EXHIBIT 4.10
XXXXXXX HOMES, INC.
THE GUARANTORS PARTY HERETO
AND
U.S. BANK TRUST NATIONAL ASSOCIATION
AS TRUSTEE
----------
INDENTURE
RELATING TO
10 1/2% SENIOR SUBORDINATED NOTES DUE 2011
DATED AS OF JUNE 28, 2001
----------
TABLE OF CONTENTS
Page
----
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions....................................................1
Section 1.02. Other Definitions.............................................19
Section 1.03. Incorporation By Reference of Trust Indenture Act.............20
Section 1.04. Rules of Construction.........................................21
ARTICLE 2
THE SECURITIES
Section 2.01. Form and Dating...............................................21
Section 2.02. Execution and Authentication..................................29
Section 2.03. Registrar and Paying Agent....................................30
Section 2.04. Paying Agent To Hold Money In Trust...........................30
Section 2.05. Securityholder Lists..........................................30
Section 2.06. Transfer and Exchange.........................................31
Section 2.07. Replacement Securities........................................31
Section 2.08. Outstanding Securities........................................32
Section 2.09. Securities Held by the Company or a Related Person............32
Section 2.10. Temporary Securities..........................................32
Section 2.11. Cancellation..................................................32
Section 2.12. Defaulted Interest............................................33
Section 2.13. Persons Deemed Owners.........................................33
Section 2.14. Computation of Interest.......................................33
ARTICLE 3
REDEMPTION
Section 3.01. Notices to Trustee............................................34
Section 3.02. Selection of Securities To Be Redeemed........................34
Section 3.03. Notice of Redemption..........................................35
Section 3.04. Effect of Notice of Redemption................................35
Section 3.05. Deposit of Redemption Price...................................35
Section 3.06. Securities Redeemed In Part...................................36
-i-
Page
----
ARTICLE 4
COVENANTS
Section 4.01. Payment of Securities.........................................36
Section 4.02. Maintenance of Office or Agency...............................36
Section 4.03. Reports to Holders............................................37
Section 4.04. Compliance Certificate........................................37
Section 4.05. Stay, Extension and Usury Laws................................37
Section 4.06. Corporate Existence...........................................38
Section 4.07. Notice of Default.............................................38
Section 4.08. Change of Control.............................................38
Section 4.09. Maintenance of Consolidated Net Worth.........................40
Section 4.10. Limitation on Additional Indebtedness.........................42
Section 4.11. Limitation on Restricted Payments.............................44
Section 4.12. Limitation on Payment Restrictions Affecting Restricted
Subsidiaries................................................46
Section 4.13. Limitation on Liens...........................................47
Section 4.14. Limitation on Transactions with Related Persons...............49
Section 4.15. Limitation on Asset Sales.....................................50
Section 4.16. Limitation on Business Activities.............................54
Section 4.17. Limitation on Designation of Restricted and Unrestricted
Subsidiaries................................................54
Section 4.18. Additional Guarantors.........................................54
Section 4.19. Limitation on Layering Indebtedness...........................54
ARTICLE 5
SUCCESSORS
Section 5.01. Limitation on Mergers and Sales of Assets by the
Company and the Guarantors..................................55
Section 5.02. Successor Substituted.........................................56
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. Events of Default.............................................56
Section 6.02. Acceleration..................................................58
Section 6.03. Other Remedies................................................58
-ii-
Page
----
Section 6.04. Waiver of Past Defaults.......................................59
Section 6.05. Control by Majority...........................................59
Section 6.06. Limitation on Suits...........................................59
Section 6.07. Rights of Holders to Receive Payment..........................60
Section 6.08. Collection Suit by Trustee....................................60
Section 6.09. Trustee May File Proofs of Claim..............................60
Section 6.10. Priorities....................................................60
Section 6.11. Undertaking for Costs.........................................61
Section 6.12. Waiver of Stay, Extension or Usury Laws.......................61
ARTICLE 7
TRUSTEE
Section 7.01. Duties of Trustee.............................................61
Section 7.02. Rights of Trustee.............................................63
Section 7.03. Individual Rights of Trustee..................................63
Section 7.04. Trustee's Disclaimer..........................................63
Section 7.05. Notice of Defaults............................................64
Section 7.06. Reports by Trustee to Holders.................................64
Section 7.07. Compensation and Indemnity....................................64
Section 7.08. Replacement of Trustee........................................65
Section 7.09. Successor Trustee by Merger, Etc..............................66
Section 7.10. Eligibility; Disqualification.................................66
Section 7.11. Preferential Collection of Claims Against Company.............66
ARTICLE 8
DISCHARGE AND DEFEASANCE
Section 8.01. Discharge and Defeasance Upon Deposit of Moneys or
U.S. Government Obligations.................................67
Section 8.02. Termination of the Obligations Pursuant to Redemption.........68
Section 8.03. Survival of Company's Obligations.............................69
Section 8.04. Application of Trust Money....................................69
Section 8.05. Repayment To Company..........................................69
Section 8.06. Reinstatement.................................................70
-iii-
Page
----
ARTICLE 9
SUBORDINATION
Section 9.01. Agreement To Subordinate......................................70
Section 9.02. Liquidation; Dissolution; Bankruptcy..........................70
Section 9.03. Company Not To Make Payments with Respect to Notes
in Certain Circumstances....................................71
Section 9.04. Acceleration of Notes.........................................72
Section 9.05. When Distribution Must Be Paid Over...........................72
Section 9.06. Notice by Company.............................................73
Section 9.07. Subrogation...................................................73
Section 9.08. Relative Rights...............................................73
Section 9.09. Subordination May Not Be Impaired by the Company..............74
Section 9.10. Distribution or Notice to Representative......................74
Section 9.11. Rights of Trustee and Paying Agent............................74
Section 9.12. Officers' Certificate.........................................75
Section 9.13. Obligation of Company Unconditional...........................75
Section 9.14. Article 9 Not To Prevent Events of Default....................76
ARTICLE 10
AMENDMENTS, MODIFICATIONS AND WAIVERS
Section 10.01. Without Consent of Holders....................................76
Section 10.02. With Consent of Holders.......................................77
Section 10.03. Compliance with Trust Indenture Act...........................78
Section 10.04. Revocation and Effect of Consents.............................78
Section 10.05. Notation on or Exchange of Securities.........................79
Section 10.06. Trustee Protected.............................................79
ARTICLE 11
GUARANTEE OF SECURITIES
Section 11.01. Guarantee.....................................................79
Section 11.02. Agreement To Subordinate......................................82
Section 11.03. Liquidation; Dissolution; Bankruptcy..........................82
Section 11.04. Guarantors Not To Make Payments with Respect to
Guarantees in Certain Circumstances.........................83
Section 11.05. Subrogation...................................................84
-iv-
Page
----
Section 11.06. Subordination May Not Be Impaired by Guarantors...............84
Section 11.07. Distribution or Notice to Representative......................85
Section 11.08. Rights of Trustee and Paying Agent............................85
Section 11.09. Officers' Certificate.........................................86
Section 11.10. Obligation of Guarantors Unconditional........................86
Section 11.11. Article 11 Not To Prevent Events of Default...................87
Section 11.12. Execution and Delivery of Guarantee...........................87
Section 11.13. Additional Guarantors.........................................87
Section 11.14. Release of a Guarantor........................................87
ARTICLE 12
MISCELLANEOUS
Section 12.01. Trust Indenture Act Controls..................................88
Section 12.02. Notices.......................................................89
Section 12.03. Communication by Holders with Other Holders...................89
Section 12.04. Certificate and Opinion as to Conditions Precedent............90
Section 12.05. Statements Required in Certificate or Opinion.................90
Section 12.06. Rules by Trustee and Agents...................................90
Section 12.07. Legal Holidays................................................91
Section 12.08. No Personal Liability of Incorporators, Shareholders,
Officers, Directors or Employees............................91
Section 12.09. Duplicate Originals...........................................91
Section 12.10. Governing Law.................................................91
Section 12.11. No Adverse Interpretation of Other Agreements.................91
Section 12.12. Successors....................................................92
Section 12.13. Separability..................................................92
Section 12.14. Benefits of Indenture.........................................92
Section 12.15. Table of Contents, Headings, Etc..............................92
EXHIBITS
Exhibit A - Form of Security
Exhibit B - Form of Guarantee
Exhibit C-1 - Form of Institutional Accredited Investor Letter
Exhibit C-2 - Form of Certificate to Be Delivered in Connection with Transfers
Pursuant to Regulation S
-v-
INDENTURE dated as of June 28, 2001 between XXXXXXX HOMES, INC., a
Delaware corporation (the "COMPANY"), the Guarantors signatory hereto (the
"GUARANTORS") and U.S. Bank Trust National Association, a national banking
association duly organized and existing under the laws of the United States, as
trustee (the "TRUSTEE").
Each party agrees for the benefit of the other parties and for the
equal and ratable benefit of the Holders of the Company's 10 1/2% Senior
Subordinated Notes due 2011 as follows:
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. DEFINITIONS.
"ADDITIONAL ASSETS" means (i) any property or assets (other than
Indebtedness and Capital Stock) in a Related Business; or (ii) the Capital Stock
of a Person that becomes a Restricted Subsidiary as a result of the acquisition
of such Capital Stock by the Company or another Restricted Subsidiary; PROVIDED,
HOWEVER, that any such Restricted Subsidiary is primarily engaged in a Related
Business.
"ADDITIONAL INTEREST" means additional interest payable with respect
to the Securities pursuant to the Registration Rights Agreement.
"ADDITIONAL SECURITIES" means any additional Securities having
identical terms and conditions to the Securities issued pursuant to Article 2
and in compliance with Section 4.10.
"AGENT" means any Registrar, Paying Agent or co-Registrar.
"ASSET ACQUISITION" means (a) an Investment by the Company or any
Restricted Subsidiary in any other Person pursuant to which such Person shall
become a Restricted Subsidiary or shall be merged with or into the Company or
any Restricted Subsidiary, or (b) the acquisition by the Company or any
Restricted Subsidiary of the assets of any Person (other than a Restricted
Subsidiary) which constitute all or substantially all of the assets of such
Person or comprise any division or line of business of such Person or any other
properties or assets of such Person other than in the ordinary course of
business.
"ASSET DISPOSITION" means any sale, lease, transfer or other
disposition (or series of related sales, leases, transfers or dispositions) by
the Company or any Restricted Subsidiary, including any disposition by means of
a merger, consolidation or similar transaction
-2-
(each referred to for the purposes of this definition as a "DISPOSITION"), of
(i) any shares of Capital Stock of a Restricted Subsidiary (other than
directors' qualifying shares and, to the extent required by local ownership laws
in foreign countries, shares owned by foreign shareholders); (ii) all or
substantially all the assets of any division, business segment or comparable
line of business of the Company or any Restricted Subsidiary; or (iii) any other
assets of the Company or any Restricted Subsidiary having a fair market value
(as determined in good faith by the Company's board of directors) in excess of
$2.5 million disposed of in a single transaction or series of related
transactions outside of the ordinary course of business of the Company or such
Restricted Subsidiary (other than, in the case of clauses (i), (ii) and (iii)
above, a disposition by a Restricted Subsidiary to the Company or by the Company
or a Restricted Subsidiary to a Restricted Subsidiary, a sale, lease, transfer
or other disposition of all or substantially all of the assets of the Company as
permitted under Section 5.01, any Restricted Payment permitted under Section
4.11 or any Permitted Investment).
"AVERAGE LIFE" means, as of the date of determination, with respect
to any Indebtedness, the quotient obtained by dividing (i) the sum of the
products of the numbers of years from the date of determination to the dates of
each successive scheduled principal payment (assuming the exercise by the
obligor of such Indebtedness of all unconditional (other than as to the giving
of notice) extension options of each such scheduled payment date) of such
Indebtedness multiplied by the amount of such principal payment by (ii) the sum
of all such principal payments.
"BANK CREDIT FACILITY" means that certain revolving credit facility,
dated as of June 28, 2001, among the Company, the lenders party thereto and
First Hawaiian Bank, as Administrative Agent, together with the related
documents thereto (including, without limitation, any guarantee agreements and
security documents, if any), in each case as such agreements may be amended
(including any amendment and restatement thereof), supplemented or modified from
time to time, or Refinanced from time to time, including any agreement replacing
or otherwise restructuring (including increasing the amount of available
borrowings thereunder or adding Subsidiaries of the Company as additional
borrowers or guarantors thereunder) all or any portion of the Indebtedness under
such agreement or any successor or replacement agreement and whether by the same
or any other agent, lender or group of lenders.
"BANKRUPTCY LAW" means Xxxxx 00, Xxxxxx Xxxxxx Code, or any similar
federal or similar law for the relief of debtors.
"BUSINESS DAY" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in any place where
payments of principal or interest are made under this Indenture are authorized
or obligated by law or executive order to close.
-3-
"CAPITAL STOCK" of any Person means any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) equity of such Person, including any Preferred
Stock, but excluding any debt securities convertible into such equity.
"CAPITALIZED LEASE OBLIGATIONS" means any obligations under a lease
that is required to be capitalized for financial reporting purposes in
accordance with GAAP.
"CASH EQUIVALENTS" means:
(i) marketable direct obligations issued by, or unconditionally
guaranteed by, the United States or issued by any agency thereof and
backed by the full faith and credit of the United States, in each case
maturing within one year from the date of acquisition thereof;
(ii) marketable direct obligations issued by any state of the United
States or any political subdivision of any such state or any public
instrumentality thereof maturing within one year from the date of
acquisition thereof and, at the time of acquisition, having one of the two
highest ratings obtainable from either S&P or Xxxxx'x;
(iii) commercial paper maturing no more than one year from the date
of creation thereof and, at the time of acquisition, having a rating of at
least A-1 from S&P or at least P-1 from Xxxxx'x;
(iv) certificates of deposit or bankers' acceptances maturing within
one year from the date of acquisition thereof issued by any bank organized
under the laws of the United States or any state thereof or any U.S.
branch of a foreign bank having at the date of acquisition thereof
combined capital and surplus of not less than $250.0 million;
(v) repurchase obligations with a term of not more than 31 days for
underlying securities of the types described in clause (i) above entered
into with any bank meeting the qualifications specified in clause (iv)
above; and
(vi) investments in money market funds which invest substantially
all their assets in securities of the types described in clauses (i)
through (v) above.
"CHANGE OF CONTROL" means the occurrence of any of the following
events:
(i) any "person" or "group" (as such terms are used in Sections
13(d) and 14(d) of the Exchange Act) is or becomes the beneficial owner
(as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that
for purposes of this clause such
-4-
person or group shall be deemed to have "beneficial ownership" of all
shares that any such person or group has the right to acquire, whether
such right is exercisable immediately or only after the passage of time),
directly or indirectly, of more than 50% of the total voting power of the
Voting Stock of the Company;
(ii) during any period of two consecutive years, individuals who at
the beginning of such period constituted the Company's board of directors
(together with any new directors whose election by such board of directors
or whose nomination for election by the shareholders of the Company was
approved by a majority vote of the directors of the Company then still in
office who were either directors at the beginning of such period or whose
election or nomination for election was previously so approved) cease for
any reason to constitute a majority of the Company's board of directors
then in office; or
(iii) the merger or consolidation of the Company with or into
another Person or the merger of another Person with or into the Company,
or the sale of all or substantially all the assets of the Company to
another Person, other than any such sale to one or more Restricted
Subsidiaries, and in the case of any such merger or consolidation, the
securities of the Company that are outstanding immediately prior to such
transaction and which represent 100% of the aggregate voting power of the
Voting Stock of the Company are changed into or exchanged for cash,
securities or property, unless pursuant to such transaction such
securities are changed into or exchanged for, in addition to any other
consideration, securities of the surviving corporation, or a parent
corporation that owns all of the Capital Stock of such surviving
corporation, that represent immediately after such transaction, at least
50% of the aggregate voting power of the Voting Stock of the surviving
corporation or such parent corporation, as the case may be.
"COMPANY" means Xxxxxxx Homes, Inc. and any other obligor until a
successor replaces it pursuant to the applicable provisions hereof and
thereafter means the successor.
"CONSOLIDATED COVERAGE RATIO" with respect to the Company as of any
date of determination (the "TRANSACTION DATE") means the ratio of the Company's
EBITDA to its Consolidated Interest Incurred for the four fiscal quarters ending
immediately prior to the date of determination (the "FOUR QUARTER PERIOD"). In
addition to and without limitation of the foregoing, for purposes of this
definition, "EBITDA" and "Consolidated Interest Incurred" shall be calculated
after giving effect on a PRO FORMA (including any PRO FORMA expense and cost
reductions calculated on a basis consistent with Regulation S-X under the
Securities Act) basis for the period of such calculation to:
-5-
(i) the incurrence or repayment of any Indebtedness of the Company
or any of the Restricted Subsidiaries (and the application of the proceeds
thereof) giving rise to the need to make such calculation and any
incurrence or repayment of other Indebtedness (and the application of the
proceeds thereof), other than the incurrence or repayment of Indebtedness
in the ordinary course of business for working capital purposes pursuant
to working capital facilities, occurring during the Four Quarter Period or
at any time subsequent to the last day of the Four Quarter Period and on
or prior to the Transaction Date, as if such incurrence or repayment, as
the case may be (and the application of the proceeds thereof), occurred on
the first day of the Four Quarter Period; and
(ii) any Asset Dispositions or Asset Acquisitions (including,
without limitation, any Asset Acquisition giving rise to the need to make
such calculation as a result of the Company or one of the Restricted
Subsidiaries (including any Person who becomes a Restricted Subsidiary as
a result of the Asset Acquisition) Incurring, assuming or otherwise being
liable for any Indebtedness as a result of such Asset Acquisition and also
including any EBITDA attributable to the assets which are the subject of
the Asset Acquisition or Asset Disposition during the Four Quarter Period)
occurring during the Four Quarter Period or at any time subsequent to the
last day of the Four Quarter Period and on or prior to the Transaction
Date, as if such Asset Disposition or Asset Acquisition (including the
Incurrence, assumption or liability for any related Indebtedness) occurred
on the first day of the Four Quarter Period.
If the Company or any of the Restricted Subsidiaries directly or
indirectly guarantees Indebtedness of a third Person, the preceding sentence
shall give effect to the Incurrence of such guaranteed Indebtedness as if the
Company or any such Restricted Subsidiary had directly Incurred or otherwise
assumed such guaranteed Indebtedness.
Furthermore, in calculating "Consolidated Interest Incurred" (but
not in calculating EBITDA) for purposes of determining the Consolidated Coverage
Ratio:
(i) interest on outstanding Indebtedness determined on a fluctuating
basis as of the Transaction Date and which will continue to be so
determined thereafter shall be deemed to have accrued at a fixed rate per
annum equal to the rate of interest on such Indebtedness in effect on the
Transaction Date;
(ii) if interest on any Indebtedness actually incurred on the
Transaction Date may optionally be determined at an interest rate based
upon a factor of a prime or similar rate, a eurocurrency interbank offered
rate, or other rates, then the interest rate in effect on the Transaction
Date will be deemed to have been in effect during the Four Quarter Period;
and
-6-
(iii) notwithstanding clause (i) or (ii) above, interest on
Indebtedness determined on a fluctuating basis, to the extent such
interest is covered by Interest Rate Agreements, shall be deemed to accrue
at the rate per annum resulting after giving effect to the operation of
such agreements.
"CONSOLIDATED INTEREST EXPENSE" of the Company means, for any
period, the aggregate amount of interest which, in accordance with GAAP, would
be included on an income statement for the Company and its Restricted
Subsidiaries on a consolidated basis, whether expensed directly, or included as
a component of cost of goods sold, or allocated to joint ventures or otherwise
(including, but not limited to, imputed interest included on Capitalized Lease
Obligations, all commissions, discounts and other fees and charges owed with
respect to letters of credit and bankers' acceptance financing, the net costs
associated with Hedging Obligations, amortization of other financing fees and
expenses, the interest portion of any deferred payment obligation, amortization
of discount or premium, if any, and all other non-cash interest expense), plus
the product of (i) cash dividends paid on any Preferred Stock of the Company,
times (ii) a fraction, the numerator of which is one and the denominator of
which is one minus the then current effective aggregate federal, state and local
tax rate of the Company, expressed as a decimal.
"CONSOLIDATED INTEREST INCURRED" of the Company means, for any
period, (i) the aggregate amount of interest which, in accordance with GAAP,
would be included on an income statement for the Company and its Restricted
Subsidiaries on a consolidated basis, whether expensed directly, or included as
a component of cost of goods sold, or allocated to joint ventures or otherwise
(including, but not limited to, imputed interest included on Capitalized Lease
Obligations, all commissions, discounts and other fees and charges owed with
respect to letters of credit and bankers' acceptance financing, the net costs
associated with Hedging Obligations, amortization of discount or premium, if
any, and all other non-cash interest expense), plus (or minus, if negative) (ii)
the difference between capitalized interest for such period and the interest
component of cost of goods sold for such period, plus (iii) the product of (A)
cash dividends paid on any Preferred Stock of the Company, times (B) a fraction,
the numerator of which is one and the denominator of which is one minus the then
current effective aggregate federal, state and local tax rate of the Company,
expressed as a decimal.
"CONSOLIDATED NET INCOME" for any period, means the aggregate of the
Net Income of the Company and its Restricted Subsidiaries for such period, on a
consolidated basis, determined in accordance with GAAP, PROVIDED that (i) the
Net Income of any Person in which the Company or any Restricted Subsidiary has a
joint interest with a third party (other than an Unrestricted Subsidiary) shall
be included only to the extent of the lesser of (A) the amount of dividends or
distributions actually paid to the Company or a Restricted Subsidiary or (B) the
Company's direct or indirect proportionate interest in the Net Income of such
Per-
-7-
son; PROVIDED that, so long as the Company or a Restricted Subsidiary has an
unqualified legal right to require the payment of a dividend or distribution,
Net Income shall be determined solely pursuant to clause (B); (ii) the Net
Income of any Person acquired in a pooling of interests transaction for any
period prior to the date of such acquisition shall be excluded; (iii) the Net
Income of any Unrestricted Subsidiary shall be included only to the extent of
the amount of dividends or distributions (the fair value of which, if other than
in cash, to be determined by the Company's board of directors, in good faith) by
such Subsidiary to the Company or to any of its consolidated Restricted
Subsidiaries; (iv) the Net Income of any Restricted Subsidiary shall be excluded
to the extent that the declaration or payment of dividends or similar
distributions by such Restricted Subsidiary is not permitted by the terms of its
charter or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to such Restricted Subsidiary during such
period; (v) in the case of a successor to the Company by merger, consolidation
or transfer of its assets, any Net Income (or loss) of the successor prior to
such merger, consolidation or transfer of assets shall be excluded; and (vi) all
non-cash items (other than income tax expense, depreciation expense,
amortization expense and any item that will require cash payments in the future
and for which an accrual reserve is, or is required by GAAP to be, made)
decreasing Consolidated Net Income shall be added back in calculating
Consolidated Net Income and all non-cash items increasing Consolidated Net
Income shall be deducted in calculating Consolidated Net Income.
"CONSOLIDATED NET WORTH" with respect to the Company means the
consolidated stockholders' equity of the Company and its Restricted
Subsidiaries, as determined in accordance with GAAP.
"CONSOLIDATED TANGIBLE ASSETS" means, as of any date, the total
amount of assets of the Company and the Restricted Subsidiaries on a
consolidated basis less the amount of Intangible Assets of the Company and the
Restricted Subsidiaries on a consolidated basis, in each case at the end of the
fiscal quarter immediately preceding such date, as determined in accordance with
GAAP.
"CONSOLIDATED TANGIBLE NET WORTH" with respect to the Company means
Consolidated Net Worth, less the Intangible Assets of the Company and its
Restricted Subsidiaries.
"CONVERTIBLE NOTES" means the Company's $57.5 million 6 1/2%
Convertible Subordinated Debentures due 2003.
"CORPORATE TRUST OFFICE OF THE TRUSTEE" shall be at the address of
the Trustee specified in Section 12.02 or such other address as the Trustee may
give notice of to the Company.
-8-
"CUSIP NUMBER" means the alphanumeric designation assigned to the
Securities by Standard & Poor's Corporation, CUSIP Service Bureau.
"CUSTODIAN" means any receiver, trustee, assignee, liquidator,
custodian or similar official under any Bankruptcy Law.
"DEFAULT" means any event which is, or after notice or passage of
time or both would be, an Event of Default.
"DEPOSITORY" or "DTC" means The Depository Trust Company and any
successor to DTC in its capacity as depository for any Securities.
"DESIGNATED SENIOR INDEBTEDNESS" means (i) Indebtedness under any
Bank Credit Facility, without regard to the amounts outstanding thereunder, (ii)
Indebtedness represented by the Company's 9 3/8% Senior Notes due 2009 and the
Company's 9% Senior Notes due 2008, and (iii) any Senior Indebtedness or
Guarantor Senior Indebtedness which, at the time of determination, has an
aggregate principal amount outstanding or committed of at least $25.0 million
and is specifically designated in the instrument evidencing such Indebtedness as
"Designated Senior Indebtedness" by the Company.
"DISQUALIFIED STOCK" means, with respect to any Person, that portion
of any Capital Stock which by its terms (or by the terms of any security into
which it is convertible or for which it is exchangeable), or upon the happening
of any event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or is redeemable at the sole option of the holder
thereof, in whole or in part, in each case on or prior to the final maturity
date of the Securities; PROVIDED that Capital Stock that would be "Disqualified
Stock" solely by virtue of its containing a customary requirement that the
issuer offer to repurchase such Capital Stock upon a change of control of the
issuer will not be deemed to be "Disqualified Stock."
"EBITDA" of the Company for any period means the sum of Consolidated
Net Income plus Consolidated Interest Expense for such period; PROVIDED that for
the purposes of calculating EBITDA, such calculation shall not give effect to
the following, without duplication, to the extent (but only to the extent) taken
into account in calculating Consolidated Net Income: (i) income tax expense,
(ii) depreciation expense, (iii) amortization expense, (iv) the exclusion of any
Net Income of the Company or any Restricted Subsidiary pursuant to clause (iv)
or (v) or the definition of Consolidated Net Income, (v) any gain (or loss),
realized by the Company or any Restricted Subsidiary upon (a) the acquisition of
any securities, or the extinguishment of any Indebtedness, of the Company or any
Restricted Subsidiary or (b) any Asset Disposition by the Company or any
Restricted Subsidiary or (vi) (a) any extraordinary gain (or extraordinary loss)
or (b) income or loss attributable to discontinued operations, in each
-9-
case together with any provisions for taxes on any such extraordinary gain or
income attributable to discontinued operations (or the tax effect of any such
extraordinary loss or loss attributable to discontinued operations), realized by
the Company or any Restricted Subsidiary, in each case for the relevant period.
"EQUITY OFFERING" means any public or private sale of equity
securities (excluding Disqualified Stock) of the Company other than any private
sales to Related Persons of the Company.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"EXCHANGE NOTES" has the meaning provided in the Registration Rights
Agreement.
"GAAP" means generally accepted accounting principles as in effect
on the Issuance Date.
"GUARANTEE" means the guarantee of the Company's Obligations
hereunder made by a Guarantor in favor of the Holders pursuant to the terms of
Article 11 hereof.
"GUARANTORS" means (i) each Restricted Subsidiary, (ii) any other
guarantors of Indebtedness under any Bank Credit Facility, and (iii) any other
Person that executes a Guarantee in accordance with the provisions of this
Indenture, and their respective successors and assigns; PROVIDED that any Person
constituting a Guarantor as described above shall cease to be a Guarantor when
its respective Guarantee is released in accordance with the terms of this
Indenture.
"GUARANTOR SENIOR INDEBTEDNESS" means, with respect to any
Guarantor, the principal of and premium, if any, and interest (including
interest after commencement of any bankruptcy or other like proceeding at the
rate specified in the applicable Guarantor Senior Indebtedness whether or not
such interest is an allowed claim in any such proceeding) on and other amounts
due on or in connection with any Indebtedness of such Guarantor existing on the
Issuance Date or any Indebtedness of such Guarantor thereafter created, incurred
or assumed and permitted under Section 4.10, unless, in the case of any
particular Indebtedness, the instrument creating or evidencing the same or
pursuant to which the same is outstanding expressly provides that such
Indebtedness shall not be senior in right of payment to the Guarantee of the
Securities. Without limiting the generality of the foregoing, "Guarantor Senior
Indebtedness" shall also include the principal of, premium, if any, interest
(including any interest accruing subsequent to the filing of a petition of
bankruptcy at the rate provided for in the documentation with respect thereto,
whether or not such interest is an allowed claim under applicable law) on, and
all other amounts owing in respect of (1) all monetary obligations of
-10-
every nature of such Guarantor under, or with respect to, the Bank Credit
Facility permitted to be Incurred under Section 4.10 including, without
limitation, obligations to pay principal and interest, reimbursement obligations
under letters of credit, fees, expenses and indemnities (and guarantees
thereof); and (2) all Interest Rate Agreements (and guarantees thereof)
permitted to be Incurred under Section 4.10, in each case whether outstanding on
the Issuance Date or thereafter incurred. Notwithstanding the foregoing,
Guarantor Senior Indebtedness will not include
(a) any Indebtedness (including such Guarantor's Guarantee of the
Securities) which by the express terms of the agreement or instrument
creating, evidencing or governing the same is junior or subordinate in
right of payment to any Guarantor Senior Indebtedness,
(b) any trade payable arising from the purchase of goods or
materials or for services obtained in the ordinary course of business,
(c) Indebtedness Incurred (but only to the extent Incurred) in
violation of this Indenture as in effect at the time of the respective
Incurrence,
(d) Non-Recourse Indebtedness,
(e) Indebtedness of such Guarantor to the Company or any
Subsidiaries of the Company,
(f) Indebtedness to, or guaranteed on behalf of, any "person" or
"group" (as such terms are used in Sections 13(d) and 14(d) of the
Exchange Act) that is or becomes the beneficial owner (as defined in Rules
13d-3 and 13d-5 under the Exchange Act, except that for the purposes of
this clause such person or group shall be deemed to have "beneficial
ownership" of all shares that any such person or group has the right to
acquire, whether such rights is exercisable immediately or only after the
passage of time) directly or indirectly, of more than 5% of the total
voting power of teh Voting Stock of the Company, or any director, officer
or employee of the Company or any Subsidiary of the Company (including,
without limitation, amounts owed for compensation),
(g) any liability for taxes owed or owing by such Guarantor, or
(h) any repurchase, redemption or other obligation in respect of
Disqualified Stock.
-11-
"HEDGING OBLIGATIONS" of any Person means the net Obligations of
such Person pursuant to any Interest Rate Agreement or any foreign exchange
contract, currency swap agreement or other similar agreement to which such
Person is a party or a beneficiary.
"HOLDER" means the Person in whose name a Security is registered on
the register for the Securities.
"HOMEBUILDING JOINT VENTURE" means any (a) Unrestricted Subsidiary
or (b) other Person in which the Company or any of its Subsidiaries has an
ownership interest but less than a majority ownership interest that, in each
case, was formed for and is engaged in homebuilding operations.
"INCUR" means issue, assume, guarantee, incur or otherwise become
liable for; PROVIDED, HOWEVER, that any Indebtedness or Capital Stock of a
Person existing at the time such Person becomes a Subsidiary (whether by merger,
consolidation, acquisition or otherwise) shall be deemed to be Incurred by such
Subsidiary at the time it becomes a Subsidiary; PROVIDED FURTHER, HOWEVER, that
neither the accrual of interest nor the accretion of original issue discount
shall be considered an Incurrence of Indebtedness. The term "INCURRENCE" when
used as a noun shall have a correlative meaning.
"INDEBTEDNESS" means on any date of determination (without
duplication), (i) the principal of and premium (if any) in respect of (A)
indebtedness of such Person for money borrowed and (B) indebtedness evidenced by
notes, debentures, bonds or other similar instruments for the payment of which
such Person is responsible or liable; (ii) all Capitalized Lease Obligations of
such Person; (iii) all Obligations of such Person issued or assumed as the
deferred purchase price of property or services, all conditional sale
Obligations of such Person and all Obligations of such Person under any title
retention agreement (but excluding accounts payable and accrued expenses arising
in the ordinary course of business and which are not more than 90 days past due
or are in dispute) which would appear as a liability on a balance sheet of a
Person prepared on a consolidated basis in accordance with GAAP, which purchase
price or obligation is due more than six months after the date of placing such
property in service or taking delivery and title thereto or the completion of
such services (PROVIDED that, in the case of Obligations of an acquired Person
assumed in connection with an acquisition of such Person, such obligations would
constitute Indebtedness of such Person); (iv) all Obligations of such Person for
the reimbursement of any obligor on any letter of credit, banker's acceptance or
similar credit transaction (other than obligations with respect to letters of
credit securing obligations (other than obligations described in (i) through
(iii) above) entered into in the ordinary course of business of such Person to
the extent such letters of credit are not drawn upon or, if and to the extent
drawn upon, such drawing is reimbursed no later than the tenth Business Day
following receipt by such Person of a demand for reimbursement following payment
on the letter of credit); (v) the amount of all Obligations of such Person with
re-
-12-
spect to the redemption, repayment or other repurchase of any Disqualified
Stock; (vi) all Obligations of the type referred to in clauses (i) through (v)
of other Persons and all dividends of other Persons for the payment of which, in
either case, such Person is responsible or liable, directly or indirectly, as
obligor, guarantor or otherwise, including by means of any guarantee; PROVIDED
that Indebtedness of the Company or a Restricted Subsidiary that is guaranteed
by the Company or a Restricted Subsidiary shall be counted only once in the
calculation of the amount of Indebtedness of the Company and its Restricted
Subsidiaries on a consolidated basis or otherwise outstanding for the purposes
of determining whether an Incurrence of Indebtedness is permitted pursuant to
Section 4.10(b); (vii) all Obligations of the type referred to in clauses (i)
through (vi) of other Persons secured by any lien on any property or asset of
such Person (whether or not such obligation is assumed by such Person), the
amount of such obligation being deemed to be the lesser of the value of such
property or assets or the amount of the obligation so secured; and (viii) to the
extent not otherwise included in this definition, Hedging Obligations of such
Person. The amount of Indebtedness of any Person at any date shall be (a) the
outstanding balance at such date of all unconditional Obligations as described
above, (b) the maximum reasonably anticipated liability, upon the occurrence of
the contingency, other than a contingency solely within the control of such
Person, giving rise to the Obligation, of any contingent Obligations as
described above (in the case of clauses other than (iii)) and the amount shown
as a liability on a balance sheet of a Person as described in clause (iii)
above, in each case at such date; PROVIDED, HOWEVER, that the amount outstanding
at any time of any Indebtedness issued with original issue discount shall be
deemed to be the face amount of such Indebtedness less the remaining unamortized
portion of the original issue discount of such indebtedness at such time as
determined in conformity with GAAP.
"INDENTURE" means this Indenture, as amended, supplemented or
otherwise modified from time to time, in accordance with the terms hereof.
"INDEPENDENT FINANCIAL ADVISOR" means a firm (i) which does not, and
whose directors, officers and employees or Related Persons do not, have a direct
or indirect financial interest in the Company and (ii) which, in the judgment of
the board of directors of the Company, is otherwise independent and qualified to
perform the task for which it is to be engaged.
"INTANGIBLE ASSETS" means the amount (to the extent reflected in
determining consolidated stockholders' equity) of (A) all write-ups (other than
write-ups of tangible assets of a going concern business made within twelve
months after the acquisition of such business) in the book value of any asset,
and (B) all goodwill, trade names, trademarks, patents, unamortized debt
discount and expense and other like intangibles.
"INTEREST RATE AGREEMENT" means any interest rate swap agreement,
interest rate cap agreement or other financial agreement or arrangement designed
to compensate the Company or any Restricted Subsidiary for fluctuations in
interest rates.
-13-
"INVESTMENT" in any Person means any direct or indirect advance,
loan (other than advances to customers in the ordinary course of business that
are recorded as accounts receivable on the balance sheet of such Person) or
other extensions of credit (including by way of guarantee or similar arrangement
but excluding extensions of trade credit to Persons other than Related Persons
in the ordinary course of business by the Company and its Restricted
Subsidiaries on commercially reasonable terms) or capital contribution to (by
means of any transfer of cash or other property to others or any payment for
property or services for the account or use of others), or any purchase or
acquisition of Capital Stock, Indebtedness or other similar instruments issued
by such Person.
"ISSUANCE DATE" means the initial date of issuance of the Company's
10 1/2% Senior Subordinated Notes due 2011.
"ISSUER REQUEST" means any written request signed in the name of the
Company by the Chairman of the board of directors, the Chief Executive Officer,
the President, any Vice President, the Chief Financial Officer or the Treasurer
of the Company and attested to by the Secretary or any Assistant Secretary of
the Company.
"MOODY'S" means Xxxxx'x Investors Service, Inc.
"MORTGAGE" means a first priority mortgage or first priority deed of
trust on improved real property.
"NET INCOME" of any Person means the net income (loss) of such
Person, determined in accordance with GAAP.
"NET PROCEEDS" means the aggregate cash proceeds received by the
Company or any of its Restricted Subsidiaries in respect of any Asset
Disposition (including, without limitation, any cash received upon the sale or
other disposition of any non-cash consideration received in any Asset
Disposition), net of the direct costs relating to such Asset Disposition
(including, without limitation, legal, accounting and investment banking fees,
and sales commissions) and any related expenses Incurred as a result thereof,
taxes paid or payable as a result thereof (after taking into account any
available tax credits or deductions and any tax sharing arrangements), amounts
required to be applied to the repayment of Indebtedness secured by a lien on the
asset or assets that were the subject of such Asset Disposition and any reserve
for adjustment in respect of the sale price of such asset or assets established
in accordance with GAAP.
"NON-RECOURSE INDEBTEDNESS" means Indebtedness or other Obligations
secured by a lien on property to the extent that the liability for such
Indebtedness or other Obligations is limited to the security of the property
without liability on the part of the Company
-14-
or any Subsidiary (other than the Subsidiary which holds title to such property)
for any deficiency.
"OBLIGATIONS" means any principal, interest (including interest
accruing after the commencement of any bankruptcy, reorganization, insolvency or
similar proceeding relating to the Company or any of its Subsidiaries whether or
not allowed as a claim in such proceeding), penalties, fees, indemnifications,
reimbursements, damages and other liabilities payable under the documentation
governing any Indebtedness.
"OFFERING MEMORANDUM" means the offering memorandum relating to the
offerings of the Securities and the Company's 9 3/8% Senior Notes due 2009 dated
June 21, 2001.
"OFFICER" means the Chief Executive Officer, the President, any Vice
President, the Treasurer or the Secretary of the Company or any Guarantor, as
applicable.
"OFFICER'S CERTIFICATE" means a certificate signed by an Officer of
the Company or any Guarantor, as applicable.
"OPINION OF COUNSEL" means a written opinion from legal counsel of
the Company who may be an employee of or counsel for the Company or other
counsel reasonably acceptable to the Trustee.
"PERMITTED ADDITIONAL ASSETS" means Additional Assets that as of the
date of acquisition, when taken together with all Permitted Additional Assets
acquired by the Company and its Restricted Subsidiaries as consideration in
respect of Asset Dispositions during the preceding twelve months, do not have a
fair market value (as determined in good faith by the board of directors of the
Company) in excess of 5% of Consolidated Tangible Assets.
"PERMITTED INVESTMENTS" means:
(i) Investments by the Company or any Guarantor in any Person that
is, or will become immediately after such Investment, a Guarantor or that
will merge or be consolidated into the Company or a Guarantor;
(ii) Investments in the Company by any Guarantor;
(iii) investments in cash and Cash Equivalents;
(iv) loans and advances to employees and officers of the Company and
the Restricted Subsidiaries (or guarantees of third party loans to such
persons) in the ordi-
-15-
nary course of business for bona fide business purposes not in excess of
$5.0 million at any one time outstanding;
(v) Interest Rate Agreements or other Hedging Obligations entered
into in the ordinary course of the Company's or a Restricted Subsidiary's
businesses and otherwise in compliance with this Indenture;
(vi) Investments in securities of trade creditors or customers
received pursuant to any plan of reorganization or similar arrangement
upon the bankruptcy or insolvency of such trade creditors or customers;
(vii) Investments made by the Company or the Restricted Subsidiaries
as a result of consideration received in connection with an Asset
Disposition made in compliance with the covenant described under Section
4.15; and
(viii) notes payable issued by Qualified Purchasers in connection
with the purchase of model homes sold by the Company and its Restricted
Subsidiaries in the ordinary course of business; PROVIDED that the
aggregate consideration received by the Company or a Restricted
Subsidiary, as the case may be, in connection with any such model home
sale transaction consists of at least 65% cash or Cash Equivalents.
"PERSON" means an individual, corporation, partnership, joint
venture, association, joint-stock company, limited liability company, limited
liability partnership, trust, unincorporated organization, or government or any
agency or political subdivision thereof.
"PREFERRED STOCK", as applied to the Capital Stock of any
corporation, means Capital Stock of any class or classes (however designated)
which is preferred as to the payment of dividends, or as to the distribution of
assets upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such
corporation.
"PRIVATE EXCHANGE" has the meaning set forth in the Registration
Rights Agreement.
"PRIVATE EXCHANGE NOTES" has the meaning set forth in the
Registration Rights Agreement.
"QUALIFIED PURCHASER" means a nationally recognized leasing or
financing company.
"REFINANCE" means, in respect of Indebtedness, to refinance, extend,
renew, refund, repay, prepay, redeem, defease or retire, or to issue other
Indebtedness in exchange or
-16-
replacement for, such Indebtedness. "REFINANCING" when used as a noun shall have
a correlative meaning.
"REGISTRATION RIGHTS AGREEMENT" means that certain Registration
Rights Agreement relating to the Securities dated June 28, 2001 by and among the
Company, the Guarantors and the other parties named therein.
"RELATED BUSINESS" means any line or lines of business or business
activity reasonably related to (x) the homebuilding business or (y) a business
or business activity of the Company and/or its Restricted Subsidiaries conducted
on the Issuance Date.
"RELATED PERSON" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For 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 and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "CONTROLLING" and "CONTROLLED" have
meanings correlative to the foregoing.
"REPRESENTATIVE" means the indenture trustee or other trustee, agent
or representative for an issue of Senior Indebtedness.
"RESTRICTED INVESTMENT" means any Investment (including by way of
guarantee or other similar arrangement), other than a Permitted Investment, in
or to any Unrestricted Subsidiary, Homebuilding Joint Venture or any other
Person; PROVIDED that Investments (including by way of guarantee or other
similar arrangement) in a Homebuilding Joint Venture shall be counted as a
Restricted Investment only to the extent that the aggregate at any one time
outstanding of all such amounts expended (or with respect to guarantees or
similar arrangement the amounts then guaranteed) exceeds, subsequent to March
31, 2001, $35.0 million in the aggregate for all Homebuilding Joint Ventures. A
Restricted Investment shall be deemed to have been made upon the designation of
a Restricted Subsidiary as an Unrestricted Subsidiary in an amount equal to the
fair market value of the net assets of such Restricted Subsidiary at the time of
such designation, as determined by the board of directors of the Company in good
faith. Any property transferred to an Unrestricted Subsidiary, Homebuilding
Joint Venture or other Person shall be valued at fair market value at the time
of such transfer, in each case as determined by the board of directors of the
Company in good faith.
"RESTRICTED SUBSIDIARY" means any Subsidiary that has not been
designated an Unrestricted Subsidiary.
"SEC" means the Securities and Exchange Commission.
-17-
"SECURITIES" means the 10 1/2% Senior Subordinated Notes due 2011
issued by the Company, including, without limitation, the Private Exchange
Notes, if any, and the Exchange Notes, treated as a single class of securities,
as amended from time to time in accordance with the terms hereof, that are
issued pursuant to this Indenture.
"SENIOR INDEBTEDNESS" means the principal of and premium, if any,
and interest (including interest after commencement of any bankruptcy or other
like proceeding at the rate specified in the applicable Senior Indebtedness
whether or not such interest is an allowed claim in any such proceeding) on and
other amounts due on or in connection with any Indebtedness of the Company
existing on the Issuance Date or any Indebtedness of the Company thereafter
created, incurred or assumed and permitted under Section 4.10, unless, in the
case of any particular Indebtedness, the instrument creating or evidencing the
same or pursuant to which the same is outstanding expressly provides that such
Indebtedness shall not be senior in right of payment to the Securities. Without
limiting the generality of the foregoing, "Senior Indebtedness" shall also
include the principal of, premium, if any, interest (including any interest
accruing subsequent to the filing of a petition of bankruptcy at the rate
provided for in the documentation with respect thereto, whether or not such
interest is an allowed claim under applicable law) on, and all other amounts
owing in respect of, (1) all monetary obligations of every nature of the Company
under, or with respect to, the Bank Credit Facility permitted to be Incurred
under Section 4.10 including, without limitation, obligations to pay principal
and interest, reimbursement obligations under letters of credit, fees, expenses
and indemnities (and guarantees thereof); and (2) all Interest Rate Agreements
(and guarantees thereof) permitted to be Incurred under Section 4.10, in each
case whether outstanding on the Issuance Date or thereafter Incurred.
Notwithstanding the foregoing, Senior Indebtedness will not include
(a) any Indebtedness (including the Securities) which by the express
terms of the agreement or instrument creating, evidencing or governing the
same is junior or subordinate in right of payment to any Senior
Indebtedness,
(b) any trade payable arising from the purchase of goods or
materials or for services obtained in the ordinary course of business,
(c) Indebtedness Incurred (but only to the extent Incurred) in
violation of this Indenture as in effect at the time of such Incurrence,
(d) Non-Recourse Indebtedness,
(e) Indebtedness of the Company to any Subsidiary of the Company,
(f) Indebtedness to, or guaranteed on behalf of, any "person" or
"group" (as such terms are used in Sections 13(d) and 14(d) of the
Exchange Act) that is or
-18-
becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under
the Exchange Act, except that for the purposes of this clause such person
or group shall be deemed to have "beneficial ownership" of all shares that
any such person or group has the right to acquire, whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, of more than 5% of the total voting power of the Voting Stock
of the Company, or any officer or employee of the Company or any
Subsidiary of the Company (including, without limitation, amounts owed for
compensation),
(g) any liability for taxes owed or owing by the Company, or
(h) any repurchase, redemption or other obligation in respect of
Disqualified Stock.
"S&P" means Standard & Poor's Corporation.
"SUBSIDIARY" means a corporation, a majority of the capital stock
with voting power to elect directors of which is directly or indirectly owned by
the Company and its Subsidiaries, or any Person in which the Company and its
Subsidiaries has at least a majority ownership interest.
"TIA" means the Trust Indenture Act of 1939 as in effect on the date
of this Indenture, except as provided in Section 10.03.
"TRUST OFFICER" means any officer of the Trustee assigned by the
Trustee to administer its corporate trust matters.
"TRUSTEE" means the party named as such in this Indenture until a
successor replaces it and thereafter means the successor.
"UNRESTRICTED SUBSIDIARY" means (i) any Subsidiary which, in
accordance with the provisions of this Indenture, has been designated in a
resolution adopted by the board of directors of the Company as an Unrestricted
Subsidiary, in each case unless and until such Subsidiary shall, in accordance
with the provisions of this Indenture, be designated by a resolution of the
Company as a Restricted Subsidiary; and (ii) any Subsidiary, a majority of the
voting stock of which shall at the time be owned directly or indirectly by one
or more Unrestricted Subsidiaries. At the Issuance Date, the Company will not
have any Subsidiaries designated as Unrestricted Subsidiaries.
"U.S. GOVERNMENT OBLIGATIONS" means direct non-callable Obligations
of, or non-callable Obligations guaranteed by, the United States of America for
the payment of which the full faith and credit of the United States of America
is pledged.
-19-
"VOTING STOCK," with respect to any Person, means securities of all
classes of Capital Stock of such Person entitling the holders thereof to vote in
the election of members of the board of directors of such Person.
"WHOLLY OWNED SUBSIDIARY," means a Restricted Subsidiary, all of the
capital stock (whether or not voting, but exclusive of directors' qualifying
shares) of which is owned by the Company or a Wholly Owned Subsidiary.
Section 1.02. OTHER DEFINITIONS.
Defined in
Term Section(s)
---- ----------
"AGENT MEMBERS".................................................... 2.01
"BASE GUARANTY LIABILITY".......................................... 11.01
"CERTIFICATED SECURITY"............................................ 2.01
"CHANGE OF CONTROL NOTICE"......................................... 4.08
"CHANGE OF CONTROL PRICE".......................................... 4.08
"CHANGE OF CONTROL REPURCHASE DATE"................................ 4.08
"CHANGE OF CONTROL REPURCHASE RIGHT"............................... 4.08
"CLEARSTREAM"...................................................... 2.01
"COMPANY".......................................................... Preamble
"DISCHARGED"....................................................... 8.01
"DTC".............................................................. 2.01
"EUROCLEAR"........................................................ 2.01
"EVENT OF DEFAULT"................................................. 6.01
"GLOBAL LEGEND".................................................... 2.01
"GLOBAL SECURITIES"................................................ 2.01
"GLOBAL SECURITY HOLDER"........................................... 2.01
"INSTITUTIONAL ACCREDITED INVESTOR"................................ 2.01
"LIEN" or "LIENS".................................................. 4.13
"LEGAL HOLIDAY".................................................... 12.07
"MINIMUM NET WORTH"................................................ 4.09
"NET PROCEEDS OFFER"............................................... 4.15
"NET PROCEEDS OFFER NOTICE"........................................ 4.15
"NET PROCEEDS REPURCHASE DATE"..................................... 4.15
"NET WORTH"........................................................ 4.09
"NET WORTH OFFER".................................................. 4.09
"NET WORTH OFFER AMOUNT"........................................... 4.09
"NET WORTH NOTICE"................................................. 4.09
"NET WORTH PRICE".................................................. 4.09
-20-
Defined in
Term Section(s)
---- ----------
"NET WORTH REPURCHASE DATE"........................................ 4.09
"NET WORTH REPURCHASE RIGHT"....................................... 4.09
"NON-PAYMENT DEFAULT".............................................. 9.03, 11.04
"NOTES OFFER PRICE"................................................ 4.15
"NOTICE OF DEFAULT"................................................ 6.01
"OFFER PRICE"...................................................... 4.15
"OFFSHORE SECURITIES EXCHANGE DATE"................................ 2.01
"PAYING AGENT"..................................................... 2.03
"Payment Blockage Notice".......................................... 9.03, 11.04
"PAYMENT BLOCKAGE PERIOD".......................................... 9.03, 11.04
"PAYMENT DEFAULT".................................................. 9.03, 11.04
"PURCHASE AMOUNT".................................................. 4.15
"QUALIFIED INSTITUTIONAL BUYER".................................... 2.01
"REGISTRAR"........................................................ 2.03
"REGULATION S GLOBAL SECURITIES"................................... 2.01
"REGULATION S PERMANENT GLOBAL SECURITY"........................... 2.01
"REGULATION S TEMPORARY GLOBAL SECURITY"........................... 2.01
"REPURCHASE DATE".................................................. 4.08
"REPURCHASE PRICE"................................................. 4.08
"RESTRICTED GLOBAL SECURITY"....................................... 2.01
"RESTRICTED PAYMENTS".............................................. 4.11
"SECURITIES ACT LEGEND"............................................ 2.01
"SUCCESSOR"........................................................ 5.01
"TRIGGER DATE"..................................................... 4.09
Section 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"INDENTURE SECURITIES" means the Securities.
"INDENTURE SECURITY HOLDER" means a Holder.
"INDENTURE TO BE QUALIFIED" means this Indenture.
-21-
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the Trustee.
"OBLIGOR" on the Indenture Securities means the Company. All other
terms used in this Indenture that are defined by the TIA, defined by TIA
reference to another statute or defined by SEC rule under the TIA have the
meanings so assigned to them by such definitions.
Section 1.04. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "OR" is not exclusive;
(4) words in the singular include the plural and in the plural
include the singular;
(5) "INCLUDING" means including, without limitation;
(6) provisions apply to successive events and transactions; and
(7) "HEREIN," "HEREOF" and "HEREUNDER" and other words of similar
import refer to this Indenture as a whole and not to any particular
Article, Section or other Subdivision.
ARTICLE 2
THE SECURITIES
Section 2.01. FORM AND DATING.
(a) FORM GENERALLY.
(i) Securities offered and sold in reliance on Rule 144A promulgated
under the Securities Act shall be issued initially in the form of one or more
permanent global Securities (each a "RESTRICTED GLOBAL SECURITY"), registered in
the name of the Depositary or its nominee, substantially in the form of EXHIBIT
A, deposited with the Trustee, as custodian for the Depositary or its nominee,
duly executed by the Company and authenticated by the Trus-
-22-
tee as herein provided. The aggregate principal amount of the Restricted Global
Security may from time to time be increased or decreased by adjustments made on
the records of the Trustee, as custodian for the Depositary or its nominee, as
hereinafter provided.
(ii) Securities offered and sold in offshore transactions in
reliance on Regulation S promulgated under the Securities Act shall be issued
initially in the form of one or more temporary global Securities, registered in
the name of the Global Security Holder for the account of the Depositary or its
nominee, substantially in the form of EXHIBIT A (the "REGULATION S TEMPORARY
GLOBAL SECURITIES"), deposited with the Trustee, as custodian for the Depositary
or its nominee, duly executed by the Company and authenticated by the Trustee as
provided herein. Thereafter, following receipt by the trust administrator
responsible for administering this Indenture of an Officer's Certificate of the
Company to such effect, at any time on or after the date which is 40 days after
the Issuance Date (the "OFFSHORE SECURITIES EXCHANGE DATE"), the Trustee shall
exchange the outstanding principal amount of Securities represented by the
Regulation S Temporary Global Securities for one or more permanent global
Securities registered in the name of the Depositary or its nominee,
substantially in the form hereinabove recited without the Securities Act Legend
(as defined below) (the "REGULATION S PERMANENT GLOBAL SECURITIES" and together
with the Regulation S Temporary Global Securities, the "REGULATION S GLOBAL
SECURITIES") duly executed by the Company and authenticated by the Trustee as
provided herein. In connection with such exchange, the Trustee shall hold the
Regulation S Permanent Global Securities as custodian for the Depositary or its
nominee, reflect on its books and records the date of such exchange and cancel
the Regulation S Temporary Global Securities. Restricted Global Securities and
Regulation S Global Securities are sometimes referred to herein as the "GLOBAL
SECURITIES." The aggregate principal amount of Regulation S Global Securities
may from time to time be increased or decreased by adjustments made on the
records of the Trustee, as custodian for the Depositary or its nominee, as
hereinafter provided.
(iii) Following the original issuance of Securities, Securities
offered and sold to an institutional "accredited investor" (within the meaning
of Rule 501(a) (1), (2), (3) or (7) of Regulation D promulgated under the
Securities Act and which is not a Qualified Institutional Buyer (as defined
below), an "INSTITUTIONAL ACCREDITED INVESTOR") shall be issued in the form of
one or more physical certificated Securities (each a "CERTIFICATED SECURITY")
registered in the name of the purchaser thereof. Certificated Securities may
only be issued in the circumstances described in subparagraph (c)(ii) and
paragraph (d) below.
(b) RESTRICTIVE LEGENDS.
(i) Each Restricted Global Security, each Regulation S Global
Security and each Certificated Security shall bear the following legend (the
"SECURITIES ACT LEGEND")
-23-
on the face thereof until the provisions of paragraph (d)(ii) or (d)(iii)
relating to the removal of such legend are complied with:
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED BY THIS CERTIFICATE WAS
ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER
SECTION 5 OF THE U.S. SECURITIES ACT OF 1933, AND THE SECURITY
EVIDENCED BY THIS CERTIFICATE MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF REGISTRATION OR AN
APPLICABLE EXEMPTION FROM THE SECURITIES ACT. EACH PURCHASER OF THE
SECURITY EVIDENCED BY THIS CERTIFICATE (1) BY ITS ACQUISITION OF THE
SECURITY REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER"
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT), (B) IT IS NOT A
U.S. PERSON AND IS ACQUIRING THE SECURITY EVIDENCED BY THIS
CERTIFICATE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION
S UNDER THE SECURITIES ACT, OR (C) IT IS AN "ACCREDITED INVESTOR"
WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR (7) UNDER THE
SECURITIES ACT (AN "INSTITUTIONAL ACCREDITED INVESTOR") THAT IS
ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF AN
INSTITUTIONAL ACCREDITED INVESTOR AND (2) IS HEREBY NOTIFIED THAT
THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF
SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A OR ANOTHER
EXEMPTION UNDER THE SECURITIES ACT. THE HOLDER OF THE SECURITY
EVIDENCED BY THIS CERTIFICATE AGREES FOR THE BENEFIT OF THE COMPANY
AND THE GUARANTORS THAT (X) THIS SECURITY MAY BE RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED ONLY (1)(A) TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED
IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (B) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, IF AVAILABLE, (C)
OUTSIDE THE UNITED STATES TO A PERSON THAT IS NOT A U.S. PERSON (AS
DEFINED IN RULE 902 UNDER THE SECURITIES ACT) IN A TRANSACTION
MEETING THE REQUIREMENTS OF REGULATION S UNDER THE SECURITIES ACT,
OR (D) TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT IS PURCHASING AT
LEAST $100,000 OF SECURITIES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF AN INSTI-
-24-
TUTIONAL ACCREDITED INVESTOR (AND BASED UPON AN OPINION
OF COUNSEL IF THE COMPANY SO REQUESTS), (2) TO THE COMPANY OR ANY OF
ITS SUBSIDIARIES OR (3) UNDER AN EFFECTIVE REGISTRATION STATEMENT
AND, IN EACH CASE, IN COMPLIANCE WITH ANY APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION AND (Y) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED
BY THIS CERTIFICATE OF THE RESALE RESTRICTIONS DESCRIBED IN (X)
ABOVE. IN CONNECTION WITH ANY TRANSFER OF THIS SECURITY WITHIN TWO
YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY, IF THE PROPOSED
TRANSFEREE IS AN ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH
TRANSFER, FURNISH TO THE TRUSTEE AND THE COMPANY SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF
THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING
MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT
TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
(ii) Each Global Security shall bear the following legends (the
"GLOBAL LEGEND") on the face thereof:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY (55 XXXXX XXXXXX, XXX XXXX, XXX
XXXX), A
NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A
DEPOSITARY OR A NOMINEE OF A DEPOSITARY. THIS GLOBAL SECURITY IS
EXCHANGEABLE FOR SE-
-25-
CURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER
THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE
DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED
EXCEPT IN SUCH LIMITED CIRCUMSTANCES.
The Securities may have such other notations, legends or
endorsements required by law, stock exchange rule or usage. Each Security shall
be dated the date of its authentication.
(c) BOOK ENTRY PROVISIONS FOR GLOBAL SECURITIES.
(i) Each Restricted Global Security initially shall (i) be
registered in the name of a nominee of the Depositary and (ii) bear legends as
set forth in paragraph (b) above. Each Regulation S Temporary Global Security
initially shall (i) be registered in the name of a nominee of the Depositary for
the accounts of Euroclear Bank, S.A./N.V., as operator of the Euroclear System
("EUROCLEAR") and Clearstream Banking, societe anonyme ("CLEARSTREAM"), (ii) be
delivered to the Trustee as custodian on behalf of the Depositary and (iii) bear
legends as set forth in paragraph (b) above. Each Regulation S Permanent Global
Security initially shall (i) be registered in the name of a nominee of the
Depositary, (ii) be delivered to the Trustee as custodian on behalf of the
Depositary and (iii) bear the legend as set forth in subparagraph (b)(ii) above.
Prior to the Offshore Securities Exchange Date, interests in the Regulation S
Temporary Global Security may only be held through Euroclear and Clearstream.
Following the Offshore Securities Exchange Date, interests in the Regulation S
Permanent Global Security may be held by any member of, or participants in, the
Depositary ("AGENT MEMBERS").
Agent Members shall have no rights under this Indenture with respect
to any Global Security held on their behalf by the Depositary, or the Trustee as
its custodian, or under the Global Security, and the Depositary may be treated
by the Company, the Trustee and any agent of any of them as the absolute owner
of such Global Security for all purposes whatsoever including, without
limitation, the giving of notices and action upon instructions. Notwithstanding
the foregoing, nothing herein shall prevent the Company, the Trustee or any
agent of any of them from giving effect to any written certification, proxy or
other authorization furnished by the Depositary or impair, as between the
Depositary and its Agent Members, the operation of customary practices governing
the exercise of the rights of a Holder of any Global Security.
-26-
(ii) Except as provided in paragraph (c)(iv), transfers of a Global
Security shall be limited to transfers of such Global Security in whole, but not
in part, to the Depositary, its successors or their respective nominees.
Certificated Securities shall be transferred to all beneficial owners in
exchange for their beneficial interests in any Restricted Global Security or
Regulation S Global Security, respectively, if (i) the Company notifies the
Trustee that DTC is unwilling or unable to continue as Depositary for such
Restricted Global Security or Regulation S Global Security, as the case may be,
and a successor depository is not appointed by the Company within 90 days of
such notice, (ii) the Company, in its sole discretion, shall so request or (iii)
an Event of Default has occurred and is continuing and the Registrar shall have
received a request from the Depositary to issue such Certificated Securities.
(iii) Any beneficial interest in one of the Global Securities that
is transferred to a Person who takes delivery in the form of an interest in
another Global Security will, upon transfer, cease to be an interest in such
Global Security previously held and become an interest in the other Global
Security and, accordingly, will thereafter be subject to all transfer
restrictions, if any, and other procedures applicable to beneficial interests in
such other Global Security for as long as it remains such an interest.
(iv) In connection with the transfer of an entire Restricted Global
Security or Regulation S Global Security to beneficial owners pursuant to the
second sentence of subparagraph (ii) of this paragraph, the Restricted Global
Security or Regulation S Global Security, as the case may be, shall be deemed to
be surrendered to the Trustee for cancellation, and the Company shall execute,
and the Trustee shall authenticate and deliver, to each beneficial owner
identified by the Depositary in exchange for its beneficial interest, as
notified by the Depositary, in such Restricted Global Security or Regulation S
Global Security, as the case may be, an equal aggregate principal amount of
Certificated Securities of authorized denominations.
(v) Any Certificated Security delivered in exchange for an interest
in a Restricted Global Security pursuant to subparagraph (ii) or (iv) of this
paragraph (c) shall, except as otherwise provided by paragraph (d)(iii), bear
the Securities Act Legend.
(d) SPECIAL TRANSFER PROVISIONS. Unless and until the Securities Act
Legend is removed from a Certificated Security or Global Security pursuant to
subparagraph (iii) below (including as a result of an exchange completed on the
Offshore Securities Exchange Date pursuant to paragraph (a)(ii) above), the
following additional provisions shall apply to the proposed transfer, exchange
or replacement of Certificated Securities:
(i) The following provisions shall apply with respect to the
registration of any proposed transfer of a Security (or interest in a
Global Security) to any Institutional Accredited Investor which is not a
Qualified Institutional Buyer (within the
-27-
meaning of Rule 144A under the Securities Act, a "QUALIFIED INSTITUTIONAL
BUYER") or to a Non-U.S. Person (as defined in Regulation S):
(A) The Registrar shall register the transfer of any
Certificated Security containing the Securities Act Legend or any
interest in a Restricted Global Security if (x) the requested
transfer is after the time period referred to in Rule 144(k) under
the Securities Act as in effect with respect to such transfer or (y)
the proposed transferee (excluding Non-U.S. Persons) has delivered
to the Registrar a certificate substantially in the form of EXHIBIT
C-1 hereto or if the transferee is a Non-U.S. Person, the proposed
transferor has delivered to the Registrar a certificate
substantially in the form of EXHIBIT C-2 hereto.
(B) If the proposed transferor is an Agent Member holding a
beneficial interest in a Restricted Global Security and the proposed
transferee is an Institutional Accredited Investor which is not a
Qualified Institutional Buyer, upon receipt by the Depositary and
Registrar of (x) the documents required by subparagraph (d)(i)(A)
above (if such transfer is pursuant to clause (y) of subparagraph
(d)(i)(A) above) and (y) instructions given in accordance with the
Registrar's procedures, the Registrar shall reflect on its books and
records the date of such transfer and a decrease in the principal
amount of such Restricted Global Security in an amount equal to the
principal amount of the beneficial interest in such Restricted
Global Security to be transferred and the Company shall execute, and
the Trustee shall authenticate and deliver, one or more Certificated
Securities of like tenor and amount.
(ii) The following provisions shall apply with respect to the
registration of any proposed transfer of a Security (or interest in a
Global Security) to a Qualified Institutional Buyer:
(A) The Registrar shall register the transfer of any
Certificated Security containing the Securities Act Legend if (x)
the requested transfer is after the time period referred to in Rule
144(k) under the Securities Act as in effect with respect to such
transfer or (y) such transfer is being made by a proposed transferor
who has checked the box provided for on the form of Security
stating, or has otherwise advised the Company and the Registrar in
writing, that the sale has been made in compliance with the
provisions of Rule 144A to a transferee who has signed the
certification provided for on the form of Security stating, or has
otherwise advised the Company and the Registrar in writing, that it
is purchasing the Security for its own account or an account with
respect to which it exercises sole investment discretion and that it
and any such account is a Qualified Institutional Buyer within the
meaning of Rule 144A, and
-28-
is aware that the sale to it is being made in reliance on Rule 144A
and the transferor is relying upon its foregoing representations in
order to claim the exemption from registration provided by Rule
144A.
(B) If the Security to be transferred is a Certificated
Security containing the Securities Act Legend and the proposed
transferee is an Agent Member holding such interest on behalf of a
Qualified Institutional Buyer, upon receipt by the Registrar of (x)
the documents referred to in subparagraph (d)(i)(A) above (if such
transfer is pursuant to clause (y) of subparagraph (d)(i)(A) above)
and (y) instructions given in accordance with the Registrar's
procedures, the Registrar shall reflect on its books and records the
date of such transfer and an increase in the principal amount of the
Restricted Global Security in an amount equal to the principal
amount of the Certificated Security to be transferred and the
Trustee shall cancel the Certificated Security so transferred.
(iii) Upon the registration of transfer, exchange or replacement of
Securities bearing the Securities Act Legend, the Registrar shall deliver
only Securities that bear the Securities Act Legend unless (x) the
requested transfer, exchange or replacement (A) is after the time period
referred to in Rule 144(k) under the Securities Act as in effect with
respect to such transfer, exchange or replacement or (B) is made under the
circumstances contemplated by paragraph (a)(ii) of this Section 2.01 or
(y) is delivered to the Registrar an opinion of counsel reasonably
satisfactory to the Company to the effect that neither such legend nor the
related restrictions on transfer are required in order to maintain
compliance with the provisions of the Securities Act. Upon the
registration of transfer, exchange or replacement of Securities not
bearing the Securities Act Legend, the Registrar shall deliver Securities
that do not bear the Securities Act Legend.
(iv) By its acceptance of any Security bearing the Securities Act
Legend, each Holder of such a Security acknowledges the restrictions on
transfer of such Security set forth herein and in the Securities Act
Legend and agrees that it will transfer such Security only as provided
herein. The Registrar shall not register a transfer of any Security unless
such transfer complies with the restrictions on transfer of such Security
set forth herein. In connection with any transfer of Securities, each
Holder agrees by its acceptance of the Securities to furnish the Registrar
or the Company such certifications, legal opinions or other information as
either of them may reasonably require to confirm that such transfer is
being made pursuant to an exemption from, or a transaction not subject to,
the registration requirements of the Securities Act; PROVIDED that the
Registrar shall not be required to determine (but may rely on a
determination made by the Company with respect to) the sufficiency of any
such certifications, legal
-29-
opinions or other information. The Registrar shall retain copies of all
letters, notices and other written communications received pursuant to
this paragraph (d) in accordance with its customary procedures. The
Company shall have the right to inspect and make copies of all such
letters, notices or other written communications at any reasonable time
upon the giving of reasonable written notice to the Registrar.
Section 2.02. EXECUTION AND AUTHENTICATION.
Two Officers shall sign the Securities for the Company by manual or
facsimile signature. The Company's seal shall be reproduced on the Securities.
If an Officer whose signature is on a Security no longer holds that office at
the time the Security is authenticated, the Security shall nevertheless be
valid.
A Security shall not be valid until authenticated by the manual
signature of the Trustee. The signature shall be conclusive evidence that the
Security has been authenticated under this Indenture.
The Company (i) on the Issuance Date, will deliver Securities for
original issue in the aggregate amount not to exceed $150,000,000 executed by
the Company to the Trustee for authentication; and (ii) at any time and from
time to time after the Issuance Date, may deliver Additional Securities executed
by the Company to the Trustee for authentication; and the Trustee shall, upon a
written order or orders of the Company signed by an Officer of the Company,
authenticate and make available for delivery such Securities or Additional
Securities. For the purposes of this Indenture, except for Section 4.10,
references to the Securities include Additional Securities, if any. The order
shall specify the amount of Securities to be authenticated and the date on which
such Securities are to be authenticated. The maximum aggregate principal amount
of Securities outstanding at any time will be unlimited.
Upon receipt of an Issuer Request and an Officers' Certificate
certifying that a registration statement relating to an exchange offer specified
in the Registration Rights Agreement or any registration rights agreement
relating to any Additional Notes is effective or that the conditions precedent
to a private exchange thereunder have been met, the Trustee shall authenticate
an additional series of Securities in unlimited maximum aggregate principal
amount for issuance in exchange for the Securities tendered for exchange
pursuant to such exchange offer registered under the Securities Act or pursuant
to a Private Exchange. Exchange Notes or Private Exchange Notes may have such
distinctive series designations and such changes in the form thereof as are
specified in the Issuer Request referred to in the preceding sentence.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Securities. An authenticating agent may authenticate
Securities whenever the
-30-
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 a Related Person.
The Securities shall be issuable only in registered form without
coupons and only in denominations of $1,000 and any integral multiple thereof.
Section 2.03. REGISTRAR AND PAYING AGENT.
The Company shall maintain in the Borough of Manhattan, the City of
New York, an office or agency where Securities may be presented for registration
of transfer or for exchange ("REGISTRAR") and an office or agency where
Securities may be presented for payment ("PAYING AGENT"); PROVIDED that payment
of interest may, at the option of the Company, be made by check mailed to a
Holder at his registered address. The Registrar shall keep a register of the
Securities and of their transfer and exchange. The Trustee, in its capacity as
the paying agent, may appoint co-paying agents, which must be acceptable to the
Company. The term "Paying Agent" includes any additional paying agent.
The Company shall enter into an appropriate agency agreement with
any Agent not a party to this Indenture. The agreement shall implement the
provisions of this Indenture that relate to such Agent.
The Company appoints the Trustee as Paying Agent and Registrar.
Section 2.04. PAYING AGENT TO HOLD MONEY IN TRUST.
Each Paying Agent shall hold in trust for the benefit of the Holders
or the Trustee all moneys held by such Paying Agent for the payment of principal
of or interest on the Securities, and shall notify the Trustee in writing of any
default by the Company in making any such payment. While any such default
continues, the Trustee may require a Paying Agent to pay to the Trustee all
money held by it upon demand. The Company at any time may require a Paying Agent
to pay all money held by it to the Trustee. Upon payment over to the Trustee,
such Paying Agent shall have no further liability for the money. If the Company,
a Subsidiary or a Related Person or any of them acts as Paying Agent, it shall
segregate and hold as a separate trust fund all money held by it as Paying
Agent.
Section 2.05. SECURITYHOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Holders. If the Trustee is not the Registrar, the Company shall furnish to the
Trustee on or before each interest payment date and at such other times as the
Trustee may request in writing a list, in such form and as of
-31-
such date as the Trustee may require, of the names, addresses and tax
identification numbers of Holders.
Section 2.06. TRANSFER AND EXCHANGE.
Where Securities are presented to the Registrar or a co-Registrar
with a request to register the transfer or to exchange them for an equal
principal amount of Securities of other authorized denominations, the Registrar
shall register the transfer or make the exchange if the requirements of Section
8-401(a) of the
New York Uniform Commercial Code as then in effect are met. To
permit registrations of transfer and exchanges, the Trustee shall authenticate
Securities at the Registrar's written (if the Registrar is not the Trustee)
request. The Company or the Trustee, as the case may be, shall not be required
(a) to issue, authenticate, register the transfer of or exchange any Security
during a period beginning at the opening of business 15 days before the mailing
of a notice, of redemption of the Securities selected for redemption under
Section 3.02 and ending at the close of business on the day of such mailing, or
(b) to register the transfer of or exchange any Security so selected for
redemption in whole or in part, except the unredeemed portion of Securities
being redeemed in part.
No Holder shall Incur a service charge for any registration of
transfer or exchange of Securities, but the Company or the Trustee, as
appropriate, may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any transfer,
registration of transfer or exchange of Securities, other than exchanges
pursuant to Section 2.10, 3.06 or 10.05 not involving any transfer.
Section 2.07. REPLACEMENT SECURITIES.
If the Holder of a Security claims that the Security has been
mutilated, lost, destroyed or wrongfully taken, the Company shall issue and the
Trustee shall authenticate a replacement Security if the requirements of Section
8-405 of the
New York Uniform Commercial Code are met and, in the case of a
mutilated Security, such mutilated Security is surrendered to the Trustee. If
required by the Trustee or the Company, an indemnity bond must be sufficient, in
the judgment of both, to protect the Company, the Trustee, or any Agent from any
loss which any of them may suffer if a Security is replaced. The Company and the
Trustee may charge for their expenses in replacing a Security.
In case any such mutilated, destroyed or wrongfully taken Security
has become or is about to become due and payable, the Company in its discretion
may, instead of issuing a new Security, pay such Security when due.
Every replacement Security is an additional Obligation of the
Company.
-32-
Section 2.08. OUTSTANDING SECURITIES.
Securities outstanding at any time are all the Securities
authenticated by the Trustee except for those canceled by it, those delivered to
it for cancellation and those described in this Section as not outstanding. A
Security does not cease to be outstanding because the Company or one of its
Subsidiaries or Related Persons holds the Security.
If a Security is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it, or a court
holds, that the replaced Security is held by a BONA FIDE purchaser.
If the Paying Agent (other than the Company) holds on a redemption
date, repurchase date or maturity date money sufficient to pay Securities
payable on that date, then on and after that date, such Securities shall be
deemed to be no longer outstanding and interest on them shall cease to accrue.
Section 2.09. SECURITIES HELD BY THE COMPANY OR A RELATED PERSON.
In determining whether the Holders of the required principal amount
of Securities have concurred in any direction, waiver or consent, Securities
owned by the Company or a Subsidiary or a Related Person shall be disregarded,
except that for the purposes of determining whether the Trustee shall be
protected in relying on any such direction, waiver or consent, only Securities
which the Trustee actually knows are so owned shall be so disregarded.
Section 2.10. TEMPORARY SECURITIES.
Until definitive Securities are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Securities. Temporary
Securities shall be substantially in the form of definitive Securities but may
have variations that the Company considers appropriate for temporary Securities.
Without unreasonable delay, the Company shall prepare and the Trustee shall
authenticate definitive Securities in exchange for temporary Securities.
Section 2.11. CANCELLATION.
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Securities surrendered to them for registration of transfer, exchange or
payment. The Trustee shall cancel all Securities surrendered for registration of
transfer, exchange, payment or cancellation and may destroy canceled Securities
and deliver a certificate of any such destruction to the Company.
-33-
The Company may not issue new Securities to replace Securities that it has paid
or delivered to the Trustee for cancellation.
Section 2.12. DEFAULTED INTEREST.
If and to the extent the Company defaults in a payment of interest
on the Securities, it shall pay the defaulted interest in any lawful manner
plus, to the extent not prohibited by applicable statute or case law, interest
at the rate then borne by the Securities on the defaulted interest. It shall pay
the defaulted interest to the persons who are Holders on a subsequent special
record date. The Company or Trustee (at the direction of the Company) shall fix
such record date and payment date. At least 15 days before the record date, the
Company or Trustee (at the direction of the Company PROVIDED that the Trustee
shall have received the same at least ten but not more than 30 days prior
thereto or such shorter period prior thereto as is acceptable to the Trustee)
shall mail to Holders a notice that states the record date, payment date and
amount of interest to be paid.
Section 2.13. PERSONS DEEMED OWNERS.
Prior to due presentment of a Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may
conclusively presume and shall treat the person in whose name such Security is
registered as the owner of such Security for the purpose of receiving payment of
principal of and (subject to Section 2.08 and Section 2.12) interest on such
Security and for all other purposes whatsoever, whether or not such Security be
overdue, and neither the Company, the Trustee nor any agent of the Company or
the Trustee shall be affected by notice to the contrary. None of the Company,
the Trustee, any Paying Agent or the Registrar will have any responsibility or
liability for any aspect of the records relating to or payments made on account
of or actions taken in respect of beneficial ownership interests of a Security
in global form or for maintaining, supervising or reviewing any records relating
to such beneficial ownership interests (including but not limited to CUSIP
numbers, if any).
Section 2.14. COMPUTATION OF INTEREST.
Interest on the Securities shall be computed on the basis of a
360-day year of twelve 30-day months.
Section 2.15. CUSIP NUMBERS
The Company, in issuing the Securities, may use CUSIP numbers (if
then generally in use), and, if so, the Trustee shall use the CUSIP numbers for
purposes of the identification of the Securities in notices as a convenience to
Holders; PROVIDED that any such notice
-34-
may state that no representation is made by the Trustee as to the correctness of
such numbers either as printed on the Securities or as contained in any notice
of a redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be affected
by any defect in or omission of such numbers. The Company will promptly notify
the Trustee of any change in CUSIP numbers.
ARTICLE 3
REDEMPTION
Section 3.01. NOTICES TO TRUSTEE.
If the Company wants to redeem all or a portion of the Securities
pursuant to paragraph 6 of the Securities, it shall provide written notice to
the Trustee at least 60 but not more than 90 days prior to the redemption date
(unless a shorter notice period shall be satisfactory to the Trustee) of the
redemption date and the principal amount of Securities to be redeemed.
Section 3.02. SELECTION OF SECURITIES TO BE REDEEMED.
If less than all the Securities are to be redeemed, the Trustee
shall select the particular Securities (or portions thereof) to be redeemed on
either a PRO RATA basis or by lot or such other method as the Trustee shall
determine, in its sole discretion, to be fair and appropriate, such
determination to be final and conclusive for all purposes hereunder, but in any
event, in such manner as complies with applicable legal and stock exchange
requirements; PROVIDED, HOWEVER, that, if a partial redemption is made pursuant
to the provisions described in paragraph 6 of the Securities, selection of the
Securities or portions thereof for redemption shall be made by the Trustee only
on a PRO RATA basis or on as nearly a PRO RATA basis as practicable (subject to
the procedures of The Depository Trust Company), unless that method is otherwise
prohibited. The Trustee shall make the selection from Securities outstanding not
previously called for redemption. The Trustee may select for redemption portions
of the principal of Securities that have denominations larger than $1,000.
Securities and portions of them it selects shall be in amounts of $1,000 or
whole multiples of $1,000. Provisions of this Indenture that apply to Securities
called for redemption also apply to portions of Securities called for
redemption.
-35-
Section 3.03. NOTICE OF REDEMPTION.
At least 30 days but not more than 60 days before a redemption date,
the Company shall mail by first-class mail a notice of redemption to each Holder
whose Securities are to be redeemed.
The notice shall identify the Securities and the principal amount
thereof to be redeemed (including the applicable CUSIP number, if any) and shall
state:
(1) the redemption date;
(2) the redemption price (including the amount of accrued interest
to be paid on the Securities called for redemption);
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be surrendered to the
Paying Agent to collect the redemption price; and
(5) that interest on Securities called for redemption ceases to
accrue on and after the redemption date.
At the Company's written direction (which shall be delivered to the
Trustee at least 45 days (or such shorter period as the Trustee may agree) prior
to the redemption date), the Trustee shall give the notice of redemption in the
Company's name and at the Company's expense. In such event the Company will
provide the Trustee with the information required by clauses (1) through (5) in
its written notice to the Trustee.
Section 3.04. EFFECT OF NOTICE OF REDEMPTION.
Once a notice of redemption is mailed, Securities or portions
thereof called for redemption become due and payable on the redemption date at
the redemption price and, on and after such date (unless the Company shall
default in the payment of the redemption price), such Securities shall cease to
bear interest. Upon surrender to the Paying Agent, such Securities shall be paid
at the redemption price plus accrued interest and Additional Interest, if any,
to the redemption date.
Section 3.05. DEPOSIT OF REDEMPTION PRICE.
On or before 5:00 P.M. Los Angeles time on the Business Day prior to
the redemption date, the Company shall deposit with the Paying Agent money in
immediately
-36-
available funds sufficient to pay the redemption price of and accrued interest
on all Securities to be redeemed on the redemption date.
Section 3.06. SECURITIES REDEEMED IN PART.
Upon surrender of a Security that is redeemed in part, the Trustee
shall authenticate for the Holder a new Security equal in principal amount to
the unredeemed portion of the Security surrendered.
ARTICLE 4
COVENANTS
Section 4.01. PAYMENT OF SECURITIES.
The Company shall pay the principal of and interest (including all
Additional Interest as provided in the Registration Rights Agreement) on the
Securities on the dates and in the manner expressly provided in the Securities.
Principal and interest shall be considered paid on the date due if the Paying
Agent holds on that date money sufficient to pay all principal and interest then
due. The Company shall pay interest on overdue principal at the rate borne by
the Securities. The Company shall pay interest on overdue installments of
interest at the same rate to the extent not prohibited by applicable statute or
case law.
Section 4.02. MAINTENANCE OF OFFICE OR AGENCY.
The Company will maintain in the Borough of Manhattan, The City of
New York, an office or agency where Securities may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Company in respect of the Securities and this Indenture may be served. The
Company will give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee.
The Company may also from time to time designate one or more other
offices or agencies where the Securities may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations;
PROVIDED, HOWEVER, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, The City of
New York for such purposes. The Company will
give prompt written notice to the Trustee of any such designation or rescission
and of any change in the location of any such other office or agency.
-37-
The Company hereby designates the Corporate Trust Office of the
Trustee in the Borough of Manhattan, The City of
New York, an agency of the
Company in accordance with Section 2.03.
Section 4.03. REPORTS TO HOLDERS.
So long as the Company is subject to the periodic reporting
requirements of the Exchange Act, the Company shall deliver to the Trustee and
the Trustee will mail to each Holder within 15 days after the Company files with
the SEC copies of the quarterly and annual reports and of the information,
documents and other reports (or copies of such portions of any of the foregoing
as the SEC may by rules and regulations prescribe) with respect to the Company
and the Guarantors, if any, which the Company and the Guarantors may be required
to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act. The
Company also shall comply with the other provisions of TIA Section 314(a).
Notwithstanding that neither the Company nor any of the Guarantors
may be required to remain subject to the reporting requirements of Section 13 or
15(d) of the Exchange Act, the Company will continue to furnish information to
the SEC and the Trustee as if it were subject to such periodic reporting
requirements, even if the Company is entitled under the Exchange Act not to
furnish such information to the Commission or to the Holders. If filing of
documents by the Company with the SEC as aforementioned in this paragraph is not
permitted under the Exchange Act, the Company shall promptly upon written notice
supply copies of such documents to any prospective holder of Securities.
Section 4.04. COMPLIANCE CERTIFICATE.
The Company shall deliver to the Trustee within 120 days after the
end of each fiscal year of the Company an Officer's Certificate stating whether
or not the signatories know of any Default by the Company in performing any of
its obligations under this Indenture and the Securities. If the Company has
knowledge of any such Default, the certificate shall describe the Default and
its status.
Section 4.05. STAY, EXTENSION AND USURY LAWS.
The Company covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay, extension or usury law
wherever enacted, now or at any time hereafter in force, which may affect the
covenants or the performance of this Indenture; and the Company (to the extent
that it may lawfully do so) hereby expressly waives all benefit or advantage of
any such law, and covenants that it will not, by resort to any such law, hinder,
delay or
-38-
impede the execution of any power herein granted to the Trustee, but will suffer
and permit the execution of every such power as though no such law had been
enacted.
Section 4.06. CORPORATE EXISTENCE.
Subject to Article 5, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence and the corporate existence of each of its Restricted Subsidiaries in
accordance with the respective organizational documents of each Restricted
Subsidiary and the rights (charter and statutory), licenses and franchises to
the Company and its Restricted Subsidiaries; PROVIDED, HOWEVER, that the Company
shall not be required to preserve any such right, license or franchise, or the
corporate existence of any Restricted Subsidiary if, in the judgment of the
board of directors of the Company, (i) such preservation or existence is not
material to the conduct of business of the Company and its Restricted
Subsidiaries taken as a whole, and (ii) the loss of such right, license or
franchise or the dissolution of such Restricted Subsidiary does not have a
material adverse impact on the Holders.
Section 4.07. NOTICE OF DEFAULT.
In the event that any Default under Section 6.01 hereof shall occur
the Company will give prompt written notice of such Default to the Trustee.
Section 4.08. CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control, each Holder shall
have the right to require that the Company repurchase all or a portion of such
Holder's Securities at a purchase price in cash equal to 101% of the principal
amount thereof plus accrued and unpaid interest and Additional Interest, if any,
to the date of repurchase (subject to the right of Holders of record on the
relevant record date to receive interest due on the relevant interest payment
date), in accordance with the provisions of this Section 4.08.
(b) Within 30 days following any Change of Control, the Company
shall mail a notice to each Holder with a copy to the Trustee stating:
(i) that a Change of Control has occurred and that such Holder has
the right to require the Company to purchase such Holder's Securities at a
purchase price in cash equal to 101% of the principal amount outstanding
at the repurchase date plus accrued and unpaid interest and Additional
Interest, if any, to the date of repurchase (the "REPURCHASE PRICE")
(subject to the right of Holders of record on the relevant record date to
receive interest on the relevant interest payment date);
-39-
(ii) the circumstances and relevant facts and relevant financial
information (as determined by the board of directors of the Company in
good faith and in compliance with applicable law) regarding such Change of
Control;
(iii) the repurchase date (which shall be no earlier than 30 days
nor later than 60 days from the date such notice is mailed) (the
"REPURCHASE DATE");
(iv) that any Security not tendered or accepted for payment will
continue to accrue interest;
(v) that any Security accepted for payment shall cease to accrue
interest after the Repurchase Date;
(vi) that Holders electing to have a Security purchased will be
required to surrender the Security, with the form entitled "Option of
Holder to Elect Purchase" on the reverse side of the Security completed,
to the Paying Agent at the address specified in the notice at least five
days before the Repurchase Date;
(vii) that Holders will be entitled to withdraw their election if
the Paying Agent receives, not later than three days prior to the
Repurchase Date, a telegram, telex, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of the Security
the Holder delivered for purchase and a statement that such Holder is
withdrawing his election to have the Security purchased;
(viii) that Holders whose Securities were purchased only in part
will be issued new Securities equal in principal amount to the unpurchased
portion of the Securities surrendered; and
(ix) such other information as is required under Section 14 of the
Exchange Act.
(c) On the Repurchase Date, the Company shall (i) accept for payment
Securities or portions thereof properly tendered, (ii) deposit with the Paying
Agent money sufficient to pay the purchase price of all Securities or portions
thereof so accepted and (iii) deliver to the Trustee Securities so accepted
together with an Officer's Certificate stating the Securities or portions
thereof accepted for payment by the Company. The Paying Agent shall promptly
mail or deliver to Holders of Securities so accepted, payment in an amount equal
to the Repurchase Price, and the Trustee shall promptly authenticate and mail or
deliver to such Holders a new Security equal in principal amount of any
unpurchased portion of the Security surrendered. The Company will publicly
announce the results on or as soon as practical after the
-40-
Repurchase Date. For purposes of this Section 4.08(c), the Trustee shall act as
the Paying Agent.
(d) If any repurchase pursuant to the foregoing provisions
constitutes a tender offer as defined under the Exchange Act, the Company will
comply with the requirements of Rule 14e-1 and any other tender offer rules
under the Exchange Act which then may be applicable. To the extent that the
provisions of any securities laws or regulations conflict with the provisions of
this Section, the Company shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations under this
Section by virtue of such compliance.
(e) Notwithstanding the foregoing, the Company will not be required
to make a Change of Control Offer upon a Change of Control if a third party
makes the Change of Control Offer in the manner, at the times and otherwise in
compliance with the requirements set forth in this Indenture applicable to a
Change of Control Offer made by the Company and purchases all Securities validly
tendered and not withdrawn under such Change of Control Offer.
Section 4.09. MAINTENANCE OF CONSOLIDATED NET WORTH.
(a) In the event that the Company's Consolidated Net Worth at the
end of each of any two consecutive fiscal quarters (the last day of such second
fiscal quarter being referred to as the "TRIGGER DATE") is less than $150.0
million (the "MINIMUM NET WORTH"), then the Company shall make an offer to all
Holders (a "NET WORTH OFFER") to acquire on a PRO RATA basis on the date (the
"NET WORTH REPURCHASE DATE") that is 45 days following the date of the Net Worth
Notice (as defined below), Securities in an aggregate principal amount equal to
10% of the initial aggregate amount of the Securities issued under this
Indenture (or if less than 10% of the initial aggregate principal amount of the
Securities issued is then outstanding, all the Securities outstanding at the
time) (the "NET WORTH OFFER AMOUNT") at a purchase price of 100% of the
principal amount thereof, plus accrued interest and Additional Interest, if any,
to the Net Worth Repurchase Date (the "NET WORTH PRICE"). The Company may credit
against a Net Worth Offer Amount the principal amount of Securities acquired by
the Company prior to the relevant Trigger Date through purchase, optional
redemption or exchange. No credit shall be made for any mandatory repurchase,
including, without limitation, repurchases pursuant to a Net Worth Offer, a
Change of Control or a Net Proceeds Offer (as defined in Section 4.15). The
Company, however, may not receive credit for a specific repurchased Security in
more than one Net Worth Offer. In no event shall the Company's failure to
maintain a Consolidated Net Worth in excess of the Minimum Net Worth at the end
of any fiscal quarter be counted toward the requirement to make more than one
Net Worth Offer. The Company shall notify the Trustee promptly after the
occurrence of any of the events specified in this Section
-41-
4.09 and shall notify the Trustee in writing if its Consolidated Net Worth is
equal to or less than the Minimum Net Worth for any fiscal quarter.
(b) Within 45 days after the Trigger Date (or 90 days if such
Trigger Date is the last day of the Company's fiscal year), the Company, or, at
the request of the Company, the Trustee, shall give notice of the Net Worth
Offer to each Holder (the "NET WORTH NOTICE").
(c) To accept a Net Worth Offer a Holder shall deliver to the
Company (if it is acting as its own trustee) or to a trustee designated by the
Company for such purpose in the Net Worth Notice, on or before the 30th day
after the date of the Net Worth Notice, or, if such day is a Legal Holiday, the
next subsequent day which is not a Legal Holiday, (i) written notice of the
Holder's acceptance of such offer, which notice shall set forth the name of the
Holder, the principal amount of Securities (or portions thereof) to be
repurchased and a statement that an acceptance of the Net Worth Offer is being
made thereby and (ii) the Securities with respect to which the Net Worth Offer
is being accepted, duly endorsed for transfer to the Company, and the Holder of
such Securities shall be entitled to receive from the Company (if it is acting
as its own paying agent) or such Paying Agent (designated by the Company for
such purpose) a nontransferable receipt of deposit evidencing such deposit. Such
written notice may be withdrawn upon further written notice delivered to such
trustee on or prior to the third day preceding the Net Worth Repurchase Date.
If the Net Worth Repurchase Date is between a regular record date
for the payment of interest and the next succeeding interest payment date, any
Security to be repurchased must be accompanied by funds equal to the interest
payable on such succeeding interest payment date on the principal amount to be
repurchased (unless such Security shall have been called for redemption, in
which case no such payment shall be required), and the interest on the principal
amount of the Security being repurchased will be paid on such next succeeding
interest payment date to the registered Holder of such Security on the
immediately preceding record date. A Security repurchased on an interest payment
date need not be accompanied by any payment, and the interest on the principal
amount of the Security being repurchased will be paid on such interest payment
date to the registered Holder of such Security on the immediately preceding
record date.
(d) In the event a Net Worth Offer is accepted in accordance with
the terms hereof, the Company shall pay or cause to be paid the applicable Net
Worth Price with respect to the Securities as to which the Net Worth Offer shall
have been accepted (on a PRO RATA basis up to the Net Worth Offer Amount, plus
accrued interest) to the Holder on the Net Worth Repurchase Date.
(e) On the Net Worth Repurchase Date, the Company shall deliver to
the Trustee the amount of Securities to be credited against the Net Worth Offer
Amount and shall
-42-
deposit with the Trustee or with a Paying Agent (or, if the Company is acting as
its own Paying Agent, segregate and hold in trust in accordance with Section
2.04) an amount of money sufficient to pay the Net Worth Price payable in
respect of all of the Securities which are to be repurchased on that date, but
in no event shall the Company be obligated to deposit an amount in excess of the
Net Worth Offer Amount, plus accrued interest.
(f) Both the notice of the Company and the notice of the Holder
having been given as specified in this Section 4.09, the Securities to be
repurchased shall, on the Net Worth Repurchase Date, become due and payable at
the Net Worth Price applicable thereto and from and after such date (unless the
Company shall default in the payment of the Net Worth Price) such Securities
shall cease to bear interest. If any Security shall not be paid upon surrender
thereof for repurchase, the principal and interest (to the extent lawful) shall,
until paid, bear interest from the Net Worth Repurchase Date at the rate borne
by such Security.
(g) Any Security which is to be submitted for repurchase only in
part shall be delivered (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and make available for delivery to the Holder of such
Security without any service charge, a new Security or Securities, of any
authorized denomination as requested by such Holder, of the same tenor and in
aggregate principal amount equal to and in exchange for the portion of the
principal of such Security not submitted for repurchase.
(h) If any repurchase pursuant to the foregoing provisions
constitutes a tender offer as defined under the Exchange Act, the Company will
comply with the requirements of Rule l4e-1 and any other tender offer rules
under the Exchange Act which then may be applicable. To the extent that the
provisions of any securities laws or regulations conflict with the provisions of
the covenant described hereunder, the Company shall comply with the applicable
securities laws and regulations and shall not be deemed to have breached its
Obligations under the covenant described hereunder by virtue thereof.
Section 4.10. LIMITATION ON ADDITIONAL INDEBTEDNESS.
(a) The Company will not, and will not permit any Restricted
Subsidiary to, directly or indirectly, Incur any Indebtedness unless, after
giving effect thereto, either (i) the ratio of Indebtedness of the Company and
its Restricted Subsidiaries to Consolidated Tangible Net Worth of the Company
and its Restricted Subsidiaries is less than 3.0 to 1; or (ii) the Consolidated
Coverage Ratio exceeds 2.0 to 1.
-43-
(b) Notwithstanding the foregoing, the Company and its Restricted
Subsidiaries may Incur:
(i) Indebtedness under one or more Bank Credit Facilities in an
amount not to exceed $400.0 million at any time outstanding;
(ii) Indebtedness existing as of the Issuance Date other than
Indebtedness under a Bank Credit Facility;
(iii) Indebtedness represented by Securities issued on the Issuance
Date and the related Guarantees;
(iv) Obligations Incurred under letters of credit, escrow
agreements, bid, performance or surety bonds, completion guarantees or
similar obligations in the ordinary course of business;
(v) Indebtedness Incurred solely for the purpose of Refinancing or
repaying any existing Indebtedness (other than Indebtedness Incurred
pursuant to clause (i), (iv), (vi), (vii), (viii) or (ix) of this Section
4.10(b)) so long as (A) the principal amount of such new Indebtedness does
not exceed the principal amount of the existing Indebtedness Refinanced or
repaid (plus the premiums or other payments required to be paid in
connection with such Refinancing or repayment and the expenses Incurred in
connection therewith); (B) the maturity of such new Indebtedness is not
earlier than that of the existing Indebtedness to be Refinanced or repaid,
(C) such new Indebtedness, determined as of the date of Incurrence, has an
Average Life at least equal to the remaining Average Life of the
Indebtedness to be Refinanced or repaid, (D) the new Indebtedness is
subordinate to the Securities to the same extent as the Indebtedness being
Refinanced or repaid, and (E) the Indebtedness Refinanced or repaid and
the new Indebtedness are Obligations of the same entity;
(vi) Indebtedness in respect of Hedging Obligations relating to
payment obligations on Indebtedness otherwise permitted to be Incurred by
this covenant;
(vii) Capitalized Lease Obligations or purchase money obligations,
in each case Incurred for the purpose of acquiring or financing all or any
part of the purchase price or cost of construction or improvement of
property or equipment used in the business of the Company or any of its
Restricted Subsidiaries, in an aggregate amount not to exceed $10.0
million at any time outstanding;
(viii) Indebtedness of the Company owed to a Guarantor and
Indebtedness of any Restricted Subsidiary owed to the Company or a
Guarantor; PROVIDED that upon
-44-
any Guarantor ceasing to be a Guarantor or such Indebtedness being owed to
any Person other than the Company or a Guarantor, the Company or such
Restricted Subsidiary, as applicable, shall be deemed to have Incurred
Indebtedness not permitted by this clause (8); and
(ix) Other Indebtedness Incurred (in addition to Indebtedness
permitted by any other clause of this paragraph) in an aggregate principal
amount at any time outstanding not to exceed $25.0 million.
For the purposes of determining compliance with this Section 4.10,
in the event that an item of Indebtedness meets the criteria of more than one of
the categories of Indebtedness described in clauses (i) through (ix) above or is
permitted to be Incurred pursuant to the first paragraph of this Section 4.10,
the Company shall, in its sole discretion, classify (or later reclassify) such
item of Indebtedness in any manner that complies with this Section 4.10.
Section 4.11. LIMITATION ON RESTRICTED PAYMENTS.
(a) The Company will not, nor will it permit any Restricted
Subsidiary to, directly or indirectly,
(i) declare or pay any dividend on, or make any distribution in
respect of, or purchase, redeem or otherwise acquire or retire for value,
any Capital Stock of the Company other than through the issuance solely of
the Company's own Capital Stock (other than Disqualified Stock) or rights
thereto;
(ii) make any principal payment on, or redeem, repurchase, defease
or otherwise acquire or retire for value prior to scheduled principal
payments or at maturity, Indebtedness of the Company or any Restricted
Subsidiary which is expressly subordinated in right of payment to the
Securities unless the Company or the Restricted Subsidiary, as the case
may be, uses the proceeds of a substantially contemporaneous Incurrence of
new Indebtedness permitted by clause (v) of Section 4.10(b) to make such
principal payment on, or redeem, repurchase, defease or otherwise acquire
or retire for value, such prior Indebtedness or unless the Company or any
of its Restricted Subsidiaries is purchasing, repurchasing or otherwise
acquiring or retiring such subordinated Indebtedness in anticipation of
satisfying a related sinking fund obligation, principal installment or
final maturity, in each case due within one year of the date of purchase,
repurchase or other acquisition or retirement; or
-45-
(iii) make any Restricted Investment (such payments or any other
actions described in clauses (i), (ii) and (iii) being referred to herein
collectively as "RESTRICTED PAYMENTS") unless:
(A) at the time of, and after giving effect to, the proposed
Restricted Payment, no Default or Event of Default shall have
occurred and be continuing,
(B) the Company is able to Incur an additional $1.00 in
Indebtedness pursuant to Section 4.10(a), and
(C) at the time of, and after giving effect thereto, the sum
of the aggregate amount expended (or with respect to guarantees or
similar arrangements the amount then guaranteed) for all such
Restricted Payments (the amount expended for such purposes, if other
than in cash, to be determined by the board of directors of the
Company, whose determination shall be conclusive and evidenced by a
resolution of such board of directors filed with the Trustee)
subsequent to March 31, 2001 shall not exceed the sum of (1) 50% of
the aggregate Consolidated Net Income (or, in case such aggregate
Consolidated Net Income shall be a deficit, minus 100% of such
deficit) of the Company accrued on a cumulative basis subsequent to
March 31, 2001; (2) the aggregate net cash proceeds and the fair
market value (to be determined by the board of directors of the
Company in good faith) of any assets to be used in the business of
the Company and its Restricted Subsidiaries (other than securities)
received by the Company from the issuance or sale, after the
Issuance Date, of Capital Stock (other than Disqualified Stock) of
the Company, including Capital Stock (other than Disqualified Stock)
of the Company issued subsequent to the Issuance Date upon the
conversion of Indebtedness of the Company issued subsequent to the
Issuance Date and initially issued for cash, (3) to the extent not
included in clause (1) above, an amount equal to the sum of (without
duplication) (aa) 100% of dividends or distributions (the fair
market value of which, if other than cash, to be determined by the
board of directors of the Company in good faith) including the
repayment of any loans or advances, paid to the Company (or any
Restricted Subsidiary) by an Unrestricted Subsidiary, (bb) 100% of
the returns on any Restricted Investment other than an Investment in
an Unrestricted Subsidiary and (cc) the portion (proportionate to
the Company's equity interest in such Subsidiary) of the fair market
value of the net assets of an Unrestricted Subsidiary at the time
such Unrestricted Subsidiary is designated a Restricted Subsidiary;
PROVIDED that the foregoing sum shall not include (x) in the case of
an Unrestricted Subsidiary, any amounts in excess of the amount of
Restricted Investments previously made (and either
-46-
made prior to the Issuance Date or treated as a Restricted Payment)
by the Company or any Restricted Subsidiary in such Unrestricted
Subsidiary or (y) in the case of any Restricted Investment (other
than an Investment in an Unrestricted Subsidiary), any amounts in
excess of the amount of such Restricted Investment (and either made
prior to the Issuance Date or treated as a Restricted Payment), net
of the costs associated with the acquisition and disposition of such
Restricted Investment and taxes related thereto; and (4) $35.0
million.
(b) The foregoing shall not prevent (i) the payment of any dividend
within 60 days after the date of declaration thereof, if at said date of
declaration the making of such payment would have complied with the provisions
of this Section 4.11; PROVIDED that such dividend shall be included in future
calculations of Restricted Payments made under clause (C) of the immediately
preceding paragraph; (ii) the retirement of any shares of the Company's Capital
Stock by exchange for, or out of proceeds of the substantially concurrent sale
of, other shares of its Capital Stock (other than Disqualified Stock); PROVIDED
that the aggregate net proceeds from such sale shall be excluded from the
calculation of the amounts under clause (C)(2) of the immediately preceding
paragraph; (iii) the redemption, repayment, repurchase, defeasance or other
retirement of Indebtedness with proceeds received from the substantially
concurrent sale of shares of the Company's Capital Stock (other than
Disqualified Stock); PROVIDED that the aggregate net proceeds from such sale
used for such purpose shall be excluded from the calculation of the amounts
under clause (C)(2) of the immediately preceding paragraph; (iv) the redemption
of the Convertible Notes in accordance with the terms thereof; (v) so long as no
Default or Event of Default shall have occurred and be continuing at the time of
or as a consequence of such redemption, the redemption of Capital Stock of the
Company held by officers, directors or employees or former officers, directors
or employees (or their transferees, estates or beneficiaries under their
estates), upon their death, disability, retirement, severance or termination of
employment or service; PROVIDED that the aggregate cash consideration paid for
all such redemptions shall not exceed $2.0 million during any calendar year
(with unused amounts in any calendar year being carried over the succeeding
calendar years subject to a maximum of $4.0 million in any calendar year);
PROVIDED, FURTHER, that the aggregate amount of consideration paid in respect of
such redemption shall be included in future calculations of Restricted Payments
made under clause (C) of the immediately preceding paragraph; or (vi)
repurchases of Capital Stock deemed to occur upon the exercise of stock options
if the Capital Stock represents a portion of the exercise price thereof.
Section 4.12. LIMITATION ON PAYMENT RESTRICTIONS AFFECTING RESTRICTED
SUBSIDIARIES.
The Company will not, and will not permit any Restricted Subsidiary
to, create or otherwise cause or permit to exist or become effective any
consensual encumbrance or con-
-47-
sensual restriction on the ability of any Restricted Subsidiary (i) to pay
dividends or make any other distributions on its Capital Stock to the Company or
a Restricted Subsidiary or pay any Indebtedness owed to the Company, (ii) to
make any loans or advances to the Company or (iii) to transfer any of its
property or assets to the Company, except: (A) any encumbrance or restriction
pursuant to an agreement in effect at or entered into on the Issuance Date; (B)
any encumbrance or restriction with respect to a Restricted Subsidiary pursuant
to an agreement relating to any Indebtedness Incurred by such Restricted
Subsidiary which was entered into on or prior to the date on which such
Restricted Subsidiary was acquired by the Company (other than as consideration
in, or to provide all or any portion of the funds or credit support utilized to
consummate, the transaction or series of related transactions pursuant to which
such Restricted Subsidiary became a Restricted Subsidiary or was acquired by the
Company) and outstanding on such date; (C) any encumbrance or restriction
pursuant to an agreement effecting a Refinancing of Indebtedness Incurred
pursuant to an agreement referred to in clause (A) or (B) of this Section 4.12
(or effecting a Refinancing of such Refinancing Indebtedness pursuant to this
clause (C)) or contained in any amendment to an agreement referred to in clause
(A) or (B) of this Section 4.12 or this clause (C); PROVIDED that the
encumbrances and restrictions with respect to such Restricted Subsidiary
contained in any such Refinancing agreement or amendment are no more restrictive
in any material respect than the encumbrances and restrictions with respect to
such Restricted Subsidiary contained in such agreements; (D) any such
encumbrance or restriction consisting of customary contractual non-assignment
provisions to the extent such provisions restrict the transfer of rights, duties
or Obligations under such contract; (E) in the case of clause (iii) above,
restrictions contained in security agreements or mortgages securing Indebtedness
of a Restricted Subsidiary or Capitalized Lease Obligations of such Restricted
Subsidiary to the extent such restrictions restrict the transfer of the property
subject to such security agreements, mortgages or Capitalized Lease Obligations;
(F) any restriction with respect to a Restricted Subsidiary imposed pursuant to
an agreement entered into for the sale or disposition of all or substantially
all the Capital Stock or assets of such Restricted Subsidiary pending the
closing of such sale or disposition; and (G) any restriction imposed by
applicable law.
Section 4.13. LIMITATION ON LIENS.
The Company will not, and will not permit any Restricted Subsidiary
to, issue, assume, guarantee or suffer to exist any Indebtedness secured by any
mortgage, pledge, lien or other encumbrance of any nature (herein collectively
referred to as a "LIEN" or "LIENS") upon any property of the Company or any
Restricted Subsidiary, or on any shares of Capital Stock of any Restricted
Subsidiary, without in any such case effectively providing that the Securities
(together with, if the Company shall so determine, any other Indebtedness of the
Company or such Restricted Subsidiary ranking PARI PASSU with the Securities)
-48-
(a) in the case of any lien securing Indebtedness ranking PARI PASSU
with the Securities or a related Guarantee, the Securities or such
Guarantees shall be secured equally and ratably with such Indebtedness or
(b) in the case of any lien securing Indebtedness that is
subordinated in right of payment to the Securities or a related Guarantee,
the Securities or such Guarantee shall be secured by a lien that is prior
to the lien securing such subordinated Indebtedness,
except that the foregoing restrictions shall not apply to:
(1) liens existing on the Issuance Date;
(2) pledges, guarantees and deposits under workers' compensation
laws, unemployment insurance laws or similar legislation, bids, tenders,
leases, contracts, public or statutory obligations, appeal or surety bonds
or other obligations of a like nature (exclusive of obligations for the
payment of borrowed money), in each case incurred in the ordinary course
of business, and liens created by special assessment districts used to
finance infrastructure improvements;
(3) liens existing on property or assets of any entity on the date
on which it becomes a Restricted Subsidiary, which secured Indebtedness is
not Incurred in contemplation of such entity becoming a Restricted
Subsidiary, PROVIDED that such liens are not extended to other property or
assets of such Restricted Subsidiary, any other Restricted Subsidiary or
the Company;
(4) liens on or leases of model home units;
(5) liens replacing any of the items set forth in clauses (i) and
(iii) above, PROVIDED that (A) the principal amount of the Indebtedness
secured by such liens shall not be increased (except premiums or other
payments required to be paid in connection with a concurrent Refinancing
or repayment of such Indebtedness and the expenses Incurred in connection
therewith), (B) the principal amount of the Indebtedness secured by such
liens, determined as of the date of Incurrence, has an Average Life at
least equal to the remaining Average Life of the Indebtedness being
Refinanced or repaid, (C) the maturity of the Indebtedness secured by such
liens is not earlier than that of the Indebtedness to be Refinanced or
repaid, (D) the liens have at least same ranking and priority as the liens
being replaced, and (E) the liens shall be limited to the property or part
thereof which secured the lien so replaced or property substituted
therefor as a result of the destruction, condemnation or damage of such
property;
-49-
(6) liens or priorities incurred in the ordinary course of business,
such as, without limitation, laborers', employees', carriers', mechanics',
vendors' and landlords' liens or priorities;
(7) (a) liens for taxes, assessments or governmental charges or
claims either (1) not delinquent, (2) contested in good faith by
appropriate proceedings and as to which the Company or the applicable
Restricted Subsidiary shall have set aside on its books such reserves as
may be required pursuant to GAAP or (3) solely encumbering abandoned
property or property in the process of being abandoned, and (b) easements,
dedications, covenants, conditions and restrictions, minor irregulations
in title, rights of way, zoning restrictions and other similar charges or
encumbrances in respect of real property not interfering in any material
respect with the ordinary conduct of business of the Company or any of the
Restricted Subsidiaries;
(8) liens arising out of judgments or awards against the Company or
any Restricted Subsidiary with respect to which the Company or such
Restricted Subsidiary is in good faith prosecuting an appeal or proceeding
for review and with respect to which it has secured a stay of execution
pending such appeal or proceeding for review;
(9) any customary right of first refusal, right of first offer,
option, contract, or other agreement to sell an asset of the Company or
any Restricted Subsidiary;
(10) liens for homeowner and property owner association developments
and assessments;
(11) liens incurred in the ordinary course of business as security
for the obligations of the Company and its Restricted Subsidiaries with
respect to indemnification in respect of title insurance providers;
(12) liens securing Senior Indebtedness, Guarantor Senior
Indebtedness or Non-Recourse Indebtedness; and
(13) liens securing the Securities and related Guarantees.
Section 4.14. LIMITATION ON TRANSACTIONS WITH RELATED PERSONS.
The Company will not, and will not permit any Restricted Subsidiary
to, directly or indirectly, enter into any transaction or series of related
transactions with Related Persons of the Company unless: (i) such transactions
are between or among the Company and its Restricted Subsidiaries; or (ii) such
transactions are in the ordinary course of business and consistent with past
practice; or (iii) the terms of such transactions are fair and reasonable to the
Company or such Restricted Subsidiary, as the case may be, and are at least as
favorable
-50-
as the terms which could be obtained by the Company or the Restricted
Subsidiary, as the case may be, in a comparable transaction made on an
arm's-length basis between Persons who are not Related Persons. In the event of
any transaction or series of transactions occurring subsequent to the Issuance
Date with a Related Person which involves in excess of $1.0 million and is not
permitted under clause (i) of the preceding sentence, a majority of the
disinterested members of the board of directors of the Company shall by
resolution determine that such transaction or series of transactions meets the
criteria set forth in clause (iii) of the preceding sentence. In the event of
any transaction or series of transactions occurring subsequent to the Issuance
Date with a Related Person which involves in excess of $10.0 million and is not
permitted under clause (i) above, the Company will be required to deliver to the
Trustee an opinion of an Independent Financial Advisor to the effect that the
transaction is fair to the Company or the relevant Restricted Subsidiary, as the
case may be, from a financial point of view or a written appraisal issued by an
Independent Financial Advisor supporting the value of the transaction.
Notwithstanding the foregoing, such provisions do not prohibit and will not
apply to (1) any Restricted Payment which is permitted by Section 4.11; (2) the
payment of compensation and the provision of customary indemnities to directors
of the Company and wages and other compensation (including customary benefits)
to officers or employees of the Company or any of its Subsidiaries in the
ordinary course of business; (3) any agreement as in effect on the Issuance Date
and described in the Offering Memorandum under the caption "Certain
Relationships and Related Party Transactions" or any transaction contemplated
thereby (including pursuant to any amendment thereto) in any replacement
agreement thereto so long as any such amendment or replacement agreement is not
more disadvantageous to the Company in any material respect than the original
agreement as in effect on the Issuance Date; or (4) the issuance by the Company
of its Capital Stock (other than Disqualified Stock).
Section 4.15. LIMITATION ON ASSET SALES.
(a) The Company will not, and will not permit any Restricted
Subsidiary to, directly or indirectly, consummate an Asset Disposition, unless
(i) the Company or such Restricted Subsidiary, as the case may be,
receives consideration at the time of such Asset Disposition at least
equal to the fair market value (as determined in good faith by the board
of directors of the Company) of the assets disposed of, and
(ii) the consideration for such Asset Disposition consists of at
least 75% cash, Cash Equivalents or Permitted Additional Assets; PROVIDED,
that (x) the amount of liabilities assumed by the transferee, (y) any
notes or other Obligations received by the Company or such Restricted
Subsidiary and converted into cash within 90 days following the receipt
thereof or (z) with respect to the sale or other disposition of all of the
Capital Stock of any Restricted Subsidiary, the amount of liabilities that
remain the
-51-
obligation of such Restricted Subsidiary subsequent to such sale or other
disposition, shall be deemed to be "cash or Cash Equivalents."
(b) Within 390 days from the date that any Asset Disposition is
consummated, (i) the Net Proceeds thereof (x) will be reinvested in Additional
Assets, or (y) will be applied to the repayment, redemption or repurchase of
Senior Indebtedness or Guarantor Senior Indebtedness or Indebtedness which ranks
PARI PASSU with the Securities or the Guarantees (which, in each case, will be a
permanent reduction of such Indebtedness), or (ii) the Company or such
Restricted Subsidiary, as the case may be, will make an offer (a "NET PROCEEDS
OFFER") to purchase, within 30 days of such Net Proceeds Offer (such date of
purchase being the "NET PROCEEDS REPURCHASE DATE"), Securities and, if
applicable, to redeem any Indebtedness ranking PARI PASSU with the Securities
the provisions of which require the Company or a Restricted Subsidiary to redeem
(or make an offer to do so) such Indebtedness with the proceeds of Asset
Dispositions (or offer to do so), having an aggregate Offer Price (defined
below) equal to the amount of Net Proceeds of such Asset Disposition not applied
as provided in the foregoing clause (i) (less any amounts used to pay reasonable
fees and expenses connected with such Net Proceeds Offer and, if applicable,
other offer to redeem Indebtedness).
Notwithstanding the foregoing, the Net Proceeds of an Asset
Disposition are not required to be applied in accordance with clause (ii) of the
preceding paragraph, unless and until the aggregate Net Proceeds of all such
Asset Dispositions not applied in accordance with clause (i) above exceed $10.0
million. Pending the final application of any such Net Proceeds, the Company may
temporarily reduce revolving credit borrowings or otherwise invest such Net
Proceeds in any manner that is not prohibited by this Indenture.
(c) If the Company or one of its Restricted Subsidiaries is required
to make a Net Proceeds Offer pursuant to clause (b) above, the Company or such
Restricted Subsidiary, or, at the request of the Company, the Trustee, shall
give notice of the Net Proceeds Offer to each Holder (the "NET PROCEEDS OFFER
NOTICE"). The Company shall deliver a copy of the Net Proceeds Offer Notice to
the Trustee not less than ten Business Days prior to the date on which such
notice is required to be delivered to Holders by the Trustee. Any such notice
shall contain all instructions and materials necessary to enable such Holders to
deliver Securities pursuant to the Net Proceeds Offer including, without
limitation, the following:
(1) the Net Proceeds Repurchase Date;
(2) the date by which the Net Proceeds Offer must be accepted;
(3) the applicable amount of Net Proceeds being applied to the
repurchase of Securities in the Net Proceeds Offer (the "PURCHASE
AMOUNT"); and
-52-
(4) that Securities are to be surrendered for payment.
The purchase price for any Securities subject to a Net Proceeds Offer shall be
100% of the principal amount thereof, plus accrued interest and Additional
Interest, if any, to the Net Proceeds Repurchase Date (the "NOTES OFFER PRICE").
If, in connection with a Net Proceeds Offer, the Company or a Restricted
Subsidiary is required to redeem (or offer to redeem) any other Indebtedness
ranking PARI PASSU with the Securities subject to such Net Proceeds Offer,
(1) the redemption price for such Indebtedness shall be as set forth
in the documentation relating to such Indebtedness (which, together with
the Notes Offer Price, shall constitute the "OFFER PRICE"), and
(2) the amount of the Net Proceeds of the subject Asset Disposition
shall be allocated as among Securities required to be subject to a Net
Proceeds Offer and the redemption (or offer to do so) of such other
Indebtedness on a PRO RATA basis relative to the outstanding aggregate
principal amount of the Securities and such other Indebtedness.
To accept a Net Proceeds Offer a Holder shall deliver to the Company
(if it is acting as its own trustee) or to a trustee designated by the Company
for such purpose in the notice referred to above on or before the Net Proceeds
Repurchase Date, or, if such day is a Legal Holiday, the next subsequent day
which is not a Legal Holiday, (i) written notice of the Holder's acceptance of
the Net Proceeds Offer, which notice shall set forth the name of the Holder, the
principal amount of Securities (or portions thereof) to be repurchased and a
statement that an election to accept the Net Proceeds Offer is being made
thereby, and (ii) the Securities with respect to which the Net Proceeds Offer is
being accepted, duly endorsed for transfer to the Company. The Holder of such
Securities shall be entitled to receive from the Company (if it is acting as its
own trustee) or such other trustee designated by the Company for such purpose a
nontransferable receipt of deposit evidencing such deposit. Such written notice
may be withdrawn upon further written notice to such trustee on or prior to the
third day preceding the Net Proceeds Repurchase Date.
If the Net Proceeds Repurchase Date is between a regular record date
for the payment of interest and the next succeeding interest payment date, any
Security to be repurchased must be accompanied by funds equal to the interest
payable on such succeeding interest payment date on the principal amount to be
repurchased (unless such Security shall have been called for redemption, in
which case no such payment shall be required), and the interest on the principal
amount of the Security being repurchased will be paid on such next succeeding
interest payment date to the registered Holder of such Security on the
immediately preceding record date. A Security repurchased on an interest payment
date need not be accompanied by any payment, and the interest on the principal
amount of the Security being repur-
-53-
chased will be paid on such interest payment date to the registered Holder of
such Security on the immediately preceding record date.
In the event a Net Proceeds Offer shall be accepted in accordance
with the terms hereof, the Company shall pay or cause to be paid the PRO RATA
portion of the Purchase Amount with respect to the Securities as to which the
Net Proceeds Offer shall have been accepted to the Holder of such Securities on
the Net Proceeds Repurchase Date. If the aggregate Notes Offer Price of
Securities validly tendered and not withdrawn by Holders exceeds the pro rata
portion of the Net Proceeds allocable to the Securities, Securities to be
purchased will be selected on a pro rata basis based on the principal amounts of
Securities tendered.
On or prior to a Net Proceeds Repurchase Date, the Company shall
deposit with the Trustee or with a trustee designated by the Company for such
purpose (or, if the Company is acting as its own trustee, segregate and hold in
trust in accordance with Section 2.04) an amount of money equal to the Purchase
Amount.
Both the notice of the Company and the notice of the Holder having
been given as specified above, the Securities to be repurchased shall, on the
Net Proceeds Repurchase Date, become due and payable and from and after such
date (unless the Company shall default in the payment of the Purchase Amount)
such Securities shall cease to bear interest. If any Security shall not be paid
upon surrender thereof for repurchase, the principal and interest shall, until
paid, bear interest from the Net Proceeds Repurchase Date at the rate borne by
such Security.
Any Security which is to be submitted for repurchase only in part
shall be delivered pursuant to this provision (with, if the Company or the
Trustee so requires, due endorsement by, or a written instrument of transfer in
form satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or his attorney duly authorized in writing), and the Company shall
execute, and the Trustee shall authenticate and make available for delivery to
the Holder of such Security without any service charge, a new Security or
Securities, of any authorized denomination as requested by such Holder, of the
same tenor and in aggregate principal amount equal to and in exchange for the
portion of the principal of such Security not submitted for repurchase.
(d) If any repurchase pursuant to the foregoing provisions
constitutes a tender offer as defined under the Exchange Act, the Company will
comply with the requirements of Rule 14e-1 and any other tender offer rules
under the Exchange Act which then may be applicable. To the extent that the
provisions of any securities laws or regulations conflict with the provisions of
the covenant described hereunder, the Company shall comply with the applicable
securities laws and regulations and shall not be deemed to have breached its
Obligations under the covenant described hereunder by virtue thereof.
-54-
(e) Any amount of Net Proceeds remaining after a Net Proceeds Offer
shall be returned by the Trustee to the Company and may be used by the Company
for any purpose not inconsistent with this Indenture.
Section 4.16. LIMITATION ON BUSINESS ACTIVITIES.
The Company will not, and will not permit any Restricted Subsidiary
to, engage in any business other than a Related Business.
Section 4.17. LIMITATION ON DESIGNATION OF RESTRICTED AND UNRESTRICTED
SUBSIDIARIES.
The Company will not permit any Restricted Subsidiary to be
designated as an Unrestricted Subsidiary (whether by designation of the board of
directors of the Company or by a reduction of its ownership interest) unless the
Company and its remaining Restricted Subsidiaries would thereafter be permitted
to (i) Incur at least $1.00 of Indebtedness pursuant to Section 4.10(a); (ii)
make a Restricted Payment of at least $1.00 pursuant to the first paragraph of
Section 4.11(a); and (iii) immediately following such designation, enter into,
as of the time of such designation, any continuing transaction or series of
related transactions between such Unrestricted Subsidiary and any of the Company
and its remaining Restricted Subsidiaries in accordance with Section 4.14.
The Company will not permit any Unrestricted Subsidiary to be
designated as a Restricted Subsidiary unless such Subsidiary has outstanding no
Indebtedness except such Indebtedness as the Company could permit it to become
liable for immediately after becoming a Restricted Subsidiary under the
provisions of Section 4.10.
Section 4.18. ADDITIONAL GUARANTORS.
The Company shall cause any Subsidiary which is designated as a
Restricted Subsidiary, simultaneously with its designation as a Restricted
Subsidiary, and, at the Company's discretion, any Unrestricted Subsidiary that
may be made a Guarantor, to execute and deliver (i) a supplemental indenture to
this Indenture, providing for the guarantee of payment of the Securities by such
Subsidiary pursuant to the terms of Article Ten hereof and EXHIBIT B hereto and
(ii) a Guarantee in the form of EXHIBIT B hereto.
Section 4.19. LIMITATION ON LAYERING INDEBTEDNESS.
The Company will not, and will not permit any Restricted Subsidiary
to, directly or indirectly, Incur any Indebtedness that is or purports to be by
its terms (or by the terms of any agreement governing such Indebtedness)
contractually subordinated to any other Indebtedness of the Company or such
Restricted Subsidiary, as the case may be, unless such
-55-
Indebtedness is also by its terms (or by the terms of any agreement governing
such Indebtedness) contractually (i) designated as ranking PARI PASSU with the
Securities or the related Guarantee of such Restricted Subsidiary, as the case
may be, or (ii) expressly made subordinate to the Securities or the related
Guarantee of such Restricted Subsidiary to the same extent and in the same
manner as such Indebtedness is contractually subordinated to such other
Indebtedness of the Company or such Restricted Subsidiary, as the case may be.
ARTICLE 5
SUCCESSORS
Section 5.01. LIMITATION ON MERGERS AND SALES OF ASSETS BY THE COMPANY AND
THE GUARANTORS.
(a) The Company will not consolidate with, merge into or transfer
all or substantially all of its assets to another Person unless (i) such Person
(if other than the Company) is a corporation organized under the laws of the
United States or any state thereof or the District of Columbia and expressly
assumes, by supplemental indenture in form and substance satisfactory to the
Trustee, all the Obligations of the Company under this Indenture, the Securities
and the Registration Rights Agreement; (ii) immediately after giving effect to
such transaction, no Default or Event of Default shall have occurred and be
continuing; (iii) the Consolidated Net Worth of the obligor of the Securities
immediately after giving effect to such transaction (exclusive of any
adjustments to Consolidated Net Worth relating to transaction costs and
accounting adjustments resulting from such transaction) is not less than the
Consolidated Net Worth of the Company immediately prior to such transaction; and
(iv) the surviving corporation would be able to Incur at least an additional
$1.00 of Indebtedness pursuant to Section 4.10(a).
(b) Any Guarantor that is a Wholly Owned Subsidiary may consolidate
with or merger with or into the Company or another Guarantor that is a Wholly
Owned Subsidiary, without limitation. No Guarantor may consolidate with or merge
with or into (whether or not such Guarantor is the surviving person) another
corporation, Person or entity, whether or not a Related Person of such Guarantor
unless: (i) subject to the provisions of the following paragraph, the Person
formed by or surviving any such consolidation or merger (if other than such
Guarantor) assumes all the Obligations of such Guarantor, pursuant to a
supplemental indenture in form and substance reasonably satisfactory to the
Trustee, under the Securities, the Indenture, the Registration Rights Agreement
and the Guarantees and (ii) immediately after giving effect to such transaction,
no Default or Event of Default exists.
-56-
The Company shall deliver to the Trustee prior to the consummation
of any proposed transaction an Officer's Certificate to the foregoing effect and
an Opinion of Counsel stating that the proposed transaction and such
supplemental indenture comply with this Indenture.
Section 5.02. SUCCESSOR SUBSTITUTED.
Upon any consolidation, merger, sale, assignment, transfer, lease or
other disposition of all or substantially all of the assets of the Company in
accordance with Section 5.01, the Successor shall succeed to, and be substituted
for, and may exercise every right and power of, and shall assume every duty and
Obligation of, the Company under this Indenture with the same effect as if such
Successor had been named as the Company herein. When the Successor assumes all
Obligations of the Company hereunder, all Obligations of the predecessor shall
terminate.
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. EVENTS OF DEFAULT.
An "EVENT OF DEFAULT" occurs if:
(1) the Company fails to pay the principal of any Security when the
same becomes due and payable at stated maturity, upon redemption, upon
purchase, upon acceleration or otherwise, whether or not prohibited by the
provisions of Article 9 of this Indenture;
(2) the Company fails to pay interest on any Security when the same
becomes due and payable and such failure continues for a period of 30
days, whether or not prohibited by the provisions of Article 9 of this
Indenture;
(3) failure by the Company to comply with any of its agreements or
covenants described above under Section 5.01(a) or in respect of its
obligation to make an offer to purchase Securities issued hereunder
following a Change of Control described in Section 4.08;
(4) failure by the Company to comply with its other agreements in
the Securities issued under this Indenture for the benefit of the Holders
of the Securities issued hereunder upon the receipt by the Company of
notice of such Default by the Trustee or the Holders of at least 25% in
aggregate principal amount of the Securities
-57-
issued hereunder and the Company's failure to cure such Default within 45
days after receipt by the Company of such notice;
(5) the Company or any of its Restricted Subsidiaries pursuant to or
within the meaning of any Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against it in
an involuntary case,
(C) consents to the appointment of a Custodian of it or for
all or substantially all of its property, or
(D) makes a general assignment for the benefit of its
creditors; or
(6) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(A) is for relief against the Company in an involuntary case,
(B) appoints a Custodian of the Company for all or
substantially all of its property, or
(C) orders the liquidation of the Company, and the order or
decree remains unstayed and in effect for 90 days.
(7) an Event of Default shall have occurred under one or more
mortgage, indenture (including this Indenture) or instrument under which
is issued or which secures or evidences Indebtedness of the Company or any
Restricted Subsidiary (other than Non-Recourse Indebtedness) which default
constitutes a failure to pay principal of such Indebtedness in an amount
of $10.0 million or more when due and payable (other than as a result of
acceleration) or results in Indebtedness (other than Non-Recourse
Indebtedness) in the aggregate of $10.0 million or more becoming or being
declared due and payable before it would otherwise become due and payable
(which acceleration is not rescinded, annulled or otherwise cured within
30 days thereof);
(8) entry of a final judgment for the payment of money against the
Company or any Restricted Subsidiary in an amount of $5.0 million or more
which remains undischarged or unstayed for a period of 60 days after the
date on which the right to appeal such judgment has expired or becomes
subject to an enforcement proceeding; or
-58-
(9) any Guarantee ceases to be in full force and effect (other than
in accordance with the terms of such Guarantee and this Indenture) or is
declared null and void or unenforceable or found to be invalid or any
Guarantor denies its liability under such Guarantee (other than by reason
of release of a Guarantor from such Guarantee in accordance with the terms
of the Guarantee and this Indenture).
The Trustee shall not be deemed to have notice of any Default
hereunder unless it shall have actual knowledge of such Default or it shall have
received written notice thereof making specific reference to such Default as a
Default.
Section 6.02. ACCELERATION.
If an Event of Default (other than an Event of Default specified in
Section 6.01(5) or 6.01(6) with respect to the Company) occurs and is
continuing, the Trustee by notice to the Company, or the Holders of at least 25%
in aggregate principal amount of the Securities then outstanding by notice to
the Company and the Trustee, may declare the principal of all the Securities to
be due and payable. Upon such declaration such principal and interest shall be
due and payable immediately. If an Event of Default specified in Section 6.01(5)
or 6.01(6) with respect to the Company occurs, all unpaid principal and accrued
interest on the Securities then outstanding shall IPSO FACTO become and be
immediately due and payable without any declaration, notice or other act on the
part of the Trustee or any Holder. The Holders of a majority in principal amount
of the Securities then outstanding by notice to the Trustee may rescind an
acceleration and its consequences if the rescission would not conflict with any
judgment or decree and if all existing Events of Default have been cured or
waived except nonpayment of principal or interest that has become due solely
because of the acceleration.
Section 6.03. OTHER REMEDIES.
Notwithstanding any other provision of this Indenture, if an Event
of Default occurs and is continuing, the Trustee may pursue any available remedy
by proceeding at law or in equity to collect the payment of principal of or
interest on the Securities or to enforce the performance of any provision of the
Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess
any of the Securities or does not produce any of them in the proceeding. A delay
or omission by the Trustee or any Holder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative.
-59-
Section 6.04. WAIVER OF PAST DEFAULTS.
Subject to Sections 6.07 and 9.02, the Holders of a majority in
principal amount of the Securities then outstanding by notice to the Trustee may
waive an existing Default and its consequences. When a Default is waived, it is
cured and ceases; but no such waiver shall extend to any other Default.
Section 6.05. CONTROL BY MAJORITY.
The Holders of a majority in principal amount of the Securities 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 the
Trustee with respect to the Securities; PROVIDED that such directions shall not
be in conflict with any law or this Indenture. Before proceeding to exercise any
right or power under this Indenture at the direction of such Holders, the
Trustee shall be entitled to receive from such Holders reasonable security or
indemnity satisfactory to it against the costs, expenses and liabilities which
might be Incurred by it in complying with any such direction.
Section 6.06. LIMITATION ON SUITS.
Except as provided in Section 6.07, a Holder may pursue a remedy
with respect to this Indenture or the Securities only if:
(1) the Holder gives to the Trustee written notice of a continuing
Event of Default;
(2) the Holders of at least 25% in aggregate principal amount of the
Securities then outstanding make a written request to the Trustee to
institute proceedings in respect of such Event of Default;
(3) such Holder or Holders offer to the Trustee reasonable
indemnity, satisfactory to the Trustee, against any loss, liability or
expense to be thereby incurred (including reasonable attorneys' fees);
(4) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer of indemnity; and
(5) during such 60-day period the Holders of a majority in principal
amount of the Securities then outstanding do not give the Trustee a
direction inconsistent with the request.
-60-
A Holder may not use this Indenture to prejudice the rights of
another Holder or to obtain a preference or priority over another Holder.
Section 6.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of
any Holder of a Security to receive payment of principal of and interest in
respect of any such Security on the stated maturity expressed in such Security,
on or after the respective due dates expressed in the Security, or to bring suit
for the enforcement of any such payment on or after such respective dates, shall
not be impaired or adversely affected without the consent of the Holder.
Section 6.08. COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.01(l) or (2) occurs
and is continuing, the Trustee may recover judgment in its own name and as
trustee of an express trust against the Company for the whole amount of
principal and interest remaining unpaid.
Section 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee, any predecessor Trustee and the Holders allowed in any judicial
proceedings relative to the Company, its creditors or its property. All rights
of action and claims under this Indenture may be prosecuted and enforced by the
Trustee without the possession of any of the Securities or the production
thereof in any proceeding related thereto. Any such proceeding instituted by the
Trustee shall be brought in its own name as trustee of an express trust.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder of the
Securities any plan of reorganization, arrangement, adjustment or composition
affecting the Securities or the rights of any Holder thereof, or to authorize
the Trustee to vote in respect of the claim of any Holder of the Securities in
any such proceeding.
Section 6.10. PRIORITIES.
If the Trustee collects any money pursuant to this Article, it shall
pay out the money in the following order:
FIRST: to the Trustee for amounts due under Section 7.07;
-61-
SECOND: to Holders for amounts due and unpaid on the Securities for
principal and interest, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Securities for
principal and interest, respectively; and
THIRD: to the Company.
The Trustee may fix a record date and payment date for any payment
by it to Holders pursuant to this Section.
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 other than the Trustee of an undertaking to pay the costs
of the suit, and the court in its discretion may assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in the suit,
having due regard to the merits and good faith of the claims or defenses made by
the party litigant. This Section 6.11 does not apply to a suit by the Trustee, a
suit by a Holder pursuant to Section 6.07 or a suit by Holders of more than 25%
in principal amount of the Securities.
Section 6.12. WAIVER OF STAY, EXTENSION OR USURY 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 or any
usury or other law wherever enacted, now or at any time hereafter in force,
which may affect the covenants or the performance of this Indenture; and the
Company (to the extent that it may lawfully do so) hereby expressly waives all
benefit or advantage of any such law, and covenants that it will not 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 7
TRUSTEE
Section 7.01. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
his own affairs.
-62-
(b) Except during the continuance of an Event of Default:
(1) The Trustee need perform only those duties that are expressly
set forth in this Indenture and no others.
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions furnished
to the Trustee and conforming to the requirements of this Indenture.
However, the Trustee shall examine the certificates and opinions to
determine whether or not they conform to the requirements of this
Indenture but need not verify the accuracy of the content thereof.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(1) This paragraph does not limit the effect of paragraph (b) of
this Section 7.01.
(2) The Trustee shall not be liable for any error of judgment made
in good faith by a Trust Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts.
(3) The Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05 hereof.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section 7.01.
(e) The Trustee may refuse to perform any duty or exercise any right
or power unless it receives indemnity satisfactory to it against any loss,
liability or expense (anticipated or actual which have or may arise), including
reasonable attorneys' fees.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree with the Company. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
(g) The Trustee shall not be required to give any bond or surety
with respect to the execution of its rights and powers or with respect to this
Indenture.
(h) The Trustee shall not be bound to ascertain or inquire as to the
performance or observance of any covenants, conditions or agreements on the part
of the Company
-63-
hereunder; but the Trustee may require of the Company full information and
advice as to the performance of the covenants, conditions and agreements as
aforesaid.
Section 7.02. RIGHTS OF TRUSTEE.
(a) The Trustee may rely on any document believed by it to be
genuine and to have been signed or presented by the proper person. The Trustee
need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require
an Officer's Certificate and/or an Opinion of Counsel in form and substance
reasonably acceptable to the Trustee. The Trustee shall not be liable for any
action it takes or omits to take in good faith in reliance on such certificate
or opinion.
(c) The Trustee may act through agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its rights or
powers.
(e) It shall not be the duty of the Trustee, except as expressly
provided herein, to ensure that any duties or Obligations herein imposed upon
the Company or any other Person are performed, and, except as expressly provided
herein, the Trustee shall not be liable or responsible for the failure of any
other Person to perform any act required of it or them by this Indenture.
(f) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability
whatsoever in the performance of any of its duties hereunder.
Section 7.03. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company or a
Related Person thereof with the same rights it would have if it were not
Trustee. Any Agent may do the same with like rights. The Trustee, however, must
comply with Sections 7.10 and 7.11.
Section 7.04. TRUSTEE'S DISCLAIMER.
The Trustee makes no representation as to the validity or adequacy
of this Indenture or the Securities; it shall not be accountable for the
Company's use of the proceeds
-64-
from the Securities; and it shall not be responsible for any statement in the
Securities other than its certificate of authentication.
Section 7.05. NOTICE OF DEFAULTS.
If a Default occurs and is continuing and if it is actually known to
the Trustee or the Trustee has received written notice thereof, the Trustee
shall mail to each Holder a notice of the Default within 90 days after the
occurrence thereof. Except in the case of a Default in payment of principal of
or interest on any Security, the Trustee may withhold the notice if and so long
as it, in good faith, determines that withholding the notice is in the interests
of Holders.
Section 7.06. REPORTS BY TRUSTEE TO HOLDERS.
If required by TIA Section 313(a), within 60 days after each January
1 beginning with January 1, 2002, the Trustee shall mail to each Holder as
required by TIA Section 313(c) a brief report dated as of such date that
complies with TIA Section 313(a). The Trustee also shall comply with TIA Section
313(b) and (c).
A copy of each report at the time of its mailing to Holders shall be
filed by the Trustee with the SEC and each stock exchange, if any, on which the
Securities are listed. The Company shall notify the Trustee when the Securities
are listed on any stock exchange.
Section 7.07. COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to time such
compensation for its services as shall be agreed upon in writing between the
Company and the Trustee. The Trustee's compensation shall not be limited by any
law on compensation of a trustee of an express trust. The Company shall promptly
reimburse the Trustee upon request for all reasonable out-of-pocket expenses
incurred by it in connection with administering this Indenture. 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 and hold it harmless against
any loss or liability (including the reasonable fees and expenses of counsel)
incurred by it in connection with the administration of this Indenture and the
performance of its duties hereunder. The Company need not pay for any settlement
made without its consent. The Trustee shall notify the Company promptly of any
claim for which it may seek indemnification. The Company need not reimburse any
expense or indemnify against any loss or liability incurred by the Trustee
through the Trustee's negligence or willful misconduct.
-65-
To secure the Company's payment Obligations in this Section, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee, except that held in trust to pay principal and
interest on particular Securities.
When the Trustee incurs expenses or renders services after an Event
of Default specified in Section 6.01(7) or (8) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
Section 7.08. REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section.
The Trustee may resign by so notifying the Company. The Holders of a
majority in principal amount of the Securities may remove the Trustee by so
notifying the Trustee and the Company and may appoint a successor Trustee with
the Company's consent. The Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged a bankrupt or an insolvent;
(3) a receiver or other public officer takes charge of the Trustee
or its property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the Securities may appoint a successor
Trustee to replace the successor Trustee appointed by the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of at least 10% in principal amount of the Securities may petition a
federal court or any court of competent jurisdiction for the appointment of a
successor Trustee.
If the Trustee fails to comply with Section 7.10, any Holder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
-66-
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to the Holders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, subject to the lien
provided for in Section 7.07.
Notwithstanding the replacement of the Trustee pursuant to this
Section 7.08, the Company's obligation to compensate the retiring Trustee under
Section 7.07 for services rendered prior to its retirement shall continue for
the benefit of the retiring Trustee.
Section 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates, merges or converts into, or transfers
all or substantially all of its corporate trust business to another corporation,
the successor corporation without any further act shall be the successor
Trustee.
Section 7.10. ELIGIBILITY; DISQUALIFICATION.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1). The Trustee shall always have a combined
capital and surplus of at least $10,000,000 as set forth in its most recent
published annual report of condition. The Trustee shall comply with TIA Section
310(b), PROVIDED that there shall be excluded from the operation of TIA Section
310(b)(1) any indenture or indentures under which other securities, or
certificates of interest or participation in other securities, of the Company
are outstanding and meeting the requirements for exclusion set forth in TIA
Section 310(b)(1).
Section 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated.
-67-
ARTICLE 8
DISCHARGE AND DEFEASANCE
Section 8.01. DISCHARGE AND DEFEASANCE UPON DEPOSIT OF MONEYS OR U.S.
GOVERNMENT OBLIGATIONS.
This Indenture and the Guarantees shall cease to be of further
effect (except that the Company's Obligations under Sections 7.07 and 8.05
hereof shall survive) when all outstanding Securities theretofore authenticated
and issued (other than Securities which have been destroyed, lost or stolen and
which have been replaced as provided in Section 2.07 hereof) have been delivered
to the Trustee for cancellation or when the Company has deposited with the
Trustee, after such Securities have become due and payable, money or U.S.
Government Obligations sufficient to pay at stated maturity all of such
outstanding Securities and all other sums payable under this Indenture with
respect to the Securities, and the Company has paid all other sums payable
hereunder with respect to the Securities.
Notwithstanding the first paragraph of this Section 8.01, at the
Company's option indicated by notice to the Trustee, either (a) the Company
shall be deemed to have been Discharged (as defined below) from its Obligations
with respect to the Securities on the 91st day after the applicable conditions
set forth below have been satisfied or (b) the Company shall cease to be under
any obligation to comply with any term, provision or condition set forth in
Sections 4.01 through 4.19 and shall cease to be subject to the provisions of
Section 6.01(3), Section 6.01(4), Section 6.01(7), Section 6.01(8) or Section
6.01(9) with respect to the Securities at any time after the conditions set
forth below have been satisfied:
(1) the Company shall have deposited or caused to be deposited
irrevocably with the Trustee as trust funds in trust, specifically pledged
as security for, and dedicated solely to, the benefit of the Holders of
the Securities (i) money in an amount, or (ii) U.S. Government Obligations
which, through the payment of interest thereon and Additional Interest, if
any, and principal in respect thereof in accordance with their terms, will
provide, not later than one day before the due date of any payment, money
in an amount, or (iii) a combination of (i) and (ii), sufficient, in the
opinion with respect to (ii) and (iii) of a nationally recognized firm of
independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay and discharge each installment of
principal of and interest on the outstanding Securities on the dates such
installments of interest or principal are due;
(2) the Company shall have delivered to the Trustee an Opinion of
Counsel stating that the Holders of the outstanding Securities will not
recognize income, gain or loss for federal income tax purposes as a result
of such defeasance and will be sub-
-68-
ject to federal income tax on the same amounts, in the same manner and at
the same times as would have been the case if such defeasance had not
occurred;
(3) such deposit will not result in a breach or violation of, or
constitute a Default under, this Indenture or any other agreement or
instrument to which the Company is a party or by which it is bound;
(4) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit; and
(5) the Company shall have delivered to the Trustee an Officers
Certificate stating that the conditions set forth in this Section 8.01
have been satisfied or complied with.
"DISCHARGED" shall mean that the Company shall be deemed to have
paid, satisfied and discharged the entire Indebtedness represented by, and
Obligations under, the Securities and to have satisfied all the Obligations
under this Indenture and the Guarantees relating to the Securities (and the
Trustee, upon the request of the Company and at the expense of the Company,
shall execute proper instruments acknowledging the same).
Section 8.02. TERMINATION OF THE OBLIGATIONS PURSUANT TO REDEMPTION.
The Company and each Guarantor may terminate its Obligations under
the Securities, this Indenture and the Guarantees (except that the Company's
Obligations under Sections 7.07 and 8.05 hereof shall survive) and the Company
and the Guarantors shall be deemed to have been Discharged from its Obligations
with respect to the Securities and the Guarantees if:
(a) either (i) pursuant to Article Three, the Company shall have
given notice to the Trustee and mailed a notice of redemption to each
Holder of the redemption of all of the Securities under arrangements
satisfactory to the Trustee for the giving of such notice or (ii) all
Securities have otherwise become due and payable hereunder;
(b) the Company shall have irrevocably deposited or caused to be
deposited with the Trustee or a trustee reasonably satisfactory to the
Trustee, under the terms of an irrevocable trust agreement in form and
substance satisfactory to the Trustee, as trust funds in trust solely for
the benefit of the Holders for that purpose, money in such amount as is
sufficient without consideration of reinvestment of such interest, to pay
principal of, premium, if any, and interest on the outstanding Securities
to maturity or redemption, as certified in a certificate of a nationally
recognized firm of independent
-69-
public accountants; PROVIDED that the Trustee shall have been irrevocably
instructed to apply such money to the payment of said principal, premium,
if any, and interest with respect to the Securities;
(c) no Default of Event of Default with respect to this Indenture or
the Securities shall have occurred and be continuing on the date of such
deposit or shall occur as a result of such deposit and such deposit will
not result in a breach or violation of, or constitute a default under, any
other instrument to which the Company is a party or by which it is bound;
(d) the Company shall have paid all other sums payable by it
hereunder; and
(e) the Company shall have delivered to the Trustee an Officer's
Certificate stating that the conditions set forth in this Section 8.02
have been complied with.
Section 8.03. SURVIVAL OF COMPANY'S OBLIGATIONS.
Notwithstanding the satisfaction and discharge of this Indenture
under Section 8.01 or Section 8.02, the Company's obligations in Sections 2.04,
2.05, 2.06, 2.07, 2.08, 4.01, 4.02, 4.05, 7.07, 7.08, 8.04, 8.05 and 8.06,
however, shall survive until the Securities are no longer outstanding.
Thereafter, the Company's obligations in Sections 7.07, 8.05 and 8.06 shall
survive.
Section 8.04. APPLICATION OF TRUST MONEY.
The Trustee shall hold in trust money or U.S. Government Obligations
deposited with it pursuant to Section 8.01. It shall apply the deposited money
and the money from U.S. Government Obligations in accordance with this Indenture
to the payment of principal of and interest on the Securities.
Section 8.05. REPAYMENT TO COMPANY.
The Trustee and the Paying Agent shall promptly pay to the Company
upon request any excess money or securities held by them at any time. The
Trustee and the Paying Agent shall pay to the Company upon request any money
held by them for the payment of principal or interest that remains unclaimed for
two years, PROVIDED, HOWEVER, that the Trustee or such Paying Agent, before
being required to make any such repayment, may at the expense of the Company
cause to be published once in a newspaper of general circulation in the City of
New York or mail to each such Holder notice that such money remains unclaimed
and that, after a date specified therein, which shall not be less than 30 days
from the date of such publication or mailing, any unclaimed balance of such
money then remaining will be repaid to the Company. After payment to the
Company, Holders entitled to the money must look to the
-70-
Company for payment as general creditors unless applicable abandoned property
law designates another person.
The Company shall indemnify Trustee to the fullest extent
permissible by law for the Trustee's failure to comply with any abandoned
property or escheat law by acting in accordance with this Section 8.05.
Section 8.06. REINSTATEMENT.
If the Trustee is unable to apply any money or U.S. Government
Obligations in accordance with Section 8.01 by reason of any legal proceeding or
by reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, the Company's
Obligations under this Indenture and the Securities shall be revived and
reinstated as though no deposit had occurred pursuant to Section 8.01 until such
time as the Trustee is permitted to apply all such money or U.S. Government
Obligations in accordance with Section 8.01; PROVIDED, HOWEVER, that if the
Company has made any payment of interest on or principal of any Securities
because of the reinstatement of its Obligations, the Company shall be subrogated
to the rights of the Holders of such Securities to receive such payment from the
money or U.S. Government Obligations held by the Trustee.
ARTICLE 9
SUBORDINATION
Section 9.01. AGREEMENT TO SUBORDINATE.
The Company agrees, and each Holder by accepting a Security agrees,
that the Indebtedness evidenced by the Securities and the payment of principal
of, and premium, if any, and interest (including Additional Interest) thereof
are subordinated in right of payment, to the extent and in the manner provided
in this Article 9, to the prior payment in full in cash when due of the
principal of, and premium if any, and accrued and unpaid interest on and all
other amounts owing in respect of all Senior Indebtedness of the Company and
that the subordination is for the benefit of the holders of Senior Indebtedness
of the Company.
Money and U.S. Government Obligations held in trust pursuant to
Article 8 are not subject to the subordination provisions of this Article 9.
Section 9.02. LIQUIDATION; DISSOLUTION; BANKRUPTCY.
Upon any payment or distribution to creditors of the Company of the
assets of the Company of any kind or character in a total or partial liquidation
or dissolution of the
-71-
Company or in a bankruptcy, reorganization, insolvency, receivership or similar
proceeding relating to the Company, whether voluntary or involuntary (including
any assignment for the benefit of creditors and proceedings for marshaling of
assets and liabilities of the Company), the holders of all Senior Indebtedness
of the Company then outstanding will be entitled to payment in full in cash or
Cash Equivalents of all Obligations due in respect of Senior Indebtedness before
the Holders are entitled to receive any payment (other than payments made from a
trust previously established pursuant to provisions described under Article 8
hereof) on or with respect to Holders of the Securities and, until all holders
of Senior Indebtedness receive payment in full in cash or Cash Equivalents of
all Obligations due in respect of Senior Indebtedness, any distribution to which
the Holders would be entitled will be made to holders of Senior Indebtedness.
Section 9.03. COMPANY NOT TO MAKE PAYMENTS WITH RESPECT TO NOTES IN
CERTAIN CIRCUMSTANCES.
Upon the occurrence of any default in the payment of any principal
of or interest on or other amounts due on any Designated Senior Indebtedness
beyond any applicable grace period (as used in this Section 9.03, a "PAYMENT
DEFAULT"), no payment or distribution of any kind or character shall be made by
the Company (or by any other Person on its behalf) with respect to the
Securities unless and until (i) such Payment Default shall have been cured or
waived in accordance with the instruments governing such Senior Indebtedness or
shall have ceased to exist, (ii) such Designated Senior Indebtedness shall have
been discharged or paid in full in cash or Cash Equivalents in accordance with
the instruments governing such Senior Indebtedness or (iii) such payment
blockage has been terminated by written notice to the Trustee from the holders
of such Designated Senior Indebtedness or their representative whether or not
such Payment Default shall have been cured or waived or shall cease to exist,
immediately after which the Company must resume making any and all required
payments, including missed payments, in respect of its obligations under the
Securities.
Upon (1) the occurrence and during the continuance of an event of
default (other than a Payment Default) relating to Designated Senior
Indebtedness of the Company, as such event of default is defined therein or in
the instrument or agreement under which it is outstanding, which event of
default, pursuant to the instruments governing such Designated Senior
Indebtedness, entitles the holders (or a specified portion of the holders) of
such Designated Senior Indebtedness or their designated representative to
accelerate (either immediately or with the passage of time or the giving of
notice or both) the stated maturity of such Designated Senior Indebtedness
(whether or not such acceleration has actually occurred) (as used in this
Section 9.03, a "NON-PAYMENT DEFAULT") and (2) the receipt by the Trustee and
the Company from the trustee or other representative of holders of such
Designated Senior Indebtedness of written notice (as used in this Section 9.03,
a "PAYMENT BLOCKAGE NOTICE") of such occurrence and continuance of a Non-Payment
Default, no payment or distribution is permitted
-72-
to be made by the Company (or by any other Person on its behalf) with respect to
the Securities for a period (as used in this Section 9.03, a "PAYMENT BLOCKAGE
Period") commencing on the date of receipt by the Trustee of such notice and
ending on the earliest to occur of the following events (subject to any blockage
of payments that may then be in effect due to a Payment Default on Senior
Indebtedness): (w) such Non-Payment Default has been cured or waived or has
ceased to exist; (x) a 179-consecutive-day period commencing on the date such
written notice is received by the Trustee has elapsed; (y) such Payment Blockage
Period has been terminated by written notice to the Trustee from the trustee or
other representative of holders of such Designated Senior Indebtedness, whether
or not such Non-Payment Default has been cured or waived or has ceased to exist;
and (z) such Designated Senior Indebtedness has been discharged or paid in full
in cash or Cash Equivalents, immediately after which, in the case of clause (w),
(x), (y) or (z), the Company must resume making any and all required payments,
including missed payments, in respect of its obligations under the Securities.
Notwithstanding the foregoing, (a) not more than one Payment Blockage Period may
be commenced in any period of 365 consecutive days, and (b) no default or event
of default with respect to the Designated Senior Indebtedness of the Company
that was the subject of a Payment Blockage Notice which existed or was
continuing on the date of the giving of any Payment Blockage Notice shall be or
serve as the basis for the giving of a subsequent Payment Blockage Notice,
whether or not within a period of 365 consecutive days unless such default or
event of default shall have been cured or waived for a period of at least 90
consecutive days after such date (it being acknowledged that any subsequent
action, or any breach of any financial covenant for a period commencing after
the date of delivery of such Payment Blockage Notice that in either case would
give rise to a default pursuant to any provisions under which a default
previously existed shall constitute a new default for this purpose).
Regardless of anything to the contrary herein, nothing shall prevent
(a) any payment by the Trustee to the Holders of amounts deposited with it
pursuant to Article 8 or (b) any payment by the Trustee or the Paying Agent as
permitted by Section 9.11 hereof.
Section 9.04. ACCELERATION OF NOTES.
If payment of the Securities is accelerated because of an Event of
Default, the Company shall promptly notify holders of Senior Indebtedness of the
Company of the acceleration.
Section 9.05. WHEN DISTRIBUTION MUST BE PAID OVER.
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company, whether in cash, property or securities,
shall be received by the Trustee or the Holders at a time when such payment or
distribution is prohibited by the foregoing provisions, such payment or
distribution shall be segregated from other funds or assets and
-73-
held in trust for the benefit of the holders of Senior Indebtedness of the
Company and shall be paid or delivered by the Trustee or such Holders, as the
case may be, to the holders of the Senior Indebtedness of the Company remaining
unpaid or unprovided for or their representative or representatives, or to the
trustee or trustees under any indenture pursuant to which any instruments
evidencing any of such Senior Indebtedness of the Company may have been issued,
ratably according to the aggregate amounts remaining unpaid on account of the
Senior Indebtedness of the Company held or represented by each, for application
to the payment of all Senior Indebtedness of the Company remaining unpaid, to
the extent necessary to pay or to provide for the payment in full in cash of all
such Senior Indebtedness after giving effect to any concurrent payment or
distribution to the holders of such Senior Indebtedness.
Notwithstanding the foregoing, Holders may receive and retain
payment from the money or the proceeds held in any defeasance trust described
under Article 8, and no such receipt or retention will be contractually
subordinated in right of payment to any Senior Indebtedness or subject to the
restrictions described in this Article 9.
Section 9.06. NOTICE BY COMPANY.
The Company shall promptly notify the Trustee and the Paying Agent
in writing of any facts known to the Company that would cause a payment of
principal of or interest on Notes to violate this Article 9, but failure to give
such notice shall not affect the subordination of the Notes to the Senior
Indebtedness of the Company provided in this Article 9.
Section 9.07. SUBROGATION.
After all Senior Indebtedness of the Company is paid in full and
until the Notes are paid in full, Holders shall be subrogated to the rights of
holders of Senior Indebtedness of the Company to receive distributions
applicable to Senior Indebtedness of the Company to the extent that
distributions otherwise payable to the Holders have been applied to the payment
of Senior Indebtedness of the Company. A distribution made under this Article 9
to holders of Senior Indebtedness of the Company which otherwise would have been
made to Holders is not, as between the Company and Holders, a payment by the
Company on Senior Indebtedness.
Section 9.08. RELATIVE RIGHTS.
This Article 9 defines the relative rights of Holders and holders of
Senior Indebtedness. Nothing in this Indenture shall:
-74-
(1) impair, as between the Company and Holders, the obligation of
the Company, which is absolute and unconditional, to pay principal of,
premium, if any, and interest on the Securities in accordance with their
terms;
(2) affect the relative rights of Holders and creditors of the
Company other than holders of Senior Indebtedness of the Company; or
(3) prevent the Trustee or any Holder from exercising its available
remedies upon a Default or Event of Default, subject to the rights of
holders of Senior Indebtedness of the Company to receive distributions
otherwise payable to Holders.
Section 9.09. SUBORDINATION MAY NOT BE IMPAIRED BY THE COMPANY.
No right of any holder of Senior Indebtedness of the Company to
enforce the subordination of the indebtedness evidenced by the Securities shall
be impaired by any act or failure to act by the Company or by its failure to
comply with this Indenture.
Section 9.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE.
Whenever a distribution is to be made or a notice given to holders
of Senior Indebtedness of the Company, the distribution may be made and the
notice given to their Representatives.
Section 9.11. RIGHTS OF TRUSTEE AND PAYING AGENT.
The Trustee or Paying Agent may continue to make payments on the
Securities until it receives written notice of facts that would cause a payment
of principal of or interest on the Securities to violate this Article 9. Only
the Company, a Representative or a holder of an issue of Senior Indebtedness of
the Company that has no Representative may give the notice.
The Trustee shall be entitled to conclusively rely on the delivery
to it of a written notice by a person representing himself to be a holder of
Senior Indebtedness of the Company (or a Representative on behalf of such
holder) to establish that such notice has been given by a holder of Senior
Indebtedness of the Company or a Representative on behalf of any such holder.
The Trustee in its individual or any other capacity may hold Senior
Indebtedness of the Company with the same rights it would have if it were not
Trustee. Any Agent may do the same with like rights.
-75-
The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness of the Company and shall not be liable to any
such holder if it shall mistakenly pay over or distribute to Holders or the
Company or any other person money or assets to which any holders of Senior
Indebtedness of the Company shall be entitled by virtue of this Article 9 or
otherwise.
Section 9.12. OFFICERS' CERTIFICATE.
If there occurs an event referred to in Section 9.02 or 9.03 hereof,
the Company shall promptly give to the Trustee an Officers' Certificate (on
which the Trustee may conclusively rely) identifying all holders of Senior
Indebtedness of the Company or their Representatives and the principal amount of
Senior Indebtedness of the Company then outstanding held by each such holder and
stating the reasons why such Officers' Certificate is being delivered to the
Trustee.
Section 9.13. OBLIGATION OF COMPANY UNCONDITIONAL.
Nothing contained in this Article 9 or elsewhere in this Indenture
or in any Security is intended to or shall impair, as between the Company, its
creditors other than holders of Senior Indebtedness of the Company and the
Holders, the obligation of the Company, which is absolute and unconditional, to
pay to the Holders the principal of, premium, if any, and interest on the
Securities as and when the same shall become due and payable in accordance with
their terms, or is intended to or shall affect the relative rights of the
Holders and creditors of the Company other than the holders of the Senior
Indebtedness of the Company, nor shall anything herein or therein prevent the
Trustee or the Holder of any Security from exercising all remedies otherwise
permitted by applicable law upon default under this Indenture, subject to the
rights, if any, under this Article 9 of the holders of Senior Indebtedness of
the Company in respect of cash, property or securities of the Company received
upon the exercise of any such remedy. Upon any distribution of assets of the
Company referred to in this Article 9, the Trustee, subject to the provisions of
Sections 7.01 and 7.02 hereof, and the Holders shall be entitled to conclusively
rely upon any order or decree by any court of competent jurisdiction in which
such dissolution, winding up, liquidation or reorganization proceedings are
pending, or a certificate of the liquidating trustee or agent or other person
making any distribution to the Trustee or the Holders, for the purpose of
ascertaining the persons entitled to participate in such distribution, the
holders of the Senior Indebtedness of the Company and other indebtedness of the
Company, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article 9.
Nothing contained in this Article 9 or elsewhere in this Indenture or in any
Security is intended to or shall affect the obligation of the Company to make,
or prevent the Company from making, at any time except during the pendency of
any dissolution, winding up, liquidation or reorganization proceeding, and
except during the continuance of any default specified in Sec-
-76-
tion 9.03 hereof (not cured or waived), payments at any time of the principal or
of interest on the Securities.
Section 9.14. ARTICLE 9 NOT TO PREVENT EVENTS OF DEFAULT.
The failure to make a payment of principal of, premium, if any, or
interest on the Securities by reason of any provision of this Article 9 shall
not be construed as preventing the occurrence of an Event of Default under
Section 6.01 hereof.
ARTICLE 10
AMENDMENTS, MODIFICATIONS AND WAIVERS
Section 10.01. WITHOUT CONSENT OF HOLDERS.
The Company and the Trustee may amend, modify or supplement this
Indenture without notice to or the consent of any Holder:
(1) to add to the covenants, agreements and Obligations of the
Company for the benefit of the Holders of all the Securities or to
surrender any right or power conferred in the Indenture upon the Company;
(2) to cure any ambiguity, defect or inconsistency;
(3) to evidence the succession of another corporation to the Company
and the assumption by it of the Obligations of the Company under this
Indenture and the Securities in order to comply with Article 5;
(4) to evidence the succession of another corporation to any
Guarantor and the assumption by it of the Obligations of the Guarantor
under the applicable Guarantee;
(5) to provide for the acceptance of appointment under the Indenture
of a successor Trustee with respect to the Securities and to add to or
change any provisions of this Indenture as shall be necessary to provide
for or facilitate the administration of the trusts by more than one
Trustee;
(6) to secure the Securities;
(7) to make any change that does not adversely affect the rights of
any Holder hereunder;
-77-
(8) to comply with the qualification of this Indenture under the
TIA; or
(9) to reflect a Guarantor ceasing to be liable on the Guarantees in
accordance with this Indenture or to reflect additional Guarantors.
For the purposes of this Section 10.01, the Trustee may, in its
discretion, determine whether or not the Holder of any Securities would be
materially adversely affected by any amendment or supplement to this Indenture
and any such determination shall be conclusive upon every Holder, whether
theretofore or thereafter entered into. The Trustee shall, subject to the
express provisions of this Indenture, not be liable for any such determination
made in good faith and shall be entitled to, and may rely upon, an Opinion of
Counsel with respect thereto.
Section 10.02. WITH CONSENT OF HOLDERS.
The Company and the Guarantors, with the consent of the Trustee, may
amend or supplement this Indenture and waive any existing Default or Event of
Default (other than any continuing Default or Event of Default in the payment of
interest on or the principal of the Securities), the Securities or the
Guarantees without notice to any Holder but with the written consent of the
Holders of at least a majority in principal amount of the Securities then
outstanding (which may include consents obtained in connection with a tender
offer or exchange offer for the Securities). Subject to Section 6.07, the
Holders of a majority in principal amount of the Securities then outstanding may
waive compliance by the Company or any Guarantor with any provision of this
Indenture, the Securities or the Guarantees without notice to any Holder.
However, without the consent of each Holder affected, an amendment, supplement
or waiver, including a waiver pursuant to Section 6.04, may not:
(1) reduce the amount of Securities whose Holders must consent to an
amendment, supplement or waiver;
(2) reduce the rate of or change the time for payment of interest,
including defaulted interest, on any Security;
(3) reduce the principal of or change the stated maturity of, or any
installment of principal or interest on, any Security (including, without
limitation, the optional redemption provisions, but excluding Sections
4.08, 4.09 and 4.15) or any premium payable upon redemption thereof;
(4) change the place or currency of payment of principal or
interest, if any, on any Note;
-78-
(5) waive a Default or Event of Default in the payment of principal
of or interest on any Security or reduce the above-stated percentage of
Holders of the Securities necessary to modify or amend this Indenture;
(6) make any change in Section 6.04, Section 6.07 or Section 10.02;
(7) release any Guarantor from any of its Obligations under its
Guarantee or this Indenture otherwise than in accordance with the terms
hereof;
(8) modify or change any provision of this Indenture or the related
definitions affecting the ranking of the Securities issued hereunder or
any Guarantee in a manner that adversely affects the Holders; or
(9) impair the right to institute suit for the enforcement of any
payment on or with respect to any such Security.
Promptly after an amendment under this Section 10.02 becomes
effective, the Company shall mail to Holders a notice briefly describing the
amendment.
It shall not be necessary for the consent of the Holders under this
Section 10.02 to approve the particular form of any proposed amendment or
supplement, but it shall be sufficient if such consent approves the substance
thereof.
Section 10.03. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment to this Indenture, the Securities or the Guarantees
shall comply with the TIA as then in effect.
Section 10.04. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes effective, a
consent to it by a Holder of a Security is a continuing consent by the Holder
and every subsequent Holder of a Security or portion of a Security that
evidences the same debt as the consenting Holder's Security, even if notation of
the consent is not made on any Security. However, any such Holder or subsequent
Holder may revoke the consent as to his Security or portion of a Security if the
Trustee receives the notice of revocation before the date the amendment,
supplement or waiver becomes effective. An amendment, supplement or waiver
becomes effective in accordance with its terms and thereafter binds every
Holder.
After an amendment, supplement or waiver becomes effective with
respect to the Securities, it shall bind every Holder unless it makes a change
described in any of clauses (1) through (8) of Section 10.02. In that case the
amendment, supplement or waiver shall bind
-79-
each Holder of a Security who has consented to it and, PROVIDED that notice of
such amendment, supplement or waiver is reflected on a Security that evidences
the same debt as the consenting Holder's Security, every subsequent Holder of a
Security or portion of a Security that evidences the same debt as the consenting
Holder's Security.
Section 10.05. NOTATION ON OR EXCHANGE OF SECURITIES.
If an amendment, supplement or waiver changes the terms of a
Security, the Trustee may require the Holder of the Security to deliver it to
the Trustee. The Trustee may place an appropriate notation on the Security about
the changed terms and return it to the Holder. Alternatively, if the Company or
the Trustee so determines, the Company in exchange for the Security shall issue
and the Trustee shall authenticate a new Security that reflects the changed
terms.
Section 10.06. TRUSTEE PROTECTED.
The Trustee need not sign any amendment, supplement or waiver
authorized pursuant to this Article that the Trustee shall conclude in its
reasonable judgment adversely affects the Trustee's rights. The Trustee shall be
entitled to receive and rely upon an Opinion of Counsel and an Officer's
Certificate that any supplemental indenture complies with this Indenture.
ARTICLE 11
GUARANTEE OF SECURITIES
Section 11.01. GUARANTEE.
Subject to the provisions of this Article 11, each Guarantor (which
term includes any successor Person under this Indenture and any additional
Guarantor pursuant to Section 4.16 of this Indenture) for consideration received
hereby jointly, severally, unconditionally and irrevocably guarantees on a
general unsecured basis, ranking (a) senior in right of payment to all
Indebtedness of such Guarantors expressly providing for any such ranking by its
terms or (b) ranking PARI PASSU with such Guarantors' Indebtedness (other than
Indebtedness described in the preceding clause (a)) that is not Guarantor Senior
Indebtedness (including Indebtedness expressly ranking PARI PASSU with the
Securities by its terms) (each a "GUARANTEE" and, collectively, the
"GUARANTEES") to each Holder of a Security authenticated and delivered by the
Trustee and to the Trustee and its successors and assigns, irrespective of the
validity and enforceability of this Indenture, the Securities or the Obligations
of the Company or any other Guarantor to the Holders or the Trustee hereunder or
thereunder, that: (a) the princi-
-80-
pal of, premium, if any, and interest and Additional Interest, if any, on the
Securities will be duly and punctually paid in full when due, whether, without
limitation, at maturity, as a result of redemption, upon a Change of Control, as
a result of a Net Worth Offer, a Net Proceeds Offer, by acceleration or
otherwise, and interest on the overdue principal, premium, if any, and (to the
extent permitted by law) interest, if any, on the Securities and all other
payment Obligations of the Company or the Guarantors to the Holders or the
Trustee hereunder or thereunder (including fees, expenses or other) will be
promptly paid in full or performed, all in accordance with the terms hereof and
thereof and all obligations of the Company to the Holders or the Trustee all in
accordance with the terms of such Security, this Indenture and the Registration
Rights Agreement will be duly and punctually performed and (b) in case of any
extension of time of payment or renewal of any Securities or any such other
Obligations, the same will be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, whether, without
limitation, at stated maturity, as a result of redemption, upon a Change of
Control, as a result of a Net Worth Offer, a Net Proceeds Offer, by acceleration
or otherwise. Failing payment when due of any amount so guaranteed for whatever
reason, each Guarantor will be obligated to pay or perform the same immediately.
An Event of Default under this Indenture or the Securities shall constitute an
event of default under the Guarantees, and shall entitle the Holders of
Securities to accelerate the Obligations of the Guarantors hereunder in the same
manner and to the same extent as the Obligations of the Company.
Each of the Guarantors hereby agrees that its Obligations hereunder
shall be absolute and unconditional, irrespective of, and shall be unaffected
by, the invalidity, irregularity or unenforceability of the Securities or this
Indenture, the absence of any action to enforce the same, any waiver,
modification or consent by any Holder of the Securities with respect to any
provisions hereof or thereof, any release of any other Guarantor, the recovery
of any judgment against the Company, any action to enforce the same, whether or
not a Guarantee is affixed to any particular Security, or any other circumstance
which might otherwise constitute a legal or equitable discharge or defense of a
Guarantor. Each of the Guarantors hereby waives the benefit of diligence,
presentment, demand of payment, filing of claims with a court in the event of
merger, insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest, notice and all demands whatsoever
and covenants that its Guarantee will not be discharged except by complete
performance of the Obligations contained in the Securities, this Indenture and
its Guarantee. If any Holder or the Trustee is required by any court or
otherwise to return to the Company or to any Guarantor, or any custodian,
trustee, liquidator or other similar official acting in relation to the Company
or such Guarantor, any amount paid by the Company or such Guarantor to the
Trustee or such Holder, its Guarantee, to the extent theretofore discharged,
shall be reinstated in full force and effect. Each Guarantor further agrees
that, as between it, on the one hand, and the Holders of Securities and the
Trustee, on the other hand, (a) subject to this Article 11, the maturity of the
Obligations guaranteed hereby may be accelerated as provided in Article 6 hereof
for the pur-
-81-
poses of its Guarantee, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the Obligations
guaranteed hereby, and (b) in the event of any declaration of acceleration of
such Obligations as provided in Article 6 hereof, such Obligations (whether or
not due and payable) shall forthwith become due and payable by such Guarantor
for the purpose of its Guarantees.
The Guarantees shall remain in full force and effect and continue to
be effective should any petition be filed by or against the Company for
liquidation or reorganization, should the Company become insolvent or make an
assignment for the benefit of creditors or should a receiver or trustee be
appointed for all or any significant part of the Company's assets, and shall, to
the fullest extent permitted by law, continue to be effective or be reinstated,
as the case may be, if at any time payment of the Securities are, pursuant to
applicable law, rescinded or reduced in amount, or must otherwise be restored or
returned by any obligee on the Securities, whether as a "voidable preference,"
"fraudulent transfer" or otherwise, all as though such payment had not been
made. In the event that any payment, or any part thereof, is rescinded, reduced,
restored or returned, the Securities shall, to the fullest extent permitted by
law, be reinstated and deemed reduced only by such amount paid and not so
rescinded, reduced, restored or returned.
For purposes of this Article 11, each Guarantor's liability (a
Guarantor's "BASE GUARANTY LIABILITY") shall be that amount from time to time
equal to the aggregate liability of a Guarantor hereunder, but shall be limited
to the lessor of (A) the aggregate amount of the obligation as stated in the
first sentence of this Section 11.01 with respect to the Securities or (B) the
amount, if any, which would not have (i) rendered such Guarantor "insolvent" (as
such term is defined in Section 101(29) of the Federal Bankruptcy Code and in
Section 271 of the Debtor and Creditor Law of the State of
New York, as each is
in effect at the date of this Indenture) or (ii) left it with unreasonably small
capital at the time its Guarantee of the Securities was entered into, after
giving effect to the incurrence of existing Debt immediately prior to such time,
PROVIDED that it shall be a presumption in any lawsuit or other proceeding in
which a Guarantor is a party that the amount guaranteed is the amount set forth
in clause (A) above unless a creditor, or representative of creditors of such
Guarantor or a trustee in bankruptcy of the Guarantor, as debtor in possession,
otherwise proves in such a lawsuit that the aggregate liability of the Guarantor
is limited to the amount set forth in clause (B). In making any determination as
to the solvency or sufficiency of capital of a Guarantor in accordance with the
previous sentence, the right of such Guarantor to contribution from other
Guarantors, to subrogation pursuant to the next paragraph and any other rights
such Guarantor may have contractual or otherwise shall be taken into account.
Each Guarantor shall be subrogated to all rights of the Holder of
any Securities and the Trustee against the Company or any of the other
Guarantors in respect of any amounts paid to the Holder and the Trustee by such
Guarantor pursuant to the provisions of this Guar-
-82-
xxxxx; PROVIDED, HOWEVER, that such Guarantor shall not be entitled to enforce,
or to receive any payments arising out of or based upon, such right of
subrogation until the principal of, premium, if any, and interest on all the
Securities have been paid in full.
Nothing contained in this Article 11 or elsewhere in this Indenture
or in any Security is intended to or shall impair, as between the Guarantors and
the Holders and the Trustee, the obligation of each Guarantor, which is absolute
and unconditional, to pay the Holders and the Trustee the principal of, premium,
if any, and interest on the Securities as and when the same shall become due and
payable in accordance with the provisions of this Guarantee, nor shall anything
herein or therein prevent the Trustee or any Holder from exercising all remedies
otherwise permitted by applicable law upon Default under this Indenture.
The Guarantors shall have the right to seek contribution from any
non-paying Guarantor so long as the exercise of such right does not impair the
rights of the Holders under the Guarantees.
Section 11.02. AGREEMENT TO SUBORDINATE.
Each Guarantor agrees, and by its acceptance of the Securities, each
Holder agrees, that the indebtedness evidenced by the Guarantee of such
Guarantor and the payment thereof are subordinated in right of payment, to the
extent and in the manner provided in this Article, to the prior payment in full
of all Guarantor Senior Indebtedness of such Guarantor and that the
subordination is for the benefit of the holders of Guarantor Senior Indebtedness
of such Guarantor.
Money and securities held in trust pursuant to Article 8 are not
subject to the subordination provision of this Article 11.
Section 11.03. LIQUIDATION; DISSOLUTION; BANKRUPTCY.
Upon any payment or distribution to creditors of a Guarantor of the
assets of such Guarantor of any kind or character in a total or partial
liquidation or dissolution of such Guarantor or in a bankruptcy, reorganization,
insolvency, receivership or similar proceeding relating to such Guarantor,
whether voluntary or involuntary (including any assignment for the benefit of
creditors and proceedings for marshaling of assets and liabilities of such
Guarantor), the holders of all Guarantor Senior Indebtedness of such Guarantor
then outstanding will be entitled to payment in full in cash before the Holders
of Securities are entitled to receive any payment (other than payments made from
a trust previously established pursuant to provisions described under Article 8)
on or with respect to the Securities or the Guarantees and until all Guarantor
Senior Indebtedness receives payment in full in cash, any distribution
-83-
to which the Holders of Securities would be entitled will be made to holders of
Guarantor Senior Indebtedness.
Section 11.04. GUARANTORS NOT TO MAKE PAYMENTS WITH RESPECT TO GUARANTEES
IN CERTAIN CIRCUMSTANCES.
Upon the occurrence of any default in the payment of any principal
of or interest on or other amounts due on any Designated Senior Indebtedness of
a Guarantor beyond any applicable grace period (as used in this Section 11.04, a
"PAYMENT DEFAULT"), no payment of any kind or character shall be made by such
Guarantor (or by any other Person on its behalf) with respect to the Securities
or any Guarantees of the Securities unless and until (i) such Payment Default
shall have been cured or waived in accordance with the instruments governing
such Indebtedness or shall have ceased to exist, (ii) such Designated Senior
Indebtedness has been discharged or paid in full in cash in accordance with the
instruments governing such Indebtedness or (iii) such payment blockage has been
terminated by written notice to the Trustee from the holders of such Designated
Senior Indebtedness or their representative whether or not such Payment Default
shall have been cured or waived or shall cease to exist, immediately after which
the Guarantor must resume making any and all required payments, including missed
payments, in respect of their obligations under the Guarantees of the
Securities.
Upon (1) the occurrence and during the continuance of an event of
default (other than a Payment Default) relating to Designated Senior
Indebtedness of a Guarantor, as such event of default is defined therein or in
the instrument or agreement under which it is outstanding, which event of
default, pursuant to the instruments governing such Designated Senior
Indebtedness, entitles the holders (or a specified portion of the holders) of
such Designated Senior Indebtedness or their designated representative to
accelerate (either immediately or with the passage of time or the giving of
notice or both) the stated maturity of such Designated Senior Indebtedness
(whether or not such acceleration has actually occurred) (as used in this
Section 11.04, a "NON-PAYMENT DEFAULT") and (2) the receipt by the Trustee and
the Company from the trustee or other representative of holders of such
Designated Senior Indebtedness of written notice, (as used in this Section
11.04, a "PAYMENT BLOCKAGE NOTICE") of such occurrence and continuance of a
Non-Payment Default, no payment or distribution is permitted to be made by a
Guarantor (or by any other Person on its behalf) with respect to Securities or
any Guarantees of the Securities for a period (as used in this Section 11.04, a
"PAYMENT BLOCKAGE PERIOD") commencing on the date of receipt by the Trustee of
such notice and ending on the earliest to occur of the following events (subject
to any blockage of payments that may then be in effect due to a Payment Default
on Designated Senior Indebtedness): (w) such Non-Payment Default has been cured
or waived or has ceased to exist; (x) a 179-consecutive-day period commencing on
the date such written notice is received by the Trustee has elapsed; (y) such
Payment Blockage Period has been terminated by written notice to the Trustee
from
-84-
the trustee or other representative of holders of such Designated Senior
Indebtedness, whether or not such Non-Payment Default has been cured or waived
or has ceased to exist; and (z) such Designated Senior Indebtedness has been
discharged or paid in full in cash or Cash Equivalents, immediately after which,
in the case of clause (w), (x), (y) or (z), the Guarantors must resume making
any and all required payments, including missed payments, in respect of its
obligations under the Guarantee of the Securities. Notwithstanding the
foregoing, (a) not more than one Payment Blockage Period may be commenced in any
period of 365 consecutive days and (b) no default or event of default with
respect to the Designated Senior Indebtedness of such Guarantors that was the
subject of a Payment Blockage Notice which existed or was continuing on the date
of the giving of any Payment Blockage Notice shall be or serve as the basis for
the giving of a subsequent Payment Blockage Notice whether or not within a
period of 365 consecutive days unless such default or event of default shall
have been cured or waived for a period of at least 90 consecutive days after
such date (it being acknowledged that any subsequent action, or any breach of
any financial covenant for a period commencing after the date of delivery of
such Payment Blockage Notice that in either case would give rise to a default
pursuant to any provisions under which a default previously existed shall
constitute a new default for this purpose).
Regardless of anything to the contrary herein, nothing shall prevent
(a) any payment by the Trustee to the Holders of amounts deposited with it
pursuant to Article 8 or (b) any payment by the Trustee or the Paying Agent as
permitted by Section 11.08. Nothing contained in this Article 11 will limit the
right of the Trustee or the Holders to take any action to accelerate the
maturity of the Securities pursuant to Section 6.02 or to pursue any rights or
remedies hereunder.
Section 11.05. SUBROGATION.
After all Guarantor Senior Indebtedness is paid in full and until
the Securities are paid in full, Holders shall be subrogated to the rights of
holders of such Guarantor Senior Indebtedness to receive distributions
applicable to such Guarantor Senior Indebtedness to the extent that
distributions otherwise payable to the Holders have been applied to the payment
of such Guarantor Senior Indebtedness. A distribution made under this Article to
holders of Guarantor Senior Indebtedness which otherwise would have been made to
Holders of Securities is not, as between such Guarantor and Holders, a payment
by such Guarantor on Guarantor Senior Indebtedness.
Section 11.06. SUBORDINATION MAY NOT BE IMPAIRED BY GUARANTORS.
No right of any holder of Guarantor Senior Indebtedness to enforce
the subordination of the indebtedness evidenced by the Securities and the
Guarantees of the Securities
-85-
shall be impaired by any act or failure to act by any Guarantor or by its or
their failure to comply with this Indenture.
Section 11.07. DISTRIBUTION OR NOTICE TO REPRESENTATIVE.
Whenever a distribution is to be made or a notice given to holders
of Guarantor Senior Indebtedness, the distribution may be made and the notice
given to their Representatives.
Section 11.08. RIGHTS OF TRUSTEE AND PAYING AGENT.
The Trustee or Paying Agent may continue to make payments on the
Securities and the related Guarantees of the Securities until it receives
written notice of facts that would cause a payment of principal of or interest
on the Securities and the Guarantees of the Securities to violate this Article.
Only the Issuers, a Guarantor, a Representative or a holder of an issue of
Guarantor Senior Indebtedness that has no Representative may give the notice.
The Trustee shall be entitled to conclusively rely on the delivery
to it of a written notice by a person representing himself to be a holder of
Guarantor Senior Indebtedness (or a Representative on behalf of such holder) to
establish that such notice has been given by a holder of Guarantor Senior
Indebtedness or a Representative on behalf of any such holder. In the event that
the Trustee determines in good faith that further evidence is required with
respect to the right of any person who is a holder of Guarantor Senior
Indebtedness to participate in any payment or distribution pursuant to this
Article, the Trustee may request such person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Guarantor Senior
Indebtedness held by such person, the extent to which such person is entitled to
participate in such payment or distribution and any other facts pertinent to the
rights of such person under this Article, and if such evidence is not furnished
the Trustee may defer any payment to such person pending judicial determination
as to the right of such person to receive such payment or until such time as the
Trustee shall be otherwise satisfied as to the right of such person to receive
such payment.
The Trustee in its individual or any other capacity may hold
Guarantor Senior Indebtedness with the same rights it would have if it were not
Trustee. Any Agent may do the same with like rights.
The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Guarantor Senior Indebtedness and shall not be liable to any such
holder if it shall mistakenly pay over or distribute to Holders, or any
Guarantor or any other person money or assets to which any holders of Guarantor
Senior Indebtedness shall be entitled by virtue of this Article or otherwise.
-86-
Section 11.09. OFFICERS' CERTIFICATE.
If there occurs an event referred to in Section 11.03 or 11.04, such
Guarantor, as applicable, shall promptly give to the Trustee an Officers'
Certificate (on which the Trustee may conclusively rely) identifying all holders
of Guarantor Senior Indebtedness or their Representatives and the principal
amount of Guarantor Senior Indebtedness then outstanding held by each such
holder and stating the reasons why such Officers' Certificate is being delivered
to the Trustee.
Section 11.10. OBLIGATION OF GUARANTORS UNCONDITIONAL.
Nothing contained in this Article 11 or elsewhere in this Indenture,
in any Security or in any Guarantee of a Security is intended to or shall
impair, as between the Guarantors, their respective creditors other than holders
of Guarantor Senior Indebtedness and the Holders of the Securities, the
obligation of the Guarantors, which is absolute and unconditional, to pay to the
Holders of the Securities the principal of and interest on the Securities as and
when the same shall become due and payable in accordance with the terms of the
Guarantees with respect to the Securities, or is intended to or shall affect the
relative rights of the Holders of the Securities and creditors of the Guarantors
other than the holders of the Guarantor Senior Indebtedness, nor shall anything
herein or therein prevent the Trustee or the Holder of any Security from
exercising all remedies otherwise permitted by applicable law upon default under
this Indenture, subject to the rights, if any, under this Article 11 of the
holders of Guarantor Senior Indebtedness in respect of cash, property or
securities of the Guarantors received upon the exercise of any such remedy. Upon
any distribution of assets of any Guarantor referred to in this Article 11, the
Trustee, subject to the provisions of Sections 7.01 and 7.02, and the Holders of
the Securities shall be entitled to conclusively rely upon any order or decree
by any court of competent jurisdiction in which such dissolution, winding up,
liquidation or reorganization proceedings are pending, or a certificate of the
liquidating trustee or agent or other person making any distribution to the
Trustee or the Holders of the Securities, for the purpose of ascertaining the
persons entitled to participate in such distribution, the holders of the
Guarantor Senior Indebtedness and other indebtedness of the Guarantors, the
amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article 11. Nothing
contained in this Article 11 or elsewhere in this Indenture, in any Security or
in any Guarantee of any Security is intended to or shall affect the obligation
of the Guarantors to make, or prevent the Guarantors from making, at any time
except during the pendency of any dissolution, winding up, liquidation or
reorganization proceeding, and except during the continuance of any default
specified in Section 9.04 (not cured or waived), payments at any time of the
principal or of interest on the Securities.
-87-
Section 11.11. ARTICLE 11 NOT TO PREVENT EVENTS OF DEFAULT.
The failure to make a payment of principal of or interest on the
Securities by reason of any provision of this Article shall not be construed as
preventing the occurrence of an Event of Default under Section 6.01.
Section 11.12. EXECUTION AND DELIVERY OF GUARANTEE.
To further evidence the Guarantee set forth in Section 11.01, each
Guarantor hereby agrees that a notation of such Guarantee, substantially in the
form included in EXHIBIT B hereto, shall be endorsed on each Security
authenticated and delivered by the Trustee after such Guarantee is executed and
executed by either manual or facsimile signature of an officer of each
Guarantor. The validity and enforceability of any Guarantee shall not be
affected by the fact that it is not affixed to any particular Security.
Each of the Guarantors hereby agrees that its Guarantee set forth in
Section 11.01 shall remain in full force and effect notwithstanding any failure
to endorse on each Security a notation of such Guarantee.
If an officer of a Guarantor whose signatures is on this Indenture
or a Security no longer holds that office at the time the Trustee authenticates
such Security or at any time thereafter, such Guarantor's Guarantee of such
Security shall be valid nevertheless.
The delivery of any Security by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery of any Guarantee
set forth in this Indenture on behalf of the Guarantor.
Section 11.13. ADDITIONAL GUARANTORS.
Any person may become a Guarantor by executing and delivering to the
Trustee (a) a supplemental indenture in form and substance satisfactory to the
Trustee, which subjects such person to the provisions of Article 11 of this
Indenture as a Guarantor, and (b) an Opinion of Counsel to the effect that such
supplemental indenture has been duly authorized and executed by such person and
constitutes the legal, valid, binding and enforceable obligation of such person
(subject to such customary exceptions concerning fraudulent conveyance laws,
creditors' rights, equitable principles, and other customary matters, as may be
acceptable to the Trustee in its discretion).
Section 11.14. RELEASE OF A GUARANTOR.
(a) Upon the sale or disposition of all of the assets or all of the
Capital Stock of any Guarantor by the Company or a Subsidiary of the Company, or
upon the consolidation
-88-
or merger of a Guarantor with or into any Person (in each case, other than to
the Company or a Related Person of the Company) in compliance with Section 5.01,
or upon the designation of a Subsidiary as an Unrestricted Subsidiary which has
been designated by the Company as a Guarantor, such Guarantor, or the entity
surviving such Guarantor, as applicable, shall be deemed automatically and
unconditionally released and discharged from all Obligations under this Article
11 without any further action required on the part of the Trustee or any Holder,
and all Obligations of such Guarantor, if any, in respect of any Indebtedness of
the Company shall also terminate upon such transaction; PROVIDED, HOWEVER, that
each such Guarantor is sold or disposed of in accordance with Section 4.15 and
Section 5.01 hereof, respectively; PROVIDED, FURTHER, that the foregoing proviso
shall not apply to the sale or disposition of a Guarantor in a foreclosure to
the extent that such proviso would be inconsistent with the requirements of any
Uniform Commercial Code.
(b) The Trustee shall deliver an appropriate instrument evidencing
the release of a Guarantor upon receipt of a request of the Company accompanied
by an Officer's Certificate certifying as to the compliance with this Section
11.04. Any Guarantor not so released or the entity surviving such Guarantor, as
applicable, will remain or be liable under its Guarantee as provided in this
Article 11.
The Trustee shall execute any documents reasonably requested by the
Company or a Guarantor in order to evidence the release of such Guarantor from
its Obligations under its Guarantee endorsed on the Securities and under this
Article 11.
Except as set forth in Articles 4 and 5 and this Section 11.04,
nothing contained in this Indenture or in any of the Securities shall prevent
any consolidation or merger of a Guarantor with or into the Company or another
Guarantor or shall prevent any sale or conveyance of the property of a Guarantor
as an entirety or substantially as an entirety to the Company or another
Guarantor.
ARTICLE 12
MISCELLANEOUS
Section 12.01. TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies or conflicts
with another provision which is required to be included in this Indenture by the
TIA, the required provision shall control.
-89-
Section 12.02. NOTICES.
Any notice or communication by the Company or the Trustee to the
other is duly given if in writing and delivered in person, mailed by first-class
mail or by express delivery to the other's address stated in this Section 12.02.
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 a Holder shall be mailed by
first-class mail to his address shown on the register kept by the Registrar.
Failure to mail a notice or communication to a Holder or any defect in it shall
not affect its sufficiency with respect to other Holders.
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 Holders, it shall
mail a copy to the Trustee and each Agent at the same time.
All notices or communications shall be in writing.
The Company's address is:
Xxxxxxx Homes, Inc.
000 Xxxx Xxxxxx Xxxx, 0xx Xxxxx
Xxxxxxxx, Xxxxxx 00000
Attention: Corporate Secretary
The Trustee's address is:
U.S. Bank Trust National Association
000 Xxxxx Xxxx Xxxxxx-Xxxxx 000
Xxx Xxxxxxx, XX 00000
Attention: Xxxxxxx Xxxx
Section 12.03. COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.
Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Securities. The
Company, the Trustee, the Registrar and anyone else shall have the protection of
TIA Section 312(c).
-90-
Section 12.04. 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:
(1) an Officers' Certificate stating that, in the opinion of the
signer, all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(2) to the extent expressly required by this Indenture or as
otherwise may be reasonably requested by the Trustee, an Opinion of
Counsel stating that, in the opinion of such counsel, all such conditions
precedent have been complied with.
Each signer of an Officer's Certificate or an Opinion of Counsel may
(if so stated) rely, effectively, upon an Opinion of Counsel as to legal matters
and an Officer's Certificate as to factual matters if such signer reasonably and
in good faith believes in the accuracy of the document relied upon.
Section 12.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that the person making such certificate or opinion
has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such person, he has made
such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has
been complied with; and
(4) a statement as to whether or not, in the opinion of such person,
such condition or covenant has been complied with.
Section 12.06. RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or at a meeting
of Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for their respective functions.
-91-
Section 12.07. LEGAL HOLIDAYS.
A "LEGAL HOLIDAY" is a Saturday, a Sunday or a day on which banking
institutions are not required to be open in The City of
New York, in the State
of New York, City of Los Angeles in the State of California or in the city in
which the Trustee administers its corporate trust business in respect of this
Indenture or the city in which the Company has its chief executive officer. If a
payment date is a Legal Holiday at a place of payment, payment may be made at
that place on the next succeeding day that is not a Legal Holiday, and no
interest shall accrue on that payment for the intervening period.
Section 12.08. NO PERSONAL LIABILITY OF INCORPORATORS, SHAREHOLDERS,
OFFICERS, DIRECTORS OR EMPLOYEES.
No director, officer, controlling person, employee or stockholder of
the Company, any Guarantor or any successor Person thereof shall have any
liability for any Obligations, covenants or agreements of the Company or any
Guarantor under the Securities or this Indenture or for any claim based on, in
respect of or by reason of such Obligations or their creation. No recourse under
or upon any obligation, covenant or agreement of the Company or any Guarantor in
this Indenture or in any of the Securities or because of the creation of any
Indebtedness represented thereby, shall be held against any incorporator,
stockholder, officer, director, employee or controlling person of the Company,
any Guarantor or any successor Person thereof. Each Holder by accepting a
Security waives and releases all such liability. The waiver and releases are
part of the consideration for the issue of the Securities.
Section 12.09. DUPLICATE ORIGINALS.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement. One signed copy is enough to prove this Indenture.
Section 12.10. GOVERNING LAW.
The laws of the State of New York, without regard to principles of
conflicts of law, shall govern this Indenture, the Securities and the
Guarantees.
Section 12.11. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret another indenture, loan
or debt agreement of the Company or a Subsidiary. Any such indenture, loan or
debt agreement may not be used to interpret this Indenture.
-92-
Section 12.12. SUCCESSORS.
All agreements of the Company and the Guarantors in this Indenture
and the Securities shall bind their respective successors. All agreements of the
Trustee in this Indenture shall bind its successors.
Section 12.13. SEPARABILITY.
In case any provision in this Indenture or in the Securities 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
and a Holder shall have no claim therefor against any party hereto.
Section 12.14. BENEFITS OF INDENTURE.
Nothing in this Indenture or in the Securities or Guarantees,
expressed or implied, shall give to any Person, other than the parties hereto
and their successors hereunder and the Holders of Securities, any benefits or
any legal or equitable right, remedy or claim under this Indenture.
Section 12.15. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part hereof and shall in no way
modify or restrict any of the terms or provisions hereof.
-93-
IN WITNESS WHEREOF, the parties hereto have executed this Indenture
as of the date first set forth above.
XXXXXXX HOMES, INC.
By:_______________________________
Name: Xxxxx X. Xxxxxxx
Title: President and CEO
By:_______________________________
Name: Xxxxxx Xxxxxxxx
Title: Chief Financial Officer and Secretary
GUARANTORS: EACH OF THE CORPORATE GUARANTORS
LISTED ON SCHEDULE I HERETO
By:_______________________________
Name: Xxxxxx Xxxxxxxx
Title: Chief Financial Officer and Secretary
EACH OF THE CORPORATE GUARANTORS
LISTED ON SCHEDULE I HERETO
By: Its respective Managing Member or Sole
Manager, as the case may be
By:_______________________________
Name: Xxxxxx Xxxxxxxx
Title: Chief Financial Officer and Secretary
Attest:_______________________
Name:
Title:
-2-
U.S. BANK TRUST NATIONAL ASSOCIATION
By:_______________________________
Name: Xxxxxxx X. Xxxxx
Title: Vice President
SCHEDULE I
SCHEDULE OF GUARANTORS
Melody Homes, Inc.
Melody Mortgage Co.
Xxxxxxx Homes of California, Inc.
Xxxxxxx Homes of Washington, Inc.
Xxxxxxx Homes of Oregon, Inc.
SHLR of Washington, Inc.
SHLR of Colorado, Inc.
SHLR of Nevada, Inc.
Xxxxxxx Realty/Maui. Inc.
Xxxxxxx Realty/Oahu, Inc.
Vertical Construction Corporation
SHLR of Utah, Inc.
Xxxxxxx Mortgage, Inc.
SHLR of California, Inc.
SSHI LLC (Xxxxxxxx)
SRHI LLC (Xxxxxx)
Xxxxxxx Homes Arizona LLC
SHA Construction LLC
LAMCO Housing, Inc.
II LAMCO Housing, Inc.
AP LHI, Inc.
APLAM, LLC
AP Western GP Corporation
AP WP Partners L.P.
AP WP Operating Corporation
HPH Homebuilders 2000 XX
Xxxxxx GP LLC
Xxxxxx XX LLC
Western Pacific Housing, Inc.
Western Pacific Housing Development Limited Partnership
Western Pacific Housing Development II Limited Partnership
WPH-Xxxxxx, LLC
Xxxxx, LLC (formerly WPH-Edgewood 56, LLC)
Western Pacific Housing-Agoura I, LLC
Western Pacific Housing-American Canyon, LLC
Western Pacific Housing-Antigua, LLC
Western Pacific Housing-Bay Vista, LLC
-2-
Western Pacific Housing-Broadway, LLC
Western Pacific Housing-Xxxxxxx, LLC
Western Pacific Housing-Calvine, LLC
Western Pacific Housing-Xxxxxxxx, LLC
Western Pacific Housing-Cloverdale I, LLC
Western Pacific Housing-Cloverdale II, LLC
Western Pacific Housing-Communications Hill, LLC
Western Pacific Housing-Xxxxxxxx Commons I, LLC
Western Pacific Housing-Coto I, LLC
Western Pacific Housing-Creekside, LLC
Western Pacific Housing-Cypress Xxxxx, LLC
Western Pacific Housing-Deer Creek, LLC
Western Pacific Housing-East Park, LLC
Western Pacific Housing-Edgewood 45, LLC
Western Pacific Housing-Escondido, LLC
Western Pacific Housing-Fieldstone, LLC
Western Pacific Housing-Hercules MRB, LLC
Western Pacific Housing-Hercules Village, LLC
Western Pacific Housing-Land Park North, LLC
Western Pacific Housing-Xxxxxx Xxxxx XX, LLC
Western Pacific Housing-Lomas Verdes, LLC
Western Pacific Housing-Xxxxxxxx, LLC
Western Pacific Housing-Menifee, LLC
Western Pacific Housing-Xxxxxxxxxx, LLC
Western Pacific Housing-Murrieta, LLC
Western Pacific Housing-Natomas Village 13, LLC
Western Pacific Housing-Norco Estates, LLC
Western Pacific Housing-Paradise Creek, LLC
Western Pacific Housing-Providence I, LLC
Western Pacific Housing-Robinhood Ridge, LLC
Western Pacific Housing-Xxxxxxx Heights, LLC
Western Pacific Housing-Saddlebrook, LLC
Western Pacific Housing-San Elijo, LLC
Western Pacific Housing-Simi I, LLC
Western Pacific Housing-Sonoma, LLC
Western Pacific Housing-Spanish Hills, LLC
Western Pacific Housing-Stone Lake, LLC
Western Pacific Housing-Sun Valley, LLC
Western Pacific Housing-Terra Bay Xxxxx, LLC
Western Pacific Housing-Xxxxxx Xxxxx, LLC
-3-
Western Pacific Housing-Towngate, LLC
Western Pacific Housing-Valpico, LLC
Western Pacific Housing-Vineyard Terrace, LLC
Western Pacific Housing-Wesminster, LLC
Western Pacific Housing-Windsor Pointe, LLC
Western Pacific Housing-Black Mountain, LLC
Western Pacific Housing-Xxxxxxx Xxxxxxx, LLC
Western Pacific Housing-Carlsberg Ranch, LLC
Western Pacific Housing-Carpenteria, LLC
Western Pacific Housing-Dos Vientos 78, LLC
Western Pacific Housing-Fillmore, LLC
Western Pacific Housing-Xxxxx Canyon Partners, LLC
Western Pacific Housing-San Elijo Area R, LLC
Western Pacific Housing-Xxxxx Ranch, LLC
Western Pacific Housing-Sorrento, LLC
Western Pacific Housing-Torrey Village Center
Western Pacific Housing-Torrey, LLC
Western Pacific Housing-Torrey Santa Fe, LLC
WPH-Camino Xxxx, LLC
WPH-HPH LLC
WPH-SAL2, L.P. (formerly WPH-Sunset Hills III, L.P.)
Western Pacific Funding, Inc.
Western Pacific Housing - XxXxxxxxx Canyon, LLC
Western Pacific Housing-Torrey Commercial, LLC
Western Pacific Housing-Torrey Multi-Family, LLC
WPH-SAL1, L.P.
WPH Management Co.
III LAMCO Housing, Inc.
IV LAMCO Housing, LLC
V LAMCO Housing, LLC
Allegra, LLC
HPH Homebuilders LP 1995
HPH Homebuilders LP 1996
Livermore Homebuilders XX
Xxxxxx-Avalon LP
Western Pacific Housing-Altamar, LLC
Western Pacific Housing-Altura, L.P.
Western Pacific Housing-Arbor Hills, LLC
Western Pacific Housing-Aviara, L.P.
Western Pacific Housing-Bella Nevona, LLC
-4-
Western Pacific Housing Co.
Western Pacific Housing-Canyon Park, LLC
Western Pacific Housing-Carlsbad I, LLC
Western Pacific Housing-Carmel, LLC
Western Pacific Housing-Xxxxxx Station, LLC
Western Pacific Housing-Corona, L.P.
Western Pacific Housing-Coto Venture, L.P.
Western Pacific Housing-Xxxxxx City, L.P.
Western Pacific Housing-Xxxxxx Grove, LLC
Western Pacific Housing-Del Sol
Western Pacific Housing-El Camino, LLC
Western Pacific Housing-Financing Partners
Western Pacific Housing-Xxxx View, LLC
Western Pacific Housing-Hamptons, L.P.
Western Pacific Housing-Lost Hills Park, LLC
Western Pacific Housing-Mayfair, LLC
Western Pacific Housing-Mountaingate, L.P.
Western Pacific Housing-Oso, L.P.
Western Pacific Housing-Pacific Park, L.P.
Western Pacific Housing-Pacific Park II, LLC
Western Pacific Housing-Penasquitos, LLC
Western Pacific Housing-Poinsettia, L.P.
Western Pacific Housing-Rancho Del Tio, LLC
Western Pacific Housing-Riverside I, LLC
Western Pacific Housing-San Simeon, L.P.
Western Pacific Housing-San Xxxxxx XX, L.P.
Western Pacific Housing-Santa Fe, LLC
Western Pacific Housing-Saugus, L.P.
Western Pacific Housing-Scripps, L.P.
Western Pacific Housing-Scripps II, LLC
Western Pacific Housing-Seacove, L.P.
Western Pacific Housing-Shadow Creek, LLC
Western Pacific Housing-Skyridge, L.P.
Western Pacific Housing-Xxxxxxx I, LLC
Western Pacific Housing-Sunset Hills I, L.P.
Western Pacific Housing-Sunset Hills II, L.P.
Western Pacific Housing-Xxxxxx Place, LLC
Western Pacific Housing-Tiburon II, L.P.
Western Pacific Housing-Torrey Hills, LLC
Western Pacific Housing-Westlake, L.P.
-5-
Western Pacific Housing-Westlake II, L.P.
Western Pacific Housing-Windflower, L.P.
Western Pacific Housing-Winterhaven, LLC
Western Pacific Housing-Xxxxx, X.X.
EXHIBIT A
S P E C I M E N
XXXXXXX HOMES, INC.
$_________
CUSIP NO.: _________
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED BY THIS CERTIFICATE WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE U.S.
SECURITIES ACT OF 1933, AND THE SECURITY EVIDENCED BY THIS CERTIFICATE MAY NOT
BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF
REGISTRATION OR AN APPLICABLE EXEMPTION FROM THE SECURITIES ACT. EACH PURCHASER
OF THE SECURITY EVIDENCED BY THIS CERTIFICATE (1) BY ITS ACQUISITION OF THE
SECURITY REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED
IN RULE 144A UNDER THE SECURITIES ACT), (B) IT IS NOT A U.S. PERSON AND IS
ACQUIRING THE SECURITY EVIDENCED BY THIS CERTIFICATE IN AN OFFSHORE TRANSACTION
IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT, (C) IT IS AN
"ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE 501(A)(1), (2), (3) OR (7)
UNDER THE SECURITIES ACT (AN "INSTITUTIONAL ACCREDITED INVESTOR") THAT IS
ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF AN
INSTITUTIONAL ACCREDITED INVESTOR AND (2) IS HEREBY NOTIFIED THAT THE SELLER MAY
BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES
ACT PROVIDED BY RULE 144A OR ANOTHER EXEMPTION UNDER THE SECURITIES ACT. THE
HOLDER OF THE SECURITY EVIDENCED BY THIS CERTIFICATE AGREES FOR THE BENEFIT OF
THE COMPANY AND THE GUARANTORS THAT (X) THIS SECURITY MAY BE RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED ONLY (1)(A) TO A PERSON WHO THE SELLER REASONABLY BELIEVES
IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (B) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, IF
AVAILABLE, (C) OUTSIDE THE UNITED STATES TO A PERSON THAT IS NOT A U.S. PERSON
(AS DEFINED IN RULE 902 UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF REGULATION S UNDER THE SECURITIES ACT, (D) TO AN INSTITUTIONAL
ACCREDITED INVES-
A-1
TOR THAT IS PURCHASING AT LEAST $100,000 OF NOTES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF AN INSTITUTIONAL ACCREDITED INVESTOR (AND BASED UPON AN OPINION OF
COUNSEL IF THE COMPANY SO REQUESTS), (2) TO THE COMPANY OR ANY OF ITS
SUBSIDIARIES OR (3) UNDER AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE,
IN COMPLIANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES OR ANY OTHER APPLICABLE JURISDICTION AND (4) THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY
EVIDENCED BY THIS CERTIFICATE OF THE RESALE RESTRICTIONS DESCRIBED IN (X) ABOVE.
IN CONNECTION WITH ANY TRANSFER OF THIS SECURITY WITHIN TWO YEARS AFTER THE
ORIGINAL ISSUANCE OF THIS SECURITY, IF THE PROPOSED TRANSFEREE IS AN ACCREDITED
INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE AND
THE COMPANY SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER
OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE
PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
A-2
REGISTERED REGISTERED
NUMBER DOLLARS
[FACE OF SECURITY]
XXXXXXX HOMES, INC.
CUSIP
10 1/2% SENIOR SUBORDINATED NOTE DUE 2011
XXXXXXX HOMES, INC., a Delaware corporation (herein called the
"COMPANY"), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, the principal sum of ONE HUNDRED FIFTY MILLION DOLLARS
($150,000,000) on July 15, 2011, and to pay interest thereon as provided on the
reverse hereof, until the principal hereof is paid or duly provided for.
Interest Payment Dates: January 15 and July 15 commencing on January
15, 2002
Record Dates: January 1and July 1
The provisions on the back of this certificate are incorporated as
if set forth on the face hereof.
A-3
IN WITNESS WHEREOF, XXXXXXX HOMES, INC. has caused this instrument to be
duly signed under its corporate seal.
[SEAL]
XXXXXXX HOMES, INC.
By:________________________________________
Name:
Title:
By:________________________________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities referred
to in the within mentioned Indenture.
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Trustee
By:________________________________________
Name:
Title: Authorized Signatory
Dated:
A-4
[REVERSE OF SECURITY]
XXXXXXX HOMES, INC.
10 1/2% SENIOR SUBORDINATED NOTE DUE 2011
1. INTEREST. Xxxxxxx Homes, Inc., a Delaware corporation (the
"COMPANY"), promises to pay interest on the principal amount of this Security at
the rate PER ANNUM shown above. The Company will pay interest semi-annually on
January 15 and July 15 of each year, commencing January 15, 2002. Interest on
the Securities will accrue from the most recent date to which interest has been
paid or, if no interest has been paid, from the date of original issuance of the
Securities set forth on the face of this Security. Interest will be computed on
the basis of a 360-day year of twelve 30-day months.
2. STATED MATURITY. The date on which the principal of the
Securities shall be payable, unless accelerated pursuant to the Indenture, is
July 15, 2011.
3. METHOD OF PAYMENT. The Company will pay interest on the
Securities (except defaulted interest) to the persons who are registered Holders
of Securities at the close of business on the record date set forth on the face
of this Security next preceding the applicable interest payment date. Holders
must surrender Securities to a Paying Agent to collect principal payments. The
Company will pay principal and interest in money of the United States that at
the time of payment is legal tender for payment of public and private debts.
The Company may, at its option, mail an interest check on a payable
date to a Holder's registered address, provided payments of principal and
interest on Securities with a principal amount of $5,000,000 or more may be made
by wire transfer to an account of the Holder, if such Holder gives 15 days
notice to the Company prior to the relevant record date.
4. PAYING AGENT AND REGISTRAR. Initially, U.S. Bank Trust National
Association (the "TRUSTEE") will act as Paying Agent and Registrar. The Company
may change any Paying Agent, Registrar or co-Registrar without notice. The
Company may act in any such capacity.
5. INDENTURE AND GUARANTEES. The Company issued the Securities under
an Indenture dated as of June 28, 2001 (the "INDENTURE") between the Company and
the Trustee. The terms of the Securities are more fully 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 Sections 77aaa-77bbbb) (the "ACT"), as in effect
on the date of the Indenture. The Securities are subject to all such terms, and
Holders are referred to the Indenture and the Act for a statement of such terms.
The Securities are general unsecured senior obligations of the Company unlimited
in aggregate principal amount, of which $150 million will be issued in
A-5
the Offering, and unlimited additional amounts may be issued after the Issuance
Date (except for Securities issued in substitution for destroyed, mutilated,
lost or stolen Securities). Terms used herein which are defined in the Indenture
have the meanings assigned to them in the Indenture.
Payment on the Securities is guaranteed (each, a "GUARANTEE"), on a senior
subordinated basis, jointly and severally, by each of the Guarantors pursuant to
Article Eleven of the Indenture. In addition, the Indenture requires the Company
to cause any Subsidiary which is designated as a Restricted Subsidiary to be
made a Guarantor, and provides that, at the Company's discretion, any
Unrestricted Subsidiary may be made a Guarantor.
6. SUBORDINATION. The Securities are unsecured obligations of the Company
and subordinated in right of payment, in the manner and to the extent set forth
in the Indenture, to the prior payment in full of all Senior Indebtedness of the
Company, whether outstanding on the date of the Indenture or thereafter created,
incurred, assumed or guaranteed. Each Holder by his acceptance hereof agrees to
be bound by such provisions and authorizes and expressly directs the Trustee, on
his behalf, to take such action as may be necessary or appropriate to effectuate
the subordination provided for in the Indenture and appoints the Trustee his
attorney-in-fact for such purposes.
7. OPTIONAL REDEMPTION. The Securities will not be redeemable at the
option of the Company prior to July 15, 2006. Thereafter, the Securities will be
redeemable, at the Company's option, in whole or in part, at any time or from
time to time, upon not less than 30 nor more than 60 days prior notice mailed by
first-class mail to each Holder's registered address, at the following
redemption prices (expressed in percentages of principal amount), plus accrued
and unpaid interest and Additional Interest, if any, to the applicable
redemption date (subject to the right of Holders of record on the relevant
record date to receive interest due on the relevant interest payment date), if
redeemed during the 12-month period commencing on July 15 of the years set forth
below:
REDEMPTION
YEAR PRICE
---- --------
2006................................................ 105.250%
2007................................................ 103.500%
2008................................................ 101.750%
2009 and thereafter................................. 100.000%
Notwithstanding the foregoing, at any time prior to July 15, 2004,
the Company may on any one or more occasions redeem up to 35% of the aggregate
principal amount of Securities originally issued under the Indenture at a
redemption price of 110.500% of the principal amount thereof, plus accrued and
unpaid interest and Additional Interest, if any, to the redemption date, with
the net cash proceeds of one or more Equity Offerings; PROVIDED
A-6
that not less than 65% of the aggregate principal amount of Securities issued
under the Indenture remain outstanding immediately after the occurrence of such
redemption (excluding Securities held by the Company and its Subsidiaries); and
PROVIDED, FURTHER, that such redemption shall occur within 90 days of the date
of the closing of such Equity Offering.
If less than all of the Securities are to be redeemed, the Trustee
will select the Securities to be redeemed on a pro rata basis, by lot or by such
other method as the Trustee in its sole discretion shall deem to be fair and
appropriate PROVIDED that no Securities of principal amount of $1,000 or less
shall be redeemed in part. In addition, if a partial redemption is made pursuant
to the provisions described in the immediately preceding paragraph, selection of
the Securities or portions thereof for redemption shall be made by the Trustee
only on a pro rata basis or on as nearly a pro rata as is practicable (subject
to the procedures of The Depository Trust Company), unless that method is
otherwise prohibited.
8. CHANGE OF CONTROL. In the event of a Change of Control (as
defined in the Indenture) with respect to the Company, then each Holder of the
Securities shall have the right, at the Holder's option, to require the Company
to buy such Holder's Securities including any portion thereof which is $1,000 or
any integral multiple thereof on the date (the "CHANGE OF CONTROL REPURCHASE
DATE") that is no earlier than 30 days nor later than 60 days after the date of
the Change of Control Notice at a price equal to 101% of the principal amount
thereof, plus accrued and unpaid interest and Additional Interest, if any, to
the Change of Control Repurchase Date.
9. REGISTRATION RIGHTS. Pursuant to the Registration Rights
Agreement by and between the Company and the Initial Purchasers, the Company
will be obligated to consummate an exchange offer pursuant to which the Holder
of this Note shall have the right to exchange this Security for the Company's 10
1/2% Senior Subordinated Notes due 2011 (the "EXCHANGE NOTES"), at such time as
the Exchange Notes shall have been registered under the Securities Act, in like
principal amount and having terms identical in all material respects to the
Securities. The Holders of the Securities shall be entitled to receive certain
Additional Interest payments in the event such exchange offer is not consummated
and upon certain other conditions, all pursuant to and in accordance with the
terms of the Registration Rights Agreement.
10. NET WORTH OFFER. In the event that the Company's Net Worth at
the end of each of any two consecutive fiscal quarters is less than $150.0
million (the "MINIMUM NET WORTH"), then the Company shall make a Net Worth Offer
to all Holders to acquire on a pro rata basis on the date (the "NET WORTH
REPURCHASE DATE") that is 45 days after the Net Worth Notice, Securities in an
aggregate principal amount equal to 10% of the aggregate principal amount of the
Securities (or, if less than 10% of the initial aggregate principal amount of
the Securities issued are then outstanding, all the Securities outstanding at
the time) (the "NET WORTH OFFER AMOUNT"), at a purchase price equal to 100% of
the principal amount thereof, plus accrued interest and Additional Interest, if
any, to the Net Worth Repurchase Date (the
A-7
"NET WORTH PRICE"). The Company may credit against the Net Worth Offer Amount
the principal amount of Securities acquired by the Company through purchase,
optional redemption or exchange prior to the Trigger Date.
11. NET PROCEEDS OFFER. Within 390 days from the date that any Asset
Disposition is consummated, (1) the Net Proceeds thereof (a) will be reinvested
in Additional Assets, or (b) will be applied to the repayment, redemption or
repurchase of Senior Indebtedness or Guarantor Senior Indebtedness or
Indebtedness which ranks PARI PASSU with the Securities or the Guarantees
(which, in each case, will be a permanent reduction of such Indebtedness), or
(2) the Company or such Restricted Subsidiary, as the case may be, will make an
offer (a "NET PROCEEDS OFFER") to purchase, within 30 days of such Net Proceeds
Offer (such date of purchase being the "NET PROCEEDS REPURCHASE DATE"),
Securities and, if applicable, to redeem any Indebtedness ranking PARI PASSU
with the Securities the provisions of which require the Company or a Restricted
Subsidiary to redeem (or make an offer to do so) such Indebtedness with the
proceeds of Asset Dispositions (or offer to do so), having an aggregate Offer
Price equal to the amount of Net Proceeds of such Asset Disposition not applied
as provided in the foregoing clause (1) (less any amounts used to pay reasonable
fees and expenses connected with such Net Proceeds Offer and, if applicable,
other offer to redeem Indebtedness). Notwithstanding the foregoing, the Net
Proceeds of an Asset Disposition are not required to be applied in accordance
with clause (2) of the preceding sentence, unless and until the aggregate Net
Proceeds of all such Asset Dispositions not applied in accordance with clause
(1) above exceed $10.0 million. Pending the final application of any such Net
Proceeds, the Company may temporarily reduce revolving credit borrowings or
otherwise invest such Net proceeds in any manner that is not prohibited by the
Indenture.
12. RESTRICTIVE COVENANTS. The Indenture contains certain
restrictive covenants that limit the ability of the Company and its Restricted
Subsidiaries to incur additional Indebtedness, pay dividends, make certain other
distributions, repurchase Capital Stock or subordinated Indebtedness, create
certain liens, enter into certain transactions with Related Persons or apply the
Net Proceeds from the sale of certain assets.
13. DENOMINATIONS, TRANSFER, EXCHANGE. The Securities are in
registered form without coupons in denominations of $1,000 and whole multiples
of $1,000. The transfer of Securities may be registered and Securities may be
exchanged as provided in the Indenture. The Registrar may require a Holder,
among other things, to furnish appropriate endorsements and transfer documents.
No service charge shall be made for any such registration or transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith. The Registrar
need not exchange or register the transfer of any Security selected for
redemption in whole or in part. Also, it need not exchange or register the
transfer of any Securities for a period of 15 days before a selection of
Securities to be redeemed.
A-8
14. PERSONS DEEMED OWNERS. The registered Holder of a Security may
be treated as its owner for all purposes.
15. AMENDMENTS AND WAIVERS. Subject to certain exceptions, the
Indenture, the Securities or the Guarantees may be amended with the consent of
the Holders of at least a majority in principal amount of the Securities
outstanding; and any existing default or Event of Default may be waived with the
consent of the Holders of a majority in principal amount of the Securities.
Without the consent of any Holder, the Indenture, the Securities or the
Guarantees may be amended to add to the covenants, agreements and Obligations of
the Company for the benefit of the Holders of all the Securities or to surrender
any right or power conferred in the Indenture upon the Company; or to evidence
the succession of another corporation to the Company and the assumption by it of
the Obligations of the Company under the Indenture and the Securities; to
provide for the acceptance of appointment under the Indenture of a successor
Trustee with respect to the Securities and to add to or change any provisions of
the Indenture as shall be necessary to provide for or facilitate the
administration of the trusts by more than one Trustee; to evidence the
succession of another corporation to any Guarantor and the assumption by it of
the Obligations of the Guarantor under the applicable Guarantee; to cure any
ambiguity, omission, defect or inconsistency to secure the Securities or to make
any change that does not adversely affect the rights of any Holder, or to
reflect a Guarantor ceasing to be liable on the Guarantees because it is no
longer a Subsidiary of the Company or otherwise in accordance with the terms of
the Indenture.
16. DEFAULTS AND REMEDIES. An Event of Default is: (i) failure by
the Company to pay the principal of any Security when such principal becomes due
and payable at maturity, upon redemption, upon purchase, upon acceleration or
otherwise, whether or not prohibited by the provisions of Article 9 of the
Indenture; (ii) failure by the Company to pay interest when due, and such
failure continues for a 30-day period, whether or not prohibited by the
provisions of Article 9 of the Indenture; (iii) failure by the Company to comply
with any of its agreements or covenants described above under Article 5 of the
Indenture or in respect of its obligation to make an offer to purchase
Securities issued thereunder following a Change of Control described under
Section 4.08 of the Indenture; (iv) the Company or any Guarantor defaults in the
observance or performance of any other covenant or agreement of the Company or
such Guarantor in the Securities, the Guarantees or the Indenture upon the
receipt by the Company of notice of such Default by the Trustee or the Holders
of at least 25% in aggregate principal amount of the Securities issued under the
Indenture and the Company's failure to cure such Default within 45 days after
receipt by the Company of such notice; (v) certain events of bankruptcy,
insolvency or reorganization of the Company or Restricted Subsidiaries; (vi)
default under any mortgage, indenture (including the Indenture) or instrument
under which is issued or which secures or evidences Indebtedness of the Company
or any Restricted Subsidiary (other than Non-Recourse Indebtedness) which
default constitutes a failure to pay principal of such Indebtedness in an amount
of $10.0 million or more when due and payable (other than as a result of
acceleration) or results in Indebtedness (other than Non-Recourse Indebtedness)
in the aggregate of $10.0 million or more becoming or being declared
A-9
due and payable before it would otherwise become due and payable (which
acceleration is not rescinded, annulled or otherwise cured within 30 days
thereof); (vii) entry of a final judgment for payment of money in excess of $5.0
in the aggregate shall be rendered against the Company or any of its Restricted
Subsidiaries and shall remain unstayed, or undischarged for a period of 60 days
after the date on which the right to appeal such judgment has expired or becomes
subject to an enforcement proceeding and (viii) any Guarantee of Securities
issued hereunder ceases to be in full force and effect (other than in accordance
with the terms of such Guarantee and the Indenture) or is declared null and void
and unenforceable or found to be invalid or any Guarantor denies its liability
under its Guarantee (other than by reason of release of a Guarantor from its
Guarantee in accordance with the terms of the Indenture and the Guarantee). The
Company is required to deliver to the Trustee within 120 days after the end of
each fiscal year of the Company, an officers' certificate stating whether or not
the signatories know of any default by the Company under this Indenture and, if
any default exists, describing such default.
If an Event of Default occurs (other than due to certain events of
bankruptcy, with respect to the Company) and is continuing, the Trustee, by
notice to the Company, or the Holders of at least 25% in principal amount of the
Securities then outstanding, by notice to the Company and the Trustee, may
declare all the Securities to be due and payable immediately. If an Event of
Default occurs due to certain events of bankruptcy, insolvency or
reorganization, with respect to the Company, such amounts shall be due and
payable without any declaration or act on the part of the Trustee or the Holders
of the Securities. Subject to certain exceptions, the Holders of a majority in
principal amount of the Securities then outstanding by notice to the Trustee may
rescind any declaration of acceleration or waive a Default and its consequences.
Holders may not enforce the Indenture or the Securities except as provided in
the Indenture. The Trustee may require indemnity satisfactory to it before it
enforces the Indenture or the Securities. Subject to certain limitations,
Holders of a majority in principal amount of the Securities may direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee or the exercise of any trust or power conferred on the Trustee. The
Trustee may withhold from Holders notice of any continuing default (except a
default in payment of principal or interest) if it determines that withholding
notice is in their interests. The Company must furnish an annual compliance
certificate to the Trustee and notify the Trustee upon the occurrence of a
Default.
17. TRUSTEE DEALINGS WITH COMPANY. U.S. Bank Trust National
Association, the Trustee under the Indenture, or any banking institution serving
as successor Trustee thereunder, in its individual or any other capacity, accept
deposits from, and perform services for the Company or its Related Persons, and
may otherwise deal with the Company or its Related Persons, as if it were not
the Trustee.
18. NO RECOURSE AGAINST OTHERS. A director, officer, controlling
person, employee or stockholder, as such, of the Company or any Guarantor or any
successor person thereof shall not have any liability for any Obligations,
covenants or agreements of the
A-10
Company or any Guarantor under the Securities or the Indenture or for any claim
based on, in respect of or by reason of such obligations, covenants or
agreements or their creation. Each Holder by accepting a Security waives and
releases all such liability. The waiver and releases are part of the
consideration for the issue of the Securities.
19. AUTHENTICATION. This Security shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent.
20. ABBREVIATIONS. Customary abbreviations may be used in the name
of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenant by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
THE COMPANY WILL FURNISH TO ANY SECURITYHOLDER UPON WRITTEN REQUEST
AND WITHOUT CHARGE A COPY OF THE INDENTURE. REQUESTS MAY BE MADE TO: Xxxxxxx
Homes, Inc., 000 Xxxx Xxxxxx Xxxx, 0xx Xxxxx, Xxxxxxxx, Xxxxxx 00000, telephone:
(000) 000-0000.
A-11
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security 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 Security on the
books of the Company. The agent may substitute another to act for him.
Date: ____________ Signature(s):____________________________
(Sign exactly as your name(s)
appear(s) on the other side of
this Security)
Signature(s) guaranteed by: _________________________________________
THE SIGNATURE(S) SHOULD BE
GUARANTEED BY AN ELIGIBLE
GUARANTOR INSTITUTION
(Banks, Stock Brokers,
Savings and Loan
Associations, and Credit
Unions) WITH MEMBERSHIP IN
AN APPROVED SIGNATURE
GUARANTEE MEDALLION PROGRAM
PURSUANT TO S.E.C. RULE
17Ad-15.)
A-12
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.08, 4.09 or 4.15, as the case may be, of the Indenture,
check the box: |_|
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.08, 4.09 or 4.15 of the Indenture, state the
amount: $__________ (in an integral multiple of $1,000)
Date: ____________ Signature(s): ____________________________
Date: ____________ Signature(s): ____________________________
(Sign exactly as your name(s) appear(s) on
the other side of this Security)
Signature(s) guaranteed by: __________________________________________
THE SIGNATURE(S) SHOULD BE
GUARANTEED BY AN ELIGIBLE
GUARANTOR INSTITUTION
(Banks, Stock Brokers,
Savings and Loan
Associations, and Credit
Unions) WITH MEMBERSHIP IN
AN APPROVED SIGNATURE
GUARANTEE MEDALLION PROGRAM
PURSUANT TO S.E.C. RULE
17Ad-15.)
A-13
EXHIBIT B
[FORM OF GUARANTEE]
SENIOR SUBORDINATED GUARANTEE
For value received, the undersigned hereby unconditionally
guarantees on a senior subordinated basis to the Holder of this Security the
payments of principal of, premium, if any, and interest on this Security in the
amounts and at the time when due and interest on the overdue principal, premium,
if any, and interest, if any, of this Security, if lawful, and the payment or
performance of all other obligations of the Company under the Indenture or the
Securities, to the Holder of this Security and the Trustee, all in accordance
with and subject to the terms and limitations of this Security, Article 11 of
the Indenture and this Guarantee. This Guarantee will become effective in
accordance with Article 11 of the Indenture and its terms shall be evidenced
therein. The validity and enforceability of any Guarantee shall not be affected
by the fact that it is not affixed to any particular Security.
The obligations of the undersigned to the Holders of Securities and
to the Trustee pursuant to the Guarantee and the Indenture are expressly set
forth, and are expressly subordinated and subject in right of payment to the
prior payment in full of all Guarantor Senior Indebtedness (as defined in the
Indenture) of such Guarantor, to the extent and in the manner provided in
Article 11 of the Indenture and reference is hereby made to the Indenture for
the precise terms of the Guarantee and all of the other provisions of the
Indenture to which this Guarantee relates.
B-1
This Guarantee is subject to release upon the terms set forth in the
Indenture.
EACH OF THE CORPORATE GUARANTORS
LISTED ON SCHEDULE I ATTACHED HERETO
By:_________________________________________
Name:
Title:
EACH OF THE OTHER GUARANTORS
LISTED ON SCHEDULE I ATTACHED HERETO
By: Its respective Managing Member or Sole
Manager, as the case may be
By:_________________________________________
Name:
Title:
B-2
SCHEDULE I
SCHEDULE OF GUARANTORS
Melody Homes, Inc.
Melody Mortgage Co.
Xxxxxxx Homes of California, Inc.
Xxxxxxx Homes of Washington, Inc.
Xxxxxxx Homes of Oregon, Inc.
SHLR of Washington, Inc.
SHLR of Colorado, Inc.
SHLR of Nevada, Inc.
Xxxxxxx Realty/Maui. Inc.
Xxxxxxx Realty/Oahu, Inc.
Vertical Construction Corporation
SHLR of Utah, Inc.
Xxxxxxx Mortgage, Inc.
SHLR of California, Inc.
SSHI LLC (Xxxxxxxx)
SRHI LLC (Xxxxxx)
Xxxxxxx Homes Arizona LLC
SHA Construction LLC
LAMCO Housing, Inc.
II LAMCO Housing, Inc.
AP LHI, Inc.
APLAM, LLC
AP Western GP Corporation
AP WP Partners L.P.
AP WP Operating Corporation
HPH Homebuilders 2000 XX
Xxxxxx GP LLC
Xxxxxx XX LLC
Western Pacific Housing, Inc.
Western Pacific Housing Development Limited Partnership
Western Pacific Housing Development II Limited Partnership
WPH-Xxxxxx, LLC
Xxxxx, LLC (formerly WPH-Edgewood 56, LLC)
Western Pacific Housing-Agoura I, LLC
Western Pacific Housing-American Canyon, LLC
Western Pacific Housing-Antigua, LLC
Western Pacific Housing-Bay Vista, LLC
Western Pacific Housing-Broadway, LLC
Western Pacific Housing-Xxxxxxx, LLC
Western Pacific Housing-Calvine, LLC
B-3
Western Pacific Housing-Xxxxxxxx, LLC
Western Pacific Housing-Cloverdale I, LLC
Western Pacific Housing-Cloverdale II, LLC
Western Pacific Housing-Communications Hill, LLC
Western Pacific Housing-Xxxxxxxx Commons I, LLC
Western Pacific Housing-Coto I, LLC
Western Pacific Housing-Creekside, LLC
Western Pacific Housing-Cypress Xxxxx, LLC
Western Pacific Housing-Deer Creek, LLC
Western Pacific Housing-East Park, LLC
Western Pacific Housing-Edgewood 45, LLC
Western Pacific Housing-Escondido, LLC
Western Pacific Housing-Fieldstone, LLC
Western Pacific Housing-Hercules MRB, LLC
Western Pacific Housing-Hercules Village, LLC
Western Pacific Housing-Land Park North, LLC
Western Pacific Housing-Xxxxxx Xxxxx XX, LLC
Western Pacific Housing-Lomas Verdes, LLC
Western Pacific Housing-Xxxxxxxx, LLC
Western Pacific Housing-Menifee, LLC
Western Pacific Housing-Xxxxxxxxxx, LLC
Western Pacific Housing-Murrieta, LLC
Western Pacific Housing-Natomas Village 13, LLC
Western Pacific Housing-Norco Estates, LLC
Western Pacific Housing-Paradise Creek, LLC
Western Pacific Housing-Providence I, LLC
Western Pacific Housing-Robinhood Ridge, LLC
Western Pacific Housing-Xxxxxxx Heights, LLC
Western Pacific Housing-Saddlebrook, LLC
Western Pacific Housing-San Elijo, LLC
Western Pacific Housing-Simi I, LLC
Western Pacific Housing-Sonoma, LLC
Western Pacific Housing-Spanish Hills, LLC
Western Pacific Housing-Stone Lake, LLC
Western Pacific Housing-Sun Valley, LLC
Western Pacific Housing-Terra Bay Xxxxx, LLC
Western Pacific Housing-Xxxxxx Xxxxx, LLC
Western Pacific Housing-Towngate, LLC
Western Pacific Housing-Valpico, LLC
Western Pacific Housing-Vineyard Terrace, LLC
Western Pacific Housing-Wesminster, LLC
Western Pacific Housing-Windsor Pointe, LLC
Western Pacific Housing-Black Mountain, LLC
B-4
Western Pacific Housing-Xxxxxxx Xxxxxxx, LLC
Western Pacific Housing-Carlsberg Ranch, LLC
Western Pacific Housing-Carpenteria, LLC
Western Pacific Housing-Dos Vientos 78, LLC
Western Pacific Housing-Fillmore, LLC
Western Pacific Housing-Xxxxx Canyon Partners, LLC
Western Pacific Housing-San Elijo Area R, LLC
Western Pacific Housing-Xxxxx Ranch, LLC
Western Pacific Housing-Sorrento, LLC
Western Pacific Housing-Torrey Village Center
Western Pacific Housing-Torrey, LLC
Western Pacific Housing-Torrey Santa Fe, LLC
WPH-Camino Xxxx, LLC
WPH-HPH LLC
WPH-SAL2, L.P. (formerly WPH-Sunset Hills III, L.P.)
Western Pacific Funding, Inc.
Western Pacific Housing - XxXxxxxxx Canyon, LLC
Western Pacific Housing-Torrey Commercial, LLC
Western Pacific Housing-Torrey Multi-Family, LLC
WPH-SAL1, L.P.
WPH Management Co.
III LAMCO Housing, Inc.
IV LAMCO Housing, LLC
V LAMCO Housing, LLC
Allegra, LLC
HPH Homebuilders LP 1995
HPH Homebuilders LP 1996
Livermore Homebuilders XX
Xxxxxx-Avalon LP
Western Pacific Housing-Altamar, LLC
Western Pacific Housing-Altura, L.P.
Western Pacific Housing-Arbor Hills, LLC
Western Pacific Housing-Aviara, L.P.
Western Pacific Housing-Bella Nevona, LLC
Western Pacific Housing Co.
Western Pacific Housing-Canyon Park, LLC
Western Pacific Housing-Carlsbad I, LLC
Western Pacific Housing-Carmel, LLC
Western Pacific Housing-Xxxxxx Station, LLC
Western Pacific Housing-Corona, L.P.
Western Pacific Housing-Coto Venture, L.P.
Western Pacific Housing-Xxxxxx City, L.P.
Western Pacific Housing-Xxxxxx Grove, LLC
B-5
Western Pacific Housing-Del Sol
Western Pacific Housing-El Camino, LLC
Western Pacific Housing-Financing Partners
Western Pacific Housing-Xxxx View, LLC
Western Pacific Housing-Hamptons, L.P.
Western Pacific Housing-Lost Hills Park, LLC
Western Pacific Housing-Mayfair, LLC
Western Pacific Housing-Mountaingate, L.P.
Western Pacific Housing-Oso, L.P.
Western Pacific Housing-Pacific Park, L.P.
Western Pacific Housing-Pacific Park II, LLC
Western Pacific Housing-Penasquitos, LLC
Western Pacific Housing-Poinsettia, L.P.
Western Pacific Housing-Rancho Del Tio, LLC
Western Pacific Housing-Riverside I, LLC
Western Pacific Housing-San Simeon, L.P.
Western Pacific Housing-San Xxxxxx XX, L.P.
Western Pacific Housing-Santa Fe, LLC
Western Pacific Housing-Saugus, L.P.
Western Pacific Housing-Scripps, L.P.
Western Pacific Housing-Scripps II, LLC
Western Pacific Housing-Seacove, L.P.
Western Pacific Housing-Shadow Creek, LLC
Western Pacific Housing-Skyridge, L.P.
Western Pacific Housing-Xxxxxxx I, LLC
Western Pacific Housing-Sunset Hills I, L.P.
Western Pacific Housing-Sunset Hills II, L.P.
Western Pacific Housing-Xxxxxx Place, LLC
Western Pacific Housing-Tiburon II, L.P.
Western Pacific Housing-Torrey Hills, LLC
Western Pacific Housing-Westlake, L.P.
Western Pacific Housing-Westlake II, L.P.
Western Pacific Housing-Windflower, L.P.
Western Pacific Housing-Winterhaven, LLC
Western Pacific Housing-Xxxxx, X.X.
B-6
EXHIBIT C-1
FORM OF INSTITUTIONAL ACCREDITED INVESTOR LETTER
We are delivering this letter in connection with a proposed purchase
of 10 1/2% Senior Subordinated Notes due 2011 (the "Securities") of Xxxxxxx
Homes, Inc. (the "Company").
We hereby confirm that:
we are an "accredited investor" within the meaning of Rule 501(a)(1), (2),
(3) or (7) under the Securities Act of 1933, as amended (the "Securities
Act"), or an entity in which all of the equity owners are accredited
investors within the meaning of Rule 501(a)(1), (2), (3) or (7) under the
Securities Act (an "Institutional Accredited Investor");
any purchase of Securities by us will be for our own account or for the
account of one or more other Institutional Accredited Investors;
in the event that we purchase any Securities, we will acquire Securities
having a minimum purchase price of at least $100,000 for our own account
and for each separate account for which we are acting;
we have such knowledge and experience in financial and business matters
that we are capable of evaluating the merits and risks of purchasing
Securities;
we are not acquiring Securities with a view to any distribution thereof in
a transaction that would violate the Securities Act or the securities laws
of any State of the United States or any other applicable jurisdiction;
PROVIDED that the disposition of our property and the property of any
accounts for which we are acting as fiduciary shall remain at all times
within our control; and
we have received a copy of the offering memorandum and we acknowledge that
we have had access to such financial and other information, and have been
afforded the opportunity to ask such questions of representatives of the
Company and receive answers thereto, as we deem necessary in connection
with our decision to purchase Securities.
We understand that the Securities are being offered in a transaction
not involving any public offering within the meaning of the Securities Act and
that the Securities have not been registered under the Securities Act, and we
agree, on our own behalf and on behalf of each account for which we acquire
Securities, that such Securities may be offered, resold, pledged or otherwise
transferred only (i) to a person whom we reasonably believe to be a
C-1-1
qualified institutional buyer (as defined in Rule 144A under the Securities Act)
in a transaction meeting the requirements of Rule 144 under the Securities Act,
outside the United States to a non-U.S. person in a transaction meeting the
requirements of Rule 904 under the Securities Act, or in accordance with another
exception from the registration requirements of the Securities Act (and based
upon an opinion of counsel if the Company so requests), (ii) to the Company or
(iii) pursuant to an effective registration statement, and, in each case, in
accordance with any applicable securities laws of any State of the United States
or any other applicable jurisdiction. We understand that the registrar and
transfer agent will not be required to accept for registration any Securities,
except upon presentation of evidence satisfactory to the Company that the
foregoing restrictions on transfer have been complied with. We further
understand and agree that the Securities purchased by us will bear a legend
reflecting the substance of this paragraph. We agree to notify any subsequent
purchasers of Securities from us of the resale restrictions set forth above
We acknowledge that you, the Company and others will rely upon our
confirmations, acknowledgments and agreements set forth herein, and we agree to
notify you promptly in writing if any of our representations or warranties
herein ceases to be accurate and complete.
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK.
______________________________________
(Name of Purchaser)
By: _________________________________________
Name:
Title:
Address: ______________________________
______________________________
______________________________
C-1-2
EXHIBIT C-2
FORM OF CERTIFICATE TO BE DELIVERED
IN CONNECTION WITH TRANSFERS PURSUANT TO REGULATION S
[Date]
U.S. Bank Trust National Association
000 Xxxxx Xxxx Xxxxxx-Xxxxx 000
Xxx Xxxxxxx, XX 00000
Attention: Corporate Trust Department
Re: XXXXXXX HOMES, INC. (THE "COMPANY")
10 1/2% SENIOR SUBORDINATED NOTES DUE 2011
(THE "SECURITIES")
Ladies and Gentlemen:
In connection with the proposed sale of $_______ aggregate principal
amount of the Securities, we confirm that such sale has been effected pursuant
to and in accordance with Regulation S under the United States Securities Act of
1933, as amended (the "Securities Act"), and, accordingly, we represent that:
(1) The offer of the Securities was not made to a person in the
United States;
(2) Either (a) at the time the buy offer was originated, the
transferee was outside of the United States or we and any
person acting on our behalf reasonably believe that the
transferee was outside of the United States, or (b) the
transaction was executed in, on or through the facilities of a
designated offshore securities market and neither we nor any
person acting on our behalf know that the transaction has been
prearranged for a buyer in the United States;
(3) No directed selling efforts have been made in the United
States in contravention of the requirements of rule 903(b) or
Rule 904(b) of Regulation S, as applicable;
(4) The transaction is not part of a plan or a scheme to evade the
registration requirements of the Securities Act; and
C-2-1
(5) We have advised the transferee of the transfer restrictions
applicable to the Securities.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceeding or official inquiry with respect
to the matters covered hereby. Terms used in this certificate have the meanings
set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:________________________
Authorized Signature
C-2-2
