EXHIBIT 4.1
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XXXXX HOMES, INC.,
THE GUARANTORS PARTY HERETO
AND
AMERICAN STOCK TRANSFER & TRUST COMPANY,
as Trustee
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INDENTURE
Dated as of June 12, 1998
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9 1/4% Series B Senior Notes
due February 1, 2008
9 1/4% Series C Senior Notes
due February 1, 2008
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CROSS-REFERENCE TABLE
TIA INDENTURE
SECTION SECTION
------- ---------
310(a)(1) ............................................... 7.10
(a)(2)............................................. 7.10
(a)(3)............................................. N.A.
(a)(4)............................................. N.A.
(a)(5)............................................. 7.10
(b)................................................ 7.08; 7.10; 11.02
(c)................................................ N.A.
311(a)................................................... 7.11
(b)................................................ 7.11
(c)................................................ N.A.
312(a)................................................... 2.05
(b)................................................ 11.03
(c)................................................ 11.03
313(a)................................................... 7.06
(b)(1)............................................. 7.06
(b)(2)............................................. 7.06
(c)................................................ 7.06; 11.02
(d)................................................ 7.06
314(a)................................................... 4.03; 4.04; 11.02
(b)................................................ N.A.
(c)(1)............................................. 11.04
(c)(2)............................................. 11.04
(c)(3)............................................. N.A.
(d)................................................ N.A.
(e)................................................ 11.05
(f)................................................ N.A.
315(a)................................................... 7.01(b)
(b)................................................ 7.05; 11.02
(c)................................................ 7.01(a)
(d)................................................ 7.01(c)
(e)................................................ 6.11
316(a) (last sentence)................................... 2.09
(a)(1)(A).......................................... 6.05
(a)(1)(B).......................................... 6.04
(a)(2)............................................. N.A.
(b)................................................ 6.06; 6.07
317(a)(1)................................................ 6.08
(a)(2)............................................. 6.09
(b)................................................ 2.04
318(a)................................................... 11.01
318(c)................................................... 11.01
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N.A. means Not Applicable.
This cross-reference table does not constitute a part of the Indenture.
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TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE..............................................................1
SECTION 1.01. Definitions......................................................................................1
SECTION 1.02. Other Definitions...............................................................................16
SECTION 1.03. Incorporation by Reference of Trust Indenture Act...............................................17
SECTION 1.04. Rules of Construction...........................................................................17
ARTICLE 2 THE SECURITIES.........................................................................................18
SECTION 2.01. Form and Dating.................................................................................18
SECTION 2.02. Execution and Authentication....................................................................19
SECTION 2.03. Registrar and Paying Agent......................................................................20
SECTION 2.04. Paying Agent to Hold Money in Trust.............................................................20
SECTION 2.05. Securityholder Lists............................................................................20
SECTION 2.06. Transfer and Exchange...........................................................................21
SECTION 2.07. Replacement Securities..........................................................................21
SECTION 2.08. Outstanding Securities..........................................................................22
SECTION 2.09. Securities Held by the Company or an Affiliate..................................................22
SECTION 2.10. Temporary Securities............................................................................22
SECTION 2.11. Cancellation....................................................................................22
SECTION 2.12. Defaulted Interest..............................................................................23
SECTION 2.13. CUSIP Number....................................................................................23
SECTION 2.14. Book-Entry Provisions for Global Securities.....................................................23
SECTION 2.15. Registration of Transfers and Exchanges.........................................................24
ARTICLE 3 REDEMPTION.............................................................................................28
SECTION 3.01. Notices to Trustee..............................................................................28
SECTION 3.02. Selection of Securities to Be Redeemed..........................................................28
SECTION 3.03. Notice of Redemption............................................................................28
SECTION 3.04. Effect of Notice of Redemption..................................................................29
SECTION 3.05. Deposit of Redemption Price.....................................................................29
SECTION 3.06. Securities Redeemed in Part.....................................................................29
ARTICLE 4 COVENANTS..............................................................................................30
SECTION 4.01. Payment of Securities...........................................................................30
SECTION 4.02. Maintenance of Office or Agency.................................................................30
SECTION 4.03. SEC Reports.....................................................................................30
SECTION 4.04. Compliance Certificate..........................................................................31
SECTION 4.05. Stay, Extension and Usury Laws..................................................................31
SECTION 4.06. Corporate Existence.............................................................................31
SECTION 4.07. Notice of Default...............................................................................32
SECTION 4.08. Change of Control...............................................................................32
SECTION 4.09. Maintenance of Net Worth........................................................................34
SECTION 4.10. Limitation on Debt..............................................................................36
SECTION 4.11. Limitation on Restricted Payments...............................................................37
SECTION 4.12. Limitation on Dividends and Other Payment Restrictions Affecting Restricted Subsidiaries........38
SECTION 4.13. Limitation on Liens.............................................................................39
SECTION 4.14. Transactions with Affiliates....................................................................39
SECTION 4.15. Limitation on Asset Sales.......................................................................40
SECTION 4.16. Additional Guarantors...........................................................................42
ARTICLE 5 SUCCESSORS.............................................................................................43
SECTION 5.01. When Company May Merge, etc.....................................................................43
SECTION 5.02. Successor Substituted...........................................................................44
ARTICLE 6 DEFAULTS AND REMEDIES..................................................................................44
SECTION 6.01. Events of Default...............................................................................44
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SECTION 6.02. Acceleration......................................................................46
SECTION 6.03. Other Remedies....................................................................46
SECTION 6.04. Waiver of Past Defaults...........................................................47
SECTION 6.05. Control by Majority...............................................................47
SECTION 6.06. Limitation on Suits...............................................................47
SECTION 6.07. Rights of Holders to Receive Payment..............................................47
SECTION 6.08. Collection Suit by Trustee........................................................48
SECTION 6.09. Trustee May File Proofs of Claim..................................................48
SECTION 6.10. Priorities........................................................................48
SECTION 6.11. Undertaking for Costs.............................................................48
ARTICLE 7 TRUSTEE..................................................................................49
SECTION 7.01. Duties of Trustee.................................................................49
SECTION 7.02. Rights of Trustee.................................................................50
SECTION 7.03. Individual Rights of Trustee......................................................51
SECTION 7.04. Trustee's Disclaimer..............................................................51
SECTION 7.05. Notice of Defaults................................................................51
SECTION 7.06. Reports by Trustee to Holders.....................................................51
SECTION 7.07. Compensation and Indemnity........................................................51
SECTION 7.08. Replacement of Trustee............................................................52
SECTION 7.09. Successor Trustee by Merger, etc..................................................53
SECTION 7.10. Eligibility; Disqualification.....................................................53
SECTION 7.11. Preferential Collection of Claims Against Company.................................53
ARTICLE 8 DEFEASANCE...............................................................................53
SECTION 8.01. Defeasance upon Deposit of Moneys or U.S. Government Obligations..................53
SECTION 8.02. Termination of the Obligations Pursuant to Redemption.............................55
SECTION 8.03. Survival of Company's Obligations.................................................55
SECTION 8.04. Application of Trust Money........................................................56
SECTION 8.05. Repayment to Company..............................................................56
SECTION 8.06. Reinstatement.....................................................................56
ARTICLE 9 AMENDMENTS...............................................................................57
SECTION 9.01. Without Consent of Holders........................................................57
SECTION 9.02. With Consent of Holders...........................................................57
SECTION 9.03. Compliance with Trust Indenture Act...............................................58
SECTION 9.04. Revocation and Effect of Consents.................................................58
SECTION 9.05. Notation on or Exchange of Securities.............................................59
SECTION 9.06. Trustee Protected.................................................................59
ARTICLE 10 GUARANTEE OF SECURITIES.................................................................59
SECTION 10.01. Guarantee........................................................................59
SECTION 10.02. Execution and Delivery of Guarantee..............................................62
SECTION 10.03. Additional Guarantors............................................................62
SECTION 10.04. Release of a Guarantor...........................................................62
ARTICLE 11 MISCELLANEOUS...........................................................................63
SECTION 11.01. Trust Indenture Act Controls.....................................................63
SECTION 11.02. Notices..........................................................................63
SECTION 11.03. Communication by Holders with Other Holders......................................64
SECTION 11.04. Certificate and Opinion as to Conditions Precedent...............................64
SECTION 11.05. Statements Required in Certificate or Opinion....................................65
SECTION 11.06. Rules by Trustee and Agents......................................................65
SECTION 11.07. Legal Holidays...................................................................65
SECTION 11.08. No Recourse Against Others.......................................................66
SECTION 11.09. Duplicate Originals..............................................................66
SECTION 11.10. Governing Law....................................................................66
SECTION 11.11. No Adverse Interpretation of Other Agreements....................................66
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SECTION 11.12. Successors.......................................................................66
SECTION 11.13. Separability.....................................................................66
SECTION 11.14. Table of Contents, Headings, etc.................................................66
SIGNATURES....................................................................................67
EXHIBIT A-1 - FORM OF SERIES B SECURITY
EXHIBIT A-2 - FORM OF SERIES C SECURITY
EXHIBIT B - FORM OF LEGEND FOR GLOBAL SECURITIES
EXHIBIT C - FORM OF CERTIFICATE DELIVERABLE UPON TRANSFER OR
EXCHANGE OF SECURITIES
EXHIBIT D - TRANSFEREE CERTIFICATE FOR NON-QIB ACCREDITED
INVESTORS
NOTE: This Table of Contents shall not, for any purpose, be deemed to be part of
the Indenture.
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INDENTURE dated as of June 12, 1998 between XXXXX HOMES, INC., a
Florida corporation (the "Company"), the Guarantors signatory hereto (the
"Guarantors") and AMERICAN STOCK TRANSFER & TRUST COMPANY, a New York
Corporation, as trustee (the "Trustee").
Each party agrees as follows for the benefit of the other parties and
for the equal and ratable benefit of the Holders of the Series B Securities and
the Series C Securities (as such terms are hereinafter defined), without
preference of one such series over the other.
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. DEFINITIONS
"1994 INDENTURE" means the indenture governing the $40,000,000
principal amount of 11 3/4% Senior Notes due 2000 of the Company.
"ADDITIONAL ASSETS" means assets used or usable by the Company or any
of its Restricted Subsidiaries in the operation of the existing lines of
business of the Company and its Restricted Subsidiaries.
"AFFILIATE" of any Person means (i) any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such Person and (ii) any other Person that beneficially owns at
least 10% of the voting common stock of such Person. For the purposes of this
definition, "control" when used with respect to any Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"AGENT" means any Registrar, Paying Agent, or co-Registrar.
"ASSET SALE" for any Person means the sale, lease, conveyance or other
disposition (including, without limitation, by merger, consolidation or sale and
leaseback transaction, and whether by operation of law or otherwise) of any of
that Person's assets (including, without limitation, the sale or other
disposition of Capital Stock of any Subsidiary of such Person, whether by such
Person or such Subsidiary) outside the ordinary course of business, whether
owned on February 2, 1998 or subsequently acquired in one transaction or a
series of related transactions, in which such Person and/or its Subsidiaries
receive cash and/or other consideration (including, without limitation, the
unconditional assumption of Indebtedness of such Person and/or its Subsidiaries)
of $2,500,000 or more as to each such transaction or series of related
transactions; PROVIDED, HOWEVER, that (i) a transaction or series of related
transactions that results in a Change of Control will not constitute an Asset
Sale, (ii) sales, leases, conveyances or other dispositions of real estate
related to the homebuilding business of the Company or its Subsidiaries will not
constitute Asset Sales, and (iii) transactions between the Company and any
Guarantor, or among such Guarantors, will not constitute Asset Sales.
"BANK FACILITY" means, collectively, one or more commitments from one
or more banks or other lending institutions to lend funds, together with any and
all agreements, documents and instruments from time to time delivered in
connection therewith as such commitments or any such agreements, documents or
instruments may be in effect or amended, amended and restated, renewed,
extended, restructured, supplemented or otherwise modified from time to time and
any credit agreement, loan agreement, note purchase agreement, indenture or
other agreement, document or instrument refinancing, refunding or otherwise
replacing such Bank Facility, whether or not with the same agent, trustee,
representative, lenders or holders, and, subject to the proviso to the next
succeeding sentence, irrespective of any changes in the terms and conditions
thereof. Without limiting the generality of the foregoing, the term "Bank
Facility" shall include any amendment, amendment and restatement, renewal,
extension, restructuring, supplement or modification to any Bank Facility and
all refundings, refinancings and replacements of any Bank Facility, including
any agreement (i) extending the maturity of any Debt Incurred thereunder or
contemplated thereby, (ii) adding or deleting borrowers or guarantors
thereunder; PROVIDED that such borrowers and issuers include one or more of the
Company and its Subsidiaries and their respective successors and assigns, (iii)
increasing the amount of Debt Incurred thereunder or available to be borrowed
thereunder; PROVIDED that on the date thereof such Debt would not be prohibited
by clause (b) of the definition of Permitted Debt, or (iv) otherwise altering
the terms and conditions thereof in a manner not prohibited by the terms of this
Indenture.
"CAPITAL STOCK" of any Person means any and all shares, interests,
participations or other equivalents (designated) of capital stock of such Person
and all warrants or options to acquire such capital stock.
"CHANGE OF CONTROL" of the Company shall be deemed to have occurred
upon the occurrence of any of the following events: (a) any "person" or "group"
(as such terms are used in Sections 13(d) and 14(d) of the Exchange Act),
excluding the Permitted Holders, is or becomes the "beneficial owner" (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a person
shall be deemed to have "beneficial ownership" of all securities that such
person has the right to acquire, whether such right is exercisable immediately,
after the passage of time, upon the happening of an event or otherwise),
directly or indirectly, of more than 50% of the total Voting Stock of the
Company; but only if the Permitted Holders do not have the right or ability by
voting power, contract or otherwise to elect or designate for election a
majority of the board of directors of the Company; (b) the Company consolidates
with, or merges with or into, another Person or sells, assigns, conveys,
transfers, leases or otherwise disposes of all or substantially all of its
assets to any Person, or any Person consolidates with, or merges with or into,
the Company, in any such event pursuant to a transaction in which the
outstanding Voting Stock of the Company is converted into or exchanged for cash,
securities or other property, other than any such transaction where immediately
after such transaction no "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Exchange Act), excluding the Permitted Holders,
is the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act, except that a person shall be deemed to have "beneficial
ownership" of all securities that such person has the right to acquire, whether
such right is exercisable immediately, after the passage of time, upon the
happening of an event or otherwise), directly or indirectly, of more than 50% of
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the total Voting Stock of the surviving or transferee corporation; but only if
the Permitted Holders do not have the right or ability by voting power, contract
or otherwise to elect or designate for election a majority of the board of
directors of the Company; (c) at any time during any consecutive two-year
period, individuals who at the beginning of such period constituted the board of
directors of the Company (together with any new directors whose election by such
board of directors or whose nomination for election by the stockholders of the
Company was approved by a vote of a majority of the directors then still in
office who were either directors at the beginning of such period or whose
election or nomination for election was previously so approved) cease for any
reason to constitute a majority of the board of directors of the Company then in
office; or (d) the Company is liquidated or dissolved or adopts a plan of
liquidation.
"COMMON STOCK" means the common stock, par value $.01 per share, of the
Company.
"COMPANY" means the party named as such above and any other obligor
until a successor replaces it pursuant to the applicable provision hereof and
thereafter means the successor.
"CONSOLIDATED INTEREST EXPENSE" of the Company means, for any period,
the aggregate amount of interest which, in accordance with generally accepted
accounting principles, would be included on an income statement for the Company
and its Restricted Subsidiaries on a consolidated basis, whether expensed
directly, or included as a component of cost of goods sold, or allocated to
joint ventures or otherwise (including, but not limited to, imputed interest
included on capitalized lease obligations, all commissions, discounts and other
fees and charges owed with respect to letters of credit and bankers' acceptance
financing, the net costs associated with hedging obligations, amortization of
other financing fees and expenses, the interest portion of any deferred payment
obligation, amortization of discount or premium, if any, and all other non-cash
interest expense), excluding interest expense related to the Company's mortgage
banking operations, PLUS the product of (x) the sum of (i) cash dividends paid
on any Preferred Stock of the Company PLUS (ii) cash dividends, the principal
amount of any debt securities issued as a dividend, the liquidation value of any
Preferred Stock issued as a dividend and the fair market value (as determined by
the Company's board of directors in good faith) of any other non-cash dividends,
in each case, paid on any Preferred Stock of any Restricted Subsidiary of the
Company (other than a Wholly-Owned Restricted Subsidiary), times (y) a fraction,
the numerator of which is one and the denominator of which is one MINUS the then
current effective aggregate federal, state and local tax rate of the Company,
expressed as a decimal.
"CONSOLIDATED INTEREST INCURRED" of the Company means, for any period,
(a) the aggregate amount of interest which, in accordance with generally
accepted accounting principles, would be included on an income statement for the
Company and its Restricted Subsidiaries on a consolidated basis, whether
expensed directly, or included as a component of cost of goods sold, or
allocated to joint ventures or otherwise (including, but not limited to, imputed
interest included on capitalized lease obligations, all commissions, discounts
and other fees and charges owed with respect to letters of credit and bankers'
acceptance financing, the net costs associated with hedging obligations,
amortization of other financing fees and expenses, the interest portion of any
deferred payment obligation, amortization of discount or premium, if any, and
all other
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non-cash interest expense), excluding interest expense related to the Company's
mortgage banking operations, PLUS OR MINUS, without duplication, (b) the
difference between capitalized interest for such period and the interest
component of cost of goods sold for such period, PLUS (c) the product of (x) the
sum of (i) cash dividends paid on any Preferred Stock of the Company PLUS (ii)
cash dividends, the principal amount of any debt securities issued as a
dividend, the liquidation value of any Preferred Stock issued as a dividend and
the fair market value (as determined by the Company's board of directors in good
faith) of any other non-cash dividends, in each case, paid on any Preferred
Stock of any Restricted Subsidiary of the Company (other than a Wholly-Owned
Restricted Subsidiary), times (y) a fraction, the numerator of which is one and
the denominator of which is one MINUS the then current effective aggregate
federal, state and local tax rate of the Company, expressed as a decimal.
"CONSOLIDATED NET INCOME" of the Company, for any period, means the net
income (loss) of the Company and its Restricted Subsidiaries for such period,
determined on a consolidated basis, in accordance with generally accepted
accounting principles; PROVIDED that, without duplication, (i) the net income of
any Person, other than a Restricted Subsidiary which is consolidated with the
Company, in which any Person other than the Company and its Restricted
Subsidiaries has an interest shall be included only to the extent of the amount
of cash dividends or distributions actually paid to the Company or a Restricted
Subsidiary during such period, (ii) the net income of any Person acquired in a
pooling of interests transaction for any period prior to the date of such
acquisition shall be excluded, (iii) the net income of any Subsidiary of the
Company shall be excluded to the extent such Subsidiary is prohibited, directly
or indirectly, from distributing such net income or any portion thereof to the
Company or a Restricted Subsidiary, (iv) all extraordinary gains and losses
(after taxes) that would be included on an income statement for such period
shall be excluded and (v) all gains and losses (after taxes) attributable to
Asset Sales shall be excluded; PROVIDED that there shall be included in such net
income, without duplication, the net income of any Unrestricted Subsidiary to
the extent such net income is actually received by the Company or any of its
Restricted Subsidiaries in cash during such period.
"CONSOLIDATED NON-CASH CHARGES" of the Company means, for any period,
the aggregate depreciation, amortization and other non-cash charges (other than
reserves or expenses established in anticipation of future cash requirements
such as reserves for taxes and uncollectible accounts) of the Company and its
Restricted Subsidiaries on a consolidated basis for such period, as determined
in accordance with generally accepted accounting principles; PROVIDED that
Consolidated Non-cash Charges shall exclude (i) any charges that are not
included for the purpose of determining Consolidated Net Income, (ii) any
charges that are included for the purpose of determining Consolidated Interest
Expense or Consolidated Tax Expense and (iii) any charges representing
capitalized selling, general and administrative expenses that are expensed
during such period as cost of goods sold.
"CONSOLIDATED TANGIBLE ASSETS" of the Company as of any date means the
total amount of assets of the Company and its Restricted Subsidiaries (less
applicable reserves and less the assets securing the payment of Non-Recourse
Debt of the Company and its Restricted Subsidiaries) on
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a consolidated basis at the end of the fiscal quarter immediately preceding such
date, as determined in accordance with generally accepted accounting principles,
less: (i) unamortized debt and debt issuance expense, deferred charges,
goodwill, patents, trademarks, copyrights, and all other items which would be
treated as intangibles on the consolidated balance sheet of the Company and its
Restricted Subsidiaries prepared in accordance with generally accepted
accounting principles and (ii) appropriate adjustments on account of minority
interests of other Persons holding equity investments in Restricted
Subsidiaries, in the case of each of clauses (i) and (ii) above, as reflected on
the consolidated balance sheet of the Company and its Restricted Subsidiaries.
"CONSOLIDATED TANGIBLE NET WORTH" of the Company means the Company's
Net Worth less unamortized debt and debt issuance expense, deferred charges,
goodwill, patents, trademarks, copyrights, and all other items which would be
treated as intangibles on the consolidated balance sheet of the Company and its
Restricted Subsidiaries prepared in accordance with generally accepted
accounting principles.
"CONSOLIDATED TAX EXPENSE" of the Company means, for any period, the
aggregate of the tax expense of the Company and its Restricted Subsidiaries for
such period, determined on a consolidated basis, in accordance with generally
accepted accounting principles.
"CONVERTIBLE NOTES" means up to $15,000,000 principal amount of the
Company's 7% Convertible Subordinated Notes due March 1, 2003.
"CORPORATE TRUST OFFICE OF THE TRUSTEE" shall be at the address of the
Trustee specified in Section 11.02 or such other address as the Trustee may give
notice of to the Company.
"COVERAGE RATIO" of the Company means the ratio of the Company's EBITDA
to its Consolidated Interest Incurred for the four fiscal quarters ending
immediately prior to the date of determination. Notwithstanding clause (ii) of
the definition of Consolidated Net Income, if the Debt which is being Incurred
is Incurred in connection with an acquisition by the Company or a Restricted
Subsidiary, the Coverage Ratio shall be determined after giving effect to both
the Consolidated Interest Incurred related to the Incurrence of such Debt and
the EBITDA (x) of the Person becoming a Restricted Subsidiary of the Company or
(y) in the case of an acquisition of assets that constitute substantially all of
an operating unit or business, relating to the assets being acquired by the
Company or a Restricted Subsidiary.
"DEBT" means, as to any Person, without duplication, (a) any
indebtedness of such Person for borrowed money, (b) all indebtedness of such
Person evidenced by bonds, debentures, notes, letters of credit, drafts or
similar instruments, (c) all indebtedness of such Person to pay the deferred
purchase price of property or services, but not including accounts payable and
accrued expenses arising in the ordinary course of business, (d) all capitalized
lease obligations of such Person, (e) all Debt of others secured by a Lien on
any asset of such Person, whether or not such Debt is assumed by such Person or
guaranteed by such Person, (f) Redeemable Stock of such Person and Preferred
Stock of any Subsidiary of such Person, (g) all obligations of such Person with
respect to Interest Rate Protection Agreements and (h) all Debt of others
guaranteed by such
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Person. The amount of all Debt of any Person at any date pursuant to clauses
(a) - (d) and (f) above shall be as would appear as a liability upon a balance
sheet of such Person prepared on a consolidated basis in accordance with
generally accepted accounting principles. Notwithstanding the foregoing, "Debt"
of the Company shall not include the amount reflected on a consolidated balance
sheet of the Company with respect to options to acquire real property which was
purchased by the Company and sold to a third party within 360 days of such
purchase for consideration at least equal to the amount paid by the Company for
such property less an amount equal to the value of such option.
"DEFAULT" means any event which is, or after notice or passage of time
or both would be, an Event of Default.
"DEPOSITORY" means, with respect to the Securities issued in the form
of one or more Global Securities, The Depository Trust Company or another Person
designated as Depository by the Company, which must be a clearing agency
registered under the Exchange Act.
"EBITDA" for the Company, for any period, means, without duplication,
the Consolidated Net Income of the Company plus, to the extent deducted in
calculating Consolidated Net Income, the sum of (a) Consolidated Tax Expense,
(b) Consolidated Interest Expense and (c) Consolidated Non-cash Charges.
"EQUITY OFFERING" means the public offering by the Company of up to
2,700,000 shares of Common Stock by means of a prospectus dated January 28,
1998, plus up to 405,000 additional shares of Common Stock which may be sold by
the Company pursuant to a 30-day option granted to Xxxxx Xxxxxx Inc., Xxxxxxxxx
& Company, Inc. and Southeast Research Partners, Inc.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXISTING DEBT" means all of the Debt of the Company and its Restricted
Subsidiaries that was outstanding on February 2, 1998.
"EXISTING GUARANTEES" means the guarantees of the Company's obligations
under the Existing Indenture.
"EXISTING INDENTURE" means the Indenture dated as of February 2, 1998
among the Company, the guarantors party thereto and American Stock Transfer &
Trust Company, as Trustee.
"EXISTING SENIOR NOTES" means the $100,000,000 aggregate principal
amount of the Company's 9 1/4% Senior Notes due February 1, 2008, issued under
the Existing Indenture, which rank PARI PASSU with the Securities in all
respects.
"GLOBAL SECURITY" means a Security evidencing all or a part of the
Securities issued to the Depository in accordance with Section 2.01 and bearing
the legend prescribed in Exhibit B.
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"GUARANTEE" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt of any
other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such Person to
purchase or pay (or advance or supply funds for the purchase or payment of) such
Debt of such other Person (whether by agreement to keepwell or to maintain
financial condition or otherwise); PROVIDED that the term "guarantee" shall not
include endorsements for collection or deposit in the ordinary course of
business.
"GUARANTEE" means the guarantee of the Company's obligations hereunder
made by a Guarantor in favor of the Holders pursuant to the terms of Article 10
hereof.
"GUARANTOR" means all of the Restricted Subsidiaries of the Company
(other than, in the Company's discretion, any Restricted Subsidiary the assets
of which have a book value of not more than $1,000,000) existing on the date
hereof and any person who becomes a guarantor pursuant to Section 10.03.
"HOLDER" or "SECURITYHOLDER" means a Person in whose name a Security is
registered on the Registrar's books.
"HOMEBUILDING JOINT VENTURE" means (i) any Unrestricted Subsidiary and
(ii) any person which is not a Guarantor in which the Company or any of its
Subsidiaries has an ownership interest and in which no other person has a
greater beneficial ownership interest than the beneficial ownership interest of
the Company that, in each case, was formed for and is engaged in homebuilding
operations.
"INDENTURE" means this Indenture, as amended, supplemented or otherwise
modified from time to time, in accordance with the terms hereof.
"INDEPENDENT FINANCIAL ADVISOR" means a firm (i) which does not, and
whose directors, officers and employees or Affiliates do not, have a direct or
indirect financial interest in the Company and (ii) which, in the judgment of
the board of directors of the Company, is otherwise independent and qualified to
perform the task for which it is to be engaged.
"INITIAL PURCHASER" means Xxxxxxxxx & Company, Inc.
"INSTITUTIONAL ACCREDITED INVESTOR" means an institution that is an
"accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act.
"INTEREST RATE PROTECTION AGREEMENT" means any arrangement with any
other Person whereby, directly or indirectly, such Person is entitled to receive
from time to time periodic payments calculated by applying either a floating or
a fixed rate of interest on a stated notional amount in exchange for periodic
payments made by such Person calculated by applying a fixed or a floating rate
of interest on the same notional amount and shall include, without limitation,
-7-
interest rate swaps, caps, floors, collars and similar agreements; PROVIDED that
any arrangement which is entered into by the Company or any of its Restricted
Subsidiaries in connection with Debt Incurred by the Company or any of its
Restricted Subsidiaries shall constitute Permitted Debt.
"INVESTMENT" means, with respect to any Person, any direct or indirect
loan or other extension of credit or capital contribution to (by means of any
transfer of cash or other property to others or any payment for property or
services for the account or use of others), or any purchase or acquisition by
such Person of any Capital Stock, bonds, notes, debentures or other securities
or evidences of Debt issued by, any other Person. "Investments" shall exclude
extensions of trade credit by the Company and its Subsidiaries in the ordinary
course of business in accordance with normal trade practices of the Company or
such Subsidiary, as the case may be.
"ISSUE DATE" means the first date on which the Series B Securities were
issued hereunder.
"LIEN" means, with respect to any asset, any mortgage, lien, pledge,
assignment (including any assignment of rights to receive payments of money
other than in connection with mortgage banking operations in the ordinary course
of business), charge, security interest or encumbrance of any kind (including
any conditional sale or other title retention agreement or any lease in the
nature thereof) in respect of such asset and any agreement to grant to any
Person any such Lien and any sale and leaseback of any asset.
"MATERIAL SUBSIDIARY" means any Restricted Subsidiary of the Company
which accounted for 10 percent or more of the Consolidated Tangible Assets or
EBITDA of the Company for the fiscal year ending immediately prior to any
Default or Event of Default.
"MORTGAGE" means a first priority mortgage or first priority deed of
trust on improved real property.
"MORTGAGE DEBT" means such mortgage banking debt as would be listed on
the consolidated balance sheet of the Company prepared in accordance with
generally accepted accounting principles.
"NET PROCEEDS" with respect to any Asset Sale means (i) cash (in U.S.
dollars or freely convertible into U.S. dollars) received by the Company or any
of its Restricted Subsidiaries from such Asset Sale (including cash received as
consideration for the assumption or incurrence of liabilities incurred in
connection with or in anticipation of such Asset Sale), after (a) provision for
all income or other taxes measured by or resulting from such Asset Sale to the
Company or any of its Restricted Subsidiaries, whether or not offset by net
operating loss and tax credit carry-forwards, (b) payment of all brokerage
commissions and the underwriting fees and, without limitation, all other fees
and expenses related to such Asset Sale, and (c) deduction of appropriate
amounts to be provided by the Company or any of its Restricted Subsidiaries as a
reserve, in accordance with generally accepted accounting principles, against
any liabilities associated with
-8-
the assets sold or otherwise disposed of in such Asset Sale (including, without
limitation, pension and other post-employment benefit liabilities and
liabilities related to environmental matters) or against any indemnification
obligations associated with the sale or other disposition of the assets sold or
otherwise disposed of in such Asset Sale, and (ii) all noncash consideration
received by the Company or any of its Restricted Subsidiaries from such Asset
Sale upon the liquidation or conversion of such consideration into cash.
"NET WORTH" of the Company means, at any date, the aggregate of
capital, surplus and retained earnings of the Company and its Restricted
Subsidiaries as would be shown on a consolidated balance sheet of the Company
prepared in accordance with generally accepted accounting principles, adjusted
to exclude (to the extent included) investments by the Company and its
Subsidiaries in joint ventures and the amount of equity attributable to
Affiliates other than Restricted Subsidiaries of such Person.
"NON-RECOURSE DEBT" with respect to any Person means Debt of such
Person for which the sole legal recourse for collection of principal and
interest on such Debt is against the specific property identified in the
instruments evidencing or securing such Debt and such property was acquired with
the proceeds of such Debt or such Debt was Incurred within 90 days after the
acquisition of such property.
"OFFICER" means the Chief Executive Officer, the President, any Vice
President, the Treasurer or the Secretary of the Company or any Guarantor, as
applicable.
"OFFICERS' CERTIFICATE" means a certificate signed by two Officers or
by an Officer and an Assistant Treasurer or an assistant Secretary of the
Company or any Guarantor, as applicable.
"OPINION OF COUNSEL" means a written opinion from legal counsel who may
be an employee of or counsel for the Company or other counsel reasonably
acceptable to the Trustee.
"ORIGINAL SECURITIES" has the meaning set forth in Section 2.02.
"PERMITTED DEBT" means:
(a) Debt evidenced by the Original Securities, the Guarantees of the
Original Securities, the Existing Senior Notes and the Existing Guarantees, and
any Series C Securities and Guarantees thereof issued in exchange for the
foregoing;
(b) Debt Incurred by the Company or any Guarantor under or in respect
of a Bank Facility (including any guarantees related thereto) for working
capital or other corporate purposes or evidenced by letters of credit; PROVIDED
that the aggregate amount of all such Debt outstanding at any time pursuant to
this clause (b) may not exceed $140,000,000;
(c) Debt Incurred by the Company or any Guarantor under or in respect
of a Warehouse Facility; PROVIDED that the amount of such Debt (including
funding drafts issued thereunder) outstanding at any time pursuant to this
clause (c) guaranteed by the Company or a
-9-
Restricted Subsidiary may not exceed the value of the Mortgages pledged to
secure Debt thereunder;
(d) Debt of the Company to any Guarantor or of any Restricted
Subsidiaries of the Company to the Company or to any Guarantor;
(e) Existing Debt (without duplication of Debt indicated under clauses
(a)-(d) above) of the Company and its Restricted Subsidiaries other than Debt to
be repaid from the proceeds of the sale of the Securities;
(f) Non-Recourse Debt;
(g) Debt in respect of performance, completion, guarantee, surety and
similar bonds or banker's acceptances provided by the Company or any of its
Restricted Subsidiaries in the ordinary course of business;
(h) Additional Debt of the Company or any Guarantor in an amount not to
exceed $7,500,000 at any time outstanding;
(i) Debt referred to in the definition of Interest Rate Protection
Agreement;
(j) Purchase Money Obligations incurred in the ordinary course of
business in an amount not exceeding $5,000,000 at any time outstanding; and
(k) Refinancing Debt.
"PERMITTED HOLDERS" means Xxxx Xxxxxxxxxx and Xxxxx Xxxxxxxxxx and
their respective estates, affiliates and associates (as such terms are defined
in the Securities Act).
"PERMITTED INVESTMENTS" of any Person means Investments of such Person
in (i) direct obligations of the United States or any agency thereof or
obligations guaranteed by the United States or any agency thereof, in each case
maturing within 180 days of the date of acquisition thereof, (ii) certificates
of deposit maturing within 180 days of the date of acquisition thereof issued by
a bank, trust company or savings and loan association which is organized under
the laws of the United States or any state thereof having capital, surplus and
undivided profits aggregating in excess of $250 million and a Xxxxx Bank Watch
Rating of C or better, (iii) certificates of deposit maturing within 180 days of
the date of acquisition thereof issued by a bank, trust company or savings and
loan association organized under the laws of the United States or any state
thereof other than banks, trust companies or savings and loan associations
satisfying the criteria in (ii) above; PROVIDED that the aggregate amount of all
certificates of deposit issued to the Company at any one time by any one such
bank, trust company or savings and loan association will not exceed $100,000,
(iv) commercial paper given the highest rating by two established national
credit rating agencies and maturing not more than 180 days from the date of the
acquisition thereof, (v) repurchase agreements or money-market accounts which
are
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fully secured by direct obligations of the United States or any agency thereof
and (vi) in the case of the Company and its Subsidiaries, (1) any receivables or
loans taken by the Company or a Subsidiary in connection with the sale of any
asset otherwise permitted by this Indenture, (2) Investments in any Guarantor,
(3) Investments in the Securities or Debt PARI PASSU with the Securities, (4)
Investments in evidences of Debt, securities or other property received from
another Person by the Company or any of its Restricted Subsidiaries in
connection with any bankruptcy proceeding or by reason of a composition or
readjustment of debt or a reorganization of such Person or as a result of
foreclosure, perfection or enforcement of any Lien in exchange for evidences of
Debt, securities or other property of such Person held by the Company or any of
its Restricted Subsidiaries, or for other liabilities or obligations of such
other Person to the Company or any of its Restricted Subsidiaries that were
created, in accordance with the terms of this Indenture, (5) Investments in
Interest Rate Protection Agreements which constitute Permitted Debt, (6)
Investments in any Homebuilding Joint Ventures not in excess of $20 million in
the aggregate for all Homebuilding Joint Ventures and (7) Investments in an
aggregate amount outstanding not greater than $5,000,000.
"PERMITTED LIENS" with respect to the Company and its Restricted
Subsidiaries means (i) (x) until such time as the Company shall have less than
an aggregate of $40,000,000 of maximum availability under one or more Bank
Facilities described under clause (b) of the definition of "Permitted Debt"
which are secured by any Liens, Liens securing the Company's Bank Facility or
Bank Facilities described under clause (b) of the definition of "Permitted
Debt", and (y) from and after the first time at which the Company shall have
less than an aggregate of $40,000,000 of maximum availability under one or more
Bank Facilities which are secured by Liens, Liens on assets of the Company or
any Restricted Subsidiary of the Company securing Debt which may be incurred
pursuant to Section 4.10, PROVIDED that the aggregate amount of Debt secured by
Liens (excluding Nonrecourse Debt of the Company and Restricted Subsidiaries and
Debt outstanding under the Warehouse Facility) may not exceed 40 percent of the
Company's Consolidated Tangible Assets; (ii) Liens securing a Warehouse
Facility, PROVIDED that such Liens shall not extend to any assets other than the
mortgages, promissory notes and other collateral that secures mortgage loans
made by the Company or any of its Restricted Subsidiaries; (iii) Liens securing
Non-Recourse Debt of the Company or any of its Restricted Subsidiaries, PROVIDED
that such Liens apply only to the property financed out of the net proceeds of
such Non-Recourse Debt within 90 days of the Incurrence of such Non-Recourse
Debt; (iv) Liens securing Debt of a Person existing at the time that such Person
is merged into or consolidated with the Company or a Restricted Subsidiary,
PROVIDED that such Liens were not created in contemplation of such merger or
consolidation and do not extend to any assets or property of the Company or any
Restricted Subsidiary, other than the surviving Person and its Subsidiaries; (v)
Liens on assets or property acquired by the Company or a Restricted Subsidiary,
PROVIDED that such Liens were not created in contemplation of such acquisition
and do not extend to any other assets or property (other than proceeds of such
acquired assets or property); (vi) Liens in respect of Interest Rate Protection
Agreements which constitute Permitted Debt; (vii) Liens for taxes, assessments
or governmental charges or claims that either (a) are not yet delinquent or (b)
are being contested in good faith by appropriate proceedings and as to which
appropriate reserves have been established or other provisions have been made in
accordance
-11-
with generally accepted accounting principles; (viii) statutory Liens of
landlords and carriers', warehousemen's, mechanics', suppliers', materialmen's,
repairmen's, contractors' or other Liens imposed by law and arising in the
ordinary course of business; (ix) Liens (other than any Lien imposed by the
Employee Retirement Income Security Act of 1974, as amended) incurred or
deposits made in the ordinary course of business in connection with workers
compensation, unemployment insurance and other types of social security; (x)
Liens incurred or deposits made to secure the performance of tenders, bids,
leases, statutory obligations, surety and appeal bonds, progress payments,
government contracts and other obligations of like nature (exclusive of
obligations for the payment of borrowed money), in each case, incurred in the
ordinary course of business; (xi) attachment or judgment Liens not giving rise
to a Default or Event of Default; (xii) easements, rights-of-way, restrictions
and other similar charges or encumbrances not materially interfering with the
ordinary conduct of the business of the Company or any of its Restricted
Subsidiaries; (xiii) leases or subleases granted to others not materially
interfering with the ordinary conduct of the business of the Company or any of
its Restricted Subsidiaries; (xiv) Liens securing Refinancing Debt; PROVIDED
that such Liens only extend to the assets securing the Debt being refinanced,
such refinanced Debt was previously secured and such Liens do not extend to any
other assets of the Company or the assets of any of the Company's other
Subsidiaries; (xv) Liens securing Purchase Money Obligations (including
capitalized lease obligations); (xvi) Liens existing on February 2, 1998; (xvii)
any contract to sell an asset provided such sale is otherwise permitted under
this Indenture; and (xviii) Liens on property or assets of any Restricted
Subsidiary securing Debt of such Restricted Subsidiary owing to the Company or
one or more Restricted Subsidiaries of the Company.
"PERSON" means any individual, corporation, partnership, association,
trust or other entity or organization, including a government or political
subdivision or agency or instrumentality thereof.
"PHYSICAL SECURITIES" has the meaning set forth in Section 2.01.
"PREFERRED STOCK" means, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated) of
such Person's preferred or preference stock whether outstanding on or issued
after February 2, 1998, and including, without limitation, all classes and
series of preferred or preference stock.
"PRINCIPAL" of a debt security means the principal of the security plus
the premium, if any, on the security.
"PRIVATE EXCHANGE NOTE" has the meaning set forth in the Registration
Rights Agreement.
"PRIVATE PLACEMENT LEGEND" means the legend initially set forth on the
Series A Securities in the form set forth on Exhibit A-1.
"PURCHASE MONEY OBLIGATIONS" means Debt of any Person secured by Liens
(i) on property purchased, acquired, or constructed by such Person or its
Subsidiaries after the Issue
-12-
Date and used in the ordinary course of business by such Person and (ii)
securing the payment of all or any part of the purchase price or construction
cost of such assets and limited to the property so acquired and improvements
thereof; PROVIDED that such Debt is incurred no later than 90 days after the
acquisition of such property or completion of such construction or improvements.
"QUALIFIED INSTITUTIONAL BUYER" or "QIB" has the meaning specified in
Rule 144A.
"REDEEMABLE STOCK" means, with respect to any Person, any class or
series of Capital Stock of such Person that is redeemable at the option of the
holder (except pursuant to a change in control provision that does not (i) cause
such Capital Stock to become redeemable in circumstances which would not
constitute a Change of Control and (ii) require the Company to pay the
redemption price therefor prior to the Change of Control Repurchase Date) or is
subject to mandatory redemption or otherwise matures prior to the final stated
maturity of the Securities .
"REFINANCING DEBT" means Debt that refunds, refinances or extends any
Securities, Existing Senior Notes, Existing Debt (other than Existing Debt to be
repaid with the net proceeds of the offering of the Securities) or other Debt
Incurred by the Company or its Restricted Subsidiaries permitted under the terms
of this Indenture, but only to the extent that (i) the Refinancing Debt is
subordinated to the Securities to the same extent as the Debt being refunded,
refinanced or extended, if at all, (ii) the Refinancing Debt is scheduled to
mature either (a) no earlier than the Debt being refunded, refinanced or
extended, or (b) after the maturity date of the Securities, (iii) the portion,
if any, of the Refinancing Debt that is scheduled to mature on or prior to the
maturity date of the Securities has a Weighted Average Life to Maturity at the
time such Refinancing Debt is Incurred that is equal to or greater than the
Weighted Average Life to Maturity of the portion of the Debt being refunded,
refinanced or extended that is scheduled to mature on or prior to the maturity
date of the Securities, and (iv) the gross proceeds of such Refinancing Debt are
an amount that is equal to or 1ess than the aggregate principal amount then
outstanding under the Debt being refunded, refinanced or extended (plus the
premium or other payments paid in connection therewith (which shall not exceed
the stated amount of any premium or other payment required to be paid in
connection with such a renewal, extension, substitution, refunding, refinancing,
redemption, repurchase or replacement pursuant to the terms of the Debt being
renewed, extended, substituted, refunded, refinanced, amended, modified,
supplemented, redeemed, repurchased or replaced) and the expenses incurred in
connection therewith).
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights Agreement
by and among the Company, the Guarantors named therein and the Initial
Purchaser, relating to the Securities and dated as of the Issue Date (or a later
date on which Series B Securities other than the Original Securities are
issued), as the same may be amended, supplemented or modified from time to time
in accordance with the terms thereof.
"RESALE RESTRICTION TERMINATION DATE" has the meaning provided in
Section 2.15(a).
-13-
"RESTRICTED PAYMENTS" means with respect to the Company or any
Restricted Subsidiary (i) the declaration or payment of any dividend or other
distribution on any shares of such Person's Capital Stock (except (x) dividends
or distributions in additional shares of Capital Stock of the Company other than
Redeemable Stock or (y) the declaration or payment of any dividend or other
distribution by a Restricted Subsidiary to the Company or another Restricted
Subsidiary), (ii) any payment on account of the purchase, redemption or other
acquisition of (a) any shares of such Person's Capital Stock or (b) any option,
warrant or other right to acquire shares of such Person's Capital Stock, except,
in each case, Capital Stock held by the Company or a Restricted Subsidiary,
(iii) any Investment (other than a Permitted Investment) in any Person, or (iv)
any principal payment, redemption, repurchase, defeasance or other acquisition
or retirement, prior to scheduled principal payment or scheduled maturity, of
Subordinated Debt of the Company or its Subsidiaries.
"RESTRICTED SECURITY" has the meaning set forth in Rule 144(a)(3) under
the Securities Act and includes, without limitation, any Private Exchange Note;
PROVIDED that the Trustee shall be entitled to request and conclusively rely
upon an Opinion of Counsel with respect to whether any Security is a Restricted
Security.
"RESTRICTED SUBSIDIARY" means any Subsidiary which is not an
Unrestricted Subsidiary.
"RULE 144A" means Rule 144A under the Securities Act.
"SEC" means the Securities and Exchange Commission.
"SECURITIES" means the Series B Securities and Series C Securities as
amended or supplemented from time to time in accordance with the terms hereof
that are issued pursuant to this Indenture.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.
"SERIES B SECURITIES" means the 9 1/4% Series B Senior Notes due
February 1, 2008, being issued and sold under this Indenture.
"SERIES C SECURITIES" means the 9 1/4% Series C Senior Notes due
February 1, 2008 (the terms of which are identical to the Series B Securities
except that the Series C Securities shall be registered under the Securities
Act, and shall not contain the restrictive legend on the face of the form of the
Series B Securities), to be issued in exchange for the Series B Securities and
the Existing Senior Notes under this Indenture.
"SUBORDINATED DEBT" means, with respect to the Company and its
Restricted Subsidiaries, all Debt of such Person which is, pursuant to its
terms, expressly subordinated in right of payment to the Securities or the
Guarantees (other than Debt held by the Company or a Restricted Subsidiary).
-14-
"SUBSIDIARY" means, with respect to any Person, (i) any corporation or
entity of which a majority of the capital stock having ordinary voting power to
elect a majority of the board of directors or other Persons performing similar
functions is at the time directly or indirectly owned by such Person or one or
more of the other Subsidiaries of that Person or (ii) any partnership or joint
venture at least a majority of the voting power of which is at the time directly
or indirectly owned by such Person or one or more of the other Subsidiaries of
that Person, or a combination thereof or a successor thereto.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code xx.xx.
77aaa-77bbbb) as in effect on the date of this Indenture, except as provided in
Section 9.03.
"TRUST OFFICER" means any officer of the Trustee assigned by the
Trustee to administer its corporate trust matters.
"TRUSTEE" means the party named as such in this Indenture until a
successor replaces it and thereafter means the successor.
"UNRESTRICTED SUBSIDIARY" means each of the Subsidiaries of the Company
(other than a Guarantor) so designated by a resolution adopted by the board of
directors of the Company as provided below; PROVIDED that (a) neither the
Company nor any of its other Subsidiaries (other than Unrestricted Subsidiaries)
(1) provides any direct or indirect credit support for any Debt of such
Subsidiary (including any undertaking, agreement or instrument evidencing such
Debt) or (2) is directly or indirectly liable for any Debt of such Subsidiary,
and (b) the creditors with respect to Debt for borrowed money of such Subsidiary
have agreed in writing that they have no recourse, direct or indirect, to the
Company or any other Subsidiary of the Company (other than Unrestricted
Subsidiaries), including, without limitation, recourse with respect to the
payment of principal or interest on any Debt of such Subsidiary. The board of
directors of the Company may designate an Unrestricted Subsidiary to be a
Restricted Subsidiary; PROVIDED that (i) any such redesignation will be deemed
to be an Incurrence by the Company and its Restricted Subsidiaries of the Debt
(if any) of such redesignated Subsidiary for purposes of Section 4.10 hereof as
of the date of such redesignation, (ii) any Debt of such Unrestricted Subsidiary
could then be Incurred in accordance with Section 4.10 on the date of such
redesignation and (iii) the Liens of such Unrestricted Subsidiary could then be
incurred in accordance with Section 4.13 hereof as of the date of such
redesignation. Subject to the foregoing, the board of directors of the Company
also may designate any Restricted Subsidiary to be an Unrestricted Subsidiary;
PROVIDED that (i) all previous Investments by the Company and its Restricted
Subsidiaries in such Restricted Subsidiary (net of any returns previously paid
on such Investments) will be deemed to be Restricted Payments at the time of
such designation and will reduce the amount available for Restricted Payments
under Section 4.11 hereof, (ii) the Company and its Restricted Subsidiaries
could incur $1.00 of additional Indebtedness under the Coverage Ratio test
contained in Section 4.10 hereof and (iii) no Default or Event of Default shall
have occurred or be continuing. Any such designation or redesignation by the
board of directors of the Company will be evidenced to the Trustee by the filing
with the Trustee of a certified copy of the resolution of the board of
-15-
directors of the Company giving effect to such designation or redesignation and
an Officers' Certificate certifying that such designation or redesignation
complied with the foregoing conditions and setting forth the underlying
calculations.
"U.S. GOVERNMENT OBLIGATIONS" means direct noncallable obligations of,
or non-callable obligations guaranteed by, the United States of America for the
payment of which the full faith and credit of the United States of America is
pledged.
"VOTING STOCK" means, with respect to any Person, Capital Stock of any
class or kind normally entitled to vote in the election of the board of
directors or other governing body of such Person.
"WAREHOUSE FACILITY" means a Bank Facility to finance the making of
mortgage loans originated by the Company or any of its Subsidiaries.
"WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any Debt or
portion thereof, if applicable, at any date, the number of years obtained by
dividing (i) the then outstanding principal amount of such Debt or portion
thereof, if applicable, into (ii) the sum of the products obtained by
multiplying (a) the amount of each then remaining installment, sinking fund,
serial maturity or other required payment of principal, including payment at
final maturity, in respect thereof, by (b) the number of years (calculated to
the nearest one-twelfth) that will elapse between such date and the making of
such payment.
"WHOLLY OWNED RESTRICTED SUBSIDIARY" means any Restricted Subsidiary of
the Company of which 100% of the outstanding Capital Stock is owned by one or
more Wholly Owned Restricted Subsidiaries of the Company or by the Company and
one or more Wholly Owned Restricted Subsidiaries of the Company. For purposes of
this definition, any directors' qualifying shares shall be disregarded in
determining the ownership of a Subsidiary.
SECTION 1.02. OTHER DEFINITIONS
TERM DEFINED IN SECTION
---- ------------------
"Bankruptcy Law"................................................ 6.01
"business day".................................................. 11.07
"Change of Control Notice"...................................... 4.08
"Change of Control Repurchase Date"............................. 4.08
"Change of Control Repurchase Right"............................ 4.08
"Custodian"..................................................... 6.01
"Discharged".................................................... 8.01
"Event of Default".............................................. 6.01
"Incur"......................................................... 4.10
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TERM DEFINED IN SECTION
---- ------------------
"Legal Holiday"................................................. 11.07
"Minimum Net Worth"............................................. 4.09
"Net Proceeds Offer"............................................ 4.15
"Net Worth"..................................................... 4.09
"Net Worth Offer Amount"........................................ 4.09
"Net Worth Price"............................................... 4.09
"Net Worth Repurchase Date"..................................... 4.09
"Net Worth Repurchase Right".................................... 4.09
"Paying Agent".................................................. 2.03
"Purchase Amount"............................................... 4.15
"Registrar"..................................................... 2.03
"Successor"..................................................... 5.01
"Trigger Date".................................................. 4.09
.ECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT
Whenever this Indenture refers to a provision of the TIA, the provision
is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC Rule under the TIA
have the meanings so assigned to them.
SECTION 1.04. RULES OF CONSTRUCTION
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
-17-
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting
principles in effect on the date hereof;
(3) "or" is NOT exclusive;
(4) words in the singular include the plural and in the plural
include the singular;
(5) provisions apply to successive events and transactions;
and
(6) "herein," "hereof" and other words of similar import refer
to this Indenture as a whole and not to any particular Article, Section
or other Subdivision.
ARTICLE 2
THE SECURITIES
SECTION 2.01. FORM AND DATING
The Series B Securities and Series C Securities, including the
Trustee's certificate of authentication, shall be substantially in the form set
forth in Exhibits A-1 and A-2, respectively, which is incorporated in and forms
a part of this Indenture. The Securities may have notations, legends or
endorsements required by law, stock exchange rule or usage. Each Security shall
be dated the date of its authentication.
The terms and provisions contained in the Securities and the Guarantees
shall constitute, and are hereby expressly made, a part of this Indenture. The
Series B Securities and the Series C Securities shall be considered collectively
to be a single class for all purposes of this Indenture, including, without
limitation, waivers, amendments, redemptions and offers to purchase.
Series B Securities offered and sold in reliance on Rule 144A shall be
issued initially in the form of one or more permanent Global Securities in
registered form, substantially in the form set forth in Exhibit A-l ("Global
Securities"), deposited with the Trustee, as custodian for the Depository, and
shall bear the legend set forth on Exhibit B. Series C Securities (other than
any constituting Private Exchange Notes) shall be issued initially in the form
of one or more permanent Global Securities in registered form, substantially in
the form set forth in Exhibit A-2, deposited with the Trustee, as custodian for
the Depositary, and shall bear the legend set forth on Exhibit B. The aggregate
principal amount of any Global Security may from time to time be increased or
decreased by adjustments made on the records of the Trustee, as custodian for
the Depository, as hereinafter provided.
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Series B Securities offered and sold in reliance on any other exemption
from registration under the Securities Act other than as described in the
preceding paragraph and any Series C Securities constituting Private Exchange
Notes shall be issued in the form of certificated Securities in registered form
in substantially the form set forth in Exhibit A-l and Exhibit A-2, respectively
(the "Physical Securities").
SECTION 2.02. EXECUTION AND AUTHENTICATION
One Officer shall sign the Securities for the Company by manual or
facsimile signature. The Company's seal shall be reproduced on the Securities.
If the Officer whose signature is on a Security no longer holds that
office at the time the Security is authenticated, the Security shall
nevertheless be valid.
A Security shall not be valid until authenticated by the manual
signature of the Trustee. The signature shall be conclusive evidence that the
Security has been authenticated under this Indenture.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities executed by the Company to
the Trustee for authentication; and the Trustee shall, upon a written order or
orders of the Company signed by two Officers or by an Officer and an Assistant
Treasurer or Assistant Secretary of the Company, authenticate and make
available, for delivery such Securities. The order shall specify the amount of
Securities to be authenticated and the date on which such Securities are to be
authenticated.
The Trustee shall authenticate (i) Series B Securities for original
issue on the Issue Date in the aggregate principal amount of $50,000,000 (the
"Original Securities"), (ii) Series B Securities for original issue after the
Issue Date in such additional principal amounts as may be set forth in an
Officers' Certificate described as follows and (iii) Series C Securities from
time to time for issue only (a) in exchange for a like principal amount of
Series B Securities or (b) in exchange for a like principal amount of Existing
Senior Notes, in each case upon receipt of a written order of the Company in the
form of an Officers' Certificate. The Officers' Certificate shall specify the
amount of Securities to be authenticated, the series and type of Securities, the
date on which the Securities are to be authenticated and the date from which
interest on such Securities shall accrue. The aggregate principal amount of
Securities outstanding at any time may not exceed $50,000,000 plus any
additional principal amount issued pursuant to item (ii) or item (iii)(b) of the
first sentence of this paragraph, except as provided in Section 2.07. Upon
receipt of a written order of the Company in the form of an Officers'
Certificate, the Trustee shall authenticate Securities in substitution of
Securities originally issued to reflect any name change of the Company.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Securities. An authenticating agent may authenticate
Securities whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes
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authentication by such agent. An authenticating agent has the same rights as an
Agent to deal with the Company or an Affiliate.
The Securities shall be issuable only in registered form without
coupons and only in denominations of $1,000 and any integral multiple thereof.
SECTION 2.03. REGISTRAR AND PAYING AGENT
The Company shall maintain in the Borough of Manhattan, The City of New
York, an office or agency where Securities may be presented for registration of
transfer or for exchange ("Registrar") and an office or agency where Securities
may be presented for payment ("Paying Agent"); provided that payment of interest
may, at the option of the Company, be made by check mailed to a Holder at his
registered address. The Registrar shall keep a register of the Securities and of
their transfer and exchange. The Company may appoint or change one or more
co-Registrars and one or more additional paying agents without notice and may
act in any such capacity on its own behalf. The term "Paying Agent" includes any
additional paying agent.
The Company shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture. The agreement shall implement the
provisions of this Indenture that relate to such Agent. The Company shall notify
the Trustee of the name and address of any Agent not a party to this Indenture.
If the Company fails to maintain a Registrar or Paying Agent, the Trustee shall
act as such, and shall be entitled to appropriate compensation therefor pursuant
to Section 7.07.
The Company initially appoints the Trustee as Paying Agent and
Registrar.
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST
Each Paying Agent shall hold in trust for the benefit of the
Securityholders or the Trustee all moneys held by such Paying Agent for the
payment of principal of or interest on the Securities, and shall notify the
Trustee of any default by the Company in making any such payment. While any such
default continues, the Trustee may require a Paying Agent to pay all money held
by it to the Trustee. The Company at any time may require a Paying Agent to pay
all money held by it to the Trustee. Upon payment over to the Trustee, such
Paying Agent shall have no further liability for the money. If the Company acts
as Paying Agent, it shall segregate and hold as a separate trust fund all money
held by it as Paying Agent.
SECTION 2.05. SECURITYHOLDER LISTS
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Securityholders. If the Trustee is not the Registrar, the Company shall furnish
to the Trustee on or before each interest payment date and at such other times
as the Trustee may request in writing a list, in such form and as of such date
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as the Trustee may reasonably require, of the names, addresses and tax
identification numbers of Securityholders.
SECTION 2.06. TRANSFER AND EXCHANGE
Where Securities are presented to the Registrar or a co-Registrar with
a request to register the transfer or to exchange them for an equal principal
amount of Securities of other authorized denominations, the Registrar shall
register the transfer or make the exchange if the requirements of Section
8-401(1) of the New York Uniform Commercial Code are met. To permit
registrations of transfer and exchanges, the Trustee shall authenticate
Securities at the Registrar's request. The Company or the Trustee, as the case
may be, shall not be required (a) to issue, authenticate, register the transfer
of or exchange any Security during a period beginning at the opening of business
15 days before the mailing of a notice, of redemption of the Securities selected
for redemption under Section 3.02 and ending at the close of business on the day
of such mailing, or (b) to register the transfer of or exchange any Security so
selected for redemption in whole or in part, except the unredeemed portion of
Securities being redeemed in part.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any transfer, registration of transfer or exchange of Securities, other
than exchanges pursuant to Section 2.10, 3.06 or 9.05 not involving any
transfer.
Any Holder of the Global Security shall, by acceptance of such Global
Security, agree that, subject to Section 2.15(d), transfers of beneficial
interests in such Global Security may be effected only through a book-entry
system maintained by the Depository (or its agent), and that ownership of a
beneficial interest in the Global Security shall be required to be reflected in
a book entry.
SECTION 2.07. REPLACEMENT SECURITIES
If the Holder of a Security claims that the Security has been
mutilated, lost, destroyed or wrongfully taken, the Company shall issue and the
Trustee shall authenticate a replacement Security if the requirements of Section
8-405 of the New York Uniform Commercial Code are met and, in the case of a
mutilated Security, such mutilated Security is surrendered to the Trustee. If
required by the Trustee or the Company, an indemnity bond must be sufficient, in
the judgment of both, to protect the Company, the Trustee, or any Agent from any
loss which any of them may suffer if a Security is replaced. The Company or the
Trustee may charge for its expenses in replacing a Security.
In case any such mutilated, destroyed or wrongfully taken Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security when due.
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Every replacement Security is an additional obligation of the Company.
SECTION 2.08. OUTSTANDING SECURITIES
Securities outstanding at any time are all the Securities authenticated
by the Trustee except for those canceled by it, those delivered to it for
cancellation and those described in this Section as not outstanding. A Security
does not cease to be outstanding because the Company or one of its subsidiaries
or Affiliates holds the Security.
If a Security is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it, or a court
holds, that the replaced Security is held by a BONA FIDE purchaser.
If the Paying Agent (other than the Company) holds on a redemption
date, repurchase date or maturity date money sufficient to pay Securities
payable on that date, then on and after that date, such Securities shall be
deemed to be no longer outstanding and interest on them shall cease to accrue.
SECTION 2.09. SECURITIES HELD BY THE COMPANY OR AN AFFILIATE
In determining whether the Holders of the required principal amount of
Securities have concurred in any direction, waiver or consent, Securities owned
by the Company or a Subsidiary or an Affiliate shall be disregarded, except that
for the purposes of determining whether the Trustee shall be protected in
relying on any such direction, waiver or consent, only Securities which the
Trustee actually knows are so owned shall be so disregarded.
SECTION 2.10. TEMPORARY SECURITIES
Until definitive Securities are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Securities. Temporary
Securities shall be substantially in the form of definitive Securities but may
have variations that the Company considers appropriate for temporary Securities.
Without unreasonable delay, the Company shall prepare and the Trustee shall
authenticate definitive Securities in exchange for temporary Securities.
SECTION 2.11. CANCELLATION
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Securities surrendered to them for registration of transfer, exchange or
payment. The Trustee shall cancel all Securities surrendered for registration of
transfer, exchange, payment or cancellation and may destroy canceled Securities
and deliver a certificate of any such destruction to the Company. The Company
may not issue new Securities to replace Securities that it has paid or delivered
to the Trustee for cancellation.
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SECTION 2.12. DEFAULTED INTEREST
If and to the extent the Company defaults in a payment of interest on
the Securities, it shall pay the defaulted interest in any lawful manner plus,
to the extent not prohibited by applicable statute or case law, interest payable
on the defaulted interest as provided in Section 4.01. It may pay the defaulted
interest to the persons who are Securityholders on a subsequent special record
date in which case such interest shall cease to be payable to the persons who
were Securityholders on the regular record date. The Company shall fix such
special record date and payment date. At least 15 days before the special record
date, the Company shall mail to Securityholders a notice that states the special
record date, payment date and amount of interest to be paid.
SECTION 2.13. CUSIP NUMBER
The Company in issuing each series of the Securities will use a "CUSIP"
number, and if so, the Trustee shall use the CUSIP number in notices of
redemption or exchange as a convenience to Holders; PROVIDED that any such
notice may state that no representation is made as to the correctness or
accuracy of the CUSIP number printed in the notice or on the Securities, and
that reliance may be placed only on the other identification numbers printed on
the Securities. The Company shall promptly notify the Trustee of any such CUSIP
number used by the Company in connection with the Securities and any change in
such CUSIP number.
SECTION 2.14. BOOK-ENTRY PROVISIONS FOR GLOBAL SECURITIES
(a) The Global Securities initially shall (i) be registered in the name
of the Depository or the nominee of such Depository, (ii) be delivered to the
Trustee as custodian for such Depository and (iii) bear legends as set forth in
Exhibit B.
Members of, or participants in, the Depository ("Agent Members") shall
have no rights under this Indenture with respect to any Global Security held on
their behalf by the Depository, or the Trustee as its custodian, or under the
Global Security, and the Depository may be treated by the Company, the Trustee
and any agent of the Company or the Trustee as the absolute owner of the Global
Security for all purposes whatsoever. Notwithstanding the foregoing, nothing
herein shall prevent the Company, the Trustee or any agent of the Company or the
Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Depository or impair, as between the Depository
and its Agent Members, the operation of customary practices governing the
exercise of the rights of a Holder of any Security.
(b) Global Securities may be transferred as a whole, and interests of
beneficial owners in Global Securities may be transferred or exchanged for
Physical Securities, only in accordance with the rules and procedures of the
Depository and the provisions of Section 2.15. In addition, Physical Securities
shall be transferred to all beneficial owners in exchange for their beneficial
interests in Global Securities if (i) the Depository notifies the Company that
it is unwilling or unable to continue as Depository for any Global Security and
a successor depositary is not
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appointed by the Company within 90 days of such notice or (ii) an Event of
Default has occurred and is continuing and the Registrar has received a request
from the Depository to issue Physical Securities.
(c) In connection with the transfer of Global Securities as an entirety
to beneficial owners pursuant to paragraph (b), the Global Securities shall be
deemed to be surrendered to the Trustee for cancellation, and the Company shall
execute, and the Trustee shall authenticate and deliver, to each beneficial
owner identified by the Depository in exchange for its beneficial interest in
the Global Securities, an equal aggregate principal amount of Physical
Securities of authorized denominations.
(d) Any Physical Security constituting a Restricted Security delivered
in exchange for an interest in a Global Security pursuant to paragraph (b) or
(c) of this Section shall, except as otherwise provided by Section 2.15, bear
the legend regarding transfer restrictions applicable to the Physical Securities
set forth in Exhibit A-l.
(e) The Holder of any Global Security may grant proxies and otherwise
authorize any person, including Agent Members and persons that may hold
interests through Agent Members, to take any action which a Holder is entitled
to take under this Indenture or the Securities.
SECTION 2.15. REGISTRATION OF TRANSFERS AND EXCHANGES
(a) TRANSFER AND EXCHANGE OF PHYSICAL SECURITIES. When Physical
Securities are presented to the Registrar with a request:
(i) to register the transfer of the Physical Securities;
or
(ii) to exchange such Physical Securities for an equal
number of Physical Securities of other authorized
denominations,
the Registrar shall register the transfer or make the exchange as requested if
the requirements under this Section 2.15 for such transactions are met;
PROVIDED, HOWEVER, that the Physical Securities presented or surrendered for
registration of transfer or exchange:
(I) shall be duly endorsed or accompanied by a written
instrument of transfer in form satisfactory to the
Company and the Registrar or co-Registrar, duly
executed by the Holder thereof or his attorney duly
authorized in writing; and
(II) in the case of Physical Securities the offer and sale
of which have not been registered under the
Securities Act and are presented for transfer or
exchange prior to (x) the date which is two years
after the later of the date of original issue and the
last date on which the Company or any affiliate of
the Company was the owner of such Security, or any
predecessor thereto
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and (y) such later date, if any, as may be required
by any subsequent change in applicable law (the
"Resale Restriction Termination Date"), such Physical
Securities shall be accompanied, in the sole
discretion of the Company, by the following
additional information and documents, as applicable:
(A) if such Physical Security is being delivered
to the Registrar by a Holder for
registration in the name of such Holder,
without transfer, a certification from such
Holder to that effect (in substantially the
form of Exhibit C hereto); or
(B) if such Physical Security is being
transferred to a qualified institutional
buyer (as defined in Rule 144A under the
Securities Act) in accordance with Rule 144A
under the Securities Act or pursuant to an
exemption from registration in accordance
with Rule 144 under the Securities Act, a
certification to that effect (in
substantially the form of Exhibit C hereto);
or
(C) if such Physical Security is being
transferred to an institutional "accredited
investor" within the meaning of subparagraph
(a)(1), (a)(2), (a)(3) or (a)(7) of Rule 501
under the Securities Act, delivery of a
Certificate of Transfer in the form of
Exhibit D hereto and an opinion of counsel
and/or other information satisfactory to the
Company to the effect that such transfer is
in compliance with the Securities Act; or
(D) if such Physical Security is being
transferred in reliance on another exemption
from the registration requirements of the
Securities Act, a certification to that
effect (in substantially the form of Exhibit
C hereto) and an opinion of counsel
reasonably acceptable to the Company to the
effect that such transfer is in compliance
with the Securities Act.
(b) RESTRICTIONS ON TRANSFER OF A PHYSICAL SECURITY FOR A BENEFICIAL
INTEREST IN A GLOBAL Security. A Physical Security may not be exchanged for a
beneficial interest in a Global Security except upon satisfaction of the
requirements set forth below. Upon receipt by the Registrar of a Physical
Security, duly endorsed or accompanied by appropriate instruments of transfer,
in form satisfactory to the Registrar, together with:
(A) certification, substantially in the form of
Exhibit C hereto, that such Security is
being transferred to a qualified
institutional buyer (as defined in Rule 144A
under the Securities Act) in accordance with
Rule 144A under the Securities Act; and
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(B) written instructions directing the Registrar
to make, or to direct the Depositary to
make, an endorsement on the Global Security
to reflect an increase in the aggregate
amount of the Securities represented by the
Global Security,
then the Registrar shall cancel such Physical Security and cause, or direct the
Depositary to cause, in accordance with the standing instructions and procedures
existing between the Depositary and the Registrar, the number of Securities
represented by the Global Security to be increased accordingly. If no Global
Security is then outstanding, the Company shall issue and the Registrar shall
authenticate a new Global Security in the appropriate amount.
(c) TRANSFER AND EXCHANGE OF GLOBAL SECURITIES. The transfer and
exchange of Global Securities or beneficial interests therein shall be effected
through the Depositary, in accordance with this Indenture (including the
restrictions on transfer set forth herein) and the procedures of the Depositary
therefor.
(d) TRANSFER OF A BENEFICIAL INTEREST IN A GLOBAL SECURITY FOR A
PHYSICAL SECURITY.
(i) Any Person having a beneficial interest in a Global
Security may upon request exchange such beneficial
interest for a Physical Security. Upon receipt by the
Registrar of written instructions or such other form
of instructions as is customary for the Depositary
from the Depositary or its nominee on behalf of any
Person having a beneficial interest in a Global
Security and upon receipt by the Registrar of a
written order or such other form of instructions as
is customary for the Depositary or the Person
designated by the Depositary as having such a
beneficial interest containing registration
instructions and, in the case of any such transfer or
exchange prior to the Resale Restriction Termination
Date, the following additional information and
documents:
(A) if such beneficial interest is being
transferred to the Person designated by the
Depositary as being the beneficial owner, a
certification from such Person to that
effect (in substantially the form of Exhibit
C hereto); or
(B) if such beneficial interest is being
transferred to a qualified institutional
buyer (as defined in Rule 144A under the
Securities Act) in accordance with Rule 144A
under the Securities Act or pursuant to an
exemption from registration in accordance
with Rule 144 under the Securities Act, a
certification to that effect from the
transferee or transferor (in substantially
the form of Exhibit C hereto); or
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(C) if such beneficial interest is being
transferred to an institutional "accredited
investor" within the meaning of subparagraph
(a)(l), (a)(2), (a)(3) or (a)(7) of Rule 501
under the Securities Act, delivery of a
Certificate of Transfer in the form of
Exhibit D hereto and an opinion of counsel
and/or other information satisfactory to the
Company to the effect that such transfer is
in compliance with the Securities Act; or
(D) if such beneficial interest is being
transferred in reliance on another exemption
from the registration requirements of the
Securities Act, a certification to that
effect (in substantially the form of Exhibit
C hereto) and an opinion of counsel
reasonably acceptable to the Company to the
effect that such transfer is in compliance
with the Securities Act,
then the Registrar will cause, in accordance with the
standing instructions and procedures existing between
the Depositary and the Registrar, the aggregate
amount of the Global Security to be reduced and,
following such reduction, the Company will execute
and, upon receipt of an authentication order in the
form of an Officers' Certificate, the Registrar will
authenticate and deliver to the transferee a Physical
Security.
(ii) Physical Securities issued in exchange for a
beneficial interest in a Global Security pursuant to
this Section 2.15(d) shall be registered in such
names and in such authorized denominations as the
Depositary, pursuant to instructions from its direct
or indirect participants or otherwise, shall instruct
the Registrar in writing. The Registrar shall deliver
such Physical Securities to the Persons in whose
names such Physical Securities are so registered.
(e) RESTRICTIONS ON TRANSFER AND EXCHANGE OF GLOBAL SECURITIES.
Notwithstanding any other provisions of this Indenture (other than the
provisions set forth in subsection (f) of this Section 2.15), a Global Security
may not be transferred as a whole except by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
(f) PRIVATE PLACEMENT LEGEND. Upon the transfer, exchange or
replacement of Securities not bearing the Private Placement Legend, the
Registrar shall deliver Securities that do not bear the Private Placement
Legend. Upon the transfer, exchange or replacement of Securities bearing the
Private Placement Legend, the Registrar shall deliver only Securities that bear
the Private Placement Legend unless, and the Trustee is hereby authorized to
deliver Securities without the Private Placement Legend only if, (i) the
circumstances contemplated by paragraph (a)(ii)(II) of this Section 2.15 exist,
(ii) there is delivered to the Registrar an Opinion of Counsel
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reasonably satisfactory to the Company and the Trustee to the effect that
neither such legend nor the related restrictions on transfer are required in
order to maintain compliance with the provisions of the Securities Act or (iii)
such Security has been sold pursuant to an effective registration statement
under the Securities Act.
(g) GENERAL. By its acceptance of any Security bearing the Private
Placement Legend, each Holder of, and each beneficial interest in, such a
Security acknowledges the restrictions on transfer of such Security set forth in
this Indenture and in the Private Placement Legend and agrees that it will
transfer such Security only as provided in this Indenture.
The Registrar shall retain copies of all letters, notices and other
written communications received pursuant to Section 2.14 or this Section 2.15.
The Company shall have the right to inspect and make copies of all such letters,
notices or other written communications at any reasonable time upon the giving
of reasonable written notice to the Registrar.
ARTICLE 3
REDEMPTION
SECTION 3.01. NOTICES TO TRUSTEE
If the Company wants to redeem a portion of the Securities pursuant to
paragraph 5 of the Securities, it shall notify the Trustee at least 60 days
prior to the redemption date (unless a shorter notice period shall be
satisfactory to the Trustee) of the redemption date and the principal amount of
Securities to be redeemed.
SECTION 3.02. SELECTION OF SECURITIES TO BE REDEEMED
If less than all the Securities are to be redeemed, the Trustee shall
select the particular Securities (or portions thereof) to be redeemed on either
a pro rata basis or by lot or such other method as the Trustee shall determine
to be fair and appropriate, such determination to be final and conclusive for
all purposes hereunder, but in any event, in such manner as complies with
applicable legal and stock exchange requirements. The Trustee shall make the
selection from Securities outstanding not previously called for redemption. The
Trustee may select for redemption portions of the principal of Securities that
have denominations larger than $1,000. Securities and portions of them it
selects shall be in amounts of $1,000 or whole multiples of $1,000. Provisions
of this Indenture that apply to Securities called for redemption also apply to
portions of Securities called for redemption.
SECTION 3.03. NOTICE OF REDEMPTION
At least 30 days but not more than 60 days before a redemption date,
the Company shall mail by first-class mail a notice of redemption to each Holder
whose Securities are to be redeemed.
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The notice shall identify the Securities and the principal amount
thereof to be redeemed and shall state:
(1) the redemption date;
(2) the redemption price (including the amount of accrued
interest to be paid on the Securities called for redemption);
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be surrendered
to the Paying Agent to collect the redemption price; and
(5) that interest on Securities called for redemption ceases
to accrue on and after the redemption date.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense. In such event the
Company will provide the Trustee with the information required by clauses (1)
through (5).
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION
Once a notice of redemption is mailed, Securities or portions thereof
called for redemption become due and payable on the redemption date at the
redemption price and, on and after such date (unless the Company shall default
in the payment of the redemption price), such Securities shall cease to bear
interest. Upon surrender to the Paying Agent, such Securities shall be paid at
the redemption price plus accrued interest to the redemption date.
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE
On or before 12:00 Noon on the redemption date, the Company shall
deposit with the Paying Agent money in funds immediately available on the
redemption date sufficient to pay the redemption price of and accrued interest
on all Securities to be redeemed on that date. The Paying Agent shall promptly
return to the Company any money deposited with it by the Company in excess of
the amounts necessary to pay the redemption price of, and accrued interest on,
all Securities to be redeemed.
SECTION 3.06. SECURITIES REDEEMED IN PART
Upon surrender of a Security that is redeemed in part, the Trustee
shall authenticate for the Holder a new Security equal in principal amount to
the unredeemed portion of the Security surrendered.
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ARTICLE 4
COVENANTS
SECTION 4.01. PAYMENT OF SECURITIES
The Company shall pay the principal of and interest on the Securities
on the dates and in the manner provided in the Securities. Principal and
interest shall be considered paid on the date due if the Paying Agent holds as
of 12:00 Noon on that date money sufficient to pay all principal and interest
then due. The Paying Agent shall return to the Company, no later then five days
following the date of payment any money (including accrued interest) that
exceeds such amount of principal and interest payable on the Securities.
The Company shall pay interest on overdue principal at the rate borne
by the Securities. The Company shall pay interest on overdue installments of
interest at the same rate to the extent not prohibited by applicable statute or
case law.
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY
The Company will maintain in the Borough of Manhattan, The City of New
York, an office or agency where Securities may be surrendered for registration
of transfer or exchange and where notices and demands to or upon the Company in
respect of the Securities and this Indenture may be served. The Company will
give prompt written notice to the Trustee of the location, and any change in the
location, of such office or agency. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the Corporate Trust Office of the Trustee.
The Company may also from time to time designate one or more other
offices or agencies where the Securities may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations;
PROVIDED, HOWEVER, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, The City of New York for such purposes. The Company will
give prompt written notice to the Trustee of any such designation or rescission
and of any change in the location of any such other office or agency.
The Company hereby designates the Corporate Trust Office of the Trustee
in the Borough of Manhattan, The City of New York, an agency of the Company in
accordance with Section 2.03.
SECTION 4.03. SEC REPORTS
So long as any of the Securities remain outstanding the Company shall
deliver to the Trustee and the Trustee will mail to each Holder within 15 days
after the Company files the same
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with the SEC copies of the quarterly and annual reports and of the information,
documents and other reports (or copies of such portions of any of the foregoing
as the SEC may by rules and regulations prescribe) with respect to the Company
and the Guarantors, if any, which the Company and the Guarantors may be required
to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act. The
Company also shall comply with the other provisions of TIA ss. 314(a).
Notwithstanding that neither the Company nor any of the Guarantors may
be required to remain subject to the reporting requirements of Section 13 or
15(d) of the Exchange Act, for so long as any of the Securities remain
outstanding, the Company will continue to file with the SEC and provide the
Trustee and Holders with such annual and quarterly reports and such information,
documents and other reports with respect to the Company and the Guarantors as
are required under Sections 13 and 15(d) of the Exchange Act. If filing of
documents by the Company with the SEC as aforementioned in this paragraph is not
permitted under the Exchange Act, the Company shall promptly upon written notice
supply copies of such documents to any prospective holder.
SECTION 4.04. COMPLIANCE CERTIFICATE
The Company shall deliver to the Trustee within 120 days after the end
of each fiscal year of the Company an Officers' Certificate stating whether or
not the signatories know of any Default by the Company in performing any of its
obligations under this Indenture and the Securities. If they do know of any such
Default, the certificate shall describe the Default and its status.
SECTION 4.05. STAY, EXTENSION AND USURY LAWS
The Company 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, extension or usury law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not, by resort to any such law, hinder, delay or
impede the execution of any power herein granted to the Trustee, but will suffer
and permit the execution of every such power as though no such law had been
enacted.
SECTION 4.06. CORPORATE EXISTENCE
Subject to Article 5, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence and the corporate existence of each of its Restricted Subsidiaries in
accordance with the respective organizational documents of each Restricted
Subsidiary and the rights (charter and statutory), licenses and franchises to
the Company and its Restricted Subsidiaries; PROVIDED, HOWEVER, that the Company
shall not be required to preserve any such right, license or franchise, or the
corporate existence of any
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Restricted Subsidiary if, in the judgment of the board of directors of the
Company, (i) such preservation or existence is not material to the conduct of
business of the Company and (ii) the loss of such right, license or franchise or
the dissolution of such Restricted Subsidiary does not have a material adverse
impact on the Holders.
SECTION 4.07. NOTICE OF DEFAULT
In the event that any Default under Section 6.01 hereof shall occur the
Company will give prompt written notice of such Default to the Trustee.
SECTION 4.08. CHANGE OF CONTROL
(a) In the event that there shall occur a Change of Control of the
Company, each Holder of a Security shall have the right (a "Change of Control
Repurchase Right") upon receipt of a Change of Control Notice (as defined
below), at such Holder's option, to require the Company to repurchase any
Securities of such Holder or any portion of the principal amount thereof which
is $1,000 or any integral multiple thereof, on the date (the "Change of Control
Repurchase Date") that is 45 days after the date of the Change of Control
Notice, or, if such 45th day is a Legal Holiday, the next subsequent day which
is not a Legal Holiday, at a price equal to 101% of the principal amount
thereof, plus accrued interest to the Change of Control Repurchase Date (the
"Change of Control Price"). The right to require the repurchase of Securities
shall not continue after a discharge of the Company from its obligations with
respect to the Securities in accordance with Article 8.
(b) Within 30 days after the occurrence of a Change of Control, the
Company, or, at the request of the Company, the Trustee, shall give notice of
the occurrence of the Change of Control and of the Change of Control Repurchase
Right set forth herein to each Holder (the "Change of Control Notice"). The
Company shall also deliver a copy of the Change of Control Notice to the
Trustee. Any such notice shall contain all instructions and materials necessary
to enable such Holders to deliver Securities pursuant to the Change of Control
Repurchase Right including, without limitation, the following:
(1) the Change of Control Repurchase Date;
(2) the date by which the Change of Control Repurchase Right
must be exercised;
(3) the Change of Control Price;
(4) that Securities are to be surrendered for payment of the
Change of Control Price; and
(5) that the exercise of the Change of Control Repurchase
Right is irrevocable.
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(c) To exercise a Change of Control Repurchase Right a Holder shall
deliver to the Company (if it is acting as its own Paying Agent) or to a Paying
Agent designated by the Company for such purpose in the notice referred to above
on or before the 30th day after the date of the Change of Control Notice, or, if
such day is a Legal Holiday, the next subsequent day which is not a Legal
Holiday, (i) written notice of the Holder's exercise of such right, which notice
shall set forth the name of the Holder, the principal amount of Securities (or
portions thereof) to be repurchased and a statement that an election to exercise
the Change of Control Repurchase Right is being made thereby, and (ii) the
Securities with respect to which the Change of Control Repurchase Right is being
exercised, duly endorsed for transfer to the Company, and the Holder of such
Securities shall be entitled to receive from the Company (if it is acting as its
own Paying Agent) or such Paying Agent a nontransferable receipt of deposit
evidencing such deposit. Such written notice shall be irrevocable.
If the Change of Control Repurchase Date is between a regular record
date for the payment of interest and the next succeeding interest payment date,
any Security to be repurchased must be accompanied by funds equal to the
interest payable on such succeeding interest payment date on the principal
amount to be repurchased (unless such Security shall have been called for
redemption, in which case no such payment shall be required), and the interest
on the principal amount of the Security being repurchased will be paid on such
next succeeding interest payment date to the registered holder of such Security
on the immediately preceding record date. A Security repurchased on an interest
payment date need not be accompanied by any payment, and the interest on the
principal amount of the Security being repurchased will be paid on such interest
payment date to the registered holder of such Security on the immediately
preceding record date.
(d) In the event a Change of Control Repurchase Right shall be
exercised in accordance with the terms hereof, the Company shall pay or cause to
be paid the applicable Change of Control Price with respect to the Securities as
to which the Change of Control Repurchase Right shall have been exercised to the
Holder on the Change of Control Repurchase Date.
(e) On or prior to a Change of Control Repurchase Date, the Company
shall deposit with the Trustee or with a Paying Agent (or, if the Company is
acting as its own Paying Agent, segregate and hold in trust in accordance with
Section 2.04) an amount of money sufficient to pay the Change of Control Price
payable in respect of all of the Securities which are to be repurchased on that
date.
(f) Both the notice of the Company and the notice of the Holder having
been given as specified in this Section 4.08, the Securities so to be
repurchased shall, on the Change of Control Repurchase Date, become due and
payable at the Change of Control Price applicable thereto and from and after
such date (unless the Company shall default in the payment of the Change of
Control Price) such Securities shall cease to bear interest. If any Security
shall not be paid upon surrender thereof for repurchase, the principal shall,
until paid, bear interest from the Change of Control Repurchase Date at the rate
borne by such Security.
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(g) Any Security which is to be submitted for repurchase only in part
shall be delivered pursuant to this Section 4.08 (with, if the Company or the
Trustee so requires, due endorsement by, or a written instrument of transfer in
form satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or his attorney duly authorized in writing), and the Company shall
execute, and the Trustee shall authenticate and make available for delivery to
the Holder of such Security without any service charge, a new Security or
Securities, of any authorized denomination as requested by such Holder, of the
same tenor and in aggregate principal amount equal to and in exchange for the
portion of the principal of such Security not submitted for repurchase.
(h) If any repurchase pursuant to the foregoing provisions constitutes
a tender offer as defined under the Exchange Act, the Company will comply with
the requirements of Rule 14e-1 and any other tender offer rules under the
Exchange Act which then may be applicable.
SECTION 4.09. MAINTENANCE OF NET WORTH
(a) In the event that the Company's Net Worth at the end of each of any
two consecutive fiscal quarters (the last day of such second fiscal quarter
being referred to as the "Trigger Date") is less than $35,000,000 (the "Minimum
Net Worth"), then the Company shall make an offer to all Holders (a "Net Worth
Offer") to acquire on a pro rata basis on the date (the "Net Worth Repurchase
Date") that is 45 days following the date of the Net Worth Notice (as defined
below), Securities in an aggregate principal amount equal to 10% of the original
outstanding principal amount of the Securities (or if less than 10% of the
original aggregate principal amount of the Securities issued are then
outstanding, all the Securities outstanding at the time) (the "Net Worth Offer
Amount") at a purchase price of 100% of the principal amount thereof, plus
accrued interest to the Net Worth Repurchase Date (the "Net Worth Price"). The
Company may credit against the Net Worth Offer Amount the principal amount of
Securities acquired by the Company prior to the Trigger Date through purchase,
optional redemption or exchange The Company, however, may not credit a specific
Security in more than one Net Worth Offer. In no event shall the failure to meet
the Minimum Net Worth at the end of any fiscal quarter be counted toward the
making of more than one Net Worth Offer. The Company shall notify the Trustee
promptly after the occurrence of any of the events specified in this Section
4.09 and shall notify the Trustee in writing if its Net Worth is equal to or
less than the Minimum Net Worth for any fiscal quarter.
(b) Within 30 days after the Trigger Date, the Company, or, at the
request of the Company, the Trustee, shall give notice of the Net Worth Offer to
each Holder (the "Net Worth Notice"). The Company shall also deliver a copy of
the Net Worth Notice to the Trustee. Any such notice shall contain all
instructions and materials necessary to enable such Holders to deliver
Securities pursuant to the Net Worth Offer including, without limitation, the
following:
(1) the Net Worth Repurchase Date;
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(2) the date by which the Net Worth Offer must be accepted by
a Holder;
(3) the Net Worth Price and the Net Worth Offer Amount; and
(4) that Securities are to be surrendered for payment of the
Net Worth Price.
(c) To accept a Net Worth Offer a Holder shall deliver to the Company
(if it is acting as its own Paying Agent) or to a Paying Agent designated by the
Company for such purpose in the Net Worth Notice, on or before the 30th day
after the date of the Net Worth Notice, or, if such day is a Legal Holiday, the
next subsequent day which is not a Legal Holiday, (i) written notice of the
Holder's acceptance of such offer, which notice shall set forth the name of the
Holder, the principal amount of Securities (or portions thereof) to be
repurchased and a statement that an acceptance of the Net Worth Offer is being
made thereby and (ii) the Securities with respect to which the Net Worth Offer
is being accepted, duly endorsed for transfer to the Company, and the Holder of
such Securities shall be entitled to receive from the Company (if it is acting
as its own Paying Agent) or such Paying Agent a nontransferable receipt of
deposit evidencing such deposit. Such written notice may be withdrawn upon
further written notice delivered to the Trustee on or prior to the third day
preceding the Net Worth Repurchase Date.
If the Net Worth Repurchase Date is between a regular record date for
the payment of interest and the next succeeding interest payment date, any
Security to be repurchased must be accompanied by funds equal to the interest
payable on such succeeding interest payment date on the principal amount to be
repurchased (unless such Security shall have been called for redemption, in
which case no such payment shall be required), and the interest on the principal
amount of the Security being repurchased will be paid on such next succeeding
interest payment date to the registered holder of such Security on the
immediately preceding record date. A Security repurchased on an interest payment
date need not be accompanied by any payment, and the interest on the principal
amount of the Security being repurchased will be paid on such interest payment
date to the registered holder of such Security on the immediately preceding
record date.
(d) In the event a Net Worth Offer is accepted in accordance with the
terms hereof, the Company shall pay or cause to be paid the applicable Net Worth
Price with respect to the Securities as to which the Net Worth Offer shall have
been accepted (on a pro rata basis up to the Net Worth Offer Amount, plus
accrued interest) to the Holder on the Net Worth Repurchase Date.
(e) On the Net Worth Repurchase Date, the Company shall deliver to the
Trustee the amount of Securities to be credited against the Net Worth Offer
Amount and shall deposit with the Trustee or with a Paying Agent (or, if the
Company is acting as its own Paying Agent, segregate and hold in trust in
accordance with Section 2.04) an amount of money sufficient to pay the Net Worth
Price payable in respect of all of the Securities which are to be repurchased on
that date, but in no event shall the Company be obligated to deposit an amount
in excess of the Net Worth Offer Amount, plus accrued interest.
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(f) Both the notice of the Company and the notice of the Holder having
been given as specified in this Section 4.09, the Securities to be repurchased
shall, on the Net Worth Repurchase Date, become due and payable at the Net Worth
Price applicable thereto and from and after such date (unless the Company shall
default in the payment of the Net Worth Price) such Securities shall cease to
bear interest. If any Security shall not be paid upon surrender thereof for
repurchase, the principal and interest (to the extent lawful) shall, until paid,
bear interest from the Net Worth Repurchase Date at the rate borne by such
Security.
(g) Any Security which is to be submitted for repurchase only in part
shall be delivered (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and make available for delivery to the Holder of such
Security without any service charge, a new Security or Securities, of any
authorized denomination as requested by such Holder, of the same tenor and in
aggregate principal amount equal to and in exchange for the portion of the
principal of such Security not submitted for repurchase.
(h) If any repurchase pursuant to the foregoing provisions constitutes
a tender offer as defined under the Exchange Act, the Company will comply with
the requirements of Rule 14e-1 and any other tender offer rules under the
Exchange Act which then may be applicable.
SECTION 4.10. LIMITATION ON DEBT
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, assume, guarantee or
otherwise become liable for ("Incur") any Debt, except Permitted Debt.
Notwithstanding the foregoing, and subject to the immediately
succeeding paragraph, the Company and the Guarantors may Incur Debt if, at the
time such Debt is so Incurred and after giving effect thereto and the
application of the proceeds therefrom, the Company's Coverage Ratio shall not be
less than 2.0 to 1.0.
The Company will not, and will not cause or permit any Guarantor to,
directly or indirectly, Incur any Debt that purports to be by its terms (or by
the terms of any agreement governing such Debt) subordinated to any other Debt
of the Company or of such Guarantor, as the case may be, unless such Debt is
also by its terms (or by the terms of any agreement governing such Debt) made
expressly subordinated to the Securities or the Guarantee of such Guarantor, as
the case may be, to the same extent and in the same manner as such Debt is
subordinated to such other Debt.
For purposes of this Section 4.10, any waiver, extension or
continuation of any or all mandatory prepayments or installment payments or the
maturity date of any of the Debt Incurred
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pursuant to this Section 4.10 shall not be or be deemed to be the Incurrence of
Debt by the Company or its Restricted Subsidiaries.
SECTION 4.11. LIMITATION ON RESTRICTED PAYMENTS
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, make any Restricted Payment, if, after
giving effect thereto:
(a) an Event of Default, or an event that through the passage
of time or the giving of notice, or both, would become an Event of
Default, shall have occurred and be continuing; or
(b) the Company would be unable to Incur $1.00 of additional
Debt under the second paragraph set forth under Section 4.10; or
(c) the aggregate amount of all Restricted Payments made by
the Company and its Restricted Subsidiaries (the amount expended or
distributed for such purposes, if other than cash, to be determined in
good faith by the board of directors of the Company) from and after
February 2, 1998 shall exceed the sum of:
(i) the aggregate of 50% of the Consolidated Net
Income of the Company accrued for the period (taken as one
accounting period) commencing with February 1, 1998 to and
including the first full month ended immediately prior to the
date of such calculation (or, in the event Consolidated Net
Income is a deficit, then minus 100% of such deficit);
(ii) the aggregate net proceeds (the amount of such
proceeds, if other than in cash, to be determined in good
faith by the board of directors of the Company) received by
the Company from the issuance or sale (other than to a
Subsidiary of the Company) of its Capital Stock (other than
Redeemable Stock), including the principal amount of any of
the Convertible Notes outstanding on February 2, 1998 and any
other convertible or exchangeable notes issued after February
2, 1998 or other convertible or exchangeable securities issued
after February 2, 1998, in any such case to the extent such
principal amount is converted or exchanged into Capital Stock
from and after February 2, 1998, and options, warrants and
rights to purchase its Capital Stock (other than Redeemable
Stock); PROVIDED that the net proceeds received by the Company
from the Equity Offering shall be excluded from this clause
(ii);
(iii) in the case of the disposition or repayment of
any Investment constituting a Restricted Payment made after
February 2, 1998 (excluding any Investment described in clause
(iv) of the following paragraph, but including upon the
redesignation of an Unrestricted Subsidiary as a Restricted
Subsidiary), an amount equal to the lesser of the return of
capital with respect to such Investment
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and the cost of such Investment, in either case, reduced (but
not below zero) by the excess, if any, of the cost of the
disposition of such Investment over the gain, if any, realized
by the Company or such Restricted Subsidiary in respect of
such disposition of such Investment; and
(iv) $5,000,000.
The foregoing paragraphs will not prevent (i) the payment of any
dividend within 60 days after the date of its declaration if such dividend could
have been made on the date of its declaration in compliance with the foregoing
provisions; (ii) so long as no Default or Event of Default shall have occurred
and be continuing, the redemption, repurchase or other acquisition or retirement
of any shares of any class of Capital Stock of the Company or any Subsidiary of
the Company in exchange for, or out of the net cash proceeds of, a substantially
concurrent (x) capital contribution to the Company from any Person (other than a
Subsidiary of the Company) or (y) issue and sale of other shares of Capital
Stock (other than Redeemable Stock) of the Company to any Person (other than to
a Subsidiary of the Company); PROVIDED, HOWEVER, that the amount of any such net
proceeds that are utilized for any such redemption, repurchase or other
acquisition or retirement shall be excluded from clause (ii) of the preceding
paragraph; (iii) so long as no Default or Event of Default shall have occurred
and be continuing, any redemption, repurchase or other acquisition or retirement
of Subordinated Debt by exchange for, or out of the net cash proceeds of, a
substantially concurrent (x) capital contribution to the Company from any Person
(other than a Subsidiary of the Company) or (y) issue and sale of (A) Capital
Stock (other than Redeemable Stock) of the Company to any Person (other than to
a Subsidiary of the Company); PROVIDED, HOWEVER, that the amount of any such net
cash proceeds that are utilized for any such redemption, repurchase or other
acquisition or retirement shall be excluded from clause (ii) of the preceding
paragraph; or (B) Debt of the Company issued to any Person (other than a
Subsidiary of the Company), so long as such Debt (x) has no stated maturity
earlier than February 1, 2008, (y) has a Weighted Average Life to Maturity equal
to or greater than the remaining Weighted Average Life to Maturity of the
Securities and (z) is subordinated to the Securities in the same manner and at
least to the same extent as the Subordinated Debt so purchased, exchanged,
redeemed, acquired or retired; (iv) Investments constituting Restricted Payments
made as a result of the receipt of non-cash consideration from any Asset Sale
made pursuant to and in compliance with Section 4.15; (v) so long as no Default
or Event of Default has occurred and is continuing, the repurchase or redemption
of shares of Capital Stock from any officer, director or employee of the Company
or its Restricted Subsidiaries whose employment has been terminated or who has
died or become disabled in an aggregate amount not to exceed $250,000 per annum;
(vi) so long as no Default or Event of Default shall have occurred and be
continuing, the making of Restricted Payments in an aggregate amount not to
exceed $5,000,000; and (vii) the redemption of the Convertible Notes; PROVIDED
that amounts paid pursuant to clauses (i), (v) and (vi) (but not clauses (ii),
(iii), (iv) or (vii)) shall reduce amounts available for future Restricted
Payments under the first paragraph of this Section 4.11.
SECTION 4.12. LIMITATION ON DIVIDENDS AND OTHER PAYMENT RESTRICTIONS
AFFECTING RESTRICTED SUBSIDIARIES
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The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, assume or otherwise cause or
suffer to exist or to become effective any consensual encumbrance or restriction
on the ability of any Restricted Subsidiary of the Company to (a) pay dividends
or make any other distributions on its Capital Stock to the Company or any of
its Restricted Subsidiaries; (b) make payments in respect of any Debt owed to
the Company or any of its Restricted Subsidiaries; or (c) make loans or advances
to the Company or any of the Company's Restricted Subsidiaries; PROVIDED,
HOWEVER, that the following restrictions shall not be prohibited pursuant to
this Section 4.12: (i) those contained in this Indenture, the Existing
Indenture, a Bank Facility, a Warehouse Facility, and Refinancing Debt (to the
extent restrictions contained in such Refinancing Debt are not more restrictive
than those contained in the Debt being refinanced); (ii) consensual encumbrances
or restrictions binding upon any Person at the time such Person becomes a
Subsidiary of the Company, PROVIDED that such encumbrances or restrictions are
not created, incurred or assumed in contemplation of such Person becoming a
Subsidiary of the Company and do not extend to any other property of the Company
or another of its Subsidiaries; (iii) restrictions contained in security
agreements permitted by this Indenture securing Debt permitted by this Indenture
to the extent such restrictions restrict the transfer of assets subject to such
security agreements; (iv) any encumbrance or restriction consisting of customary
nonassignment provisions in leases to the extent such provisions restrict the
transfer of the leases; (v) any encumbrance or restriction pursuant to an
agreement in effect on February 2, 1998; or (vi) any restrictions with respect
to a Subsidiary of the Company imposed pursuant to an agreement which has been
entered into for the sale or disposition of all or substantially all the Capital
Stock or assets of such Subsidiary.
SECTION 4.13. LIMITATION ON LIENS
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, assume or permit to
exist any Lien upon or with respect to any of the assets of the Company or any
such Subsidiary, whether now owned or hereafter acquired, or on any income or
profits therefrom, other than Liens which constitute Permitted Liens at the date
such Liens are created, unless contemporaneously therewith or prior thereto all
payments due under this Indenture and the Securities are secured on an equal and
ratable basis with the obligation or liability so secured until such time as
such obligation or liability is no longer secured by a Lien. Notwithstanding the
foregoing, the Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, assume or permit to
exist any Lien on any Debt from the Company in favor of any Restricted
Subsidiary.
SECTION 4.14. TRANSACTIONS WITH AFFILIATES
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into any transactions with
Affiliates of the Company unless (i) such transactions are between or among the
Company and its Restricted Subsidiaries, (ii) such transactions are in the
ordinary course of business and consistent with past practice or (iii) the terms
of such transactions are as fair and reasonable to the Company or such
Restricted
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Subsidiary, as the case may be, and are at least as favorable at the terms which
could be obtained by the Company or such Restricted Subsidiary, as the case may
be, in a comparable transaction made on an arm's length basis between
unaffiliated parties. In the event of any transaction or series of transactions
occurring subsequent to February 2, 1998 with an Affiliate of the Company which
involves in excess of $1,000,000 and is not permitted under clause (i) of the
preceding sentence, all of the disinterested members of the board of directors
shall by resolution determine that such transaction or series of transactions
meets the criteria set forth in clause (iii) of the preceding sentence. In the
event of any transaction or series of transactions occurring subsequent to
February 2, 1998 with an Affiliate of the Company which involves in excess of
$10,000,000 and is not permitted under clause (i) above, the Company will be
required to deliver to the Trustee an opinion of an Independent Financial
Advisor to the effect that the transaction is fair to the Company or the
relevant Restricted Subsidiary, as the case may be, from a financial point of
view. Notwithstanding the foregoing, such provisions do not prohibit and will
not apply to (1) any Restricted Payment which is permitted by Section 4.11 or
(2) the payment of compensation to directors of the Company who are not
employees of the Company and wages and other compensation to officers of the
Company or any of its Subsidiaries.
SECTION 4.15. LIMITATION ON ASSET SALES
(a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, consummate an Asset Sale, unless (i)
the Company 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 board of directors of the Company or
the Restricted Subsidiary, as the case may be) of the assets disposed of, and
(ii) the consideration for such Asset Sale consists of at least 85% cash;
PROVIDED that (x) the amount of liabilities assumed by the transferee, (y) any
notes or other obligations received by the Company or such Restricted Subsidiary
and immediately converted into cash or (z) with respect to the sale or other
disposition of all of the Capital Stock of any Restricted Subsidiary, the amount
of liabilities that remain the obligation of such Restricted Subsidiary
subsequent to such sale or other disposition, shall be deemed to be "cash".
(b) Within 12 months from the date that any Asset Sale is consummated,
the Net Proceeds thereof shall be reinvested in Additional Assets or applied to
the redemption or repurchase of Debt of the Company which ranks PARI PASSU with
the Securities or Debt of a Restricted Subsidiary of the Company which is not
subordinated to other debt of such Restricted Subsidiary (which, in each case,
shall be a permanent reduction of such Debt). To the extent that the Net
Proceeds of an Asset Sale are not so applied, the Company or such Restricted
Subsidiary, as the case may be, shall, within 30 days from the expiration of
such 12-month period, use the remaining Net Proceeds (less any amounts used to
pay reasonable fees and expenses connected with a Net Proceeds Offer (as defined
below)) to make an offer (a "Net Proceeds Offer") to repurchase the Securities
at a price equal to 100% of the principal amount thereof, plus accrued interest
to the date of such repurchase, which date shall be on or before the 30th day
after the date of the Net Proceeds Offer (the "Net Proceeds Repurchase Date"),
in accordance with the provisions of clause (c) below.
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Notwithstanding the foregoing, the Net Proceeds of an Asset Sale are
not required to be applied in accordance with the preceding paragraph, unless
and until the aggregate Net Proceeds for all such Asset Sales in a 12-month
period exceeds $5,000,000.
(c) If the Company or one of its Restricted Subsidiaries is required to
make a Net Proceeds Offer pursuant to clause (b) above, the Company or such
Restricted Subsidiary, or, at the request of the Company, the Trustee, shall
give notice of the Net Proceeds Offer to each Holder (the "Net Proceeds Offer
Notice"). The Company shall also deliver a copy of the Net Proceeds Offer Notice
to the Trustee. Any such notice shall contain all instructions and materials
necessary to enable such Holders to deliver Securities pursuant to the Net
Proceeds Offer including, without limitation, the following:
(1) the Net Proceeds Repurchase Date;
(2) the date by which the Net Proceeds Offer must be accepted;
(3) the applicable amount of Net Proceeds being applied to the
repurchase of Securities in the Net Proceeds Offer (the "Purchase
Amount"); and
(4) that Securities are to be surrendered for payment.
To accept a Net Proceeds Offer a Holder shall deliver to the Company
(if it is acting as its own Paying Agent) or to a Paying Agent designated by the
Company for such purpose in the notice referred to above on or before the Net
Proceeds Repurchase Date, or, if such day is a Legal Holiday, the next
subsequent day which is not a Legal Holiday, (i) written notice of the Holder's
acceptance of the Net Proceeds Offer, which notice shall set forth the name of
the Holder, the principal amount of Securities (or portions thereof) to be
repurchased and a statement that an election to accept the Net Proceeds Offer is
being made thereby and (ii) the Securities with respect to which the Net
Proceeds Offer is being accepted, duly endorsed for transfer to the Company, and
the Holder of such Securities shall be entitled to receive from the Company (if
it is acting as its own Paying Agent) or such Paying Agent a nontransferable
receipt of deposit evidencing such deposit. Such written notice may be withdrawn
upon further written notice to the Trustee on or prior to the third day
preceding the Net Proceeds Repurchase Date.
If the Net Proceeds Repurchase Date is between a regular record date
for the payment of interest and the next succeeding interest payment date, any
Security to be repurchased must be accompanied by funds equal to the interest
payable on such succeeding interest payment date on the principal amount to be
repurchased (unless such Security shall have been called for redemption, in
which case no such payment shall be required), and the interest on the principal
amount of the Security being repurchased will be paid on such next succeeding
interest payment date to the registered holder of such Security on the
immediately preceding record date. A Security repurchased on an interest payment
date need not be accompanied by any payment, and the interest on the principal
amount of the Security being repurchased will be paid on such
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interest payment date to the registered holder of such Security on the
immediately preceding record date.
In the event a Net Proceeds Offer shall be accepted in accordance with
the terms hereof, the Company shall pay or cause to be paid the pro rata portion
of the Purchase Amount with respect to the Securities as to which the Net
Proceeds Offer shall have been accepted to the Holder on the Net Proceeds
Repurchase Date.
On or prior to a Net Proceeds Repurchase Date, the Company shall
deposit with the Trustee or with a Paying Agent (or, if the Company is acting as
its own Paying Agent, segregate and hold in trust in accordance with Section
2.04) an amount of money equal to the Purchase Amount.
Both the notice of the Company and the notice of the Holder having been
given as specified above, the Securities to be repurchased shall, on the Net
Proceeds Repurchase Date, become due and payable and from and after such date
(unless the Company shall default in the payment of the Purchase Amount) such
Securities shall cease to bear interest. If any Security shall not be paid upon
surrender thereof for repurchase, the principal and interest shall, until paid,
bear interest from the Net Proceeds Repurchase Date at the rate borne by such
Security.
Any Security which is to be submitted for repurchase only in part shall
be delivered pursuant to this provision (with, if the Company or the Trustee so
requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder thereof
or his attorney duly authorized in writing), and the Company shall execute, and
the Trustee shall authenticate and make available for delivery to the Holder of
such Security without any service charge, a new Security or Securities, of any
authorized denomination as requested by such Holder, of the same tenor and in
aggregate principal amount equal to and in exchange for the portion of the
principal of such Security not submitted for repurchase.
If any repurchase pursuant to the foregoing provisions constitutes a
tender offer as defined under the Exchange Act, the Company will comply with the
requirements of Rule 14e-1 and any other tender offer rules under the Exchange
Act which then may be applicable.
(d) Any amount of Net Proceeds remaining after a Net Proceeds Offer
shall be promptly returned by the Trustee to the Company and may be used by the
Company for any purpose not inconsistent with this Indenture.
SECTION 4.16. ADDITIONAL GUARANTORS
The Company shall cause any Subsidiary with a net book value greater
than $1,000,000 which is designated as a Restricted Subsidiary to,
simultaneously with its designation as a Restricted Subsidiary, execute and
deliver (i) a supplemental indenture to this Indenture,
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providing for the guarantee of payment of the Securities by such Subsidiary
pursuant to the terms of Article Ten hereof and (ii) a guarantee in the form
included in Exhibits A-1 and A-2 hereof.
ARTICLE 5
SUCCESSORS
SECTION 5.01. WHEN COMPANY MAY MERGE, ETC.
Neither the Company nor any Guarantor shall consolidate or merge with
or into, or sell, lease, convey or otherwise dispose of all or substantially all
of its assets (including, without limitation, by way of liquidation or
dissolution), or assign any of its obligations under the Securities, the
Guarantees or this Indenture (as an entirety or substantially as an entirety in
one transaction or a series of related transactions), to any Person or permit
any of its Restricted Subsidiaries to do any of the foregoing (in each case
other than with the Company or another Wholly Owned Restricted Subsidiary)
unless:
(1) the Person formed by or surviving any such consolidation
or merger (if other than the Company or such Guarantor, as the case may
be), or to which such sale, lease, conveyance or other disposition or
assignment will be made (collectively, the "Successor"), is a
corporation or other legal entity organized and existing under the laws
of the United States, any state thereof or the District of Columbia;
(2) the Successor assumes by supplemental indenture in a form
reasonably satisfactory to the Trustee all of the obligations of the
Company or such Guarantor, as the case may be, under the Securities or
such Guarantor's Guarantee, as the case may be, and this Indenture;
(3) immediately after giving effect to such transaction no
Default or Event of Default has occurred and is continuing;
(4) immediately after giving effect to such transaction and
the use of any net proceeds therefrom, on a pro forma basis, the
Consolidated Tangible Net Worth of the Company or the Successor (in the
case of a transaction involving the Company), as the case may be, would
be at least equal to the Consolidated Tangible Net Worth of the Company
immediately prior to such transaction; and
(5) in the case of a transaction involving the Company,
immediately after giving effect to such transaction and the use of any
net proceeds therefrom, on a pro forma basis, the Coverage Ratio of the
Company or the Successor (in the case of a transaction involving the
Company), as the case may be, would be such that the Company or the
Successor (in the case of a transaction involving the Company), as the
case may be, would be entitled to Incur at least $1.00 of additional
Debt under such Coverage Ratio test set forth in Section 4.10.
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The foregoing provisions shall not apply to a transaction involving the
consolidation or merger of a Guarantor with or into another Person, or the sale,
lease, conveyance or other disposition of all or substantially all of the assets
of such Guarantor, that results in such Guarantor being released from its
Guarantee as provided under its Guarantee.
Notwithstanding the foregoing, clauses (4) and (5) shall not prohibit a
transaction, the principal purpose of which is (as determined in good faith by
the board of directors of the Company) to change the state of incorporation of
the Company, and such transaction does not have as one of its purposes the
evasion of the restrictions of this Section 5.01.
The Company shall deliver to the Trustee prior to the consummation of
the proposed transaction an Officers' Certificate to the foregoing effect and an
Opinion of Counsel stating that the proposed transaction and such supplemental
indenture comply with this Indenture.
SECTION 5.02. SUCCESSOR SUBSTITUTED
Upon any consolidation, merger, sale, assignment, transfer, lease or
other disposition of all or substantially all of the assets of the Company in
accordance with Section 5.01, the Successor shall succeed to, and be substituted
for, and may exercise every right and power of, and shall assume every duty and
obligation of, the Company under this Indenture with the same effect as if such
Successor had been named s the Company herein. When the Successor assumes all
obligations of the Company hereunder, all obligations of the predecessor shall
terminate.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT
An "Event of Default" occurs if:
(1) the Company fails to pay interest on any Security when the
same becomes due and payable and such failure continues for a period of
30 days;
(2) the Company fails to pay the principal of any Security
when the same becomes due and payable at maturity, upon acceleration or
otherwise;
(3) the Company or any Guarantor defaults in the observance or
performance of any other covenant or agreement of the Company or the
Guarantors in the Securities, the Guarantees or this Indenture and the
default continues for the period and after the notice specified below;
(4) an event of default shall have occurred under one or more
evidences of Debt of the Company or any of its Restricted Subsidiaries
(other than Non-Recourse
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Debt) with an outstanding aggregate principal amount of $5,000,000 or
more, whether such Debt now exists or is created hereafter, which event
of default (i) consists of the failure by the Company or any Restricted
Subsidiary to make any payment in respect of such Debt at its final
maturity or (ii) results in the acceleration of such Debt, which
acceleration shall be in effect;
(5) any final judgment or judgments for the payment of money
in excess of $5,000,000 in the aggregate are rendered against the
Company or any of its Restricted Subsidiaries and such judgment or
judgments remain unstayed, unsatisfied or undischarged for the period
and after the notice specified below;
(6) any Guarantee of a Material Subsidiary ceases to be in
full force and effect (other than in accordance with the terms of such
Guarantee and this Indenture) or is declared null and void and
unenforceable or found to be invalid or any Guarantor denies its
liability under its Guarantee (other than by reason of release of a
Guarantor from its Guarantee in accordance with the terms of the
Guarantee and this Indenture);
(7) the Company or any of its Material Subsidiaries pursuant
to or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief
against it in an involuntary case,
(C) consents to the appointment of a Custodian of it
or for all or substantially all of its property, or
(D) makes a general assignment for the benefit of its
creditors; or
(8) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(A) is for relief against the Company in an
involuntary case,
(B) appoints a Custodian of the Company for all or
substantially all of its property, or
(C) orders the liquidation of the Company,
and the order or decree remains unstayed and in effect for 90
days.
The term "Bankruptcy Law" means Title 11, U.S. Code or any similar
Federal or State law for the relief of debtors.
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The term "Custodian" means any receiver, trustee, assignee, liquidator
or similar official under any Bankruptcy Law.
A default under clause (3) or (5) is not an Event of Default until the
Trustee or the Holders of at least 25% in principal amount of the Securities
then outstanding notify the Company of the default and the Company does not cure
the default within 60 days after receipt of the notice. The notice must specify
the default, demand that it be remedied and state that the notice is a "Notice
of Default". If the Holders of 25% in principal amount of Securities then
outstanding request the Trustee to give such notice on their behalf, the Trustee
shall do so.
The Trustee shall not be deemed to have notice of any Default hereunder
unless it shall have actual knowledge of such Default or it shall have received
written notice thereof making specific reference to such Default as a Default.
SECTION 6.02. ACCELERATION
If an Event of Default (other than an Event of Default specified in
Section 6.01(7) or Section 6.01(8) with respect to the Company) occurs and is
continuing, the Trustee by notice to the Company, or the Holders of at least 25%
in principal amount of the Securities then outstanding by notice to the Company
and the Trustee, may declare the principal of and accrued interest on all the
Securities to be due and payable. Upon such declaration such principal and
interest shall be due and payable immediately. If an Event of Default specified
in Section 6.01(7) or Section 6.01(8), with respect to the Company occurs, all
unpaid principal and accrued interest on the Securities then outstanding shall
IPSO FACTO become and be immediately due and payable without any declaration or
other act on the part of the Trustee or any Securityholder. The Holders of a
majority in principal amount of the Securities then outstanding by notice to the
Trustee may rescind an acceleration and its consequences if the rescission would
not conflict with any judgment or decree and if all existing Events of Default
have been cured or waived except nonpayment of principal or interest that has
become due solely because of the acceleration.
SECTION 6.03. OTHER REMEDIES
Notwithstanding any other provision of this Indenture, if an Event of
Default occurs and is continuing, the Trustee may pursue any available remedy by
proceeding at law or in equity to collect the payment of principal of or
interest on the Securities or to enforce the performance of any provision of the
Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Securityholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative.
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SECTION 6.04. WAIVER OF PAST DEFAULTS
Subject to Sections 6.07 and 9.02, the Holders of a majority in
principal amount of the Securities then outstanding by notice to the Trustee may
waive an existing Default and its consequences. When a Default is waived, it is
cured and ceases; but no such waiver shall extend to any other default.
SECTION 6.05. CONTROL BY MAJORITY
The Holders of a majority in principal amount of the Securities then
outstanding may direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee or exercising any trust or power
conferred on it. However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture, that the Trustee determines is unduly
prejudicial to the rights of other Securityholders or would involve the Trustee
in personal liability and the Trustee may take any other action deemed proper by
the Trustee which is not inconsistent with such direction.
SECTION 6.06. LIMITATION ON SUITS
Except as provided in Section 6.07, a Securityholder may pursue a
remedy with respect to this Indenture or the Securities only if:
(1) the Holder gives to the Trustee written notice of a
continuing Event of Default;
(2) the Holders of at least 25% in principal amount of the
Securities then outstanding make a written request to the Trustee to
institute proceedings in respect of such Event of Default;
(3) such Holder or Holders offer to the Trustee reasonable
indemnity against any loss, liability or expense to be thereby incurred
(including reasonable attorneys' fees);
(4) the Trustee does not comply with the request within 60
days after receipt of the request and the offer of indemnity; and
(5) during such 60-day period the Holders of a majority in
principal amount of the Securities then outstanding do not give the
Trustee a direction inconsistent with the request.
A Securityholder may not use this Indenture to prejudice the rights of
another Securityholder or to obtain a preference or priority over another
Securityholder.
SECTION 6.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT
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Notwithstanding any other provision of this Indenture, the right of any
Holder of a Security to receive payment of principal of and interest on the
Security, on or after the respective due dates expressed in the Security, or to
bring suit for the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of he Holder.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE
If an Event of Default specified in Section 6.01(1) or (2) occurs and
is continuing, the Trustee may recover judgment in its own name and as trustee
of an express trust against the Company for the whole amount of principal and
interest remaining unpaid.
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM
The Trustee may file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have the claims of the Trustee, any
predecessor Trustee and the Securityholders allowed in any judicial proceedings
relative to the Company, its creditors or its property.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder of the
Securities any plan of reorganization, arrangement, adjustment or composition
affecting the Securities or the rights of any Holder thereof, or to authorize
the Trustee to vote in respect of the claim of any Holder of the Securities in
any such proceeding.
SECTION 6.10. PRIORITIES
If the Trustee collects any money pursuant to this Article, it shall
pay out the money in the following order:
FIRST: to the Trustee for amounts due under Section 7.07;
SECOND: to Securityholders for amounts due and unpaid on the Securities
for principal and interest, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Securities for principal and
interest, respectively; and
THIRD: to the Company.
The Trustee may fix a record date and payment date for any payment by
it to Securityholders pursuant to this Section.
SECTION 6.11. UNDERTAKING FOR COSTS
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In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party
litigant in the suit other than the Trustee of an undertaking to pay the costs
of the suit, and the court in its discretion may assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in the suit,
having due regard to the merits and good faith of the claims or defenses made by
the party litigant. This Section does not apply to a suit by the Trustee, a suit
by a Holder pursuant to Section 6.07 or a suit by Holders of more than 10% in
principal amount of the Securities.
ARTICLE 7
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in their exercise, as a prudent person
would exercise or use under the circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
(1) The Trustee need perform only those duties that are
specifically set forth in this Indenture and no others.
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture. However, the Trustee shall examine the certificates and
opinions to determine whether or not they conform to the requirements
of this Indenture but need not verify the accuracy of the content
thereof.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(1) This paragraph does not limit the effect of paragraph (b)
of this Section 7.01.
(2) The Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts.
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(3) The Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section 7.01.
(e) The Trustee may refuse to perform any duty or exercise any right or
power unless it receives indemnity satisfactory to it against any loss,
liability or expense, including reasonable attorneys' fees.
(f) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree with the Company. Money held in trust by
the Trustee need not be segregated from other funds except to the extent
required by law.
(g) The Trustee shall not be required to give any bond or surety with
respect to the execution of its rights and powers or with respect to this
Indenture.
(h) The Trustee shall not be bound to ascertain or inquire as to the
performance or observance of any covenants, conditions or agreements on the part
of the Company hereunder; but the Trustee may require of the Company full
information and advice as to the performance of the covenants, conditions and
agreements as aforesaid.
SECTION 7.02. RIGHTS OF TRUSTEE
(a) The Trustee may rely on any document believed by it to be genuine
and to have been signed or presented by the proper person. The Trustee need not
investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate and/or an Opinion of Counsel. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on
such Certificate or Opinion.
(c) The Trustee may act through agents and shall not be responsible for
the misconduct or negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith which it believes to be authorized or within its rights or
powers.
(e) It shall not be the duty of the Trustee, except as expressly
provided herein, to ensure that any duties or obligations herein imposed upon
the Company or any other Person are performed, and, except as expressly provided
herein, the Trustee shall not be liable or responsible for the failure of any
other Person to perform any act required of it or them by this Indenture.
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(f) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder.
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company or an
Affiliate thereof with the same rights it would have if it were not Trustee. Any
Agent may do the same with like rights. The Trustee, however, must comply with
Sections 7.10 and 7.11.
SECTION 7.04. TRUSTEE'S DISCLAIMER
The Trustee makes no representation as to the validity or adequacy of
this Indenture or the Securities; it shall not be accountable for the Company's
use of the proceeds from the Securities; and it shall not be responsible for any
statement in the Securities other than its certificate of authentication.
SECTION 7.05. NOTICE OF DEFAULTS
If a Default occurs and is continuing and if it is actually known to
the Trustee or the Trustee has received written notice thereof, the Trustee
shall mail to each Securityholder a notice of the Default within 90 days after
it occurs. Except in the case of a Default in payment of principal of or
interest on any Security, the Trustee may withhold the notice if and so long as
it in good faith determines that withholding the notice is in the interests of
Securityholders.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS
If required by TIA ss. 313(a), within 60 days after each March 1
beginning with March 1, 1998, the Trustee shall mail to each Securityholder as
required by TIA ss. 313(c) a brief report dated as of such date that complies
with TIA ss. 313(a). The Trustee also shall comply with TIA ss. 313(b) and (c).
A copy of each report at the time of its mailing to Securityholders
shall be filed by the Trustee with the SEC and each stock exchange, if any, on
which the Securities are listed. The Company shall notify the Trustee when the
Securities are listed on any stock exchange.
SECTION 7.07. COMPENSATION AND INDEMNITY
The Company shall pay to the Trustee from time to time such
compensation for its services as shall be agreed upon ln writing. The Trustee's
compensation shall not be limited by any law on compensation of a trustee of an
express trust. The Company shall reimburse the Trustee upon request for all
reasonable out-of-pocket expenses incurred by it. Such expenses shall include
the reasonable compensation and out-of-pocket expenses of the Trustee's agents
and counsel.
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The Company shall indemnify the Trustee against any loss or liability
(including the fees and expenses of counsel) incurred by it in connection with
the administration of this trust and the performance of its duties hereunder.
The Company need not pay for any settlement made without its consent. The
Trustee shall notify the Company promptly of any claim for which it may seek
indemnification. The Company need not reimburse any expense or indemnify against
any loss or liability incurred by the Trustee through the Trustee's negligence
or bad faith.
To secure the Company's payment obligations in this Section, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee, except that held in trust to pay principal and
interest on particular Securities.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(7) or (8) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
SECTION 7.08. REPLACEMENT OF TRUSTEE
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section.
The Trustee may resign by so notifying the Company. The Holders of a
majority in principal amount of the Securities may remove the Trustee by so
notifying the Trustee and the Company and may appoint a successor Trustee with
the Company's consent. The Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged a bankrupt or an insolvent;
(3) a receiver or other public officer takes charge of the
Trustee or its property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the Securities may appoint a successor
Trustee to replace the successor Trustee appointed by the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of at least 10% in principal
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amount of the Securities may petition any court of competent jurisdiction for
the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Holder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Securityholders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, subject to the lien
provided for in Section 7.07.
Notwithstanding the replacement of the Trustee pursuant to Section
7.08, the Company's obligation to compensate the retiring Trustee under Section
7.07 for services rendered prior to its retirement shall continue for the
benefit of the retiring Trustee.
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates, merges or converts into, or transfers all
or substantially all of its corporate trust business to another corporation, the
successor corporation without any further act shall be the successor Trustee.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION
This Indenture shall always have a Trustee who satisfies the
requirements of TIA ss. 310(a)(1). The Trustee shall always have a combined
capital and surplus of at least $10,000,000 as set forth in its most recent
published annual report of condition. The Trustee shall comply with TIA ss.
310(b), PROVIDED that there shall be excluded from the operation of TIA ss.
310(b)(1) the 1994 Indenture and any other indenture or indentures under which
other securities, or certificates of interest or participation in other
securities, of the Company are outstanding and meeting the requirements for
exclusion set forth in TIA ss. 310(b)(1).
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY
The Trustee shall comply with TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated.
ARTICLE 8
DEFEASANCE
SECTION 8.01. DEFEASANCE UPON DEPOSIT OF MONEYS OR U.S. GOVERNMENT
OBLIGATIONS
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This Indenture and the Guarantees shall cease to be of further effect
(except that the Company's obligations under Sections 7.07 and 8.05 hereof shall
survive) when all outstanding Securities theretofore authenticated and issued
(other than Securities which have been destroyed, lost or stolen and which have
been replaced as provided in Section 2.07 hereof) have been delivered to the
Trustee for cancellation and the Company has paid all sums payable hereunder.
Notwithstanding the first paragraph of this Section 8.01, at the
Company's option indicated by notice to the Trustee, either (a) the Company
shall be deemed to have been Discharged (as defined below) from its obligations
with respect to the Securities on the 91st day after the applicable conditions
set forth below have been satisfied or (b) the Company shall cease to be under
any obligation to comply with any term, provision or condition set forth in
Sections 4.07 through 4.16 and shall cease to be subject to the provisions of
Section 6.01(3) with respect to Sections 4.07 through 4.16 and Section 6.01(4)
with respect to the Securities at any time after the conditions set forth below
have been satisfied:
(1) the Company shall have deposited or caused to be deposited
irrevocably with the Trustee as trust funds in trust, specifically
pledged as security for, and dedicated solely to, the benefit of the
Holders of the Securities (i) money in an amount, or (ii) U.S.
Government Obligations which through the payment of interest and
principal in respect thereof in accordance with their terms will
provide, not later than one day before the due date of any payment,
money in an amount, or (iii) a combination of (i) and (ii), sufficient,
in the opinion with respect to (ii) and (iii) of a nationally
recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay and
discharge each installment of principal of and interest on the
outstanding Securities on the dates such installments of interest or
principal are due;
(2) the Company shall have delivered to the Trustee an Opinion
of Counsel stating that the Holders of the outstanding Securities will
not recognize income, gain or loss for Federal income tax purposes as a
result of such defeasance and will be subject to Federal income tax on
the same amounts, in the same manner and at the same times as would
have been the case if such defeasance had not occurred;
(3) such deposit will not result in a breach or violation of,
or constitute a Default under, this Indenture or any other agreement or
instrument to which the Company is a party or by which it is bound;
(4) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit; and
(5) the Company shall have delivered to the Trustee an
Officers Certificate stating that the conditions set forth in this
Section 8.01 have been satisfied or complied with.
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"Discharged" shall mean that the Company and each Guarantor shall be
deemed to have paid and discharged the entire indebtedness represented by, and
obligations under, the Securities and to have satisfied all the obligations
under this Indenture and the Guarantees relating to the Securities (and the
Trustee, upon the request of the Company and at the expense of the Company,
shall execute proper instruments acknowledging the same).
SECTION 8.02. TERMINATION OF THE OBLIGATIONS PURSUANT TO REDEMPTION
The Company and each Guarantor may terminate its obligations under the
Securities, this Indenture and the Guarantees (except that the Company's
obligations under Sections 7.07 and 8.05 hereof shall survive) and the Company
and the Guarantors shall be deemed to have been Discharged from its Obligations
with respect to the Securities and the Guarantees if:
(a) either (i) pursuant to Article Three, the Company shall have given
notice to the Trustee and mailed a notice of redemption to each Holder of the
redemption of all of the Securities under arrangements satisfactory to the
Trustee for the giving of such notice or (ii) all Securities have otherwise
become due and payable hereunder;
(b) the Company shall have irrevocably deposited or caused to be
deposited with the Trustee or a trustee reasonably satisfactory to the Trustee,
under the terms of an irrevocable trust agreement in form and substance
satisfactory to the Trustee, as trust funds in trust solely for the benefit of
the Holders for that purpose, money in such amount as is sufficient without
consideration of reinvestment of such interest, to pay principal of, premium, if
any, and interest on the outstanding Securities to maturity or redemption, as
certified in a certificate of a nationally recognized firm of independent public
accountants; PROVIDED that the Trustee shall have been irrevocably instructed to
apply such money to the payment of said principal, premium, if any, and interest
with respect to the Securities;
(c) no Default of Event of Default with respect to this Indenture or
the Securities shall have occurred and be continuing on the date of such deposit
or shall occur as a result of such deposit and such deposit will not result in a
breach or violation of, or constitute a default under, any other instrument to
which the Company is a party or by which it is bound;
(d) the Company shall have paid all other sums payable by it hereunder;
and
(e) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the conditions set forth in this Section 8.02 have been
complied with.
SECTION 8.03. SURVIVAL OF COMPANY'S OBLIGATIONS
Notwithstanding the satisfaction and discharge of this Indenture under
Section 8.01 or Section 8.02, the Company's obligations in Sections 2.04, 2.05,
2.06, 2.07, 2.08, 4.01, 4.02, 4.05, 7.07, 7.08, 8.04, 8.05 and 8.06, however,
shall survive until the Securities are no longer
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outstanding. Thereafter, the Company's obligations in Sections 7.07, 8.05 and
8.06 shall survive.
SECTION 8.04. APPLICATION OF TRUST MONEY
The Trustee shall hold in trust money or U.S. Government Obligations
deposited with it pursuant to Section 8.01. It shall apply the deposited money
and the money from U.S. Government Obligations in accordance with this Indenture
to the payment of principal of and interest on the Securities.
SECTION 8.05. REPAYMENT TO COMPANY
The Trustee and the Paying Agent shall promptly pay to the Company upon
request any excess money or securities held by them at any time. The Trustee and
the Paying Agent shall pay to the Company upon request any money held by them
for the payment of principal or interest that remains unclaimed for two years,
provided, however, that the Trustee or such Paying Agent, before being required
to make any such repayment, may at the expense of the Company cause to be
published once in a newspaper of general circulation in the City of New York or
mail to each such Holder notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the
date of such publication or mailing, any unclaimed balance of such money then
remaining will be repaid to the Company. After payment to the Company,
Securityholders entitled to the money must look to the Company for payment as
general creditors unless applicable abandoned property law designates another
person.
The Company shall indemnify Trustee to the fullest extent permissible
by law for the Trustee's failure to comply with any abandoned property or
escheat law by acting in accordance with this Section 8.05.
SECTION 8.06. REINSTATEMENT
If the Trustee is unable to apply any money or U.S. Government
Obligations in accordance with Section 8.01 by reason of any legal proceeding or
by reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, the Company's
obligations under this Indenture and the Securities shall be revived and
reinstated as though no deposit had occurred pursuant to Section 8.01 until such
time as the Trustee is permitted to apply all such money or U.S. Government
Obligations in accordance with Section 8.01; PROVIDED, HOWEVER, that if the
Company has made any payment of interest on or principal of any Securities
because of the reinstatement of its obligations, the Company shall be subrogated
to the rights of the Holders of such Securities to receive such payment from the
money or U.S. Government Obligations held by the Trustee.
ARTICLE 9
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AMENDMENTS
SECTION 9.01. WITHOUT CONSENT OF HOLDERS
The Company and the Guarantors, with the consent of the Trustee, may
amend or supplement this Indenture, the Securities or the Guarantees without
notice to or the consent of any Securityholder:
(1) to cure any ambiguity, omission, defect or inconsistency;
PROVIDED that such amendment or supplement does not adversely affect
the rights of any Securityholder;
(2) to comply with Section 5.01;
(3) to provide for uncertificated Securities in addition to or
in place of certificated Securities;
(4) to make any change that does not materially adversely
affect the rights of any Securityholder hereunder, including, without
limitation, any amendments reasonably necessary to issue additional
Securities hereunder;
(5) to comply with the qualification of this Indenture under
the TIA; or
(6) to reflect a Guarantor ceasing to be liable on the
Guarantees because it is no longer a Subsidiary of the Company or to
reflect additional Guarantors.
For the purposes of Section 9.01, the Trustee may, in its discretion,
determine whether or not the Holder of any Securities would be materially
adversely affected by any amendment, or supplement to this Indenture and any
such determination shall be conclusive upon every Holder, whether theretofore or
thereafter entered into. The Trustee shall, subject to the express provisions of
this Indenture, not be liable for any such determination made in good faith and
shall be entitled to, and may rely upon, an Opinion of Counsel with respect
thereto.
SECTION 9.02. WITH CONSENT OF HOLDERS
The Company and the Guarantors, with the consent of the Trustee, may
amend or supplement this Indenture and waive any existing Default or Event of
Default (other than any continuing Default or Event of Default in the payment of
interest on or the principal of the Securities), the Securities or the
Guarantees without notice to any Securityholder but with the written consent of
the Holders of at least a majority in principal amount of the Securities then
outstanding (which may include consents obtained in connection with a tender
offer or exchange offer for the Securities). Subject to Section 6.07, the
Holders of a majority in principal amount of the Securities then outstanding may
waive compliance by the Company or any Guarantor with any provision of this
Indenture, the Securities or the Guarantees without notice to any
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Securityholder. However, without the consent of each Securityholder affected, an
amendment, supplement or waiver, including a waiver pursuant to Section 6.04,
may not:
(1) reduce the amount of Securities whose Holders must consent
to an amendment, supplement or waiver;
(2) reduce the rate of or change the time for payment of
interest, including defaulted interest, on any Security;
(3) reduce the principal of or change the fixed maturity of
any Security (including, without limitation, the optional redemption
provisions, but excluding Sections 4.08, 4.09 and 4.15);
(4) waive a Default or Event of Default in the payment of
principal of or interest on any Security;
(5) make any Security payable in money other than that stated
in the Security;
(6) make any change in Section 6.04, Section 6.07 or Section
9.02;
(7) adversely modify the terms and conditions of the
obligations of the Guarantors or ranking or priority of the Securities
or any Guarantee; or
(8) release any Guarantor from any of its obligations under
its Guarantee or this Indenture otherwise than in accordance with the
terms hereof.
Promptly after an amendment under this Section becomes effective, the
Company shall mail to Securityholders a notice briefly describing the amendment.
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment or supplement,
but it shall be sufficient if such consent approves the substance thereof.
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT
Every amendment to this Indenture, the Securities or the Guarantees
shall comply with the TIA as then in effect.
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS
Until an amendment, supplement or waiver becomes effective, a consent
to it by a Holder of a Security is a continuing consent by the Holder and every
subsequent Holder of a Security or portion of a Security that evidences the same
debt as the consenting Holder's Security, even if notation of the consent is not
made on any Security. However, any such Holder or subsequent
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Holder may revoke the consent as to his Security or portion of a Security if the
Trustee receives the notice of revocation before the date the amendment,
supplement or waiver becomes effective. An amendment, supplement or waiver
becomes effective in accordance with its terms and thereafter binds every
Securityholder.
After an amendment, supplement or waiver becomes effective with respect
to the Securities, it shall bind every Securityholder unless it makes a change
described in any of clauses (1) through (8) of Section 9.02. In that case the
amendment, supplement or waiver shall bind each Holder of a Security who has
consented to it and; PROVIDED that notice of such amendment, supplement or
waiver is reflected on a Security that evidences the same debt as the consenting
Holder's Security, every subsequent Holder of a Security or portion of a
Security that evidences the same debt as the consenting Holder's Security.
SECTION 9.05. NOTATION ON OR EXCHANGE OF SECURITIES
If an amendment, supplement or waiver changes the terms of a Security,
the Trustee may require the Holder of the Security to deliver it to the Trustee.
The Trustee may place an appropriate notation on the Security about the changed
terms and return it to the Holder. Alternatively, if the Company or the Trustee
so determines, the Company in exchange for the Security shall issue and the
Trustee shall authenticate a new Security that reflects the changed terms.
SECTION 9.06. TRUSTEE PROTECTED
The Trustee need not sign any amendment, supplement or waiver
authorized pursuant to this Article that adversely affects the Trustee's rights.
The Trustee shall be entitled to receive and rely upon an Opinion of Counsel and
an Officers' Certificate that any supplemental indenture complies with this
Indenture.
ARTICLE 10
GUARANTEE OF SECURITIES
SECTION 10.01. GUARANTEE
Subject to the provisions of this Article 10, each Guarantor (which
term includes any successor Person under this Indenture and any additional
Guarantor pursuant to Section 4.16 of this Indenture) for consideration received
hereby jointly and severally unconditionally and irrevocably guarantees on a
senior basis (each a "Guarantee", and collectively, the "Guarantees") to each
Holder of a Security authenticated and delivered by the Trustee and to the
Trustee and its successors and assigns, irrespective of the validity and
enforceability of this Indenture, the Securities or the obligations of the
Company or any other Guarantor to the Holders or the Trustee hereunder or
thereunder, that: (a) the principal of, premium, if any, and interest on the
Securities will be duly and punctually paid in full when due, whether at
maturity, as a result of redemption,
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upon a Change of Control, as a result of a Net Worth Offer, by acceleration or
otherwise, and interest on the overdue principal, premium, if any, and (to the
extent permitted by law) interest, if any, on the Securities and all other
payment obligations of the Company or the Guarantors to the Holders or the
Trustee hereunder or thereunder (including fees, expenses or other) will be
promptly paid in full or performed, all in accordance with the terms hereof and
thereof; (b) all other obligations under this Indenture to the Holders or the
Trustee will be duly and punctually performed all in accordance with the terms
of this Indenture and the Securities and (c) in case of any extension of time of
payment or renewal of any Securities or any such other obligations, the same
will be promptly paid in full when due or performed in accordance with the terms
of the extension or renewal, whether at stated maturity, as a result of
redemption, upon a Change of Control, as a result of a Net Worth Offer, by
acceleration or otherwise. Failing payment or performance when due of any amount
or obligations so guaranteed for whatever reason, each Guarantor will be
obligated to pay or perform the same immediately. An Event of Default under this
Indenture or the Securities shall constitute an event of default under the
Guarantees, and shall entitle the Holders of Securities to accelerate the
obligations of the Guarantors hereunder in the same manner and to the same
extent as the obligations of the Company.
Each of the Guarantors hereby agrees that its obligations hereunder
shall be absolute and unconditional, irrespective of, and shall be unaffected
by, the invalidity, irregularity or unenforceability of the Securities or this
Indenture, the absence of any action to enforce the same, any waiver,
modification or consent by any holder of the Securities with respect to any
provisions hereof or thereof, any release of any other Guarantor, the recovery
of any judgment against the Company, any action to enforce the same, whether or
not a Guarantee is affixed to any particular Security, or any other circumstance
which might otherwise constitute a legal or equitable discharge or defense of a
Guarantor. Each of the Guarantors hereby waives the benefit of diligence,
presentment, demand of payment, filing of claims with a court in the event of
merger, insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest, notice and all demands whatsoever
and covenants that its Guarantee will not be discharged except by complete
performance of the obligations contained in the Securities, this Indenture and
its Guarantee. If any Holder or the Trustee is required by any court or
otherwise to return to the Company or to any Guarantor, or any custodian,
trustee, liquidator or other similar official acting in relation to the Company
or such Guarantor, any amount paid by the Company or such Guarantor to the
Trustee or such Holder, its Guarantee, to the extent theretofore discharged,
shall be reinstated in full force and effect. Each Guarantor further agrees
that, as between it, on the one hand, and the Holders of Securities and the
Trustee, on the other hand, (a) subject to this Article 10, the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article 6 hereof
for the purposes of its Guarantee, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (b) in the event of any declaration of acceleration of
such obligations as provided in Article 6 hereof, such obligations (whether or
not due and payable) shall forthwith become due and payable by such Guarantor
for the purpose of its Guarantees.
The Guarantees shall remain in full force and effect and continue to be
effective should any petition be filed by or against the Company for liquidation
or reorganization, should the
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Company become insolvent or make an assignment for the benefit of creditors or
should a receiver or trustee be appointed for all or any significant part of the
Company's assets, and shall, to the fullest extent permitted by law, continue to
be effective or be reinstated, as the case may be, if at any time payment of the
Securities are, pursuant to applicable law, rescinded or reduced in amount, or
must otherwise be restored or returned by any obligee on the Securities, whether
as a "voidable preference," "fraudulent transfer" or otherwise, all as though
such payment had not been made. In the event that any payment, or any part
thereof, is rescinded, reduced, restored or returned, the Securities shall, to
the fullest extent permitted by law, be reinstated and deemed reduced only by
such amount paid and not so rescinded, reduced, restored or returned.
For purposes of this Article 10, each Guarantor's liability (a
Guarantor's "Base Guaranty Liability") shall be that amount from time to time
equal to the aggregate liability of a Guarantor hereunder, but shall be limited
to the lessor of (A) the aggregate amount of the obligation as stated in the
first sentence of this Section 10.01 with respect to the Securities or (B) the
amount, if any, which would not have (i) rendered such Guarantor "insolvent" (as
such term is defined in Section 101(29) of the Federal Bankruptcy Code and in
Section 271 of the Debtor and Creditor Law of the State of New York, as each is
in effect at the date of this Indenture) or (ii) left it with unreasonably small
capital at the time its Guarantee of the Securities was entered into, after
giving effect to the incurrence of existing Debt immediately prior to such time,
provided, that, it shall be a presumption in any lawsuit or other proceeding in
which a Guarantor is a party that the amount guaranteed is the amount set forth
in (A) above unless a creditor, or representative of creditors of such Guarantor
or a trustee in bankruptcy of the Guarantor, as debtor in possession, otherwise
proves in such a lawsuit that the aggregate liability of the Guarantor is
limited to the amount set forth in (B). In making any determination as to the
solvency or sufficiency of capital of a Guarantor in accordance with the
previous sentence, the right of such Guarantor to contribution from other
Guarantors, to subrogation pursuant to the next paragraph and any other rights
such Guarantor may have contractual or otherwise shall be taken into account.
Each Guarantor shall be subrogated to all rights of the Holder of any
Securities and the Trustee against the Company or any of the other Guarantors in
respect of any amounts paid to the Holder and the Trustee by such Guarantor
pursuant to the provisions of this Guarantee; provided, however, that such
Guarantor shall not be entitled to enforce, or to receive any payments arising
out of or based upon, such right of subrogation until the principal of, premium,
if any, and interest on all the Securities have been paid in full.
Nothing contained in this Article 10 or elsewhere in this Indenture or
in any Security is intended to or shall impair, as between the Guarantors and
the Holders and the Trustee, the obligation of each Guarantor, which is absolute
and unconditional, to pay the Holders and the Trustee the principal of, premium,
if any, and interest on the Securities as and when the same shall become due and
payable and to perform all other obligations in accordance with the provisions
of this Guarantee, nor shall anything herein or therein prevent the Trustee or
any Holder from exercising all remedies otherwise permitted by applicable law
upon Default under this Indenture.
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The Guarantors shall have the right to seek contribution from any
non-paying Guarantor so long as the exercise of such right does not impair the
rights of the Holders under the Guarantees.
SECTION 10.02. EXECUTION AND DELIVERY OF GUARANTEE
To further evidence the Guarantee set forth in Section 10.01, each
Guarantor hereby agrees that a notation of such Guarantee, substantially in the
form included in Exhibits A-1 and A-2 hereto, shall be endorsed on each Security
authenticated and delivered by the Trustee after such Guarantee is executed and
executed by either manual or facsimile signature of an officer of each
Guarantor. The validity and enforceability of any Guarantee shall not be
affected by the fact that it is not affixed to any particular Security.
Each of the Guarantors hereby agrees that its Guarantee set forth in
Section 10.01 shall remain in full force and effect notwithstanding any failure
to endorse on each Security a notation of such Guarantee.
If an officer of a Guarantor whose signatures is on this Indenture or a
Security no longer holds that office at the time the Trustee authenticates such
Security or at any time thereafter, such Guarantor's Guarantee of such Security
shall be valid nevertheless.
The delivery of any Security by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of any Guarantee set forth in
this Indenture on behalf of the Guarantor.
SECTION 10.03. ADDITIONAL GUARANTORS
Any person may become a Guarantor by executing and delivering to the
Trustee (a) a supplemental indenture in form and substance satisfactory to the
Trustee, which subjects such person to the provisions of this Indenture as a
Guarantor, and (b) an Opinion of Counsel to the effect that such supplemental
indenture has been duly authorized and executed by such person and constitutes
the legal, valid, binding and enforceable obligation of such person (subject to
such customary exceptions concerning fraudulent conveyance laws, creditors'
rights and equitable principles as may be acceptable to the Trustee in its
discretion).
SECTION 10.04. RELEASE OF A GUARANTOR
(a) Upon the sale or disposition of all of the assets or all of the
Capital Stock of a Guarantor by the Company or a Subsidiary of the Company, or
upon the consolidation or merger of a Guarantor with or into any Person (in each
case, other than to the Company or an Affiliate of the Company), such Guarantor
shall be deemed automatically and unconditionally released and discharged from
all obligations under this Article 10 without any further action required on the
part of the Trustee or any Holder, if all obligations of such Guarantor, if any,
in respect of any Indebtedness of the Company shall also terminate upon such
transaction; PROVIDED, HOWEVER, that
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each such Guarantor is sold or disposed of in accordance with Section 4.15
hereof; PROVIDED, FURTHER, that the foregoing proviso shall not apply to the
sale or disposition of a Guarantor in a foreclosure to the extent that such
proviso would be inconsistent with the requirements of the Uniform Commercial
Code.
(b) The Trustee shall deliver an appropriate instrument evidencing the
release of a Guarantor upon receipt of a request of the Company accompanied by
an Officers' Certificate certifying as to the compliance with this Section
10.04. Any Guarantor not so released or the entity surviving such Guarantor, as
applicable, will remain or be liable under its Guarantee as provided in this
Article 10.
The Trustee shall execute any documents reasonably requested by the
Company or a Guarantor in order to evidence the release of such Guarantor from
its obligations under its Guarantee endorsed on the Securities and under this
Article 10.
Except as set forth in Articles 4 and 5 and this Section 10.04, nothing
contained in this Indenture or in any of the Securities shall prevent any
consolidation or merger of a Guarantor with or into the Company or another
Guarantor or shall prevent any sale or conveyance of the property of a Guarantor
as an entirety or substantially as an entirety to the Company or another
Guarantor.
ARTICLE 11
MISCELLANEOUS
SECTION 11.01. TRUST INDENTURE ACT CONTROLS
If any provision of this Indenture limits, qualifies or conflicts with
another provision which is required to be included in this Indenture by the TIA,
the required provision shall control.
SECTION 11.02. NOTICES
Any notice or communication by the Company, the Guarantors or the
Trustee to the other, is duly given if in writing and delivered in person,
mailed by first-class mail or by express delivery to the other's address stated
in this Section 11.02. The Company, the Guarantors or the Trustee by notice to
the other, may designate additional or different addresses for subsequent
notices or communications.
Any notice or communication to a Securityholder shall be mailed by
first-class mail to his address shown on the register kept by the Registrar.
Failure to mail a notice or communication to a Securityholder or any defect in
it shall not affect its sufficiency with respect to other Securityholders.
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If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Securityholders, it
shall mail a copy to the Trustee and each Agent at the same time.
All notices or communications shall be in writing.
The Company's address is, and notices to the Guarantors may be sent in
care of:
Xxxxx Homes, Inc.
000 X.X. 00xx Xxxxxx
Xxxx Xxxxx, Xxxxxxx 00000
Attention: Xxxxx Xxxxxxx
With a copy to:
Xxxxxxxxx Xxxxxxx Xxxxxxx Xxxxxx
Xxxxx & Quentel, P.A.
0000 Xxxxxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxxxx
The Trustee's address is:
American Stock Transfer & Trust Company
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Corporation Trust Department
SECTION 11.03. COMMUNICATION BY HOLDERS WITH OTHER HOLDERS
Securityholders may communicate pursuant to TIA ss. 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and anyone else shall have
the protection of TIA ss. 312(c).
SECTION 11.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT
Upon any request or application by the Company and/or a Guarantor to
the Trustee to take any action under this Indenture the Company or such
Guarantor, as the case may be, shall furnish to the Trustee:
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(1) an Officers' Certificate stating that, in the opinion of
the signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
Each signer of an Officers' Certificate or an Opinion of Counsel may
(if so stated) rely, effectively, upon an Opinion of Counsel as to legal matters
and an Officers' Certificate as to factual matters if such signer reasonably and
in good faith believes in the accuracy of the document relied upon.
SECTION 11.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION
Each certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture shall include:
(1) a statement that the person making such certificate or
opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such person, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
SECTION 11.06. RULES BY TRUSTEE AND AGENTS
The Trustee may make reasonable rules for action by or at a meeting of
Securityholders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for their respective functions.
SECTION 11.07. LEGAL HOLIDAYS
A "Legal Holiday" is a Saturday, a Sunday or a day on which banking
institutions are not required to be open in The City of New York, in the State
of New York or in the city in which the Trustee administers its corporate trust
business. If a payment date is a Legal Holiday at a place of payment, payment
may be made at that place on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue on that payment for the intervening
period.
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A "business day" is a day other than a Legal Holiday.
SECTION 11.08. NO RECOURSE AGAINST OTHERS
No director, officer, controlling person, employee or stockholder of
the Company, any Guarantor or any successor Person thereof shall have any
liability for any obligations, covenants or agreements of the Company or any
Guarantor under the Securities or this Indenture or for any claim based on, in
respect of or by reason of such obligations or their creation. Each
Securityholder by accepting a Security waives and releases all such liability.
The waiver and releases are part of the consideration for the issue of the
Securities.
SECTION 11.09. DUPLICATE ORIGINALS
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
SECTION 11.10. GOVERNING LAW
The laws of the State of New York, without regard to principles of
conflicts of law, shall govern this Indenture, the Securities and the
Guarantees.
SECTION 11.11. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or a subsidiary. Any such indenture, loan or debt
agreement may not be used to interpret this Indenture.
SECTION 11.12. SUCCESSORS
All agreements of the Company in this Indenture and the Securities
shall bind its successors. All agreements of the Trustee in this Indenture shall
bind its successors.
SECTION 11.13. SEPARABILITY
In case any provision in this Indenture or in the Securities shall be
valid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby
and a Holder shall have no claim therefor against any party hereto.
SECTION 11.14. TABLE OF CONTENTS, HEADINGS, ETC
The Table of Contents, Cross-Reference Table and headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part hereof and shall in no way
modify or restrict any of the terms or provisions hereof.
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SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, all as of the day and year first above written.
AMERICAN STOCK TRANSFER & TRUST
COMPANY, as Trustee
By: /S/ XXXXXXX X. XXXXXX
---------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
XXXXX HOMES, INC.
By: /S/ XXXXX XXXXXXX
---------------------------------------
Name: Xxxxx Xxxxxxx
Title: Vice President
BANYAN TRAILS, INC.
BILTMORE SOUTH CORP.
XXXXX HOMES/ARIZONA, INC.
XXXXX HOMES/ATLANTA, INC.
XXXXX HOMES/BROWARD, INC.
XXXXX HOMES/COLORADO, INC.
XXXXX HOMES/GULF COAST, INC.
XXXXX HOMES/JACKSONVILLE, INC.
XXXXX HOMES/XXXX XXXXXXXXXX, INC.
XXXXX HOMES/NORTH CAROLINA, INC.
XXXXX HOMES/ORLANDO, INC.
XXXXX HOMES/PALM BEACH, INC.
XXXXX HOMES/PEMBROKE, INC.
XXXXX HOMES/SOUTHWEST FLORIDA, INC.
XXXXX HOMES/TEXAS, INC.
XXXXX HOMES/VIRGINIA, INC.
XXXXX HOMES REALTY, INC.
XXXXXXXXX HOMES, INC.
PEMBROKE FALLS REALTY, INC.
PREFERRED BUILDERS REALTY, INC.
PREFERRED HOME MORTGAGE COMPANY
ST. TROPEZ AT BOCA GOLF, INC.
UNIVERSAL LAND TITLE, INC.
XXXXX HOMES/ARIZONA CONSTRUCTION, INC.
UNIVERSAL LAND TITLE OF COLORADO, INC.
By: /S/ XXXXX XXXXXXX
---------------------------------------
Authorized Officer
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XXXXXXX X-0
[FORM OF SERIES B SECURITY]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1993, AS
AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS
THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" ( AS DEFINED IN RULE 144A
PROMULGATED UNDER THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED
INVESTOR" (AS DEFINED IN RULE 501 (a)(l), (2), (3) OR (7) PROMULGATED UNDER THE
SECURITIES ACT) (AN "INSTITUTIONAL ACCREDITED INVESTOR"), (2) AGREES THAT IT
WILL NOT RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE ISSUER
THEREOF OR ANY SUBSIDIARY THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN
COMPLIANCE WITH RULE 144A PROMULGATED UNDER THE SECURITIES ACT, (C) TO AN
INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHED (OR
HAS FURNISHED ON ITS BEHALF BY A U.S. BROKER-DEALER) TO THE TRUSTEE A SIGNED
LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
RESTRICTIONS ON TRANSFER OF THIS SECURITY, (D) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 PROMULGATED UNDER THE SECURITIES ACT (IF
AVAILABLE) OR (E) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS
SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN
CONNECTION WITH ANY TRANSFER OF THIS SECURITY WITHIN TWO YEARS AFTER THE
ORIGINAL ISSUANCE OF THIS SECURITY, IF THE PROPOSED TRANSFEREE IS AN
INSTITUTIONAL ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER,
FURNISH TO THE TRUSTEE AND THE ISSUER SUCH CERTIFICATIONS, WRITTEN LEGAL
OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO
CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
A-1-1
REGISTERED $________________
NUMBER
XXXXX HOMES, INC.
................ CUSIP _________
9 1/4% SERIES B SENIOR NOTE DUE 2008
XXXXX HOMES, INC., a Florida corporation (herein called the "Company"),
for value received, hereby promises to pay to ________________________________,
or registered assigns, the principal sum of ____________________________________
Dollars on February 1, 2008, and to pay interest thereon as provided on the
reverse hereof, until the principal hereof is paid or duly provided for.
Interest Payment Dates: February 1 and August 1
Record Dates: January 15 and July 15
The provisions on the back of this certificate are incorporated as if
set forth on the face hereof.
IN WITNESS WHEREOF, XXXXX HOMES, INC. has caused this instrument to be
duly signed under its corporate seal.
[SEAL] XXXXX HOMES, INC.
By:
----------------------------------
[TITLE]
A-1-2
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities referred to in the within-mentioned Indenture.
AMERICAN STOCK TRANSFER & TRUST
COMPANY, as Trustee
By:
-------------------------------------
Signatory
Dated:
A-1-3
XXXXX HOMES, INC.
9 1/4% SERIES B SENIOR NOTE DUE 2008
1. INTEREST. Xxxxx Homes, Inc., a Florida corporation (the "Company"),
promises to pay interest on the principal amount of this Security at the rate
PER ANNUM shown above. The Company will pay interest semi-annually on February 1
and August 1 of each year, commencing August 1, 1998. Interest on the Securities
will accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from June 12, 1998. Interest will be computed on the
basis of a 360-day year of twelve 30-day months.
2. METHOD OF PAYMENT. The Company will pay interest on the Securities
(except defaulted interest) to the persons who are registered Holders of
Securities at the close of business on the record date set forth on the face of
this Security next preceding the applicable interest payment date. Holders must
surrender Securities to a Paying Agent to collect principal payments. The
Company will pay principal and interest in money of the United States that at
the time of payment is legal tender for payment of public and private debts.
However, the Company must pay principal and interest by check payable in such
money. The Company may, at its option, mail an interest check to a Holder's
registered address.
3. PAYING AGENT AND REGISTRAR. Initially, American Stock Transfer &
Trust Company (the "Trustee") will act as Paying Agent and Registrar. The
Company may change any Paying Agent, Registrar or co-registrar without notice.
The Company may act in any such capacity.
4. INDENTURE. The Company issued the Securities under an Indenture
dated as of June 12, 1998 (the "Indenture") between the Company, the Guarantors
party thereto and the Trustee. The terms of the Securities include those stated
in the Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939, as amended (15 U.S. Code xx.xx. 77aaa-77bbbb) (the
"Act"), as in effect on the date of the Indenture. The Securities are subject to
all such terms, and Securityholders are referred to the Indenture and the Act
for a statement of such terms. The Securities are general unsecured senior
obligations of the Company limited in aggregate principal amount to $50,000,000
issued on the Issue Date and additional principal amounts issuable thereafter
subject to the terms of the Indenture. Terms used herein which are defined in
the Indenture have the meanings assigned to them in the Indenture.
5. OPTIONAL REDEMPTION. The Securities may be redeemed on at least 30
and not more than 60 days' notice at the option of the Company on or after
February 1, 2003, in whole at any time or in part (in any integral multiple of
$1,000) from time to time, for a redemption price of 104.625% of principal
amount thereof if redeemed on or after February 1, 2003 but prior to February 1,
2004, for a redemption price of 103.083% of principal amount thereof if redeemed
on or after February 1, 2004 but prior to February 1, 2005, for a redemption
price of 101.542% of principal amount thereof if redeemed on or after February
1, 2005 but prior to February 1, 2006,
A-1-4
and at a redemption price of 100% of the principal amount thereof if redeemed on
or after February 1, 2006, in each case, together with accrued and unpaid
interest to the redemption date.
In addition, if the Company consummates one or more public offerings of
its Common Stock subsequent to the date hereof and on or prior to February 1,
2001, the Company may, at its option, redeem up to 33% of the original
outstanding principal amount of the Securities with the net proceeds of such
offerings at 109.250% of the principal amount thereof, plus accrued and unpaid
interest, if any, to the redemption date; PROVIDED, HOWEVER that, immediately
after giving effect to any such redemption not less than 67% of the original
outstanding principal amount of the Securities remains outstanding. As used in
this Section 5 and in Section 8 hereof, the term "original outstanding principal
amount of the Securities" means the aggregate principal amount of Securities
which is outstanding plus the aggregate principal amount of Securities which has
been purchased or redeemed by the Company as of the time of determination.
6. NOTICE OF REDEMPTION. Notice of redemption will be mailed at least
30 days but not more than 60 days before the redemption date to each Holder of
Securities to be redeemed at his registered address. Securities in denominations
larger than $1,000 may be redeemed in part but only in whole multiples of
$1,000. On and after the redemption date, interest ceases to accrue on
Securities or portions of them called for redemption.
7. CHANGE OF CONTROL. In the event of a Change of Control (as defined
in the Indenture) with respect to the Company, then each Holder of the
Securities shall have the right, at the Holder's option, to require the Company
to buy such Holder's Securities including any portion thereof which is $1,000 or
any integral multiple thereof on the date (the "Change of Control Repurchase
Date") that is 45 days after the date of the Change of Control Notice at a price
equal to 101% of the principal amount thereof, plus accrued interest to the
Change of Control Repurchase Date.
8. NET WORTH OFFER. In the event that the Company's Net Worth at the
end of each of any two consecutive fiscal quarters is less than $35,000,000 (the
"Minimum Net Worth"), then the Company shall make a Net Worth Offer to all
Holders to acquire on the date (the "Net Worth Repurchase Date") that is 45 days
after the Net Worth Notice, Securities in an aggregate principal amount equal to
10% of the original outstanding principal amount of the Securities (the "Net
Worth Offer Amount"), at a price equal to 100% of the principal amount thereof,
plus accrued interest to the Net Worth Repurchase Date. The Company may credit
against the Net Worth Offer Amount the principal amount of Securities acquired
by the Company through purchase, optional redemption or exchange prior to the
Trigger Date.
9. NET PROCEEDS OFFER. Within 12 months from the date that the Company
or any of its Restricted Subsidiaries makes any Asset Sale, the Net Proceeds
thereof shall, in accordance with Section 4.15 of the Indenture, be reinvested
in Additional Assets or used to repurchase or redeem Debt of the Company which
rank PARI PASSU with the Securities, or Debt of a Restricted Subsidiary of the
Company which is not subordinated to other Debt of such Restricted Subsidiary
(which in each case shall be a permanent reduction of such Debt) or if not so
used
A-1-5
within 30 days from the expiration of such 12-month period, to use the remaining
Net Proceeds to make an offer to repurchase Securities at a price equal to 100%
of the principal amount thereof plus accrued interest in accordance with the
procedures set forth in the Indenture (a "Net Proceeds Offer"). Notwithstanding
the preceding sentence, a Net Proceeds Offer made in connection with any Asset
Sale need not be applied in accordance with the preceding sentence, unless and
until the aggregate Net Proceeds for all such Asset Sales in a 12-month period
exceeds $5,000,000.
10. RESTRICTIVE COVENANTS. The Indenture contains certain restrictive
covenants that limit the ability of the Company and its Restricted Subsidiaries
to incur additional indebtedness, pay dividends, make certain other
distributions, repurchase Capital Stock or subordinated indebtedness, create
certain liens, enter into certain transactions with affiliates or apply the net
proceeds from the sale of certain assets.
11. DENOMINATIONS, TRANSFER, EXCHANGE. The Securities are in registered
form without coupons in denominations of $1,000 and whole multiples of $1,000.
The transfer of Securities may be registered and Securities may be exchanged as
provided in the Indenture. The Registrar may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents. No service
charge shall be made for any such registration or transfer or exchange, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection herewith. The Registrar need not
exchange or register the transfer of any Security selected for redemption in
whole or in part. Also, it need not exchange or register the transfer of any
Securities for a period of 15 days before a selection of Securities to be
redeemed.
12. PERSONS DEEMED OWNERS. The registered Holder of a Security may be
treated as its owner for all purposes.
13. AMENDMENTS AND WAIVERS. Subject to certain exceptions, the
Indenture, the Securities or the Guarantees may be amended with the consent of
the Holders of at least a majority in principal amount of the Securities
outstanding; and any existing default or Even of Default may be waived with the
consent of the Holders of a majority in principal amount of the Securities.
Without the consent of any Securityholder, the Indenture, the Securities or the
Guarantees may be amended to cure any ambiguity, omission, defect or
inconsistency (provided that such amendment does not materially, adversely
affect the rights of any Securityholder) or to provide for uncertificated
Securities in addition to certificated Securities, to comply with Section 5.01
of the Indenture, to make any change that does not materially adversely affect
the rights of any Securityholder, to comply with the qualification of the
Indenture under the Trust Indenture Act, or to reflect a Guarantor ceasing to be
liable on the Guarantees because it is no longer a Subsidiary of the Company.
14. DEFAULTS AND REMEDIES. An Event of Default is: (i) failure to pay
the principal of any Security when such principal becomes due and payable at
maturity, upon acceleration or otherwise (ii) failure to pay interest when due,
and such failure continues for a 30-day period; (iii) a default in the
observance or performance of any other covenant or agreement of the
A-1-6
Company or the Guarantors in the Security, the Guarantee or the Indenture that
continues for the period and after the notice specified below; (iv) an event of
default shall have occurred under one or more evidences of Debt of the Company
or any of its Restricted Subsidiaries (other than Non-Recourse Debt) with an
outstanding aggregate principal amount of $5,000,000 or more, whether such Debt
now exists or is created hereafter, which event of default (1) consists of the
failure by the Company or any Restricted Subsidiary to make any payment in
respect of such Debt at its final maturity or (2) results in the acceleration of
such Debt which acceleration shall be in effect; (v) any final judgment or
judgments for payment of money in excess of $5,000,000 in the aggregate shall be
rendered against the Company or any of its Restricted Subsidiaries and shall
remain unstayed, unsatisfied or undischarged for the period and after the notice
specified below; (vi) certain events of bankruptcy, insolvency or reorganization
of the Company or Material Subsidiaries; and (vii) any Guarantee of a Material
Subsidiary ceases to be in full force and effect (other than in accordance with
the terms of such Guarantee and the Indenture) or is declared null and void and
unenforceable or found to be invalid or any Guarantor denies its liability under
its Guarantee (other than by reason of release of a Guarantor from its Guarantee
in accordance with the terms of the Indenture and the Guarantee). The Company is
required to deliver to the Trustee within 120 days after the end of each fiscal
year of the Company, an officer's certificate stating whether or not the
signatories know of any default by the Company under this Indenture and, if any
default exists, describing such default.
A default under clause (iii) or (v) above is not an Event of Default
until the Trustee or the holders of at least 25% in principal amount of the
Securities then outstanding notify the Company of the default and the Company
does not cure the default within 60 days. The notice must specify the default,
demand that it be remedied and state that the notice is a "Notice of Default."
If the Holders of 25% in principal amount of the Securities then outstanding
request the Trustee to give such notice on their behalf, the Trustee shall do
so.
If an Event of Default occurs (other than due to certain events of
bankruptcy, with respect to the Company) and is continuing, the Trustee, by
notice to the Company, or the Holders of at least 25% in principal amount of the
Securities may declare all the Securities to be due and payable immediately. If
an Event of Default occurs due to certain events of bankruptcy, insolvency or
reorganization, with respect to the Company, such amounts shall be due and
payable without any declaration or act on the part of the Trustee or the Holders
of the Securities. Subject to certain exceptions, the Holders of a majority in
principal amount of the Securities then outstanding by notice to the Trustee may
rescind any declaration of acceleration or waive a Default and its consequences.
Securityholders may not enforce the Indenture or the Securities except as
provided in the Indenture. The Trustee may require indemnity satisfactory to it
before it enforces the Indenture or the Securities. Subject to certain
limitations, Holders of a majority in principal amount of the Securities may
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee or the exercise of any trust or power conferred on the
Trustee. The Trustee may withhold from Securityholders notice of any continuing
default (except a default in payment of principal or interest) if it determines
that withholding notice is in their interests. The Company must furnish an
annual compliance certificate to the Trustee and notify the Trustee upon the
occurrence of a Default.
A-1-7
15. TRUSTEE DEALINGS WITH COMPANY. American Stock Transfer & Trust
Company, the Trustee under the Indenture, or any banking institution serving as
successor Trustee thereunder, in its individual or any other capacity, may make
loans to, accept deposits from, and perform services for the Company or its
Affiliates, and may otherwise deal with the Company or its Affiliates, as if it
were not the Trustee.
16. NO RECOURSE AGAINST OTHERS. A director, officer, controlling
person, employee or stockholder, as such, of the Company or any Guarantor shall
not have any liability for any obligations, covenants or agreements of the
Company or any Guarantor under the Securities or the Indenture or for any claim
based on, in respect of or by reason of such obligations, covenants or
agreements or their creation. Each Securityholder by accepting a Security waives
and releases all such liability. The waiver and releases are part of the
consideration for the issue of the Securities.
17. AUTHENTICATION. This Security shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent.
18. ABBREVIATIONS. Customary abbreviations may be used in the name of a
Securityholder or an assignee, such as: TEN COM (= tenants in common), TEN ENT
(= tenant by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
THE COMPANY WILL FURNISH TO ANY SECURITYHOLDER UPON WRITTEN REQUEST AND
WITHOUT CHARGE A COPY OF THE INDENTURE. REQUESTS MAY BE MADE TO: Xxxxx Homes,
Inc., 000 X.X. 00xx Xxxxxx, Xxxx Xxxxx, Xxxxxxx 00000, Attention: Corporate
Secretary.
A-1-8
ASSIGNMENT FORM
I or we assign and transfer this Security to
(Print or type name, address and zip code of assignee)
(Insert Social Security or other identifying number of assignee)
and irrevocably appoint
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
In connection with any transfer of this Security occurring prior to the
date which is the earlier of (i) the date of the declaration by the SEC of the
effectiveness of a registration statement under the Securities Act of 1933, as
amended (the "Securities Act") covering resales of this Security (which
effectiveness shall not have been suspended or terminated at the date of the
transfer) and (ii) June 12, 2000, the undersigned confirms that it has not
utilized any general solicitation or general advertising in connection with the
transfer and that:
[CHECK ONE]
[ ] (a) this Security is being transferred in compliance with the
exemption from registration under the Securities Act provided
by Rule 144A thereunder.
OR
[ ] (b) this Security is being transferred other than in accordance
with (a) above and documents are being furnished which comply
with the conditions of transfer set forth in this Security and
the Indenture.
If none of the foregoing boxes is checked, the Trustee or Registrar shall not be
obligated to register this Security in the name of any person other than the
Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 2.15 of the Indenture shall have
been satisfied.
Dated: Signed:
(Sign exactly as name appears on the other
side of this Security)
Signature Guarantee:
(The signature(s) should be guaranteed by an eligible
Guarantor Institution (Banks, Stock Brokers, Savings and Loan
Associations, and Credit Unions) with membership in an
approved Signature Guarantee Medallion Program pursuant to
S.E.C. Rule 17Ad-15.)
A-1-9
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Dated:
NOTICE: To be executed by an executive officer
A-1-10
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.08, 4.09 or 4.15, as the case may be, of the Indenture,
check the box:
[ ]
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.08, 4.09 or 4.15 of the Indenture, state the
amount:
$____________________________________________________
(in an integral multiple of $1,000)
Date: _______________ Signature(s):
(Sign exactly as your name(s) appear(s) on
the other side of this Security)
Signature(s) guaranteed by:
(The signature(s) should be guaranteed by an
Eligible Guarantor Institution (banks, stock
brokers, savings and loan associations, and
credit unions) with membership in an
Approved Signature Guarantee Medallion
Program pursuant to S.E.C. Rule 17Ad-15.)
A-1-11
GUARANTEE
For value received, the undersigned hereby unconditionally guarantees
to the Holder of this Security the payments of principal of, premium, if any,
and interest on this Security in the amounts and at the time when due and
interest on the overdue principal, premium, if any, and interest, if any, of
this Security, if lawful, and the payment or performance of all other
obligations of the Company under the Indenture or the Securities, to the Holder
of this Security and the Trustee, all in accordance with and subject to the
terms and limitations of this Security, Article 10 of the Indenture and this
Guarantee. This Guarantee will become effective in accordance with Article 10 of
the Indenture and its terms shall be evidenced therein. The validity and
enforceability of any Guarantee shall not be affected by the fact that it is not
affixed to any particular Security.
The obligations of the undersigned to the Holders of Securities and to
the Trustee pursuant to the Guarantee and the Indenture are expressly set forth
in Article 10 of the Indenture and reference is hereby made to the Indenture for
the precise terms of the Guarantee and all of the other provisions of the
Indenture to which this Guarantee relates.
A-1-12
This Guarantee is subject to release upon the terms set forth in the Indenture.
XXXXX HOMES, INC.
BANYAN TRAILS, INC.
BILTMORE SOUTH CORP.
XXXXX HOMES/ARIZONA, INC.
XXXXX HOMES/ATLANTA, INC.
XXXXX HOMES/BROWARD, INC.
XXXXX HOMES/COLORADO, INC.
XXXXX HOMES/GULF COAST, INC.
XXXXX HOMES/JACKSONVILLE, INC.
XXXXX HOMES/XXXX XXXXXXXXXX, INC.
XXXXX HOMES/NORTH CAROLINA, INC.
XXXXX HOMES/ORLANDO, INC.
XXXXX HOMES/PALM BEACH, INC.
XXXXX HOMES/PEMBROKE, INC.
XXXXX HOMES/SOUTHWEST FLORIDA, INC.
XXXXX HOMES/TEXAS, INC.
XXXXX HOMES/VIRGINIA, INC.
XXXXX HOMES REALTY, INC.
XXXXXXXXX HOMES, INC.
PEMBROKE FALLS REALTY, INC.
PREFERRED BUILDERS REALTY, INC.
PREFERRED HOME MORTGAGE COMPANY
ST. TROPEZ AT BOCA GOLF, INC.
UNIVERSAL LAND TITLE, INC.
XXXXX HOMES/ARIZONA CONSTRUCTION, INC.
UNIVERSAL LAND TITLE OF COLORADO, INC.
By:
-----------------------------------
Authorized Officer
X-0-00
XXXXXXX X-0
[FORM OF SERIES C SECURITY]
REGISTERED $________________
NUMBER
XXXXX HOMES, INC.
................ CUSIP _________
9 1/4% SERIES C SENIOR NOTE DUE 2008
XXXXX HOMES, INC., a Florida corporation (herein called the "Company"),
for value received, hereby promises to pay to __________________________, or
registered assigns, the principal sum of ________________________Dollars on
February 1, 2008, and to pay interest thereon as provided on the reverse hereof,
until the principal hereof is paid or duly provided for.
Interest Payment Dates: February 1 and August 1
Record Dates: January 15 and July 15
The provisions on the back of this certificate are incorporated as if
set forth on the face hereof.
IN WITNESS WHEREOF, XXXXX HOMES, INC. has caused this instrument to be
duly signed under its corporate seal.
[SEAL] XXXXX HOMES, INC.
By:
--------------------------------
[TITLE]
A-2-1
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities referred to in the within-mentioned Indenture.
AMERICAN STOCK TRANSFER & TRUST
COMPANY, as Trustee
By:
-----------------------------
Signatory
Dated:
A-2-2
XXXXX HOMES, INC.
9 1/4% SERIES C SENIOR NOTE DUE 2008
1. INTEREST. Xxxxx Homes, Inc., a Florida corporation (the "Company"),
promises to pay interest on the principal amount of this Security at the rate
PER ANNUM shown above. The Company will pay interest semi-annually on February 1
and August 1 of each year, commencing August 1, 1998. Interest on the Securities
will accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from June 12, 1998. Interest will be computed on the
basis of a 360-day year of twelve 30-day months.
2. METHOD OF PAYMENT. The Company will pay interest on the Securities
(except defaulted interest) to the persons who are registered Holders of
Securities at the close of business on the record date set forth on the face of
this Security next preceding the applicable interest payment date. Holders must
surrender Securities to a Paying Agent to collect principal payments. The
Company will pay principal and interest in money of the United States that at
the time of payment is legal tender for payment of public and private debts.
However, the Company must pay principal and interest by check payable in such
money. The Company may, at its option, mail an interest check to a Holder's
registered address.
3. PAYING AGENT AND REGISTRAR. Initially, American Stock Transfer &
Trust Company (the "Trustee") will act as Paying Agent and Registrar. The
Company may change any Paying Agent, Registrar or co-registrar without notice.
The Company may act in any such capacity.
4. INDENTURE. The Company issued the Securities under an Indenture
dated as of June 12, 1998 (the "Indenture") between the Company, the Guarantors
party thereto and the Trustee. The terms of the Securities include those stated
in the Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939, as amended (15 U.S. Code xx.xx. 77aaa-77bbbb) (the
"Act"), as in effect on the date of the Indenture. The Securities are subject to
all such terms, and Securityholders are referred to the Indenture and the Act
for a statement of such terms. The Securities are general unsecured senior
obligations of the Company limited in aggregate principal amount to $50,000,000
issued on the Issue Date and additional principal amounts issuable thereafter
subject to the terms of the Indenture. Terms used herein which are defined in
the Indenture have the meanings assigned to them in the Indenture.
5. OPTIONAL REDEMPTION. The Securities may be redeemed on at least 30
and not more than 60 days' notice at the option of the Company on or after
February 1, 2003, in whole at any time or in part (in any integral multiple of
$1,000) from time to time, for a redemption price of 104.625% of principal
amount thereof if redeemed on or after February 1, 2003 but prior to February 1,
2004, for a redemption price of 103.083% of principal amount thereof if redeemed
on or after February 1, 2004 but prior to February 1, 2005, for a redemption
price of 101.542% of principal amount thereof if redeemed on or after February
1, 2005 but prior to February 1, 2006,
A-2-3
and at a redemption price of 100% of the principal amount thereof if redeemed on
or after February 1, 2006, in each case, together with accrued and unpaid
interest to the redemption date.
In addition, if the Company consummates one or more public offerings of
its Common Stock subsequent to the date hereof and on or prior to February 1,
2001, the Company may, at its option, redeem up to 33% of the original
outstanding principal amount of the Securities with the net proceeds of such
offerings at 109.250% of the principal amount thereof, plus accrued and unpaid
interest, if any, to the redemption date; PROVIDED, HOWEVER that, immediately
after giving effect to any such redemption not less than 67% of the original
outstanding principal amount of the Securities remains outstanding. As used in
this Section 5 and in Section 8 hereof, the term "original outstanding principal
amount of the Securities" means the aggregate principal amount of Securities
which is outstanding plus the aggregate principal amount of Securities which has
been purchased or redeemed by the Company as of the time of determination.
6. NOTICE OF REDEMPTION. Notice of redemption will be mailed at least
30 days but not more than 60 days before the redemption date to each Holder of
Securities to be redeemed at his registered address. Securities in denominations
larger than $1,000 may be redeemed in part but only in whole multiples of
$1,000. On and after the redemption date, interest ceases to accrue on
Securities or portions of them called for redemption.
7. CHANGE OF CONTROL. In the event of a Change of Control (as defined
in the Indenture) with respect to the Company, then each Holder of the
Securities shall have the right, at the Holder's option, to require the Company
to buy such Holder's Securities including any portion thereof which is $1,000 or
any integral multiple thereof on the date (the "Change of Control Repurchase
Date") that is 45 days after the date of the Change of Control Notice at a price
equal to 101% of the principal amount thereof, plus accrued interest to the
Change of Control Repurchase Date.
8. NET WORTH OFFER. In the event that the Company's Net Worth at the
end of each of any two consecutive fiscal quarters is less than $35,000,000 (the
"Minimum Net Worth"), then the Company shall make a Net Worth Offer to all
Holders to acquire on the date (the "Net Worth Repurchase Date") that is 45 days
after the Net Worth Notice, Securities in an aggregate principal amount equal to
10% of the original outstanding principal amount of the Securities (the "Net
Worth Offer Amount"), at a price equal to 100% of the principal amount thereof,
plus accrued interest to the Net Worth Repurchase Date. The Company may credit
against the Net Worth Offer Amount the principal amount of Securities acquired
by the Company through purchase, optional redemption or exchange prior to the
Trigger Date.
9. NET PROCEEDS OFFER. Within 12 months from the date that the Company
or any of its Restricted Subsidiaries makes any Asset Sale, the Net Proceeds
thereof shall, in accordance with Section 4.15 of the Indenture, be reinvested
in Additional Assets or used to repurchase or redeem Debt of the Company which
rank PARI PASSU with the Securities, or Debt of a Restricted Subsidiary of the
Company which is not subordinated to other Debt of such Restricted Subsidiary
(which in each case shall be a permanent reduction of such Debt) or if not so
used
A-2-4
within 30 days from the expiration of such 12-month period, to use the remaining
Net Proceeds to make an offer to repurchase Securities at a price equal to 100%
of the principal amount thereof plus accrued interest in accordance with the
procedures set forth in the Indenture (a "Net Proceeds Offer"). Notwithstanding
the preceding sentence, a Net Proceeds Offer made in connection with any Asset
Sale need not be applied in accordance with the preceding sentence, unless and
until the aggregate Net Proceeds for all such Asset Sales in a 12-month period
exceeds $5,000,000.
10. RESTRICTIVE COVENANTS. The Indenture contains certain restrictive
covenants that limit the ability of the Company and its Restricted Subsidiaries
to incur additional indebtedness, pay dividends, make certain other
distributions, repurchase Capital Stock or subordinated indebtedness, create
certain liens, enter into certain transactions with affiliates or apply the net
proceeds from the sale of certain assets.
11. DENOMINATIONS, TRANSFER, EXCHANGE. The Securities are in registered
form without coupons in denominations of $1,000 and whole multiples of $1,000.
The transfer of Securities may be registered and Securities may be exchanged as
provided in the Indenture. The Registrar may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents. No service
charge shall be made for any such registration or transfer or exchange, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection herewith. The Registrar need not
exchange or register the transfer of any Security selected for redemption in
whole or in part. Also, it need not exchange or register the transfer of any
Securities for a period of 15 days before a selection of Securities to be
redeemed.
12. PERSONS DEEMED OWNERS. The registered Holder of a Security may be
treated as its owner for all purposes.
13. AMENDMENTS AND WAIVERS. Subject to certain exceptions, the
Indenture, the Securities or the Guarantees may be amended with the consent of
the Holders of at least a majority in principal amount of the Securities
outstanding; and any existing default or Even of Default may be waived with the
consent of the Holders of a majority in principal amount of the Securities.
Without the consent of any Securityholder, the Indenture, the Securities or the
Guarantees may be amended to cure any ambiguity, omission, defect or
inconsistency (provided that such amendment does not materially, adversely
affect the rights of any Securityholder) or to provide for uncertificated
Securities in addition to certificated Securities, to comply with Section 5.01
of the Indenture, to make any change that does not materially adversely affect
the rights of any Securityholder, to comply with the qualification of the
Indenture under the Trust Indenture Act, or to reflect a Guarantor ceasing to be
liable on the Guarantees because it is no longer a Subsidiary of the Company.
14. DEFAULTS AND REMEDIES. An Event of Default is: (i) failure to pay
the principal of any Security when such principal becomes due and payable at
maturity, upon acceleration or otherwise (ii) failure to pay interest when due,
and such failure continues for a 30-day period; (iii) a default in the
observance or performance of any other covenant or agreement of the
A-2-5
Company or the Guarantors in the Security, the Guarantee or the Indenture that
continues for the period and after the notice specified below; (iv) an event of
default shall have occurred under one or more evidences of Debt of the Company
or any of its Restricted Subsidiaries (other than Non-Recourse Debt) with an
outstanding aggregate principal amount of $5,000,000 or more, whether such Debt
now exists or is created hereafter, which event of default (1) consists of the
failure by the Company or any Restricted Subsidiary to make any payment in
respect of such Debt at its final maturity or (2) results in the acceleration of
such Debt which acceleration shall be in effect; (v) any final judgment or
judgments for payment of money in excess of $5,000,000 in the aggregate shall be
rendered against the Company or any of its Restricted Subsidiaries and shall
remain unstayed, unsatisfied or undischarged for the period and after the notice
specified below; (vi) certain events of bankruptcy, insolvency or reorganization
of the Company or Material Subsidiaries; and (vii) any Guarantee of a Material
Subsidiary ceases to be in full force and effect (other than in accordance with
the terms of such Guarantee and the Indenture) or is declared null and void and
unenforceable or found to be invalid or any Guarantor denies its liability under
its Guarantee (other than by reason of release of a Guarantor from its Guarantee
in accordance with the terms of the Indenture and the Guarantee). The Company is
required to deliver to the Trustee within 120 days after the end of each fiscal
year of the Company, an officer's certificate stating whether or not the
signatories know of any default by the Company under this Indenture and, if any
default exists, describing such default.
A default under clause (iii) or (v) above is not an Event of Default
until the Trustee or the holders of at least 25% in principal amount of the
Securities then outstanding notify the Company of the default and the Company
does not cure the default within 60 days. The notice must specify the default,
demand that it be remedied and state that the notice is a "Notice of Default."
If the Holders of 25% in principal amount of the Securities then outstanding
request the Trustee to give such notice on their behalf, the Trustee shall do
so.
If an Event of Default occurs (other than due to certain events of
bankruptcy, with respect to the Company) and is continuing, the Trustee, by
notice to the Company, or the Holders of at least 25% in principal amount of the
Securities may declare all the Securities to be due and payable immediately. If
an Event of Default occurs due to certain events of bankruptcy, insolvency or
reorganization, with respect to the Company, such amounts shall be due and
payable without any declaration or act on the part of the Trustee or the Holders
of the Securities. Subject to certain exceptions, the Holders of a majority in
principal amount of the Securities then outstanding by notice to the Trustee may
rescind any declaration of acceleration or waive a Default and its consequences.
Securityholders may not enforce the Indenture or the Securities except as
provided in the Indenture. The Trustee may require indemnity satisfactory to it
before it enforces the Indenture or the Securities. Subject to certain
limitations, Holders of a majority in principal amount of the Securities may
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee or the exercise of any trust or power conferred on the
Trustee. The Trustee may withhold from Securityholders notice of any continuing
default (except a default in payment of principal or interest) if it determines
that withholding notice is in their interests. The Company must furnish an
annual compliance certificate to the Trustee and notify the Trustee upon the
occurrence of a Default.
A-2-6
15. TRUSTEE DEALINGS WITH COMPANY. American Stock Transfer & Trust
Company, the Trustee under the Indenture, or any banking institution serving as
successor Trustee thereunder, in its individual or any other capacity, may make
loans to, accept deposits from, and perform services for the Company or its
Affiliates, and may otherwise deal with the Company or its Affiliates, as if it
were not the Trustee.
16. NO RECOURSE AGAINST OTHERS. A director, officer, controlling
person, employee or stockholder, as such, of the Company or any Guarantor shall
not have any liability for any obligations, covenants or agreements of the
Company or any Guarantor under the Securities or the Indenture or for any claim
based on, in respect of or by reason of such obligations, covenants or
agreements or their creation. Each Securityholder by accepting a Security waives
and releases all such liability. The waiver and releases are part of the
consideration for the issue of the Securities.
17. AUTHENTICATION. This Security shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent.
18. ABBREVIATIONS. Customary abbreviations may be used in the name of a
Securityholder or an assignee, such as: TEN COM (= tenants in common), TEN ENT
(= tenant by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
THE COMPANY WILL FURNISH TO ANY SECURITYHOLDER UPON WRITTEN REQUEST AND
WITHOUT CHARGE A COPY OF THE INDENTURE. REQUESTS MAY BE MADE TO: Xxxxx Homes,
Inc., 000 X.X. 00xx Xxxxxx, Xxxx Xxxxx, Xxxxxxx 00000, Attention: Corporate
Secretary.
A-2-7
ASSIGNMENT FORM
I or we assign and transfer this Security to
(Print or type name, address and zip code of assignee)
(Insert Social Security or other identifying number of assignee)
and irrevocably appoint
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
Dated: Signed:
(Sign exactly as name appears on the other
side of this Security)
Signature Guarantee:
(The signature(s) should be guaranteed by an eligible
Guarantor Institution (banks, stock brokers, savings
and loan associations, and credit unions) with
membership in an Approved Signature Guarantee
Medallion Program pursuant to S.E.C. Rule 17Ad-15.)
A-2-8
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.08, 4.09 or 4.15, as the case may be, of the Indenture,
check the box:
[ ]
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.08, 4.09 or 4.15 of the Indenture, state the
amount:
$___________________________________________________
(in an integral multiple of $1,000)
Date: ______________ Signature(s):
(Sign exactly as your name(s) appear(s) on
the other side of this Security)
Signature(s) guaranteed by:
(The signature(s) should be guaranteed by an Eligible
Guarantor Institution (banks, stock brokers, savings
and loan associations, and credit unions) with
membership in an Approved Signature Guarantee
Medallion Program pursuant to S.E.C. Rule 17Ad-15.)
A-2-9
GUARANTEE
For value received, the undersigned hereby unconditionally guarantees
to the Holder of this Security the payments of principal of, premium, if any,
and interest on this Security in the amounts and at the time when due and
interest on the overdue principal, premium, if any, and interest, if any, of
this Security, if lawful, and the payment or performance of all other
obligations of the Company under the Indenture or the Securities, to the Holder
of this Security and the Trustee, all in accordance with and subject to the
terms and limitations of this Security, Article 10 of the Indenture and this
Guarantee. This Guarantee will become effective in accordance with Article 10 of
the Indenture and its terms shall be evidenced therein. The validity and
enforceability of any Guarantee shall not be affected by the fact that it is not
affixed to any particular Security.
The obligations of the undersigned to the Holders of Securities and to
the Trustee pursuant to the Guarantee and the Indenture are expressly set forth
in Article 10 of the Indenture and reference is hereby made to the Indenture for
the precise terms of the Guarantee and all of the other provisions of the
Indenture to which this Guarantee relates.
A-2-10
This Guarantee is subject to release upon the terms set forth in the Indenture.
XXXXX HOMES, INC.
BANYAN TRAILS, INC.
BILTMORE SOUTH CORP.
XXXXX HOMES/ARIZONA, INC.
XXXXX HOMES/ATLANTA, INC.
XXXXX HOMES/BROWARD, INC.
XXXXX HOMES/COLORADO, INC.
XXXXX HOMES/GULF COAST, INC.
XXXXX HOMES/JACKSONVILLE, INC.
XXXXX HOMES/XXXX XXXXXXXXXX, INC.
XXXXX HOMES/NORTH CAROLINA, INC.
XXXXX HOMES/ORLANDO, INC.
XXXXX HOMES/PALM BEACH, INC.
XXXXX HOMES/PEMBROKE, INC.
XXXXX HOMES/SOUTHWEST FLORIDA, INC.
XXXXX HOMES/TEXAS, INC.
XXXXX HOMES/VIRGINIA, INC.
XXXXX HOMES REALTY, INC.
XXXXXXXXX HOMES, INC.
PEMBROKE FALLS REALTY, INC.
PREFERRED BUILDERS REALTY, INC.
PREFERRED HOME MORTGAGE COMPANY
ST. TROPEZ AT BOCA GOLF, INC.
UNIVERSAL LAND TITLE, INC.
XXXXX HOMES/ARIZONA CONSTRUCTION, INC.
UNIVERSAL LAND TITLE OF COLORADO, INC.
By:
Authorized Officer
A-2-11
EXHIBIT B
FORM OF LEGEND FOR BOOK-ENTRY SECURITIES
Any Global Security authenticated and delivered hereunder shall bear a
legend (which would be in addition to any other legends required in the case of
a Restricted Security) in substantially the following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A
DEPOSITORY OR A NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS
SECURITY IS NOT EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A
PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS
SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY THE
DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE
DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY) MAY
BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION
("DTC"), TO ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE,
OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC),
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE
& CO., HAS AN INTEREST HEREIN.
EXHIBIT C
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF SECURITIES
Re: 9 1/4% Senior Notes due February 1, 2008, (the "Securities") of Xxxxx
Homes, Inc.
This Certificate relates to _____ Securities held in* _____ book-entry
or* _____ certificated form by _____ (the "Transferor" ) .
The Transferor:*
[ ] has requested that the Registrar by written order to deliver in
exchange for its beneficial interest in the Global Security held by the
Depositary a Security or Securities in definitive, registered form of authorized
denominations and an aggregate number equal to its beneficial interest in such
Global Security (or the portion thereof indicated above); or
[ ] has requested that the Registrar by written order to exchange or
register the transfer of a Security or Securities.
In connection with such request and in respect of each such
Security, the Transferor does hereby certify that the Transferor is familiar
with the Indenture relating to the above captioned Securities and the
restrictions on transfers thereof as provided in Section 2.15 of such Indenture,
and that the transfer of this Securities does not require registration under the
Securities Act of 1933, as amended (the "Act") because[*]:
[ ] Such Security is being acquired for the Transferor's own account,
without transfer (in satisfaction of Section 2.15(a)(II)(A) or Section
2.15(d)(i)(A) of the Indenture).
[ ] Such Security is being transferred to a qualified institutional
buyer (as defined in Rule 144A under the Act), in reliance on Rule 144A or in
accordance with Regulation S under the Act.
[ ] Such Security is being transferred in accordance with Rule 144
under the Act.
[ ] Such Security is being transferred in reliance on and in compliance
with an exemption from the registration requirements of the Act, other than Rule
144A or Rule 144 or Regulation S under the Act. An opinion of counsel to the
effect that such transfer does not require registration under the Act
accompanies this Certificate.
[INSERT NAME OF TRANSFEROR]
By:
Date:
*Check applicable box.
EXHIBIT D
TRANSFEREE LETTER OF REPRESENTATION
Xxxxx Homes, Inc.
000 X.X. 00xx Xxxxxx, Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000
Ladies and Gentlemen:
In connection with our proposed purchase of 9 1/4% Senior Notes due
February 1, 2008, (the "Securities") of Xxxxx Homes, Inc. (the "Company") we
confirm that:
1. We understand that the Securities have not been registered
under the Securities Act of 1933, as amended (the "Securities Act")
and, unless so registered, may not be sold except as permitted in the
following sentence. We agree on our own behalf and on behalf of any
investor account for which we are purchasing Securities to offer, sell
or otherwise transfer such Securities prior to the date which is two
years after the later of the date of original issue and the last date
on which the Company or any affiliate of the Company was the owner of
such Securities, or any predecessor thereto (the "Resale Restriction
Termination Date") only (a) to the Company, (b) pursuant to a
registration statement which has been declared effective under the
Securities Act, (c) so long as the Securities are eligible for resale
pursuant to Rule 144A, under the Securities Act, to a person we
reasonably believe is a qualified institutional buyer under Rule 144A
(a "QIB") that purchases for its own account or for the account of a
QIB and to whom notice is given that the transfer is being made in
reliance on Rule 144A, (d) to an institutional "accredited investor"
within the meaning of subparagraph (a)(l), (2), (3) or (7) of Rule 501
under the Securities Act that is purchasing for his own account or for
the account of such an institutional "accredited investor," or (e)
pursuant to any other available exemption from the registration
requirements of the Securities Act, subject in each of the foregoing
cases to any requirement of law that the disposition of our property or
the property of such investor account or accounts be at all times
within our or their control and to compliance with any applicable state
securities laws. The foregoing restrictions on resale will not apply
subsequent to the Resale Restriction Termination Date. If any resale or
other transfer of the Securities is proposed to be made pursuant to
clause (e) above prior to the Resale Restriction Termination Date, the
transferor shall deliver a letter from the transferee substantially in
the form of this letter to the registrar under the Indenture pursuant
to which the Securities were issued (the "Registrar") which shall
provide, among other things, that the transferee is an institutional
"accredited investor" within the meaning of subparagraph (a)(l), (2),
(3) or (7) of Rule 501 under the Securities Act and that it is
acquiring such Securities for investment purposes and not for
distribution in violation of the Securities Act. The Registrar and the
Company reserve the right prior to any offer, sale or other transfer
prior to the Resale Restriction Termination Date of the
EXHIBIT D
Securities pursuant to clause (e) or (f) above to require the delivery
of a written opinion of counsel, certifications, and or other
information satisfactory to the Company and the Registrar.
2. We are an institutional "accredited investor" (as defined
in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities
Act) purchasing for our own account or for the account of such an
institutional "accredited investor," and we are acquiring the
Securities for investment purposes and not with a view to, or for offer
or sale in connection with, any distribution in violation of the
Securities Act and we have such knowledge and experience in financial
and business matters as to be capable of evaluating the merits and
risks of our investment in the Securities, and we and any accounts for
which we are acting are each able to bear the economic risk of our or
its investment for an indefinite period.
3. We are acquiring the Securities purchased by us for our own
account or for one or more accounts as to each of which we exercise
sole investment discretion.
4. You and your counsel are entitled to rely upon this letter
and you are irrevocably authorized to produce this letter or a copy
hereof to any interested party in any administrative or legal
proceeding or official inquiry with respect to the matters covered
hereby.
Very truly yours,
(Name of Purchaser)
By:
Date:
Upon transfer the Securities would be registered in the name of the new
beneficial owner as follows:
Name:
Address:
Taxpayer ID Number:
