EXHIBIT 4.2
FIRST SUPPLEMENTAL INDENTURE
(Senior Subordinated Debt Indenture)
This FIRST SUPPLEMENTAL INDENTURE, dated as of December 18, 2003, (this
"First Supplemental Indenture"), by and between KB Home, a Delaware corporation
(the "Issuer"), SunTrust Bank (successor to SunTrust Bank, Atlanta), as trustee
under the Indenture referred to below (the "Trustee"), and each of the
Guarantors (as defined below).
W I T N E S S E T H:
WHEREAS, the Issuer and the Trustee have heretofore executed and
delivered a Senior Subordinated Debt Indenture, dated as of November 19, 1996
(the "Original Indenture, which term shall include the form and terms of each
series of Securities (as defined in the Original Indenture) established as
contemplated under the Original Indenture; the Original Indenture, as amended
and supplemented by this First Supplemental Indenture is hereinafter called the
"Indenture"), providing for the issuance from time to time of the Issuer's
Securities;
WHEREAS, pursuant to Article Two of the Original Indenture, the Issuer
has established (i) by Officers' Certificates, dated as of January 27, 2003 and
February 7, 2003 the form and terms of a series of the Issuer's Securities
designated the "7 3/4% Senior Subordinated Notes due 2010" (the "2010 Notes"),
(ii) by an Officers' Certificate, dated as of December 14, 2001, the form and
terms of a series of the Issuer's Securities designated the "8 5/8% Senior
Subordinated Notes due 2008" (the "2008 Notes") and (iii) by an Officers'
Certificate, dated as of February 8, 2001, the form and terms of a series of the
Issuer's Securities designated the "9 1/2% Senior Subordinated Notes due 2011"
(the "2011 Notes," and together with the 2010 Notes and the 2008 Notes, the
"Senior Subordinated Notes");
WHEREAS, the Issuer and the Guarantors wish to supplement the Original
Indenture to provide for the guaranty by the Guarantors of the obligations of
the Issuer under the Senior Subordinated Notes and, solely insofar as relates to
the Senior Subordinated Notes, under the Original Indenture, and otherwise to
modify the Original Indenture on the terms set forth in this First Supplemental
Indenture; and
WHEREAS, the Issuer has requested that the Trustee execute and deliver
this First Supplemental Indenture pursuant to Section 8.1 of the Original
Indenture, and all requirements necessary to make this First Supplemental
Indenture a valid instrument in accordance with its terms have been performed
and the execution and delivery of this First Supplemental Indenture have been
duly authorized in all respects by the Issuer and each of the Guarantors.
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Issuer, the Guarantors and the Trustee mutually covenant and
agree for the equal and proportionate benefit of the Holders (as defined in the
Original Indenture) from time to time of the Senior Subordinated Notes as
follows:
ARTICLE ONE
GUARANTY AND RELATED PROVISIONS
SECTION 1.1 Additional Event of Default. Pursuant to Section
24(a) of each Officers' Certificate (as defined in Section 14.1 of the
Indenture), Section 5.1 of the Original Indenture was amended and restated, but
only insofar as it relates to the series of Senior Subordinated Notes issued
pursuant to such Officers' Certificate, to read in full as set forth in such
Section 24(a), and Section 5.1 as set forth in Section 24(a) of each Officers'
Certificate is hereby further amended, but only insofar as relates to the series
of Senior Subordinated Notes issued pursuant to such Officers' Certificates, by
replacing the period following clause (f) with "; or" and adding the following
new clause (g) thereto, such clause to read in full as follows:
"(g) the Guaranty (as defined in Section 14.1 of this
Indenture) of any Guarantor (as defined in Section 14.1 of this
Indenture) with respect to the Notes ceases to be in full force and
effect (other than by reason of the release of such Guarantor in
accordance with the terms of Article Fourteen of this Indenture) or is
declared to be null and void or unenforceable or the Guaranty of any
Guarantor with respect to the Notes is found to be invalid or a
Guarantor denies its liability under its Guaranty with respect to the
Notes (other than by reason of the release of such Guarantor in
accordance with the terms of Article Fourteen of this Indenture)."
SECTION 1.2. Amendment of Section 5.7 of the Indenture. Section 5.7 of
the Original Indenture is hereby amended and restated, but only insofar as
relates to the Senior Subordinated Notes, to read in full as follows:
"SECTION 5.7 Unconditional Right of the Securityholders to
Institute Certain Suits. Notwithstanding any other provisions of this
Indenture and any provision of any Senior Subordinated Note or
Guaranty, the right of any Holder of any Senior Subordinated Note to
receive payment of the principal of and interest on such Senior
Subordinated Note on or after the respective due dates expressed in
this Indenture or such Senior Subordinated Note (and to receive such
payment pursuant to any Guaranty of such Senior Subordinated Note), or
to institute suit for the enforcement of any such payment on or after
such respective dates, shall not be impaired or affected without the
consent of such Holder."
SECTION 1.3 Guaranty and Subordination of Guaranty. The
Original Indenture is hereby amended, but only insofar as relates to the Senior
Subordinated Notes, to add the following new Article Fourteen and Article
Fifteen, such Articles to read in full as follows:
"ARTICLE FOURTEEN
GUARANTY
"SECTION 14.1 Defined Terms. Capitalized terms used in Article
Fourteen and Article Fifteen of this Indenture have the meanings given
them in such Articles and the Officers' Certificates (provided,
however, if the definition of any term defined in any Officers'
Certificate differs from the definition of such term in any other
Officers' Certificate, then the definition of such term with respect to
the 2008 Notes, the 2010 Note and the 2011 Notes shall be the
definition of such term set forth in the respective
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Officers' Certificates applicable to such series of Senior Subordinated
Notes), or if not defined in this Article Fourteen, such Article
Fifteen or the Officers' Certificates, in Section 1.1 of this
Indenture.
"As used in this Article Fourteen and in Article Fifteen, the
following terms have the respective meanings set forth below:
"2008 Notes" means that series of the Issuer's
Securities designated as the "8 5/8% Senior Subordinated Notes
due 2008."
"2008 Officers' Certificate" means the Officers'
Certificate, dated as of December 14, 2001, establishing the
form and terms of the 2008 Notes pursuant to Article Two of
this Indenture.
"2010 Notes" means that series of the Issuer's
Securities designated as the "7 3/4% Senior Subordinated Notes
due 2010."
"2010 Officers' Certificates" means the Officers'
Certificates, dated as of January 27, 2003 and February 7,
2003, establishing the form and terms of the 2010 Notes
pursuant to Article Two of this Indenture.
"2011 Notes" means that series of the Issuer's
Securities designated as the "9 1/2% Senior Subordinated Notes
due 2011."
"2011 Officers' Certificate" means the Officers'
Certificate, dated as of February 8, 2001, establishing the
form and terms of the 2011 Notes pursuant to Article Two of
this Indenture.
"Guaranty" and "Guaranties" mean the guaranty set
forth in Section 14.2 of this Indenture and any guaranties
that are executed and delivered pursuant to Section 14.14 of
this Indenture, collectively, or all or any such guaranties,
as the context shall require.
"Guarantors" means (i) the Persons whose names appear
under the caption "Guarantors" on the signature pages of the
First Supplemental Indenture dated as of December 18, 2003
between the Issuer, the Trustee and the Guarantors named
therein and (ii) any Person that becomes a Guarantor after the
date of such First Supplemental Indenture in accordance with
the provisions of this Article Fourteen, but excluding in each
case any Person whose Guaranty has been released pursuant to
the terms of this Article Fourteen.
"Loan Agreement" means that certain Revolving Loan
Agreement, dated as of October 24, 2003, between the Issuer,
the banks party thereto and Bank of America, N.A., as
Administrative Agent, Bank One, N.A., as Syndication Agent,
Fleet National Bank, Credit Lyonnais New York Branch, Wachovia
Bank, National Association, KeyBank National Association and
SunTrust Bank, as Documentation Agents, and Banc of America
Securities LLC, as Sole Lead
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Arranger and Sole Book Manager, as the same may be amended,
supplemented or modified from time to time and including any
increase in the amount of credit available thereunder.
"Officers' Certificates" means, collectively, the 2008
Officers' Certificate, the 2010 Officers' Certificates and the
2011 Officers' Certificate and "Officers' Certificate" means
any of the Officers' Certificates.
"Senior Subordinated Notes" means, collectively, the
2008 Notes, the 2010 Notes and the 2011 Notes.
"Substitute Loan Agreement" means any credit facility
(as the same may be amended, supplemented or modified from
time to time) of the Issuer which is created subsequent to
December 18, 2003 and which replaces all or part of the Loan
Agreement or a Substitute Loan Agreement (and which may
provide for an increase in the amount of credit available
thereunder), so long as the Issuer is a borrower under such
Substitute Loan Agreement.
"SECTION 14.2 Unconditional Guaranty. In recognition of the
benefits that the issuance of the Senior Subordinated Notes has
conferred and will continue to confer, and the benefits that the
issuance of the Guaranties will confer, upon the Issuer and the
Guarantors and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, each Guarantor hereby
absolutely and unconditionally guaranties, jointly and severally, to
each Holder of any Senior Subordinated Notes and to the Trustee on
behalf of each such Holder prompt payment when due, whether at stated
maturity, upon acceleration, upon repurchase at the option of the
Holder, upon redemption at the option of the Issuer or otherwise, and
at all times thereafter, of the principal of and premium, if any, and
interest on the Senior Subordinated Notes and of any and all other
existing and future indebtedness and liabilities of every kind, nature
and character, direct or indirect, absolute or contingent, liquidated
or unliquidated, voluntary or involuntary, of the Issuer to the Holders
of the Senior Subordinated Notes arising under this Indenture or the
Senior Subordinated Notes (collectively, the "Guarantied Obligations").
The Trustee's books and records showing the amount of the Guarantied
Obligations shall be admissible in evidence in any action or
proceeding, and shall be binding upon the Guarantors and conclusive for
the purpose of establishing the amount of the Guarantied Obligations,
absent manifest error. The Guaranties shall not be affected by the
validity, regularity or enforceability of the Guarantied Obligations or
of the Senior Subordinated Notes, this Indenture or any other
instrument or agreement evidencing any Guarantied Obligations, or any
question as to the authenticity of any of the Senior Subordinated
Notes, this Indenture or any other such instrument or agreement, or by
the existence, validity, enforceability, perfection or extent of any
collateral therefor, or by any fact or circumstance relating to the
Guarantied Obligations which might otherwise constitute a defense to
the obligations of any Guarantor under its Guaranty, other than payment
in full by the Issuer or any other Person.
"SECTION 14.3 Limitation of the Guarantors' Liability. Each
Guarantor and, by its acceptance and ownership of a Senior Subordinated
Note and by its acceptance of any
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benefits under any Guaranty, each Holder of a Senior Subordinated Note
hereby confirms that it is the intention of all parties that the
obligations of the Guarantors under their Guaranties shall not
constitute a fraudulent conveyance or fraudulent transfer under any
applicable fraudulent conveyance, fraudulent transfer, bankruptcy,
insolvency or other similar law of any applicable jurisdiction. To
effectuate the foregoing intention, each Holder of the Senior
Subordinated Notes, by its acceptance and ownership of Senior
Subordinated Notes and by its acceptance of any benefits under any
Guaranty, and each Guarantor hereby agree that the obligations of such
Guarantor under its Guaranty are limited to the maximum amount as will,
after giving effect to all other contingent and fixed liabilities of
such Guarantor, result in the obligations of such Guarantor under its
Guaranty not constituting a fraudulent conveyance or fraudulent
transfer under applicable law. Subject to the preceding limitation, the
obligations of each Guarantor under its Guaranty constitute a guaranty
of payment in full when due and not merely a guaranty of collectability
"SECTION 14.4 No Termination. Each Guaranty is a continuing
and irrevocable guaranty of all Guarantied Obligations now or hereafter
existing and shall remain in full force and effect until all of the
Guarantied Obligations are paid in full or, in the case of the Guaranty
of any Guarantor, until such time, if any, as such Guarantor is
released from its Guaranty in accordance with this Article Fourteen.
All payments under any Guaranty shall be made to the Trustee on behalf
of the Holders of the applicable series of Senior Subordinated Notes.
"SECTION 14.5 Waiver of Notices. Each Guarantor waives, to the
fullest extent permitted by law, notice of the acceptance of its
Guaranty and of the extension or continuation of the Guarantied
Obligations or any part thereof. Each Guarantor further waives, to the
fullest extent permitted by law, presentment, protest, notice, dishonor
or default, demand for payment and any other notices to which such
Guarantor might otherwise be entitled.
"SECTION 14.6 Subrogation. The Guarantors shall exercise no
right of subrogation, contribution or similar rights against the Issuer
or any other Guarantor with respect to any payments on the Guarantied
Obligations made under any Guaranty until all of the Guarantied
Obligations are paid in full. If any amounts are paid to a Guarantor in
violation of the foregoing limitation, then such amounts shall be held
in trust for the benefit of the Holders of the Senior Subordinated
Notes, and shall forthwith be paid to the Trustee, on behalf of such
Holders.
"SECTION 14.7. Waiver of Suretyship Defenses. Each Guarantor
agrees, to the fullest extent permitted by law, that the Trustee or,
subject to Sections 5.6 and 5.7 of this Indenture, the Holders of the
Senior Subordinated Notes may, at any time and from time to time, and
without notice to such Guarantor, make any agreement with the Issuer or
with any other Person liable on any of the Guarantied Obligations or
providing collateral as security for the Guarantied Obligations, for
the extension, renewal, payment, compromise, discharge or release of
the Guarantied Obligations or any collateral (in whole or in part), or
for any modification or amendment of the terms thereof or of any
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instrument or agreement evidencing the Guarantied Obligations or the
provision of collateral, all without in any way impairing, releasing,
discharging or otherwise affecting the obligations of such Guarantor
under its Guaranty. To the fullest extent permitted by law, each
Guarantor waives any defense arising by reason of any disability or
other defense of the Issuer or any other Guarantor, or the cessation
from any cause whatsoever of the liability of the Issuer (other than by
payment in full of the Guarantied Obligations), or any claim that such
Guarantor's obligations exceed or are more burdensome than those of the
Issuer and waives the benefit of any statute of limitations affecting
the liability of such Guarantor hereunder. To the fullest extent
permitted by law, each Guarantor waives any right to enforce any remedy
which the Trustee or any Holder of the Senior Notes now has or may
hereafter have against the Issuer and waives any benefit of and any
right to participate in any security now or hereafter held by the
Trustee or any Holder of the Senior Subordinated Notes until all of the
Guarantied Obligations are paid in full. Further, each Guarantor
consents, to the fullest extent permitted by law, to the Trustee's or
any Holder's taking of, or failure to take, any action which might in
any manner or to any extent vary the risks of the Guarantors under
their Guaranties or which, but for this provision, might operate as a
discharge of any Guarantor.
"SECTION 14.8 Exhaustion of Other Remedies Not Required. The
obligations of each Guarantor under this Indenture and its Guaranty are
those of primary obligor, and not merely as surety, and are independent
of the Guarantied Obligations. Each Guarantor waives, to the fullest
extent permitted by law, diligence by the Trustee or the Holders and
action on delinquency in respect of the Guarantied Obligations or any
part thereof, including, without limitation any provisions of law
requiring any party to exhaust any right or remedy or to take any
action against the Issuer, any other Guarantor or any other Person or
property before enforcing the Guaranty against such Guarantor.
"SECTION 14.9 Reinstatement. Notwithstanding anything in this
Indenture or any Guaranty delivered pursuant to Section 14.14 of this
Indenture to the contrary, the provisions of this Article Fourteen and
of the Guaranties delivered pursuant to Section 14.14 of this Indenture
shall continue to be effective or be reinstated, as the case may be, if
at any time any payment of any portion of the Guarantied Obligations is
revoked, terminated, rescinded or reduced or must otherwise be restored
or returned upon the insolvency, bankruptcy or reorganization of the
Issuer or any other Person or otherwise, as if such payment had not
been made and whether or not the Trustee or any Holder of Senior
Subordinated Notes is in possession of or has released any Guarantor
from its Guaranty and regardless of any prior revocation, rescission,
termination or reduction.
"SECTION 14.10 Subordination. While an Event of Default under
the Senior Subordinated Notes of any series has occurred and is
continuing, each Guarantor hereby subordinates the payment of all
obligations and indebtedness of the Issuer owing to such Guarantor,
whether now existing or hereafter arising, including but not limited to
any obligation of the Issuer to such Guarantor as subrogee of the
Trustee or any Holder of Senior Subordinated Notes or resulting from
such Guarantor's performance under its Guaranty, until such time as all
Guarantied Obligations have been paid in full. If the
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Trustee so requests or, subject to Sections 5.6 and 5.7 of this
Indenture, the Holders of at least 25% of the outstanding principal
amount of the Senior Subordinated Notes of any series so request, any
such obligation or indebtedness of the Issuer to such Guarantor shall
be enforced and performance received by such Guarantor as trustee for
the Trustee and the proceeds thereof shall be paid over to the Trustee
on behalf of the Holders of the Senior Subordinated Notes on account of
the Guarantied Obligations, but without reducing or affecting in any
manner the liability of any of the Guarantors under their Guaranties.
"SECTION 14.11 Information. While an Event of Default under
the Senior Subordinated Notes of any series has occurred and is
continuing, each Guarantor shall furnish promptly to the Trustee any
and all financial or other information regarding such Guarantor or its
property as the Trustee may reasonably request in writing.
"SECTION 14.12 Stay of Acceleration. In the event that
acceleration of the time for payment of any of the Guarantied
Obligations relating to any series of Senior Subordinated Notes is
stayed, upon the insolvency, bankruptcy or reorganization of the Issuer
or any other Person, or otherwise, all such Guarantied Obligations
shall nonetheless be payable by the Guarantors immediately upon demand
by the Trustee or the Holders of at least 25% of the outstanding
principal amount of the Senior Subordinated Notes of such series, as
the case may be.
"SECTION 14.13 Condition of the Issuer. Each Guarantor
acknowledges and agrees that it has the sole responsibility for, and
has adequate means of, obtaining from the Issuer such information
concerning the financial condition, business and operations of the
Issuer as such Guarantor requires, and that neither the Trustee nor any
Holder has any duty, and such Guarantor is not relying on the Trustee
or any Holder at any time, to disclose to such Guarantor any
information relating to the business, operations or financial condition
of the Issuer.
"SECTION 14.14 Execution of Guaranty. To further evidence the
Guaranty set forth in Section 14.2 hereof, each Guarantor hereby agrees
to execute a Guaranty in substantially the form set forth below in
respect of each series of Senior Subordinated Notes:
"[FORM OF GUARANTY]
"GUARANTY
"For value received, each of the undersigned (the
"Guarantors") hereby absolutely and unconditionally guaranties, jointly
and severally, to each Holder of any of the Issuer's [INSERT REFERENCE
TO APPLICABLE SERIES OF SENIOR SUBORDINATED NOTES] [8 5/8% Senior
Subordinated Notes due 2008] [7 3/4% Senior Subordinated Notes due
2010] [9 1/2% Senior Subordinated Notes due 2011] (the "Subject Notes")
and to the Trustee on behalf of each such Holder prompt payment when
due, whether at stated maturity, upon acceleration, upon repurchase at
the option of the Holder, upon redemption at the option of the Issuer
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or otherwise, and at all times thereafter, of the principal of and
premium, if any, and interest on any of the Subject Notes and of any
and all other existing and future indebtedness and liabilities of every
kind, nature and character, direct or indirect, absolute or contingent,
liquidated or unliquidated, voluntary or involuntary, of the Issuer to
the Holders of the Subject Notes arising under the Senior Subordinated
Debt Indenture dated as of November 19, 1996, as amended and
supplemented by the First Supplemental Indenture dated as of December
18, 2003, among the Issuer, Sun Trust Bank, as successor trustee, and
the guarantors party thereto (such Indenture, as so amended and
supplemented and as the same may be further amended or supplemented
from time to time, the "Indenture") or the Subject Notes (collectively,
the "Guarantied Obligations") in accordance with, and subject to, the
terms set forth in Article Fourteen of the Indenture. All capitalized
terms used in this Guaranty which are defined in the Indenture shall
have the meaning assigned to them in the Indenture.
"Each Guarantor and, by its acceptance and ownership of a
Subject Note and by its acceptance of any benefits under this Guaranty,
each Holder of a Subject Note hereby confirms that it is the intention
of all parties that the obligations of the Guarantors under their
Guaranties shall not constitute a fraudulent conveyance or fraudulent
transfer under any applicable fraudulent conveyance, fraudulent
transfer, bankruptcy, insolvency or other similar law of any applicable
jurisdiction. To effectuate the foregoing, each Holder of Subject
Notes, by its acceptance and ownership of Subject Notes and by its
acceptance of any benefits under this Guaranty, and each Guarantor
hereby agrees that the obligations of such Guarantor under its Guaranty
are limited to the maximum amount as will, after giving effect to all
other contingent and fixed liabilities of such Guarantor, result in the
obligations of such Guarantor under its Guaranty not constituting a
fraudulent conveyance or fraudulent transfer under applicable law.
Subject to the preceding limitation, the obligations of each Guarantor
under its Guaranty constitute a guaranty of payment in full when due
and not merely a guaranty of collectability.
"The obligations of each Guarantor to the Holders of Subject
Notes and to the Trustee pursuant to its Guaranty and the Indenture are
expressly set forth in Article Fourteen of the Indenture, and reference
is hereby made to such Indenture for the precise terms thereof.
"This instrument shall be governed by and construed in
accordance with the laws of the State of New York.
"IN WITNESS WHEREOF, the undersigned have caused this
instrument to be executed by their respective duly authorized
signatories.
[NAMES OF GUARANTORS]
By:
-----------------------------
Title:
"Upon execution of any Guaranty pursuant to this Section
14.14, the Guarantors party thereto shall deliver such Guaranty to the
Trustee, which shall deliver such
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Guaranty to the Holders of the Senior Subordinated Notes of the
applicable series as an endorsement to the Senior Subordinated Notes of
such series held by such Holders, or alternatively hold such Guaranty
on behalf of each such Holders.
"Anything in this Indenture or the Senior Subordinated Notes
to the contrary notwithstanding, neither the validity nor the
enforceability of any Guaranty set forth in Section 14.2 of this
Indenture shall be impaired or otherwise affected by the fact that a
Guaranty (whether in substantially the form specified pursuant to this
Section 14.14 or otherwise) is not endorsed on any of the Senior
Subordinated Notes or delivered to any Holder of Senior Subordinated
Notes or the Trustee, and each Guarantor agrees that its Guaranty set
forth in Section 14.2 of this Indenture shall remain in full force and
effect with respect to each Senior Subordinated Note notwithstanding
any failure of any or all of the Guarantors to execute or deliver
Guaranties pursuant to this Section 14.14, it being understood and
agreed by the Guarantors and the Issuer that the provisions of this
Section 14.14 are intended merely to further evidence the Guaranties
set forth in Section 14.2.
"Each Guarantor agrees that any Guaranty executed pursuant to
this Section 14.14 shall be signed on behalf of such Guarantor by its
president, any vice president or its treasurer or any other duly
authorized signatory of such Guarantor (each, a "subject officer") and
that such Guarantor's seal, or a facsimile thereof, may, but need not
be, affixed to such Guaranty. The signature of any subject officer may
be the manual or facsimile signature of the present or any future such
subject officer. Typographical and other minor errors defects in any
such reproduction of any such signature shall not effect the validity
or enforceability of any Guaranty delivered pursuant to this Section
14.14.
"In case any subject officer of any Guarantor who shall have
signed any Guaranty pursuant to this Section 14.14 shall cease to be
such subject officer before such Guaranty shall have been delivered to
the Holders of Senior Subordinated Notes or the Trustee, such Guaranty
may nonetheless be delivered as though the person who signed such
Guaranty had not ceased to be such subject officer, and any Guaranty
delivered pursuant to this Section 14.14 may be signed on behalf of any
Guarantor by any person who was, at the actual date of the execution of
such Guaranty, a subject officer of such Guarantor.
"SECTION 14.15 Release of Guarantors.
"(a) For so long as the Issuer is a party to or otherwise
bound by the terms of the Loan Agreement or any Substitute Loan
Agreement, if a Guarantor is released from all of its guaranties under
or pursuant to the Loan Agreement and all Substitute Loan Agreements,
such Guarantor shall be automatically and unconditionally released and
discharged from all of its obligations under this Indenture and its
Guaranty without any further action required on the part of the Issuer,
the other Guarantors, the Trustee or any Holder.
"(b) For so long as the Issuer is not a party to or bound
by the terms of the Loan Agreement or any Substitute Loan Agreement, if
a Guarantor shall cease to be either a Restricted Domestic Subsidiary
or a Restricted Significant Subsidiary, such
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Guarantor shall be automatically and unconditionally released and
discharged from all of its obligations under this Indenture and its
Guaranty without any further action required on the part of the Issuer,
the other Guarantors, the Trustee or any Holder; provided that all
guarantees (as defined in Section 20 of the Officers' Certificates) by
such Guarantor of any other Indebtedness (as defined in Section 20 of
the Officers' Certificates) of the Issuer (other than guarantees of
Senior Indebtedness of the Issuer) and all guarantees by such Guarantor
(other than guarantees that constitute Guarantor Senior Indebtedness of
such Guarantor) of any Indebtedness (as defined in Section 20 of the
Officers' Certificates) of any Subsidiaries of the Issuer are
terminated at or prior to the time of such release.
"(c) The Trustee shall deliver an appropriate instrument
evidencing any such release upon receipt of a written request by the
Issuer accompanied by an Officers' Certificate and an Opinion of
Counsel, each to the effect that such release has been effected in
compliance with the provisions of this Indenture.
"SECTION 14.16 Additional Guarantors.
"(a) For so long as the Issuer is a party to or bound by
the terms of the Loan Agreement or any Substitute Loan Agreement, if
any Subsidiary of the Issuer that is not then a Guarantor guaranties
any indebtedness or other obligations of the Issuer under the Loan
Agreement or any Substitute Loan Agreement, then, contemporaneously
with or prior to the effectiveness of such guaranty, the Issuer shall
(i) execute and deliver, cause such Subsidiary and all other Guarantors
to execute and deliver and use its reasonable best efforts to cause the
Trustee to execute and deliver a supplemental indenture, in form
satisfactory to the Trustee, pursuant to which such Subsidiary shall
become a Guarantor under this Indenture and shall cause such Subsidiary
and all other Guarantors to execute and deliver Guaranties pursuant to
Section 14.14 of this Indenture and (ii) deliver to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that such
supplemental indenture and such Guaranties pursuant to Section 14.14
hereof comply with this Indenture. Thereafter, such Subsidiary shall be
a Guarantor for all purposes of this Indenture unless and until
released from its Guaranty pursuant to Section 14.15 of this Indenture.
"(b) For so long as the Issuer is not a party to or bound
by the terms of the Loan Agreement or any Substitute Loan Agreement, if
any Subsidiary of the Issuer that is not a Guarantor is or becomes both
a Restricted Domestic Subsidiary and a Restricted Significant
Subsidiary, the Issuer shall (i) promptly execute and deliver, cause
such Subsidiary and all other Guarantors to execute and deliver and use
its reasonable best efforts to cause the Trustee to execute and deliver
a supplemental indenture, in form satisfactory to the Trustee, pursuant
to which such Subsidiary shall become a Guarantor under this Indenture
and shall cause such Subsidiary and all other Guarantors to execute and
deliver Guaranties pursuant to Section 14.14 of this Indenture and (ii)
deliver to the Trustee an Officers' Certificate and an Opinion of
Counsel, each stating that such supplemental indenture and such
Guaranties pursuant to Section 14.14 hereof comply with this Indenture.
Thereafter, such Subsidiary shall be a Guarantor for all purposes of
the Indenture unless and until released from its Guaranty pursuant to
Section 14.15 of this
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Indenture.
"SECTION 14.17. Notices to Guarantors. Any notice or demand to
a Guarantor under this Indenture shall be delivered pursuant to Section
11.4 of this Indenture to such Guarantor in care of the Issuer.
"SECTION 14.18 Waiver of Stay, Extension and Usury Laws. Each
Guarantor covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law or
any usury law or other law which would prohibit or forgive such
Guarantor from paying all or any portion of any amount due under its
Guaranty as contemplated in this Indenture, wherever enacted, now or at
any time hereafter in force, or which may affect the covenants or the
performance of this Indenture and (to the extent that it may lawfully
do so) each Guarantor hereby expressly waives all benefit or advantage
of any such law and covenants that it will not hinder, delay or impede
the execution of any power granted to the Trustee, but will suffer and
permit the execution of every such power as though no such law had been
enacted.
"ARTICLE FIFTEEN
SUBORDINATION OF GUARANTY
"Section 15.1 Agreement to Subordinate. Each Guarantor
covenants and agrees, and each Holder of any Senior Subordinated Note,
by such Holder's acceptance and ownership thereof and by such Holder's
acceptance of any benefits under any Guaranty likewise covenants and
agrees, that, to the extent and in the manner hereinafter set forth in
this Article Fifteen, payment of any and all amounts by such Guarantor
under its Guaranty of the Senior Subordinated Notes is hereby expressly
made subordinate and subject in right of payment to the prior payment
in full of all Guarantor Senior Indebtedness of such Guarantor.
"Guarantor Senior Indebtedness" means, with respect to any
Guarantor, the principal of (and premium, if any) and unpaid interest
(including interest accruing after the filing of a petition initiating
any proceeding pursuant to any Bankruptcy Laws, whether or not the
payment of such interest is permitted by law) or accrued original issue
discount on and other amounts due on or in connection with any Debt
incurred, assumed or guarantied by such Guarantor whether outstanding
on the date the First Supplemental Indenture, dated as of December 18,
2003 between the Issuer, the Trustee and the guarantors party thereto
(the "First Supplemental Indenture") or thereafter incurred, assumed or
guarantied and all renewals, extensions and refundings of any such
Debt; provided, however, that the following will not constitute
Guarantor Senior Indebtedness of such Guarantor:
"(a) any Debt of such Guarantor as to which, in
the instrument creating the same or evidencing the same or
pursuant to which the same is outstanding, it is expressly
provided that such Debt is subordinate in right of payment to
all other Debt of such Guarantor not expressly subordinated to
such Debt;
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"(b) any Debt of such Guarantor which by its
terms refers explicitly to the Guaranties of the Senior
Subordinated Notes and states that such Debt shall not be
senior in right of payment to the Guaranties of the Senior
Subordinated Notes;
"(c) all Guaranties of such Guarantor in respect
of the Senior Subordinated Notes;
"(d) any Debt of such Guarantor to any Subsidiary
of such Guarantor or of the Issuer;
"(e) any Debt of such Guarantor to any joint
venture or partnership, which joint venture or partnership is
required, under generally accepted accounting principles, to
be consolidated in the Issuer's or such Guarantor's
consolidated financial statements; and
"(f) any Debt of such Guarantor which by its
terms ranks pari passu with or subordinate to such Guarantor's
Guaranties of the Senior Subordinated Notes.
"For purposes of the foregoing definition, it is hereby expressly
agreed and understood that all references to Debt of any Guarantor
shall include all obligations of such Guarantor as guarantor of any
Debt of others and, without limitation to the foregoing, any guaranty
by such Guarantor of the Issuer's 7 3/4% Senior Notes due October 15,
2004 shall constitute Guarantor Senior Indebtedness of such Guarantor.
"Section 15.2. Payment Over of Proceeds Upon Dissolution, Etc.
Upon any distribution of assets of a Guarantor in the event of (a) any
insolvency or bankruptcy case or proceeding, or any receivership,
liquidation, reorganization or other similar case or proceeding in
connection therewith, relative to such Guarantor or to its creditors,
as such, or to its assets, or (b) any liquidation, dissolution or other
winding up of such Guarantor, whether voluntary or involuntary, or (c)
any assignment for the benefit of creditors or any other marshalling of
assets and liabilities of such Guarantor, then and in such event;
"(1) the holders of the Guarantor Senior
Indebtedness of such Guarantor shall be entitled to receive
payment in full of all amounts due or to become due on or in
respect of all such Guarantor Senior Indebtedness, or
provision shall be made for such payment in cash, before the
Holders of the Senior Subordinated Notes are entitled to
receive any payment under or with respect to such Guarantor's
Guaranty of the Senior Subordinated Notes; and
"(2) any payment or distribution of assets of
such Guarantor of any kind or character, whether in cash,
property or securities, by set-off or otherwise, to which the
Holders of the Senior Subordinated Notes or the Trustee would
be entitled but for the provisions of this Article Fifteen,
including any such payment
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or distribution which may be payable or deliverable by reason
of the payment of any other Debt of such Guarantor being
subordinated to the payment of amounts due under such
Guarantor's Guaranty, shall be paid, to the extent permitted
by law, by the liquidating trustee or agent or other Person
making such payment or distribution, whether a trustee in
bankruptcy, a receiver or liquidating trustee or otherwise,
directly to the holders of the Guarantor Senior Indebtedness
of such Guarantor or their representative or representatives
or to the trustee or trustees under any indenture under which
any instruments evidencing any such Guarantor Senior
Indebtedness of such Guarantor may have been issued, ratably
according to the aggregate amounts remaining unpaid on account
of the principal of, and premium, if any, and interest on the
Guarantor Senior Indebtedness of such Guarantor held or
represented by each, to the extent necessary to make payment
in full of all such Guarantor Senior Indebtedness of such
Guarantor remaining unpaid, after giving effect to any
concurrent payment or distribution to the holders of such
Guarantor Senior Indebtedness of such Guarantor.
"In the event that, notwithstanding the foregoing provisions
of this Section 15.2, the Trustee or the Holder of any Senior
Subordinated Notes shall receive any payment or distribution of assets
of a Guarantor of any kind or character, whether in cash, property or
securities, including any such payment or distribution which may be
payable or deliverable by reason of the payment of any other Debt of
the Guarantor being subordinated to the payment of the amounts due
under such Guarantor's Guaranty, before all Guarantor Senior
Indebtedness of such Guarantor is paid in full or payment thereof
provided for, then and in such event such payment or distribution
shall, to the extent permitted by law, be held in trust for the benefit
of and paid over or delivered forthwith to the holders of Guarantor
Senior Indebtedness of such Guarantor or their representative or
representatives or to the trustee or trustees under any indenture under
which any instruments evidencing any such Guarantor Senior Indebtedness
have been issued for application to the payment of all Guarantor Senior
Indebtedness of such Guarantor remaining unpaid in the manner provided
in clause (2) of the immediately preceding paragraph, to the extent
necessary to pay all such Guarantor Senior Indebtedness of such
Guarantor in full, after giving effect to any concurrent payment or
distribution to or for the holders of Guarantor Senior Indebtedness of
such Guarantor.
"For purposes of this Article Fifteen only, the words "cash,
property or securities" shall not be deemed to include shares of
capital stock of any Guarantor as reorganized or readjusted, or
securities of any Guarantor or any other corporation provided for by a
plan of reorganization or readjustment the payment of which is
subordinated, at least to the extent provided in this Article Fifteen
with respect to the Guaranty of such Guarantor, to the payment of all
Guarantor Senior Indebtedness of such Guarantor which may at the time
be outstanding; provided, however, that (i) the Guarantor Senior
Indebtedness of such Guarantor is assumed by the new corporation, if
any, resulting from any such reorganization or readjustment, and (ii)
the rights of the holders of any Guarantor Senior Indebtedness of such
Guarantor are not, without the consent of such holders, altered by such
reorganization or readjustment, including without limitation, such
rights being impaired within the meaning of Section 1124 of Title 11 of
the United States Code, or
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any impairment of the right to receive interest accruing during the
pendency of a bankruptcy or insolvency proceeding, including
proceedings under Title 11 of the United States Code.
"The consolidation of any Guarantor with, or the merger of any
Guarantor into, another corporation or the liquidation or dissolution
of any Guarantor following the conveyance or transfer of all or
substantially all of its assets to another Person shall not be deemed a
dissolution, winding up, liquidation, reorganization, assignment for
the benefit of creditors or marshalling of assets and liabilities of
such Guarantor for the purposes of this Section 15.2 if the corporation
or Person formed by such consolidation or into which such Guarantor is
merged or the Person which acquires by conveyance or transfer all or
substantially all the assets of such Guarantor, as the case may be,
shall, as a part of such consolidation, merger, conveyance or transfer,
and if required by Section 14.16 of this Indenture, become a Guarantor
in accordance with the applicable provisions of Section 14.16.
"SECTION 15.3. Acceleration of Senior Subordinated Notes. In
the event that any Senior Subordinated Notes shall have been
accelerated and declared due and payable pursuant to Section 5.1, no
Guarantor may make any payment under its Guaranty of the Senior
Subordinated Notes or acquire any Senior Subordinated Notes until 135
days have passed after such acceleration occurs and may thereafter make
payments under its Guaranty of the Senior Subordinated Notes or acquire
Senior Subordinated Notes only if this Article Fifteen permits the
payment or acquisition at that time.
"In the event that, notwithstanding the foregoing, a Guarantor
shall make any payment to the Trustee or the Holder of any Senior
Subordinated Notes prohibited by the foregoing provisions of this
Section 15.3, then and in such event such payment shall, to the extent
permitted by law, be held in trust for the benefit of and be paid over
and delivered forthwith to the holders of Guarantor Senior Indebtedness
of such Guarantor or their representative or representatives or to the
trustee or trustees under any indenture under which any instruments
evidencing the Guarantor Senior Indebtedness of such Guarantor may have
been issued.
"The provisions of this Section 15.3 shall not apply to any
payment with respect to which Section 15.2 would be applicable.
"SECTION 15.4. Default on Guarantor Senior Indebtedness. A
Guarantor may not make any payment under its Guaranty of the Senior
Subordinated Notes and may not acquire any Senior Subordinated Notes
for cash or property if:
"(1) a default on Guarantor Senior Indebtedness
of such Guarantor or Senior Indebtedness of the Issuer occurs
and is continuing that permits holders of such Guarantor
Senior Indebtedness or such Senior Indebtedness, as the case
may be, to accelerate the maturity thereof; and
"(2) unless such default relates to a failure by
such Guarantor or the
- 14 -
Issuer to make any payment in respect of any Guarantor Senior
Indebtedness of such Guarantor or any Senior Indebtedness of
the Issuer, respectively, when due or within any applicable
grace period (a "Payment Default"), such default is either the
subject of judicial proceedings or such Guarantor or the
Issuer receives notice of the default. If such Guarantor or
the Issuer receives any such notice, then a similar notice
received within nine months thereafter relating to the same
default on the same issue of Guarantor Senior Indebtedness of
such Guarantor or Senior Indebtedness of the Issuer, as the
case may be, shall not be effective for purposes of this
Section 15.4.
"A Guarantor may resume payments under its Guaranty of the
Senior Subordinated Notes and may acquire Senior Subordinated Notes if
and when:
"(A) (i) 135 days pass after, in the case of a
Payment Default, the later of the date such payment was due
and the expiration of any applicable grace period for such
payment or, in the case of any other such default, the date
the related judicial proceedings commence or that notice of
such default is given to such Guarantor or the Issuer, as the
case may be, and (ii) the Guarantor Senior Indebtedness of
such Guarantor or the Senior Indebtedness of the Issuer, as
the case may be, in respect of which such default exists has
not been declared due and payable in its entirety within such
135 day period or, if declared due and payable, such
declaration has been rescinded, waived or annulled; or
"(B) the default with respect to the Guarantor
Senior Indebtedness of such Guarantor or the Senior
Indebtedness of the Issuer, as the case may be, is cured or
waived; and
this Article Fifteen otherwise permits the payment or acquisition at
that time.
"In the event that, notwithstanding the foregoing, any
Guarantor shall make any payment to the Trustee or the Holder of any
Senior Subordinated Notes prohibited by the foregoing provisions of
this Section 15.4, then and in such event such payment shall, to the
extent permitted by law, be held in trust for the benefit of and be
paid over and delivered forthwith to the holders of the Guarantor
Senior Indebtedness of such Guarantor or their representative or
representatives or to the trustee or trustees under any indenture under
which any instruments evidencing such Guarantor Senior Indebtedness may
have been issued.
"The provisions of this Section 15.4 shall not apply to any
payment with respect to which Section 15.2 would be applicable.
"Without limiting the effect of this Section 15.4, no
Guarantor shall make any payment under its Guaranty during any period
when the Issuer would be prohibited from making payments on the Senior
Subordinated Notes pursuant to Section 13.4 of this Indenture.
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"SECTION 15.5. Payment Permitted if No Default. Nothing
contained in this Article Fifteen or elsewhere in this Indenture or in
any of the Senior Subordinated Notes shall prevent (a) any Guarantor,
at any time except during the pendency of any case, proceeding,
dissolution, liquidation or other winding up, assignment for the
benefit of creditors or other marshalling of assets and liabilities of
such Guarantor referred to in Section 15.2 or under the conditions
described in Section 15.3 or 15.4, from making payments at any time
under its Guaranty of any Senior Subordinated Notes, or (b) the
application by the Trustee of any money deposited with it hereunder to
the payment of or on account of such Guaranty if the Trustee did not
have, at the time provided in the proviso to the first paragraph of
Section 15.10, written notice that such payment would have been
prohibited by the provisions of this Article Fifteen.
"SECTION 15.6. Subrogation. Subject to the payment in full of
all Guarantor Senior Indebtedness of any Guarantor, the Holders of the
Senior Subordinated Notes shall be subrogated, to the extent of the
payments or distributions made to the holders of the Guarantor Senior
Indebtedness of such Guarantor pursuant to the provisions of this
Article Fifteen, to the rights of the holders of such Guarantor Senior
Indebtedness to receive payments or distributions of cash, property or
securities applicable to such Guarantor Senior Indebtedness until the
principal of or interest on the Senior Subordinated Notes shall be paid
in full. For purposes of such subrogation, no payments or distributions
to the holders of any Guarantor Senior Indebtedness of any Guarantor of
any cash, property or securities to which the Holders of the Senior
Subordinated Notes or the Trustee would be entitled except for the
provisions of this Article Fifteen, and no payments pursuant to the
provisions of this Article Fifteen to any Guarantor or to the holders
any Guarantor Senior Indebtedness of such Guarantor by Holders of the
Senior Subordinated Notes or the Trustee, shall, as between such
Guarantor, its creditors other than holders of Guarantor Senior
Indebtedness of such Guarantor and the Holders of the Senior
Subordinated Notes, be deemed to be a payment or distribution by such
Guarantor to or on account of the Guarantor Senior Indebtedness of such
Guarantor.
"SECTION 15.7. Provisions Solely to Define Relative Rights.
The provisions of this Article Fifteen are and are intended solely for
the purpose of defining the relative rights of the Holders of the
Senior Subordinated Notes, on one hand, and the holders of Guarantor
Senior Indebtedness of the respective Guarantors, on the other hand.
Nothing contained in this Article Fifteen or elsewhere in this
Indenture or in the Senior Subordinated Notes or any Guaranty is
intended to or shall
"(a) impair, as between any Guarantor and the
Holders of the Senior Subordinated Notes, the obligation of
such Guarantor, which is absolute and unconditional, to make
all payment due under its Guaranty as and when the same shall
become due and payable in accordance with the terms of such
Guaranty and this Indenture and which, subject to the rights
under this Article Fifteen of the holders of Guarantor Senior
Indebtedness of such Guarantor, is intended to rank equally
with all other general obligations of such Guarantor, or
"(b) affect the relative rights against any
Guarantor of the Holders of
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the Senior Subordinated Notes and creditors of such Guarantor
other than holders of Guarantor Senior Indebtedness of such
Guarantor, or
"(c) prevent the Trustee or the Holder of any
Senior Subordinated Notes from exercising all remedies
otherwise permitted by applicable law upon default under this
Indenture, subject to the rights, if any, under this Article
Fifteen of the holders of Guarantor Senior Indebtedness of any
Guarantor to receive cash, property or securities otherwise
payable or deliverable to the Trustee or such Holder.
"SECTION 15.8. Trustee to Effectuate Subordination. Each
Holder of any Senior Subordinated Notes, by such Holder's acceptance
and ownership thereof and such Holder's acceptance of any benefits
under the Guaranties, authorizes and directs the Trustee on such
Holder's behalf to take such action as may be necessary or appropriate
to effectuate the subordination provided in this Article Fifteen and
appoints the Trustee such Holder's attorney-in-fact for any and all
such purposes. If the Trustee does not file a proper claim or proof of
debt in connection with any insolvency or bankruptcy case or proceeding
or any receivership, liquidation, reorganization or other similar case
or proceeding in connection therewith relative to any Guarantor in
proper form within 30 days prior to the expiration of the time to file
such claim or proof of debt, then the holders of Guarantor Senior
Indebtedness of such Guarantor are hereby authorized to file an
appropriate claim for and on behalf of the Holders of the Senior
Subordinated Notes.
"SECTION 15.9. No Waiver of Subordination Provisions. No right
of any present or future holder of any Guarantor Senior Indebtedness of
any Guarantor to enforce subordination as herein provided shall at any
time in any way be prejudiced or impaired by any act or failure to act
on the part of any Guarantor or by any act or failure to act, in good
faith, by any such holder, or by any noncompliance by any Guarantor
with the terms, provisions and covenants of this Indenture, regardless
of any knowledge thereof any such holder may have or be otherwise
charged with.
"Without in any way limiting the generality of the foregoing
paragraph, the holders of any Guarantor Senior Indebtedness of any
Guarantor may, at any time and from time to time, without the consent
of, or notice to, the Trustee or the Holders of the Senior Subordinated
Notes, without incurring responsibility to the Holders of the Senior
Subordinated Notes and without impairing or releasing the subordination
provided in this Article Fifteen or the obligations hereunder of the
Holders of the Senior Subordinated Notes to the holders of Guarantor
Senior Indebtedness of such Guarantor, do any one or more of the
following: (i) change the manner, place or terms of payment or extend
the time of payment of, or renew or alter, any Guarantor Senior
Indebtedness of such Guarantor, or otherwise amend or supplement in any
manner any Guarantor Senior Indebtedness of such Guarantor or any
instrument evidencing the same or any agreement under which such
Guarantor Senior Indebtedness is outstanding; (ii) sell, exchange,
release or otherwise dispose of any property pledged, mortgaged or
otherwise securing any Guarantor Senior Indebtedness of such Guarantor;
(iii) release any Person liable in any manner for the collection of any
Guarantor Senior Indebtedness of such Guarantor;
- 17 -
and (iv) exercise or refrain from exercising any rights against such
Guarantor and any other Person.
"Notwithstanding the payment in full of all Guarantor Senior
Indebtedness of any Guarantor, the provisions of this Article Fifteen
shall be reinstated and revived, and the enforceability of such
provisions shall continue, in each case to the extent permitted by law,
with respect to (and only with respect to) any amount of Guarantor
Senior Indebtedness of any Guarantor which such Guarantor shall have
repaid to the holders thereof (or to their representative or the
trustee under the indenture under which the instruments evidencing such
Guarantor Senior Indebtedness shall have been issued) following a
demand for such repayment by such holders (or representatives or
trustee) made pursuant to provisions set forth in the instrument
evidencing such Guarantor Senior Indebtedness or under which such
Guarantor Senior Indebtedness shall have been issued, which provisions
entitle such holders (or such representative or trustee) to demand such
repayment upon the occurrence of a Change in Control or other
substantially similar event with respect to the Issuer specified
therein, if such amount thereafter must be restored or returned by such
holders of such Guarantor Senior Indebtedness (or representative or
trustee) because it constitutes a voidable preference under Section 547
of Title 11 of the United States Code (or any successor provision
thereto) or under any similar provision of any other applicable
Bankruptcy Law or a fraudulent transfer under any applicable law
regarding fraudulent transfers.
"SECTION 15.10. Notice to Trustee. Each Guarantor shall give
prompt written notice to the Trustee of any fact known to such
Guarantor which would prohibit the making of any payment to or by the
Trustee in respect of such Guarantor's Guaranty. Failure to give such
notice shall not affect the subordination of such Guarantor's Guaranty
to any Guarantor Senior Indebtedness of such Guarantor. Notwithstanding
the provisions of this Article Fifteen or any other provision of this
Indenture, the Trustee shall not be charged with knowledge of the
existence of any facts which would prohibit the making of any payment
to or by the Trustee in respect of the Guaranty of any Guarantor,
unless and until the Trustee shall have received written notice thereof
at the address specified in Section 11.4 from a Guarantor, the Issuer
or a holder of Guarantor Senior Indebtedness of a Guarantor or from any
trustee or agent therefor; and, prior to the receipt of any such
written notice, the Trustee, subject to the provisions of Section 6.1,
shall be entitled in all respects to assume that no such facts exist;
provided, however, that if a Responsible Officer of the Trustee shall
not have received, at least three Business Days prior to the date upon
which by the terms hereof any such money may become payable for any
purpose (including, without limitation, the payment of any Guaranty
Obligations), the notice with respect to such money provided for in
this Section 15.10, then, anything herein contained to the contrary
notwithstanding, the Trustee shall have full power and authority to
receive such money and to apply the same to the purpose for which such
money was received and shall not be affected by any notice to the
contrary which may be received by it within three Business Days prior
to such date.
"Subject to the provisions of Section 6.1, the Trustee shall
be entitled to rely on the delivery to it of a written notice by a
Person representing himself to be a holder of
- 18 -
Guarantor Senior Indebtedness of any Guarantor (or a trustee or agent
on behalf of such holder) to establish that such notice has been given
by a holder of such Guarantor Senior Indebtedness (or a trustee or
agent on behalf of any such holder). In the event that the Trustee
determines in good faith that further evidence is required with respect
to the right of any Person as a holder of Guarantor Senior Indebtedness
of any Guarantor to participate in any payment or distribution pursuant
to this Article Fifteen, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount
of such Guarantor Senior Indebtedness held by such Person, the extent
to which such Person is entitled to participate in such payment or
distribution and any other facts pertinent to the rights of such Person
under this Article Fifteen, and if such evidence is not furnished, the
Trustee may defer any payment which it may be required to make for the
benefit of such Person pursuant to the terms of this Indenture pending
judicial determination as to the right of such Person to receive such
payment.
"SECTION 15.11. Reliance on Judicial Order or Certificate of
Liquidation Agent. Upon any payment or distribution of assets of any
Guarantor referred to in this Article Fifteen, the Trustee, subject to
the provisions of Section 6.1, and the Holders of the Senior
Subordinated Notes shall be entitled to rely upon any order or decree
entered by any court of competent jurisdiction in which such
insolvency, bankruptcy, receivership, liquidation, reorganization,
dissolution, winding up or similar case or proceeding is pending, or a
certificate of the trustee in bankruptcy, liquidating trustee,
custodian, receiver, assignee for the benefit of creditors, agent or
other person making such payment or distribution, delivered to the
Trustee or to the Holders of Senior Subordinated Notes, for the purpose
of ascertaining the Persons entitled to participate in such payment or
distribution, the holders of Guarantor Senior Indebtedness of such
Guarantor and other indebtedness of such Guarantor, the amount thereof
or payable thereon, the amount or amounts paid or distributed thereon
and all other facts pertinent thereto or to this Article Fifteen.
"SECTION 15.12. Trustee Not Fiduciary for Holders of Guarantor
Senior Indebtedness. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Guarantor Senior Indebtedness of any
Guarantor and not be liable to any such holders if the Trustee shall in
good faith mistakenly pay over or distribute to Holders of Senior
Subordinated Notes or to any Guarantor or to any other Person cash,
property or securities to which any holders of Guarantor Senior
Indebtedness of any Guarantor shall be entitled by virtue of this
Article Fifteen or otherwise. The Trustee shall not be charged with
knowledge of the existence of Guarantor Senior Indebtedness of any
Guarantor or of any facts that would prohibit any payment pursuant to
the Guaranty of any Guarantor unless a Responsible Officer of the
Trustee shall have received written notice to that effect at the
address of the Trustee set forth in Section 11.4. With respect to the
holders of Guarantor Senior Indebtedness of any Guarantor, the Trustee
undertakes to perform or to observe only such of its covenants or
obligations as are specifically set forth in this Article Fifteen and
no implied covenants or obligations with respect to holders of
Guarantor Senior Indebtedness of any Guarantor shall be read into this
Indenture against the Trustee.
- 19 -
"SECTION 15.13. Rights of Trustee as Holder of Guarantor
Senior Indebtedness; Preservation of Trustee's Rights. The Trustee in
its individual capacity shall be entitled to all the rights set forth
in this Article Fifteen with respect to any Guarantor Senior
Indebtedness of any Guarantor which may at any time be held by it, to
the same extent as any other holder of such Guarantor Senior
Indebtedness, and nothing in this Indenture shall deprive the Trustee
of any of its rights as such holder.
"Nothing in this Article Fifteen shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 6.6.
"SECTION 15.14. Article Fifteen Applicable to Paying Agents.
In case at any time any paying agent other than the Trustee shall have
been appointed by the Issuer and be then acting hereunder, the term
"Trustee" as used in this Article Fifteen shall in such case (unless
the context otherwise requires) be construed as extending to and
including such paying agent within its meaning as fully for all intents
and purposes as if such paying agent were named in this Article Fifteen
in addition to or in place of the Trustee; provided, however, that
Section 15.10 and 15.12 shall not apply to the Issuer, any Guarantor or
any Subsidiary or Affiliate of the Issuer or any Guarantor if the
Issuer or such Guarantor or such Subsidiary or Affiliate acts as paying
agent.
"SECTION 15.15 Limitation in Ranking of Future Indebtedness of
the Guarantors. No Guarantor will incur any Debt which is subordinated
by the terms of the instrument creating such Debt in right of payment
to any other Debt of such Guarantor and which is not expressly by the
terms of the instrument creating such Debt made pari passu with, or
subordinate and junior in right of payment to, such Guarantor's
Guaranty. For purposes of the foregoing sentence, it is hereby
expressly agreed and understood that all references to Debt of any
Guarantor shall include all obligations of such Guarantor as guarantor
of any Debt of others.
ARTICLE TWO
MISCELLANEOUS
SECTION 2.1 Ratification of Indenture; First Supplemental
Indenture Part of Indenture. Except as expressly amended and supplemented
hereby, the Indenture is in all respects ratified and confirmed and all the
terms, conditions and provisions thereof shall remain in full force and effect.
This First Supplemental Indenture shall form a part of the Indenture for all
purposes.
SECTION 2.2 Concerning the Trustee. The rights and duties of
the Trustee shall be determined by the express provisions of the Indenture and
except as expressly set forth in this First Supplemental Indenture, nothing in
this First Supplemental Indenture shall in any way modify or otherwise affect
the Trustee's rights and duties thereunder. The Trustee makes no representation
or warranty as to the validity with respect to the Issuer or the Guarantors or
sufficiency of this First Supplemental Indenture and, except insofar as relates
to the validity hereof with respect to the Trustee, shall not be liable in
connection therewith.
- 20 -
SECTION 2.3 New York Law to Govern. This First Supplemental
Indenture shall be deemed to be a contract under the laws of the State of New
York, and for all purposes shall be governed by and construed in accordance with
the laws of such State.
SECTION 2.4 Separability. In case any one or more of the
provisions contained in this First Supplemental Indenture shall for any reason
be held to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provisions of this
First Supplemental Indenture, but this First Supplemental Indenture shall be
construed as if such invalid, illegal or unenforceable provision had never been
contained herein.
SECTION 2.5 Counterparts. This First Supplemental Indenture
may be executed in any number of counterparts each of which shall be an
original; but such counterparts shall together constitute but one and the same
instrument.
SECTION 2.6 Effect of Headings. The Article and Section
headings herein are for convenience only and shall not affect the construction
hereof.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed as of the day and year first above
written.
"Issuer" KB HOME, a Delaware corporation
By: _________________________
Title:
"Trustee" SUNTRUST BANK, as Trustee
By: _________________________
Title:
"Guarantors" KB HOME PHOENIX INC., an Arizona
corporation
By: _________________________
Title:
KB HOME COASTAL INC., a California
corporation
By: _________________________
Title:
KB HOME NORTH BAY INC., a California
corporation
By: _________________________
Title:
- 22 -
KB HOME SOUTH BAY INC., a California
corporation
By: _________________________
Title:
KB HOME GREATER LOS ANGELES INC., a
California corporation
By: _________________________
Title:
KB HOME COLORADO INC., a Colorado
corporation
By: _________________________
Title:
KB HOME NEVADA INC., a Nevada corporation
By: _________________________
Title:
KB HOME LONE STAR LP, a Texas limited
partnership
By: KBSA, Inc., a Texas corporation,
Its general partner
By: _________________________
Title:
- 23 -
