HOME HOLDINGS INC.
AND
[ ],
TRUSTEE
-----------------
INDENTURE
DATED AS OF APRIL __, 1998
----------------
$[ ]
[ ]% SENIOR NOTES DUE APRIL __, 2006
CROSS-REFERENCE TABLE
Trust Indenture Act Section Indenture Section
--------------------------- -----------------
310(a)(1) 7.10
(a)(2) 7.10
(a)(3) N.A.
(a)(4) N.A.
(b) 7.8, 7.10, 10.2
(c) N.A.
311(a) 7.11
(b) 7.11
(c) N.A.
312(a) 2.5
(b) 10.3
(c) 10.3
313(a) 7.6
(b)(1) N.A.
(b)(2) 7.6
(c) 7.6, 10.2
(d) 7.6
314(a) 3.2, 10.2
(b) N.A.
(c)(1) 10.4
(c)(2) 10.4
(c)(3) N.A.
(d) N.A.
(e) 10.5
(f) N.A.
315(a) 7.1(b)
(b) 7.5, 10.2
(c) 7.1(a)
(d) 7.1(c)
(e) 6.11
316(a)(last sentence) 2.9
(a)(1)(A) 6.5
(a)(1)(B) 6.4
(a)(2) N.A.
(b) 6.7
317(a)(1) 6.8
(a)(2) 6.9
(b) 2.4
318(a) 10.1
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be a
part of this Indenture.
"N.A." means not applicable.
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE..... 1
Section 1.1 Definitions ................................... 1
Section 1.2 Other Definitions ............................. 4
Section 1.3 Incorporation by Reference of Trust
Indenture Act ............................... 5
Section 1.4 Rules of Construction .......................... 5
ARTICLE II THE NOTES....................................... 6
Section 2.1 Form and Dating ................................ 6
Section 2.2 Execution and Authentication; Payments-in-Kind . 6
Section 2.3 Registrar and Paying Agent ..................... 7
Section 2.4 Paying Agent to Hold Money in Trust ............ 7
Section 2.5 Noteholder Lists ............................... 7
Section 2.6 Transfer and Exchange .......................... 8
Section 2.7 Replacement Notes .............................. 8
Section 2.8 Outstanding Notes .............................. 8
Section 2.9 Treasury Notes ................................. 8
Section 2.10 Temporary Notes ................................ 9
Section 2.11 Cancellation ................................... 9
Section 2.12 Defaulted Interest ............................. 9
Section 2.13 CUSIP Numbers .................................. 9
ARTICLE III COVENANTS....................................... 10
Section 3 1 Payment of Notes ............................... 10
Section 3.2 Commission Reports; Reports to Noteholders ..... 10
Section 3.3 Compliance Certificate ......................... 11
Section 3.4 Notice of Default .............................. 11
Section 3.5 Corporate Existence ............................ 11
Section 3.6 Taxes and Other Claims ......................... 11
Section 3.7 Change of Control .............................. 11
Section 3.8 Limitation on Liens ............................ 12
Section 3.9 Limitation on Disposition of Stock of
Significant Subsidiaries ....................... 13
Section 3.10 Limitation on Transactions with Affiliates ..... 13
Section 3.11 Limitation on Dividends, Redemptions and Loans.. 14
ARTICLE IV SUCCESSORS...................................... 14
Section 4.1 When Company May Merge, etc .................... 14
Section 4.2 Successor Corporation Substituted............... 15
i
Page
----
ARTICLE V REDEMPTION....................................... 15
Section 5 1 Optional Redemption by the Company .............. 15
Section 5.2 Notice to Trustees .............................. 16
Section 5.3 Selection of Notes to be Redeemed ............... 16
Section 5.4 Notice of Redemption ............................ 16
Section 5.5 Effect of Notice of Redemption .................. 17
Section 5.6 Deposit of Redemption Price ..................... 17
Section 5.7 Notes Redeemed in Part .......................... 17
ARTICLE VI DEFAULTS AND REMEDIES............................ 17
Section 6 1 Events of Default ............................... 17
Section 6 2 Acceleration .................................... 18
Section 6.3 Other Remedies .................................. 19
Section 6.4 Waiver of Past Defaults ......................... 19
Section 6.5 Control by Majority ............................. 19
Section 6.6 Limitation on Suits ............................. 19
Section 6.7 Rights of Holders to Receive Payment ............ 20
Section 6.8 Collection Suit by Trustee ...................... 20
Section 6.9 Trustee May File Proofs of Claim ................ 20
Section 6 10 Priorities ...................................... 20
Section 6 11 Undertaking for Costs ........................... 21
Section 6 12 Waiver of Stay or Extension Laws ................ 21
ARTICLE VII TRUSTEE.......................................... 21
Section 7.1 Duties of Trustee ............................... 21
Section 7 2 Rights of Trustee ............................... 22
Section 7.3 Individual Rights of Trustee .................... 23
Section 7.4 Trustee's Disclaimer ............................ 23
Section 7.5 Notice of Defaults .............................. 23
Section 7.6 Reports by Trustee to Holders ................... 23
Section 7.7 Compensation and Indemnity ...................... 23
Section 7.8 Replacement of Trustee .......................... 24
Section 7.9 Successor Trustee by Merger, etc ................ 25
Section 7.10 Eligibility; Disqualification ................... 25
Section 7.11 Preferential Collection of Claims Against Company 25
ARTICLE VIII SATISFACTION AND DISCHARGE OF INDENTURE;
DEFEASANCE....................................... 25
Section 8.1 Discharge of Liability on the Notes;
Legal and Covenant Defeasance ............... 25
Section 8 2 Satisfaction, Discharge of the Indenture
and Termination of the Company's Obligations
upon Cancellation of the Notes .............. 27
Section 8.3 Survival of Certain Obligations ................. 27
Section 8.4 Acknowledgment of Discharge by Trustee .......... 27
Section 8.5 Application of Trust Money ...................... 27
Section 8.6 Repayment to Company ............................ 27
Section 8.7 Reinstatement ................................... 27
ii
Page
----
ARTICLE IX AMENDMENTS AND WAIVERS........................... 28
Section 9.1 Without Consent of Holders ...................... 28
Section 9.2 With Consent of Holders ......................... 28
Section 9.3 Compliance with Trust Indenture Act ............. 29
Section 9.4 Revocation and Effect of Consents ............... 29
Section 9.5 Notation on or Exchange of Notes ................ 30
Section 9.6 Trustee To Sign Amendments, Etc ................. 30
ARTICLE X MISCELLANEOUS.................................... 30
Section 10.1 Trust Indenture Act Controls ..................... 30
Section 10.2 Notices .......................................... 30
Section 10 3 Communications by Holders with Other Holders ..... 31
Section 10.4 Certificate and Opinion as to Conditions Precedent 31
Section 10.5 Statements Required in Certificate or Opinion .... 32
Section 10.6 Rules by Trustee and Agents ...................... 32
Section 10.7 Legal Holidays ................................... 32
Section 10.8 No Recourse Against Others ....................... 32
Section 10.9 Duplicate Originals .............................. 33
Section 10.10 Governing Law .................................... 33
Section 10.11 No Adverse Interpretation of Other Agreements .... 33
Section 10.12 Successors ....................................... 33
Section 10.13 Severability ..................................... 34
iii
INDENTURE dated as of April __, 1998 between HOME HOLDINGS INC.,
a Delaware corporation (the "Company"), and [ ], a
______________ banking corporation (the "Trustee").
WHEREAS, the Notes (as defined below) have the benefit of the
security interest granted under the Assignment and Security Agreement dated
April ___, 1998, made by the Company in favor of __________, as collateral agent
for holders of the Notes
Each party agrees as follows for the benefit of the other party and
for the equal and ratable benefit of the Holders (as defined below) of the
Company's [ ]% Senior Notes due April __, 2006 (the "Notes"):
ARTICLE I
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.1 Definitions. As used in this Indenture, the following
terms shall have the following meanings:
"Affiliate" means, when used with reference to any Person, any
Person directly or indirectly controlling, controlled by, or under direct
or indirect common control with, that Person. For the purposes of this
definition, "control" when used with respect to any specified Person means
the power to direct or cause the direction of the management or 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 of the foregoing.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Board of Directors" means the Board of Directors of the Company or
any authorized committee thereof.
"Business Day" means a day that is not a Legal Holiday.
"Capital Stock" means any and all shares, interests, participations
or other equivalents (however designated) of corporate stock or any and
all equivalent ownership interests in a Person (other than a corporation).
"Change of Control" means an event or series of events pursuant to
which (i) any person or group (as such terms are defined for purposes of
Section 13 of the Exchange Act), other than Zurich, or any of its
Affiliates, becomes the beneficial owner (as defined in Rule 13d-3 of the
Exchange Act) of 50% or more
2
of the total voting power (on a fully diluted basis) of the Voting Stock
(as defined below) of the Company, (ii) the Company consolidates or merges
with another person or conveys, transfers or leases all or substantially
all of its assets to another person, or any person consolidates or merges
with 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 transactions (A)
with ZRNA or an Affiliate of ZRNA or (B) in which the holders of a
majority (on a fully diluted basis) of the Voting Stock of the Company
immediately prior to such transaction own, directly or indirectly, not
less than a majority (on a fully diluted basis) of the Voting Stock of the
surviving corporation immediately after such transaction or (iii) the
stockholders of the Company approve any plan of liquidation or dissolution
of the Company. For purposes of the foregoing definition, "Voting Stock"
of any person means the Capital Stock of such person that ordinarily has
voting power for the election of directors (or persons performing similar
functions), whether at all times or only so long as no senior class of
securities has such voting power by reason of any contingency.
"Commission" means the Securities and Exchange Commission.
"Company" means Home Holdings Inc. until a successor replaces it and
thereafter means the successor.
"Default" means any event which is, or after notice or passage of
time would be, an Event of Default.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Holder" or "Noteholder" means a Person in whose name a Note is
registered.
"Indebtedness" means, with respect to any Person, (i) Indebtedness
for Borrowed Money of such Person, any other indebtedness of such Person,
including any indebtedness representing the balance deferred and unpaid of
the purchase price of any property or interest therein, and any guarantee,
endorsement or other contingent obligation of such Person in respect of
any indebtedness of another Person, (ii) obligations of such Person under
interest rate, commodity or currency swaps, caps, collars, options and
similar arrangements, (iii) obligations of such Person for the
reimbursement of any obligor on any letter of credit, banker's acceptance
or similar credit transaction and (iv) any amendments, modifications,
refundings, renewals or extensions of any indebtedness or other
obligations described in the foregoing clauses (i) through (iii).
"Indebtedness for Borrowed Money" means, with respect to any Person,
(i) the principal of and premium, if any, and interest, if any, on
indebtedness for borrowed money of such Person which is evidenced by
bonds, notes, debentures or similar instruments, and any guarantee by such
Person or letter of credit for
3
the account of such Person in respect of indebtedness for borrowed money
of another Person which is evidenced by bonds, notes, debentures or
similar instruments, whether such indebtedness, guarantee or letter of
credit is outstanding on the date of this Indenture or is thereafter
created, assumed or incurred, (ii) lease obligations of such Person which
such Person capitalizes in accordance with generally accepted accounting
principles as in effect from time to time and (iii) any amendments,
modifications, refundings, renewals or extensions of any indebtedness or
other obligations described in the foregoing clauses (i) and (ii);
provided that Indebtedness for Borrowed Money shall not include any other
obligation of such Person which is not described in the foregoing clause
(i), (ii) or (iii) (including, without limitation, any sale or pledge of
insurance receivables), whether or not secured by any Lien on any property
of such Person.
"Indenture" means this Indenture, as amended, supplemented or
otherwise modified from time to time.
"Notes" means the Notes described above and issued under this
Indenture, including any Additional Notes.
"Noteholder" or "Holder" means a Person in whose name a Note is
registered.
"Officer" means the Chairman of the Board of Directors, any
President, any Vice President, the Chief Financial Officer, the Treasurer,
the Secretary or the Controller of the Company.
"Officers' Certificate" means a certificate signed by two Officers
or by an Officer and an Assistant Treasurer, Assistant Secretary or
Assistant Controller of the Company or of any other obligor upon the
Notes, as the case may be. One of the Officers signing an Officers'
Certificate pursuant to Section 3.3 shall be the Principal Executive
Officer, Principal Financial Officer or Principal Accounting Officer of
the Company.
"Opinion of Counsel" means a written opinion from legal counsel who
is reasonably acceptable to the Trustee. The counsel may be an employee of
or counsel to the Company, any other obligor upon the Notes or the
Trustee.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
"Principal" of a debt security (including the Notes) means the
principal of the security.
"Reorganization Plan" means the "pre-arranged" or "pre-negotiated"
reorganization plan for the Home Holdings Inc., a Delaware corporation and
the predecessor of the Company, dated as of January 15, 1998, under
chapter 11 of title 11 of the United States Code, 11 U.S.C. ss. 101 et
seq.
4
"Senior Indebtedness" means the Notes and any other Indebtedness
that ranks pari passu as to payment of principal or interest with the
Notes.
"Significant Subsidiary" means each insurance Subsidiary with a
statutory surplus equal to or greater than $50 million.
"Subsidiary" of a Person means (i) a corporation at least a majority
of whose Capital Stock with voting power, under ordinary circumstances, to
elect directors is at the time, directly or indirectly, owned or
controlled, directly or indirectly, by such Person or (ii) any other
Person (other than a corporation) in which such Person, directly or
indirectly, at the date of determination thereof has at least a majority
ownership interest.
"Trust Indenture Act" 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 9.3 hereof.
"Trustee" means [ ] until a successor replaces it and
thereafter means the successor.
"Trust Officer" means any officer or assistant officer of the
corporate trust administration department of the Trustee or otherwise
assigned by the Trustee to administer its corporate trust matters.
"U.S. Legal Tender" means such coin or currency of the United States
of America as at the time of payment shall be legal tender for the payment
of public and private debts and, except for purposes of Article VIII
hereof, includes a check of the Company or a bank check payable in U.S.
Legal Tender.
"ZRNA" means Zurich Reinsurance North America, an insurance company
organized under the Laws of Connecticut.
"Zurich" means Zurich Insurance Company, a corporation organized and
existing under the laws of Switzerland.
Section 1.2 Other Definitions. As used in this Indenture, the
following terms shall have the meanings assigned in the Sections referred to
opposite such terms below:
Term Defined in Section
---- ------------------
"Additional Notes" ........................................................2.2
"Bankruptcy Law"...........................................................6.1
"Change of Control Offer"..................................................3.7
"Covenant Defeasance"......................................................8.1
"Custodian"................................................................6.1
"Event of Default".........................................................6.1
"Interest Payment Date" ....................................Note (paragraph 1)
5
"Lien".....................................................................3.8
"Legal Defeasance".........................................................8.1
"Legal Holiday"...........................................................10.7
"Paying Agent".............................................................2.3
"Registrar"................................................................2.3
"Regular Record Date" ......................................Note (paragraph 2)
"U.S. Government Obligations"..............................................8.1
Section 1.3 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the Trust Indenture Act, the
provision is incorporated by reference in and made a part of this Indenture.
The following terms used in this Indenture and defined in the Trust
Indenture Act have the following meanings:
"indenture securities" means the Notes;
"indenture security holder" means a Noteholder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee;
and
"obligor" on the indenture securities means the Company and any
other obligor upon the Notes.
All other terms used in this Indenture that are defined by the Trust
Indenture Act, defined by Trust Indenture Act by reference to another statute or
defined by Commission rule under the Trust Indenture Act have the meanings
assigned to them.
Section 1.4 Rules of Construction. Unless the context otherwise
requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting principles in
effect as of the date any determination hereunder is required;
(c) "or" is not exclusive;
(d) words in the singular include the plural, and in the
plural include the singular; and
(e) provisions apply to successive events and transactions.
6
ARTICLE II
THE NOTES
Section 2.1 Form and Dating. The Notes shall be substantially in the
form of Exhibit A, which is part of this Indenture. The Notes may have
notations, legends or endorsements required by law, stock exchange rule or
usage. Each Note shall be dated the date of its authentication.
Section 2.2 Execution and Authentication; Payments-in-Kind. (a) Two
Officers shall sign the Notes for the Company by manual or facsimile signature.
The Company's seal shall be reproduced on the Notes.
(b) If an Officer whose signature is on a Note no longer holds that
office at the time the Note is authenticated, the Note shall be valid
nevertheless.
(c) A Note shall not be valid until authenticated by the manual
signature of the Trustee. The signature shall be conclusive evidence that the
Note has been authenticated under this Indenture.
(d) The Trustee shall authenticate Notes for original issue up to
the aggregate principal amount of not more than $___ million upon a written
order of the Company signed by two Officers. The aggregate principal amount of
Notes outstanding at any time may not exceed that amount except as provided in
Sections 2.2(e) and 2.7.
(e) (i) The Company may, at its option and in its sole discretion,
in lieu of a cash payment of any or all of the interest due on the Notes on any
Interest Payment Date (as defined in the Notes) up to and including April __,
2001, by giving notice to the Noteholders and the Trustee of such election not
less than 30 nor more than 60 days prior to a Regular Record Date of an interest
payment (as defined in the Notes), require the Trustee or an authenticating
agent (upon written order of the Company signed by one Officer, given not less
than 30 nor more than 60 days prior to the Interest Payment Date) on each such
Interest Payment Date as to which the Company has elected not to make interest
payments in cash, in full or in part, to authenticate for original issue and
deliver additional Notes ("Additional Notes"), in an aggregate principal amount
equal to the amount of cash interest not paid on each such Interest Payment
Date. Each issuance of Additional Notes in lieu of cash payment of interest on
the Notes shall be made pro rata with respect to the outstanding Notes.
(ii) If the Company fails to give the notice required by
Section 2.2(e)(i) to the Noteholders, such notice requirement with respect to
the Noteholders shall be deemed satisfied by the issuance and delivery to the
Noteholders of Additional Notes in lieu of cash on the relevant Interest Payment
Date. The Trustee shall authenticate and deliver such Additional Notes even if
the Company has failed to give the notice required by Section 2.2(e)(i) to the
Noteholders upon the Trustee's receipt of such notice. Failure to pay interest
in such manner on the Interest Payment Date following the failure to give the
notice required by Section 2.2(e)(i) to the Noteholders, or failure to give such
notice to the Trustee, shall obligate the Company to immediately pay the
interest due in cash, subject to the provisions of Section 6.1(a).
7
(f) The Trustee may appoint an authenticating agent acceptable to
the Company to authenticate Notes. An authenticating agent may authenticate
Notes whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with the Company or
an Affiliate of the Company.
(g) The Notes shall be issuable only in registered form without
coupons and only in denominations of $1,000 and integral multiples thereof.
Section 2.3 Registrar and Paying Agent. The Company shall maintain
an office or agency where Notes may be presented for registration of transfer or
for exchange (the "Registrar") and an office or agency where Notes may be
presented for payment (the "Paying Agent"). The Registrar shall keep a register
of the Notes and of their transfer and exchange. The Company may appoint one or
more co-registrars and one or more additional paying agents. The term "Paying
Agent" includes any additional paying agent.
The Company shall enter into an appropriate agency agreement with
any Registrar or Paying Agent not a party to this Indenture, which shall
incorporate the terms of the Trust Indenture Act and the relevant provisions of
this Indenture and shall not otherwise be inconsistent with 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.
The Company initially appoints the Trustee as Registrar and Paying
Agent in connection with the Notes.
Section 2.4 Paying Agent to Hold Money in Trust. The Company shall
require each Paying Agent other than the Trustee to agree in writing that the
Paying Agent will hold in trust for the benefit of Noteholders or the Trustee
all money and/or Additional Notes held by the Paying Agent for the payment of
principal of or interest on the Notes, and will notify the Trustee of any
default by the Company or any other obligor upon the Notes in making any such
payment. While any such default continues, the Trustee may require a Paying
Agent to pay all money and/or Additional Notes held by it to the Trustee. The
Company at any time may require a Paying Agent to pay all money and/or
Additional Notes held by it to the Trustee. Upon payment over to the Trustee,
the Paying Agent (if other than the Company) shall have no further liability for
the money and/or Additional Notes. If the Company or a Subsidiary acts as Paying
Agent, it shall segregate and hold as a separate trust fund all money held by it
as Paying Agent.
Section 2.5 Noteholder 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 Noteholders. If the Trustee is not the Registrar,
the Company or any other obligor upon the Notes 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 as the Trustee may
reasonably require of the names and addresses of Noteholders.
8
Section 2.6 Transfer and Exchange. When Notes are presented to the
Registrar with a request to register a transfer or to exchange them for an equal
principal amount of Notes of other denominations, the Registrar shall register
the transfer or make the exchange if its requirements for such transactions are
met. To permit registrations of transfers and exchanges, the Company shall
execute and the Trustee shall authenticate Notes at the Registrar's request. Any
transfer or exchange shall be without charge, except that the Company may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto, other than exchanges pursuant to
Section 2.10 or 9.5.
Section 2.7 Replacement Notes. If the Holder of a Note claims that
the Note has been lost, destroyed or wrongfully taken, the Company shall issue
and the Trustee shall authenticate a replacement Note if the requirements of the
Trustee and the Company are met. If required by the Trustee or the Company, such
Holder must provide an indemnity bond, sufficient in the judgment of both the
Company and the Trustee, to protect the Company, the Trustee, any Paying Agent
or any authenticating agent from any loss which any of them may suffer if a Note
is replaced. The Company may charge for its reasonable expenses in replacing a
Note lost, destroyed or wrongfully taken.
Every replacement Note is an additional obligation of the Company
and shall be entitled to the benefits of this Indenture.
Section 2.8 Outstanding Notes. The Notes outstanding at any time are
all Notes authenticated by the Trustee except for those cancelled by it, those
delivered to it for cancellation and those described in this Section as not
outstanding. Additional Notes shall be deemed outstanding as of the date with
respect to which they are issued in lieu of cash interest.
If a Note is replaced pursuant to Section 2.7 (other than a
mutilated Note surrendered for replacement), it ceases to be outstanding unless
the Trustee receives proof satisfactory to it that the replaced Note is held by
a bona fide purchaser. A mutilated Note ceases to be outstanding upon surrender
of such Note and replacement thereof pursuant to Section 2.7.
If Notes are considered paid under Section 3.1, they cease to be
outstanding and interest on them ceases to accrue.
Subject to Section 2.9, a Note does not cease to be outstanding
because the Company or an Affiliate of the Company holds the Note.
Section 2.9 Treasury Notes. In determining whether the Holders of
the required principal amount of Notes have concurred in any direction, waiver
or consent, Notes owned by the Company, any other obligor upon the Notes or an
Affiliate of the Company or such obligor shall not be disregarded (including for
purposes of determining the outstanding principal amount of Notes); provided,
however, that for the purposes of the last sentence of subsection 316(a) of the
Trust Indenture Act in determining whether the Holders of the required principal
amount of Notes have concurred in any direction, waiver or consent, Notes owned
by the Company, any other obligor upon the Notes or an Affiliate of
9
the Company or such obligor shall be disregarded (including for purposes of
determining the outstanding principal amount of Notes); provided further, that
for the purposes of determining whether the Trustee shall be protected in
relying on any such latter direction, waiver or consent, only Notes which a
Trust Officer of the Trustee knows are so owned shall be so disregarded.
Section 2.10 Temporary Notes. Until definitive Notes are ready for
delivery, the Company may prepare and the Trustee shall authenticate temporary
Notes. Temporary Notes shall be substantially in the form of definitive Notes
but may have variations that the Company considers appropriate for temporary
Notes. Without unreasonable delay, the Company shall prepare and the Trustee
shall authenticate definitive Notes in exchange for temporary Notes. Until such
exchange, such temporary Notes shall be entitled to the same rights, benefits
and privileges as the definitive Notes.
Section 2.11 Cancellation. The Company at any time may deliver Notes
to the Trustee for cancellation. The Registrar and Paying Agent shall forward to
the Trustee any Notes surrendered to them for registration of transfer, exchange
or payment. The Trustee shall cancel all Notes surrendered for registration of
transfer, exchange, payment or cancellation and shall dispose of cancelled Notes
in accordance with its usual custom or as the Company otherwise directs,
provided, however, that the Trustee shall not be required to destroy such
cancelled Notes. The Company may not issue new Notes to replace Notes that it
has paid, purchased (on the open market or otherwise) or otherwise acquired or
delivered to the Trustee for cancellation.
Section 2.12 Defaulted Interest. If the Company defaults in a
payment of interest on the Notes, it shall pay the defaulted interest, plus, to
the extent lawful, any interest (which may be payable in Additional Notes for
the period permitted by Section 2.2(e)(i) hereof and Paragraph 1 of the Note)
payable on the defaulted interest, to the Persons who are Noteholders on a
subsequent special record date. The Company shall fix the special record date
and payment date in a manner reasonably satisfactory to the Trustee. At least 15
days before the special record date, the Company shall mail to Noteholders a
notice that states the special record date, payment date and amount of defaulted
interest to be paid. Notwithstanding the preceding two sentences, the Company
may pay defaulted interest in any other lawful manner.
Section 2.13 CUSIP Numbers. The Company in issuing the Notes may use
"CUSIP" numbers (if then generally in use), and, if so, the Trustee shall use
"CUSIP" numbers in notices of redemption as a convenience to Holders; provided
that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Notes or as contained in
any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Notes, and any such redemption shall not
be affected by any defect in or omission of such numbers.
10
ARTICLE III
COVENANTS
Section 3.1 Payment of Notes. The Company shall pay the principal of
and interest on the Notes on the dates and in the manner provided in the Notes
and in this Indenture. Principal and interest shall be considered paid on the
date due if the Paying Agent (other than the Company or an Affiliate of the
Company) holds on that date money in immediately available funds and/or
Additional Notes sufficient to pay all principal and interest then due.
The Company shall pay interest on overdue principal at the rate
borne by the Notes and the Company shall pay interest on overdue installments of
interest at the same rate to the extent lawful.
Section 3.2 Commission Reports; Reports to Noteholders. (a) The
Company shall file with the Trustee, within 15 days after it files them with the
Commission, copies of the annual reports and the information, documents and
other reports (or copies of such portions of any of the foregoing as the
Commission may by rules and regulations prescribe) which the Company may be
required to file with the Commission pursuant to Section 13 (other than Form
11-K) or 15(d) of the Exchange Act. The Company also shall comply with the other
provisions of Section 314(a) of the Trust Indenture Act. If the Company is not
subject to the requirements of Section 13 or 15(d) of the Exchange Act, it shall
file with the Trustee, within 15 days after it would have been required to file
with the Commission, financial statements, including any notes thereto (and with
respect to annual reports, an auditors' report by a nationally recognized firm
of independent certified public accountants) comparable to that which the
Company would have been required to include in such annual reports, information,
documents or other reports if it were subject to the requirements of Section 13
or 15(d) of the Exchange Act.
(b) So long as the Notes remain outstanding, the Company shall
cause its annual reports to stockholders and any quarterly or other financial
reports furnished by it to stockholders to be mailed to the Noteholders (no
later than ten days after the date such materials are mailed to the Company's
stockholders) at their addresses appearing in the register of Notes maintained
by the Registrar. If the Company is not required to furnish annual or quarterly
reports to its stockholders pursuant to the Exchange Act, it shall cause its
financial statements referred to in subsection 3.2(a) above, including any notes
thereto (and with respect to annual reports, an auditors' report by a nationally
recognized firm of independent certified public accountants), to be so mailed to
the Holders within 120 days after the end of each of the Company's fiscal years
and within 60 days after the end of each of its first three fiscal quarters.
Delivery of such reports, information and documents to the Trustee
is for informational purposes only and the Trustee's receipt of such reports
shall not constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
11
Section 3.3 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 complying with Section 314(a)(4) of the Trust Indenture
Act and stating whether or not the signers know of any Default that occurred
during such fiscal year. If they do, the Officers' Certificate shall describe
the Default and its status. Such compliance shall be determined without regard
to periods of grace or notice requirements.
Section 3.4 Notice of Default. The Company will deliver to the
Trustee an Officers' Certificate promptly upon becoming aware of any Event of
Default or a Default which could result in an Event of Default under subsection
6.1(d) and which Officers' Certificate will specify such Default or Event of
Default.
Section 3.5 Corporate Existence. Subject to Article IV, the Company
shall do or cause to be done all things necessary to preserve and keep in full
force and effect its corporate existence and the corporate or other existence of
its Significant Subsidiaries in accordance with the respective organizational
documents of each such Subsidiary and the rights (charter and statutory) and
corporate franchises of the Company and each such Subsidiary; provided, however,
that the Company shall not be required to preserve, with respect to itself, any
right or corporate franchise; and with respect to such Significant Subsidiaries,
any such existence, right or corporate franchise if the Board of Directors, or
the board of directors of the Significant Subsidiary concerned, shall determine
that the preservation thereof is no longer desirable in the conduct of the
business of the Company or such Subsidiary and that the loss thereof is not
disadvantageous in any material respect to the Holders.
Section 3.6 Taxes and Other Claims. The Company and each Significant
Subsidiary shall file all federal, state and local tax returns required to be
filed by it and shall pay or discharge or cause to be paid or discharged, before
the same shall become delinquent, (i) all taxes, assessments and governmental
charges which are material to the Company and its Subsidiaries, on a
consolidated basis (including withholding taxes and any penalties, interest and
additions to taxes) levied or imposed upon the Company or its Subsidiaries or
upon the income, profits or property of the Company or any such Significant
Subsidiary, and (ii) all lawful claims of materialmen, mechanics, carriers,
warehousemen, landlords and other like persons which are material to the Company
and its Subsidiaries, on a consolidated basis and, if unpaid, might by law
become a lien upon the property of the Company or any such Subsidiary; provided,
however, that the Company shall not be required to pay or discharge or cause to
be paid or discharged any such tax, assessment or governmental charge or claim
whose amount, applicability or validity is being contested in good faith and for
which disputed amounts adequate reserves have been made in the opinion of the
Company's management or as required by generally accepted accounting principles.
Section 3.7 Change of Control. Upon the occurrence of a Change of
Control, the Company shall make an offer (a "Change of Control Offer") to
purchase each Holder's outstanding Notes at a purchase price in cash equal to
101% of the principal amount of such Holder's Notes, plus accrued and unpaid
interest, if any, to the date of purchase, in accordance with the following
terms.
12
Within 30 days following any Change of Control, the Company will
mail or cause the mailing of a notice to each Holder of a Note, at the address
of such Holder as it appears on the Note register, stating (i) that a Change of
Control has occurred and that such Holder has the right to require the Company
to repurchase all of such Holder's Notes at the applicable purchase price in
cash as provided above, plus accrued and unpaid interest, if any, to the date of
purchase, (ii) the circumstances and relevant facts regarding such Change of
Control (including, but not limited to, information with respect to pro forma
income, cash flow and capitalization after giving effect to such Change of
Control), (iii) the purchase date (which shall be no earlier than 30 days and no
later than 60 days from the date such notice is mailed) and (iv) the
instructions determined by the Company, consistent with the foregoing, that a
Holder of Notes must follow in order to have its Notes repurchased.
Notwithstanding the foregoing, in the event that the Company is
required to make a Change of Control Offer, the Company will comply with the
provisions of Section 14(e), Rule 14e-1 and any other tender offer rules under
the Exchange Act which may then be applicable in connection with any Change of
Control Offer. To the extent that the provisions of any securities laws or
regulations conflict with the provisions of this Section 3.7, the Company shall
comply with the applicable securities laws and regulations and shall not be
deemed to have breached its obligations hereunder by virtue thereof.
Section 3.8 Limitation on Liens. The Company shall not, and shall
not permit any of its Significant Subsidiaries to, incur, issue, assume,
guarantee or permit to exist any Indebtedness for Borrowed Money secured by any
mortgage, pledge, lien or other encumbrance of any nature (collectively,
"Liens") on any property or assets of the Company or any of its Significant
Subsidiaries, or any shares of Capital Stock of any of its Significant
Subsidiaries, without effectively providing that the Notes (together with, if
the Company shall so determine, any other Senior Indebtedness) shall be secured
equally and ratably with such Indebtedness for Borrowed Money; provided,
however, that the foregoing restrictions shall not apply to (i) Liens existing
on the date of this Indenture; (ii) Liens existing on property or assets of, or
on any shares of Capital Stock of, any Person at the time such Person becomes a
Significant Subsidiary or consolidates or merges with the Company or any of its
Significant Subsidiaries; (iii) Liens upon real or personal property of the
Company or any of its Significant Subsidiaries, each of which Liens either (a)
existed on such property before the time of its acquisition or (b) was created
solely for the purpose of securing Indebtedness for Borrowed Money representing,
or incurred to finance, the cost of such property (provided that (x) no such
Lien shall extend to or cover any property of the Company or any Significant
Subsidiary other than the property acquired (and any fixtures or other
improvements thereafter made to such property) and (y) the principal amount (or
the aggregate amount which in conformity with generally accepted accounting
principles is required to be reported as a liability on the balance sheet of the
Company or any of its Significant Subsidiaries in respect of a capital lease of
such property) of such Indebtedness for Borrowed Money secured by such Lien
shall at no time exceed 80% of the fair market value of such property at the
time it was acquired); (iv) Liens securing Indebtedness for Borrowed Money of
the Company owed to any of its Subsidiaries; and (v) any extension, renewal or
replacement, as a whole or in part, of any Lien referred to in the foregoing
clauses (i) through (iv), provided, however, that (a) such extension, renewal or
replacement Lien is limited to all or a part of the same property or shares of
Capital Stock that secured the Lien extended, renewed or replaced and (b) the
Indebtedness for Borrowed Money
13
secured by such Lien at such time is not increased (except as otherwise
permitted pursuant to the foregoing clauses (i) through (iv)). For purpose of
determining compliance with this Section 3.8, in the event that an item of
Indebtedness for Borrowed Money meets the criteria of more than one of the types
of Indebtedness for Borrowed Money described in clauses (i) through (v) of this
Section 3.8, the Company, in its sole discretion, shall classify such item of
Indebtedness for Borrowed Money and only be required to include the amount and
type of such Indebtedness for Borrowed Money under one of said clauses.
Section 3.9 Limitation on Disposition of Stock of Significant
Subsidiaries. Except as provided in Section 3.8, the Company shall not, and
shall not permit any Significant Subsidiary to, sell, transfer or otherwise
dispose of any shares of Capital Stock of any Significant Subsidiary unless such
disposition is effected for fair value as determined by the Board of Directors
of the Company acting in good faith and the Company makes an offer to purchase
Notes outstanding at a purchase price equal to 101% of the principal amount
thereof, plus accrued and unpaid interest, if any, to the date of purchase, with
the proceeds of such disposition; provided that the Company or any Subsidiary
may sell, transfer or otherwise dispose of shares of Capital Stock of any
Subsidiary to the Company or a direct or indirect wholly owned Subsidiary of the
Company.
Within 30 days following any disposition of shares of Capital Stock
of any Significant Subsidiary, the Company will mail or cause the mailing of a
notice to each Holder of a Note, at the address of such Holder as it appears on
the Note register, stating (i) that such a disposition has occurred and that
such Holder has the right to require the Company to repurchase with the proceeds
of such disposition such Holder's Notes, pro rata with all Notes tendered by
other Holders of Notes, at the applicable purchase price in cash as provided
above, plus accrued and unpaid interest, if any, to the date of purchase, (ii)
the circumstances and relevant facts regarding such disposition (including, but
not limited to, information with respect to pro forma income, cash flow and
capitalization after giving effect to such disposition), (iii) the purchase date
(which shall be no earlier than 30 days and no later than 60 days from the date
such notice is mailed) and (iv) the instructions determined by the Company,
consistent with this Indenture, that such Holder must follow in order to have
its Notes repurchased.
The Company will comply with the provisions of Section 14(e), Rule
14e-1 and any other tender offer rules under the Exchange Act which may then be
applicable in connection with any offer by the Company to purchase Notes at the
option of the Holders thereof as described above. To the extent that the
provisions of any securities laws or regulations conflict with the provisions of
this Section 3.9, the Company shall comply with the applicable securities laws
and regulations and shall not be deemed to have breached its obligations
hereunder by virtue thereof.
Section 3.10 Limitation on Transactions with Affiliates. The Company
shall not, and shall not permit any of its Significant Subsidiaries to, enter
into any transaction or series of related transactions in an aggregate amount
exceeding $25 million with (i) any Affiliate of the Company or any of its
Significant Subsidiaries (other than the Company and its Subsidiaries whose
Voting Stock is wholly owned, directly or indirectly by the Company) or (ii) any
Person (or any Affiliate of such Person) holding 10% or more of any class of
Capital Stock of the Company or any of its Significant Subsidiaries (other than
the Company
14
and its wholly owned Subsidiaries) except in each case on terms, determined by
the Board of Directors of the Company acting in good faith, that are either (x)
equal and ratable among all holders of the Company's equity securities or (y) no
less favorable to the Company or the relevant Significant Subsidiary than would
be obtainable at the time for a comparable transaction on an arm's-length basis
from an unrelated third party; provided that the foregoing restriction shall not
apply to the transactions contemplated by the Reorganization Plan.
Section 3.11 Limitation on Dividends, Redemptions and Loans. The
Company shall not, directly or indirectly: (i) declare or pay any dividends, in
cash or in kind, on account of any shares of any class of capital stock of the
Company now or hereafter outstanding beneficially owned by Zurich or its
Affiliates, its successors, assigns or transferees, or set aside or otherwise
deposit or invest any sums for such purpose, or redeem, retire, defease,
purchase or otherwise acquire any such shares (or set aside or otherwise deposit
or invest any sums for such purpose) for any consideration other than common
stock or apply or set apart any sum, or make any other distribution (by
reduction of capital or otherwise) in respect of any such shares so owned or
agree to do any of the foregoing, or (ii) make any loans or other forms of
credit accommodation to Zurich or its Affiliates, its successors, assigns or
transferees.
ARTICLE IV
SUCCESSORS
Section 4.1 When Company May Merge, etc. The Company shall not
consolidate or merge with any other Person or transfer (by lease, assignment,
sale or otherwise) all or substantially all of its assets, in a single
transaction or through a series of related transactions, to another Person or
group of affiliated Persons unless (i) the Company is the surviving or
continuing Person or, subject to Section 3.9, the Person (if other than the
Company) formed by such consolidation or merger or to which the assets of the
Company are transferred is a Person organized and existing under the laws of the
United States of America or any state thereof or the District of Columbia and
expressly assumes, by an indenture supplemental to this Indenture, in form
satisfactory to the Trustee, all the obligations of the Company under the Notes
and this Indenture and (ii) immediately before and immediately after giving
effect to such transaction, no Default or Event of Default shall have occurred
or be continuing; provided that the transactions contemplated by the
Reorganization Plan shall not constitute a consolidation or a merger which is
subject to this Section 4.1. The Company shall deliver to the Trustee prior to
the consummation of any consolidation, merger or transfer of assets involving
the Company, an Officers' Certificate to the foregoing effect and an Opinion of
Counsel stating that the proposed transactions and such supplemental indenture
comply with this Indenture.
In addition, the Company will not permit any Significant Subsidiary
to consolidate or merge with, or transfer all or substantially all of its assets
in a single transaction or through a series of related transactions to, another
Person or group of affiliated Persons unless such transaction is effected for
fair value as determined by the Board of Directors of the Company acting in good
faith and the Company makes an offer to purchase
15
the Notes outstanding at a purchase price equal to 101% of the principal amount
thereof, plus accrued and unpaid interest, if any, to the date of purchase, with
the proceeds of such transaction; provided that any Subsidiary may consolidate
or merge with or transfer all or substantially all of its assets to the Company
or a direct or indirect wholly owned Subsidiary of the Company.
Within 30 days following any consolidation, merger or transfer of
assets involving a Significant Subsidiary, the Company will mail or cause the
mailing of a notice to each Holder of a Note, at the address of such Holder as
it appears on the Note register, stating (i) that such a transaction has
occurred and that such Holder has the right to require the Company to repurchase
with the proceeds of such transaction such Holder's Notes, pro rata with all
Notes tendered by other Holders of Notes, at the applicable purchase price in
cash as provided above, plus accrued and unpaid interest, if any, to the date of
purchase, (ii) the circumstances and relevant facts regarding such transaction
(including, but not limited to, information with respect to pro forma income,
cash flow and capitalization after giving effect to such transaction), (iii) the
purchase date (which shall be no earlier than 30 days and no later than 60 days
from the date such notice is mailed) and (iv) the instructions determined by the
Company, consistent with this Indenture, that such Holder must follow in order
to have its Notes repurchased.
The Company will comply with the provisions of Section 14 (e), Rule
14e-1 and any other tender offer rules under the Exchange Act which may then be
applicable in connection with any offer by the Company to purchase Notes at the
option of the Holders thereof as described above. To the extent that the
provisions of any securities laws or regulations conflict with the provisions of
this Section 4.1, the Company shall comply with the applicable securities laws
and regulations and shall not be deemed to have breached its obligations
hereunder by virtue thereof.
Section 4.2 Successor Corporation Substituted. Upon any
consolidation, merger or transfer of assets involving the Company in accordance
with Section 4.1, any successor Person formed by such consolidation or merger or
to which such transfer is made shall succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Indenture with the
same effect as if such successor Person had been named as an original party
herein. When a successor Person assumes all of the obligations of the Company
hereunder and under the Notes, the Company shall be released from such
obligations.
ARTICLE V
REDEMPTION
Section 5.1 Optional Redemption by the Company. If either (i) the
aggregate principal amount of Notes registered to Persons who are not Affiliates
of the
16
Company is less than $___ million1/ or (ii) the Company has a Significant
Subsidiary, then the Company may redeem the Notes, in whole or in part from time
to time, at a redemption price equal to the principal amount of the Notes plus
accrued and unpaid interest, if any, to the redemption date.
Section 5.2 Notice to Trustees. If the Company elects to redeem any
or all of the Notes pursuant to Section 5.1, it shall notify the Trustee of the
redemption date and the principal amount of Notes to be redeemed. The Company
shall give such notice in an Officers' Certificate delivered at least 45 days
before the redemption date (unless a shorter period shall be satisfactory to the
Trustee).
Section 5.3 Selection of Notes to be Redeemed. If less than all of
the Notes are to be redeemed, the Trustee shall select the Notes to be redeemed
by lot or such other method as the Trustee may deem fair and appropriate so long
as such method is not proscribed by any securities exchange on which the Notes
are then listed. The Trustee shall make the selection from Notes outstanding and
not previously called for redemption. The Trustee may select for redemption
portions of the principal of Notes that have denominations larger than $1,000.
Provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption.
Section 5.4 Notice of Redemption. At least 30 days but not more than
60 days before a redemption date, the Company shall mail a notice of redemption
to each Holder whose Notes are to be redeemed.
The notice shall identify the Notes to be redeemed and shall state:
(a) the redemption date;
(b) the redemption price;
(c) the name and address of the Paying Agent;
(d) that Notes called for redemption must be surrendered to
the Paying Agent to collect the redemption price;
(e) that, unless the Company defaults in making the redemption
payment, interest on Notes called for redemption ceases to accrue on and after
the redemption date;
(f) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the redemption date
and upon surrender of such Note, a new Note or Notes will be issued having an
aggregate principal amount equal to the unredeemed portion thereof; and
----------------------
1/ Amount equal to 50% of the aggregate principal amount of Notes originally
issued.
17
(g) the identification, including CUSIP number, of the
particular Notes (or portion thereof) to be redeemed, as well as the aggregate
principal amount of Notes to be redeemed and the aggregate principal amount of
Notes estimated to be outstanding after such redemption.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense.
Section 5.5 Effect of Notice of Redemption. Once notice of
redemption is mailed, Notes called for redemption become due and payable on the
redemption date at the redemption price.
Section 5.6 Deposit of Redemption Price. On or before the redemption
date, the Company shall deposit with the Paying Agent (or, if the Company is its
own Paying Agent, the Company shall segregate and hold in trust) money
sufficient to pay the redemption price of all Notes to be redeemed on that date.
Section 5.7 Notes Redeemed in Part. After the redemption date, upon
surrender of a Note that is redeemed in part, the Trustee shall authenticate for
the Holder a new Note equal in principal amount to the unredeemed portion of the
Note surrendered.
ARTICLE VI
DEFAULTS AND REMEDIES
Section 6.1 Events of Default. An "Event of Default" occurs if:
(a) the Company defaults in the payment of interest (including
default in the payment of interest in Additional Notes in lieu of a cash
payment) on any Note when the same becomes due and payable and the default
continues for a period of 30 days;
(b) the Company defaults in the payment of the principal of
any Note (including failure to make a payment pursuant to a Change of Control
Offer or other offer to purchase the Notes which is required to be made pursuant
to this Indenture) when the same becomes due and payable at maturity;
(c) the Company fails to comply with any of its other
covenants or agreements in the Notes or this Indenture and the default continues
for 60 days after notice to the Company by the Trustee or to the Company and the
Trustee by the Holders of at least 25% in principal amount of the Notes then
outstanding as specified below;
(d) there shall be a default under any evidence of
Indebtedness of the Company or any Significant Subsidiary, whether any such
Indebtedness exists on the date of this Indenture or shall hereafter be created,
in the amount, individually or in the aggregate, of $10 million, if the maturity
of such Indebtedness has been accelerated prior to its expressed maturity;
18
(e) a court of competent jurisdiction enters a final and non-
appealable judgment against the Company or any Significant Subsidiary in which
the Company or any such Significant Subsidiary is required to pay an amount
(calculated after the application of any proceeds of insurance policies
applicable to such loss), individually or in the aggregate, in excess of $10
million, and such final and non-appealable judgment remains unsatisfied for a
period of 60 days;
(f) the Company or any Significant Subsidiary, pursuant to or
within the meaning of any Bankruptcy Law (i) becomes insolvent, (ii) fails
generally to pay its debts as they become due, (iii) admits in writing its
inability to pay its debts generally as they become due, (iv) commences a
voluntary case or proceeding, (v) consents to, or acquiesces in, the institution
of a bankruptcy or an insolvency proceeding against it or the entry of a
judgment, decree or order for relief against it in an involuntary case or
proceeding, (vi) applies for, consents to or acquiesces in the appointment of or
taking possession by a Custodian of the Company or any Significant Subsidiary or
of all or substantially all of its property or (vii) makes a general assignment
for the benefit of its creditors; or
(g) a court of competent jurisdiction enters a judgment,
decree or order under any Bankruptcy Law which (i) is for relief against the
Company or any Significant Subsidiary in an involuntary case, (ii) appoints a
Custodian of the Company or any Significant Subsidiary or a Custodian for all or
substantially all of its property or (iii) orders the winding-up or liquidation
of the Company or any Significant Subsidiary; and such judgment, decree or order
shall remain unstayed and in effect for a period of 60 consecutive days.
The term "Bankruptcy Law" means title 11, U.S. Code or any similar
federal or state law for the relief, supervision, conservation, reorganization
or liquidation of debtors or for the benefit of creditors. The term "Custodian"
means any receiver, trustee, assignee, liquidator or similar official under any
Bankruptcy Law.
A Default under subsection 6.1(c) is not an Event of Default until
the Trustee or the Holders of at least 25% in principal amount of the Notes then
outstanding notify the Company of the Default and the Company does not cure the
Default within the period specified in such subsection 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". Such notice shall be given by
the Trustee if requested by the Holders of at least 25% in principal amount of
the Notes then outstanding.
Notwithstanding any Provision of this Indenture, none of the
transactions contemplated by the Reorganization Plan shall constitute an Event
of Default.
Section 6.2 Acceleration. If an Event of Default (other than an
Event of Default specified in subsection 6.1(f) or (g)) occurs and is
continuing, the Trustee by notice to the Company, or the Holders of at least 25%
in principal amount of the Notes then outstanding by notice to the Company and
the Trustee, may declare the unpaid principal of and accrued interest on all the
Notes to be due and payable. Upon such declaration, the principal of and accrued
interest on such Notes shall be due and payable immediately. If an
19
Event of Default specified in subsection 6.1(f) or (g) occurs, all unpaid
principal of and accrued interest on the Notes then outstanding shall
automatically become due and payable without any declaration or other act on the
part of the Trustee or any Noteholder. Upon payment of such principal amount and
interest, all of the Company's obligations under the Notes and this Indenture
shall terminate. The Holders of a majority in principal amount of the Notes 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 6.3 Other Remedies. 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 Notes or to
enforce the performance of any provision of the Notes or this Indenture. The
Trustee may maintain a proceeding even if it does not possess any of the Notes
or does not produce any of them in the proceeding. A delay or omission by the
Trustee or any Noteholder 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. No remedy is exclusive of any other
remedy. All available remedies are cumulative.
Section 6.4 Waiver of Past Defaults. Subject to Sections 6.2, 6.7
and 9.2, the Holders of a majority in principal amount of the Notes by notice to
the Trustee may waive an existing Default and its consequences except a Default
in the payment of the principal of or interest on any Note. When a Default or
Event of Default is waived, it is cured and ceases to exist.
Section 6.5 Control by Majority. The Holders of a majority in
principal amount of the Notes 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, is unduly
prejudicial to the rights of other Noteholders or would involve the Trustee in
personal liability.
Section 6.6 Limitation on Suits. A Noteholder may pursue a remedy
with respect to this Indenture or the Notes only if:
(a) the Holder gives to the Trustee written notice of a
continuing Event of Default;
(b) the Holders of at least 25% in principal amount of the
Notes then outstanding make a request to the Trustee to pursue the remedy;
(c) such Holder or Holders offer to the Trustee indemnity
satisfactory to the Trustee against any loss, liability or expense;
(d) the Trustee does not comply with the request within 60
days after receipt of the request and the offer of indemnity; and
20
(e) during such 60-day period, the Holders of a majority in
principal amount of the Notes do not give the Trustee a direction inconsistent
with the request.
A Noteholder may not use this Indenture to prejudice the rights of
another Noteholder or to obtain a preference or priority over another
Noteholder.
Section 6.7 Rights of Holders to Receive Payment. Notwithstanding
any other Provision of this Indenture, the right of any Holder of a Note to
receive payment of principal of and interest on the Note, on or after the
respective due dates expressed in the Note, or to institute suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of the Holder.
Section 6.8 Collection Suit by Trustee. If an Event of Default
specified in subsection 6.1(a) or (b) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company or any other obligor upon the Notes for the whole amount of principal
and interest remaining unpaid, together with interest on overdue principal and,
to the extent that payment of such interest is lawful, interest on overdue
installments of interest, in each case at the rate per annum borne by the Notes
and such further amount as shall be sufficient to cover the costs and expenses
of collection, including the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel and any other amounts due
the Trustee under Section 7.7.
Section 6.9 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 (including any claim for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel and any other amounts due under Section 7.7) and
the Noteholders allowed in any judicial proceedings relative to the Company (or
any other obligor upon the Notes), its creditors or its property and shall be
entitled and empowered to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute it, and any
Custodian in any such judicial proceedings is hereby authorized by each
Noteholder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the
Noteholders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.7. Nothing
herein contained shall be deemed to authorize the Trustee to authorize or
consent to or accept or adopt on behalf of any Noteholder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder thereof or to authorize the Trustee to vote in respect
of the claim of any Noteholder 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 7.7;
21
second, to Noteholders for amounts due and unpaid on the Notes for
principal and interest, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Notes for principal
and interest, respectively; and
third, to the Company.
The Trustee, upon prior written notice to the Company, may fix a
record date and payment date for any such payment to Noteholders in such manner
and procedure as the Trustee deems appropriate.
Section 6.11 Undertaking for Costs. In any suit for the enforcement
of any right or remedy under this Indenture or in any suit against the Trustee
for any action taken or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section does not apply to a suit by the
Trustee, a suit by a Holder pursuant to Section 6.7 or a suit by Holders of more
than 10% in principal amount of Notes then outstanding.
Section 6.12 Waiver of Stay or Extension Laws. The Company covenants
(to the extent that it may lawfully do so) that it will not at any time insist
upon, or plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, which materially adversely affects 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 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.
ARTICLE VII
TRUSTEE
Section 7.1 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 or her own affairs.
(b) Except during the continuance of an Event of Default:
(i) The Trustee need perform only those duties that are
specifically set forth in this Indenture and no others.
(ii) In the absence of bad faith or negligence 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
22
and conforming to the requirements of this Indenture. However, in the case
of any such certificates or opinions which by any provision hereof are
specifically required to be furnished to the Trustee, the Trustee shall
examine the certificates and opinions to determine whether or not they
conform to the requirements of this Indenture.
(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:
(i) This paragraph does not limit the effect of
paragraph (b) of this Section.
(ii) 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.
(iii) 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 6.5.
(iv) 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, or in the
exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity
against such risk or liability is not reasonably assured to it.
(d) Every provision of this Indenture that in any way relates
to the Trustee is subject to subsections 7.1(a), (b) and (c).
(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.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
Section 7.2 Rights of Trustee. (a) The Trustee may rely on any
document reasonably believed by it to be genuine and to have been signed or
presented by the proper Person. The Trustee need not investigate any fact or
matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate 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
the 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.
23
(d) The Trustee may consult with counsel of its selection and
the advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in reliance thereon.
Section 7.3 Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Notes and
may otherwise deal with the Company or an Affiliate of the Company with the same
rights it would have if it were not Trustee. Any Agent may do the same with like
rights. However, the Trustee is subject to Sections 7.10 and 7.11.
Section 7.4 Trustee's Disclaimer. The Trustee makes no
representation as to the validity or adequacy of this Indenture or the Notes, it
shall not be accountable for the Company's use of the proceeds from the Notes,
and it shall not be responsible for any statement in the Notes other than its
authentication.
Section 7.5 Notice of Defaults. If a Default occurs and is
continuing and if it is known to the Trustee, the Trustee shall mail to
Noteholders a notice of the Default within 90 days after it occurs. Except in
the case of a Default in payment on any Note, the Trustee may withhold the
notice if and so long as a committee of its Trust Officers in good faith
determines that withholding the notice is in the interests of Noteholders.
Section 7.6 Reports by Trustee to Holders. Within 60 days after each
May 1 beginning with May 1, 1998, the Trustee shall mail to each Noteholder to
the extent required by Section 313(c) of the Trust Indenture Act a brief report
dated as of such date that complies with Section 313(a) of the Trust Indenture
Act. The Trustee also shall comply with Section 313(b) of the Trust Indenture
Act.
A copy of each report at the time of its mailing to Noteholders
shall be filed with the Commission and each stock exchange on which the Notes
are listed. The Company shall promptly notify the Trustee when the Notes are
listed on any stock exchange.
Section 7.7 Compensation and Indemnity. The Company shall pay to the
Trustee from time to time such compensation as the Company and the Trustee shall
agree in writing for its services. 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.
The Company shall indemnify the Trustee against any, and all loss,
damage, claim, expense or liability incurred by it except as provided below. The
Trustee shall notify the Company promptly of any claim for which it may seek
indemnity. The Company shall defend the claim and the Trustee shall cooperate in
the defense. The Trustee may have separate counsel and the Company shall pay the
reasonable fees and expenses of one such counsel. The Company need not pay for
any settlement made without its consent.
24
The Company need not reimburse any expense or indemnify against any
loss or liability incurred by the Trustee through negligence or bad faith.
To secure the Company's payment obligations in this Section, the
Trustee shall have a lien prior to the Notes on all money or property held or
collected by the Trustee, except that held in trust to pay principal of and
interest on particular Notes.
When the Trustee incurs expenses or renders services after an Event
of Default specified in subsection 6.1(f) or (g) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
The provisions of this Section shall survive the termination of this
Indenture.
Section 7.8 Replacement of Trustee. A resignation or removal of the
Trustee and the 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 Notes may remove the Trustee by so notifying
the removed Trustee and, with the Company's consent, may appoint a successor
Trustee. The Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10;
(b) the Trustee is adjudged a bankrupt or an insolvent;
(c) a receiver or public officer takes charge of the Trustee
or its property; or
(d) 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 and any other obligor upon the
Notes shall promptly appoint a successor Trustee.
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 amount of the Notes 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 Noteholder 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
25
succession to Noteholders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, provided all sums owing
to the Trustee hereunder have been paid and subject to the lien provided for in
Section 7.7. Notwithstanding replacement of the Trustee, the Company's
obligations under Section 7.7 shall continue for the benefit of the retiring
Trustee.
Section 7.9 Successor Trustee by Merger, etc. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all of its corporate trust business 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 Section 310(a)(1) of the
Trust Indenture Act. The Trustee shall always have a combined capital and
surplus of at least $50 million as set forth in its most recent published annual
report of condition. The Trustee shall comply with Section 310(b) of the Trust
Indenture Act, including the optional provision permitted by the second sentence
of Section 310(b)(9) of the Trust Indenture Act.
Section 7.11 Preferential Collection of Claims Against Company. The
Trustee is subject to Section 311(a) of the Trust Indenture Act, excluding any
creditor relationship listed in Section 311(b) of the Trust Indenture Act. A
Trustee who has resigned or been removed is subject to Section 311(a) of the
Trust Indenture Act to the extent indicated.
ARTICLE VIII
SATISFACTION AND DISCHARGE OF INDENTURE; DEFEASANCE
Section 8.1 Discharge of Liability on the Notes; Legal and Covenant
Defeasance. Subject to Section 8.3, the Company may terminate all of its
obligations under the Notes and this Indenture (a "Legal Defeasance"), or may
terminate its obligations under the covenants contained in Sections 3.7, 3.8,
3.9, 3.10, 3.11, 4.1 and 4.2 of this Indenture with respect to the outstanding
Notes (a "Covenant Defeasance"), if at any time:
(a) The Company irrevocably deposits in trust with the
Trustee, pursuant to an irrevocable trust and security agreement in form and
substance reasonably satisfactory to the Trustee, U.S. Legal Tender or direct
non-callable obligations of, or non-callable obligations guaranteed by, the
United States of America for the payment of which obligation or guarantee the
full faith and credit of the United States of America is pledged ("U.S.
Government Obligations") maturing as to principal and interest in such amounts
and at such times as are, without consideration of the reinvestment of such
interest and after payment of all federal, state and local taxes or other
charges or assessments in respect thereof payable by the Trustee, sufficient (in
the opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee) to pay
the principal of and interest on the outstanding Notes on the dates on which any
such payments are due and payable in accordance with the terms of this Indenture
and of the Notes;
26
(b) Such deposits shall not cause the Trustee to have a
conflicting interest as defined in and for purposes of the Trust Indenture Act;
(c) No Default or Event of Default shall have occurred or be
continuing on the date of such deposit or shall occur on or before the
ninety-first day after the date of such deposit;
(d) Such deposit will not result in a breach or violation of,
or constitute a default under, this Indenture or any other instrument to which
the Company is a party or by which it or its property is bound;
(e) The Company shall deliver to the Trustee an Opinion of
Counsel, (A) in the case of a Legal Defeasance, to the effect that (i) the
Internal Revenue Service has published a ruling, (ii) the Company has received a
ruling from the Internal Revenue Service or (iii) since the date hereof, there
has been a change in applicable United States federal income tax law, in any
such case to the effect that, and based upon such opinion shall confirm that,
Holders of the Notes will not recognize income, gain or loss for federal income
tax purposes as a result of such deposit and the Legal Defeasance contemplated
hereby, and will be subject to federal income tax in the same amounts, in the
same manner and at the same times as would have been the case if such deposit
and defeasance had not occurred or, (B) in the case of a Covenant Defeasance, to
the effect that the Holders of Notes will not recognize income, gain or loss for
federal income tax purposes as a result of such deposit and the Covenant
Defeasance contemplated hereby, and will be subject to federal income tax in the
same amounts, in the same manner and at the same times as would have been the
case if such deposit and defeasance had not occurred;
(f) The deposit shall not result in the Company, the Trustee
or the trust becoming or being deemed to be an "investment company" under the
Investment Company Act of 1940, as amended;
(g) The Holders, or the Trustee on behalf of such Holders,
shall have a perfected security interest under applicable law in the monies or
U.S. Government Obligations deposited pursuant to Section 8.1(a) above; and
(h) The Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent specified herein relating to the Legal Defeasance or the Covenant
Defeasance, as applicable, contemplated by this Section 8.1 have been complied
with.
If the Company exercises its option to make a Legal Defeasance or a
Covenant Defeasance payment of the Notes may not be accelerated because of an
Event of Default.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to this Section 8.1 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is for
the account of the Holders of outstanding Notes.
27
Section 8.2 Satisfaction, Discharge of the Indenture and Termination
of the Company's Obligations upon Cancellation of the Notes. In addition to its
rights under Section 8.1, the Company may satisfy and be discharged from all of
its obligations under this Indenture (subject to Section 8.3) when:
(a) All Notes theretofore authenticated and delivered (other
than Notes which have been destroyed, lost or stolen and which have been
replaced or paid as provided in Section 2.7) have been delivered to the Trustee
for cancellation;
(b) The Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
(c) The Company has delivered to the Trustee an Officers'
Certificate and an opinion of Counsel, each stating that all conditions
precedent specified herein relating to the satisfaction and discharge of this
Indenture have been complied with.
Section 8.3 Survival of Certain Obligations. Notwithstanding the
satisfaction and discharge of this Indenture and of the Notes referred to in
Section 8.1 or 8.2, the respective obligations of the Company, the Trustee and
the Paying Agent under Sections 2.3, 2.4, 2.5, 2.6, 2.7, 3.1, 3.5, 7.7, 7.8, 8.6
and 8.7 shall survive until the Notes are no longer outstanding, and thereafter
the obligations of the Company, the Trustee and the Paying Agent under Sections
7.7, 8.5, 8.6 and 8.7 shall survive. Nothing contained in this Article VIII
shall abrogate any of the obligations or duties of the Trustee under this
Indenture.
Section 8.4 Acknowledgment of Discharge by Trustee. After the
conditions of Section 8.1 or 8.2 have been satisfied, the Trustee upon request
shall acknowledge in writing the discharge of those obligations that the Company
terminates.
Section 8.5 Application of Trust Money. The Trustee shall hold in
trust money or U.S. Government Obligations deposited with it pursuant to Section
8.1. It shall apply the deposited money and the money from U.S. Government
Obligations through the Paying Agent and in accordance with this Indenture to
the payment of principal of and interest on the Notes.
Section 8.6 Repayment to Company. The Trustee and the Paying Agent
shall promptly pay to the Company upon written request any excess money or
securities held by them at any time. The Trustee and the Paying Agent shall pay
to the Company upon written request any money held by them for the payment of
principal or interest that remains unclaimed for two years; provided that the
Company shall have first caused notice of such payment to be mailed to each
Noteholder entitled thereto no less than 30 days prior to such repayment. After
payment to the Company, Noteholders entitled to the money must look to the
Company for payment as general creditors unless an applicable abandoned property
law designates another Person, and the Trustee shall have no further liability
with respect thereto.
Section 8.7 Reinstatement. If the Trustee or the Paying Agent is
unable to apply any money in accordance with Section 8.5 by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining,
28
restraining or otherwise prohibiting such application, the Company's obligations
under this Indenture and the Notes shall be revived and reinstated as though no
deposit had occurred pursuant to Section 8.1 until such time as the Trustee or
the Paying Agent is permitted to apply all such money in accordance with Section
8.5; provided that, if the Company has made any payment of interest on or
principal of any Note because of the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of such Notes to
receive such payment from the money held by the Trustee or the Paying Agent.
ARTICLE IX
AMENDMENTS AND WAIVERS
Section 9.1 Without Consent of Holders. The Company and the Trustee
may amend or supplement this Indenture or the Notes without the consent of any
Noteholder:
(a) to cure any ambiguity, defect or inconsistency;
(b) to comply with Article IV;
(c) to provide for uncertificated Notes in addition to
certificated Notes;
(d) to make any change that does not adversely affect the
rights of any Noteholder; or
(e) to comply with the Trust Indenture Act.
Section 9.2 With Consent of Holders. The Company and the Trustee may
amend or supplement any provision of either this Indenture or the Notes with the
written consent of the Holders of at least a majority in principal amount of the
Notes then outstanding without notice to any Noteholder. The Holders of a
majority in principal amount of the outstanding Notes may waive compliance by
the Company with any such provision without notice to any Noteholder. However,
without the consent of each Noteholder affected, an amendment, supplement or
waiver under this Section may not:
(a) change the maturity of the principal of or the date of payment
of any installment of interest on any Note;
(b) reduce the principal amount of or interest on any Note or change
the form of payment thereof (except as permitted in Section 2.2 hereof);
(c) impair the right to institute suit for the enforcement of
any payment on or with respect to any Note;
(d) reduce the principal amount of Notes whose Holders must
consent to an amendment, supplement or waiver; or
29
(e) make any change in Sections 6.4 or 6.7 or this Section
9.2.
The Company and the Trustee hereby agree to amend or supplement any
provision of either this Indenture or the Notes at any time after August __,
1998, upon receipt of a written direction indicating the approval of any
amendment or supplement by the Holders of at least a majority in principal
amount of the Notes then outstanding, without notice to any Noteholder;
provided, however, that any such change may not adversely affect the rights of
the Company or the Trustee, it being understood that the elimination of any or
all of Sections 3.7, 3.8, 3.9, 3.10, 3.11, 4.1 and 4.2 of this Indenture would
not constitute such a change; and provided further, that such amendment or
supplement may not make any of the changes specified in clauses (a) through (e)
of the first paragraph of this Section 9.2 without the consent of each
Noteholder affected.
Any amendment or supplement shall be effective upon certification to
the Trustee by the Company or an agent of the Company that such amendment or
supplement has been authorized by the Company and that either (i) the consent of
the majority of an aggregate principal amount of the Notes has been obtained or
(ii) the Company has received a written direction indicating the approval of the
majority of an aggregate principal amount of the Notes, unless such consent or
direction specifies that it shall become effective at a later date, in which
case such amendment or supplement shall become effective in accordance with the
terms of such consent or direction.
After an amendment, supplement or waiver under this Section becomes
effective, the Company shall mail to Noteholders a notice briefly describing the
amendment, supplement or waiver. Any failure of the Company to mail such notice,
or any defect therein, shall not, however, in any way impair or affect the
validity of any amendment, supplement or waiver.
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment, supplement or
waiver, but it shall be sufficient if such consent approves the substance
thereof.
Section 9.3 Compliance with Trust Indenture Act. Every amendment or
supplement to this Indenture or the Notes or waiver of the provisions hereof or
thereof shall comply with the Trust Indenture Act as then in effect.
Section 9.4 Revocation and Effect of Consents. Until an amendment,
supplement or waiver becomes effective, a consent to it by a Holder of a Note is
a continuing consent by the Holder and every subsequent Holder of a Note or
portion of a Note that evidences the same debt as the consenting Holder's Note,
even if notation of the consent is not made on any Note. However, any such
Holder or subsequent Holder may revoke the consent as to his Note or portion of
a Note if the Trustee receives the notice of revocation before the date the
amendment, supplement or waiver becomes effective.
The Company may, but shall not be obligated to, fix a record date
for the purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver. If a record date is fixed, then notwithstanding the
immediately preceding paragraph, those Persons who were Holders at such record
date (or their duly designated proxies), and
30
only those Persons, shall be entitled to revoke any consent previously given,
whether or not such Persons continue to be Holders after such record date. No
such consent shall be valid or effective for more than 120 days after such
record date.
After an amendment, supplement or waiver becomes effective, it shall
bind every Noteholder, unless it makes a change described in any of clauses (a)
through (e) of Section 9.2. In that case, the amendment, supplement or waiver
shall bind each Holder of a Note who has consented to it and every subsequent
Holder of a Note or portion of a Note that evidences the same debt as the
consenting Holder's Note.
Section 9.5 Notation on or Exchange of Notes. The Trustee may place
an appropriate notation about an amendment or waiver on any Note thereafter
authenticated. The Company in exchange for all Notes may issue and the Trustee
shall authenticate new Notes that reflect the amendment, supplement or waiver.
Section 9.6 Trustee To Sign Amendments, Etc. The Trustee shall sign
any amendment or supplement authorized pursuant to this Article IX if the
amendment or supplement does not adversely affect the rights, duties,
liabilities or immunities of the Trustee. If it does, the Trustee may, but need
not, sign it. In signing or refusing to sign such amendment or supplement, the
Trustee shall be entitled to receive, if requested, an indemnity reasonably
satisfactory to it and to receive and, subject to Section 7.1, shall be fully
protected in relying upon, an Officers' Certificate and an Opinion of Counsel as
conclusive evidence that such amendment or supplement is authorized or permitted
by this Indenture, that it is not inconsistent herewith, and that it will be
valid and binding upon the company in accordance with its terms.
ARTICLE X
MISCELLANEOUS
Section 10.1 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 Trust Indenture Act, the
required provision shall control.
Section 10.2 Notices. Any notice or communication by the Company or
the Trustee to the other is duly given if in writing and delivered in person or
by facsimile or registered or certified mail, postage prepaid, return receipt
requested, addressed as follows:
if to the Company:
Home Holdings Inc.
00 Xxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
31
if to the Trustee:
[ ]
[ ]
[ ]
Attention: Corporate Trust Trustee
Administration
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications. Any
notice or communication to the Company or the Trustee shall be deemed to have
been given or made as of the date so delivered if personally delivered; when
receipt is acknowledged, if facsimiled; and five calendar days after mailing if
sent by registered or certified mail (except that a notice of change of address
shall not be deemed to have been given until actually received by the
addressee).
Any notice or communication to a Noteholder shall be mailed by
first-class mail or other equivalent means to his address shown on the register
kept by the Registrar. Failure to mail a notice or communication to a Noteholder
or any defect in it shall not affect its sufficiency with respect to other
Noteholders.
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 Noteholders, it
shall mail a copy to the Trustee and each Agent at the same time.
All notices or communications shall be in writing.
In case by reason of the suspension of regular mail service, or by
reason of any other cause, it shall be impossible to mail any notice as required
by this Indenture, then such method of notification as shall be made with the
approval of the Trustee shall constitute a sufficient mailing of such notice.
Section 10.3 Communications by Holders with Other Holders.
Noteholders may communicate pursuant to Section 312(b) of the Trust Indenture
Act with other Noteholders with respect to their rights under this Indenture or
the Notes. The Company, the Trustee, the Registrar and anyone else shall have
the protection of Section 312(c) of the Trust Indenture Act.
Section 10.4 Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take any action
under this Indenture, the Company shall furnish to the Trustee:
(a) 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
32
(b) an Opinion of Counsel reasonably satisfactory to the
Trustee stating that, in the opinion of such counsel, all such conditions
precedent have been complied with.
Section 10.5 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:
(a) a statement that each party making such certificate or
opinion has read such covenant or condition;
(b) 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;
(c) a statement that, in the opinion of each such party, he or
she has made such examination or investigation as is necessary to enable him or
her to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(d) a statement as to whether or not, in the opinion of each
such party, such condition or covenant has been complied with;
provided, however, that with respect to matters of law, an Officers' Certificate
may be based upon an Opinion of Counsel, unless the signers know, or in the
exercise of reasonable care should know, that such Opinion of Counsel is
erroneous, and provided, further, that with respect to matters of fact an
Opinion of Counsel may rely on an Officers' Certificate or certificates of
public officials, unless the signer knows, or in the exercise of reasonable care
should know, that any such document is erroneous.
Section 10.6 Rules by Trustee and Agents. The Trustee may make
reasonable rules for action by or at a meeting of Noteholders. The Registrar or
Paying Agent may make reasonable rules and set reasonable requirements for its
functions.
Section 10.7 Legal Holidays. A "Legal Holiday" is a Saturday, a
Sunday or a day on which banking institutions are not required to be open either
in New York City or in the city where the principal corporate trust office of
the Trustee is located. If a payment date is a Legal Holiday at a place of
payment, payment may be made at such place on the next succeeding day that is
not a Legal Holiday, and no interest shall accrue for the intervening period.
Section 10.8 No Recourse Against Others. A director, officer,
employee or stockholder, as such, of the Company shall not have any liability
for any obligations of the Company under the Notes or this Indenture or for any
claim based on, in respect of or by reason of such obligations or their creation
and if any liability does exist, such liability is waived and released as
provided in the Notes.
33
Section 10.9 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 10.10 Governing Law. The internal laws of the State of New
York shall govern this Indenture and the Notes, without regard to the conflicts
of laws rules thereof. The Company hereby irrevocably submits to the
jurisdiction of any federal or New York State court sitting in the Borough of
Manhattan in New York City in respect of any suit, action or proceeding arising
out of or relation to this Indenture, and irrevocably agrees that all claims in
respect of any such suit, action or proceeding may be heard and determined in
any such court. The Company irrevocably waives, to the fullest extent it may
effectively do so under applicable law, any objection which it may now or
hereafter have to the laying of the venue of any such suit, action or proceeding
brought in any such court and any claim that any such suit, action or proceeding
brought in any such court has been brought in an inconvenient forum.
Section 10.11 No Adverse Interpretation of Other Agreements. This
Indenture may not be used to interpret another indenture, loan or debt agreement
of the Company or any Subsidiary. Any such indenture, loan or debt agreement may
not be used to interpret this Indenture.
Section 10.12 Successors. All agreements of the Company in this
Indenture and the Notes shall bind its successor. All agreements of the Trustee
in this Indenture shall bind its successors.
[Rest of page intentionally left blank]
34
Section 10.13 Severability. In case any provision in this Indenture
or in the Notes shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed and delivered as of the date first above written.
HOME HOLDINGS INC.
By:
--------------------------------------
Name:
Title:
By:
--------------------------------------
Name:
Title:
[ ], as Trustee
By:
--------------------------------------
Name:
Title:
35
EXHIBIT A
(Face of Note)
REGISTERED CUSIP No.
----------
No.
HOME HOLDINGS INC.
[ ]% Senior Note due April __, 2006
Home Holdings Inc., a Delaware corporation (the "Company"), for
value received, promises to pay to _______________, or registered assigns, the
principal sum of ______________ Dollars on _____________________, and interest
on such principal sum, at the rate, on the dates and to the Persons specified on
the reverse hereof.
This Note shall not be valid or become obligatory for any purpose
until the certificate of authentication hereon shall have been signed by the
Trustee or an authenticating agent under the Indenture referred to on the
reverse hereof.
Reference is made to the further provisions of this Note set forth
on the reverse hereof. Such further provisions shall for all purposes have the
same effect as though fully set forth at this place.
IN WITNESS WHEREOF, the Company has caused this Note to be duly
executed under its corporate seal.
HOME HOLDINGS INC.
By:
------------------------------------
Name:
Title:
By:
------------------------------------
Name:
Title:
(SEAL)
36
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
Dated:
This is one of the Notes described in the within-mentioned indenture.
[ ],
as Trustee
By:
--------------------------------------
Authorized Signatory
(Back of Note)
HOME HOLDINGS INC.
[ ]% Senior Note due April __, 2006
1. Interest. Home Holdings Inc., a Delaware corporation (the
"Company"), promises to pay interest (a) on the principal amount of this Note
from April __, 1998, payable semi-annually on March 15 and September 15 (each an
"Interest Payment Date") of each year, commencing on September 15, 1998, at the
initial rate per annum of [ ]%, subject to adjustment as provided below, to
holders of record on the Regular Record Date (as defined in paragraph 2 below)
next preceding each Interest Payment Date, and (b) to the extent lawful, on any
interest payment due but unpaid on such principal amount at such rate per annum.
Interest on this Note will accrue from the most recent date to which interest
has been paid or, if no interest has been paid, from April __, 1998; provided
that, if there is no existing Default in the payment of interest and if this
Note is authenticated between a Regular Record Date and the next succeeding
Interest Payment Date, interest shall accrue from such Interest Payment Date.
Subject to the terms of this paragraph, the Company may, in its sole
discretion, issue Additional Notes (as hereinafter defined) in lieu of a cash
payment of any or all of the interest due on any Interest Payment Date up to and
including April __, 2001. If the Company elects to issue Additional Notes in
lieu of cash payment of interest due on any Interest Payment Date pursuant to
the immediately preceding sentence, it shall, by giving notice to the
Noteholders and the Trustee of such election not less than 30 nor more than 60
days prior to the Regular Record Date for such Interest Payment Date, issue to
the person who is the registered holder of this Note, and shall instruct the
Trustee to authenticate, an additional Note (the "Additional Note"), dated the
date of such Interest Payment Date, in a principal amount equal to the amount of
cash interest due but not paid on such Interest Payment Date, and with a
maturity date, interest rate, and other terms of, and generally in the form of,
this Note. The issuance of such Additional Note shall constitute full payment of
such interest. If the Company fails to give the required notice of such election
to the Noteholders, the notice requirement shall be deemed satisfied by the
issuance and delivery of Additional Notes in lieu of cash on the relevant
Interest Payment Date. Failure to pay interest in such manner on the Interest
Payment Date following failure to give the required notice to the Noteholders,
or failure to give such notice to the Trustee, shall obligate the Company to pay
the interest due in cash. Each issuance of Additional Notes in lieu of cash
payment of interest on the Notes shall be made pro rata with respect to the
outstanding Notes. The term "Notes" shall include the Additional Notes that may
be issued under the Indenture. After April __, 2001, all interest due on an
Interest Payment Date shall be paid in cash.
2
The Company shall pay interest on overdue principal and interest on
overdue installments of interest to the extent lawful, at the rate per annum
borne by the Notes in cash or by issuance of Additional Notes up to and
including April __, 2001, and, thereafter, in cash.
2. Regular Record Date. The record date for each payment of interest
on this Note on each Interest Payment Date shall be the close of business of the
Company's office in New York, New York on the March 1 or September 1 next
preceding such Interest Payment Date (a "Regular Record Date").
3. Method of Payment. The Company will pay interest on this Note
(except defaulted interest) to the Persons who are registered Holders of Notes
at the close of business on the Regular Record Date for the next Interest
Payment Date even though Notes are canceled after such Regular Record Date and
on or before the Interest Payment Date. Holders must surrender Notes to a Paying
Agent to collect principal payments. Up to and including April __, 2001, and
subject to paragraph 1 above, the Company may, at its sole discretion, pay
interest in the form of Additional Notes, otherwise the Company will pay
principal and interest in money of the United States of America that at the time
of payment is legal tender for payment of public and private debts. However, the
Company may pay principal and interest by check payable in such money. It may
mail an interest check to a Holder's registered address. If a payment date is a
Legal Holiday at a place of payment, payment may be made at that place on the
next succeeding Business Day, and no interest on the amount payable on such
payment date shall accrue for the intervening period.
4. Paying Agent and Registrar. Initially, [ ] (the "Trustee"), [ ],
will act as Paying Agent and Registrar. The Company may appoint and change any
Paying Agent and Registrar or Co-Registrar at any time without notice. The
Company or any Subsidiary of the Company may act in any such capacity.
5. Indenture. The Company issued this Note under an Indenture dated
as of April __, 1998 (the "Indenture") between the Company and the Trustee. The
terms of this Note 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), as in effect on the date of the Indenture. This
Note is subject to all such terms, and Noteholders are referred to the Indenture
and the Trust Indenture Act for a statement of such terms. Capitalized terms not
otherwise defined herein have the meaning attributed to them in the Indenture.
The Notes are general obligations of the Company limited in aggregate principal
amount as provided in the Indenture.
6. Optional Redemption and No Sinking Fund. If either (i) the
aggregate principal amount of Notes registered to Persons who are not Affiliates
of the Company is less than $___ million or (ii) the Company has a Significant
Subsidiary, then the Company may redeem the Notes, upon notice as provided
hereunder, in whole at any time or in part from time to time, at a redemption
price
3
equal to the principal amount of the Notes plus accrued and unpaid interest, if
any, to the redemption date.
Notice of redemption will be mailed at least 30 days but not more
than 60 days before the redemption date of each Holder of Notes to be redeemed
at his registered address. Notes in denominations larger than $1,000 may be
redeemed in part but only in whole multiples of $1,000; provided, however, that
if the Company elects to pay interest in the form of Additional Notes, Notes
larger than $1,000 may be redeemed in part in amounts other than multiples of
$1,000. On and after the redemption date interest ceases to accrue on Notes or
portions of them called for redemption unless the Company defaults in making
this redemption payment.
The Notes do not provide for any mandatory sinking fund.
7. Denominations, Transfer, Exchange. The Notes are in registered
form without coupons in denominations of $1,000 and integral multiples of
$1,000; provided, however, that if the Company elects to pay interest in the
form of Additional Notes, the Additional Notes may be in denominations other
than multiples of $1,000. The transfer of Notes may be registered and Notes may
be exchanged as provided in the Indenture. The Registrar may require a Holder,
among other things, to furnish appropriate endorsements and transfer documents
and to pay any taxes and fees required by law or permitted by the Indenture.
8. Persons Deemed Owners. The registered Holder of a Note may be
treated as its owner for all purposes.
9. Defeasance. Subject to certain conditions set forth in the
Indenture, the Company at any time may terminate some or all of its obligations
under the Notes and the Indenture if the Company deposits with the Trustee U.S.
Legal Tender or U.S. Government Obligations for the payment of principal of and
interest on the Notes at maturity.
10. Amendments and Waivers. Subject to certain exceptions, the
Indenture or the Notes may be amended with the consent of the Holders of at
least a majority in principal amount of the Notes, and any existing Default may
be waived with the consent of the Holders of a majority in principal amount of
the Notes. Without the consent of any Noteholder, the Indenture or the Notes may
be amended to cure any ambiguity, defect or inconsistency, to provide for
assumption of Company obligations to Noteholders, to provide for uncertificated
Notes in addition to certificated Notes, to make any change that does not
adversely affect the rights of any Noteholder or to comply with the Trust
Indenture Act.
After August __, 1998, Holders of at least a majority in principal
amount of the Notes then outstanding may direct the Company and the Trustee to
amend or supplement the provisions of the Indenture or the Notes (including the
restrictive covenants described in paragraph 11 below).
4
In determining whether the Holders of the required principal amount
of Notes have concurred in any direction, waiver or consent, Notes owned by the
Company and its Affiliates are not disregarded.
11. Restrictive Covenants. The Indenture imposes certain limitations
on the ability of the Company to, among other things, consolidate with or merge
with or into any other Person or transfer all or substantially all its
properties and assets to another Person. The Indenture also limits the ability
of the Company and its Significant Subsidiaries to incur Indebtedness secured by
Liens on properties, assets or Capital Stock of the Company or the Significant
Subsidiary (unless the Holders are secured equally and ratably thereunder) or to
dispose of Capital Stock of the Significant Subsidiaries or of any Subsidiaries
controlling a Significant Subsidiary.
12. Successor Corporation. When a successor corporation assumes all
of the obligations of its predecessor under the Notes and the Indenture and the
transaction complies with the terms of Article IV of the Indenture, the
predecessor corporation will be released from those obligations.
13. Defaults and Remedies. Under the Indenture, an Event of Default
occurs if: (i) the Company defaults in the payment of interest on any Note when
the same becomes due and payable and the default continues for a period of 30
days; (ii) the Company defaults in the payment of the principal of any Note
(including failure to make a payment pursuant to a Change of Control Offer or
other offer to purchase the Notes which is required to be made pursuant to the
Indenture) when the same becomes due and payable at maturity; (iii) the Company
fails to comply with any of its other covenants or agreements in the Notes or
the Indenture and the default continues for 60 days after notice to the Company
by the Trustee or to the Company and the Trustee by the Holders of at least 25%
in principal amount of the Notes then outstanding as specified below; (iv) there
shall be a default under any evidence of Indebtedness of the Company or any
Significant Subsidiary, whether any such Indebtedness exists on the date of this
Indenture or shall hereafter be created, in the amount, individually or in the
aggregate, of $10 million, if the maturity of such Indebtedness has been
accelerated prior to its expressed maturity; (v) a court of competent
jurisdiction enters a final and non-appealable judgment against the Company or
any Significant Subsidiary in which the Company or such Significant Subsidiary
is required to pay an amount (calculated after the application of any proceeds
of insurance policies applicable to such loss), individually or in the
aggregate, in excess of $10 million, and such final and non-appealable judgment
remains unsatisfied for a period of 60 days; and (vi) certain events of
bankruptcy or insolvency of the Company or any Significant Subsidiary occur,
provided, however, that none of the transactions contemplated by the
Reorganization Plan shall constitute an Event of Default. If an Event of Default
occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the Notes may declare all the Notes to be due and payable
immediately (other than certain Events of Default relating to the bankruptcy or
insolvency of the Company, which do not require any such action to result in the
Notes being due and payable immediately). Noteholders may not enforce the
Indenture or the Notes except as provided in the Indenture. The Trustee may
require indemnity satisfactory to it before it enforces the Indenture or the
5
Notes. Subject to certain limitations, Holders of a majority in principal amount
of the Notes may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Noteholders 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.
14. Trustee Dealings with Company. The Trustee, 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.
15. No Recourse Against Others. A director, officer, employee or
stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under the Notes or the Indenture or for any claim
based on, in respect of or by reason of such obligations or their creation. Each
Noteholder by accepting a Note waives and releases all such liability. The
waiver and release are part of the consideration for the issue of the Notes.
16. Unclaimed Money. If money and/or Additional Notes for the
payment of principal or interest remains unclaimed for two years, the Trustee or
Paying Agent shall pay the money and/or Additional Notes back to the Company at
its request unless an abandoned property law designates another person. After
any such payment, Holders entitled to the money and/or Additional Notes must
look only to the Company (unless an abandoned Property law designates another
person) and not to the Trustee for payment.
17. Abbreviations. Customary abbreviations may be used in the name
of a Noteholder or an assignee, such as: TEN COM (= as tenants in common), TEN
ENT (= as tenants by the entireties), JT TEN (= as joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (=
Uniform Gifts to Minors Act).
18. Governing Law. The internal laws of the State of New York shall
govern the Indenture and the Notes, without regard to the conflicts of laws
rules thereof. The Company hereby irrevocably submits to the jurisdiction of any
federal or New York State court sitting in the Borough of Manhattan in New York
City in respect of any suit, action or proceeding arising out of or relation to
the Indenture or the Notes, and irrevocably agrees that all claims in respect of
any such suit, action or proceeding may be heard and determined in any such
court. The Company irrevocably waives, to the fullest extent it may effectively
do so under applicable law, any objection which it may now or hereafter have to
the laying of the venue of any such suit, action or proceeding brought in any
such court and any claim that any such suit, action or proceeding brought in any
such court has been brought in an inconvenient forum.
ASSIGNMENT FORM
To assign this Note, fill in the form below: I or we assign and transfer this
Note to
--------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint __________________ agent to transfer this Note on the
books of the Company. The agent may substitute another to act for him.
--------------------------------------------------------------------------------
Date: Your Signature
----------------------------------- ------------------------
(Sign exactly as your name appears on the
other side of this security)
--------------------------------------
Signature Guarantee
