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FLAGSTAR CORPORATION
Issuer
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Supplemental Indenture
Dated as of July 10, 1997
to Indenture
Dated as of September 23, 1993
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11-3/8% Senior Subordinated Debentures due 2003
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THE BANK OF NEW YORK
Trustee
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THIS SUPPLEMENTAL INDENTURE, dated as of July 10, 1997, between FLAGSTAR
CORPORATION, a Delaware corporation (the "Company"), and THE BANK OF NEW YORK, a
New York State Bank, as trustee (the "Trustee").
W I T N E S S E T H:
WHEREAS, the Company and the Trustee are parties to an Indenture, dated as
of September 23, 1993 (the "Indenture"), pursuant to which the Company issued
$125,000,000 in aggregate principal amount of 11-3/8% Senior Subordinated
Debentures due 2003 (the "Securities"); and
WHEREAS, Section 7.2 of the Indenture provides, among other things, that
with the consent of the Holders of not less than a majority in aggregate
principal amount of the Securities outstanding, the Company, when authorized by
a resolution of its Board of Directors, and the Trustee, may amend the Indenture
in certain respects; and
WHEREAS, pursuant to a Prospectus, dated June 5, 1997, (the "Prospectus"),
the Company, among other things, solicited consents ("Consents") to a proposed
amendment to the Indenture, in conjunction with an identical amendment (and the
solicitation of consents therefor) to the indenture dated as of November 16,
1992 (the "Other Indenture") pursuant to which the Company issued $722,400,000
in aggregate principal amount of 11.25% Senior Subordinated Debentures due 2004,
as set forth herein (such consents to amend the Other Indenture referred to
herein as the "Other Consents"); and
WHEREAS, the Company has obtained the requisite Consents to amend the
Indenture as provided herein and has delivered such Consents to the Trustee, all
as required by Section 7.2 of the Indenture; and
WHEREAS, the Company has obtained and delivered the requisite Other
Consents to amend the Other Indenture in accordance with the provisions thereof;
and
WHEREAS, the Company has duly authorized the execution and delivery of this
Supplemental Indenture, and all conditions and requirements necessary to make
this instrument a valid and binding agreement, including, without limitation,
the condition set forth in Section 1.2 hereof, have been duly performed and
complied with;
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, receipt and sufficiency of which are hereby
acknowledged, it is mutually covenanted and agreed as follows:
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ARTICLE 1.
AMENDMENT TO INDENTURE
Section 1.1. Subject to Section 1.2 hereof, the Indenture is hereby amended
by adding a new Section 4.12 as follows:
Section 4.12 Certain Distributions Upon Events of Bankruptcy.
Notwithstanding any provision to the contrary set forth in this Indenture, upon
(i) the occurrence of an event described in clause (6) or (7) of Section 4.1
hereof as a result of which the Issuer becomes subject to the jurisdiction of
the United States Bankruptcy Court, and (ii) pursuant to such event, the Issuer
seeks approvals for, and the Bankruptcy Court confirms, a plan of reorganization
substantially as described on Annex 1 attached hereto (the "Plan"), then, to the
extent necessary to implement the purposes and intent of such Plan and as set
forth below, Holders of the Securities together with the holders of securities
ranking pari passu in right of payment with the Securities, shall make the
following distributions:
Holders of the Securities, together with the holders of securities
ranking pari passu in right of payment with the Securities, will make
distributions to the holders of $2.25 Series A Cumulative Convertible
Exchangeable Preferred Stock (the "FCI Preferred Stock") of Flagstar
Companies, Inc. ("FCI") and holders of the $.50 par value Common Stock (the
"FCI Common Stock") of FCI, as intended to be made to them pursuant to the
Plan, if such classes of holders vote in favor of the Plan, even if such
classes would not otherwise be entitled to a distribution under the terms
of the Plan and the Bankruptcy Laws because the Plan has not been accepted
by one or more senior classes. In accordance with the foregoing:
(i) if the holders of the 10% Debentures do not accept the Plan, but the
holders of the FCI Preferred Stock accept the Plan, holders of the FCI
Preferred Stock will receive the distributions of securities otherwise
allocated to them on Annex I hereto (and pursuant thereto, the Trustee
shall deliver, or instruct the Disbursing Agent under the Plan to deliver,
to the Transfer Agent for the FCI Preferred Stock for distribution to the
holders of the FCI Preferred Stock on the Effective Date (as defined in the
Plan), 500,000 shares of New Common Stock (as defined in the Plan) of
Reorganized Flagstar (as defined in the Plan) which is the distribution
which the holders of FCI Preferred Stock would have received if all classes
of holders securities of FCI and the Company had approved the Plan); and
(ii) if the holders of the 10% Debentures or the holders of the FCI
Preferred Stock do not accept the Plan, but holders of the FCI Common Stock
accept the Plan, holders of the FCI Common Stock will receive the
distribution of securities otherwise allocated to them as set forth on
Annex I hereto (and pursuant thereto, the Trustee shall deliver or instruct
the Disbursing Agent under the Plan to deliver to the Transfer Agent for
the FCI Common Stock for distribution to the holder of the FCI Common Stock
on the Effective
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Date, the New Warrants (as defined in the Plan) which is the distribution
which the holders of FCI Common Stock would have received if all classes of
holders of securities of FCI and the Company had approved the Plan).
Section 1.2. It shall be a condition to the effectiveness of the amendment
to the Indenture set forth in Section 1.1 hereof that the Other Indenture shall
have been amended to the same effect and that such amendment of the Other
Indenture shall be in full force and effect.
ARTICLE 2.
MISCELLANEOUS
Section 2.1. The Trustee accepts the trusts created by the Indenture, as
supplemented by this Supplemental Indenture, and agrees to perform the same upon
the terms and conditions of the Indenture, as supplemented by this Supplemental
Indenture.
Section 2.2. The recitals contained herein shall be taken as statements of
the Company and the Trustee assumes no responsibility for their correctness. The
Trustee makes no representations as to the validity or sufficiency of this
Supplemental Indenture.
Section 2.3. All capitalized terms used and not defined herein shall have
the respective meanings assigned to them in the Indenture.
Section 2.4. Each of the Company and the Trustee hereby confirms and
reaffirms the Indenture in every particular except as amended by this
Supplemental Indenture.
Section 2.5. All covenants and agreements in this Supplemental Indenture by
the Company or the Trustee shall bind each of their respective successors and
assigns, whether so expressed or not.
Section 2.6. In case any provisions in this Supplemental Indenture 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.
Section 2.7. This Supplemental Indenture shall be governed by and construed
in accordance with the laws of the State of New York.
Section 2.8. All provisions of this Supplemental Indenture shall be deemed
to be incorporated in, and made a part of, the Indenture; and the Indenture, as
supplemented by this Supplemental Indenture, shall be read, taken and construed
as one and the same instrument.
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This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.
FLAGSTAR CORPORATION
By:
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Xxxxxx X. Xxxxxx, Senior Vice President
Attest:
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Name:
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Title:
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BANK OF NEW YORK,
Trustee
By:
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Name:
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Title:
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Attest:
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Name:
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Title:
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STATE OF SOUTH CAROLINA)
ss.:
COUNTY OF SPARTANBURG )
On this 10th day of July, 1997, before me personally came Xxxxxx X. Xxxxxx,
to me known, who, being by me personally sworn, did depose and say that she is a
Senior Vice President of Flagstar Corporation, the corporation described in and
on behalf of which she has executed the above instrument and that she is
authorized by said corporation to execute the same.
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Notary Public
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STATE OF NEW YORK )
ss.:
COUNTY OF NEW YORK)
On this 10th day of July, 1997, before me personally came ________________,
to me to me known, who, being by me personally sworn, did depose and say that he
is the Vice President of the Bank of New York, the corporation described in and
on behalf of which he has executed the above instrument and that he is
authorized by said corporation to execute the same.
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Notary Public
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