recognized investment bank or a
nationally recognized appraisal or valuation firm 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, premium (if any)
and interest on the notes to redemption or maturity, as the case may be;
provided
that upon any redemption that requires the payment of the Applicable
Premium, the amount deposited shall be sufficient for purposes of the indenture to the extent that an amount is deposited with the Trustee equal to the Applicable Premium calculated as of the earlier
of the date on which arrangements referred to in the succeeding
sentence are entered into and the date of the notice of redemption, with any deficit as of the date of the redemption only required to be deposited with the Trustee on or prior to the date of the
redemption. Notwithstanding the foregoing, the Opinion of Counsel required by the immediately preceding sentence with respect to a legal defeasance need not be delivered if all of the notes not
theretofore delivered to the Trustee for cancellation (x) have become due and payable or (y) will become due and payable at their Stated Maturity within one year under arrangements
satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Issuer.
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Concerning the trustee
U.S. Bank National Association is the Trustee under the indenture and will initially act as registrar and paying agent with regard to
the notes.
Governing law
The indenture and the notes are governed by, and construed in accordance with, the laws of the State of New York.
Certain definitions
"2023 Notes Indenture" means the indenture for the Initial 2023 Notes, dated as of February 23, 2015, between the Issuer and
U.S. Bank, National Association, as trustee, as
amended, restated, supplemented or otherwise modified from time to time in accordance with the requirements thereof.
"Acquired
Indebtedness" means, with respect to any specified Person:
(1) Indebtedness
of any other Person existing at the time such other Person is merged, consolidated or amalgamated with or into or became a Restricted Subsidiary of such
specified Person, and
(2) Indebtedness
secured by a Lien encumbering any asset acquired by such specified Person.
Acquired
Indebtedness will be deemed to have been Incurred, with respect to clause (1) of the preceding sentence, on the date such Person becomes a Restricted Subsidiary and, with
respect to clause (2) of the preceding sentence, on the date of consummation of such acquisition of such assets.
"Acquisition"
means the acquisition by Dollar Tree of Family Dollar pursuant to the Acquisition Agreement.
"Acquisition
Agreement" means the Agreement and Plan of Merger, dated as of July 27, 2014, by and among Family Dollar, Dollar Tree and Dime Merger Sub, Inc., as amended,
restated, supplemented or otherwise modified from time to time.
"Acquisition
Date" means the date of the consummation of the Acquisition.
"Acquisition
Documents" means the Acquisition Agreement and any other agreements or instruments contemplated thereby, in each case, as amended, restated, supplemented or otherwise
modified from time to time.
"Acquisition
Merger" means the merger of Dime Merger Sub, Inc. with and into Family Dollar pursuant to the Acquisition Agreement.
"Additional
Refinancing Amount" means, in connection with the Incurrence of any Refinancing Indebtedness, the aggregate principal amount of additional Indebtedness, Disqualified Stock or
Preferred Stock Incurred to pay accrued and unpaid interest, premiums (including tender premiums), expenses, underwriting discounts, commissions, defeasance costs and fees in respect thereof.
"Affiliate"
of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For
purposes of this definition, "control" (including, with correlative meanings, the terms "controlling," "controlled by" and "under common control with"), as used with respect to any Person, means the
possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or
otherwise.
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"Applicable
Premium" means, with respect to any note on any applicable redemption date, as determined by the Issuer, the greater of:
(1) 1%
of the then outstanding principal amount of the note; and
(2) the
excess, if any, of:
(a) the
present value at such redemption date of (i) the redemption price of the note, at March 1, 2017 (such redemption price being set forth in the
applicable table appearing above under "
Optional redemption
")
plus
(ii) all required
interest payments due on the note through March 1, 2017 (excluding accrued but unpaid interest), computed using a discount rate equal to the Treasury Rate as of such redemption date plus 50
basis points; over
(b) the
then outstanding principal amount of the note.
"Asset
Sale" means:
(1) the
sale, conveyance, transfer or other disposition (whether in a single transaction or a series of related transactions) of property or assets (including by way of
Sale/Leaseback Transactions) of the Issuer or any Restricted Subsidiary outside the ordinary course of business (each referred to in this definition as a "disposition"); or
(2) the
issuance or sale of Equity Interests (other than directors' qualifying shares and shares issued to foreign nationals or other third parties to the extent required by
applicable law) of any Restricted Subsidiary (other than to the Issuer or another Restricted Subsidiary) (whether in a single transaction or a series of related transactions),
in
each case other than:
(a) a
disposition of Cash Equivalents or obsolete, damaged or worn out property or equipment in the ordinary course of business;
(b) the
disposition of all or substantially all of the assets of the Issuer or any Guarantor in a manner permitted pursuant to the provisions described above under
"
Merger, amalgamation, consolidation or sale of all or substantially all assets" or any disposition that constitutes a Change of Control;
(c) any
Restricted Payment or Permitted Investment that is permitted to be made, and is made, under the covenant described above under
"
Certain covenantsLimitation on restricted payments";
(d) any
disposition of assets of the Issuer or any Restricted Subsidiary or issuance or sale of Equity Interests of any Restricted Subsidiary, which assets or Equity
Interests so disposed or issued in any single transaction or series of related transactions have an aggregate Fair Market Value (as determined in good faith by the Issuer) of less than
$25 million;
(e) any
disposition of property or assets, or the issuance of securities, by the Issuer or a Restricted Subsidiary to the Issuer or a Restricted Subsidiary;
(f) any
exchange of assets (including a combination of assets and Cash Equivalents) for assets related to a Similar Business of comparable or greater market value or
usefulness to the business of the Issuer and its Restricted Subsidiaries as a whole, as determined in good faith by the Issuer;
(g) foreclosure
or any similar action with respect to any property or other asset of the Issuer or any of the Restricted Subsidiaries;
(h) any
disposition of Equity Interests in, or Indebtedness or other securities of, an Unrestricted Subsidiary;
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(i) the
lease, assignment or sublease of any real or personal property in the ordinary course of business;
(j) any
sale of inventory or other assets in the ordinary course of business;
(k) any
grant in the ordinary course of business of any license of patents, trademarks, know-how or any other intellectual property;
(l) any
swap of assets, or lease, assignment or sublease of any real or personal property, in exchange for services (including in connection with any outsourcing
arrangements) of comparable or greater value or usefulness to the business of the Issuer and its Restricted Subsidiaries as a whole, as determined in good faith by the Issuer;
(m) a
transfer of assets of the type specified in the definition of "Securitization Financing" (or a fractional undivided interest therein), including by a Securitization
Subsidiary in a Securitization Financing, or any other disposition (including by capital contribution) of Permitted Securitization Facility Assets;
(n) [reserved];
(o) dispositions
in connection with Permitted Liens;
(p) any
disposition of Capital Stock of a Restricted Subsidiary pursuant to an agreement or other obligation with or to a Person (other than the Issuer or a Restricted
Subsidiary) from whom such Restricted Subsidiary was acquired or from whom such Restricted Subsidiary acquired its business and assets (having been newly formed in connection with such acquisition),
made as part of such acquisition and in each case comprising all or a portion of the consideration in respect of such sale or acquisition;
(q) the
disposition of any property in a Permitted Sale/Leaseback Transaction described in clause (i), (ii) or (iii) of the definition thereof;
(r) dispositions
of receivables in connection with the compromise, settlement or collection thereof in the ordinary course of business or in bankruptcy or similar
proceedings and exclusive of factoring or similar arrangements;
(s) any
surrender, expiration or waiver of contract rights or the settlement, release, recovery on or surrender of contract, tort or other claims of any kind; or
(t) dispositions
by the Issuer or any of the Restricted Subsidiaries to charitable foundations, not-for-profits or other similar organizations with an aggregate Fair Market
Value not to exceed $10 million in any calendar year.
"Attributable
Debt" means, as of any date of determination, as to Sale/Leaseback Transactions, the total obligation (discounted to present value at the rate of interest implicit in the
lease included in such transaction) of the lessee for rental payments (other than amounts required to be paid on account of property Taxes, maintenance, repairs, insurance, assessments, utilities,
operating and labor costs and other items which do not constitute payments for property rights) during the remaining portion of the term (including extensions which are at the sole option of the
lessor) of the lease included in such transaction.
"Attributable
Receivables Indebtedness" shall mean the principal amount of Indebtedness (other than any Indebtedness subordinated in right of payment owing by a Securitization Subsidiary
to a receivables seller or a receivables seller to another receivables seller in connection with the transfer, sale and/or pledge of Securitization Assets) which (i) if a Securitization
Financing is structured as a secured lending agreement or other similar agreement, constitutes the principal amount of such Indebtedness or (ii) if a Securitization Financing is structured as a
purchase agreement or other similar agreement, would be outstanding at such time under such Securitization Financing if the same were structured as a secured lending agreement rather than a purchase
agreement or such other similar agreement.
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"Bank Indebtedness" means any and all amounts payable under or in respect of (a) the Credit Agreement and the other Credit Agreement Documents, as amended,
restated, supplemented, waived, replaced (whether or not upon termination, and whether with the original lenders or otherwise), restructured, repaid, refunded, refinanced or otherwise modified in
whole or in part from time to time (including after termination of the Credit Agreement), including any agreement or indenture extending the maturity thereof, refinancing, replacing or otherwise
restructuring all or any portion of the Indebtedness under such agreement or agreements or indenture or indentures or any successor or replacement agreement or agreements or indenture or indentures or
increasing the amount loaned or issued thereunder or altering the maturity thereof, including principal, premium (if any), interest (including interest accruing on or after the filing of any petition
in bankruptcy or for reorganization relating to the Issuer whether or not a claim for post-filing interest is allowed in such proceedings), fees, charges, expenses, reimbursement obligations,
guarantees and all other amounts payable thereunder or in respect thereof and (b) whether or not the Indebtedness referred to in clause (a) remains outstanding, if designated by the
Issuer to be included in this definition, one or more (A) debt facilities or commercial paper facilities, providing for revolving credit loans, term loans, reserve-based loans, securitization
or receivables financing (including through the sale of receivables to lenders or to special purpose entities formed to borrow from lenders against such receivables) or letters of credit,
(B) debt securities, indentures or other forms of debt financing (including convertible or exchangeable debt instruments or bank guarantees or bankers' acceptances), or (C) instruments
or agreements evidencing any other Indebtedness, in each case, with the same or different borrowers or issuers and, in
each case, as amended, supplemented, modified, extended, restructured, renewed, refinanced, restated, replaced or refunded in whole or in part from time to time.
"Board
of Directors" means, as to any Person, the board of directors or managers, as applicable, of such Person or any direct or indirect parent of such Person (or, if such Person is a
partnership, the board of directors or other governing body of the general partner of such Person) or any duly authorized committee thereof.
"Business
Day" means a day other than a Saturday, Sunday or other day on which banking institutions are authorized or required by law to close in New York City.
"Capital
Markets Indebtedness" means any Indebtedness consisting of bonds, debentures, notes or other similar debt securities issued in (a) a public offering registered under the
Securities Act or (b) a private placement to institutional investors that is resold in accordance with Rule 144A or Regulation S of the Securities Act, whether or not it includes
registration rights entitling the holders of such debt securities to registration thereof with the SEC. The term "Capital Markets Indebtedness" (i) shall not include the notes (including, for
the avoidance of doubt any additional notes) and (ii) for the avoidance of doubt, shall not be construed to include any Indebtedness under the Credit Agreement or similar Indebtedness,
Capitalized Lease Obligation or recourse transfer of any financial asset or any other type of Indebtedness incurred in a manner not customarily viewed as a "securities offering."
"Capital
Stock" means:
(1) in
the case of a corporation, corporate stock or shares;
(2) in
the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock;
(3) in
the case of a partnership or limited liability company, partnership or membership interests (whether general or limited); and
(4) any
other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing
Person.
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"Capitalized
Lease Obligation" means, at the time any determination thereof is to be made, the amount of the liability in respect of a capital lease that would at such time be required
to be capitalized and reflected as a liability on a balance sheet (excluding the footnotes thereto) in accordance with GAAP;
provided
that all
obligations of any person that are or would be characterized as operating lease obligations in accordance with GAAP on July 27, 2014 (whether or not such operating lease obligations were in
effect on such date) shall continue to be accounted for as operating lease obligations (and not as Capitalized Lease Obligations) for purposes of the indenture regardless of any change in GAAP
following the Issue Date that would otherwise require such obligations to be recharacterized (on a prospective or retroactive basis or otherwise) as Capitalized Lease Obligations.
"Cash
Equivalents" means:
(1) U.S.
dollars, pounds sterling, euros, or the national currency of any member state in the European Union or such local currencies held from time to time in the ordinary
course of business;
(2) direct
obligations of the United States or any member of the European Union or any agency thereof or obligations guaranteed by the United States or any member of the
European Union or any agency thereof, in each case with maturities not exceeding two years from the date of acquisition thereof;
(3) time
deposit accounts, certificates of deposit, money market deposits, banker's acceptances and other bank deposits maturing within 180 days of the date of
acquisition thereof issued by a bank or trust company having capital, surplus and undivided profits in excess of $250 million and whose long-term debt, or whose parent holding company's
long-term debt, is rated at least A by S&P or A2 by Moody's (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));
(4) repurchase
obligations with a term of not more than 180 days for underlying securities of the types described in clause (2) above entered into with a bank
meeting the qualifications described in clause (3) above;
(5) commercial
paper, maturing not more than one year after the date of acquisition, issued by a corporation (other than an Affiliate of the Issuer) with a rating at the
time as of which any investment therein is made of P-1 (or higher) according to Moody's, or A-1 (or higher) according to S&P (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));
(6) securities
with maturities of two years or less from the date of acquisition, issued or fully guaranteed by any State, commonwealth or territory of the United States, or
by any political subdivision or taxing authority thereof, and rated at least A by S&P or A by Moody's (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));
(7) shares
of mutual funds whose investment guidelines restrict 95% of such funds' investments to those satisfying the provisions of clauses (2) through (6);
(8) money
market funds that (i) comply with the criteria set forth in Rule 2a-7 under the Investment Company Act of 1940, (ii) are rated AAA by S&P or
Aaa by Moody's and (iii) have portfolio assets of at least $1,000 million;
(9) time
deposit accounts, certificates of deposit, money market deposits, banker's acceptances and other bank deposits in an aggregate face amount not in excess of 0.5% of
the total assets of the Issuer and its Restricted Subsidiaries, on a consolidated basis, as of the end of the Issuer's most recently completed fiscal year; and
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(10) instruments
equivalent to those referred to in clauses (2) through (9) above denominated in any foreign currency comparable in credit quality and tenor to
those referred to above and commonly used by corporations for cash management purposes in any jurisdiction outside the United States to the extent reasonably required in connection with any business
conducted by the Issuer or any Restricted Subsidiary organized in such jurisdiction.
"cash
management services" means cash management services for collections, treasury management services (including controlled disbursement, overdraft, automated clearing house fund
transfer services, return items and interstate depository network services), any demand deposit, payroll, trust or operating account relationships, commercial credit cards, merchant card, purchase or
debit cards, non-card e-payables services, and other cash management services, including electronic funds transfer services, lockbox services, stop payment services and wire transfer services.
"CFC"
means a "controlled foreign corporation" under section 957 of the Code.
"Change
of Control" means the occurrence of any of the following:
(1) the
sale, lease or transfer (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all the assets of the
Issuer and its Subsidiaries, taken as a whole, to any Person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision) other
than to the Issuer or any of its Subsidiaries; or
(2) the
Issuer becomes aware (by way of a report or any other filing pursuant to Section 13(d) of the Exchange Act, proxy, vote, written notice or otherwise) of the
acquisition by any Person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision), including any group acting for the
purpose of acquiring, holding or disposing of securities (within the meaning of Rule 13d-5(b)(1) under the Exchange Act), in a single transaction or in a related series of transactions, by way
of merger, consolidation, amalgamation or other business combination or purchase of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act, or any successor provision),
of more than 50% of the total voting power of the Voting Stock of the Issuer, in each case, other than an acquisition where the holders of the Voting Stock of the Issuer as of immediately prior to
such acquisition hold 50% or more of the Voting Stock of the ultimate parent of the Issuer or successor thereto immediately after such acquisition
(
provided
no holder of the Voting Stock of the Issuer as of immediately prior to such acquisition owns, directly or indirectly, more than 50% of the
voting power of the Voting Stock of the Issuer immediately after such acquisition (other than any Person who previously acquired Equity Interests of the Issuer in a transaction constituting a Change
of Control as to which a Change of Control Offer was consummated)), in which case, upon the consummation of any such transaction, "Change of Control" shall thereafter include any Change of Control of
such ultimate parent of the Issuer or successor thereto.
"Code"
means the Internal Revenue Code of 1986, as amended.
"consolidated"
means, with respect to any Person, such Person consolidated with its Restricted Subsidiaries, and shall not include any Unrestricted Subsidiary, but the interest of such
Person in an Unrestricted Subsidiary will be accounted for as an Investment.
"Consolidated
Interest Expense" means, with respect to any Person for any period, the sum, without duplication, of:
(1) gross
interest expense of such Person for such period on a consolidated basis, including (a) the amortization of debt discounts, (b) the amortization of
all fees (including fees with respect to Hedging
Agreements) payable in connection with the Incurrence of Indebtedness to the extent included in interest expense, (c) the portion of any payments or accruals with respect to
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Capitalized
Lease Obligations allocable to interest expense and (d) net payments and receipts (if any) pursuant to interest rate Hedging Obligations, and excluding unrealized mark-to-market
gains and losses attributable to such Hedging Obligations, additional interest (if any) in respect of the notes, amortization of deferred financing fees and expensing of any bridge or other financing
fees;
plus
(2) capitalized
interest of such Person, whether paid or accrued;
plus
(3) commissions,
discounts, yield and other fees and charges incurred for such period, including any losses on sales of receivables and related assets, in connection with
any receivables financing of such Person or any of its Restricted Subsidiaries that are payable to Persons other than the Issuer and its Restricted Subsidiaries.
"Consolidated
Net Income" means, with respect to any Person for any period, the aggregate Net Income of such Person and its Subsidiaries for such period, on a consolidated basis, in
accordance with GAAP;
provided
,
however
, that, without duplication:
(1) any
net after-Tax extraordinary, nonrecurring or unusual gains or losses (less all fees and expenses relating thereto) or expenses or charges shall be excluded;
(2) effects
of purchase accounting adjustments (including the effects of such adjustments pushed down to such Person and such Subsidiaries) in amounts required or permitted
by GAAP, resulting from the application of purchase accounting in relation to any consummated acquisition or the amortization or write-off of any amounts thereof, net of Taxes, shall be excluded;
(3) the
cumulative effect of a change in accounting principles (which shall in no case include any change in the comprehensive basis of accounting) during such period shall
be excluded;
(4) (a)
any net after-Tax income or loss from disposed, abandoned, transferred, closed or discontinued operations, (b) any net after-Tax gain or loss on disposal of
disposed, abandoned, transferred, closed or discontinued operations and (c) any net after-Tax gains or losses (less all fees and expenses or charges relating thereto) attributable to business
dispositions or asset dispositions other than in the ordinary course of business (as determined in good faith by the Issuer) shall be excluded;
(5) any
net after-Tax gains or losses, or any subsequent charges or expenses (less all fees and expenses or charges relating thereto), attributable to the early
extinguishment of Indebtedness, Hedging Obligations or other derivative instruments shall be excluded;
(6) the
Net Income for such period of any Person that is not a Subsidiary of such Person, or is an Unrestricted Subsidiary, or that is accounted for by the equity method of
accounting, shall be included only to the extent of the amount of dividends or distributions or other payments actually paid in cash or Cash Equivalents (or to the extent converted into cash or Cash
Equivalents) to the referent Person or a Restricted Subsidiary thereof in respect of such period;
(7) solely
for the purpose of calculating the Cumulative Credit, the Net Income for such period of any Subsidiary of such Person shall be excluded to the extent that the
declaration or payment of dividends or similar distributions by such Subsidiary of its Net Income is not at the date of determination permitted without any prior governmental approval (which has not
been obtained) or, directly or indirectly, by the operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to
such subsidiary or its equityholders, unless such restrictions with respect to the payment of dividends or similar distributions have been legally waived;
provided
that the Consolidated Net Income of
such Person shall be increased by the amount of dividends or other distributions or other payments actually
paid in cash (or converted into cash) by any such Subsidiary to such Person or a
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Subsidiary
of such Person (subject to the provisions of this clause (7)), to the extent not already included therein;
(8) any
impairment charge or asset write-off and amortization of intangibles, in each case pursuant to GAAP, shall be excluded;
(9) any
non-cash expense realized or resulting from stock option plans, employee benefit plans or post-employment benefit plans, or grants or sales of stock, stock
appreciation or similar rights, stock options, restricted stock, Preferred Stock or other rights shall be excluded;
(10) any
(a) non-cash compensation charges or (b) non-cash costs or expenses realized in connection with or resulting from stock appreciation or similar
rights, stock options or other rights existing on the Acquisition Date of officers, directors and employees, in each case of such Person or any of its Subsidiaries, shall be excluded;
(11) accruals
and reserves that are established or adjusted within 12 months after the Acquisition Date (excluding any such accruals or reserves to the extent that
they represent an accrual of or reserve for cash expenses in any future period or amortization of a prepaid cash expense that was paid in a prior period) and that are so required to be established or
adjusted in accordance with GAAP or as a result of adoption or modification of accounting policies shall be excluded;
(12) the
Net Income of any person and its Subsidiaries shall be calculated by deducting the income attributable to, or adding the losses attributable to, the minority equity
interests of third parties in any non-Wholly Owned Subsidiary;
(13) any
unrealized gains and losses related to currency remeasurements of Indebtedness, and any unrealized net loss or gain resulting from hedging transactions for interest
rates, commodities or currency exchange risk, shall be excluded;
(14) to
the extent covered by insurance and actually reimbursed, or, so long as such Person has made a determination that there exists reasonable evidence that such amount
will in fact be reimbursed by the insurer and only to the extent that such amount is (a) not denied by the applicable carrier in writing within 180 days and (b) in fact reimbursed
within 365 days of the date of such evidence (with a deduction for any amount so excluded to the extent not so reimbursed within 365 days), expenses with respect to liability or casualty
events or business interruption shall be excluded; and
(15) non-cash
charges for deferred Tax asset valuation allowances shall be excluded (except to the extent reversing a previously recognized increase to Consolidated Net
Income).
"Consolidated
Total Indebtedness" means, as of any date of determination, the sum of (without duplication) (i) all Indebtedness of the type set forth in clauses (1), (2),
(5) (to the extent related to any Indebtedness that would otherwise constitute Consolidated Total Indebtedness), (6), (8) (other than letters of credit, to the extent undrawn), (9),
(11) (to the extent related to any Indebtedness that would otherwise constitute Consolidated Total Indebtedness) and (12) of the definition of "Indebtedness" and (ii) the amount
of all obligations with respect to the redemption, repayment or other repurchase of
(x) any Disqualified Stock (excluding accrued dividends that have not increased the liquidation preference of such Disqualified Stock) of the Issuer and its Restricted Subsidiaries or
(y) any Preferred Stock of any Restricted Subsidiary that is not a Guarantor, in each case determined on a consolidated basis on such date;
provided
that the amount of any Indebtedness with respect
to which the applicable obligors have entered into currency hedging arrangements shall be
calculated giving effect to such currency hedging arrangements.
"Consolidated
Total Net Leverage Ratio" means, with respect to any Person, at any date, the ratio of (i) Consolidated Total Indebtedness of such Person and its Restricted
Subsidiaries as of such date of
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calculation
(determined on a consolidated basis in accordance with GAAP) less the Unrestricted Cash Amount as of such date of determination to (ii) EBITDA of such Person for the four full
fiscal quarters for which internal financial statements are available immediately preceding such date.
In
the event that the Issuer or any such Subsidiary Incurs, repays, repurchases or redeems any Indebtedness or issues, repurchases or redeems any Disqualified Stock or Preferred Stock
subsequent to the commencement of the period for which the Consolidated Total Net Leverage Ratio is being calculated but prior to the event for which the calculation of the Consolidated Total Net
Leverage Ratio is made (the "Consolidated Total Net Leverage Calculation Date"), then the Consolidated Total Net Leverage Ratio shall be calculated giving
pro
forma
effect to such Incurrence, repayment, repurchase or redemption of Indebtedness, or such issuance, repurchase or redemption of Disqualified Stock or Preferred Stock, as if
the same had occurred at the beginning of the applicable four-quarter period.
For
purposes of making the computation referred to above, Investments (or series of related Investments) in excess of $25 million, acquisitions, dispositions, mergers,
amalgamations, consolidations and discontinued operations (as determined in accordance with GAAP), in each case with respect to an operating unit of a business, and any operational changes, business
realignment projects or initiatives, restructurings or reorganizations that the Issuer or any Restricted Subsidiary has determined to make and/or made during the four-quarter reference period or
subsequent to such reference period and on or prior to or simultaneously with the Consolidated Total Net Leverage Calculation Date (each, for purposes of this definition, a "pro forma event") shall be
calculated on a
pro forma
basis assuming that all such Investments, acquisitions, dispositions, mergers, amalgamations, consolidations, discontinued
operations and other operational changes, business realignment projects or initiatives, restructurings or reorganizations (and the change of any associated fixed charge obligations and the change in
EBITDA resulting therefrom) had occurred on the first day of the four-quarter reference period. If since the beginning of such period any Person that subsequently became a Restricted Subsidiary or was
merged with or into the Issuer or any Restricted Subsidiary since the beginning of such period shall have made any Investment, acquisition, disposition, merger, consolidation, amalgamation,
discontinued operation, operational change, business realignment project or initiative, restructuring or reorganization, in each
case with respect to an operating unit of a business, that would have required adjustment pursuant to this definition, then the Consolidated Total Net Leverage Ratio shall be calculated giving
pro forma
effect thereto for such period as if such Investment, acquisition, disposition, discontinued operation, merger, amalgamation, consolidation,
operational change, business realignment project or initiative, restructuring or reorganization had occurred at the beginning of the applicable four-quarter period. If since the beginning of such
period any Restricted Subsidiary is designated an Unrestricted Subsidiary or any Unrestricted Subsidiary is designated a Restricted Subsidiary, then the Consolidated Total Net Leverage Ratio shall be
calculated giving
pro forma
effect thereto for such period as if such designation had occurred at the beginning of the applicable four-quarter period.
For
purposes of this definition, whenever
pro forma
effect is to be given to any
pro forma
event, the
pro forma
calculations shall be made in good faith by a responsible financial or accounting officer of the Issuer. Any such
pro forma
calculation may include adjustments appropriate, in the reasonable good faith determination of the Issuer as set forth in an Officers'
Certificate, to reflect operating expense reductions and other operating improvements or synergies reasonably expected to result from the applicable event within 12 months of the date the
applicable event is consummated and which are expected to have a continuing impact and are factually supportable;
provided
that the aggregate amount of
adjustments in respect of
pro forma
operating improvements or synergies that do not comply with Article 11 of Regulation S-X for any four
quarter period (the "Non-S-X Adjustment Amount") shall not exceed 20% of EBITDA for such period prior to giving effect to the Non-S-X Adjustment Amount for such period.
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For
purposes of this definition, any amount in a currency other than U.S. dollars will be converted to U.S. dollars based on the average exchange rate for such currency for the most
recent twelve month period immediately prior to the date of determination in a manner consistent with that used in calculating EBITDA for the applicable period.
"Credit
Agreement" means (i) the Credit Agreement, entered into in connection with the Acquisition, among the Issuer and the agents, lenders or other parties thereto from time to
time, as amended, restated, supplemented, waived, replaced (whether or not upon termination, and whether with the original lenders or otherwise), restructured, repaid, refunded, refinanced or
otherwise modified in whole or in part from time to time, including any agreement or indenture extending the maturity thereof, refinancing, replacing or otherwise restructuring all or any portion of
the Indebtedness under such agreement or agreements or indenture or indentures or any successor or replacement agreement or agreements or indenture or indentures or increasing the amount loaned or
issued thereunder or altering the maturity thereof (except to the extent any such refinancing, replacement or restructuring is designated by the Issuer to not be included in the definition of "Credit
Agreement") and (ii) whether or not any credit agreement referred to in clause (i) remains outstanding, if designated by the Issuer to be included in the definition of "Credit
Agreement," one or more (A) debt facilities or commercial paper facilities, providing for revolving credit loans, term loans, securitization or receivables financing (including through the sale
of receivables to lenders or to special purpose entities formed to borrow
from lenders against such receivables) or letters of credit, (B) debt securities, indentures or other forms of debt financing (including convertible or exchangeable debt instruments or bank
guarantees or bankers' acceptances), or (C) instruments or agreements evidencing any other Indebtedness, in each case, with the same or different borrowers or issuers and, in each case, as
amended, supplemented, modified, waived, extended, restructured, repaid, renewed, refinanced, restated, replaced (whether or not upon termination, and whether with the original lenders or otherwise)
or refunded in whole or in part from time to time.
"Credit
Agreement Documents" means the collective reference to any Credit Agreement, any notes issued pursuant thereto and the guarantees thereof, and the collateral documents
(including, without limitation, intercreditor agreements) relating thereto, as amended, supplemented, restated, renewed, refunded, replaced (whether or not upon termination, and whether with the
original lenders or otherwise), restructured, repaid, refinanced or otherwise modified, in whole or in part, from time to time.
"Default"
means any event which is, or after notice or passage of time or both would be, an Event of Default.
"Designated
Non-cash Consideration" means the Fair Market Value (as determined in good faith by the Issuer) of non-cash consideration received by the Issuer or a Restricted Subsidiary in
connection with an Asset Sale that is so designated as Designated Non-cash Consideration pursuant to an Officers' Certificate of the Issuer, setting forth such valuation, less the amount of cash or
Cash Equivalents received in connection with a subsequent disposition of such Designated Non-cash Consideration.
"Designated
Preferred Stock" means Preferred Stock of the Issuer or any direct or indirect parent of the Issuer (other than Disqualified Stock), that is issued for cash (other than to
the Issuer or any of its Subsidiaries or an employee stock ownership plan or trust established by the Issuer or any of its Subsidiaries) and is so designated as Designated Preferred Stock, pursuant to
an Officers' Certificate, on the issuance date thereof.
"Disqualified
Stock" means, with respect to any Person, any Equity Interests of such Person which, by its terms (or by the terms of any security into which it is convertible or for which
it is redeemable or exchangeable), or upon the happening of any event:
(1) matures
or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise,
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(2) is
convertible or exchangeable for Indebtedness or Disqualified Stock of such Person or any of its Restricted Subsidiaries, or
(3) is
redeemable at the option of the holder thereof, in whole or in part,
in
each case prior to 91 days after the earlier of the maturity date of the notes or the date the notes are no longer outstanding and other than as a result of a change of control or asset
sale;
provided
,
however
, that only the portion of Equity Interests which so matures or is mandatorily
redeemable, is so convertible or exchangeable or is so redeemable at the option of the holder thereof prior to such date shall be deemed to be Disqualified Stock;
provided
,
further
,
however,
that if such Equity
Interests are issued to any employee or to any plan for the benefit of employees of the Issuer or its Subsidiaries or direct or indirect parent entity or by any such plan to such employees, such
Equity Interests shall not constitute Disqualified Stock solely because they may be required to be repurchased by such Person in order to satisfy applicable statutory or regulatory obligations or as a
result of such employee's termination, death or disability;
provided
,
further
, that any class of Equity
Interests of such Person that by its terms authorizes such Person to satisfy its obligations thereunder by delivery of Equity Interests that are not Disqualified Stock shall not be deemed to be
Disqualified Stock.
"Domestic
Subsidiary" means a Restricted Subsidiary that is not a Foreign Subsidiary.
"EBITDA"
means, with respect to any Person for any period, the Consolidated Net Income of such Person and its Restricted Subsidiaries for such period
plus
:
(1) the
sum of, without duplication, in each case, to the extent deducted in calculating or otherwise reducing Consolidated Net Income for such period:
(a) provision
for Taxes based on income, profits or capital of such Person and its Restricted Subsidiaries for such period, without duplication, including, without
limitation, state franchise and similar Taxes, and foreign withholding Taxes (including penalties and interest related to Taxes or arising from Tax examination);
plus
(b) (x)
Consolidated Interest Expense of such Person and its Restricted Subsidiaries for such period and (y) all cash dividend payments (excluding items eliminated in
consolidation) on any series of preferred stock of any Restricted Subsidiary of such Person or any Disqualified Stock of such Person and its Restricted Subsidiaries;
plus
(c) depreciation,
amortization (including amortization of intangibles, deferred financing fees and actuarial gains and losses related to pensions and other post-employment
benefits, but excluding amortization of prepaid cash expenses that were paid in a prior period) and other non-cash expenses (excluding any such non-cash charges or expenses to the extent that it
represents an accrual of or reserve for cash expenses in any future period or amortization of a prepaid cash expense that was paid in a prior period) of such Person and its Restricted Subsidiaries for
such period;
plus
(d) any
costs or expenses incurred pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement or any stock
subscription or shareholder agreement, to the extent that such costs or expenses are funded with cash proceeds contributed to the capital of such Person or net cash proceeds of an issuance of Equity
Interests of the Issuer (other than Disqualified Stock) solely to the extent that such net cash proceeds are excluded from the calculation of the Cumulative Credit;
plus
(e) any
non-cash losses related to non-operational hedging, including, without limitation, resulting from hedging transactions for interest rate or currency exchange risks
associated with the notes, the Credit Agreement or the Existing Family Dollar Notes;
minus
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(2) the
sum of, without duplication, in each case, to the extent added back in or otherwise increasing Consolidated Net Income for such period:
(a) non-cash
items increasing such Consolidated Net Income for such period (excluding the recognition of deferred revenue or any non-cash items which represent the reversal
of any accrual of, or reserve for, anticipated cash charges in any prior period and any items for which cash was received in any prior period);
plus
(b) any
non-cash gains related to non-operational hedging, including, without limitation, resulting from hedging transactions for interest rate or currency exchange risks
associated with the notes, the Credit Agreement or the Existing Family Dollar Notes.
Notwithstanding
the preceding, the provision for Taxes based on the income or profits of, the Consolidated Interest Expense of, the depreciation and amortization and other non-cash
expenses or non-cash items of and the restructuring charges or expenses of, a Restricted Subsidiary (other than any Wholly Owned Subsidiary) of such Person will be added to (or subtracted from, in the
case of non-cash items described in clause (b) above) Consolidated Net Income to compute EBITDA (A) in the same proportion that the Net Income of such Restricted Subsidiary was added to
compute such Consolidated Net Income of such Person, and (B) only to the extent that a corresponding amount of the Net Income of such Restricted Subsidiary would be permitted at the date of
determination to be dividended or distributed to such Person by such Restricted Subsidiary without prior governmental approval (that has not been obtained), and without direct or indirect restriction
pursuant to the terms of its charter and all agreements, instruments, judgments, decrees, orders, statutes, rules and governmental regulations applicable to that Restricted Subsidiary or its
stockholders.
"Equity
Interests" means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for,
Capital Stock).
"Equity
Offering" means any public or private sale after the Issue Date of common Capital Stock or Preferred Stock of the Issuer or any direct or indirect parent of the Issuer, as
applicable (other than Disqualified Stock), other than:
(1) public
offerings with respect to the Issuer's or such direct or indirect parent's Capital Stock registered on Form F-4, S-4 or Form S-8;
(2) issuances
to any Subsidiary of the Issuer; and
(3) any
such public or private sale that constitutes an Excluded Contribution.
"Exchange
Act" means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.
"Excluded
Contributions" means the Cash Equivalents or other assets (valued at their Fair Market Value as determined in good faith by the Issuer) received by the Issuer after the
Acquisition Date from:
(1) contributions
to its common equity capital, and
(2) the
sale (other than to a Subsidiary of the Issuer or to any Subsidiary management equity plan or stock option plan or any other management or employee benefit plan or
agreement) of Capital Stock (other than Disqualified Stock and Designated Preferred Stock) of the Issuer, in each case designated as Excluded Contributions pursuant to an Officers' Certificate.
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"Excluded Subsidiary" means (a) each Unrestricted Subsidiary, (b) each Subsidiary that is prohibited from guaranteeing the notes by any requirement
of law or that would require consent, approval, license or authorization of a Governmental Authority to guarantee the notes (unless such consent, approval, license or authorization has been received),
(c) each Subsidiary that is prohibited by any applicable contractual requirement from guaranteeing the notes on the Acquisition Date or at the time such Subsidiary becomes a Subsidiary (to the
extent not incurred in connection with becoming a Subsidiary and in each case for so long as such restriction or any replacement or renewal thereof is in effect), (d) any Securitization
Subsidiary, (e) any Insurance Subsidiary, (f) any direct or indirect Domestic Subsidiary of any Foreign Subsidiary, (g) any Domestic Subsidiary that owns no material assets
(directly or through its Subsidiaries) other than Equity Interests of one or more Foreign Subsidiaries that are CFCs (a "FSHCO") and (h) any Domestic Subsidiary that owns no material assets
(directly or through its Subsidiaries) other than Equity Interests of one or more FSHCOs.
"Existing
Dollar Tree Notes" means the 4.03% Series A Senior Notes due September 16, 2020, 4.63% Series B Senior Notes due September 16, 2023 and 4.78%
Series C Senior Notes due September 16, 2025 of Dollar Tree Stores, Inc., each issued pursuant to the Existing Dollar Tree Notes Purchase Agreement.
"Existing
Dollar Tree Notes Purchase Agreement" means the Note Purchase Agreement, dated as of September 16, 2013, among Dollar Tree Stores, Inc., Dollar Tree, and the
purchasers named therein, as amended, modified or supplemented from time to time.
"Existing
Family Dollar Notes" means the 5.00% Senior Notes due 2021 of Family Dollar issued pursuant to the Existing Family Dollar Notes Indenture.
"Existing
Family Dollar Notes Indenture" means the Indenture, dated as of January 28, 2011, among Family Dollar and U.S. Bank National Association, as trustee, as amended,
modified or supplemented from time to time (including by, without limitation, the First Supplemental Indenture thereto, dated as of January 28, 2011).
"Fair
Market Value" means, with respect to any asset or property, the price which could be negotiated in an arm's-length transaction, for cash, between a willing seller and a willing and
able buyer, neither of whom is under undue pressure or compulsion to complete the transaction.
"Family
Dollar" means Family Dollar Stores, Inc. and any successors thereto.
"Financial
Officer" of any Person shall mean the Chief Financial Officer, principal accounting officer, Treasurer, Assistant Treasurer, Controller or any Director or other executive
responsible for the financial affairs of such Person.
"Fixed
Charge Coverage Ratio" means, with respect to any Person for any period, the ratio of EBITDA of such Person for such period to the Fixed Charges of such Person for such period.
In
the event that the Issuer or any of the Restricted Subsidiaries Incurs, repays, repurchases or redeems any Indebtedness (other than in the case of any Securitization Financing, in
which case interest expense shall be computed based upon the average daily balance of such Indebtedness during the applicable period) or issues, repurchases or redeems Disqualified Stock or Preferred
Stock subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated but prior to the event for which the calculation of the Fixed Charge Coverage Ratio is
made (the "Fixed Charge Calculation Date"), then the Fixed Charge Coverage Ratio shall be calculated giving
pro forma
effect to such Incurrence,
repayment, repurchase or redemption of Indebtedness, or such issuance, repurchase or redemption of Disqualified Stock or Preferred Stock, as if the same had occurred at the beginning of the applicable
four-quarter period;
provided
that the Issuer may elect pursuant to an Officers' Certificate delivered to the Trustee to treat all or any portion of the
commitment under any Indebtedness as being Incurred at such time, in which case any subsequent
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Incurrence
of Indebtedness under such commitment shall not be deemed, for purposes of this calculation, to be an Incurrence at such subsequent time.
The
Fixed Charge Coverage Ratio shall also be subject to the adjustments described in clause (2)(A) of the third paragraph of the covenant described under "Certain
covenantsLimitation on incurrence of indebtedness and issuance of disqualified stock and preferred stock" and, for purposes of the first paragraph of "Limitation on
incurrence of indebtedness and issuance of disqualified stock and preferred stock" only, clause (2)(B) of the third paragraph of the covenant described under "Certain
covenantsLimitation on incurrence of indebtedness and issuance of disqualified stock and preferred stock."
For
purposes of making the computation referred to above, Investments (or series of related Investments) in excess of $25 million, acquisitions, dispositions, mergers,
amalgamations, consolidations and discontinued operations (as determined in accordance with GAAP), in each case with respect to an operating unit of a business, and any operational changes, business
realignment projects or initiatives, restructurings or reorganizations that the Issuer or any Restricted Subsidiary has determined to make and/or made during the four-quarter reference period or
subsequent to such reference period and on or prior to or simultaneously with the Fixed Charge Calculation Date (each, for purposes of this definition, a "pro forma event") shall be calculated on a
pro forma
basis assuming that all such Investments, acquisitions, dispositions, mergers, amalgamations, consolidations, discontinued operations and
other operational changes, business realignment projects or initiatives, restructurings or reorganizations (and the change of any associated fixed charge obligations and the change in EBITDA resulting
therefrom) had occurred on the first day of the four-quarter reference period. If since the beginning of such period any Person that subsequently became a Restricted Subsidiary or was merged with or
into the Issuer or any Restricted Subsidiary since the beginning of such period shall have made any Investment, acquisition, disposition, merger, consolidation, amalgamation, discontinued operation,
operational change, business realignment project or initiative, restructuring or reorganization, in each case with respect to an operating unit of a business, that would have required adjustment
pursuant to this definition, then the Fixed Charge Coverage Ratio shall be calculated giving
pro forma
effect thereto for such period as if such
Investment, acquisition, disposition, discontinued operation, merger, amalgamation, consolidation, operational change, business realignment project or initiative, restructuring or reorganization had
occurred at the beginning of the applicable four-quarter period. If since the beginning of such period any Restricted Subsidiary is designated an Unrestricted Subsidiary or any Unrestricted Subsidiary
is designated a Restricted Subsidiary, then the Fixed Charge Coverage Ratio shall be calculated giving
pro forma
effect thereto for such period as if
such designation had occurred at the beginning of the applicable four-quarter period.
For
purposes of this definition, whenever
pro forma
effect is to be given to any
pro forma
event, the
pro forma
calculations shall be made in good faith by a responsible financial or accounting officer of the Issuer. Any such
pro forma
calculation may include adjustments appropriate, in the reasonable good faith determination of the Issuer as set forth in an Officers'
Certificate, to reflect operating expense reductions and other operating improvements or synergies reasonably expected to result from the
applicable event within 12 months of the date the applicable event is consummated and which are expected to have a continuing impact and are factually supportable;
provided
that the Non-S-X
Adjustment Amount shall not exceed 20% of EBITDA for such period prior to giving effect to the Non- S-X Adjustment Amount for
such period.
If
any Indebtedness bears a floating rate of interest and is being given
pro forma
effect, the interest on such Indebtedness shall be
calculated as if the rate in effect on the Fixed Charge Calculation Date had been the applicable rate for the entire period (taking into account any Hedging Obligations applicable to such Indebtedness
if such Hedging Obligation has a remaining term in excess of 12 months). Interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by a
responsible financial or accounting officer of the Issuer to be the rate of
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interest
implicit in such Capitalized Lease Obligation in accordance with GAAP. For purposes of making the computation referred to above, interest on any Indebtedness under a revolving credit facility
computed on a
pro forma
basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period. Interest on
Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a Eurocurrency interbank offered rate, or other rate, shall be deemed to have been
based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Issuer may designate.
For
purposes of this definition, any amount in a currency other than U.S. dollars will be converted to U.S. dollars based on the average exchange rate for such currency for the most
recent twelve month period immediately prior to the date of determination in a manner consistent with that used in calculating EBITDA for the applicable period.
"Fixed
Charges" means, with respect to any Person for any period, the sum, without duplication, of: (1) Consolidated Interest Expense (excluding amortization or write-off of
deferred financing costs) of such Person and its Restricted Subsidiaries for such period and (2) all cash dividend payments (excluding items eliminated in consolidation) on any series of
Preferred Stock or Disqualified Stock of such Person and its Restricted Subsidiaries.
"Foreign
Subsidiary" means a Restricted Subsidiary not organized or existing under the laws of the United States of America or any state thereof or the District of Columbia.
"GAAP"
means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of
Certified Public
Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been approved by a significant segment of the
accounting profession, which are in effect from time to time, it being understood that, for purposes of the indenture, all references to codified accounting standards specifically named in the
indenture shall be deemed to include any successor, replacement, amended or updated accounting standard under GAAP.
"Governmental
Authority" means any federal, state, local or foreign court or governmental agency, authority, instrumentality or regulatory or legislative body.
"guarantee"
means a guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business), direct or indirect, in any manner (including,
without limitation, letters of credit and reimbursement agreements in respect thereof), of all or any part of any Indebtedness or other obligations. The amount of any guarantee shall be deemed to be
an amount equal to the stated or determinable amount of the Indebtedness in respect of which such guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in
respect thereof as determined by such person in good faith.
"Guarantee"
means any guarantee of the obligations of the Issuer under the indenture and the notes by any Guarantor in accordance with the provisions of the indenture.
"Guarantor"
means (x) each Subsidiary of the Issuer that provides a Guarantee as of the Acquisition Date and (y) any Subsidiary of the Issuer that Incurs a Guarantee;
provided
that upon the release or
discharge of such Person from its Guarantee in accordance with the indenture, such Person shall cease to be a
Guarantor.
"Hedging
Agreement" shall mean any agreement with respect to any swap, forward, future or derivative transaction, or option or similar agreement involving, or settled by reference to,
one or more rates, currencies, commodities, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value, or credit
spread transaction, repurchase transaction, reserve repurchase transaction, securities lending transaction, weather index
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transaction,
spot contracts, fixed price physical delivery contracts, or any similar transaction or any combination of these transactions, in each case of the foregoing, whether or not exchange
traded;
provided
, that no phantom stock or similar plan providing for payments only on account of services
provided by current or former directors, officers, employees or consultants of the Issuer or any direct or indirect parent thereof or any of the Restricted Subsidiaries shall be a Hedging Agreement.
"Hedging
Obligations" means obligations in respect of any Hedging Agreement.
"holder"
or "noteholder" means the Person in whose name a note is registered on the registrar's books.
"Immaterial
Subsidiary" means any Subsidiary of the Issuer that, as of the last day of the fiscal quarter of the Issuer most recently ended, (a) did not have assets with a value
in excess of 5.0% of Total Assets or revenues representing in excess of 5.0% of total revenues of the Issuer and its Restricted Subsidiaries on a consolidated basis as of such date and
(b) taken together with all such Subsidiaries as of such date, did not have assets with a value in excess of 7.5% of Total Assets or revenues representing in excess of 7.5% of total revenues of
the Issuer and its Restricted Subsidiaries on a consolidated basis as of such date.
"Incur"
means issue, assume, guarantee, incur or otherwise become liable for;
provided
,
however
, that any Indebtedness or Capital Stock of a Person existing at the
time such Person becomes a Subsidiary (whether by merger, amalgamation,
consolidation, acquisition or otherwise) shall be deemed to be Incurred by such Person at the time it becomes a Subsidiary.
"Indebtedness"
of any Person means, without duplication, (1) all obligations of such Person for borrowed money, (2) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments (except any such obligation issued in the ordinary course of business with a maturity date of no more than six months in a transaction intended to extend
payment terms of trade payables or similar obligations to trade creditors Incurred in the ordinary course of business), (3) all obligations of such Person under conditional sale or other title
retention agreements relating to property or assets purchased by such Person (except any such obligation that constitutes a trade payable or similar obligation to a trade creditor Incurred in the
ordinary course of business), (4) all obligations of such Person issued or assumed as the deferred purchase price of property or services (except any such balance that (a) constitutes a
trade payable or similar obligation to a trade creditor Incurred in the ordinary course of business, (b) any earn-out obligations until such obligation becomes a liability on the balance sheet
of such Person in accordance with GAAP and (c) liabilities accrued in the ordinary course of business) which purchase price is due more than six months after the date of placing the property in
service or taking delivery and title thereto, (5) all guarantees by such Person of Indebtedness of others, (6) all Capitalized Lease Obligations of such Person, (7) Hedging
Obligations, to the extent the foregoing would appear on a balance sheet of such Person as a liability, (8) the principal component of all obligations, contingent or otherwise, of such Person
as an account party in respect of letters of credit, (9) the principal component of all obligations of such Person in respect of bankers' acceptances,
(10) [reserved], (11) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be
secured by) any Lien on property owned or acquired by such Person (other than Liens on Equity Interests of Unrestricted Subsidiaries securing Indebtedness of such Unrestricted Subsidiaries), whether
or not the Indebtedness secured thereby has been assumed and (12) all Attributable Receivables Indebtedness with
respect to Securitization Financings. The amount of Indebtedness of any Person for purposes of clause (11) above shall (unless such Indebtedness has been assumed by such Person) be deemed to be
equal to the lesser of (i) the aggregate unpaid amount of such Indebtedness and (ii) the Fair Market Value of the property encumbered thereby. Notwithstanding anything in this
description to the contrary, Indebtedness shall not include, and shall be calculated without giving effect to, (x) the effects of Financial Accounting Standards Board Accounting Standards
Codification 825 and related interpretations to the extent such
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effects
would otherwise increase or decrease an amount of Indebtedness for any purpose under the indenture as a result of accounting for any embedded derivatives created by the terms of such
Indebtedness and (y) obligations under the Acquisition Documents, and any such amounts that would have constituted Indebtedness under the indenture but for the application of clause (x)
or (y) of this sentence shall not be deemed an Incurrence of Indebtedness under the indenture.
"Independent
Financial Advisor" means an accounting, appraisal or investment banking firm or consultant, in each case of nationally recognized standing, that is, in the good faith
determination of the Issuer, qualified to perform the task for which it has been engaged.
"Initial
2023 Notes" means the 5.750% Senior Notes due 2023 issued by the Issuer on the Issue Date, any guarantees thereof, any exchange notes in respect thereof, and any guarantees of
any such exchange notes.
"Initial
Purchasers" means the financial institutions listed on the cover page of the Offering Memorandum.
"Insurance
Subsidiary" means any Subsidiary that is a so-called "captive" insurance company, including, without limitation, Family Dollar Insurance, Inc.
"Investment
Grade Rating" means a rating equal to or higher than "Baa3" (or the equivalent) by Moody's or "BBB" (or the equivalent) by S&P, or an equivalent rating by
any other Rating Agency in the event that either Moody's and/or S&P has not then rated the notes.
"Investments"
means, with respect to any Person, all investments by such Person in other Persons (including Affiliates) in the form of loans (including guarantees), advances or capital
contributions
(excluding accounts receivable, trade credit and advances to customers and commission, travel and similar advances to officers, employees and consultants made in the ordinary course of business and
any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any
prepayments and other credits to suppliers made in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities issued by
any other Person and investments that are required by GAAP to be classified on the balance sheet of such Person in the same manner as the other investments included in this definition to the extent
such transactions involve the transfer of cash or other property. For purposes of the definition of "Unrestricted Subsidiary" and the covenant described under "Certain
covenantsLimitation on restricted payments":
(1) "Investments"
shall include the portion (proportionate to the Issuer's equity interest in such Subsidiary) of the Fair Market Value (as determined in good faith by the
Issuer) of the net assets of such Subsidiary at the time that such Subsidiary is designated an Unrestricted Subsidiary;
provided
,
however
, that upon a
redesignation of such Subsidiary as a Restricted Subsidiary, the Issuer shall be deemed to continue to have an "Investment" in an
Unrestricted Subsidiary equal to an amount (if positive) equal to:
(a) its
"Investment" in such Subsidiary at the time of such redesignation
less
(b) the
portion (proportionate to its equity interest in such Subsidiary) of the Fair Market Value (as determined in good faith by the Issuer) of the net assets of such
Subsidiary at the time of such redesignation; and
(2) any
property transferred to or from an Unrestricted Subsidiary shall be valued at its Fair Market Value (as determined in good faith by the Issuer) at the time of such
transfer.
"Issue
Date" means February 23, 2015.
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"Lien"
means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or similar encumbrance of any kind in respect of such asset, whether or not filed, recorded
or otherwise perfected under applicable law (including any conditional sale or other title retention agreement or any lease in the nature thereof);
provided
that in no event shall an operating lease or
an agreement to sell be deemed to constitute a Lien.
"Limited
Condition Acquisition" means any acquisition, including by means of a merger, amalgamation or consolidation, by the Issuer or one or more of its Restricted Subsidiaries, the
consummation of which is not conditioned upon the availability of, or on obtaining, third party financing or in connection with which any fee or expense would be payable by Issuer or its Subsidiaries
to the seller or target in the event financing to consummate the acquisition is not obtained as contemplated by the definitive acquisition agreement.
"Market
Capitalization" means an amount equal to (i) the total number of issued and outstanding shares of Capital Stock of the Issuer or any direct or indirect parent of the
Issuer on the date of the declaration of the relevant dividend multiplied by (ii) the arithmetic mean of the closing prices per share of such Capital Stock for the 30 consecutive trading days
immediately preceding the date of declaration of such dividend.
"Material
Subsidiary" means each Wholly-Owned Domestic Subsidiary that is not an Immaterial Subsidiary.
"Moody's"
means Moody's Investors Service, Inc. or any successor to the rating agency business thereof.
"Net
Income" means, with respect to any Person, the net income (loss) of such Person, determined in accordance with GAAP and before any reduction in respect of Preferred Stock dividends.
"Net
Proceeds" means the aggregate cash proceeds received by the Issuer or any Restricted Subsidiary in respect of any Asset Sale (including, without limitation, any cash received in
respect of or upon the sale or other disposition of any Designated Non-cash Consideration received in any Asset Sale and 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 the assumption by the acquiring Person of Indebtedness relating to the disposed assets or other
consideration received in any other non-cash form), net of the direct costs relating to such Asset Sale and the sale or disposition of such Designated Non-cash Consideration (including, without
limitation, legal, accounting and investment banking fees, and brokerage and sales commissions), and any relocation expenses Incurred as a result thereof, Taxes paid or payable as a result thereof
(after taking into account any available Tax credits or deductions and any Tax sharing arrangements related solely to such disposition), amounts required to be applied to the repayment of principal,
premium (if any) and interest on Indebtedness secured by a Lien on the assets subject to such Asset Sale required (other than pursuant to the second paragraph of the covenant described under
"
Certain covenantsAsset sales") to be paid as a result of such transaction, and any deduction of appropriate amounts to be
provided by the Issuer and its Restricted Subsidiaries as a reserve in accordance with GAAP against any liabilities associated with the asset disposed of in such transaction and retained by the Issuer
and its Restricted Subsidiaries after such sale or other disposition thereof, including, without limitation, pension and other post-employment benefit liabilities and liabilities related to
environmental matters or against any indemnification obligations associated with such transaction.
"Notes
Obligations" means Obligations in respect of the notes, the indenture and the Guarantees.
"Obligations"
means any principal, interest, penalties, fees, indemnifications, reimbursements (including, without limitation, reimbursement obligations with respect to letters of credit
and bankers' acceptances), damages and other liabilities payable under the documentation governing any
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Indebtedness;
provided
that Obligations with respect to the notes shall not include fees or indemnifications in favor of third parties other than the
Trustee and the holders of the notes.
"Offering
Memorandum" means the Issuer's offering memorandum, dated February 6, 2015, relating to the issuance of the Initial 2020 Notes.
"Officer"
means, with respect to any Person, as applicable, (i) the Chairman of the Board, Chief Executive Officer, President, any Executive Vice President, Senior Vice President
or Vice President, the Treasurer, or the Secretary of such Person or (ii) any other duly authorized employee or signatory of such Person.
"Officers'
Certificate" means, with respect to any Person, a certificate signed on behalf of such Person by two Officers of such Person, one of whom must be, to the extent such Person
has an Officer meeting such description, the principal executive officer, the principal financial officer, the treasurer or the principal accounting officer of such Person, which meets the
requirements set forth in the indenture.
"Opinion
of Counsel" means, with respect to any Person, a written opinion from legal counsel who is acceptable to the Trustee. The counsel may be an employee of or counsel to such
Person.
"Pari
Passu Indebtedness" means: (a) with respect to the Issuer, the notes and any Indebtedness which ranks
pari passu
in right of
payment to the notes; and (b) with respect to any Guarantor, its Guarantee and any Indebtedness which ranks
pari passu
in right of payment to
such Guarantor's Guarantee.
"Permitted
Investments" means:
(1) any
Investment in the Issuer or any Restricted Subsidiary;
(2) any
Investment in Cash Equivalents;
(3) any
Investment by the Issuer or any Restricted Subsidiary in a Person if as a result of such Investment (a) such Person becomes a Restricted Subsidiary, or
(b) such Person, in one transaction or a series of related transactions, is merged, consolidated or amalgamated with or into, or transfers or conveys all or substantially all of its assets to,
or is liquidated into, the Issuer or a Restricted Subsidiary;
(4) any
Investment in securities or other assets not constituting Cash Equivalents and received in connection with an Asset Sale made pursuant to the provisions of
"
Certain covenants
Asset sales
" or any other disposition of assets not
constituting an Asset Sale;
(5) any
Investment of Dollar Tree or any Subsidiary of Dollar Tree existing on, or made pursuant to binding commitments existing on, the Issue Date, or of Family Dollar or
any Subsidiary of Family Dollar existing on, or made pursuant to binding commitments existing on, the Acquisition Date, or in each case, any extension, modification or renewal of any such Investment;
provided
that the amount of any such Investment may be increased (x) as required by the terms of such Investment as in existence on the Issue
Date or Acquisition Date, as applicable, or (y) as otherwise permitted under the indenture;
(6) loans
and advances to officers, directors, employees or consultants of the Issuer or any of its Subsidiaries (i) in the ordinary course of business in an
aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any write-downs or write-offs thereof) not to exceed $15 million at the time of Incurrence,
(ii) in respect of payroll payments and expenses in the ordinary course of business and (iii) in connection with such Person's purchase of Equity Interests of the Issuer or any direct or
indirect parent of the Issuer solely to the extent that the amount of such loans and advances shall be contributed to the Issuer in cash as common equity;
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(7) any
Investment acquired by the Issuer or any Restricted Subsidiary (a) in exchange for any other Investment or accounts receivable held by the Issuer or such
Restricted Subsidiary in connection with
or as a result of a bankruptcy, workout, reorganization or recapitalization of the Issuer of such other Investment or accounts receivable, or (b) as a result of a foreclosure by the Issuer or
any Restricted Subsidiary with respect to any secured Investment or other transfer of title with respect to any secured Investment in default;
(8) Hedging
Obligations permitted under clause (j) of the second paragraph of the covenant described under "Certain covenantsLimitation on
incurrence of indebtedness and issuance of disqualified stock and preferred stock";
(9) [reserved];
(10) additional
Investments by the Issuer or any Restricted Subsidiary having an aggregate Fair Market Value (as determined in good faith by the Issuer), taken together with
all other Investments made pursuant to this clause (10) that are at that time outstanding, not to exceed the sum of (x) the greater of $1,750 million and 13% of Total Assets as of
the date of such Investment
plus
(y) an amount equal to any returns (including dividends, interest, distributions, returns of principal, profits
on sale, repayments, income and similar amounts) actually received in respect of any such Investment (with the Fair Market Value of each Investment being measured at the time made and without giving
effect to subsequent changes in value);
provided
,
however
, that if any Investment pursuant to this
clause (10) is made in any Person that is not the Issuer or a Restricted Subsidiary at the date of the making of such Investment and such Person becomes the Issuer or a Restricted Subsidiary
after such date, such Investment shall thereafter be deemed to have been made pursuant to clause (1) above and shall cease to have been made pursuant to this clause (10) for so long as
such Person continues to be the Issuer or a Restricted Subsidiary;
(11) loans
and advances to officers, directors or employees for business- related travel expenses, moving expenses and other similar expenses, in each case Incurred in the
ordinary course of business or consistent with past practice or to fund such Person's purchase of Equity Interests of the Issuer or any direct or indirect parent of the Issuer;
(12) Investments
the payment for which consists of Equity Interests of the Issuer (other than Disqualified Stock);
provided
,
however
, that such Equity Interests will not
increase the amount available for Restricted Payments under clause (3) of the definition of
Cumulative Credit contained in "Certain covenantsLimitation on restricted payments";
(13) any
transaction to the extent it constitutes an Investment that is permitted by and made in accordance with the provisions of the second paragraph of the covenant
described under "Certain covenantsTransactions with affiliates" (except transactions described in clauses (2), (4), (6), (9)(b) and (16) of such paragraph);
(14) guarantees
issued in accordance with the covenants described under "Certain covenantsLimitation on incurrence of indebtedness and issuance of
disqualified stock and preferred stock" and "Certain covenantsFuture guarantors," including, without limitation, any guarantee or other obligation issued or incurred under
any Credit Agreement in connection with any letter of credit issued for the account of the Issuer or any of its Subsidiaries (including with respect to the issuance of, or payments in respect of
drawings under, such letters of credit);
(15) Investments
consisting of or to finance purchases and acquisitions of inventory, supplies, materials, services or equipment or purchases of contract rights or licenses
or leases of intellectual property;
(16) any
Investment in a Securitization Subsidiary or any Investment by a Securitization Subsidiary in any other Person in connection with a Securitization Financing,
including Investments
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of
funds held in accounts permitted or required by the arrangements governing such Securitization Financing or any related Indebtedness;
(17) Investments
consisting of Permitted Securitization Facility Assets or arising as a result of a Securitization Financing;
(18) Investments
of a Restricted Subsidiary acquired after the Issue Date or of an entity merged into, amalgamated with, or consolidated with the Issuer or a Restricted
Subsidiary in a transaction that is not prohibited by the covenant described under "Merger, amalgamation, consolidation or sale of all or substantially all assets" after the Issue Date to
the extent that such Investments were not made in contemplation of such acquisition, merger, amalgamation or consolidation and were in existence on the date of such acquisition, merger, amalgamation
or consolidation;
(19) Investments
in the ordinary course of business consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code
Article 4 customary trade arrangements with customers;
(20) advances
in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Issuer or the Restricted
Subsidiaries;
(21) any
Investment in any Subsidiary of the Issuer or any joint venture in connection with intercompany cash management arrangements or related activities arising in the
ordinary course of business;
(22) Investments
consisting of the licensing or contribution of intellectual property pursuant to joint marketing or other arrangements with other Persons, in each case in
the ordinary course of business;
(23) additional
Investments in joint ventures and Unrestricted Subsidiaries not to exceed the sum of (A) the greater of $500 million and 3.75% of Total Assets
when made,
plus
(B) an aggregate amount equal to any returns (including dividends, interest, distributions, returns of principal, profits on
sale, repayments, income and similar amounts) actually received in respect of any such Investment with the Fair Market Value of each Investment being measured at the time such Investment is made and
without giving effect to subsequent changes in value);
provided
,
however
, that if any Investment
pursuant to this clause (23) is made in any Person that is not a Restricted Subsidiary at the date of the making of such Investment and such Person becomes a Restricted Subsidiary after such
date, such Investment shall thereafter be deemed to have been made pursuant to clause (1) above and shall cease to have been made pursuant to this clause (23) for so long as such Person
continues to be a Restricted Subsidiary;
(24) any
Investment in fixed income or other assets by any Insurance Subsidiary consistent with customary practices of portfolio management; and
(25) any
Investment in Insurance Subsidiaries that is (i) required by law or applicable regulators or (ii) in an amount, taken together with all other
Investments made pursuant to this subclause (ii) that are at the time outstanding, not to exceed the greater of $50 million and 0.5% of Total Assets.
"Permitted
Liens" means, with respect to any Person:
(1) pledges
or deposits and other Liens granted by such Person under workmens' compensation laws, unemployment insurance laws or similar legislation, or good faith deposits
in connection with bids, tenders, contracts (other than for the payment of Indebtedness) or leases to which such Person is a party, or deposits to secure public or statutory obligations of such Person
or deposits of cash or U.S. government bonds to secure surety or appeal bonds, performance and return of money bonds, or deposits as security for contested Taxes or import duties or for the payment of
rent, in each case Incurred in the ordinary course of business;
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(2) Liens
imposed by law, such as landlord's, carriers', warehousemen's, mechanics', materialmen's, repairmen's, construction or other like Liens securing obligations that
are not overdue by more than 30 days or that are being contested in good faith by appropriate proceedings or other Liens arising out of judgments or awards against such Person with respect to
which such Person shall then be proceeding with an appeal or other proceedings for review;
(3) Liens
for Taxes, assessments or other governmental charges not yet overdue by more than 30 days or that are being contested in good faith by appropriate
proceedings;
(4) Liens
in favor of issuers of performance and surety bonds or bid bonds or with respect to other regulatory requirements or letters of credit, bankers' acceptances or
similar obligations issued pursuant to the request of and for the account of such Person in the ordinary course of its business;
(5) minor
survey exceptions, minor encumbrances, trackage rights, special assessments, easements or reservations of, or rights of others for, licenses, rights-of-way,
sewers, electric lines, telegraph and
telephone lines and other similar purposes, servicing agreements, development agreements, site plan agreements and other similar encumbrances incurred in the ordinary course of business or zoning or
other restrictions as to the use of real properties or Liens incidental to the conduct of the business of such Person or to the ownership of its properties which were not Incurred in connection with
Indebtedness and which do not in the aggregate materially adversely affect the value of said properties or materially impair their use in the operation of the business of such Person;
(6) (A)
Liens on assets of a Subsidiary that is not a Guarantor securing Indebtedness of a Subsidiary that is not a Guarantor permitted to be Incurred pursuant to the
covenant described under "Certain covenantsLimitation on incurrence of indebtedness and issuance of disqualified stock and preferred stock";
(B) Liens
securing (x) Indebtedness Incurred pursuant to clause (a) of the second paragraph of the covenant described under
"
Certain covenantsLimitation on incurrence of indebtedness and issuance of disqualified stock and preferred stock" and
(y) any other Indebtedness permitted to be Incurred under the indenture if, as of the date such Indebtedness was Incurred, and after giving
pro
forma
effect thereto and the application of the net proceeds therefrom, the Secured Leverage Ratio of the Issuer does not exceed 3.00 to 1.00; and
(C) Liens
securing Obligations in respect of Indebtedness permitted to be Incurred pursuant to clause (d), (n) (to the extent such guarantees are issued in
respect of any such Indebtedness) or (p) (to the extent the Secured Leverage Ratio of the Issuer, after giving
pro forma
effect thereto, does not
exceed 3.00 to 1.00 or is no more than such ratio immediately prior to such incurrence) of the second paragraph of the covenant described under "Certain covenantsLimitation
on incurrence of indebtedness and issuance of disqualified stock and preferred stock";
(D) on
and after the Acquisition Date, Liens securing all obligations in respect of the Existing Family Dollar Notes and any guarantees thereof and the Existing Family
Dollar Notes Indenture;
(7) Liens
existing (x) on the assets or property of Dollar Tree or any Subsidiary of Dollar Tree on the Issue date or (y) on the assets or property of Family
Dollar or any Subsidiary of Family Dollar on the Acquisition Date (other than Liens in favor of the lenders under the Credit Agreement and Liens securing the Existing Family Dollar Notes and any
guarantees thereof);
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(8) Liens
on assets, property or Equity Interests of a Person at the time such Person becomes a Subsidiary;
provided
,
however
, that such Liens are not created or
Incurred in connection with, or in contemplation of, such other Person becoming such a Subsidiary;
provided
,
further
,
however
, that such Liens may not
extend to any other property owned by the Issuer or any Restricted Subsidiary (other than pursuant to after-acquired property clauses in effect with respect to such Lien at the time of acquisition on
property of the type that would have been subject to such Lien notwithstanding the occurrence of such acquisition);
(9) Liens
on assets or property at the time the Issuer or a Restricted Subsidiary acquired the assets or property, including any acquisition by means of a merger,
amalgamation or consolidation with or into the Issuer or any Restricted Subsidiary;
provided
,
however
,
that such Liens are not created or Incurred in connection with, or in contemplation of, such acquisition;
provided
,
further
,
however
, that the Liens may not extend to any other property owned by the Issuer or any
Restricted Subsidiary (other than pursuant to after-acquired property clauses in effect with respect to such Lien at the time of acquisition on property of the type that would have been subject to
such Lien notwithstanding the occurrence of such acquisition);
(10) Liens
securing Indebtedness or other obligations of the Issuer or a Restricted Subsidiary owing to the Issuer or another Restricted Subsidiary permitted to be Incurred
in accordance with the covenant described under "Certain covenantsLimitation on incurrence of indebtedness and issuance of disqualified stock and preferred stock";
(11) Liens
securing Hedging Obligations not Incurred in violation of the indenture;
provided
that with respect to Hedging
Obligations relating to Indebtedness, such Lien extends only to the property, if any, securing such Indebtedness, property securing other Indebtedness or cash and Cash Equivalents;
(12) Liens
on inventory or other goods and proceeds of any Person securing such Person's obligations in respect of documentary letters of credit, bank guarantees or bankers'
acceptances issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods;
(13) leases
and subleases of real property which do not materially interfere with the ordinary conduct of the business of the Issuer or any of the Restricted Subsidiaries;
(14) Liens
arising from Uniform Commercial Code financing statement filings regarding operating leases or other obligations not constituting Indebtedness;
(15) Liens
in favor of the Issuer or any Guarantor;
(16) Liens
on Permitted Securitization Facility Assets or the Equity Interests of any Securitization Subsidiary Incurred in connection with a Securitization Financing;
(17) pledges
and deposits and other Liens made in the ordinary course of business to secure liability to insurance carriers;
(18) Liens
on the Equity Interests of Unrestricted Subsidiaries;
(19) leases
or subleases, and licenses or sublicenses (including with respect to intellectual property) granted to others in the ordinary course of business;
(20) Liens
to secure any refinancing, refunding, extension, renewal or replacement (or successive refinancings, refundings, extensions, renewals or replacements) as a whole,
or in part, of any Indebtedness secured by any Lien referred to in clauses (6), (7), (8), (9), (15) and (25) of this definition;
provided
,
however
, that (x) such new Lien shall be limited to all or part of the same property
(including any after-acquired property to the extent it would have been subject to the original Lien) that secured the original Lien (plus improvements on and accessions to such
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property,
proceeds and products thereof, customary security deposits and any other assets pursuant to the after-acquired property clauses to the extent such assets secured (or would have secured) the
Indebtedness being refinanced, refunded, extended, renewed or replaced), and (y) the Indebtedness secured by such Lien at such time is not increased to any amount greater than the sum of
(A) the outstanding principal amount (or accreted value, if applicable) or, if greater, committed amount (but only to the extent the undrawn portion of such commitment was deemed to be Secured
Indebtedness on such date in accordance with the definition of Secured Leverage Ratio) of the applicable Indebtedness described under clauses (6), (7), (8), (9), (15) and (25) at
the time the original Lien became a Permitted Lien under the indenture, (B) unpaid accrued interest and premiums (including tender premiums), and (C) an amount necessary to pay any
underwriting discounts, defeasance costs, commissions, fees and expenses related to such refinancing, refunding, extension, renewal or replacement;
provided
,
further
,
however
, that in the case of any
Liens to secure any refinancing, refunding, extension or renewal of Indebtedness secured by a Lien referred to in clause (6)(B) or (6)(C), the principal amount of any Indebtedness Incurred for
such refinancing, refunding, extension or renewal shall be deemed secured by
a Lien under clause (6)(B) or (6)(C) and not this clause (20) for purposes of determining the principal amount of Indebtedness outstanding under clause (6)(B) or (6)(C);
(21) Liens
on equipment of the Issuer or any Restricted Subsidiary granted in the ordinary course of business to the Issuer's or such Restricted Subsidiary's client at which
such equipment is located;
(22) judgment
and attachment Liens not giving rise to an Event of Default and notices of lis pendens and associated rights related to litigation being contested in good
faith by appropriate proceedings and for which adequate reserves have been made;
(23) Liens
arising out of conditional sale, title retention, consignment or similar arrangements for the sale or purchase of goods entered into in the ordinary course of
business;
(24) Liens
Incurred to secure cash management services or to implement cash pooling arrangements in the ordinary course of business;
(25) other
Liens securing obligations the outstanding principal amount of which does not, taken together with the principal amount of all other obligations secured by Liens
incurred under this clause (25) (and by any Liens incurred under clause (20) hereof with respect to any refinancing, refunding, extension, renewal or replacement of any Indebtedness
secured by any Lien referred to in this clause (25)) that are at that time outstanding, exceed the greater of $600 million and 4.50% of Total Assets at the time of Incurrence;
(26) any
encumbrance or restriction (including put and call arrangements) with respect to Capital Stock of any joint venture or similar arrangement securing obligations of
such joint venture or pursuant to any joint venture or similar agreement;
(27) Liens
on any amounts held by a trustee (i) in the funds and accounts under an indenture securing any revenue bonds issued for the benefit of the Issuer or any
Restricted Subsidiary, (ii) under any indenture or other debt agreement issued in escrow pursuant to customary escrow arrangements pending the release thereof, or (iii) under any
indenture pursuant to customary discharge, redemption or defeasance provisions;
(28) Liens
(i) arising by virtue of any statutory or common law provisions relating to banker's Liens, rights of set-off or similar rights and remedies as to deposit
accounts or other funds maintained with a depository or financial institution, (ii) attaching to commodity trading accounts or other commodity brokerage accounts incurred in the ordinary course
of business or (iii) encumbering reasonable customary initial deposits and margin deposits and similar Liens
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attaching
to brokerage accounts incurred in the ordinary course of business and not for speculative purposes;
(29) Liens
(i) in favor of credit card companies pursuant to agreements therewith and (ii) in favor of customers;
(30) Liens
disclosed by the title insurance policies delivered pursuant to the Credit Agreement and any replacement, extension or renewal of any such Lien;
provided
that such replacement, extension or renewal Lien
shall not cover any property other than the property that was subject to such Lien prior to
such replacement, extension or renewal;
provided
,
further
, that the Indebtedness and other obligations
secured by such replacement, extension or renewal Lien are permitted under the indenture;
(31) Liens
that are contractual rights of set-off relating to purchase orders and other agreements entered into with customers, suppliers or service providers of the Issuer
or any Restricted Subsidiary in the ordinary course of business;
(32) in
the case of real property that constitutes a leasehold interest, any Lien to which the fee simple interest (or any superior leasehold interest) is subject;
(33) agreements
to subordinate any interest of the Issuer or any Restricted Subsidiary in any accounts receivable or other prices arising from inventory consigned by the
Issuer or any such Restricted Subsidiary pursuant to an agreement entered into in the ordinary course of business;
(34) Liens
on securities that are the subject of repurchase agreements constituting Cash Equivalents under clause (4) of the definition thereof; and
(35) Liens
securing insurance premium financing arrangements;
provided
that such Liens are limited to the applicable unearned
insurance premiums.
"Permitted Regulatory Sale" means the sale, divestiture, license, conveyance, transfer or other disposition (whether in a single transaction or a series of
related transactions) of stores and other assets, properties and rights of the Issuer and/or its Subsidiaries to the extent necessary or advisable (as determined in good faith by the Issuer) to permit
the satisfaction of Section 6.1(b) and Section 6.1(e) of the Acquisition Agreement.
"Permitted
Sale/LeaseBack Transaction" means (i) any Sale/Leaseback Transaction entered into prior to the Acquisition Date, (ii) any Sale/Leaseback Transaction by the
Issuer or any of its Subsidiaries (including Family Dollar and its Subsidiaries) with respect to store properties, (iii) a Sale/Leaseback Transaction by the Issuer or any of its Subsidiaries
(including Family Dollar and its Subsidiaries) with respect to one distribution center property per fiscal year, with aggregate net proceeds in any fiscal year not to exceed $75 million (with
one year carry-forward of any unused amount of such base amount), and (iv) any other Sale/Leaseback Transaction, the proceeds of which shall constitute Net Proceeds.
"Permitted
Securitization Facility Assets" means (i) Securitization Assets, (ii) Related Assets and (iii) loans to the Issuer or any of its Subsidiaries secured by
Securitization Assets (whether now existing or arising in the future) and Related Assets which are made pursuant to a Securitization Financing.
"Person"
means any individual, corporation, company, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization,
government or any agency or political subdivision thereof or any other entity.
"Preferred
Stock" means any Equity Interest with a preferential right of payment of dividends or upon liquidation, dissolution, or winding up.
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"Rating
Agency" means (1) each of Moody's and S&P and (2) if Moody's or S&P ceases to rate the notes for reasons outside of the Issuer's control, a "nationally recognized
statistical rating organization" within the meaning of Section 3(a)(62) under the Exchange Act selected by the Issuer or any direct or indirect parent of the Issuer as a replacement agency for
Moody's or S&P, as the case may be.
"Refinancing"
means:
(1) the
repayment in full of all obligations and termination of all commitments under the Credit Agreement, dated as of June 6, 2012, among Dollar Tree
Stores, Inc., Dollar Tree, the guarantors parties thereto, the lenders and other financial institutions parties thereto, and Wells Fargo Bank, National Association, as administrative agent, as
amended, modified or supplemented from time to time;
(2) the
repayment in full of all obligations and termination of all commitments under the Amended and Restated 5-Year Credit Agreement, dated as of November 13, 2013,
among Family Dollar, the lenders and other financial institutions parties thereto, and Wells Fargo Bank, National Association, as administrative agent, as amended, modified or supplemented from time
to time;
(3) the
repayment in full of all obligations and termination of all commitments under the Amended and Restated 4-Year Credit Agreement, dated as of November 13, 2013,
among Family Dollar, the lenders and other financial institutions parties thereto, and Wells Fargo Bank, National Association, as administrative agent, as amended, modified or supplemented from time
to time;
(4) the
redemption, repurchase, defeasance and/or discharge of the Existing Dollar Tree Notes;
(5) the
redemption, repurchase, defeasance and/or discharge of the 5.41% Series 2005-A Senior Notes, Tranche A due September 27, 2015 and the 5.24%
Series 2005-A Senior Notes, Tranche B due September 27, 2015 of Family Dollar and Family Dollar, Inc.; and
(6) the
making of effective provision to secure all of the Existing Family Dollar Notes, equally and ratably with any and all Indebtedness under the credit agreement
described in clause (i) of the definition of the term "Credit Agreement," as required pursuant to the Existing Family Dollar Notes Indenture.
"Registration
Rights Agreement" means (a) with respect to the initial notes issued on the Issue Date, the Registration Rights Agreement dated the Issue Date, among Family Tree
Escrow, LLC, Dollar Tree and the Initial Purchasers, and (b) with respect to each issuance of additional notes issued in a transaction exempt from the registration requirements of the
Securities Act, the registration rights agreement, if any, among the Issuer, any Guarantors and the Persons purchasing such Additional Notes under the related purchase agreement, each as amended,
modified or supplemented from time to time.
"Related
Assets" means any assets related to any Securitization Assets including, without limitation, all collateral securing such Securitization Assets, all contracts and all guarantees
or other obligations in respect of such Securitization Assets, proceeds of such Securitization Assets and other assets which are customarily transferred, sold and/or pledged or in respect of which
security interests are customarily granted in connection with asset securitization transactions involving Securitization Assets, any Hedging Obligations entered into by the Issuer or any such
Subsidiary in connection with such Securitization
Assets and any collections or proceeds of any of the foregoing (including, without limitation, lock-boxes, deposit accounts, records in respect of Securitization Assets or such Hedging Obligations and
collections in respect of Securitization Assets or such Hedging Obligations).
"Restricted
Cash" means cash and Cash Equivalents held by the Issuer and its Restricted Subsidiaries that would appear as "restricted" on a consolidated balance sheet of the Issuer or
any of the Restricted Subsidiaries.
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"Restricted
Investment" means an Investment other than a Permitted Investment.
"Restricted
Subsidiary" means, with respect to any Person, any Subsidiary of such Person other than an Unrestricted Subsidiary of such Person. Unless otherwise indicated in this
"Description of 2020 exchange notes," all references to Restricted Subsidiaries shall mean Restricted Subsidiaries of the Issuer.
"Sale/Leaseback
Transaction" means an arrangement relating to property now owned or hereafter acquired by the Issuer or a Restricted Subsidiary whereby the Issuer or such Restricted
Subsidiary transfers such property to a Person and the Issuer or such Restricted Subsidiary leases it from such Person, other than leases between any of the Issuer and a Restricted Subsidiary or
between Restricted Subsidiaries.
"S&P"
means Standard & Poor's Ratings Group or any successor to the rating agency business thereof.
"SEC"
means the Securities and Exchange Commission.
"Secured
Indebtedness" means any Consolidated Total Indebtedness secured by a Lien.
"Secured
Leverage Ratio" means, with respect to any Person, at any date, the ratio of (i) Secured Indebtedness of such Person and its Restricted Subsidiaries as of such date of
calculation (determined on a consolidated basis in accordance with GAAP) less the Unrestricted Cash Amount as of such date of determination to (ii) EBITDA of such Person for the four full
fiscal quarters for which internal
financial statements are available immediately preceding such date on which such additional Indebtedness is Incurred.
In
the event that the Issuer or any such Subsidiary Incurs, repays, repurchases or redeems any Indebtedness or issues, repurchases or redeems any Disqualified Stock or Preferred Stock
subsequent to the commencement of the period for which the Secured Leverage Ratio is being calculated but prior to the event for which the calculation of the Secured Leverage Ratio is made (the
"Secured Leverage Calculation Date"), then the Secured Leverage Ratio shall be calculated giving
pro forma
effect to such Incurrence, repayment,
repurchase or redemption of Indebtedness, or such issuance, repurchase or redemption of Disqualified Stock or Preferred Stock, as if the same had occurred at the beginning of the applicable
four-quarter period;
provided
that, the Issuer may elect pursuant to an Officers' Certificate delivered to the Trustee to treat all or any portion of
the commitment under any Indebtedness as being Incurred at such time, in which case any subsequent Incurrence of Indebtedness under such commitment shall not be deemed, for purposes of this
calculation, to be an Incurrence at such subsequent time.
The
Secured Leverage Ratio shall also be subject to the adjustments described in clause (2) of the third paragraph of the covenant described under "Certain
covenantsLimitation on incurrence of indebtedness and issuance of disqualified stock and preferred stock."
For
purposes of making the computation referred to above, Investments (or series of related Investments) in excess of $25 million, acquisitions, dispositions, mergers,
amalgamations, consolidations and discontinued operations (as determined in accordance with GAAP), in each case with respect to an operating unit of a business, and any operational changes, business
realignment projects or initiatives, restructurings or reorganizations that the Issuer or any Restricted Subsidiary has determined to make and/or made during the four-quarter reference period or
subsequent to such reference period and on or prior to or simultaneously with the Secured Leverage Calculation Date (each, for purposes of this definition, a "pro forma event") shall be calculated on
a
pro forma
basis assuming that all such Investments, acquisitions, dispositions, mergers, amalgamations, consolidations, discontinued operations and
other operational changes, business realignment projects or initiatives, restructurings or reorganizations (and the change of any associated fixed charge obligations and the change in EBITDA
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resulting
therefrom) had occurred on the first day of the four-quarter reference period. If since the beginning of such period any Person that subsequently became a Restricted Subsidiary or was merged
with or into the Issuer or any Restricted Subsidiary since the beginning of such period shall have made any Investment, acquisition, disposition, merger, consolidation, amalgamation, discontinued
operation, operational change, business realignment project or initiative, restructuring or reorganization, in each case with respect to an operating unit of a business, that would have required
adjustment pursuant to this definition, then the Secured Leverage Ratio shall be calculated giving
pro forma
effect thereto for
such period as if such Investment, acquisition, disposition, discontinued operation, merger, amalgamation, consolidation, operational change, business realignment project or initiative, restructuring
or reorganization had occurred at the beginning of the applicable four-quarter period. If since the beginning of such period any Restricted Subsidiary is designated an Unrestricted Subsidiary or any
Unrestricted Subsidiary is designated a Restricted Subsidiary, then the Secured Leverage Ratio shall be calculated giving
pro forma
effect thereto for
such period as if such designation had occurred at the beginning of the applicable four-quarter period.
For
purposes of this definition, whenever
pro forma
effect is to be given to any
pro forma
event, the
pro forma
calculations shall be made in good faith by a responsible financial or accounting officer of the Issuer. Any such
pro forma
calculation may include adjustments appropriate, in the reasonable good faith determination of the Issuer as set forth in an Officers'
Certificate, to reflect operating expense reductions and other operating improvements or synergies reasonably expected to result from the applicable event within 12 months of the date the
applicable event is consummated and which are expected to have a continuing impact and are factually supportable;
provided
that the Non-S-X Adjustment
Amount shall not exceed 20% of EBITDA for such period prior to giving effect to the Non-S-X Adjustment Amount for such period.
For
purposes of this definition, any amount in a currency other than U.S. dollars will be converted to U.S. dollars based on the average exchange rate for such currency for the most
recent twelve month period immediately prior to the date of determination in a manner consistent with that used in calculating EBITDA for the applicable period.
"Securities
Act" means the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder.
"Securitization
Assets" means any of the following assets (or interests therein) from time to time originated, acquired or otherwise owned by the Issuer or any Restricted Subsidiary or
in which the Issuer or any Restricted Subsidiary has any rights or interests, in each case, without regard to where such assets or interests are located: (1) accounts receivable (including any
bills of exchange), (2) royalty and other similar payments made related to the use of trade names and other intellectual property, business support, training and other services,
(3) revenues related to distribution and merchandising of the products of the Issuer and its Restricted Subsidiaries, (4) intellectual property rights relating to the generation of any
of the foregoing types of assets, (5) parcels of or interests in real property, together with all easements, hereditaments and appurtenances thereto, all improvements and appurtenant fixtures
and equipment, incidental to the ownership, lease or operation thereof and (6) any other assets and property to the extent customarily included in securitization transactions of the relevant
type in the applicable jurisdictions (as determined by the Issuer in good faith).
"Securitization
Fees" means distributions or payments made directly or by means of discounts with respect to any participation interests issued or sold in connection with, and all other
fees paid to a Person that is not a Restricted Subsidiary in connection with, any Securitization Financing.
"Securitization
Financing" means any transaction or series of transactions that may be entered into by the Issuer or any of its Subsidiaries pursuant to which the Issuer or any of its
Subsidiaries may sell, convey, transfer and/or pledge (either directly or through any other of the Issuer and its Subsidiaries) of Permitted Securitization Facility Assets to (a) a
Securitization Subsidiary, which in turn shall sell,
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convey,
transfer and/or pledge interests in the respective Permitted Securitization Facility Assets to any other Person in return for the cash used by such Securitization Subsidiary to acquire such
Permitted Securitization Facility Assets; or (b) a bank or other financial institution, which in turn shall finance the acquisition of the Permitted Securitization Facility Assets through a
commercial paper conduit or other conduit facility, or directly to a commercial paper conduit or other conduit facility established and maintained by a bank or other financial institution that will
finance the acquisition of the Permitted Securitization Facility Assets through the commercial paper conduit or other conduit facility, so long as no portion of the Indebtedness or any other
obligations (contingent or otherwise) under such securitization facility or facilities (i) is guaranteed by the Issuer or any Restricted Subsidiary other than a Securitization Subsidiary
(excluding guarantees of obligations pursuant to Standard Securitization Undertakings), (ii) is recourse to or obligates the Issuer or any Restricted Subsidiary other than a Securitization
Subsidiary in any way other than pursuant to Standard Securitization Undertakings, or (iii) subjects any property or asset (other than Permitted Securitization Facility Assets or the Equity
Interests of any Securitization Subsidiary) of the Issuer or any Restricted Subsidiary other than a Securitization Subsidiary, directly or indirectly, contingently or otherwise, to the satisfaction
thereof, in each case other than pursuant to Standard Securitization Undertakings.
"Securitization
Repurchase Obligation" means any obligation of a seller of Securitization Assets in a Securitization Financing to repurchase Securitization Assets arising as a result of
a breach of a representation, warranty or covenant or otherwise, including as a result of a Securitization Asset or portion thereof becoming subject to any asserted defense, dispute, off-set or
counterclaim of any kind as a result of any action taken by, any failure to take action by or any other event relating to the seller.
"Securitization
Subsidiary" means a Wholly Owned Restricted Subsidiary (or another Person formed for the purposes of engaging in Securitization Financing with the Issuer or any of its
Subsidiaries in which the Issuer or any of its Subsidiaries makes an Investment and to which the Issuer or any of its Subsidiaries transfers Securitization Assets and Related Assets) which engages in
no activities other than in connection with the financing of Securitization Assets or Related Assets of the Issuer and its Subsidiaries, all proceeds thereof and all rights (contractual or other),
collateral and other assets relating thereto, and any business or activities incidental or related to such business, and which is designated by the Issuer (as provided below) as a Securitization
Subsidiary and:
(a) with
which neither the Issuer nor any Restricted Subsidiary has any material contract, agreement, arrangement or understanding other than on terms which the Issuer
determines in good faith to be no
less favorable to the Issuer or such Restricted Subsidiary than those that might be obtained at the time from Persons that are not Affiliates of the Issuer (other than pursuant to Standard
Securitization Undertakings); and
(b) to
which neither the Issuer nor any Restricted Subsidiary has any obligation to maintain or preserve such entity's financial condition or cause such entity to achieve
certain levels of operating results (other than pursuant to Standard Securitization Undertakings).
Any
such designation by the Issuer shall be evidenced to the Trustee by filing with the Trustee an Officers' Certificate of the Issuer certifying that, to the best of such officers'
knowledge and belief after consultation with counsel, such designation complied with the foregoing conditions.
"Significant
Subsidiary" means any Restricted Subsidiary that would be a "Significant Subsidiary" of the Issuer within the meaning of Rule 1-02 under Regulation S-X
promulgated by the SEC (or any successor provisions).
"Similar
Business" means any business the majority of whose revenues are derived from (x) business or activities conducted by the Issuer and its Subsidiaries on the Acquisition
Date, (y) any business that is a natural outgrowth or reasonable extension, development or expansion of any business or activities conducted by the Issuer and its Subsidiaries on the
Acquisition Date or any business
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similar,
reasonably related, incidental, complementary or ancillary to any of the foregoing or (z) any business that in the Issuer's good faith business judgment constitutes a reasonable
diversification of businesses conducted by the Issuer and its Subsidiaries.
"Standard
Securitization Undertakings" means representations, warranties, covenants, indemnities and guarantees of performance entered into by the Issuer or any of its Subsidiaries which
the Issuer has determined in good faith to be reasonably customary in a securitization financing transaction, including, without limitation, those relating to the servicing of the assets of a
Securitization Subsidiary, it being understood that any Securitization Repurchase Obligation shall be deemed to be a Standard Securitization Undertaking.
"Stated
Maturity" means, with respect to any note, the date specified in such note as the fixed date on which the final payment of principal of such note is due and payable, including
pursuant to any
mandatory redemption provision (but excluding any provision providing for the repurchase of such note at the option of the holder thereof upon the happening of any contingency beyond the control of
the Issuer unless such contingency has occurred).
"Subordinated
Indebtedness" means (a) with respect to the Issuer, any Indebtedness of the Issuer which is by its terms subordinated in right of payment to the notes, and
(b) with respect to any Guarantor, any Indebtedness of such Guarantor which is by its terms subordinated in right of payment to its Guarantee;
provided
,
however
, that no guarantee of Indebtedness which Indebtedness does not itself constitute
Subordinated Indebtedness shall constitute Subordinated Indebtedness.
"Subsidiary"
means, with respect to any Person, (1) any corporation, association or other business entity (other than a partnership, joint venture or limited liability company) of
which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees
thereof is at the time of determination owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof, and (2) any
partnership, joint venture or limited liability company of which (x) more than 50% of the capital accounts, distribution rights, total equity and voting interests or general and limited
partnership interests, as applicable, are owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof, whether in the
form of membership, general, special or limited partnership interests or otherwise, and (y) such Person or any Subsidiary of such Person is a controlling general partner or otherwise controls
such entity.
"Taxes"
means any and all present or future taxes, duties, levies, imposts, assessments, deductions, withholdings or other similar charges imposed by any Governmental Authority, whether
computed on a separate, consolidated, unitary, combined or other basis and any interest, fines, penalties or additions to tax with respect to the foregoing.
"TIA"
means the Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb) as in effect on the date of the indenture.
"Total
Assets" means the total consolidated assets of the Issuer and its Restricted Subsidiaries, as shown on the most recent balance sheet of the Issuer, calculated on a
pro forma
basis after giving effect to
any subsequent acquisition or disposition of a Person or business.
"Transactions"
means (a) the issuance and sale of the notes pursuant to the Offering Memorandum, (b) the entry into the Escrow Agreement and the transactions related
thereto, (c) the Incurrence of Indebtedness to finance the Acquisition, the Refinancing and related costs and expenses, (d) the Refinancing and (e) the Acquisition.
"Treasury
Rate" means, as of the applicable redemption date, as determined by the Issuer, the yield to maturity as of such redemption date of United States Treasury securities with a
constant
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maturity
(as compiled and published in the most recent Federal Reserve Statistical Release H. 15 (519) that has become publicly available at least two Business Days prior to such
redemption date (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from such redemption date to
March 1, 2017;
provided
,
however
, that if the period from such redemption date to March 1,
2017, as applicable, is less than one year, the weekly average yield on actively traded United States Treasury securities adjusted to a constant maturity of one year will be used.
"Trust
Officer" means any officer within the corporate trust department of the Trustee, including any director, vice president, assistant vice president, associate or any other officer
of the Trustee who customarily performs functions similar to those performed by the Persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred
because of such person's knowledge of and familiarity with the particular subject, in each case, who shall have direct responsibility for the administration of the indenture.
"Trustee"
means the party named as such in the indenture until a successor replaces it and, thereafter, means the successor.
"Unrestricted
Cash Amount" means, on any date, the lesser of (i) $400 million and (ii) the aggregate amount of unrestricted cash and Cash Equivalents of the Issuer
and its Restricted Subsidiaries on such date in excess of $100 million.
"Unrestricted
Subsidiary" means:
(1) any
Subsidiary of the Issuer that at the time of determination shall be designated an Unrestricted Subsidiary by the Board of Directors of the Issuer in the manner
provided below; and
(2) any
Subsidiary of an Unrestricted Subsidiary.
The
Issuer may designate any Subsidiary of the Issuer (including any newly acquired or newly formed Subsidiary of the Issuer) to be an Unrestricted Subsidiary unless at the time of such
designation such Subsidiary or any of its Subsidiaries owns any Equity Interests or Indebtedness of, or owns or holds any Lien on any property of, the Issuer or any Restricted Subsidiary that is not a
Subsidiary of the Subsidiary to be so designated, in each case at the time of such designation;
provided
,
however
, that the Subsidiary to be so designated
and its Subsidiaries do not at the time of designation have and do not thereafter Incur any
Indebtedness pursuant to which the lender has recourse to any of the assets of the Issuer or any of the Restricted Subsidiaries other than Permitted Liens described in clause (18) of the
definition thereof unless otherwise permitted under the covenant described under "Certain covenantsLimitation on restricted payments";
provided
,
further
,
however
that either (a) the
Subsidiary to be so designated has total consolidated assets of $1,000 or less or (b) if such Subsidiary has consolidated assets greater than $1,000, then such designation would be permitted
under the covenant described under "Certain covenantsLimitation on restricted payments."
The
Issuer may designate any Unrestricted Subsidiary to be a Restricted Subsidiary;
provided
,
however
, that immediately after giving effect to such
designation:
(x) (1)
the Issuer could Incur $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test described under "Certain
covenantsLimitation on incurrence of indebtedness and issuance of disqualified stock and preferred stock," or (2) the Fixed Charge Coverage Ratio of the Issuer would be no less
than such ratio immediately prior to such designation, in each case on a
pro forma
basis taking into account such designation, and
(y) no
Event of Default shall have occurred and be continuing.
Any
such designation by the Issuer shall be evidenced to the Trustee by promptly filing with the Trustee a copy of the resolution of the Board of Directors of the Issuer, giving effect
to such designation and an Officers' Certificate certifying that such designation complied with the foregoing provisions.
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"U.S. Government Obligations" means securities that are:
(1) direct
obligations of the United States of America for the timely payment of which its full faith and credit is pledged, or
(2) obligations
of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America, the timely payment of which is
unconditionally guaranteed as a full faith and credit obligation by the United States of America,
which,
in each case, are not callable or redeemable at the option of the issuer thereof, and shall also include a depository receipt issued by a bank (as defined in Section 3(a)(2) of the
Securities Act) as custodian with respect to any such U.S. Government Obligations or a specific payment of principal of or interest on any such U.S. Government Obligations held by such custodian for
the account of the holder of such depository receipt;
provided
that (except as required by law) such custodian is not authorized to make any deduction
from the amount payable to the holder of such depository receipt
from any amount received by the custodian in respect of the U.S. Government Obligations or the specific payment of principal of or interest on the U.S. Government Obligations evidenced by such
depository receipt.
"Voting
Stock" of any Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person.
"Weighted
Average Life to Maturity" means, when applied to any Indebtedness or Disqualified Stock or Preferred Stock, as the case may be, at any date, the quotient obtained by dividing
(1) the sum of the products of the number of years from the date of determination to the date of each successive scheduled principal payment of such Indebtedness or redemption or similar
payment with respect to such Disqualified Stock or Preferred Stock multiplied by the amount of such payment, by (2) the sum of all such payments.
"Wholly
Owned Domestic Subsidiary" means any Wholly Owned Restricted Subsidiary that is a Domestic Subsidiary.
"Wholly
Owned Restricted Subsidiary" means any Wholly Owned Subsidiary that is a Restricted Subsidiary.
"Wholly
Owned Subsidiary" of any Person means a Subsidiary of such Person 100% of the outstanding Capital Stock or other ownership interests of which (other than directors' qualifying
shares or shares required pursuant to applicable law) shall at the time be owned by such Person or by one or more Wholly Owned Subsidiaries of such Person.
Book-Entry, Delivery and Form
Except as set forth below, the notes will be issued in registered, global form in minimum denominations of $2,000 and integral
multiples of $1,000 in excess thereof.
The
notes will be represented by one or more notes in registered, global form without interest coupons (collectively, the "Global Notes"). The Global Notes will be deposited upon
issuance, with the trustee as custodian for DTC, and registered in the name of DTC or its nominee, in each case for credit to an account of a direct or indirect participant in DTC as described below.
DTC will be the depositary for
the Global Notes. Except as set forth below, the Global Notes may be transferred, in whole and not in part, only to another nominee of DTC or to a successor of DTC or its nominee. Beneficial interests
in the Global Notes may not be exchanged for notes in certificated form except in the limited circumstances described below. See "Exchange of Global Notes for Certificated Notes."
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In
addition, transfers of beneficial interests in the Global Notes will be subject to the applicable rules and procedures of DTC and its direct or indirect participants (including, if
applicable, those of Euroclear and Clearstream), which may change from time to time.
Exchange of Global Notes for Certificated Notes
A Global Note is exchangeable for definitive notes in registered certificated form ("Certificated Notes") if: (1) DTC
(a) notifies us that it is unwilling or unable to continue as depositary for the Global Notes and a successor depositary is not appointed within 90 days of that notice or (b) has
ceased to be a clearing agency registered under the Exchange Act; or (2) there shall have occurred and be continuing an event of default with respect to the notes pursuant to the terms of the
2020 Notes Indentures and the 2023 Notes Indentures (together the "Indentures") and DTC requests such exchange.
In
all cases, Certificated Notes delivered in exchange for any Global Note or beneficial interests in Global Notes will be in registered form, registered in such names as the Depositary
shall direct, and issued only in minimum denominations of $2,000 and any integral multiple of $1,000 in excess thereof.
Depository Procedures
The following description of the operations and procedures of DTC, Euroclear and Clearstream are provided solely as a matter of
convenience. These operations and
procedures are solely within the control of the respective settlement systems and are subject to changes by them. We and the trustee take no responsibility for these operations and procedures and urge
investors to contact the system or their participants directly to discuss these matters.
DTC
has advised us that DTC is a limited-purpose trust company organized under New York banking law, a "banking organization" within the meaning of the New York banking law, a member of
the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code and a "clearing agency" registered pursuant to the provisions of Section 17A of
the Exchange Act. DTC was created to hold securities for its participating organizations (collectively, the "Participants") and to facilitate the clearance and settlement of transactions in those
securities between Participants through electronic computerized book-entry changes, including transfers and pledges, in accounts of its Participants. This eliminates the need for physical movement of
securities certificates. The Participants include securities brokers and dealers (including the initial purchasers), banks, trust companies, clearing corporations and certain other organizations.
Access to DTC's system is also available to other entities such as banks, brokers, dealers, trust companies and clear corporations that clear through or maintain a custodial relationship with a
Participant, either directly or indirectly (collectively, the "Indirect Participants"). Persons who are not Participants may beneficially own securities held by or on behalf of DTC only through the
Participants or the Indirect Participants. The ownership interests in, and transfers of ownership interests in, each security held by or on behalf of DTC are recorded on the records of the
Participants and Indirect Participants. DTC has also advised us that, pursuant to procedures established by it: (1) upon deposit of the Global Notes, DTC or its custodian will credit the
accounts of Participants designated by the initial purchasers with portions of the principal amount of the Global Notes; and (2) ownership of beneficial interests in the Global Notes will be
shown on, and the transfer of ownership thereof will be effected only through, records maintained by DTC (with respect to the Participants) or by the Participants and the Indirect Participants (with
respect to other owners of beneficial interest in the Global Notes). Investors in the Global Notes who are Participants in DTC's system may hold their interests therein directly through DTC. Investors
in the Global Notes who are not Participants may hold their interests therein indirectly through organizations (including Euroclear and Clearstream) which are Participants in such system. All
interests in a Global Note, including those held through Euroclear or Clearstream, may be subject to
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the
procedures and requirements of DTC. Those interests held through Euroclear or Clearstream may also be subject to the procedures and requirements of such systems.
The
laws of some states require that certain persons take physical delivery in definitive form of securities that they own. Consequently, the ability to transfer beneficial interests in
a Global Note to such persons will be limited to that extent. Because DTC can act only on behalf of the Participants, which in turn act on behalf of the Indirect Participants, the ability of a person
having beneficial interests in a Global Note to pledge such interests to persons that do not participate in the DTC system, or otherwise take actions in respect of such interests, may be affected by
the lack of a physical certificate evidencing such interests.
Except as described above, owners of interests in the Global Notes will not have notes registered in their names, will not receive physical delivery of notes in
certificated form and will not be considered the registered owners or "holders" thereof under the 2020 Notes Indenture or 2023 Notes Indenture, as applicable, for any purpose.
Payments
in respect of the principal of, and interest or premium, if any, on a Global Note registered in the name of DTC or its nominee will be payable to DTC in its capacity as the
registered holder under the Indentures. Under the terms of the Indentures, we and the trustee will treat the persons in whose names the notes, including the Global Notes, are registered as the owners
thereof for the purpose of receiving payments and for all other purposes. Consequently, neither we, the trustee, nor any agent of ours or the trustee has or will have any responsibility or liability
for: (1) any aspect of DTC's records or any Participant's or Indirect Participant's records relating to or payments made on account of beneficial ownership interest in the Global Notes or for
maintaining, supervising or reviewing any of DTC's records or any Participant's or Indirect Participant's records relating to the beneficial ownership interests in the Global Notes; or (2) any
other matter relating to the actions and practices of DTC or any of its Participants or Indirect Participants.
DTC
has advised us that its current practice, upon receipt of any payment in respect of securities such as the notes (including principal, interest and additional interest, if any), is
to credit the accounts of the relevant Participants with the payment on the payment date unless DTC has reason to believe it will not receive payment on such payment date. Each relevant Participant is
credited with an amount proportionate to its beneficial ownership of an interest in the principal amount of the relevant security as shown on the records of DTC. Payments by the Participants and the
Indirect Participants to the beneficial owners of the notes will be governed by standing instructions and customary practices and will be the responsibility of the Participants or the Indirect
Participants and will not be the responsibility of DTC, the trustee or us. Neither we nor the trustee will be liable for any delay by DTC or any of its Participants in identifying the beneficial
owners of the notes, and we and the trustee may conclusively rely on and will be protected in relying on instructions from DTC or its nominee for all purposes.
Transfers
between Participants in DTC will be effected in accordance with DTC's procedures, and will be settled in same-day funds, and transfers between participants in Euroclear and
Clearstream will be effected in accordance with their respective rules and operating procedures.
Cross-market
transfers between the Participants in DTC, on the one hand, and Euroclear or Clearstream participants, on the other hand, will be effected through DTC in accordance with
DTC's rules on behalf of Euroclear or Clearstream, as the case may be, by its respective depositary; however, such cross-market transactions will require delivery of instructions to Euroclear or
Clearstream, as the case may be, by the counterparty in such system in accordance with the rules and procedures and within the established deadlines (Brussels time) of such system. Euroclear or
Clearstream, as the case may be, will, if the transaction meets its settlement requirements, deliver instructions to its respective depositary to take action to effect final settlement on its behalf
by delivering or receiving interests in the relevant Global Note in DTC, and making or receiving payment in accordance with normal
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procedures
for same-day funds settlement applicable to DTC. Euroclear participants and Clearstream participants may not deliver instructions directly to the depositories for Euroclear or Clearstream.
DTC
has advised us that it will take any action permitted to be taken by a holder of the notes only at the direction of one or more Participants to whose account DTC has credited the
interests in the Global Notes and only in respect of such portion of the aggregate principal amount of the notes as to which such Participant or Participants has or have given such direction. However,
if there is an Event of Default under the Indentures, DTC reserves the right to exchange the Global Notes for legended notes in certificated form, and to distribute such notes to its Participants.
Although
DTC, Euroclear and Clearstream have agreed to the foregoing procedures to facilitate transfers of interests in each Global Note among participants in DTC, Euroclear and
Clearstream, they are under no obligation to perform or to continue to perform such procedures, and may discontinue such procedures at any time. Neither we nor the trustee nor any of our or their
respective agents will have any responsibility for the performance by DTC, Euroclear or Clearstream or their respective participants or indirect participants of their respective obligations under the
rules and procedures governing their operations.
Same Day Settlement and Payment
We will make payments in respect of the notes represented by the Global Notes, including principal, premium, if any, and interest by
wire transfer of immediately available funds to the accounts specified by DTC or its nominee. The notes represented by the Global Notes are expected to be eligible to trade in DTC's Same-Day Funds
Settlement System, and any permitted secondary market trading activity in such notes will, therefore, be required by DTC to be settled in immediately available funds.
Because
of time zone differences, the securities account of a Euroclear or Clearstream participant purchasing an interest in a Global Note from a Participant will be credited, and any
such crediting will be reported to the relevant Euroclear or Clearstream participant, during the securities settlement processing day (which must be a business day for Euroclear and Clearstream)
immediately following the settlement date of DTC. DTC has advised us that cash received in Euroclear or Clearstream as a result of sales of interests in a Global Note by or through a Euroclear or
Clearstream participant to a
Participant will be received with value on the settlement date of DTC but will be available in the relevant Euroclear or Clearstream cash account only as of the business day for Euroclear or
Clearstream following DTC's settlement date.
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