EXHIBIT T3C
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[Form of Indenture]
NEW MILLENNIUM HOMES, LLC,
ISSUER,
AND
U.S. BANK TRUST NATIONAL ASSOCIATION,
TRUSTEE
INDENTURE
Dated as of August __, 2000
_______________________________
UP TO
$116,843,000
ZERO COUPON NOTES DUE DECEMBER 31, 2004
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TABLE OF CONTENTS
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ARTICLE ONE DEFINITIONS............................................................................................... 1
Section 1.1 Certain Terms Defined.............................................................................. 1
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ARTICLE TWO SECURITIES................................................................................................ 15
Section 2.1 Form and Dating.................................................................................... 15
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Section 2.2 Execution and Authentication....................................................................... 16
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Section 2.3 Certificate of Authentication...................................................................... 17
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Section 2.4 Registration, Transfer and Exchange................................................................ 17
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Section 2.5 Mutilated, Defaced, Destroyed, Lost and Stolen Securities.......................................... 19
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Section 2.6 Cancellation of Securities; Destruction Thereof.................................................... 20
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Section 2.7 Temporary Securities............................................................................... 20
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Section 2.8 Currency and Manner of Payments in Respect of Securities........................................... 20
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ARTICLE THREE REDEMPTIONS............................................................................................. 21
Section 3.1 Notices to Trustee................................................................................. 21
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Section 3.2 Selection of Securities to be Redeemed............................................................. 21
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Section 3.3 Notice of Redemption............................................................................... 21
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Section 3.4 Effect of Notice of Redemption..................................................................... 22
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Section 3.5 Deposit of Redemption Price........................................................................ 22
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Section 3.6 Securities Redeemed in Part........................................................................ 23
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Section 3.7 Optional Redemption................................................................................ 23
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Section 3.8 Mandatory Redemption............................................................................... 23
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ARTICLE FOUR COVENANTS OF THE COMPANY................................................................................. 23
Section 4.1 Payment of Principal............................................................................... 23
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Section 4.2 Offices for Payments, etc.......................................................................... 24
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Section 4.3 Appointment to Fill a Vacancy in Office of Trustee................................................. 24
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Section 4.4 Paying Agents...................................................................................... 24
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Section 4.5 Compliance Certificate; Notices of Default......................................................... 25
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Section 4.6 Reports............................................................................................ 26
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Section 4.7 Legal Existence.................................................................................... 26
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Section 4.8 Payment of Taxes and Other Claims.................................................................. 26
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Section 4.9 Maintenance of Properties.......................................................................... 27
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Section 4.10 Maintenance of Insurance........................................................................... 27
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Section 4.11 Compliance with Laws............................................................................... 27
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Section 4.12 Change of Control.................................................................................. 27
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Section 4.13 Limitation on Issuances and Dispositions of Capital of Subsidiaries................................ 28
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Section 4.14 Limitation on Restricted Payments.................................................................. 29
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Table of Contents
(Continued)
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Section 4.15 Limitation on Transactions with Affiliates........................................................ 31
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Section 4.16 Limitation on Asset Sales......................................................................... 32
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Section 4.17 Limitation on Payment Restrictions Affecting Subsidiaries......................................... 33
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Section 4.18 Limitation on Investments......................................................................... 34
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Section 4.19 Waiver of Stay, Extension or Usury Laws........................................................... 35
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Section 4.20 Limitation on Incurrence of Indebtedness.......................................................... 35
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Section 4.21 Additional Subsidiary Guarantors.................................................................. 36
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Section 4.22 Limitation of Liens............................................................................... 36
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Section 4.23 Payments for Consent.............................................................................. 36
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Section 4.24 Real Property Acquisitions........................................................................ 36
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Section 4.25 Maintenance and Alterations....................................................................... 36
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Section 4.26 Certain Environmental Matters..................................................................... 37
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ARTICLE FIVE HOLDERS LISTS AND REPORTS BY COMPANY AND THE TRUSTEE.................................................... 37
Section 5.1 The Company to Furnish Trustee Information as to Names and Addresses of Holders................... 37
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Section 5.2 Disclosure of Names and Addresses of Holders...................................................... 37
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Section 5.3 Reports by the Trustee............................................................................ 37
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ARTICLE SIX CONSOLIDATION, MERGER, CONVEYANCE OR TRANSFER.............................................................. 38
Section 6.1 Merger or Consolidation............................................................................ 38
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Section 6.2 Successor Corporation Substituted.................................................................. 39
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ARTICLE SEVEN REMEDIES OF THE TRUSTEE AND HOLDERS ON EVENT OF DEFAULT................................................. 39
Section 7.1 Event of Default Defined; Acceleration of Maturity; Waiver of Default.............................. 39
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Section 7.2 Collection of Indebtedness by Trustee; Trustee May Prove Debt...................................... 42
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Section 7.3 Application of Proceeds............................................................................ 44
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Section 7.4 Suits for Enforcement.............................................................................. 45
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Section 7.5 Restoration of Rights on Abandonment of Proceedings................................................ 45
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Section 7.6 Limitations on Suits by Holders.................................................................... 45
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Section 7.7 Unconditional Right of Holders to Institute Certain Suits.......................................... 46
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Section 7.8 Powers and Remedies Cumulative; Delay or Omission Not Waiver of Default............................ 46
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Section 7.9 Control by Holders of Securities................................................................... 46
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Section 7.10 Waiver of Past Defaults............................................................................ 47
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Table of Contents
(Continued)
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Section 7.11 Trustees to Give Notice of Default, But May Withhold in Certain Circumstances...................... 47
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Section 7.12 Right of Court to Require Filing of Undertaking to Pay Costs....................................... 48
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ARTICLE EIGHT CONCERNING THE TRUSTEE................................................................................... 48
Section 8.1 Duties and Responsibilities of the Trustee; During Default; Prior to Default....................... 48
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Section 8.2 Certain Rights of the Trustee...................................................................... 49
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Section 8.3 Trustee Not Responsible for Recitals, Disposition of Securities or Application of Proceeds
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Thereof............................................................................................ 50
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Section 8.4 Trustee and Agents May Hold Securities; Collections, etc........................................... 51
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Section 8.5 Monies Held by Trustee............................................................................. 51
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Section 8.6 Compensation and Indemnification of Trustee and Its Prior Claim.................................... 51
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Section 8.7 Right of Trustee to Rely on Officers' Certificate, etc............................................. 51
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Section 8.8 Persons Eligible for Appointment as Trustee........................................................ 52
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Section 8.9 Resignation and Removal; Appointment of Successor Trustee.......................................... 52
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Section 8.10 Acceptance of Appointment by Successor Trustee..................................................... 53
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Section 8.11 Merger, Conversion, Consolidation or Succession to Business of Trustee............................. 54
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Section 8.12 Preferential Collection of Claims Against the Company.............................................. 54
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Section 8.13 Appointment of Authenticating Agent................................................................ 54
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ARTICLE NINE CONCERNING THE HOLDERS.................................................................................... 55
Section 9.1 Evidence of Action Taken by Holders................................................................ 55
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Section 9.2 Proof of Execution of Instruments and of Holding of Securities..................................... 56
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Section 9.3 Holders to be Treated as Owners.................................................................... 56
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Section 9.4 Securities Owned by the Company Deemed Not Outstanding............................................. 56
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Section 9.5 Right of Revocation of Action Taken................................................................ 57
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ARTICLE TEN AMENDMENTS................................................................................................. 57
Section 10.1 Amendments and Supplements Permitted Without Consent of Holders.................................... 57
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Section 10.2 Amendments and Supplements Requiring Consent of Holders............................................ 58
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Section 10.3 Compliance with TIA................................................................................ 59
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Section 10.4 Revocation and Effect of Consents.................................................................. 59
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Table of Contents
(Continued)
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Section 10.5 Notation on or Exchange of Securities.............................................................. 60
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Section 10.6 Trustee Protected.................................................................................. 60
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ARTICLE ELEVEN SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONIES................................................................................... 60
Section 11.1 Satisfaction and Discharge of Indenture............................................................ 60
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Section 11.2 Application by Trustee of Funds Deposited for Payment of Securities; Other Miscellaneous 64
Provisions.........................................................................................
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Section 11.3 Repayment of Monies Held by Paying Agent........................................................... 65
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Section 11.4 Return of Monies Held by Trustee and Paying Agent Unclaimed for Two Years.......................... 65
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Section 11.5 Indemnity for U.S. Government Obligations.......................................................... 65
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ARTICLE TWELVE THE SECURITY............................................................................................ 66
Section 12.1 Security........................................................................................... 66
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Section 12.2 Recording, etc..................................................................................... 66
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Section 12.3 Release of Pledged Collateral...................................................................... 67
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Section 12.4 Satisfaction and Discharge; Defeasance............................................................. 67
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Section 12.5 Authorization of Actions To Be Taken by the Trustee Under the Pledge Agreement..................... 68
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Section 12.6 Authorization of Receipt of Funds by the Trustee Under the Pledge Agreement........................ 68
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Section 12.7 No Real Property Security.......................................................................... 68
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ARTICLE THIRTEEN MISCELLANEOUS PROVISIONS.............................................................................. 68
Section 13.1 Incorporators, Equityholders, Officers, Managers and Directors of Company Exempt from Individual 68
Liability..........................................................................................
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Section 13.2 Provisions of Indenture for the Sole Benefit of Parties and Holders of Securities.................. 69
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Section 13.3 Successors and Assigns of the Company Bound by Indenture........................................... 69
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Section 13.4 Notices............................................................................................ 69
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Section 13.5 Officers' Certificates and Opinions of Counsel; Statements to be Contained Therein................. 69
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Section 13.6 Payments Due on Saturdays, Sundays and Holidays.................................................... 70
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Section 13.7 Conflict of Any Provision of Indenture with TIA.................................................... 71
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Section 13.8 New York Law to Govern............................................................................. 71
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Section 13.9 Counterparts....................................................................................... 71
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Section 13.10 Effect of Headings................................................................................. 71
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CROSS REFERENCE SHEET/1/
Provisions of Trust Indenture Act of 1939, as amended and Indenture to be
dated as of August ___, 2000 among NEW MILLENNIUM HOMES, LLC and U.S. Bank
Trust National Association, Trustee:
Section of the Act Section of Indenture
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310(a).......................................... 8.8
310(a)(1) and (2)............................... 8.9, 8.10(b)
310(b).......................................... 8.8, 8.9(b), 8.10, 8.11, 13.7
311............................................. 13.7
311(a).......................................... 5.1, 5.2, 8.12
312............................................. 5.3
312(a).......................................... 5.1, 5.2, 13.7
312(b).......................................... 5.2, 13.7
312(c).......................................... 13.7
313............................................. 5.3, 13.7
313(c).......................................... 2.2, 7.11
314............................................. 13.7
314(a).......................................... 4.6
314(c)(1) and (2)............................... 13.5
314(e).......................................... 13.5
315(a), (c) and (d)............................. 8.1, 13.7
315(b).......................................... 7.11, 13.7
315(e).......................................... 7.12, 8.9(b), 13.7
316(a).......................................... 7.6, 13.7
316(b).......................................... 7.6, 13.7
317(a).......................................... 7.2
317(b).......................................... 4.4
318(a).......................................... 13.7
_________________________________
/1/ This Cross Reference Sheet is not part of the Indenture.
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INDENTURE, dated as of August __, 2000, between New Millennium Homes, LLC, a
Delaware limited liability company (the "Company") and any successor entity
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thereto, having its principal office at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, and U.S. Bank Trust National Association (the "Trustee"), having its
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principal office at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
Each party hereto agrees as follows for the benefit of the other party and
for the equal and ratable benefit of the Holders of the Company's Zero Coupon
Notes due December 31, 2004.
ARTICLE ONE
DEFINITIONS
Section 1.1 Certain Terms Defined.
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The following terms (except as otherwise expressly provided or unless the
context otherwise clearly requires) for all purposes of this Indenture shall
have the respective meanings specified in this Section. All other terms used in
this Indenture that are defined in the TIA or the definitions of which in the
Securities Act are referred to in the TIA, including terms defined therein by
reference to the Securities Act (except as herein otherwise expressly provided
or unless the context otherwise requires), shall have the meanings assigned to
such terms in the TIA and in the Securities Act as in force at the date of this
Indenture. All accounting terms used herein and not expressly defined shall
have the meanings assigned to such terms in accordance with GAAP. The words
"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. The terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular.
"Acceleration Notice" shall have the meaning set forth in Section 7.1.
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"Acquisition" means the purchase or other acquisition of any Person or all
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or substantially all of the assets of any Person by any other Person, whether by
purchase of Capital or assets, merger, consolidation or other transfer, and
whether or not for consideration.
"Additional Guarantor" shall have the meaning set forth in Section 4.21.
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"Adjusted Consolidated Net Income" means, for any Person for any period,
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the aggregate net income (or loss) of such Person and its consolidated
Subsidiaries for such period determined in accordance with GAAP; provided,
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however, that the following items shall be excluded in computing Adjusted
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Consolidated Net Income (without duplication): (a) the net income (or loss) of
any Person (other than a Wholly Owned Subsidiary of such first Person) in which
any other Person (other than such first Person or any of its Wholly Owned
Subsidiaries) has a joint or shared interest, except to the extent of the amount
of cash dividends or other distributions actually paid to, and received by, such
first Person or any of its Wholly Owned Subsidiaries during such period out of
funds legally available therefor; (b) the net income (or loss) of any Person
accrued prior to the date it becomes a Subsidiary of such first Person or any of
its
Subsidiaries or all or substantially all of the property and assets of such
Person are acquired by such first Person or any of its Subsidiaries; (c) the net
income (or loss) of any Subsidiary of such first Person which Subsidiary is
subject to a Payment Restriction except (i) such exclusion shall not apply to
the extent of the amount of cash dividends or other distributions actually paid
to, and received by, such first Person or any of its Subsidiaries during such
period from such Subsidiary in compliance with such Payment Restriction out of
funds legally available therefor, and (ii) such exclusion shall apply only while
such Payment Restriction is in effect, and upon the elimination or reduction of
such Payment Restriction, the previously excluded net income (or loss) shall be
added back retroactively; (d) any gains or losses (on an after-tax basis)
attributable to Asset Sales; and (e) all extraordinary gains and extraordinary
losses.
"Affiliates" means, as applied to any Person, any other Person directly or
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indirectly controlling, controlled by, or under direct or indirect common
control with, such Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling", "controlled by"
and "under common control with"), as applied to any Person, is defined to mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.
"Affiliate Transaction" shall have the meaning set forth in Section
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4.15(a).
"Applicable Documents" means collectively, this Indenture, the Securities,
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the Pledge Agreement and the Guaranty.
"Appraisal" means an appraisal of the fair market value of Real Property,
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taking into account the currently permissible uses of such property under
existing laws and regulations applicable thereto, independently and impartially
prepared in writing by a qualified appraiser who is not employed by the Company
or any senior lender party to the Working Capital Line.
"Appraised Value" means the fair market value of real property as
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determined by the most recent Appraisal or, if there is no such Appraisal, Fair
Market Value.
"Asset Sale" means any sale, transfer or other disposition (including by
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way of merger, consolidation, exchange of assets or sale-leaseback
transactions), in one transaction or a series of related transactions, by the
Company or any of its Subsidiaries to any Person other than the Company or any
of its Wholly Owned Subsidiaries of (a) all or any of the Capital of any
Subsidiary of the Company, (b) all or substantially all of the property and
assets of an operating unit or business of the Company or any of its
Subsidiaries, or (c) any other property and assets of the Company or any of its
Subsidiaries outside the ordinary course of business of the Company or such
Subsidiary and, in each case, that is not governed by the provisions of Article
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Six of this Indenture.
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"Authenticating Agent" shall have the meaning set forth in Section 8.13.
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"Board of Directors" means, (a) with respect to any Person that is a
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limited liability company, either the sole manager of such Person or, if there
is more than one manager, the managers of such Person, acting as a group, or any
committee of the managers of such Person authorized, with respect to any
particular matter, to exercise the power of the managers, and
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(b) when used with reference to any corporation, means the Board of Directors of
such Person or any committee of such Board duly authorized, with respect to any
particular matter, to exercise the power of the Board of Directors of such
Person.
"Board Resolution" means, with respect to any Person, a duly adopted
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resolution of the Board of Directors or general partner or partners of such
Person, as applicable.
"Business Day" means any day except a Saturday, Sunday or other day on
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which commercial banks in the City of New York, New York, are authorized or
required by law to close.
"Calabasas Development Financing" means financing of the holding,
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development or improvement of the Calabasas Property (including, without
limitation, the financing of any related interest reserve) in the ordinary
course of business, which financing is secured primarily by the Calabasas
Property.
"Calabasas Property" means all or any part of the 527 lots owned by New
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Millennium in Calabasas, California on the date of this Indenture.
"Capital" means, (a) with respect to any corporation, any and all shares,
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interests, participations or other equivalents (however designated, whether
voting or non-voting) of such corporation's capital stock, whether now
outstanding or issued after the date of this Indenture, including, without
limitation, all common stock and any series of preferred stock, and (b) with
respect to any other Person, any partnership interest, joint venture interest,
limited liability company member interest or other form of equity sharing or
participation interest, as applicable, and (c) warrants, options, participations
or other equivalents of or interests (however designated) in any of the items
described in clause (a) or (b) above.
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"Capitalized Lease Obligation" means, as applied to any Person, obligations
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of such Person under any lease of any property (whether real, personal or mixed)
which, in accordance with GAAP, is required to be capitalized on the balance
sheet of such Person, and the amount of Indebtedness represented by such
obligations shall be the capitalized amount of such obligations determined in
accordance with GAAP.
"Cash Equivalents" means (a) U.S. Government Obligations, (b) commercial
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paper, (c) time deposits, certificates of deposit and banker's acceptances, (d)
repurchase agreements that are secured by a perfected security interest in U.S.
Government Obligations and (e) money market funds investing solely in one or
both of the types of securities described in clause (a) and clause (b) above.
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"Change of Control" means (a) any transaction or series of related
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transactions occurring after the Closing Date that results in any Person or
group of Persons (within the meaning of Section 13(d)(3) of the Exchange Act),
becoming "beneficial owner" (within the meaning of Section 13(d) under the
Exchange Act and the rules and regulations promulgated thereunder), directly or
indirectly, of more than 50% of the total voting power of the Capital of the
Company or of any Person that possesses beneficial ownership (as determined in
accordance with Rule 13d-3 under the Exchange Act), directly or indirectly of
50% or more of the aggregate voting power of all classes of Capital; (b) the
sale, lease, transfer or other disposition (other than
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to a Wholly Owned Subsidiary) whether direct or indirect, of all or
substantially all of the assets of the Company to any Person or group of Persons
(within the meaning of Section 13(d)(3) of the Exchange Act) in one transaction
or a series of related transactions, provided, however, that (i) a sale of the
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Calabasas Property in one transaction or a series of related transactions or
(ii) a transaction or series of related transactions where the holders of the
total voting power of the Capital of the Company immediately prior to such
transaction own, directly or indirectly, 50% or more of the total voting power
of the Capital of such Person or group of Persons immediately after such
transaction will not be a Change of Control; (c) the merger or consolidation of
the Company, with or into another corporation or entity, or the merger of
another corporation or entity into the Company, or any other transaction, with
the effect that, immediately after the consummation thereof Persons beneficially
owning (within the meaning of Section 13(d) under the Exchange Act and the rules
and regulations promulgated thereunder) the total voting power of the Capital of
the Company immediately prior to such consummation shall beneficially own
(within the meaning of Section 13(d) under the Exchange Act and the rules and
regulations promulgated thereunder) less than 50% of the total voting power of
the Capital of the Company or the surviving entity if other than the Company
after giving effect to the applicable transaction; (d) the liquidation or
dissolution of the Company, provided, however, that a liquidation or dissolution
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of the Company which is part of a transaction or series of related transactions
that does not constitute a Change of Control under the provision of clause (b)
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above will not constitute a Change of Control under this clause (d); or (e) the
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first day on which a majority of the members of the Board of Directors of the
Company are not Continuing Directors. For purposes of this definition, the term
Person includes a "person" within the meaning of Section 13(d) of the Exchange
Act and the rules and regulations promulgated thereunder.
"Closing Date" means the date on which the Securities are originally issued
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under this Indenture.
"Commission" means the Securities and Exchange Commission, as from time to
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time constituted, or if at any time after the execution and delivery of this
Indenture such Commission is not existing and performing the duties now assigned
to it under the TIA, then the body performing such duties on such date.
"Commodity Agreement" means any agreement or arrangement designed to
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protect the Company or any of its Subsidiaries against fluctuations in the
prices of commodities used by the Company or any of its Subsidiaries in the
ordinary course of its business.
"Company" means New Millennium Homes, LLC, a Delaware limited liability
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company, and, subject to Article Six hereof, its successors and assigns.
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"Company Order" means a written statement, request or order of the Company
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signed in its name by the Chairman, the Chief Executive Officer, the President
or a Vice President and by the Treasurer, an Assistant Treasurer, the Secretary
or an Assistant Secretary of the Company and delivered to the Trustee.
"Consolidated" or "consolidated," when used with reference to any
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accounting term, means the amount described by such accounting term, determined
on a consolidated basis in accordance with GAAP, after elimination of
intercompany items; provided, however, that for
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purposes of this Indenture, all Subsidiaries of the Company shall be deemed to
be consolidated with the Company under GAAP.
"Consolidated Coverage Ratio" of any Person on any date of determination
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(the "Transaction Date") means, the ratio on a pro forma basis, of (a) the
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aggregate amount of EBITDA of such Person attributable to continuing operations
and business (exclusive of amounts attributable to operations and businesses
permanently discontinued or disposed of prior to the Transaction Date) to (b)
the aggregate Consolidated Fixed Charges of such Person (exclusive of amounts
attributable to operations and businesses permanently discontinued or disposed
of prior to the Transaction Date but only to the extent that the obligations
giving rise to such Consolidated Fixed Charges would no longer be obligations
contributing to such Person's Consolidated Fixed Charges subsequent to the
Transaction Date) during the Reference Period; provided, however, that for
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purposes of such calculation, (i) Acquisitions which occurred during the
Reference Period or subsequent to the Reference Period and on or prior to the
Transaction Date shall be given pro forma effect as if they had occurred on the
first day of the Reference Period, (ii) transactions giving rise to the need to
calculate the Consolidated Coverage Ratio shall be given pro forma effect as if
they had occurred on the first day of the Reference Period, (iii) the incurrence
of any Indebtedness or issuance of any Disqualified Capital during the Reference
Period or subsequent to the Reference Period and on or prior to the Transaction
Date (and the application of the proceeds therefrom to the extent used to
refinance or retire other Indebtedness) shall be given pro forma effect as if
they had occurred on the first day of such Reference Period, and (iv) the
Consolidated Fixed Charges of such person attributable to any Indebtedness or
any Disqualified Capital bearing a floating interest (or dividend) rate shall be
computed on a pro forma basis as if the average rate in effect from the
beginning of the Reference Period to the Transaction Date had been the
applicable rate for the entire period, unless such person or any of its
Subsidiaries is a party to an Interest Rate Agreement (which shall remain in
effect for the 12 month period immediately following the Transaction Date) that
has the effect of fixing the interest rate on the date of computation, in which
case such rate (whether higher or lower) shall be used.
"Consolidated Fixed Charges" of any Person means, for any period, the
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aggregate amount (without duplication and determined in each case in accordance
with GAAP) of (a) interest expense of such person for such period, whether
expensed or capitalized, paid or accrued (including, in accordance with the
following sentence, interest attributable to Capitalized Lease Obligations), of
such Person and its Subsidiaries during such period, including, without
limitation, to the extent such expense was deducted in computing Adjusted
Consolidated Net Income for such period (i) amortization of original issue
discount and non-cash interest payments or accruals on any Indebtedness, (ii)
the interest portion of all deferred payment obligations that constitute
Indebtedness and (iii) all commission, discounts and other fees and charges owed
with respect to bankers' acceptances and letter of credit financings and
Interest Rate Agreements, and (b) the amount of dividends payable, whether
expensed or capitalized, paid or accrued, by such person or any of its
Subsidiaries in respect of Disqualified Capital (other than by Subsidiaries of
such person to such person or such person's Wholly Owned Subsidiaries). For
purposes of this definition, (x) interest on a Capitalized Lease Obligation
shall be deemed to accrue at an interest rate reasonably determined by the
Company to be the rate of interest implicit in such Capitalized Lease Obligation
in accordance with GAAP and (y) interest expense attributable to any
Indebtedness represented by the guaranty by such Person or a Subsidiary of such
Person of an
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obligation of another Person shall be deemed to be the interest expense
attributable to the Indebtedness guaranteed.
"Consolidated Net Worth" of any Person at any date means the aggregate of
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capital, surplus and retained earnings of such Person and its Subsidiaries, as
would be shown on the consolidated balance sheet of such Person prepared in
accordance with GAAP, adjusted to exclude (to the extent included in calculating
such equity) and without duplication (a) the amount of capital, surplus and
accrued but unpaid dividends attributable to any Disqualified Capital or
treasury Capital of such person or any of its Subsidiaries and (b) all upward
reevaluations and other write-ups in the book value of any asset of such person
or a Subsidiary of such Person subsequent to the date of this Indenture.
"Continuing Director" means, as of the date of determination, any member of
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the Board of Directors of the Company who (a) was a member of the Board of
Directors of the Company on the date hereof or (b) was nominated or elected to
the Board of Directors subsequent to such date with the affirmative vote of at
least a majority of the Continuing Directors who were members of the Board of
Directors of the Company at the time of such election or nomination.
"Corporate Reorganization" means a merger, consolidation or similar
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transaction involving the Company, the purpose of which is (a) to organize the
Company in a new jurisdiction or (b) to change the organizational form of the
Company, including, without limitation, a change to a corporate form.
"Corporate Trust Office" means the office of the Trustee at which the
----------------------
corporate trust business of the Trustee shall, at any particular time, be
principally administered, which office is, at the date as of which this
Indenture is dated, located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇. ▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
"Currency Agreement" means any foreign exchange contract, currency swap
------------------
agreement or other similar agreement or arrangement designed to protect the
Company or any of its Subsidiaries against fluctuations in currency values or
under which the Company or any of its Subsidiaries is a party or a beneficiary
on the date of the Indenture or becomes a party or a beneficiary thereafter.
"Default" means any event that is, or after notice or passage of time or
-------
both would be, an Event of Default.
"Deferred Excess Cash Amount" shall have the meaning set forth in Section
--------------------------- -------
3.8.
----
"Depository" means, with respect to the Securities issued in the form of
----------
one or more Global Securities, each Person designated as Depository by the
Company until a successor Depository shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Depository" shall mean
or include each Person who is then a Depository hereunder.
"Disqualified Capital" means any class or series of Capital of any Person
--------------------
that by its terms or otherwise (a) is required to be redeemed on or prior to the
Stated Maturity of the Securities, (b) may be required to be redeemed at the
option of the holder of such class or series of Capital at any time on or prior
to the Stated Maturity of the Securities or (c) is convertible into or
exchangeable for Capital referred to in clause (a) or clause (b) above or
---------- ----------
Indebtedness having a scheduled maturity prior to the Stated Maturity of the
Securities; provided, however, that any
-------- -------
6
Capital that would not constitute Disqualified Capital but for provisions
thereof offering holders thereof the right to require the Company to repurchase
or redeem such Capital upon the occurrence of change of control, including,
without limitation, an "asset sale," occurring prior to the Stated Maturity of
the Securities shall not constitute Disqualified Capital if such asset sale
provisions contained in such Capital specifically provide that in respect of any
particular asset sale proceeds, the Company will not repurchase or redeem any
such Capital pursuant to such provisions prior to the Company's repurchase of
such Securities as are required to be repurchased from Holders accepting an
Excess Proceeds Offer pursuant to the provisions of Section 4.16 hereof.
------------
"EBITDA" means, with respect to any period, the Adjusted Consolidated Net
------
Income of the Company and its Subsidiaries for such period, plus, to the extent
that any of the following shall have been taken into account, in computing such
Adjusted Consolidated Net Income (a) provision for taxes based on income or
profits (other than income taxes attributable to extraordinary, unusual or
nonrecurring gains or losses or taxes attributable to sales or dispositions of
assets outside the ordinary course of business), (b) Consolidated Fixed Charges
for such period, (c) depreciation and amortization (less the amortized portion,
if any, of the value of the Real Property held by the Company at the Closing
Date), and (d) other non-cash items (other than non-cash interest) reducing
Adjusted Consolidated Net Income, other than any non-cash item which requires
the accrual of or a reserve for cash charges for any future period, less other
non-cash items increasing Adjusted Consolidated Net Income.
"Event of Default" means any event or condition specified as such in
----------------
Section 7.1.
-----------
"Environmental Law" means any judgment, decree, order, law, license, rule
-----------------
or regulation pertaining to environmental matters, including without limitation,
those arising under ("RCRA"), the Comprehensive Environmental Response,
----
Compensation and Liability Act of 1980 ("CERCLA"), as amended by the Superfund
------
Amendments and Reauthorization Act of 1986 ("▇▇▇▇"), the Federal Clean Water
----
Act, the Toxic Substances Control Act, the Federal Clean Air Act, the Safe
Drinking Water Act, the Flood Disaster Protection Act of 1973, or any state or
local statute, regulation, ordinance, order or decree relating to health,
safety, wetlands, land usage and development, or the environment.
"Excess Cash Amount" shall have the meaning set forth in Section 3.8.
------------------ -----------
"Excess Proceeds" shall have the meaning set forth in Section 4.16.
--------------- ------------
"Excess Proceeds Offer" shall have the meaning set forth in Section 4.16.
--------------------- ------------
"Excess Proceeds Payment" shall have the meaning set forth in Section 4.16.
----------------------- ------------
"Excess Proceeds Purchase Date" shall have the meaning set forth in Section
----------------------------- -------
4.16.
----
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
------------
"Existing Indebtedness" means the outstanding indebtedness of the Company
---------------------
existing as of the Closing Date, other than the Working Capital Line and
Permitted Construction Financing.
7
"Fair Market Value" means the price a willing buyer would pay to a willing
-----------------
seller in an arm's length transaction with neither party being under a
compulsion to act, as determined by the Board of Directors in good faith;
provided, however, that the "Fair Market Value" of Real Property acquired by the
-------- -------
Company for $1,000,000 or less shall be deemed to be the purchase price thereof.
"GAAP" means generally accepted accounting principles in the United States
----
of America as in effect as of the date of this Indenture, including, without
limitation, those set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board.
"Global Security" means a Security evidencing all or a part of the
---------------
Securities, issued to a Depository or its nominee in accordance with Section
-------
2.2, and bearing the legend prescribed in Section 2.2.
--- -----------
"Guarantees" means the guarantees of the Company's obligations under this
----------
Indenture and the Securities pursuant to the Joint and Several Guaranty dated as
of even date herewith in substantially the form attached as Exhibit A hereto.
---------
"Guarantors" means each Subsidiary guaranteeing the Company's obligations
----------
under the Securities.
"Hazardous Substance" means any hazardous waste, as defined by 42 U.S.C.
-------------------
(S) 9601(5), any hazardous substances, as defined by 42 U.S.C. (S) 9601(14), any
pollutant or contaminant, as defined by 42 U.S.C. (S) 9601(33), or any toxic
substances oil or hazardous materials or other chemicals or regulated by any
Environmental Law.
"Holder," "Holder of Securities" or other similar terms means the person in
------ --------------------
whose name a Security is registered in the security register kept by the Company
for that purpose in accordance with the terms hereof.
"Incurrence Date" shall have the meaning set forth in Section 4.20(b).
--------------- ---------------
"Indebtedness" means, with respect to any Person at any date of
------------
determination (without duplication), (a) all indebtedness of such Person for
borrowed money, (b) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments, (c) all obligations of such
Person in respect of letters of credit or other similar instruments (including
reimbursement obligations with respect thereto), (d) all obligations of such
Person to pay the deferred and unpaid purchase price of property or services,
which purchase price 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, except Trade Payables, (e) all Capitalized Lease Obligations of
such Person, (f) all Indebtedness of other Persons secured by a Lien on any
asset of such Person, whether or not such Indebtedness is assumed by such
Person; provided, however, that the amount of such Indebtedness shall be the
-------- -------
lesser of (i) the Fair Market Value of such asset at such date of determination
and (ii) the stated principal amount of such Indebtedness, (g) all Indebtedness
of other Persons guaranteed by such Person to the extent such Indebtedness is
guaranteed by such Person, and (h) to the extent not otherwise included in this
definition,
8
obligations under Currency Agreements, Interest Rate Agreements and Commodity
Agreements. The amount of Indebtedness of any Person at any date shall be the
outstanding balance at such date of all unconditional obligations as described
above and the maximum liability, upon the occurrence of the contingency giving
rise to the obligation, of any contingent obligations at such date; provided,
--------
however, that the amount outstanding at any time of any Indebtedness issued with
-------
original issue discount is 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 instrument as originally executed and delivered or,
---------
if amended or supplemented as herein provided, as so amended or supplemented or
both, and shall include the form and terms of the Securities as set forth
herein.
"Independent Financial Advisor" means an accounting, appraisal or
-----------------------------
investment banking firm of nationally recognized standing that is, in the
reasonable judgment of the Company's Board of Directors, (a) qualified to
perform the task for which it has been engaged, and (b) disinterested and
independent with respect to the Company, all of its Subsidiaries, and each
Affiliate of the Company and/or its Subsidiaries that is involved in the
Affiliate Transaction with respect to which such firm has been engaged.
"Interest Rate Agreement" means any interest rate future agreement,
-----------------------
interest rate option agreement, interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement, interest rate hedge agreement or
other similar agreement or arrangement designed to protect the Company or any of
its Subsidiaries against fluctuations in interest rates or under which the
Company or any of its Subsidiaries is a party or a beneficiary on the date of
this Indenture or becomes a party or a beneficiary thereafter.
"Investment" means, with respect to any Person, any direct or indirect
----------
advance, loan (other than advances to customers in the ordinary course of
business consistent with past practices that are recorded as accounts receivable
on the balance sheet of such Person or its Subsidiaries) or other extension of
credit or capital contribution by such Person to any other Person (by means of
any transfer of cash or other property to others or any payment for property or
services for the account or use of others), or any purchase or acquisition by
such Person of Capital, bonds, notes, debentures or other similar instruments
issued by any other Person.
"Joint Venture" means any Person (other than a Subsidiary of the Company)
-------------
in which any Person other than the Company or any of its Subsidiaries has a
joint or shared equity interest with the Company or any of its Subsidiaries.
"Lien" means any mortgage, pledge, security interest, encumbrance, lien or
----
charge of any kind (including, without limitation, any conditional sale or other
title retention agreement or lease in the nature thereof, any sale with recourse
against the seller or any Affiliate of the seller, or any agreement to give any
security interest); provided, however, that in no event shall a true operating
-------- -------
lease be deemed to constitute a Lien hereunder.
"Net Cash Proceeds" means, with respect to any Asset Sale, the proceeds of
-----------------
such Asset Sale in the form of cash or Cash Equivalents, including payments in
respect of deferred payment
9
obligations (to the extent corresponding to the principal, but not interest,
component thereof) when received in the form of cash or Cash Equivalents (except
to the extent such obligations are financed or sold with recourse to the Company
or any Subsidiary of the Company) and proceeds from the conversion of other
property received when converted to cash or Cash Equivalents, net of (a)
brokerage commissions and other fees and expenses (including fees and expenses
of counsel and investment bankers) related to such Asset Sale, (b) provisions
for all taxes payable as a result of such Asset Sale without regard to the
consolidated results of operations of the Company and its Subsidiaries, taken as
a whole, (c) payments made to repay Indebtedness or any other obligation
outstanding at the time of such Asset Sale that either (i) is secured by a Lien
on the property or assets sold or (ii) is required by its own terms to be paid
as a result of such Asset Sale, and (d) appropriate amounts to be provided by
the Company or any Subsidiary of the Company as a reserve against any
liabilities associated with such Asset Sale, including, without limitation,
pension and other post-employment benefit liabilities, liabilities related to
environmental matters and liabilities under any indemnification obligations
associated with such Asset Sale, all as determined in conformity with GAAP.
"Net Offering Proceeds" means, with respect to any Public Offering Sale,
---------------------
the proceeds of such Public Offering Sale in the form of cash or Cash
Equivalents, net of (a) underwriting discounts and commissions and other fees
and expenses (including fees and expenses of counsel) incurred in connection
with such Public Offering Sale, (b) provisions for all taxes payable as a result
of such Public Offering Sale without regard to the consolidated results of
operations of the Company and its Subsidiaries, taken as a whole, and (c)
appropriate amounts to be provided by the Company or any Subsidiary of the
Company as a reserve against any liabilities associated with such Public
Offering Sale, all as determined in conformity with GAAP.
"Officer" means with respect to any Person, the Chairman, the President,
-------
the Secretary, any Assistant Secretary, the Chief Financial Officer, the
Controller, the Treasurer, the Assistant Treasurer or any Vice President of such
Person.
"Officers' Certificate" means a certificate signed by the Chairman, the
---------------------
Chief Executive Officer, the President or a Vice President of the Company and by
the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary
of the Company.
"Opinion of Counsel" means a written opinion of legal counsel, who may be
------------------
either internal or outside counsel for the Company.
"Outstanding" when used with reference to Securities, subject to the
-----------
provisions of Section 9.4 means, as of any particular time, all Securities
-----------
authenticated and delivered by the Trustee under this Indenture, except:
(a) Securities theretofore canceled by the Trustee or delivered to the
Trustee for cancellation;
(b) Securities, or portions thereof, for the payment or redemption of
which monies or U.S. Government Obligations (as provided for in Section
-------
11.1) in the necessary amount shall have been deposited in trust with the
----
Trustee or with any Paying Agent (other than the Company) or shall have
been set aside, segregated and held in trust
10
by the Company for the Holders of such Securities (if the Company shall act
as Paying Agent); provided, however, that, if such Securities, or portions
-------- -------
thereof, are to be redeemed prior to the maturity thereof, notice of such
redemption shall have been given as herein provided, or provision
satisfactory to the Trustee shall have been made for giving such notice;
and
(c) Securities that shall have been paid or in substitution for which
other Securities shall have been authenticated and delivered pursuant to
the terms of Section 2.6.
-----------
"Paying Agent" means any Person (which may include the Company) authorized
------------
by the Company to pay the principal of or premium, if any, on the Securities on
behalf of the Company.
"Payment Restriction" means, with respect to a Subsidiary of any Person,
-------------------
any encumbrance, restriction or limitation, whether by operation of the terms of
its charter or by reason of any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation, on the ability of (a) such Subsidiary
to (i) pay dividends or make other distributions on its Capital or make payments
on any obligation, liability or Indebtedness owed to such Person or any other
Subsidiary of such Person, (ii) make loans or advances to such Person or any
other Subsidiary of such Person, or (iii) transfer any of its property or assets
to such Person or any other Subsidiary of such Person, or (b) such Person or any
other Subsidiary of such Person to receive or retain any such (i) dividends,
distributions or payments, (ii) loans or advances, or (iii) property or assets.
"Permitted Construction Financing" means financing of the acquisition,
--------------------------------
holding, development or improvement of property other than the Calabasas
Property by the Company and/or any of the Subsidiaries (including, without
limitation, the financing of any related interest reserve) in the ordinary
course of business, which financing is secured primarily by the property to be
acquired, developed or improved with the proceeds of such financing.
"Permitted Investments" shall have the meaning set forth in Section 4.18.
--------------------- ------------
"Permitted Liens" means (a) Liens securing the Existing Indebtedness; (b)
---------------
Liens securing the Securities; (c) Liens on property of a Person existing at the
time such Person is merged into or consolidated with the Company or any
Subsidiary or becomes a Subsidiary of the Company subsequent to the Closing
Date; provided, however, that such Liens were in existence prior to such merger
-------- -------
or consolidation or the time such Person becomes a Subsidiary and were not
created in contemplation, thereof; (d) Liens on property existing at the time of
acquisition thereof by the Company or any Subsidiary; provided, however, that
-------- -------
such Liens were in existence prior to such acquisition and were not created in
contemplation thereof; (e) Liens incurred or deposits made to secure the
performance of tenders, bids, leases, statutory obligations, surety or appeal
bonds, performance bonds, completion bonds, guarantee bonds, progress payments,
government contracts, fees for conditions of government development orders and
letters of credit in lieu thereof or other obligations of a like nature incurred
in the ordinary course of business; (f) Liens for taxes, assessments or
governmental charges or claims that are not yet delinquent or that are being
contested in good faith by appropriate proceedings promptly instituted and
diligently pursued; provided, however, that any reserve or other appropriate
-------- -------
provision as shall be required
11
in conformity with GAAP shall have been made therefor; (g) Liens securing the
Working Capital Line or Permitted Construction Financing; (h) Liens securing the
Calabasas Financing; (i) statutory Liens of landlords and carriers',
warehousemen' s mechanics', suppliers', materialmen's, repairmen's or other
Liens imposed by law and arising in the ordinary course of business; (j)
easements, rights-of-way, restrictions and other similar charges or encumbrances
not materially interfering with the ordinary course of business of the Company;
(k) Liens created by special assessment districts used to finance infrastructure
improvements; (l) zoning restrictions, licenses, restrictions on the use of real
property or minor irregularities in title thereto, which do not materially
impair the use of such real property in the ordinary course of business of the
Company and its Subsidiaries or the value of such real property for the purpose
of such business; (m) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance and
other types of social security; (n) any attachment or judgment Lien, unless the
judgment it secures shall not, within 30 calendar days after the entry thereof,
have (i) been discharged or (ii) had execution thereof stayed pending appeal, or
shall not have been discharged within 30 calendar days after the expiration of
any such stay, and, if stayed, bonded, unless otherwise an Event of Default; (o)
leases or subleases granted to others that do not materially interfere with the
ordinary conduct of the business of the Company; (p) Liens securing Refinancing
Indebtedness, provided, however, that such Liens extend only to the assets
-------- -------
securing the Indebtedness being refinanced, and such refinanced Indebtedness was
previously secured by such assets; (q) any contract to sell an asset provided
such sale is otherwise permitted under this Indenture; (r) any right of a lender
or lenders under the Existing Indebtedness, the Permitted Construction
Financing, the Working Capital Line, the Calabasas Financing or the Refinancing
Indebtedness to offset against, or apply to the payment of any Indebtedness
thereunder any and all balances, credits, deposits, accounts or monies of the
Company and its Subsidiaries with or held by such lender or lenders; and (s) any
pledge or deposit of cash or property in conjunction with obtaining bonds or
letters of credit required by municipalities or other governmental authorities
in the ordinary course of business of the Company.
"Person" means an individual, a corporation, a partnership, an association,
------
a business trust, a trust or any other entity or organization, including a
government or political subdivision or an agency or instrumentality thereof.
"Pledge Agreement" means the non-recourse Pledge Agreement dated the date
----------------
hereof, made by the Company in favor of the Trustee for the benefit of the
Holders, as such agreement may be amended, modified or supplemented from time to
time.
"Pledged Collateral" means all property pledged to the Trustee pursuant to
------------------
the Pledge Agreement, whether now owned or hereafter acquired.
"Property" means any interest in any kind of property or asset, whether
--------
real, personal or mixed, or tangible or intangible, including the Real Property.
"Public Offering Sale" means an underwritten public offering of Capital of
--------------------
the Company, any Subsidiary, or any successor entity thereto, pursuant to a
registration statement filed pursuant to the Securities Act.
12
"Purchase Money Obligations" means (a) Indebtedness of the Company or any
--------------------------
Subsidiary secured by Liens (i) on property purchased, acquired, or constructed
by the Company or any Subsidiaries after the date of the Indenture and used in
the ordinary course of business and (ii) securing the payment of all or any part
of the purchase price or construction cost of such assets and limited to the
property so acquired and improvements thereof: provided that such Indebtedness
is incurred no later than 90 days after the acquisition of such property or
completion of such construction or improvements, and (b) Indebtedness assumed by
the Company and/or any Subsidiary in connection with the acquisition of
property.
"Real Property" means the land, including any improvements situated
-------------
thereon, owned or acquired by the Company or any Subsidiary from time to time.
"Redemption Date" when used with respect to any Security to be redeemed,
---------------
means the date fixed for such redemption pursuant to this Indenture and the
Securities.
"Redemption Price" when used with respect to any Security to be redeemed,
----------------
means the price fixed for such redemption pursuant to this Indenture and the
Securities.
"Reference Period" with regard to any person means the four full fiscal
----------------
quarters (or such lesser period during which such person has been in existence)
for which financial information is available ended immediately preceding any
date upon which any determination is to be made pursuant to the terms of the
Securities or this Indenture.
"Refinancing Indebtedness" means any Indebtedness of the Company or any
------------------------
Subsidiary issued in exchange for, or the net proceeds of which are applied
entirely to substantially concurrently repay, refinance, refund or replace,
outstanding Indebtedness of the Company or any of its Subsidiaries (the
"Refinanced Indebtedness"), to the extent such Indebtedness:
-----------------------
(a) is issued in a principal amount (or if such Indebtedness is issued
at an original issue discount, is issued at an original issue price) not
exceeding the outstanding principal amount (or, if such Refinanced
Indebtedness was issued at an original issue discount, not exceeding the
outstanding accreted principal amount) of such Refinanced Indebtedness; and
(b) if the Refinanced Indebtedness is Indebtedness of the Company and
ranks by contract, by its terms or otherwise junior in right of payment to
the Securities, (i) does not have a final scheduled maturity and is not
subject to any principal payments, including but not limited to payments
upon mandatory or optional redemption, prior to the dates of analogous
payments under the Refinanced Indebtedness, and (ii) has subordination
provisions effective to subordinate such Indebtedness to the Securities at
least to the extent that such Refinanced Indebtedness is subordinated to
the Securities; and
(c) if the Refinanced Indebtedness is Indebtedness of the Company
which is pari passu in right of payment with the Securities, (i) is pari
---- ----- ----
passu or subordinated in right of payment to the Securities, (ii) does not
-----
have a final scheduled maturity and is not subject to any principal
payments, including but not limited to, payments upon mandatory or optional
redemption, prior to the final scheduled maturity date of the Refinanced
13
Indebtedness, and (iii) is not secured by any Lien on any property of the
Company or any Subsidiary in addition to Liens securing the Refinanced
Indebtedness.
"Responsible Officer" when used with respect to the Trustee means the
-------------------
chairman of the Board of Directors, any vice chairman of the Board of Directors,
the chairman of the trust committee, the chairman of the executive committee,
any vice chairman of the executive committee, the chief executive officer, the
president, any vice president (whether or not designated by numbers or words
added before or after the title "vice president"), the secretary, the treasurer,
any trust officer, any assistant trust officer, any assistant secretary, any
assistant treasurer, or any other officer or assistant officer of the Trustee
customarily performing functions similar to those performed by the persons who
at the time shall be such officers, respectively, or to whom any corporate trust
matter is referred because of his knowledge of and familiarity with the
particular subject.
"Restricted Payment" and "Restricted Payments" shall have the meaning set
------------------ -------------------
forth in Section 4.14.
------------
"Securities Act" means the Securities Act of 1933, as amended.
--------------
"Securityholder Lien" shall have the meaning set forth in Section 12.1(b).
------------------- ---------------
"Security" or "Securities" means the Company's Zero Coupon Notes due
-------- ----------
December 31, 2004 issued under this Indenture and any other Securities that are
issued under this Indenture, in each case as this Indenture may be amended,
amended and restated, or supplemented from time to time.
"Stated Maturity" means, with respect to the principal of the Securities,
---------------
December 31, 2004.
"Subsidiary" means any corporation or other entity, which more than 50% of
----------
the outstanding Capital of which at the time of determination is owned by the
Company, whether directly or indirectly through one or more Subsidiaries, or
both.
"TIA" means the Trust Indenture Act of 1939, as amended.
---
"Trade Payables" means, with respect to any Person, any accounts payable or
--------------
any other indebtedness or monetary obligation to trade creditors created,
assumed or guaranteed by such Person or any of its Subsidiaries and arising in
the ordinary course of business in connection with the acquisition of goods or
services.
"Trustee" means the Person identified as the "Trustee" in the first
-------
paragraph hereof and, subject to the provisions of Article Eight, shall also
-------------
include any successor trustee. "Trustee" shall also mean or include each Person
-------
who is then a trustee hereunder.
"U.S. Government Obligations" means securities that are (a) direct
---------------------------
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (b) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America the payment of which is unconditionally guaranteed as a full
14
faith and credit obligation by the United States of America, which, in either
case, are not callable or redeemable at the option of the issuer thereof at any
time prior to the Stated Maturity of the principal of the Securities, and shall
also include a depository receipt issued by a bank or trust company as custodian
with respect to any such U.S. Government Obligation or a specific payment of
interest on or principal of any such U.S. Government Obligation held by such
custodian for the account of the holder of a depository receipt; provided,
--------
however, that (except as required by law) such custodian is not authorized to
-------
make any deduction from the amount payable to the holder of such depository
receipt from any amount received by the custodian in respect of the U.S.
Government Obligation or the specific payment of interest on or principal of the
U.S. Government Obligation evidenced by such depository receipt.
"U.S. Legal Tender" means such coin or currency of the United States of
-----------------
America as at the time of payment shall be legal tender for the payment of
public and private debts.
"Voting Capital" means any class or classes of Capital pursuant to which
--------------
the holders thereof have the general voting power under ordinary circumstances
to vote for the election of directors, managers or trustees of any Person
(irrespective of whether or not at the time Capital of any class or classes will
have or might have voting power by the reason of the happening of any
contingency).
"Wholly Owned Subsidiary" means, a Subsidiary all of the Capital or other
-----------------------
similar equity ownership interests of which (other than any director's
qualifying shares or Investments by foreign nationals mandated by applicable
law) is owned directly or indirectly by the Company.
"Working Capital Line" means any credit facility or facilities obtained by
--------------------
the Company and/or any of the Subsidiaries to provide working capital.
ARTICLE TWO
SECURITIES
Section 2.1 Form and Dating.
---------------
The Securities and the related Trustee's certificate of authentication
shall be substantially in the respective forms set forth in Exhibit B, which
---------
exhibit is a part of this Indenture. The Securities may have notations, legends
or endorsements required by law, stock exchange rule or usage. Any such
notations, legends or endorsements not contained in the form of the Securities
attached as Exhibit B hereto shall be delivered in writing to the Trustee.
---------
Whether or not issued on the Closing Date, each Security shall be dated as of
the Closing Date, except as provided in Section 2.4 and Section 2.5. The
----------- -----------
Securities shall be issuable only in registered form in denominations of $1,000
and integral multiples thereof.
The terms and provisions contained in the Securities shall constitute, and
are hereby expressly made, a part of this Indenture and, to the extent
applicable, the Company and the Trustee, by their execution and delivery of this
Indenture, expressly agree to such terms and provisions and agree to be bound
thereby.
15
Section 2.2 Execution and Authentication.
----------------------------
One Officer of the Company shall sign each Security for the Company by
manual or facsimile signature, which signature shall be attested to by another
Officer of the Company (each of which Officers shall have been duly authorized
by all requisite corporate actions). If an Officer whose signature is on a
Security no longer holds that office at the time any Securities are
authenticated, such Securities shall nevertheless be valid and the Company shall
nevertheless be bound by the terms of the Security and this Indenture. The
Company's seal shall be reproduced on each Security. The seal of the Company
may be in the form of a facsimile thereof and may be impressed, affixed;
imprinted or otherwise reproduced on the Securities. Typographical and other
minor errors or defects in any such reproduction of the seal or any such
signature shall not affect the validity or enforceability of any Security that
has been duly authenticated and delivered by the Trustee.
The Trustee shall authenticate Securities for original issue in the
aggregate principal amount of up to $116,843,000, upon a written order of the
Company in the form of an Officers' Certificate complying with TIA (S) 313(c).
The Officers' Certificate shall specify the amount of Securities to be
authenticated and the date on which the Securities are to be authenticated.
Upon the written order of the Company in the form of an Officers' Certificate,
the Trustee shall authenticate in substitution of Securities originally issued
to reflect any name change of the Company.
If any Securities are to be issued in the form of one or more Global
Securities, then the Company shall execute and the Trustee shall authenticate
and deliver one or more Global Securities, that (a) shall be in denominations of
$1,000 or integral multiples thereof, (b) shall be registered in the name of the
Depository for such Global Security or Securities or the nominee of such
Depository, (c) shall be delivered by the Trustee to such Depository or pursuant
to such Depository's instructions, and (d) shall bear a legend substantially to
the following effect:
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR
SECURITIES IN DEFINITIVE REGISTERED FORM, THIS SECURITY MAY
NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TO
THE NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE
DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE
DEPOSITORY OR BY THE DEPOSITORY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITORY.
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR
UNDER THE SECURITIES LAWS OR ANY STATE. THESE SECURITIES MAY
NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE
ACT AND THE APPLICABLE STATE SECURITIES LAWS PURSUANT TO AN
EFFECTIVE
16
REGISTRATION STATEMENT OR AN EXEMPTION FROM
THE REGISTRATION REQUIREMENTS THEREUNDER.
Each Depository must, at the time of its designation and at all times while it
serves as Depository, be a clearing agency registered under the Exchange Act and
any other applicable statute or regulation.
Section 2.3 Certificate of Authentication.
-----------------------------
Only such Securities as shall bear thereon a certificate of authentication
substantially in the form set forth in Exhibit B hereto, executed (subject to
---------
Section 8.13) by the Trustee by the manual signature of one of its authorized
------------
officers, shall be entitled to the benefits of this Indenture or be valid or
obligatory for any purpose. The execution of such certificate by the Trustee
upon any Security executed by the Company shall be conclusive evidence, and the
only evidence, that the Security so authenticated has been duly authenticated
and delivered hereunder and that the Holder of such Security is entitled to the
benefits of this Indenture.
Section 2.4 Registration, Transfer and Exchange.
-----------------------------------
The Company will keep at each office or agency to be maintained for the
purpose as, provided in Section 4.2 hereof, a register or registers in which,
-----------
subject to such reasonable regulations as it may prescribe, it will provide for
the registration of Securities and the registration of transfer of Securities.
Such register shall be in written form in the English language or in any other
form capable of being converted into such form within a reasonable time. At all
reasonable times such register or registers shall be open for inspection by the
Trustee.
Upon due presentation for registration of transfer of any Security at any
such office or agency to be maintained for the purpose as provided in Section
-------
4.2, the Company shall execute and the Trustee shall authenticate and deliver in
---
the name of the transferee or transferees a new Security or Securities.
At the option of the Holder thereof, Securities (other than a Global
Security, except as set forth below) may be exchanged for a Security or
Securities having authorized denominations in an equal aggregate principal
amount, upon surrender of such Securities to be exchanged at the office or
agency of the Company that shall be maintained for such purpose in accordance
with Section 4.2 and upon payment, if the Company shall so require, of the
-----------
amounts hereinafter provided.
All Securities presented for registration of transfer, exchange, redemption
or payment shall (if so required by the Company or the Trustee) be duly endorsed
by, or be accompanied by a written instrument or instruments of transfer, in
form satisfactory to the Company and the Trustee and duly executed by the Holder
or his attorney duly authorized in writing.
The Company may require payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection with any exchange or
registration of transfer of Securities. No service charge shall be made for any
such transaction.
17
The Company shall not be required to exchange or register a transfer of (a)
any Securities for a period of 15 days next preceding the first mailing of
notice of redemption of Securities to be redeemed or (b) any Securities
selected, called or being called for redemption, in whole or in part, except, in
the case of any Security to be redeemed in part, the portion thereof not so to
be redeemed.
Notwithstanding any other provision of this Section 2.4, unless and until
-----------
it is exchanged in whole or in part for Securities in non-global form, a Global
Security representing all or a portion of the Securities may not be transferred
except as a whole by the Depository to a nominee of such Depository or by a
nominee of such Depository to such Depository or another nominee of such
Depository or by such Depository or any such nominee to a successor Depository
or a nominee of such successor Depository.
If at any time the Depository for any Securities represented by one or more
Global Securities notifies the Company that it is unwilling or unable to
continue as Depository for such Securities or if at any time the Depository for
such Securities shall no longer be eligible under Section 2.2, the Company shall
-----------
appoint a successor Depository eligible under Section 2.2 with respect to such
-----------
Securities. If a successor Depository eligible under Section 2.2 for such
-----------
Securities is not appointed by the Company within 90 days after the Company
receives such notice or becomes aware of such ineligibility, the Company will
execute, and the Trustee, upon receipt of an Officers' Certificate of the
Company for the authentication and delivery of Securities in non-global form,
will authenticate and deliver Securities in non-global form in exchange for such
Global Security or Securities.
The Company may at any time and in its sole discretion determine that the
Securities issued in the form of one or more Global Securities shall no longer
be represented by a Global Security or Securities. In such event the Company
will execute, and the Trustee, upon receipt of a Company Order for the
authentication and delivery of Securities in non-global form, will authenticate
and deliver, Securities in non-global form in exchange for such Global Security
or Securities.
Any person having a beneficial interest in a Global Security may upon
request exchange such beneficial interest for Securities in non-global form.
Upon receipt by the Trustee of written instructions (or such other form of
instructions as is customary for the Depository) from the Depository or its
nominee on behalf of any person having a beneficial interest in a Global
Security and upon receipt by the Trustee of a written order or such other form
of instructions as is customary for the Depository or the person designated by
the Depository as having such a beneficial interest containing registration
instructions, then the Trustee will cause, in accordance with the standing
instructions and procedures existing between the Depository and the Trustee, the
aggregate principal amount of the Global Security to be reduced and following
such reduction, the Trustee will authenticate and deliver Securities in non-
global form.
Securities in non-global form issued in exchange for a beneficial interest
in a Global Security pursuant to this Section 2.4 shall be registered in such
-----------
names and in such authorized denominations as the Depository for such Global
Security, pursuant to instructions from its direct or indirect participants or
otherwise, shall instruct the Trustee or an agent of the Company or the
18
Trustee. The Trustee or such agent shall deliver such Securities to or as
directed by the Person in whose names such Securities are so registered.
The Securities executed by the Company, and authenticated and delivered by
the Trustee, upon any transfer or exchange contemplated by this Section 2.4
-----------
shall be dated the date of their authentication, shall be in authorized
denominations, shall be in like aggregate principal amount and have the same
Stated Maturity date as the Securities surrendered upon such transfer or
exchange (or as the portion of any Global Security being exchanged for
Securities in non-global form, as the case may be), and shall bear a number or
other distinguishing symbol not appearing on any Security contemporaneously
Outstanding.
All Securities issued upon any transfer or exchange of Securities shall be
valid obligations of the Company, evidencing the same debt, and entitled to the
same benefits under this Indenture, as the Securities surrendered upon such
transfer or exchange.
Section 2.5 Mutilated, Defaced, Destroyed, Lost and Stolen Securities.
---------------------------------------------------------
In case any temporary or definitive Security shall become mutilated,
defaced or be destroyed, lost or stolen, the Company in its discretion may
execute, and upon the written request of any officer of the Company, the Trustee
shall authenticate and deliver a new Security dated the date of its
authentication, of the same principal amount and Stated Maturity date, the
mutilated or defaced Security, or the Security so destroyed, lost or stolen, and
bearing a number or other distinguishing symbol not appearing on any Security
contemporaneously Outstanding, in exchange and substitution for the mutilated or
defaced Security, or in lieu of or in substitution for the Security so
destroyed, lost or stolen. In every case the applicant for a substitute
Security shall furnish to the Company and to the Trustee and any agent of the
Company or the Trustee such security or indemnity as may be required by them to
indemnify and defend and to save each of them harmless and, in every case of
destruction, loss or theft, evidence to their satisfaction of the destruction,
loss or theft of such Security and of the ownership thereof and in the case of
mutilation or defacement, shall surrender the Security to the Trustee or such
agent.
Upon the issuance of any substitute Security, the Company may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto and any other expenses (including the fees
and expenses of the Trustee or its agent) connected therewith. In case any
Security that has matured or is about to mature or has been called for
redemption in full shall become mutilated or defaced or be destroyed, lost or
stolen, the Company may, instead of issuing a substitute Security, pay or
authorize the payment of the same (without surrender thereof except in the case
of a mutilated or defaced Security), if the applicant for such payment shall
furnish to the Company and to the Trustee and any agent or the Company or the
Trustee such security or indemnity as any of them may require to save each of
them harmless, and, in every case of destruction, loss or theft, the applicant
shall also furnish to the Company and the Trustee and any agent of the Company
or the Trustee evidence to their satisfaction of the destruction, loss or theft
of such Security and of the ownership thereof.
Every substitute Security issued pursuant to the provisions of this Section
-------
2.5 by virtue of the fact that any such Security is destroyed, lost or stolen
---
shall constitute an additional contractual obligation of the Company whether or
not the destroyed, lost or stolen Security shall
19
be at any time enforceable by anyone and Shall be entitled to all the benefits
of (but shall be subject to all the limitations of rights set forth in) this
Indenture equally and proportionately with any and all other Securities duly
authenticated and delivered hereunder. All Securities shall be held and owned
upon the express condition that, to the extent permitted by law, the foregoing
provisions are exclusive with respect to the replacement or payment of
mutilated, defaced or destroyed, lost or stolen Securities and shall preclude
any and all other rights or remedies notwithstanding any law or statute existing
or hereafter enacted to the contrary with respect to the replacement or payment
of negotiable instruments or other securities without their surrender.
Section 2.6 Cancellation of Securities; Destruction Thereof.
-----------------------------------------------
(a) All Securities surrendered for payment, redemption,
registration of, transfer or exchange, if surrendered to the Company or any
agent of the Company or any agent of the Trustee, shall be delivered to the
Trustee for cancellation and, upon receipt thereof by the Trustee, shall be
canceled by it; and no Securities shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Indenture. The Trustee
shall destroy canceled Securities held by it and deliver a certificate of
destruction to the Company. If the Company or any agent of the Company shall
acquire any of the Securities, such acquisition shall not operate as a
redemption or satisfaction of the indebtedness represented by such Securities
unless and until the same are delivered to the Trustee for cancellation.
(b) At such time as all beneficial interests in a Global Security
have either been exchanged for Securities in non-global form, redeemed,
repurchased or canceled, such Global Security shall be returned to and canceled
by the Trustee. At any time prior to such cancellation, if any beneficial
interest in a Global Security is exchanged for Securities in non-global form,
redeemed, repurchased or canceled, the principal amount of Securities
represented by such Global Security shall be reduced and an endorsement shall be
made on such Global Security by the Trustee to reflect such reduction.
Section 2.7 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, upon
receipt of a written order signed by two Officers of the Company, shall
authenticate definitive Securities in exchange for temporary Securities. Until
such exchange, temporary Securities shall be entitled to the same rights,
benefits and privileges as definitive Securities.
Section 2.8 Currency and Manner of Payments in Respect of Securities.
--------------------------------------------------------
Payment of the principal of and premium, if any, on any Security will be
made in U.S. Legal Tender.
20
ARTICLE THREE
REDEMPTIONS
Section 3.1 Notices to Trustee.
------------------
If the Company elects to redeem Securities pursuant to Section 3.7 or is
-----------
required to redeem Securities pursuant to Section 3.8, it shall furnish to the
-----------
Trustee, at least 10 days before notice of any redemption is to be mailed to
Holders (or such shorter time as may be satisfactory to the Trustee), an
Officers' Certificate stating that the Company has elected to redeem Securities
pursuant to Section 3.7 or is required to redeem Securities pursuant to Section
----------- -------
3.8, as the case may be, the date notice of redemption is to be mailed to
---
Holders, the Redemption Date, the aggregate principal amount of Securities to be
redeemed and the Redemption Price for such Securities. If the Trustee is not
the registrar for the Securities, the Company shall, concurrently with delivery
of its notice to the Trustee of a redemption, cause the registrar for the
Securities to deliver to the Trustee a certificate (upon which the Trustee may
rely) setting forth the name of, and the aggregate principal amount of
Securities held by each Holder. The Company will also provide the Trustee with
any additional information that the Trustee reasonably requests in connection
with any redemption.
Section 3.2 Selection of Securities to be Redeemed.
--------------------------------------
If less than all Outstanding Securities are to be redeemed, the Company
shall select the Outstanding Securities to be redeemed or accepted for payment
in compliance with the requirements of the principal national securities
exchange, if any, on which the Securities are listed or, if the Securities are
not listed on a securities exchange, on a pro rata basis, by lot or by any other
method that the Trustee deems fair and appropriate. If the Company elects to
mail notice of a redemption to Holders, the Trustee shall, at least five days
prior to the date notice of redemption is to be mailed, (a) select the
Securities to be redeemed from Securities Outstanding not previously called for
redemption, and (b) upon request from the Company, promptly notify the Company
of the names of each Holder of Securities selected for redemption, the principal
amount of Securities held by each such Holder and the principal amount of such
Holder's Securities that are to be redeemed. The Trustee shall select for
redemption Securities or portions of Securities in principal amounts of $1,000
or integral multiples of $1,000; provided, however, that if all of the
-------- --------
Securities of a Holder are selected for redemption, the aggregate principal
amount of the Securities held by such Holder, even if not a multiple of $1,000,
may be redeemed. Except as provided in the preceding sentence, provisions of
this Indenture that apply to Securities called for redemption also apply to
portions of Securities called for redemption.
Section 3.3 Notice of Redemption.
--------------------
(a) At least 30 days but not more than 60 days before any
Redemption Date, the Company shall mail by first class mail to each Holder's
registered address a notice of redemption to each Holder whose Securities or
portions thereof are to be redeemed. With respect to any redemption of
Securities, the notice shall identify the Securities or portions thereof to be
redeemed and shall state: (i) the Redemption Date; (ii) the Redemption Price for
the Securities; (iii) if any Security is being redeemed in part, the portion of
the principal amount of
21
such Security to be redeemed and that, after the Redemption Date, upon surrender
of such Security, a new Security or Securities in principal amount equal to the
unredeemed portion will be delivered; (iv) the name and address of the Paying
Agent; (v) that Securities called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price for such Securities; (vi) that the
only remaining right of the Holders of such Securities is to receive payment of
the Redemption Price upon surrender to the Paying Agent of the Securities
redeemed; and (vii) if fewer than all the Securities are to be redeemed, the
identification of the particular Securities (or portions thereof) to be
redeemed, as well as the aggregate principal amount of Securities to be redeemed
and the aggregate principal amount of Securities to be outstanding after such
partial redemption.
(b) At the Company's request, the Trustee shall (at the Company's
expense) give the notice of any redemption to Holders; provided, however, that
-------- -------
the Company shall deliver to the Trustee, at least 10 days prior to the date
that notice of the redemption is to be mailed to Holders, an Officers'
Certificate that (i) requests the Trustee to give notice of the redemption to
Holders, (ii) sets forth the information to be provided to Holders in the notice
of redemption, as set forth in the preceding paragraph, and (iii) sets forth the
aggregate principal amount of Securities to be redeemed and the amount of
accrued and unpaid interest, if any, thereon as of the redemption date. If the
Trustee is not the registrar for the Securities, the Company shall, concurrently
with any such request, cause the registrar for the Securities to deliver to the
Trustee a certificate (upon which the Trustee may rely) setting forth the name
of, the address of, and the aggregate principal amount of Securities held by,
each Holder; provided, further, that any such Officers' Certificate may be
-------- -------
delivered to the Trustee on a date later than permitted under this Section
-------
3.3(b) if such later date is acceptable to the Trustee.
------
Section 3.4 Effect of Notice of Redemption.
------------------------------
Once notice of redemption is mailed to the Holders, Securities called for
redemption shall become due and payable on the Redemption Date at the Redemption
Price. Upon surrender to the Trustee or the Paying Agent, the Securities called
for redemption shall be paid at the Redemption Price.
Section 3.5 Deposit of Redemption Price.
---------------------------
(a) On or prior to any Redemption Date, the Company shall deposit
with the Paying Agent money sufficient to pay the Redemption Price of all
Securities to be redeemed on that date. After any Redemption Date, the Trustee
or the Paying Agent shall promptly return to the Company any money that the
Company deposited with the Trustee or the Paying Agent in excess of the amounts
necessary to pay the Redemption Price of all Securities to be redeemed.
(b) If any Security called for redemption shall not be so paid
upon surrender for redemption because of the failure of the Company to comply
with the preceding paragraph, interest will be paid on the unpaid principal from
the redemption date until such principal is paid, at the rate of 6.62% per
annum.
22
Section 3.6 Securities Redeemed in Part.
---------------------------
Upon surrender of a Security that is redeemed in part, the Company shall
execute and the Trustee shall authenticate and deliver to the Holder at the
Company's expense a new Security equal in principal amount to the unredeemed
portion of the Security surrendered. If a Global Security is so surrendered,
such new Security so issued shall be a new Global Security.
Section 3.7 Optional Redemption.
-------------------
The Company, at its option upon notice to the Holders as provided herein,
may redeem the Securities at any time in whole or in part, at a Redemption Price
equal to 100% of the aggregate principal face amount of the Securities to be
redeemed.
Section 3.8 Mandatory Redemption.
--------------------
Within 90 days after availability to the Company of (a) its interim
unaudited financial statements for the six month periods ending on June 30 in
any year and (b) of its audited annual financial statements for its fiscal years
ending December 31, in either case reflecting cash of $20,000,000 or greater,
(the "Excess Cash Amount"), the Company must redeem, on a pro rata basis and in
------------------
accordance with the requirements of this Article 3, the maximum face amount of
the Securities (in integral multiples of $1,000) that may be redeemed at the
Redemption Price with the Excess Cash Amount. Notwithstanding the foregoing, if
the Excess Cash Amount as of any period ending on June 30 or December 31, as
reflected on the Company's balance sheet, is less than $1,000,000 (such amount
less than $1,000,000 is referred to as the "Deferred Excess Cash Amount"), the
---------------------------
Company shall not be obligated to redeem the Securities at that time. The
Deferred Excess Cash Amount will be carried over into subsequent periods ending
on June 30 or December 31 until the total of all Deferred Excess Cash Amounts
and the Excess Cash Amount for the then current period equals or exceeds
$1,000,000, at which point the Company will be required, within 90 days after
availability to the Company of its balance sheet reflecting an Excess Cash
Amount which, together with the Deferred Excess Cash Amounts that have not yet
been subject to a mandatory redemption pursuant to this Section 3.8, equals or
-----------
exceeds $1,000,000, to redeem the maximum face amount of the Securities (in
integral multiples of $1,000) that may be redeemed at the Redemption Price with
such Deferred Excess Cash Amounts and Excess Cash Amount.
ARTICLE FOUR
COVENANTS OF THE COMPANY
Section 4.1 Payment of Principal.
--------------------
The Company covenants and agrees that it will duly and punctually pay or
cause to be paid the principal of and premium, if any, on each of the Securities
at the place or places, at the respective times and in the manner provided in
such Securities and in this Indenture. In the event the Company is not the
Paying Agent, payments of principal or dividends or distributions will be
considered paid on the date due if the Trustee or Paying Agent holds on that
date money deposited by the Company designated for and sufficient to pay all
amounts then due. In the event the Company is the Paying Agent, principal and
premium, if any, will be considered paid on the date actual payment is mailed to
the Holders entitled to such payment. [To the extent lawful, the Company shall
pay interest on overdue principal and premium at a rate equal to the then
applicable interest rate on the Securities, compounded semi-annually].
23
Section 4.2 Offices for Payments, etc.
--------------------------
Presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee as specified in Section 13.4 hereof.
------------
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 or change the
location of any such office or agency. 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.
Section 4.3 Appointment to Fill a Vacancy in Office of Trustee.
--------------------------------------------------
The Company, whenever necessary to avoid or fill a vacancy in the office of
Trustee, will appoint, in the manner provided in Section 8.9, a Trustee so that
-----------
there shall at all times be a Trustee with respect to the Securities.
Section 4.4 Paying Agents.
-------------
Whenever the Company shall appoint a Paying Agent other than the Trustee
with respect to the Securities, it will cause such Paying Agent to execute and
deliver to the Trustee an instrument in which such agent shall agree with the
Trustee, subject to the provisions of this Section 4.4:
-----------
(a) that it will hold all sums received by it as such agent for the
payment of the principal of, interest on overdue payments and premium, if
any, on the Securities (whether such sums have been paid to it by the
Company or any other obligor on the Securities) in trust for the benefit of
the Holders of the Securities or of the Trustee until such sums have been
paid to such Persons or otherwise disposed of as herein provided;
(b) that it will give the Trustee notice of any failure by the
Company (or by any other obligor on the Securities) to make any payment of
the principal of and premium, if any, on the Securities when the same shall
be due and payable;
(c) that it will pay any such sums so held in trust by it to the
Trustee upon the Trustee's written request, at any time during the
continuance of the failure referred to in clause (b) above; and
----------
(d) that it will acknowledge, accept, and agree to comply in all
aspects with the provisions of this Indenture relating to the duties,
rights and disabilities of such Paying Agent;
The Company will, on or at least one Business Day prior to each due date of
the principal of, interest on overdue payments and premium, if any, on the
Securities, deposit with the Paying Agent a sum in same day funds sufficient to
pay such principal or premium so becoming due, and (unless such Paying Agent is
the Trustee) the Company will promptly notify the Trustee of any failure to take
such action.
24
If the Company shall at any time act as its own Paying Agent with respect
to the Securities it will, on or at least one Business Day prior to each due
date of the principal of or premium, if any, on the Securities set aside,
segregate and hold in trust for the benefit of the Holders of the Securities a
sum sufficient to pay such amount so becoming due until such sums will be paid
to such Persons or otherwise disposed of as herein provided. The Company will
promptly notify the Trustee of any failure to take such action.
Anything in this Section 4.4 to the contrary notwithstanding, but subject
-----------
to Section 11.1, the Company may at any time, for the purpose of obtaining a
------------
satisfaction and discharge with respect to the Securities or for any other
reason, pay or cause to be paid to the Trustee all sums held in trust with
respect to the Securities by the Company or any Paying Agent hereunder, as
required by this Section, such sums to be held by the Trustee upon the trusts
herein contained; and upon such payment by any Paying Agent hereunder, such.
Paying Agent shall be released from all further liability with respect to such
sums.
Anything in this Section 4.4 to the contrary notwithstanding, the agreement
-----------
to hold sums in trust as provided in this Section 4.4 is subject to the
-----------
provisions of Sections 11.3 and 11.4 hereof.
------------- ----
Section 4.5 Compliance Certificate; Notices of Default.
------------------------------------------
(a) The Company will furnish to the Trustee within 120 days after
the end of each fiscal year an Officers' Certificate stating that (i) a review
of the activities of the Company and its Subsidiaries during the preceding
fiscal year has been made to determine whether the Company has kept, observed,
performed and fulfilled all of its obligations under this Indenture and the
Securities, (ii) such review was supervised by the Officers of the Company
signing such certificate, and (iii) that to the actual knowledge of each Officer
signing such certificate, (A) during such year the Company has kept, observed,
performed and fulfilled each and every covenant contained in this Indenture and
is not in default in the performance or observance of any of the terms,
provisions and conditions of this Indenture (or, if a Default or Event of
Default occurred, describing all such Defaults or Events of Default of which
each such Officer may have knowledge and what action the Company has taken or
proposes to take with respect thereto), and (B) no event has occurred and
remains in existence by reason of which payments on account of the principal of
or premium, if any, on the Securities are prohibited or if such event has
occurred, a description of the event and what action the Company is taking or
proposes to take with respect thereto. The Company will deliver within 120 days
after the end of each fiscal year a statement from the Company's independent
accountants that nothing has come to their attention that would lead them to
believe that the Company has violated any provision of this Indenture.
(b) The Company will, so long as any of the Securities are
outstanding, deliver to the Trustee, promptly after any Officer of the Company
becomes aware of (i) any Default or Event of Default, or (ii) any default or
event of default under any issue of Indebtedness that could result in an Event
of Default under Section 7.1, an Officers' Certificate specifying such Default,
-----------
Event of Default or default and what action the Company is taking or proposes to
take with respect thereto.
25
Section 4.6 Reports.
-------
(a) The Company shall file with the Trustee within 15 days after
it files them with the Commission copies of any quarterly and annual reports and
of any information, documents and other reports (or copies of such portions of
any of the foregoing as the Commission may by rules and regulations prescribe)
which the Company is required to file with the Commission pursuant to Section 13
and 15(d) of the Exchange Act. The Company shall also comply with the other
provisions of TIA (S) 314(a).
(b) So long as any of the Securities remain outstanding, the
Company shall cause any annual and any quarterly or other financial reports
furnished by it to holders of the Company's Capital, to be filed with the
Trustee and mailed to the Holders at their addresses appearing in the register.
If the Company is not required to furnish annual or quarterly reports to the
holders of its Capital pursuant to the Exchange Act, the Company shall cause its
consolidated financial statements, including any notes thereto (and, in the case
of a fiscal year end, an auditor's report by an accounting firm of nationally
established reputation) and a statement from management discussing any material
developments regarding the Company during the period reported on, to be so filed
with the Trustee and mailed to the Holders at their addresses appearing in the
register within 105 days after the end of each fiscal year and within 60 days
after the end of each of the Company's first three fiscal quarters in each
fiscal year.
(c) The Trustee shall receive the reports, information and
documents described in clause (a) and clause (b) above, for the purpose of
---------- ----------
providing copies of the same to Holders upon their written request and at their
expense, but shall not be responsible for reviewing or analyzing the same to
ascertain any non-compliance by the Company with its obligations under this
Indenture and the Securities.
Section 4.7 Legal Existence.
---------------
Subject to Article Six hereof, the Company will do or cause to be done all
-----------
things necessary to preserve and keep in full force and effect its legal
existence and the corporate, partnership or other existence of each Subsidiary
of the Company and the rights (charter and statutory) and franchises of the
Company and any Subsidiary of the Company; provided, however, that the Company
-------- -------
shall not be required to preserve any such corporate, partnership or other
existence of any Subsidiary or any such right or franchise, if the Board of
Directors of the Company shall determine in the exercise of its business
judgment that the preservation thereof is no longer desirable in the conduct of
the business of the Company or any Subsidiary and that abandonment of any such
right or franchise shall have no material adverse effect on the business,
prospects, assets or financial condition of the Company and its Subsidiaries
taken as a whole, and would not have a materially adverse impact on the Holders.
Section 4.8 Payment of Taxes and Other Claims.
---------------------------------
The Company will pay or discharge or cause to be paid or discharged, before
the same shall become delinquent, (a) all taxes, assessments and governmental
charges levied or imposed upon the Company or any Subsidiary or upon the income,
profits or property of the Company or any Subsidiary, and (b) all lawful claims
for labor, materials and supplies that, if unpaid, might
26
by law become a Lien (other than a Permitted Lien) upon the property of the
Company, or any Subsidiary; provided, however, that the Company shall not be
-------- -------
required to pay or discharge or cause to be paid or discharged any such tax,
assessment, charge or claim the amount, applicability or validity of which is
being contested in good faith by appropriate proceedings and with respect to
which an adequate reserve has been established by the Company to the extent
required by GAAP.
Section 4.9 Maintenance of Properties.
-------------------------
The Company shall, and shall cause each of its Subsidiaries to, maintain in
appropriate condition each of its principal properties which in the judgment of
management is essential to the business operations of the Company and its
Subsidiaries taken as a whole and the loss of which would have a material
adverse effect on the financial condition of the Company and its Subsidiaries
taken as a whole; provided, however, that nothing in this Section shall prevent
-------- -------
the Company or any Subsidiary from selling, abandoning or otherwise disposing of
any of such properties if such sale, abandonment or other disposition is, in the
good faith judgment of the Company or such Subsidiary, as the case may be,
desirable in the conduct of its respective business and not disadvantageous in
any material respect to the Holders.
Section 4.10 Maintenance of Insurance.
------------------------
The Company will insure and keep insured, and will cause each Subsidiary to
insure and keep insured (either in the name of the Company or in such
Subsidiary's own name), with reputable third party insurance companies, each of
their respective properties, to such an extent and against such risks, and will
maintain liability insurance and insurance coverage against other business
risks, to the extent that property of a similar character is usually so insured
by companies engaged in a similar business and owning similar properties in
accordance with good business practice.
Section 4.11 Compliance with Laws.
--------------------
The Company shall comply, and shall cause each of its Subsidiaries to
comply, with all applicable statutes, rules, regulations, orders and
restrictions of the United States of America, all states and municipalities
thereof, and of any governmental department, commission, board, regulatory
authority, bureau, agency and instrumentality of the foregoing, in respect of
the conduct of their respective businesses and the ownership of their respective
properties.
Section 4.12 Change of Control.
-----------------
(a) Upon a Change of Control, each Holder shall have the right
to require the Company to repurchase all or any part of such Holder's Securities
at a repurchase price equal to 101% of the principal amount thereof to the date
of purchase.
(b) Within 30 days following any Change of Control, the Company
shall (with written notice to the Trustee) or the Trustee at the Company's
request (and at the expense of the Company), send or cause to be sent a notice
by first class mail, postage prepaid, to each Holder stating:
27
(i) that a Change of Control has occurred and that such
Holder has the right to require the Company to purchase all or any part of
such Holder's Securities at a purchase price in cash equal to 101% of the
principal amount thereof and the length of time within which the Holder may
require such repurchase;
(ii) the circumstances and relevant facts regarding such
Change of Control;
(iii) the purchase date (which shall be no earlier than 30
days nor later than 60 days from the date such notice is mailed); and
(iv) instructions regarding the procedures, consistent
with this Section 4.12, that the Company reasonably determines that a
------------
Holder must follow to have its Securities repurchased.
(c) Holders electing to have a Security purchased will be required to
surrender the Security, with an appropriate form duly completed, to the Company
at the address specified in the notice at least ten Business Days prior to the
purchase date. Holders will be entitled to withdraw their election if the
Company receives not later than three Business Days prior to the purchase date,
a telegram, telex, facsimile transmission or letter setting forth the name of
the Holder, the principal amount of the Security which was delivered for
purchase by the Holder and a statement that such Holder is withdrawing his
election to have such Security purchased.
(d) On the purchase date, all Securities purchased by the Company
under this Section shall be delivered by the Company to the Trustee for
cancellation, together with an Officers' Certificate requesting such
cancellation and stating that they are being delivered for cancellation in
accordance with the terms of this Section 4.12 and that the Company shall pay
------------
the purchase price to the Holders entitled thereto.
(e) The Company shall comply with the requirements of Section 14(e)
of the Exchange Act and any other securities laws or regulations in connection
with the repurchase of Securities pursuant to this Section 4.12. To the extent
------------
that the provisions of any securities laws or regulations conflict with
provisions of this Section 4.12, the Company shall comply with the applicable
------------
securities laws and regulations and shall not be deemed to have breached its
obligations under this Section 4.12 by virtue thereof.
------------
(f) The Trustee shall be under no obligation to ascertain the
occurrence of a Change of Control or to give notice with respect thereto other
than as provided above, upon receipt of the written notice of Change of Control
from the Company. The Trustee may conclusively assume, in the absence of
written notice to the contrary from the Company, that no Change of Control has
occurred.
Section 4.13 Limitation on Issuances and Dispositions of Capital of
------------------------------------------------------
Subsidiaries.
------------
The Company (a) shall not, and shall not permit any Subsidiary to,
transfer, convey, sell, pledge, encumber or otherwise dispose of any Capital of
a Subsidiary, or securities convertible or exchangeable into, or options,
warrants, rights or any other interest with respect to, Capital of a Subsidiary
to any Person (other than the Company or a Wholly Owned Subsidiary) and (b)
shall
28
not permit any Subsidiary to issue any of its Capital (other than directors'
qualifying shares), or securities convertible or exchangeable into, or options,
warrants, rights or any other interest with respect to, its Capital to any
Person other than to the Company or a Wholly Owned Subsidiary.
Section 4.14 Limitation on Restricted Payments.
---------------------------------
(a) Except as otherwise provided in this Section 4.14, the
------------
Company shall not, and shall not permit any Subsidiary to, directly or
indirectly:
(i) declare or pay any dividends on or make any
distributions of cash, securities or other property or assets in respect of
the Capital of the Company (other than dividends or distributions payable
solely in shares of Capital (other than Disqualified Capital) or in
options, warrants, or other rights to purchase Capital (other than
Disqualified Capital)) to holders of Capital of the Company; (other than
(x) in the case of the Company, dividends or distributions payable solely
in Capital of the Company (other than Disqualified Capital) or options,
warrants or other rights to acquire Capital of the Company (other than
Disqualified Capital, and (y) any dividends, distributions or other
payments in respect of any Capital made by any Subsidiary to the Company or
a Wholly Owned Subsidiary);
(ii) purchase, redeem or otherwise acquire or retire for
value (other than through the issuance solely of Capital (other than
Disqualified Capital) or options, warrants or other rights to purchase
Capital (other than Disqualified Capital)) any Capital or warrants, rights
(other than exchangeable or convertible Indebtedness of the Company not
prohibited under clause (iii) below) or options to acquire Capital of the
------------
Company, either directly or indirectly;
(iii) redeem, repurchase, defease (including, but not
limited to, in substance or legal defeasance), or otherwise acquire or
retire for value (other than through the issuance solely of Capital (other
than Disqualified Capital) or warrants, rights or options to acquire
Capital (other than Disqualified Capital)) (collectively, a "prepayment"),
directly or indirectly (including by way of amendment of the terms of any
Indebtedness in connection with any retirement or acquisition of such
Indebtedness), other than at any scheduled maturity thereof or by any
scheduled repayment or scheduled sinking fund payment, any Indebtedness of
the Company which is subordinated in right of payment to the Securities or
which matures after the maturity date of the Securities (except out of the
proceeds of Refinancing Indebtedness); or
(iv) make any Investment other than a Permitted Investment
if, at the time of such transaction described in clause (i), (ii), (iii) or (iv)
---------- ---- ----- ----
(such transactions being hereinafter collectively referred to as, "Restricted
----------
Payments" and each, a "Restricted Payment") or after giving effect thereto, any
-------- ------------------
of (x) a Default or an Event of Default shall have occurred and be continuing or
occurs as a consequence thereof or (y) the aggregate amount expended by the
Company and its Subsidiaries for all Restricted Payments (the amount of any
Restricted Payment if other than cash to be the Fair Market Value of the
property included in such payment) from and after the Closing Date shall equal
or exceed the sum of (A) 50% of the aggregate Adjusted
29
Consolidated Net Income (or if such Adjusted Consolidated Net Income is a loss,
minus 100% of such loss) of the Company and its Subsidiaries for the period from
the first day of the first quarter ended subsequent to the Closing Date and
through the last day of the most recently completed quarter immediately
preceding the quarter in which the Restricted Payment occurs, calculated on a
cumulative basis as if such period were a single accounting period; (B) the
aggregate net proceeds received by the Company after the Closing Date (including
the Fair Market Value of non-cash proceeds) from any Person other than a
Subsidiary, as a result of the issuance of (or contribution to capital on)
Capital of the Company (other than any Disqualified Capital) or warrants, rights
or options to acquire Capital (other than any Disqualified Capital); (C) the
aggregate net proceeds received by the Company after the Closing Date from any
Person other than a Subsidiary as a result of the issuance of Capital (other
than Disqualified Capital) upon conversion or exchange of Indebtedness or upon
exercise of options, warrants or other rights to acquire such Capital and (D)
$1,000,000 or (z) the Company cannot, at the time of such Restricted Payment and
after giving effect thereto as if such Restricted Payment had been made at the
beginning of the applicable Reference Period, incur at least $1.00 of additional
Indebtedness under Section 4.20. For purposes of any calculation that is
------------
required to be made in respect of, or after, the declaration of a dividend by
the Company, such dividend shall be deemed to be paid at the date of declaration
and shall be included in determining the aggregate amount of Restricted
Payments.
For the purposes of this Section 4.14, the net proceeds from the
------------
issuance of Capital of the Company upon conversion of debt securities shall be
deemed to be an amount equal to the net book value of such debt securities (plus
the additional amount required to be paid upon such conversion, if any), less
any cash payment on account of fractional shares; the "net book value" of a
security shall be the net amount received by the Company on the issuance of such
security, as adjusted on the books of the Company to the date of conversion.
(b) Notwithstanding the foregoing, if no Default or Event of Default
shall have occurred or be continuing at the time or as a result thereof, the
provisions of this Section 4.14 shall not prohibit (i) the payment of any
------------
dividend in respect of the Company's Capital within 60 days after the date of
declaration thereof, if at such date of declaration such payment complied with
the provisions hereof; (ii) the purchase, redemption or other acquisition or
retirement for value of any shares of the Company's Capital or the prepayment of
any Indebtedness of the Company which is subordinated in right of payment to the
Securities or which matures after the maturity date of the Securities by any
exchange for, or out of and to the extent the Company has received cash proceeds
from the substantially concurrent sale or issuance (other than to a Subsidiary)
of, shares of Capital (other than any Disqualified Capital) of the Company or
warrants, rights or options to acquire Capital (other than any Disqualified
Capital); or (iii) the purchase or redemption of shares of Capital of the
Company (including options on any such shares or related stock appreciation
rights or similar securities) held by officers or employees of the Company or
its Subsidiaries (or their estates or beneficiaries under their estates) upon
death, disability, retirement, termination of employment of any such Person
pursuant to the terms of any Plan or any other agreement under which such shares
of stock or related rights were issued; provided, however, that the aggregate
-------- -------
amount of such purchases or redemptions of such Capital shall not exceed
$1,000,000 in any one fiscal year of the Company. For purposes of determining
the aggregate amount of Restricted Payments permitted under clause (y) of
----------
Section 4.14(a), all amounts expended pursuant to clause (i) (to the extent
--------------- ----------
deemed
30
to have been paid and already included in determining the aggregate amount of
Restricted Payments pursuant to clause (y) of Section 4.14(a)), clause
---------- --------------- ------
(ii) and clause (iii) of this Section 4.14(b) shall be excluded.
---- ------------ ---------------
Prior to making any Restricted Payment under this Section, the Company
shall deliver to the Trustee an Officers' Certificate setting forth the
computation by which the amount available for Restricted Payments was
determined. The Trustee shall have no duty or responsibility to determine the
accuracy or correctness of this computation or that the provisions of this
Section have been satisfied and shall be fully protected in relying on such
Officers' Certificate.
Section 4.15 Limitation on Transactions with Affiliates.
------------------------------------------
(a) Neither the Company nor any Subsidiary of the Company shall,
directly or indirectly (i) make any loan, advance, guarantee or capital
contribution to, or for the benefit of (ii) sell, lease, transfer or otherwise
dispose of any of its properties or assets, or issue securities to, or for the
benefit of, (iii) purchase or lease any property, assets or securities from,
(iv) make any Investment in, or (v) enter into, suffer to exist or amend any
contract, agreement or understanding with or for the benefit of, an Affiliate or
holder of 5% or more of any class of Capital (and any Affiliate of such holder)
of the Company or any of its Subsidiaries (each, an "Affiliate Transaction"),
---------------------
other than (x) Affiliate Transactions permitted under Section 4.15(b) and (y)
---------------
Affiliate Transactions (including lease transactions) which are on fair and
reasonable terms no less favorable to the Company or such Subsidiary, as the
case may be, than those as might reasonably have been obtainable on an arm's
length basis at such time from an unaffiliated party; provided, however, that if
-------- -------
an Affiliate Transaction or series of related Affiliate Transactions involves or
has a value in excess of $10,000,000, the Company or such Subsidiary, as the
case may be, shall not enter into such Affiliate Transaction or series of
related Affiliate Transactions unless a majority of the disinterested members of
the Board of Directors of the Company or such Subsidiary shall reasonably and in
good faith determine that such Affiliate Transaction is fair to the Company or
such Subsidiary, as the case may be, or is on terms no less favorable to the
Company or such Subsidiary, as the case may be, than those as might reasonably
have been obtainable at such time from an unaffiliated party and shall have
adopted a Board Resolution to such effect; provided, further, however, that the
-------- ------- -------
Company shall not, and shall not permit any of its Subsidiaries to, enter into
an Affiliate Transaction or series of related Affiliate Transactions involving
or having a value in excess of $25,000,000 unless the Company has delivered to
the Trustee (i) an opinion of an Independent Financial Advisor to the effect
that the transaction is fair to the Company or the relevant Subsidiary, as the
case may be, from a financial point of view and (ii) if such Affiliate
Transaction involves the purchase or sale of real estate, an appraisal from a
nationally recognized MAI certified real estate appraisal firm that indicates a
Fair Market Value at least equal to the aggregate payments made or received by
the Company or its Subsidiary in connection with the Affiliate Transaction.
(b) The provisions of Section 4.15(a) shall not apply to (i) any
---------------
agreement as in effect as of the Closing Date, or any amendment thereto so long
as any such amendment is not disadvantageous to the Holders in any material
respect or any transaction contemplated thereby (including pursuant to any
amendment thereto); (ii) any transaction between the Company and any Wholly
Owned Subsidiary or between Wholly Owned Subsidiaries, provided such
31
transactions are not otherwise prohibited by this Indenture; (iii) reasonable
and customary fees and compensation paid to, and indemnity provided on behalf
of, officers, managers, directors, employees or consultants of the Company or
any Subsidiary, as determined by the Board of Directors of the Company or such
Subsidiary or the senior management thereof in good faith; (iv) Capital
issuances to members of the Board of Directors, officers and employees of the
Company and its Subsidiaries pursuant to plans approved by the Board of
Directors of the Company, or (v) any Restricted Payments not prohibited by
Section 4.14.
------------
Section 4.16 Limitation on Asset Sales.
-------------------------
Neither the Company nor any of its Subsidiaries shall consummate any Asset
Sale unless (a) such Asset Sale is for at least Fair Market Value, (b) at least
60% of the consideration received by the Company or such Subsidiary is in the
form of cash or Cash Equivalents, (c) no Default or Event of Default shall have
occurred or be continuing, and (d) the Company or such Subsidiary shall apply
the Net Cash Proceeds of such Asset Sale as follows:
(i) (x) to permanently repay any Indebtedness secured by a Lien on
the Pledged Collateral subject to such Asset Sale or a portion thereof
(including a permanent reduction in committed amounts therefor in the case
of the Working Capital Line so repaid) within 180 days of such Asset Sale
or (y) to reinvest in other Real Property, in each case if the Company or
any Subsidiary, as the case may be, shall have committed in writing within
180 days of such Asset Sale to so reinvest such Net Cash Proceeds and shall
have so reinvested such Net Cash Proceeds within 360 days of such Asset
Sale; and
(ii) with respect to any Net Cash Proceeds remaining after application
pursuant to the preceding paragraph (i) (the "Excess Proceeds"), the
------------- ---------------
Company shall make an offer to purchase (the "Excess Proceeds Offer") from
---------------------
all Holders a principal amount (expressed as an integral multiple of
$1,000) of Securities equal to the amount of the Excess Proceeds at a
purchase price equal to 100% of the principal amount thereof, ("Excess
------
Proceeds Payment"). If at any time any non-cash consideration received by
----------------
either the Company or any Subsidiary, as the case may be, in connection
with any Asset Sale is converted into or sold or otherwise disposed of for
cash, then such conversion or disposition shall be deemed to constitute an
Asset Sale hereunder and the Net Cash Proceeds thereof shall be applied in
accordance with this Section 4.16. The Company may defer the Excess
------------
Proceeds Offer until there is an aggregate unutilized amount of Excess
Proceeds equal to or in excess of $10,000,000 resulting from one or more
Asset Sales (at which time, the entire unutilized amount of Excess
Proceeds, and not just the amount in excess of $10,000,000, shall be
applied as required pursuant to this paragraph).
The Company shall commence an Excess Proceeds Offer by causing the Trustee
to mail a notice to each Holder stating: (A) that the Excess Proceeds Offer is
being made pursuant to this Section 4.16 and that all Securities validly
------------
tendered will be accepted for purchase; provided, however, that if the aggregate
-------- -------
purchase price of Securities tendered in an Excess Proceeds Offer exceeds the
aggregate amount of the Excess Proceeds required to be applied in such Excess
Proceeds Offer, the Company shall select the Securities to be purchased on a pro
rata basis (with such adjustments as may be deemed appropriate by the Company so
that only Securities in denominations of $1,000 or integral
32
multiples thereof shall be purchased); (B) the purchase price and the purchase
date (which shall be a Business Day no earlier than 30 days nor later than 60
days from the date such notice is mailed) (the "Excess Proceeds Purchase Date");
-----------------------------
(C) that Holders electing to have a Security purchased pursuant to the Excess
Proceeds Offer will be required to surrender the Security, with the form
entitled "Option of the Holder to Elect Purchase" on the reverse side of the
Security completed, to the Paying Agent at the address specified in the notice
prior to the close of business on the Business Day immediately preceding the
Excess Proceeds Purchase Date; (D) that each Holder will be entitled to withdraw
its election (in whole but not in part) if the Paying Agent receives, not later
than the close of business on the third Business Day immediately preceding the
Excess Proceeds Purchase Date, a telegram, telex, facsimile transmission or
letter setting forth the name of such Holder, the principal amount of Securities
delivered for purchase and a statement that such Holder is withdrawing its
election to have such Securities purchased; and (E) that Holders whose
Securities are being purchased only in part will be issued new Securities equal
in aggregate principal amount to the unpurchased portion of the Securities
surrendered.
On the Excess Proceeds Purchase Date, the Company shall: (x) accept for
purchase on a pro rata basis Securities or portions thereof tendered pursuant to
the Excess Proceeds Offer; (y) deposit with the Paying Agent money sufficient to
pay the purchase price of all Securities or portions thereof so accepted; and
(z) deliver, or cause to be delivered, to the Trustee all Securities or portions
thereof so accepted together with an Officers' Certificate specifying the
Securities or portions thereof accepted for purchase by the Company. The Paying
Agent shall promptly mail to the Holders of Securities so accepted payment in an
amount equal to the purchase price, and the Company shall execute and the
Trustee shall promptly authenticate and mail to each such Holder a new Security
equal in principal amount to any unpurchased portion of the Security
surrendered; provided, however, that each Security purchased and each new
-------- -------
Security delivered shall be in a principal amount of $1,000 or an integral
multiple thereof. The Company will publicly announce the results of the Excess
Proceeds Offer as soon as practicable after the Excess Proceeds Purchase Date.
For purposes of this Section 4.16, the Trustee shall act as the Paying Agent.
------------
The Company will comply with Rule 14e-l under the Securities Exchange Act
of 1934, as amended, and any other securities laws and regulations thereunder to
the extent such laws and regulations are applicable, in the event that such
Excess Proceeds are received by the Company as contemplated by this Section 4.16
------------
and the Company is required to repurchase Securities as described above.
Section 4.17 Limitation on Payment Restrictions Affecting Subsidiaries.
---------------------------------------------------------
The Company shall not, and shall not permit any Subsidiary to, create,
assume or otherwise cause or suffer to exist or become effective any Payment
Restriction or consensual encumbrance with respect to any Subsidiary thereof to:
(a) pay dividends or make any other distributions on such Subsidiary's Capital
or any other interest or participation in, or measured by, its profits, owned by
the Company or any of its other Subsidiaries or pay interest on or principal of
any Indebtedness owed to the Company or any of its other Subsidiaries; (b) make
any loans or advances to the Company or any other Subsidiary; or (c) transfer
any of its property or assets to the Company or any other Subsidiary, except (i)
restrictions imposed by applicable
33
law; (ii) any restrictions existing under this Indenture; (iii) restrictions
imposed under the Working Capital Line and (iv) encumbrances or restrictions
contained in any agreement or instrument (A) relating to any property acquired
or leased by the Company or any of its Subsidiaries after the Closing Date,
provided, however, that such encumbrance or restriction relates only to the
-------- -------
property which is acquired or leased; (B) relating to any Indebtedness of any
Subsidiary at the date of acquisition of such Subsidiary by the Company or any
Subsidiary of the Company, provided, further, however, that such Indebtedness
-------- ------- -------
was not incurred in connection with, or in contemplation of, such acquisition
(the Company being entitled to rely upon a certificate of such Subsidiary as to
whether such Indebtedness was incurred in contemplation thereof); (C) arising
pursuant to an agreement effecting a refinancing of Indebtedness issued pursuant
to an agreement referred to in the foregoing clause (A) and clause (B), so long
---------- ----------
as the encumbrances and restrictions contained in any such refinancing agreement
are no more restrictive than the encumbrances and restrictions contained in such
agreements; (D) which constitute customary provisions restricting subletting or
assignment of any lease of the Company or any Subsidiary or provisions in
agreements that restrict the assignment of such agreement or any rights
thereunder; and (E) which constitute restrictions on the sale or other
disposition of any property securing Indebtedness as a result of a lien on such
property.
Section 4.18 Limitation on Investments.
-------------------------
The Company shall not, and shall not permit any Subsidiary to make any
Investment other than (a) Investments consisting of non-cash proceeds from Asset
Sales as contemplated by Section 4.16 of this Indenture; (b) Investments
------------
consisting of Cash Equivalents; (c) accounts receivable if credited or acquired
in the ordinary course of business and payable or dischargeable in accordance
with customary trade terms; (d) payroll advances and advances for business and
travel expenses in the ordinary course of business; (e) Investments by the
Company in its Wholly Owned Subsidiaries in the ordinary course of business; (f)
Investments by any Wholly Owned Subsidiary in the Company or in another Wholly
Owned Subsidiary; (g) Investments by the Company for the purpose of acquiring
businesses reasonably related to the business of the Company, in an aggregate
amount not exceeding $10,000,000 in any fiscal year of the Company; (h)
Investments made by way of any endorsement of negotiable instruments received by
the Company or any Subsidiary in the ordinary course of its business and
presented by it to any bank for collection or deposit; (i) stock, obligations or
securities received in settlement of debts created in the ordinary course of
business owing to the Company or any Subsidiary; (j) Investments for the purpose
of acquiring Real Properties permitted to be acquired under Section 4.24 so long
------------
as any such Investment shall be secured by the Real Property so acquired; (k)
Investments in Joint Ventures and Subsidiaries which have been approved by the
Board of Directors, up to a maximum aggregate amount of $10,000,000; provided
that any joint venture involving the development of the Calabasas Property that
is approved by the Board of Directors will not be included in calculating such
maximum aggregate amount and shall not be limited to any maximum aggregate
amount; and (l) in addition to any other permitted investments, any other
Investments by the Company in an aggregate amount not exceeding $5,000,000 at
any time (collectively, the "Permitted Investments").
---------------------
34
Section 4.19 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, plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay, extension law or any usury law or
other law that would prohibit or forgive the Company from paying all or any
portion of the principal of or premium on the Securities as contemplated herein,
wherever enacted, now or at any time hereafter in force, or that may affect the
covenants or the performance of this Indenture; and (to the extent that it may
lawfully do so) the Company 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.
Section 4.20 Limitation on Incurrence of Indebtedness.
----------------------------------------
(a) Except as otherwise set forth in this Section 4.20, the
------------
Company shall not and shall not permit any of its Subsidiaries to, directly or
indirectly, create, incur, issue, assume, guaranty or otherwise become directly
or indirectly liable with respect to, including as a result of an acquisition,
merger or consolidation, extend the maturity of, or otherwise become responsible
for, contingently or otherwise (collectively, "incur") any Indebtedness or any
-----
Disqualified Capital from and after the Closing Date.
(b) Notwithstanding Section 4.20(c) and in addition to
---------------
Indebtedness and Disqualified Capital permitted to be incurred under Section
-------
4.20(c), the Company or any Subsidiary may incur Indebtedness or Disqualified
-------
Capital if, and to the extent that, (i) no Default or Event of Default shall
have occurred and be continuing at the time or as a consequence of the
incurrence of such Indebtedness and (ii) on the date of such incurrence (the
"Incurrence Date"), the Consolidated Coverage Ratio of the Company for the
---------------
Reference Period immediately preceding the Incurrence Date, after giving effect
on a pro forma basis to such incurrence of such Indebtedness or Disqualified
Capital is greater than 2.0 to 1.0.
(c) Notwithstanding Section 4.20(b) and in addition to
---------------
Indebtedness and Disqualified Capital permitted to be incurred under Section
-------
4.20(b), the Company and its Subsidiaries may incur the following Indebtedness:
-------
(i) Indebtedness evidenced by the Securities and the Guarantees; (ii) Existing
Indebtedness; (iii) non-recourse Indebtedness incurred in the ordinary course of
business for Purchase Money Obligations; (iv) Indebtedness in respect of
performance, completion, payment, guarantee, surety and similar bonds, banker's
acceptances or letters of credit provided by the Company in the ordinary course
of business; (v) Indebtedness under any Working Capital Line in an amount at any
one time not to exceed $40,000,000; (vi) Permitted Construction Financing in an
amount at any one time not to exceed $80,000,000; (vii) Calabasas Financing; and
(viii) Refinancing Indebtedness; provided, however, that to the extent any
-------- -------
Indebtedness permitted pursuant to clause (ii), (v) or (viii) of this paragraph
----------- --- ------
is repaid with the proceeds from Asset Sales in accordance with the procedures
described in Section 4.16, such Indebtedness may not be reincurred.
------------
35
Section 4.21 Additional Subsidiary Guarantors.
--------------------------------
The Company shall cause each of its current Subsidiaries to execute the
Guaranty and any other Subsidiary created or acquired after the Closing Date
(each, an "Additional Guarantor") to execute a guaranty providing that such
--------------------
Additional Guarantor guarantees the Obligations of the Company in accordance
with the terms of the Guaranty and that all terms of the Guaranty applying to
the current Subsidiaries shall apply with the same effect to such Additional
Guarantor(s), and to deliver copies of the Guaranty to the Trustee.
Section 4.22 Limitation of Liens.
-------------------
The Company shall not, and shall not permit any of its Subsidiaries to,
create, incur or assume any Lien upon any of their respective properties or
assets (including assets acquired after the date of this Indenture), except for
Permitted Liens. This Section 4.22 does not authorize the incurrence of any
------------
Indebtedness not otherwise permitted by Section 4.20.
------------
Section 4.23 Payments for Consent.
--------------------
The Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, pay or cause to be paid any consideration, whether by
way of interest, fee or otherwise, to any Holder for or as an inducement to any
consent, waiver or amendment of any of the terms or provisions of the Indenture
or the Securities unless such consideration is offered to be paid or agreed to
be paid to all Holders that consent, waive or agree to amend in the time frame
set forth in the solicitation documents relating to such consent, waiver or
amendment.
Section 4.24 Real Property Acquisitions.
--------------------------
The Company shall not, and the Company shall not permit any of its
Subsidiaries to, acquire or enter into any commitment to acquire any additional
Real Property; provided, however, that, subject to the provisions of Section
-------- ------- -------
4.18, the Company and its Subsidiaries may acquire the following Real Property:
----
(a) any Real Property, so long as such Real Property is purchased at
no more than its Appraised Value; and
(b) Real Property previously owned by the Company or any of its
Subsidiaries that has been sold and which is encumbered by a purchase money
mortgage in favor of the Company or any of its Subsidiaries that is in
default.
Section 4.25 Maintenance and Alterations.
---------------------------
The Company and the Subsidiaries shall preserve and maintain the Real
Property in good order, repair and condition, and free from any damage from
casualty or condemnation, which damage or condemnation could have a material
adverse affect on its business operations or financial condition, and shall not
permit or commit waste on the Real Property and shall cause each and every part
of the Real Property to comply in all material respects with all applicable
Federal, state and local laws and governmental regulations, and any lawful
private restrictions or other requirements or provisions relating to the
development, operation, maintenance or use of
36
the Real Property, including, without limitation, the terms and provisions of
any mortgages or other agreements or instruments constituting Permitted Liens.
Section 4.26 Certain Environmental Matters.
-----------------------------
The Company and the Subsidiaries shall (a) strictly comply with all
applicable requirements of any Environmental Law; (b) provide the Trustee with
written notice immediately upon obtaining knowledge of (i) any potential or
known release, or threat of release, of any Hazardous Substances or oil at or
from the Real Properties or upon receiving notice from any Federal, state or
other environmental agency or authority in connection with the foregoing
matters, including the assessment, containment or removal of any Hazardous
Substance from its properties; or (ii) and any non-compliance with or challenge
to any zoning requirement, applicable license or permit, or any other
Environmental Law.
ARTICLE FIVE
HOLDERS LISTS AND REPORTS BY COMPANY AND THE TRUSTEE
Section 5.1 The Company to Furnish Trustee Information as to Names and
----------------------------------------------------------
Addresses of Holders.
--------------------
If and so long as the Trustee shall not be the Security registrar for the
Securities, the Company covenants and agrees that it will furnish or cause to be
furnished to the Trustee a list in such form as the Trustee may reasonably
require of the names and addresses of the Holders of the Securities pursuant to
TIA (S) 312(a):
(a) semiannually, and
(b) at such other times as the Trustee may request in writing.
Section 5.2 Disclosure of Names and Addresses of Holders.
--------------------------------------------
Each and every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the Trustee
nor any agent of the Company or the Trustee shall be held accountable by reason
of the disclosure of any such information as to the names and addresses of the
Holders of Securities in accordance with TIA (S) 312(a), regardless of the
source from which such information was derived, and that the Trustee shall not
be held accountable by reason of mailing any material pursuant to a request made
under TIA (S) 312(b).
Section 5.3 Reports by the Trustee.
----------------------
Any Trustee's report required under TIA (S) 313 shall be transmitted on or
before July 15th in each year beginning July 15, 2000, in the manner and to the
extent provided in TIA (S) 313(c), so long as any Securities are outstanding
hereunder, and shall be dated as of a date convenient to the Trustee no more
than 60 days prior thereto.
37
ARTICLE SIX
CONSOLIDATION, MERGER, CONVEYANCE OR TRANSFER
Section 6.1 Merger or Consolidation.
-----------------------
The Company shall not, and shall not permit any of its Subsidiaries to,
consolidate with or merge into any other Person or convey, lease, transfer or
otherwise dispose of all or substantially all of its assets whether in a single
transaction or a series of related transactions to any Person or group of
Persons (within the meaning of Section 13(d)(3) of the Exchange Act), unless:
(a) if the transaction involves the Company or a Subsidiary, either
(i) the Company or such Subsidiary, as the case may be, is the continuing
entity, and in the case of a Subsidiary, (x) such Subsidiary remains a
Subsidiary of the Company and (y) the Guarantees remain in full force and
effect and the rights of the Holders thereunder and under this Indenture
and the other Applicable Documents are not to be adversely affected as a
result thereof, or (ii) the corporation or other entity formed by such
consolidation or into which the Company or the Subsidiary, as the case may
be, is merged or the Person that acquires by conveyance, lease or transfer
the properties and assets of the Company or the Subsidiary, as the case may
be, substantially as an entirety shall be a corporation or other legal
entity organized and existing under the laws of the United States of
America or any State or the District of Columbia, and shall expressly
assume, by an indenture supplemental hereto (or in the case of a
Subsidiary, by becoming a Guarantor either by operation of law or by
executing a Guaranty Agreement), executed and delivered to the Trustee, in
form satisfactory to the Trustee, the Company's obligation for the due and
punctual payment of the principal of, interest on overdue payments and
premium, if any, on all the Securities according to their tenor and the
performance of every covenant of this Indenture on the part of the Company
to be performed or observed or the Subsidiary's obligations in connection
with the Guarantees, as applicable, and the rights of the Holders under the
Securities are not adversely affected as a result thereof;
(b) immediately before and after giving effect to such transaction,
no Event of Default, and no event that, after notice or lapse of time, or
both, would become an Event of Default, shall have happened and be
continuing;
(c) other than in the case of a transaction between the Company and
a Wholly Owned Subsidiary or between Wholly Owned Subsidiaries of the
Company, immediately after giving effect to such transaction and the use of
any net proceeds therefrom on a pro forma basis, the Consolidated Net Worth
of the consolidated surviving or transferee entity is at least equal to the
Consolidated Net Worth of the Company or such Subsidiary, as the case may
be, immediately prior to such transaction;
(d) other than in the case of a transaction solely between the
Company and any Wholly Owned Subsidiary or between Wholly Owned
Subsidiaries of the Company or a Corporate Reorganization, the consolidated
surviving or transferee entity would,
38
immediately after giving effect to such transaction on a pro forma basis,
be permitted to incur at least $1.00 of additional Indebtedness pursuant to
Section 4.20; and
------------
(e) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel each stating that such consolidation,
merger, conveyance, lease or transfer and such supplemental indenture, if
applicable, comply with this Article Six and that all conditions precedent
-----------
herein provided for relating to such transaction have been complied with.
Section 6.2 Successor Corporation Substituted.
---------------------------------
Upon any consolidation or merger by the Company with or into any other
corporation, or any conveyance or transfer by the Company of its properties and
assets substantially as an entirety to any Person, in accordance with Section
-------
6.1, the successor corporation formed by such consolidation or into which the
---
Company is merged or to which such conveyance or transfer is made shall succeed
to, and be substituted for, and may exercise every right and power of, the
Company under this Indenture with the same effect as if such successor
corporation had been named as the Company and in the event of any such
conveyance or transfer, the Company, except in the event of a conveyance by way
of lease, shall be discharged from all obligations and covenants under this
Indenture and the Securities and may be dissolved and liquidated. Such successor
corporation may cause to be signed, and may issue either in its own name or in
the name of the Company prior to such succession, any or all of the Securities
issuable hereunder that theretofore shall not have been signed by the Company
and delivered to the Trustee; and, upon the order of such successor corporation,
instead of the Company and subject to all the terms, conditions and limitations
in this Indenture prescribed, the Trustee shall authenticate and shall deliver
any Securities that previously shall have been signed and delivered by the
officers of the Company to the Trustee for authentication, and any Securities
that such successor corporation thereafter shall, cause to be signed and
delivered to the Trustee for that purpose. All the Securities so issued shall in
all respects have the same legal rank and benefit under this Indenture as the
Securities theretofore or thereafter issued in accordance with the terms of this
Indenture as though all of such Securities had been issued at the date of the
execution hereof.
In case of any such consolidation, merger, conveyance or transfer, such
changes in phrasing and form (but not in substance) may be made in the
Securities that may be endorsed thereon, as the case may be, thereafter to be
delivered as may be appropriate.
ARTICLE SEVEN
REMEDIES OF THE TRUSTEE AND HOLDERS ON
EVENT OF DEFAULT
Section 7.1 Event of Default Defined; Acceleration of Maturity; Waiver of
-------------------------------------------------------------
Default.
-------
"Event of Default", with respect to the Securities, means any one of the
----------------
following events that shall have occurred and be continuing (whatever the reason
for such Event of Default and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any
39
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(a) default in the payment of the principal of or premium, if any,
on any Security when the same becomes due and payable, at maturity, upon
acceleration, redemption or otherwise (including the failure to make a
payment pursuant to Section 4.12 or Section 4.16 hereof);
------------ ------------
(b) the Company or a Subsidiary defaults in the performance of or
breaches any other covenant or agreement of the Company or a Subsidiary in
this Indenture or any other Applicable Documents or under the Securities
and such default or breach continues for a period of 30 consecutive days
after the date on which written notice specifying such failure, stating
that such notice is a "Notice of Default" under the Indenture and demanding
that the Company remedy the same, shall have been given by registered or
certified mail, return receipt requested, to the Company by the Trustee or
to the Company and the Trustee by the Holders of 25% or more in aggregate
principal amount of the Securities Outstanding;
(c) there occurs with respect to any issue or issues of
Indebtedness of the Company and/or one or more Subsidiaries having an
outstanding principal amount of $15,000,000 or more in the aggregate for
all such issues of all such Persons, whether such Indebtedness now exists
or shall hereafter be created, an event of default that has caused the
holder thereof to declare such Indebtedness to be due and payable prior to
its Stated Maturity and such Indebtedness has not been discharged in full
or such acceleration has not been rescinded or annulled within 30 days of
such acceleration;
(d) any final judgment or order (not covered by insurance) for the
payment of money in excess of $15,000,000 in the aggregate for all such
final judgments or orders against all such Persons (treating any
deductibles, self-insurance or retention as not so covered) shall be
rendered against the Company or any Subsidiary and shall not be discharged,
and there shall be any period of 60 consecutive days following entry of the
final judgment or order that causes the aggregate amount for all such final
judgments or orders outstanding against all such Persons to exceed
$10,000,000 during which a stay of enforcement of such final judgment or
order, by reason of a pending appeal or otherwise, shall not be in effect;
(e) a court having jurisdiction in the premises enters a decree or
order for (i) relief in respect of the Company or any Subsidiary in an
involuntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, (ii) appointment of a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official
of the Company or any Subsidiary or for all or substantially all of the
property and assets of the Company or any Subsidiary or (iii) the winding
up or liquidation of the affairs of the Company or any Subsidiary and, in
each case, such decree or order shall remain unstayed and in effect for a
period of 60 consecutive days;
(f) the Company or any Subsidiary (i) commences a voluntary case
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or
40
consents to the entry of an order for relief in an involuntary case under
any such law, (ii) consents to the appointment of or taking possession by a
receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official of the Company or any Subsidiary or for all or substantially all
of the property and assets of the Company or any Subsidiary or (iii)
effects any general assignment for the benefit of creditors of the Company
or any Subsidiary;
(g) the Company and/or one or more Subsidiaries fail to make at the
final (but not any interim) fixed maturity if one or more issues of
Indebtedness a principal payment or principal payments aggregating more
than $10,000,000 and all such defaulted payments shall not have been made,
waived or extended within 30 days of the payment default that caused the
aggregate amount of such defaulted payments to exceed $10,000,000; or
(h) any of the Applicable Documents shall cease, for any reason, to
be in full force and effect in any material respect, except as a result of
an amendment, waiver or termination thereof as contemplated or permitted
therein.
If an Event of Default (other than an Event of Default specified in clause
------
(e) or (f) above that occurs with respect to the Company) occurs and is
--- ---
continuing, the Trustee or the Holders of at least 25% of the aggregate
principal amount of the Securities then Outstanding, by written notice to the
Company (and to the Trustee if such notice is given by the Holders (the
"Acceleration Notice")), may, and the Trustee at the request of the Holders
-------------------
shall, declare the entire unpaid principal and premium, if any, on the
Securities to be immediately due and payable as specified below. Upon a
declaration of acceleration, such principal and premium, if any, shall be
immediately due and payable. In the event of a declaration of acceleration
because an Event of Default set forth in clause (c) above has occurred and is
----------
continuing, such declaration of acceleration shall be automatically rescinded
and annulled if the event of default triggering such Event of Default shall be
remedied, cured by the Company or waived by the holders of the relevant
Indebtedness within 30 days after the occurrence of the Event of Default with
respect thereto and the Company has delivered an Officers' Certificate as to
such effect. If an Event of Default specified in clause (e) or (f) above occurs
--------- ---
with respect to the Company, all unpaid principal of and premium, if any, on the
Securities then outstanding shall ipso facto become and be immediately due and
---- -----
payable without declaration or other act on the part of the Trustee or any
Holder.
The Holders of at least a majority in principal amount of the outstanding
Securities, by written notice to the Company and the Trustee, may waive all past
defaults and rescind and annul a declaration of acceleration and its
consequences if (i) all existing Events of Default, other than the non-payment
of the principal of and premium, if any, on Securities that have become due
solely by such declaration of acceleration, have been cured or waived and (ii)
the rescission would not conflict with any judgment or decree of a court of
competent jurisdiction.
Upon receipt by the Trustee of any Notice of Default pursuant to this
Section 7.1 with respect to Securities all or part of which are represented by a
-----------
Global Security, a record date shall be established for determining Holders of
Outstanding Securities entitled to join in such Notice of Default, which record
date shall be at the close of business on the day the Trustee receives
41
such Notice of Default. The Holders on such record date, or their duly
designated proxies, and only such Persons, shall be entitled to join in such
Notice of Default, whether or not such Holders remain Holders after such record
date; provided, however, that unless Holders of at least 25% in principal
-------- -------
amount of the Outstanding Securities, or their proxies, shall have joined in
such Notice of Default prior to the day which is 90 days after such record date,
such Notice of Default shall automatically and without further action by any
Holder be canceled and of no further effect. Nothing in this paragraph shall
prevent a Holder, or a proxy of a Holder, from giving, after expiration of such
90-day period, a new Notice of Default identical to a Notice of Default which
has been canceled pursuant to the proviso to the preceding sentence, in which
event a new record date shall be established pursuant to the provisions of this
Section 7.1 .
-----------
Upon receipt by the Trustee of any Acceleration Notice or any rescission
and annulment thereof, with respect to Securities all or part of which are
represented by a Global Security, a record date shall be established for
determining Holders of Outstanding Securities entitled to join in such notice,
which record date shall be at the close of business on the day the Trustee
receives such notice. The Holders on such record date, or their duly designated
proxies, and only such Persons, shall be entitled to join in such notice,
whether or not such Holders remain Holders after such record date; provided,
--------
however, that unless such declaration of acceleration, or rescission and
-------
annulment, as the case may be, shall have become effective by virtue of the
requisite percentage having joined in such notice prior to the day which is 90
days after such record date, such notice of declaration of acceleration or
rescission and annulment, as the case may be, shall automatically and without
further action by any Holder be canceled and of no further effect. Nothing in
this paragraph shall prevent a Holder, or a proxy of a Holder, from giving,
after expiration of such 90-day period, a new written notice of declaration of
acceleration, or rescission and annulment thereof, as the case may be, that is
identical to a written notice which has been canceled pursuant to the proviso to
the preceding sentence, in which event a new record date shall be established
pursuant to the provisions of this Section 7.1.
-----------
Section 7.2 Collection of Indebtedness by Trustee; Trustee May Prove Debt.
-------------------------------------------------------------
The Company covenants that in case default shall be made in the payment of
all or any part of the principal of any of the Securities when the same shall
have become due and payable, whether upon maturity of the Securities or upon any
redemption or by declaration or otherwise, then upon demand of the Trustee, the
Company will pay to the Trustee for the benefit of the Holders of the Securities
the whole amount that then shall have become due and payable on all Securities
for principal (with interest to the date of such payment upon the overdue
principal and premium, if any, to the extent that payment of such interest is
enforceable under applicable law, at the rate of 6.62% per annum); and in
addition thereto, such further amount as shall be sufficient to cover the costs
and expenses of collection, including reasonable compensation to the Trustee and
each predecessor Trustee, their respective agents, attorneys and counsel, and
any expenses and liabilities incurred, and all advances made by the Trustee and
each predecessor Trustee except as a result of its negligence or bad faith.
42
Until such demand is made by the Trustee, the Company may pay the principal
of and premium, if any, on the Securities to the registered Holders, whether or
not the Securities are overdue.
In case the Company shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any action or proceedings at law or
inequity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceedings to judgment or final decree, and may enforce any such
judgment or final decree against the Company or other obligor upon the
Securities and collect in the manner provided by law out of the property of the
Company or other obligor upon the Securities, wherever situated the monies
adjudged or decreed to be payable.
In case there shall be pending proceedings relative to the Company or any
other obligor upon the Securities under Title 11 of the United States Code or
any other applicable Federal or state bankruptcy, insolvency or other similar
law, or in case a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for or
taken possession of the Company or the property of the Company or such other
obligor, or in case of any other judicial proceedings relative to the Company or
other obligor upon the Securities, or to the creditors or property of the
Company or such other obligor, the Trustee, irrespective of whether the
principal of the Securities shall then be due and payable as therein expressed
or by declaration or otherwise and irrespective of whether the Trustee will have
made any demand pursuant to the provisions of this Section, shall be entitled
and empowered, by intervention in such proceedings or otherwise:
(i) to file and prove a claim or claims for the whole amount of
principal, interest on overdue payments and premium, if any, owing and
unpaid in respect of the Securities and to file such other papers or
documents as may be necessary or advisable in order to have the claims of
the Trustee (including any claim for reasonable compensation to the Trustee
and each predecessor Trustee and their respective agents, attorneys and
counsel, and for reimbursement of all expenses and liabilities incurred,
and all advances made, by the Trustee and each predecessor Trustee, except
as a result of negligence or bad faith) and of the Holders allowed in any
judicial proceedings relative to the Company or other obligor upon the
Securities, or to the creditors or property of the Company or such other
obligor;
(ii) unless prohibited by applicable law and regulations, to vote on
behalf of the Holders of the Securities in any election of a trustee or a
standby trustee in arrangement, reorganization, liquidation or other
bankruptcy or insolvency proceedings or person performing similar functions
in comparable proceedings; and
(iii) to collect and receive any monies or other property payable or
deliverable on any such claims, and to distribute all amounts received with
respect to the claims of the Holders and of the Trustee on their behalf;
and any trustee, receiver, or liquidator, custodian or other similar
official is hereby authorized by each of the Holders to make payments to
the Trustee, and, in the event that the Trustee shall consent to the making
of payments directly to the Holders, to pay to the Trustee such amounts as
shall be sufficient to cover reasonable compensation to the Trustee, each
predecessor Trustee and their respective agents, attorneys and counsel, and
all other expenses and liabilities incurred,
43
and all advances made, by the Trustee and each predecessor Trustee except
as a result of negligence or bad faith.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or vote for or accept or adopt on behalf of any Holder
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 in any such proceeding except, as
aforesaid, to vote for the election of a trustee in bankruptcy or similar
person.
All rights of action and of asserting claims under this Indenture, or under
any of the Securities may be enforced by the Trustee without the possession of
any of the Securities or the production thereof in any trial or other
proceedings relative thereto, and any such action or proceedings instituted by
the Trustee shall be brought in its own name as trustee of an express trust, and
any recovery of judgment, subject to the payment of the expenses, disbursements
and compensation of the Trustee, each predecessor Trustee and their respective
agents and attorneys, shall be for the ratable benefit of the Holders of the
Securities in respect of which such judgment has been recovered.
In any proceedings brought by the Trustee (and also any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party) the Trustee shall be held to represent all the Holders
of the Securities in respect of which such action was taken, and it shall not be
necessary to make any Holders of such Securities parties to any such
proceedings.
Section 7.3 Application of Proceeds.
-----------------------
Any monies collected by the Trustee pursuant to this Article Seven in
-------------
respect of the Securities shall be applied in the following order at the date or
dates fixed by the Trustee and, in the case of the distribution of such monies
on account of principal or otherwise, upon presentation of the several
Securities in respect of which monies have been collected and stamping (or
otherwise noting) thereon the payment, or issuing Securities in reduced
principal amounts in exchange for the presented Securities if only partially
paid, or upon surrender thereof if fully paid:
FIRST: To the payment of amounts due the Trustee or any
predecessor Trustee under Section 8.6;
-----------
SECOND: In case the principal of the Securities shall have become
and shall be then due and payable, to the payment of the whole amount then
owing and unpaid upon all the Securities for principal, with interest upon
the overdue principal at the rate of 6.62% per annum; and
THIRD: To the payment of the remainder, if any, to the Company or
any other person lawfully entitled thereto.
44
Section 7.4 Suits for Enforcement.
---------------------
In case an Event of Default has occurred, has not been waived and is
continuing, the Trustee may in its discretion proceed to protect and enforce the
rights vested in it by this Indenture by such appropriate judicial proceedings
as the Trustee shall deem most effectual to protect and enforce any of such
rights, either at law or in equity or in bankruptcy or otherwise, whether for
the specific enforcement of any covenant or agreement contained in this
Indenture or in aid of the exercise of any power granted in this Indenture or to
enforce any other legal or equitable right vested in the Trustee by this
Indenture or by law.
Section 7.5 Restoration of Rights on Abandonment of Proceedings.
---------------------------------------------------
In case the Trustee shall have proceeded to enforce any right under this
Indenture and such proceedings shall have been discontinued or abandoned for any
reason, or shall have been determined adversely to the Trustee, then and in
every such case the Company and the Trustee shall be restored respectively to
their former positions and rights hereunder, and all rights, remedies and powers
of the Company, the Trustee and the Holders shall continue as though no such
proceedings had been taken.
Section 7.6 Limitations on Suits by Holders.
-------------------------------
A Holder of Securities may not pursue any remedy with respect to this
Indenture or the Securities unless: (a) such Holder gives to the Trustee
written notice of a continuing Event of Default; (b) the Holders of at least 25%
in aggregate principal amount of outstanding Securities make a written request
to the Trustee to pursue the remedy; (c) such Holder or Holders offer to the
Trustee indemnity satisfactory to the Trustee against any costs, liability or
expense; (d) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer of indemnity; and (e) during such 60-day
period, the Holders of a majority in aggregate principal amount of the
outstanding Securities do not give the Trustee a direction that is inconsistent
with the request.
For purposes of this Section 7.6, the Trustee shall comply with TIA (S)
-----------
316(a) in making any determination of whether the Holders of the required
aggregate principal amount of outstanding Securities have concurred in any
request or direction of the Trustee to pursue any remedy available to the
Trustee or the Holders with respect to this Indenture or the Securities or
otherwise under the law.
A Holder of Securities may not use this Indenture to prejudice the rights
of another Holder or to obtain a preference or priority over such other Holder.
45
Section 7.7 Unconditional Right of Holders to Institute Certain Suits.
---------------------------------------------------------
Notwithstanding any other provision in this Indenture and any provision of
any Security, the right of any Holder of any Security to receive payment of the
principal of and premium, if any, on such Security on or after the respective
due dates expressed in such Security, or to institute suit for the enforcement
of any such payment on or after such respective dates, shall not be impaired or
affected without the consent of such Holder.
Section 7.8 Powers and Remedies Cumulative; Delay or Omission Not Waiver of
---------------------------------------------------------------
Default.
-------
Except as provided in Section 7.6, no right or remedy herein conferred upon
-----------
or reserved to the Trustee or to the Holders is intended to be exclusive of any
other right or remedy, and every right and remedy shall, to the extent permitted
by law, be cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder, or otherwise, shall
not prevent the concurrent assertion or employment of any other appropriate
right or remedy.
No delay or omission of the Trustee or of any Holder to exercise any right
or power accruing upon any Event of Default occurring and continuing as
aforesaid shall impair any such right or power or shall be construed to be a
waiver of any such Event of Default or an acquiescence therein; and, subject to
Section 7.6, every power and remedy given by this Indenture or by law to the
-----------
Trustee or to the Holders may be exercised from time to time, and as often as
shall be deemed expedient, by the Trustee or by the Holders.
Section 7.9 Control by Holders of Securities.
--------------------------------
The Holders of a majority in aggregate principal amount of the Securities
at the time outstanding shall have the right to 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 by this Indenture; provided, however, that such direction shall not
-------- -------
be otherwise than in accordance with law and the provisions of this Indenture;
and provided, further, that (subject to the provisions of Section 8.1) the
-------- ------- -----------
Trustee shall have the right to decline to follow any such direction if the
Trustee, being advised by counsel, shall determine that the action or proceeding
so directed may not lawfully be taken or if the Trustee in good faith by its
Board of Directors, the executive committee, or a trust committee of directors
or Responsible Officers of the Trustee shall determine that the action or
proceedings so directed would involve the Trustee in personal liability or if
the Trustee in good faith shall so determine that the actions or forbearance
specified in or pursuant to such direction would be unduly prejudicial to the
interests of Holders not joining in the giving of said direction. It being
understood that (subject to Section 8.1) the Trustee shall have no duty to
-----------
ascertain whether or not such actions or forbearance are unduly prejudicial to
such Holders.
Nothing in this Indenture shall impair the right of the Trustee in its
discretion to take any action deemed proper by the Trustee and that is not
inconsistent with such direction or directions by the Holders.
46
Upon receipt by the Trustee of any written notice directing the time,
method or place of conducting any such proceeding or exercising any such trust
or power, with respect to Securities all or part of which are represented by a
Global Security, a record date shall be established for determining Holders of
Outstanding Securities entitled to join in such notice, which record date shall
be at the close of business on the day the Trustee receives such notice. The
Holders on such record date, or their duly designated proxies, and only such
Persons, shall be entitled to join in such notice, whether or not such Holders
remain Holders after such record date; provided, however, that unless the
-------- -------
Holders of a majority in principal amount of the Outstanding Securities shall
have joined in such notice prior to the day which is 90 days after such record
date, such notice shall automatically and without further action by any Holder
be canceled and of no further effect. Nothing in this paragraph shall prevent a
Holder, or a proxy of a Holder, from giving, after expiration of such 90-day
period, a new notice identical to a notice which has been canceled pursuant to
the proviso to the preceding sentence, in which event a new record date shall be
established pursuant to the provisions of this Section 7.9.
-----------
Section 7.10 Waiver of Past Defaults.
-----------------------
Subject to Sections 7.1 and 7.7, the Holders of at least a majority in
------------ ---
principal amount of the outstanding Securities, by notice to the Trustee, may
waive an existing Event of Default and its consequences, except a default in the
payment of principal on any Security as specified in clause (a) of Section 7.1.
---------- -----------
The Company may, but shall not be obligated to, fix record date for the
purpose of determining the Persons entitled to waive any past default hereunder.
If a record date is fixed, the Holders on such record date, or their duly
designated proxies, and only such Persons, shall be entitled to waive any
default hereunder, whether or not such Holders remain Holders after such record
date; provided, however, that unless such majority in principal amount shall
-------- -------
have waived such default prior to the date which is 90 days after such record
date, any such waiver previously given shall automatically and without further
action by any Holder be canceled and of no further effect.
Upon any such waiver, such Default shall cease to exist and be deemed to
have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured, and not to have occurred for every
purpose of this Indenture, but no such waiver shall extend to any subsequent or
other Default or Event of Default or impair any right consequent thereon.
Section 7.11 Trustees to Give Notice of Default, But May Withhold in Certain
---------------------------------------------------------------
Circumstances.
-------------
The Trustee shall in accordance with TIA (S) 315(b), within 90 days after
the occurrence of a Default with respect to the Securities, give notice of all
Defaults known to the Trustee to all Holders of Securities in the manner and to
the extent provided in TIA (S) 313(c), unless in each case such Defaults shall
have been cured before the mailing or publication of such notice; provided,
--------
however, that, except in the case of Default in the payment of the principal of
-------
any of the Securities, the Trustee shall be protected in withholding such notice
if and so long as the Board of Directors, the executive committee, or a trust
committee of directors or trustees or
47
Responsible Officers of the Trustee, or any combination of the foregoing, in
good faith determines that the withholding of such notice is in the interests of
the Holders.
Section 7.12 Right of Court to Require Filing of Undertaking to Pay Costs.
------------------------------------------------------------
All parties to this Indenture agree, and each Holder of any Security by its
acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, 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, suffered
or omitted by it as Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merit and good
faith of the claims or defenses made by such party litigant; provided, however,
-------- -------
that the provisions of this Section shall not apply to any suit instituted by
the Trustee, to any suit instituted by any Holder or group of Holders holding in
the aggregate more than 10% in aggregate principal amount of the Securities or
to any suit instituted by any Holder for the enforcement of the payment of the
principal of or interest, if any, on any Security on or after the due date
expressed in such Security or any date fixed for redemption.
ARTICLE EIGHT
CONCERNING THE TRUSTEE
Section 8.1 Duties and Responsibilities of the Trustee; During Default; Prior
-----------------------------------------------------------------
to Default.
----------
With respect to the Holders of the Securities issued hereunder, the
Trustee, prior to the occurrence of an Event of Default with respect to the
Securities and after the curing or waiving of all Events of Default that may
have occurred, has undertaken to perform such duties and only such duties as are
specifically set forth in this Indenture. In case an Event of Default with
respect to the Securities has occurred (that has not been cured or waived), the
Trustee shall exercise with respect to such Securities 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 man would exercise or use under the
circumstances in the conduct of his own affairs.
No provision of this Indenture shall be construed to relieve the Trustee
from liability for its own negligent action, its own negligent failure to act or
its own willful misconduct, except that:
(a) prior to the occurrence of an Event of Default with respect
to the Securities and after the curing or waiving of all such Events of
Default with respect to such Securities that may have occurred:
(i) the duties and obligations of the Trustee with respect to
the Securities shall be determined solely by the express provisions of
this Indenture, and the Trustee shall not be liable except for the
performance of such duties and obligations as are specifically set
forth in this Indenture, and no implied covenants or obligations shall
be read into this Indenture against the Trustee; and
48
(ii) in the absence of bad faith on the part of the Trustee,
the Trustee may conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed therein, upon any
statements, certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture; but in the case of
any such statements, certificates or opinions that by any provision
hereof are specifically required to be furnished to the Trustee, the
Trustee shall be under a duty to examine the same to determine whether
or not they conform to the requirements of this Indenture;
(b) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer or Responsible Officers of the
Trustee, unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts; and
(c) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders pursuant to Section 7.9 relating to the time,
-----------
method and place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred upon the Trustee,
under this Indenture.
None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if there shall be reasonable ground for believing that the
repayment of such funds or adequate indemnity against such liability is not
reasonably assured to it.
Whether or not therein expressly so provided, every provision of this
Indenture relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Section.
The provisions of this Section 8.1 are in furtherance of and subject to TIA
-----------
(S) 315.
Section 8.2 Certain Rights of the Trustee.
-----------------------------
In furtherance of and subject to the TIA, and subject to Section 8.1:
-----------
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, Officers' Certificate or any
other certificate, statement, instrument, opinion, report, notice, request,
consent, order, bond, debenture, note, coupon, security or other paper or
document believed by it to be genuine and to have been signed or presented
by the proper party or parties;
(b) any request, direction, order or demand of the Company
mentioned herein shall be sufficiently evidenced by an Officers'
Certificate of the Company (unless other evidence in respect thereof be
herein specifically prescribed); and any resolution of the Board of
Directors of the Company may be evidenced to the Trustee by a copy thereof
certified by the secretary or an assistant secretary of the Company;
49
(c) the Trustee may consult with counsel and any written advice or
any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted to be taken
by it hereunder in good faith and in reliance thereon in accordance with
such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any of
the trusts or powers vested in it by this Indenture at the request, order
or direction of any of the Holders pursuant to the provisions of this
Indenture, unless such Holders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities that
might be incurred therein or thereby;
(e) the Trustee shall not be liable for any action taken or
omitted by it in good faith and believed by it to be authorized or within
the discretion, rights or powers conferred upon it by this Indenture; and
(f) prior to the occurrence of an Event of Default hereunder and
after the curing or waiving of all Events of Default, the Trustee shall not
be bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, appraisal, bond, debenture, note,
coupon, security, or other paper or document unless requested in writing to
so do by the Holders of not less than a majority in aggregate principal
amount of the Securities then Outstanding; provided, however, that, if the
-------- -------
payment within a reasonable time to the Trustee of the costs, expenses, or
liabilities likely to be incurred by it in the making of such investigation
is, in the opinion of the Trustee, not reasonably assured to the Trustee by
the security afforded to it by the terms of this Indenture, the Trustee may
require reasonable indemnity against such expenses or liabilities as a
condition to proceeding; the reasonable expenses of every such
investigation shall be paid by the Company or, if paid by the Trustee or
any predecessor Trustee, shall be repaid by the Company upon demand.
Section 8.3 Trustee Not Responsible for Recitals, Disposition of Securities or
------------------------------------------------------------------
Application of Proceeds Thereof.
-------------------------------
The recitals contained herein and in the Securities, except the Trustee's
certificates of authentication, shall be taken as the statements of the Company
and the Trustee assumes no responsibility for the correctness of the same. The
Trustee makes no representation as to the validity or sufficiency of this
Indenture or of the Securities. The Trustee shall not be accountable for the
use or application by the Company of any of the Securities or of the proceeds
thereof.
The Trustee shall have no duty to inquire as to the performance of the
Company's covenants in Article Four hereof. In addition, the Trustee shall not
------------
be deemed to have knowledge of any Default or Event of Default, except (a) any
Default or Event of Default occurring pursuant to Section 7.1(a) or Section 4.1,
-------------- -----------
or (b) any Default or Event of Default of which the Trustee shall have received
written notification or obtained actual knowledge.
50
Section 8.4 Trustee and Agents May Hold Securities; Collections, etc.
---------------------------------------------------------
The Trustee or any agent of the Company or the Trustee, in its individual
or any other capacity, may become the owner or pledgee of Securities with the
same rights it would have if it were not the Trustee or such agent and may
otherwise deal with the Company and receive, collect, hold and retain
collections from the Company with the same rights it would have if it were not
the Trustee or such agent.
Section 8.5 Monies Held by Trustee.
----------------------
Subject to the provisions of Section 11.4 hereof, all monies received by
------------
the Trustee shall, until used or applied as herein provided, be held in trust
for the purposes for which they were received, but need not be segregated from
other funds except to the extent required by mandatory provisions of law.
Neither the Trustee nor any agent of the Company or the Trustee shall be under
any liability for interest on any monies received by it hereunder.
Section 8.6 Compensation and Indemnification of Trustee and Its Prior Claim.
---------------------------------------------------------------
The Company covenants and agrees to pay to the Trustee from time to time,
and the Trustee shall be entitled to, reasonable compensation (which shall not
be limited by any provision of law in regard to the compensation of a trustee of
an express trust) and the Company covenants and agrees to pay or reimburse the
Trustee and each predecessor Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by or on behalf of it in
accordance with any of the provisions of this Indenture (including the
reasonable compensation and the expenses and disbursements of its counsel and of
all agents and other persons not regularly in its employ) except any such
expense, disbursement or advance as may arise from its negligence or bad faith.
The Company also covenants to indemnify the Trustee and each predecessor Trustee
for, and to hold it harmless against, any loss, liability or expense incurred,
without negligence or bad faith on its part, arising out of or in connection
with the acceptance or administration of this Indenture or the trusts hereunder
and its duties hereunder, including the costs and expenses of defending itself
against or investigating any claim of liability in the premises. The
obligations of the Company under this Section to compensate and indemnify the
Trustee and each predecessor Trustee and to pay or reimburse the Trustee and
each predecessor Trustee for expenses, disbursements and advances shall
constitute additional indebtedness of the Company hereunder and shall survive
the satisfaction and discharge of this Indenture. Such additional indebtedness
shall be a senior claim to that of the Securities upon all property and funds
held or collected by the Trustee as such, except funds held in trust for the
benefit of the Holders of particular Securities, and the Securities are hereby
subordinated to such senior claim.
Section 8.7 Right of Trustee to Rely on Officers' Certificate, etc.
-------------------------------------------------------
Subject to Sections 8.1 and 8.2, whenever in the administration of this
------------ ---
Indenture the Trustee shall deem it necessary or desirable that a matter be
proved or established prior to taking or suffering or omitting any action
hereunder, such matter (unless other evidence in respect thereof be herein
specifically prescribed) may, in the absence of negligence or bad faith on the
part of the Trustee, be deemed to be conclusively proved and established by an
Officers'
51
Certificate of the Company delivered to the Trustee, and such certificate, in
the absence of negligence or bad faith on the part of the Trustee, shall be full
warrant to the Trustee for any action taken, suffered or omitted by it under the
provisions of this Indenture upon the faith thereof.
Section 8.8 Persons Eligible for Appointment as Trustee.
-------------------------------------------
The Trustee shall at all times be a corporation organized and doing
business under the laws of the United States of America or of any State or the
District of Columbia, or a corporation or other Person permitted to act as
Trustee by the Commission pursuant to the TIA, having a combined capital and
surplus of at least $25,000,000, and that is authorized under such laws to
exercise corporate trust powers and is subject to supervision or examination by
Federal, State or District of Columbia authority. Such corporation shall have
an address or agent in the Borough of Manhattan, The City of New York for the
presentment of Securities, which address for the initial Trustee is ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ - Operations, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or such other address
as the initial Trustee shall hereafter provide to the Holders of the Securities
in writing. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the aforesaid supervising or
examining authority, then for the purposes of this Section, the combined capital
and surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, the Trustee shall resign immediately in the manner
and with the effect specified in Section 8.9.
-----------
The provisions of this Section 8.8 are in furtherance of and subject to TIA
-----------
(S) 310(a).
Section 8.9 Resignation and Removal; Appointment of Successor Trustee.
---------------------------------------------------------
(a) The Trustee, or any trustee or trustees hereafter appointed,
may at any time resign upon 30 days written notice of resignation to the Company
and by mailing notice of such resignation to the Holders of then Outstanding
Securities at their addresses as they shall appear on the registry books. Upon
receiving such notice of resignation, the Company shall promptly appoint a
successor trustee or trustees by written instrument in duplicate, executed by
authority of the Board of Directors of the Company, one copy of which instrument
shall be delivered to the resigning Trustee and one copy to the successor
trustee or trustees. If no successor trustee shall have been so appointed and
have accepted appointment within 30 days after the mailing of such notice of
resignation, the resigning trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee, or any Holder who has
been a bona fide Holder of a Security or Securities for at least six months may,
subject to the provisions of Section 8.12, on behalf of itself and all others
------------
similarly situated, petition any such court for the appointment of a successor
trustee. Such court may thereupon, after such notice, if any, as it may deem
proper and prescribe, appoint a successor trustee.
(b) In case at any time any of the following shall occur:
(i) the Trustee shall fail to comply with the provisions of
TIA (S) 310(b) with respect to the Securities after written request
therefor by the Company or
52
by any Holder who has been a bona fide Holder of a Security or Securities
for at least six months; or
(ii) the Trustee shall cease to be eligible in accordance
with the provisions of Section 8.8 and TIA (S) 310(a) and shall fail to
-----------
resign after written request therefor by the Company or by any Holder; or
(iii) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent, or a receiver or liquidator of the
Trustee or of its property shall be appointed, or any public officer shall
take charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation;
then, in any such case, unless the Trustee's duty to resign has been stayed as
provided pursuant to TIA (S) 310(b), the Company may remove the Trustee and
appoint a successor trustee by written instrument, in duplicate, executed by
order of the Board of Directors of the Company, one copy of which instrument
shall be delivered to the Trustee so removed and one copy to the successor
trustee, or, subject to the provisions of TIA (S) 315(e), any Holder who has
been a bona fide Holder of a Security or Securities of such series for at least
six months may on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor trustee. Such court may thereupon, after such
notice, if any, as it may deem proper and prescribe, remove the Trustee and
appoint a successor trustee.
(c) The Holders of a majority in aggregate principal amount of
the Securities at the time Outstanding may upon 30 days written notice remove
the Trustee and appoint a successor trustee by delivering to the Trustee so
removed, to the successor trustee so appointed, and to the Company the evidence
provided for in Section 9.1 of the action in that regard taken by the Holders.
-----------
(d) Any resignation or removal of the Trustee and any appointment
of a successor trustee pursuant to any of the provisions of this Section 8.9
-----------
shall become effective upon acceptance of appointment by the successor trustee
as provided in Section 8.10.
------------
Section 8.10 Acceptance of Appointment by Successor Trustee.
----------------------------------------------
Any successor trustee appointed as provided in Section 8.9 shall execute
-----------
and deliver to the Company and to its predecessor Trustee an instrument
accepting such appointment hereunder, and thereupon the resignation or removal
of the predecessor Trustee shall become effective and such successor trustee,
without any further act, deed or conveyance, shall become vested with all
rights, powers, duties and obligations of its predecessor hereunder, with like
effect as if originally named as trustee hereunder; but nevertheless, on the
written request of the Company or of the successor trustee, upon payment of its
charges then unpaid, the Trustee ceasing to act shall, subject to Section 11.4,
------------
pay over to the successor trustee all monies at the time held by it hereunder
and shall execute and deliver an instrument transferring to such successor
trustee all such rights, powers, duties and obligations, Upon request of any
such successor trustee, the Company shall execute any and all instruments in
writing for more fully and certainly vesting in and confirming to such successor
trustee all such rights and powers.
53
Any Trustee ceasing to act shall, nevertheless, retain a prior claim upon all
property or funds held or collected by such trustee to secure any amounts then
due it pursuant to the provisions of Section 8.6.
-----------
No successor trustee shall accept appointment as provided to this Section
-------
8.10 unless at the time of such acceptance such successor trustee shall be
----
qualified under TIA (S) 310(b) and eligible under the provisions of Section 8.8.
-----------
Upon acceptance of appointment by any successor trustee as provided in this
Section 8.10, the Company shall give notice thereof to the Holders of
------------
Securities, by mailing such notice to such Holders at their addresses as they
shall appear on the registry books. If the acceptance of appointment is
substantially contemporaneous with the resignation, then the notice called for
by the preceding sentence may be combined with the notice called for by Section
-------
8.9. If the Company fails to give such notice within ten days after acceptance
---
of appointment by the successor trustee, the successor trustee shall cause such
notice to be given at the expense of the Company.
Section 8.11 Merger, Conversion, Consolidation or Succession to Business of
--------------------------------------------------------------
Trustee.
-------
Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to the corporate trust business of the Trustee, shall be
the successor of the Trustee hereunder; provided, however, that such corporation
-------- -------
shall be qualified under TIA (S) 310(b) and eligible under the provisions of
Section 8.8, without the execution or filing of any paper or any further act on
-----------
the part of any of the parties hereto, anything herein to the contrary
notwithstanding.
In case at the time such successor to the Trustee shall succeed to the
trust created by this Indenture any of the Securities shall have been
authenticated but not delivered, any such successor to the Trustee may adopt the
certificate of authentication of any predecessor Trustee and deliver such
Securities so authenticated: and, in case at that time any of the Securities
shall not have been authenticated, any successor to the Trustee may authenticate
such Securities either in the name of any predecessor Trustee hereunder or in
the name of the successor Trustee; and in all such cases such certificate shall
have the full force that it has anywhere in the Securities or in this Indenture
provided that the certificate of the Trustee shall have; provided, however, that
-------- -------
the right to adopt the certificate of authentication of any predecessor Trustee
or to authenticate Securities in the name of any predecessor Trustee shall apply
only to its successor or successors by merger, conversion or consolidation.
Section 8.12 Preferential Collection of Claims Against the Company.
-----------------------------------------------------
The Trustee shall comply with TIA (S) 311(a). Any Trustee that has
resigned or been removed is subject to TIA (S) 311(a) to the extent indicated
therein.
Section 8.13 Appointment of Authenticating Agent.
-----------------------------------
As long as any Securities remain Outstanding, the Trustee may, by an
instrument in writing, appoint an authenticating agent (the "Authenticating
--------------
Agent") that shall be authorized to
-----
54
act on behalf of the Trustee to authenticate Securities, including Securities
issued upon exchange, registration of transfer, partial redemption or pursuant
to Section 2.5. Securities authenticated by such Authenticating Agent shall be
-----------
entitled to the benefits of this Indenture and shall be valid and obligatory for
all purposes as if authenticated by the Trustee. Whenever reference is made in
this Indenture to the authentication and delivery of Securities by the Trustee
or to the Trustee's Certificate of Authentication (including, without
limitation, in Section 2.3), such reference shall be deemed to include
------------
authentication and delivery on behalf of the Trustee by an Authenticating Agent
and a Certificate of Authentication executed on behalf of the Trustee by such
Authenticating Agent. Such Authenticating Agent shall at all times be a
corporation organized and doing business under the laws of the United States of
America or of any State or the District of Columbia, authorized under such laws
to exercise corporate trust powers, having a combined capital and surplus of at
least $5,000,000 (determined as provided in Section 8.8 with respect to the
-----------
Trustee) and subject to supervision or examination by Federal or State
authority.
Any corporation into which any Authenticating Agent may be merged or
converted, or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which any Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency business
of any Authenticating Agent, shall continue to be the Authenticating Agent with
respect to all Securities for which it served as Authenticating Agent without
the execution or filing of any paper or any further act on the part of the
Trustee or such Authenticating Agent. Any Authenticating Agent may at any time,
and if it shall cease to be eligible shall, resign by giving written notice of
resignation to the Trustee and to the Company.
Upon receiving such a notice of resignation or upon such a termination, or
in case at any time any Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section 8.13, the Trustee shall upon
------------
receipt of an Company Order appoint a successor Authenticating Agent and the
Company shall provide notice of such appointment to all Holders in the manner
and to the extent provided in Section 13.4. Any successor Authenticating Agent
------------
upon acceptance of its appointment hereunder shall become vested with all
rights, powers, duties and responsibilities of its predecessor hereunder, with
like effect as if originally named as Authenticating Agent. The Company agrees
to pay to the Authenticating Agent from time to time reasonable compensation.
The Authenticating Agent for the Securities shall have no responsibility or
liability for any action taken by it as such at the direction of the Trustee.
Sections 8.2, 8.3, 8.4, 8.6, 8.8 and 9.3 shall be applicable to any
------------ --- --- --- --- ---
Authenticating Agent as if each reference to "Trustee" therein referred to the
Authenticating Agent.
ARTICLE NINE
CONCERNING THE HOLDERS
Section 9.1 Evidence of Action Taken by Holders.
-----------------------------------
Any request demand, authorization, direction, notice, consent, waiver or
other action provided by this Indenture to be given or taken by a specified
percentage in principal amount of the Holders may be embodied in and evidenced
by one or more instruments of substantially similar tenor signed by such
specified percentage of Holders in person or by agent duly
55
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee. Proof of execution of any instrument or of a writing appointing
any such agent shall be sufficient for any purpose of this Indenture and
(subject to Sections 8.1 and 8.2) conclusive in favor of the Trustee and the
------------- ---
Company, if made in the manner provided in this Article Nine.
------------
Section 9.2 Proof of Execution of Instruments and of Holding of Securities.
--------------------------------------------------------------
Subject to Sections 8.1 and 8.2, the execution of any instrument by a
------------ ---
Holder or his agent or proxy may be proved in the following manner:
(a) The fact and date of the execution by any Holder of any
instrument may be proved by the certificate of any notary public or other
officer of any jurisdiction authorized to take acknowledgments of deeds or
administer oaths that the person executing such instruments acknowledged to him
the execution thereof, or by an affidavit of a witness to such execution sworn
to before any such notary or other such officer. Where such execution is by or
on behalf of any legal entity other than an individual, such certificate or
affidavit shall also constitute sufficient proof of the authority of the person
executing the same.
(b) The ownership of Securities shall be proved by the Security
register or by a certificate of the Security registrar.
The Company may set a record date for purposes of determining the identity
of Holders of Securities entitled to vote or consent to any action referred to
in Section 9.1, which record date may be set at any time or from time to time by
notice to the Trustee, for any date or dates (in the case of any adjournment or
reconsideration not more than 60 days nor less than five days prior to the
proposed date of such vote or consent, and thereafter, notwithstanding any other
provisions hereof, only Holders of Securities of record on such record date
shall be entitled to so vote or give such consent or revoke such vote or
comment.
Section 9.3 Holders to be Treated as Owners.
-------------------------------
The Company, the Trustee and any agent of the Company or the Trustee may
deem and treat the person in whose name any Security shall be registered upon
the Security register as the absolute owner of such Security (whether or not
such Security shall be overdue and notwithstanding any notation of ownership or
other writing thereon) for the purpose of receiving payment of or on account of
the principal of or premium, if any, on such Security and for all other
purposes, and neither the Company or the Trustee nor any agent of the Company or
the Trustee shall be affected by any notice to the contrary.
Section 9.4 Securities Owned by the Company Deemed Not Outstanding.
------------------------------------------------------
In determining whether the Holders of the requisite aggregate principal
amount of Outstanding Securities have concurred in any direction, consent or
waiver under this Indenture, Securities that are owned by the Company or any
other obligor on the Securities with respect to which such determination is
being made or by any Affiliate of the Company or any other obligor on the
Securities with respect to which such determination is being made shall be
disregarded and deemed not to be Outstanding for the purpose of any such
determination, except that for the
56
purpose of determining whether the Trustee shall be protected in relying on any
such direction, consent or waiver only Securities that the Trustee knows are so
owned shall be so disregarded. Securities so owned that have been pledged in
good faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Securities and that the pledgee is not the Company or any other obligor upon the
Securities or any person directly or indirectly controlling or controlled by or
under direct or indirect con-u-non control with the Company or any other obligor
on the Securities. In case of a dispute as to such right, the advice of counsel
shall be full protection in respect of any decision made by the Trustee in
accordance with such advice. Upon request of the Trustee, the Company shall
furnish to the Trustee promptly an Officers' Certificate listing and identifying
all Securities, if any, known by the Company, to be owned or held by or for the
account of any of the above-described persons; and, subject to Section 8.1 and
-----------
Section 8.2, the Trustee shall be entitled to accept such Officers' Certificate
-----------
as conclusive evidence of the facts therein set forth and of the fact that all
Securities not listed therein are Outstanding for the purpose of any such
determination.
Section 9.5 Right of Revocation of Action Taken.
-----------------------------------
At any time prior to (but not after) the evidencing to the Trustee, as
provided in Section 9.1, of the taking of any action by the Holders of the
-----------
percentage in aggregate principal amount of the Securities specified in this
Indenture in connection with such action, any Holder of a Security the serial
number of which is shown by the evidence to be included among the serial numbers
of the Securities the Holders of which have consented to such action may, by
filing written notice at the Corporate Trust Office and upon proof of holding as
provided in this Article Nine, revoke such action so far as it concerns such
Security. Except as aforesaid, any such action taken by the Holder of any
Security shall be conclusive and binding upon such Holder and upon all future
Holders and owners of such Security and of any Securities issued in exchange of
substitution therefor or on registration of transfer thereof, irrespective of
whether or not any notation in regard thereto is made upon any such Security.
Any action taken by the Holders of the percentage in aggregate principal amount
of the Securities specified in this Indenture in connection with such action
shall be conclusively binding upon the Company, the Trustee and the Holders of
all the Securities affected by such action.
ARTICLE TEN
AMENDMENTS
Section 10.1 Amendments and Supplements Permitted Without Consent of Holders.
---------------------------------------------------------------
(a) Notwithstanding Section 10.2, the Company and the Trustee may
------------
amend or supplement this Indenture or the Securities without the consent of any
Holder to: (i) cure any ambiguity, correct or supplement any provisions herein
which may be inconsistent with any other provision herein, or to make any other
provisions with respect to matters or questions arising under this Indenture
which shall not be inconsistent with the provisions of this Indenture; provided
that such amendment does not adversely affect the rights of the Holders; (ii)
provide for uncertificated Securities in addition to or in place of certificated
Securities; (iii) evidence the succession of another corporation to the Company
and provide for the assumption by such successor of the Company's obligations to
the Holders hereunder and under the Securities as
57
permitted under Article Six; (iv) make any change that would (A) provide any
-----------
additional rights or benefits to Holders or (B) not adversely affect the legal
rights under the Indenture of any Holder, or (v) comply with the requirements of
the Commission in order to effect or maintain the qualification of this
Indenture under the TIA.
(b) Upon the Company's request, after receipt by the Trustee of a
resolution of the Board of Directors authorizing the execution of any amended or
supplemental indenture, and the Officers' Certificate and Opinion of Counsel
described in Section 10.6, the Trustee shall join with the Company in the
------------
execution of any amended or supplemental indenture authorized or permitted by
the terms of this Indenture and to make any further appropriate agreements and
stipulations that may be contained in any such amended or supplemental
indenture, but the Trustee shall not be obligated to enter into an amended or
supplemental indenture that affects its own rights, duties or immunities under
this Indenture or otherwise.
Section 10.2 Amendments and Supplements Requiring Consent of Holders.
-------------------------------------------------------
(a) Except as otherwise provided in Section 10.1(a) and 10.2(c),
--------------- -------
this Indenture and the Securities may be amended or supplemented with the
written consent of the Holders of at least a majority in aggregate principal
amount of the then outstanding Securities (including consents obtained in
connection with a tender offer or exchange offer for the Securities), and any
existing Default or Event of Default or noncompliance with any provision of the
Indenture or the Securities may be waived with the consent of Holders of at
least a majority in principal of the then outstanding Securities (including
consents obtained in connection with a tender offer or exchange offer for the
Securities).
(b) Upon the Company's request and after receipt by the Trustee
of a resolution of the Board of Directors authorizing the execution of any
supplemental indenture, evidence of the Holders' consent, and the documents
described in Section 10.6, the Trustee shall join with the Company in the
------------
execution of such amended or supplemental indenture unless such amended or
supplemental indenture affects the Trustee's own rights, duties or immunities
under this Indenture or otherwise, in which case the Trustee may in its
discretion, but shall not be obligated to, enter into such amended or
supplemental indenture,
(c) Without the consent of each Holder affected, no amendment,
supplement or waiver to this Indenture shall: (i) reduce the principal amount
of Securities whose Holders must consent to an amendment, supplement or waiver
of any provision of this Indenture on the Securities; (ii) reduce the principal
of or change the fixed maturity of any Security, or alter the provisions with
respect to the redemption of the Securities in a manner adverse to the Holders;
(iii) waive a Default or Event of Default in the payment of principal of or
premium, if any, on, the Securities (except that Holders of at least a majority
in aggregate principal amount of the then outstanding Securities may (A) rescind
an acceleration of the Securities that resulted from a non-payment default, and
(B) waive the payment default that resulted from such acceleration); (iv) make
any Security payable in money other than U.S. Legal Tender; (v) make any change
in the provisions of the Indenture relating to waivers of past Defaults or the
rights of Holders to receive payments of principal of or premium, if any, on the
Securities; (vi) waive a redemption payment with respect to any Security; or
(vii) make any change in Section 7.7, Section 7.10 or this sentence.
----------- ------------
58
(d) The Company may, but shall not be obligated to, fix a record
date for the purpose of determining the Persons entitled to consent to any
indenture supplemental hereto. If a record date is fixed, the Holders on such
record date, or their duly designated proxies, and only such Persons shall be
entitled to consent to such supplemental indenture, whether or not such Holders
remain Holders after such record date; provided, however, that unless such
-------- -------
consent shall have become effective by virtue of the requisite percentage having
been obtained prior to the date which is 90 days after such record date, any
such consent previously given shall automatically and without further action by
any Holder be canceled and of no further effect.
(e) It shall not be necessary for the consent of the Holders
under this Section 10.2 to approve the particular form of any proposed amendment
------------
or waiver, but it shall be sufficient if such consent approves the substance
thereof. After an amendment, supplement or waiver under this Section 10.2
------------
becomes effective, the Company shall mail to each Holder affected thereby a
notice briefly describing the amendment, supplement or waiver Any failure of the
Company to mail such notice, or any defect therein, shall not, however, in any
way impair or affect the validity of any such amended or supplemental indenture
or waiver.
Section 10.3 Compliance with TIA.
-------------------
Every amendment or supplement to this Indenture or the Securities shall be
set forth in an amended supplemental indenture that complies with the TIA as
then in effect.
Section 10.4 Revocation and Effect of Consents.
---------------------------------
(a) 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 Indebtedness 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 its Security or portion of a
Security if the Trustee receives the notice of revocation before the date on
which the Trustee receives an Officers' Certificate certifying that the Holders
of the requisite principal amount of Securities have consented (and not
theretofore revoked such consent) to the amendment or waiver.
(b) The Company may, but shall not be obligated to, fix a record
date for the purpose of determining the holders of Securities entitled to
consent to any amendment or waiver. If a record date is fixed, then
notwithstanding the provisions of the immediately preceding paragraph, those
Persons who were holders of Securities at such record date (or their duly
designated proxies), and only those Persons, shall be entitled to consent to
such amendment or waiver or to revoke any consent previously given, whether or
not such Persons continue to be holders of Securities after such record date. No
consent shall be valid or effective for more than 90 days after such record
date.
(c) After an amendment or waiver becomes effective it shall bind
every Holder, unless it is of the type described in Section 10.2(c), in which
---------------
case the amendment or waiver shall only bind each Holder that consented to it
and every subsequent holder of a Security that evidences the same debt as the
consenting Holders Security.
59
Section 10.5 Notation on or Exchange of Securities.
-------------------------------------
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Security thereafter authenticated. The Company in
exchange for all Securities may issue and the Trustee shall authenticate new
Securities that reflect the amendment, supplement or waiver. Failure to make the
appropriate notation or issue a new Security shall not affect the validity and
effect of such amendment, supplement or waiver.
Section 10.6 Trustee Protected.
-----------------
The Trustee shall sign any amendment or supplemental indenture authorized
pursuant to this Article Ten if the amendment does not adversely affect the
-----------
rights, duties, liabilities or immunities of the Trustee. If it does, the
Trustee may, but need not, sign it. In signing such amendment or supplemental
indenture, the Trustee shall be entitled to receive and, subject to Section 8.1,
-----------
shall be fully protected in relying upon, an Officers' Certificate and Opinion
of Counsel as conclusive evidence that such amendment or supplemental indenture
is authorized or permitted by this Indenture, that it is not inconsistent
herewith, and that it will be valid and binding upon the Company in accordance
with its terms. The Company may not sign an amendment or supplemental indenture
until the Board of Directors approves it.
ARTICLE ELEVEN
SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONIES
Section 11.1 Satisfaction and Discharge of Indenture.
---------------------------------------
(a) Except as otherwise provided in this Section 11.1, the
------------
Company may terminate its obligations under the Securities and this Indenture
with respect to the Securities if:
(i) all Securities previously authenticated and delivered
(other than destroyed, lost or stolen Securities that have been replaced or
Securities that are paid pursuant to Section 4.1 of this Indenture or
-----------
Securities for whose payment money or securities have theretofore been held
in trust and thereafter repaid to the Company, as provided in Section 11.4
------------
of this Indenture) have been delivered to the Trustee for cancellation and
the Company has paid all sums payable by it hereunder; or
(ii) (A) the Securities mature within one year or all of
them are to be called for redemption within one year under arrangements
satisfactory to the Trustee for giving the notice of redemption, (B) the
Company irrevocably deposits in trust with the Trustee during such one-year
period, under the terms of an irrevocable trust agreement in form and
substance satisfactory to the Trustee, as trust funds solely for the
benefit of the Holders for that purpose, money or U.S. Government
Obligations sufficient (in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee), without consideration of any reinvestment of any
interest thereon, to pay principal on the Securities to maturity or
redemption, as the case may be, and to pay all other sums payable by it
hereunder, (C) no Event of Default with respect to the Securities shall
have occurred and be continuing on
60
the date of such deposit, (D) such deposit will not result in a breach or
violation of, or constitute a default under, this Indenture or any other
agreement or instrument to which the Company is a party or by which either
is bound and (E) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, in each case stating that all
conditions precedent provided for herein relating to the satisfaction and
discharge of this Indenture have been complied with.
With respect to the foregoing clause (i), the Company's obligations
----------
under Section 8.6 shall survive. With respect to the foregoing clause (ii), the
----------- -----------
Company's obligations in Sections 2.2, 2.3, 2.4, 2.5, 2.6, 4.1, 4.2, 4.3, 4.4,
------------ --- --- --- --- --- --- --- ---
4.5, 8.6, 8.9, 11.2, 11.4 and 11.5 of this Indenture shall survive until the
--- --- --- ---- ---- ----
Securities are no longer outstanding. Thereafter, only the Company's obligations
in Sections 8.6 and 11.2 of this Indenture shall survive. After any such
------------ ----
irrevocable deposit, the Trustee upon request shall acknowledge in writing the
discharge of the Company's obligations under the Securities and this Indenture
with respect to the Securities except for those surviving obligations specified
above.
(b) The Company will be deemed to have paid and will be discharged
from any and all obligations in respect of the Securities on the 123rd day after
the deposit referred to in clause (a)(ii)(B) of this paragraph, and the
-----------------
provisions of this Indenture will no longer be in effect with respect to the
Securities, except as to (i) rights of registration of transfer and exchange;
(ii) substitution of apparently mutilated, defaced, destroyed, lost or stolen
Securities; (iii) rights of Holders to receive payments of principal thereof and
interest, if any, thereon; (iv) the Company's obligations under Section 4.1; (v)
-----------
the rights, obligations and immunities of the Trustee hereunder; and (vi) the
rights of the Holders of Securities as beneficiaries of this Indenture with
respect to the property so deposited with the Trustee payable to all or any of
them, and the Trustee, at the expense of the Company, shall at the Company's
request execute proper instruments acknowledging the same; provided, however,
-------- -------
that the following conditions shall have been satisfied:
(A) with reference to this Section 11.1(b), the Company has
---------------
irrevocably deposited or caused to be irrevocably deposited with the
Trustee (or another trustee satisfying the requirements of Section 8.8) and
-----------
conveyed all right, title and interest for the benefit of the Holders of
the Securities, under the terms of an irrevocable trust agreement in form
and substance satisfactory to the Trustee as trust funds in crust, in and
to (1) money in an amount, (2) U.S. Government Obligations that, through
the payment of interest and principal in respect thereof in accordance with
their terms, will provide, not later than one day before the due date of
any payment referred to in this clause (A), money in an amount or (3) a
----------
combination thereof in an amount sufficient, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, to pay and discharge,
without consideration of the reinvestment of such interest and after
payment of all federal, state and local taxes or other charges and
assessments in respect thereof payable by the Trustee, the principal of and
premium, if any, on the outstanding Securities at the Stated Maturity of
such principal; provided, however, that the Trustee shall have been
-------- -------
irrevocably instructed to apply such money or the proceeds of such U.S.
Government Obligations to the payment of such principal and premium, if
any, with respect to the Securities;
61
(B) 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 either is bound:
(C) the Company shall have delivered to the Trustee (1) either
(x) a ruling directed to the Trustee received from the Internal Revenue
Service to the effect that the Holders of Securities will not recognize
income, gain or loss for federal income tax purposes as a result of the
Company's exercise of its option under this Section 11.1(b) and will be
---------------
subject to federal income tax on the same amount and in the same manner and
at the same times as would have been the case if such option had not been
exercised or (y) an Opinion of Counsel to the same effect as the ruling
described in clause (x) above and (2) an Opinion of Counsel to the effect
----------
that (w) the creation of the defeasance trust does not violate the
Investment Company Act of 1940, (x) the Holders have a valid first-priority
security interest in the trust funds and (y) after the passage of 123 days
following the deposit (except, with respect to any trust funds for the
account of any Holder who may be deemed to be an "insider" for purposes of
the United States Bankruptcy Code, after one year following the deposit),
the trust funds will not be subject to the effect of ▇▇▇▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ Bankruptcy Code or Section 15 of the New York Debtor and
Creditor Law in a case commenced by or against the Company under either
such statute, and either (I) the trust funds will not longer remain the
property of the Company (and therefore will not be subject to the effect of
any applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally) or (II) if a court were to rule
under any such law in any case or proceeding that the trust funds remained
property of the Company, (a) assuming such trust funds remained in the
possession of the Trustee prior to such court ruling to the extent not paid
to the Holders, the Trustee will hold, for the benefit of the Holders, a
valid and perfected security interest in such trust funds that is not
avoidable in bankruptcy or otherwise except for the effect of Section
552(b) of the United States Bankruptcy Code on interest on the trust funds
accruing after the commencement of a case under such statute and (b) the
Holders will be entitled to receive adequate protection of their interests
in such trust funds if such trust funds are used in such case or
proceeding;
(D) if the Securities are then listed on a national securities
exchange, the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that such deposit, defeasance and discharge will not
cause the Securities to be delisted; and
(E) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, in each case stating that all
conditions precedent provided for herein relating to the defeasance
contemplated by this Section 11.1(b) have been complied with.
---------------
Notwithstanding the foregoing clause (a), prior to the end of the 123-
----------
day period referenced to in Section 11.1(b), none of the Company's obligations
---------------
under this Indenture shall be discharged. Subsequent to the end of such 123-day
period with respect to this Section 11.1, the Company's obligations in Sections
------------ --------
2.2, 2.3, 2.4, 2.5, 2.6, 4.1, 4.2, 4.3, 4.4, 4.5, 8.6, 8.9, 11.2, 11.4 and 11.5
--- --- --- --- --- --- --- --- --- --- --- --- ---- ---- ----
shall survive until the Securities are no longer outstanding. Thereafter, only
the Company's obligations in Section 8.6 and 11.2 shall survive. If and when a
----------- ----
ruling from
62
the Internal Revenue Service or an Opinion of Counsel referred to in Section
-------
11.1(b)(vi)(C) is able to be provided specifically without regard to, and not in
--------------
reliance upon, the continuance of the Company's obligations under Section 4.1,
-----------
then the Company's obligations under such Section 4.1 shall cease upon delivery
-----------
to the Trustee of such ruling or Opinion of Counsel and compliance with the
other conditions precedent provided for herein relating to the defeasance
contemplated by this Section 11.1.
------------
After any such irrevocable deposit, the Trustee upon request, shall
acknowledge in writing the discharge of the Company's obligations under the
Securities and this Indenture with respect to the Securities except for those
surviving obligations in the immediately preceding paragraph.
(c) The Company may omit to comply with any term, provision or
condition set forth in clause (c) of Section 6.1 of this Indenture, the
---------- -----------
covenants described in Sections 4.12, 4.14, 4.15, 4.16 and 4.18 of this
------------- ---- ---- ---- ----
Indenture and clause (b) of Section 7.1 of this Indenture with respect to such
---------- -----------
covenants, and clauses (c), (d) and (g) of Section 7.1 shall be deemed not to be
----------- --- --- -----------
Events of Default, in each case with respect to the outstanding Securities if:
(i) with reference to this Section 11.1(c), the Company has
---------------
irrevocably deposited or caused to be irrevocably deposited with the
Trustee (or another trustee satisfying the requirements of Section 8.8) and
-----------
conveyed in and to all right, title and interest to the Trustee for the
benefit of the Holders, under the terms of an irrevocable trust agreement
in form and substance satisfactory to the Trustee as trust funds in trust,
specifically pledged to the Trustee as security for payment of the
principal of, interest on overdue payments and premium, if any, and
interest, if any, on the Securities for, and dedicated solely to, the
benefit of the Holders of the Securities, in and to (A) money in an amount
sufficient, (B) U.S. Government Obligations that, through the payment of
interest and principal in respect thereof in accordance with their terms,
will provide, not later than one day before the due date of any payment
referred to in this clause (i), money in an amount sufficient or (C) a
----------
combination thereof in an amount sufficient, in each case in the opinion of
a nationally recognized firm of independent public accountants expressed in
a written certification thereof delivered to the Trustee, to pay and
discharge, without consideration of the reinvestment of such interest and
after payment of all federal, state and local taxes or other charges and
assessments in respect thereof payable by the Trustee, the principal of,
interest on overdue payments and premium, if any, on the outstanding
Securities on the Stated Maturity of such principal, provided, however,
-------- -------
that the Trustee shall have been irrevocably instructed to apply such money
or the proceeds of such U.S. Government Obligations to the payment of such
principal, interest on overdue payments or premium if any, with respect to
the Securities: (ii) 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;
(iii) no Default or Event of Default shall have occurred and
be continuing on the date of such deposit;
63
(iv) the Company has delivered to the Trustee an Opinion of
Counsel to the effect that (A) the creation of the defeasance trust does
not violate the Investment Company Act of 1940, (B) the Holders of the
Securities have a valid first-priority security interest in the trust
funds, (C) the Holders will not recognize income ,gain or loss for federal
income tax purposes as a result of such deposit and defeasance of certain
obligations and will be subject to federal income tax on the same amount
and in the same manner and at the same times as would have been the case if
such deposit and defeasance had not occurred, and (D) after the passage of
123 days following the deposit (except, with respect to any trust funds for
the account of any Holder who may be deemed to be an "insider" for purposes
of the United States Bankruptcy Code, after one year following the
deposit), the trust funds will not be subject to the effect of ▇▇▇▇▇▇▇ ▇▇▇
▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Bankruptcy Code or Section 15 of the New York Debtor
and Creditor Law in a case commenced by or against the Company under either
such statute, and either (x) the trust funds will no longer remain the
property of the Company (and therefore will not be subject to the effect of
any applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally) or (y) if a court were to rule under
any such law in any case or proceeding that the trust funds remained
property of the Company, and (1) assuming such trust funds remained in the
possession of the Trustee prior to such court ruling to the extent not paid
to the Holders, the Trustee will hold, for the benefit of the Holders, a
valid and perfected security interest in such trustee funds that is not
avoidable in bankruptcy or otherwise except for the effect of Section
552(b) of the United States Bankruptcy Code on interest on the trust funds
accruing after the commencement of a case under such statute and (2) the
Holders will be entitled to receive adequate protection of their interests
in such trust funds if such trust funds are used in such case or
proceeding;
(v) if the Securities are then listed on a national securities
exchange, the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that such deposit, defeasance and discharge will not
cause the Securities to be delisted; and
(vi) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, in each case stating that all
conditions precedent provided for herein relating to the defeasance
contemplated by this Section 11.1 have been complied with.
------------
Section 11.2 Application by Trustee of Funds Deposited for Payment of
--------------------------------------------------------
Securities; Other Miscellaneous Provisions.
------------------------------------------
Subject to Section 11.4, all monies deposited with the Trustee (or other
------------
trustee) pursuant to Section 11.3 shall be held in trust and applied by it to
------------
the payment, either directly or through any Paying Agent (including the Company
or the guarantor acting as Paying Agent), to the Holders of the Securities for
the payment or redemption of which such monies have been deposited with the
Trustee, of all sums due and to become due thereon for principal and premium, if
any; provided, however, that such money need not be segregated from other funds
-------- -------
except to the extent required by law.
64
If the Trustee or any Paying Agent is unable to apply any money or U.S.
Government Obligations in accordance with Section 11.1 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 applications, the
Company's obligations under this Indenture and the Securities related thereto
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 11.1(b)(vi)(A) or 11.1(c)(i) until such time as the Trustee or any
---------------------- ----------
Paying Agent is permitted to apply all such money or U.S. Government Obligations
in accordance with Section 11.1; provided, however, that if the Company has made
------------ -------- -------
any payment of principal of, interest on overdue payments and premium, if any,
on the Securities because of the reinstatement of its obligations hereunder, the
Company shall be subrogated to the rights of the holders of the Securities to
receive such payment from the money or U.S. Government obligations held by the
Trustee for such purpose.
Section 11.3 Repayment of Monies Held by Paying Agent.
----------------------------------------
In connection with the satisfaction and discharge of this Indenture with
respect to Securities, all monies then held by any Paying Agent under the
provisions of this Indenture with respect to such Securities shall, upon demand
of the Company, be repaid to the Company or paid to the Trustee and thereupon
such Paying Agent shall be released from all further liability with respect to
such monies.
Section 11.4 Return of Monies Held by Trustee and Paying Agent Unclaimed for
---------------------------------------------------------------
Two Years.
---------
Any monies deposited with or paid to the Trustee or any Paying Agent for
the payment of the principal of, interest on overdue payments and premium if
any, on any Security and not applied but remaining unclaimed for two years after
the date upon which such principal, interest on overdue payments and premium, if
any, shall have become due and payable shall, upon the written request of the
Company and unless otherwise required by mandatory provisions of applicable
escheat or abandoned or unclaimed property law, be repaid to the Company by the
Trustee or such Paying Agent, and the Holder of the Securities shall, unless
otherwise required by mandatory provisions of applicable escheat or abandoned or
unclaimed property laws, thereafter look only to the Company for any payment
that such Holder may be entitled to collect, and all liability of the Trustee or
any Paying Agent with respect to such monies shall thereupon cease; provided,
--------
however, that the Trustee or such Paying Agent, before being required to make
-------
any such repayment with respect to monies deposited with it for any payment, may
at the expense of the Company, mail by first-class mail to Holders of such
Securities at their addresses as they shall appear on the security register
notice, that such monies remain and that, after a date specified therein, which
shall not be less than thirty days from the date of such mailing, any unclaimed
balance of such money then remaining will be, repaid to the Company.
Section 11.5 Indemnity for U.S. Government Obligations.
-----------------------------------------
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the U.S. Government Obligations
deposited by the Company pursuant to Section 11.1 or the principal or interest
------------
received in respect of such obligations.
65
ARTICLE TWELVE
THE SECURITY
Section 12.1 Security.
--------
(a) In order to secure the due and punctual payment of the
principal of and premium, if any, on the Securities when and as the same shall
be due and payable whether at maturity, by acceleration, purchase, repurchase,
redemption or otherwise, and interest on the overdue principal of the
Securities, if any, and the performance of all other obligations of the Company
to the Holders or the Trustee under this Indenture and the Securities, the
Company has simultaneously with the execution of this Indenture entered into the
Pledge Agreement pursuant to which the Company has pledged and assigned to the
Trustee, for the benefit of the Holders, all of its right, title and interest in
and to the Pledged Collateral on a non-recourse basis. Each Holder, by accepting
a Security, agrees to all of the terms and provisions of the Pledge Agreement,
as the same may be amended from time to time pursuant to the provisions thereof
and of this Indenture.
(b) At the time this Indenture and the Pledge Agreement are
executed, the Company will have full right, power and lawful authority to grant,
convey, hypothecate, assign, mortgage and pledge the property constituting the
Pledged Collateral, in the manner and form done, or intended to be done, in this
Indenture and the Security Documents, free and clear of all Liens whatsoever,
except the Liens created by this Indenture and the Security Documents and except
to the extent otherwise provided therein and herein, and the Company covenants
and agrees to (i) forever warrant and defend the title to the same against the
claims of all Persons whatsoever, (ii) execute, acknowledge and deliver to the
Trustee such further assignments, transfers, assurances or other instruments as
the Trustee may reasonably require or request, and (iii) do or cause to be done
all such acts and things as may be necessary or proper, or as may be reasonably
required by the Trustee, to assure and confirm to the Trustee the security
interests in the Pledged Collateral contemplated hereby and by the Pledge
Agreement, or any part thereof, as from time to time constituted, so as to
render the same available for the security and benefit of this Indenture and of
the Securities secured hereby, according to the intent and purposes herein
expressed. This Indenture and the Pledge Agreement will create in favor of the
Trustee for the benefit of the Holders a direct and valid first priority Lien,
the ("Securityholder Lien") on the property constituting the Pledged Collateral,
-------------------
whether now owned or hereafter acquired, as set forth herein and therein.
Section 12.2 Recording, etc.
---------------
The Company will, at its own expense, register, record and file or
rerecord, refile and renew the Pledge Agreement, this Indenture and all
amendments or supplements thereto in such manner and in such place or places, if
any as may be required by law in order fully to preserve and protect the
Securityholder Lien and the Pledge Agreement and to effectuate and preserve the
Securityholder Lien and all rights of the Trustee in the Pledged Collateral.
The Company will, at its own expense, register and record and file or rerecord,
refile and renew additional security
66
documents in such manner and in such places as may be required by law in order
to effectuate and preserve the Securityholder Lien and all rights of the Trustee
in the Pledged Collateral.
The Company shall furnish to the Trustee as promptly as possible after
qualification of the Indenture: an Opinion of Counsel either (a) stating that,
in the opinion of such counsel, this Indenture and the assignment of the Pledged
Collateral intended to be made by the Pledge Agreement and all other instruments
of further assurance or amendment have been properly recorded, registered and
filed to the extent necessary to make effective the Securityholder Lien intended
to be created by the Pledge Agreement, or (b) stating that, in the opinion of
such counsel, no such action is necessary to make such Securityholder Lien and
assignment effective; and each anniversary after qualification of this Indenture
under the TIA, an Opinion of Counsel, dated as of such date, either (i) stating
that, in the opinion of such counsel, such action has been taken with respect to
the recording, registering, filing, rerecording, reregistering and refiling of
all supplemental indentures, or other instruments of further assurance as is
necessary to maintain the Securityholder Lien of the other Pledge Agreement, or
(ii) stating that, in the opinion of such counsel, no such action is necessary
to maintain such Securityholder Lien and assignment.
Section 12.3 Release of Pledged Collateral.
-----------------------------
(a) The Trustee, in its capacity as trustee under the Pledge
Agreement, shall not at any time release Pledged Collateral from the security
interest created by the Pledge Agreement unless such release is in accordance
with the provisions of this Indenture and the Pledge Agreement.
(b) At any time when an Event of Default shall have occurred and
be continuing, no release of Pledged Collateral pursuant to the provisions of
this Indenture and the Pledge Agreement shall be effective as against the
Holders of the Securities.
(c) The release of any Pledged Collateral from the terms of the
Pledge Agreement shall not be deemed to impair the security under this Indenture
in contravention of the provisions hereof if and to the extent the Pledged
Collateral is released pursuant to this Indenture and the Pledge Agreement.
Section 12.4 Satisfaction and Discharge; Defeasance.
--------------------------------------
The Company shall be entitled to obtain a full release of all of the
Pledged Collateral from the Liens of the Pledge Agreement upon compliance with
the conditions precedent set forth in Article Eleven for satisfaction and
--------------
discharge of this Indenture. Upon delivery by the Company to the Trustee of an
Officers' Certificate and an Opinion of Counsel, each to the effect that such
conditions precedent have been complied with, the Trustee shall forthwith take
all necessary action (at the request of and the expense of the Company) to
release and reconvey to the Company all of the Pledged Collateral, and shall
deliver such Pledged Collateral in its possession to the Company including,
without limitation; the execution and delivery of releases and satisfactions
wherever required (in such form as provided to the Trustee).
67
Section 12.5 Authorization of Actions To Be Taken by the Trustee Under the
-------------------------------------------------------------
Pledge Agreement.
----------------
Subject to the provisions of the Pledge Agreement, (a) the Trustee may, in
its sole discretion and without the consent of the Holders, take all actions it
deems necessary or appropriate in order to (i) enforce any of the terms of the
Pledge Agreement and (ii) collect and receive any and all amounts payable in
respect of the obligations of the Company hereunder and (b) the Trustee shall
have power to institute and to maintain such suits and proceedings as it may
deem expedient to prevent any impairment of the Pledged Collateral by any act
that may be unlawful or in violation of the Pledge Agreement or this Indenture,
and such suits and proceedings as the Trustee may deem expedient to preserve or
protect its interests and the interests of the Holders in the Pledged Collateral
(including the power to institute and maintain suits or proceedings to restrain
the enforcement of or compliance with any legislative or other governmental
enactment, rule or order that may be unconstitutional or otherwise invalid if
the enforcement of, or compliance with, such enactment, rule or order would
impair the security interest thereunder or be prejudicial to the interests of
the Holders or of the Trustee.)
Section 12.6 Authorization of Receipt of Funds by the Trustee Under the Pledge
-----------------------------------------------------------------
Agreement.
---------
The Trustee is authorized to receive any funds for the benefit of the
Holders distributed under the Pledge Agreement, and to make further
distributions of such funds to the Holders in accordance with the provisions of
this Indenture.
Section 12.7 No Real Property Security.
------------------------
For so long as there remains outstanding any amounts under the Working
Capital Line, neither the Notes nor the Guarantees shall be secured by any
collateral consisting of Real Property owned now or in the future by any of the
Company or the Guarantors, or their respective successors and assigns.
ARTICLE THIRTEEN
MISCELLANEOUS PROVISIONS
Section 13.1 Incorporators, Equityholders, Officers, Managers and Directors of
-----------------------------------------------------------------
Company Exempt from Individual Liability.
----------------------------------------
No director, officer, employee, manager, incorporator or direct or indirect
equityholder, past, present or future, of the Company, any Subsidiary or any
successor entity or the Trustee shall have any liability for any obligation of
the Company or any Subsidiary under this Indenture or the Securities or for any
claim based on, in respect of, or by reason of, any such obligation or the
creation of any such obligation by reason of his, her or its status as such
director, officer, employee, manager, incorporator or equityholder. Each Holder
by accepting a Security waives and releases such Persons from all such liability
and such waiver and release are part of the consideration for the issuance of
the Securities.
68
Section 13.2 Provisions of Indenture for the Sole Benefit of Parties and
-----------------------------------------------------------
Holders of Securities.
---------------------
Nothing in this Indenture or in the Securities expressed or implied, shall
give or be construed to give to any person, firm or corporation, other than the
parties hereto and their successors and the Holders of the Securities any legal
or equitable right, remedy or claim under this Indenture or under any covenant
or provision herein contained, all such covenants and provisions being for the
sole benefit of the parties hereto and their successors and of the Holders of
the Securities.
Section 13.3 Successors and Assigns of the Company Bound by Indenture.
--------------------------------------------------------
All the covenants, stipulations, promises and agreements in this Indenture
or any other Applicable Documents contained by or on behalf of the Company or
any Subsidiary shall bind its successors and assigns, whether so expressed or
not.
Section 13.4 Notices.
-------
Any notice, communication or demand that by any provision of this Indenture
is required or permitted to be given or served may be given or served by being
personally delivered, deposited postage prepaid, first-class mail, return
receipt requested or delivered by telecopier or overnight air courier
guaranteeing next day delivery addressed if to the Company to: ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇; if to the Trustee to: U.S. Bank Trust National
Association, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
Corporate Trust. The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Where this Indenture provides for notice to Holders, such notice shall be
sufficiently given (unless otherwise herein expressly provided) it in writing
and mailed, first-class postage prepaid, to each Holder entitled thereto, at his
last address an it appears in the Security register. In any case where notice to
such Holders is given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed, to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders. Where this Indenture
provides for notice in any manner,, such notice may be waived in writing by the
person entitled to receive such notice, either before or after the event, and
such waiver shall be the equivalent of such notice. Waivers of notice by Holders
shall be filed with the Trustee, but each filing shall not be a condition
precedent to the validity of any action taken in reliance upon such waiver.
Section 13.5 Officers' Certificates and Opinions of Counsel; Statements to be
----------------------------------------------------------------
Contained Therein.
-----------------
Upon any application or demand by the Company to the Trustee to take any
action under any of the provisions of this Indenture, the Company shall furnish
to the Trustee an Officers' Certificate stating that all conditions precedent
provided for in this indenture relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent have been complied with, except that in
the case of any such application or demand as to which the furnishing of such
documents is specifically
69
required by any provision of this Indenture relating to such particular
application or demand, no additional certificate or opinion need be furnished.
Each Officers' Certificate or Opinion of Counsel provided for in this
Indenture (other than pursuant to Section 4.5(a) or Section 12.2 hereof) and
-------------- ------------
delivered to the Trustee with respect to compliance with a condition or covenant
provided for in this Indenture shall include (a) a statement that the person
making such certificate or opinion has read such covenant or condition, (b) a
brief statement as to the nature and scope of the examination or investigation
upon which the statements or opinions contained in such certificate or opinion
are based, (c) a statement that, in the opinion of 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 (d) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
Any certificate, statement or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion of
or representations by counsel, unless such officer knows that the certificate or
opinion or representations with respect to the matters upon which his
certificate, statement or opinion may be based as aforesaid are erroneous, or in
the exercise of reasonable care should know that the same are erroneous. Any
certificate, statement or opinion of counsel may be based, insofar as it relates
to factual matters, information with respect to which is in the possession of
the Company, upon the certificate, statement or opinion of or representations by
an officer or officers of the Company unless such counsel knows that the
certificate, statement or opinion or representations with respect to the matters
upon which his certificate, statement or opinion may be based as aforesaid are
erroneous, or in the exercise of reasonable care should know that the same are
erroneous.
Any certificate, statement or opinion of an officer of the Company or of
counsel may be based, insofar as it relates to accounting matters, upon a
certificate or opinion of or representations by an accountant or firm of
accountants in the employ of the Company, unless such officer or counsel, as the
case may be, knows that the certificate or opinion or representations with
respect to the accounting matters upon which his certificate, statement or
opinion may be based as aforesaid are erroneous, or in the exercise of
reasonable care should know that the same are erroneous.
Any certificate or opinion of any independent firm of public accountants
filed with and directed to the Trustee shall contain a statement that such firm
is independent.
Section 13.6 Payments Due on Saturdays, Sundays and Holidays.
-----------------------------------------------
If the date of maturity of principal of the Securities, or the date fixed
for redemption or repayment of any Security shall not be a Business Day, then
payment of principal need not be made on such date, but may be made on the next
succeeding Business Day with the same force and effect as if made on the date of
maturity or the date fixed for redemption, and no interest shall accrue for the
period after such date.
70
Section 13.7 Conflict of Any Provision of Indenture with TIA.
-----------------------------------------------
If and to the extent that any provision of this Indenture limits, qualifies
or conflicts with the duties imposed by, or with another provision (an
"incorporated provision") included in this Indenture by operation of, TIA (S)(S)
----------------------
310 to 316, inclusive, such imposed duties or incorporated provision shall
control.
Section 13.8 New York Law to Govern.
----------------------
This Indenture and each Security, shall be deemed to be a contract under
the law of the State of New York, and for all purposes shall be construed in
accordance with the law of such State, except as may otherwise be required by
mandatory provisions of law.
Section 13.9 Counterparts.
------------
This Indenture may be executed in any number of counterparts, each of which
shall be an original; but such counterparts shall together constitute but one
and the same instrument.
Section 13.10 Effect of Headings.
------------------
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
[signature page follows]
71
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of August __, 2000.
NEW MILLENNIUM HOMES, LLC
By:
----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President
ATTEST:
By: ___________________________
U.S. BANK TRUST NATIONAL
ASSOCIATION
By: ___________________________
Name: ▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Assistant Vice President
72
EXHIBIT A
JOINT AND SEVERAL
-----------------
GUARANTY
--------
JOINT AND SEVERAL GUARANTY, dated as of August ____, 2000 (as amended from
time to time, the "Guaranty"), by NM Homes One, Inc. a Delaware corporation
--------
("NMH One"), and NM Homes Two, Inc., a Delaware corporation ("NMH Two") (each of
NMH One and NMH Two being individually referred to herein as a "Guarantor" and
---------
collectively as the "Guarantors" and each such collective reference shall refer
----------
individually and collectively to each of NMH One and NMH Two), in favor of U.S.
Bank Trust National Association (the "Beneficiary").
-----------
RECITALS
--------
A. Beneficiary is the Trustee under that certain Indenture ("Indenture"),
---------
dated as of August ____, 2000, between Beneficiary and New Millennium Homes,
LLC, a Delaware limited liability company ("Principal Obligor"). Pursuant to
-----------------
the Indenture, Principal Obligor is issuing up to $116,843,000 aggregate
principal amount of Zero Coupon Notes due 2004 (the "Zero Coupon Notes").
-----------------
B. Each Guarantor is a wholly-owned Subsidiary of the Principal Obligor.
C. In consideration of the provision of the loan evidenced by the
Indenture, the Guarantors have agreed, at the request of the Principal Obligor,
to guaranty unconditionally any and all obligations of the Principal Obligor to
the Beneficiary under the Indenture as provided herein.
AGREEMENT
---------
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, each Guarantor agrees as follows:
ARTICLE 1.
DEFINITIONS AND RELATED MATTERS
Section 1.1. Definitions. Terms with initial capital letters not
-----------
otherwise defined herein have the respective meanings set forth in the
Indenture. In addition, the following terms with initial capital letters have
the following meanings:
"Beneficiary" is defined in the Preamble.
-----------
"Principal Obligor" is defined in the Recitals.
-----------------
"Collateral" is defined in Section 2.2.
---------- -----------
"Guarantor" and "Guarantors" are defined in the Preamble.
--------- ----------
"Material", "Material Adverse Effect" or "Material Adverse Change" means
-------- ----------------------- -----------------------
(i) a condition or event material to, (ii) a material adverse effect on or (iii)
a material adverse change in, as the case may be, any one or more of the
following: (A) the business, assets, results of operations, financial condition
or prospects of the Guarantors or (B) the ability of any Guarantor to perform
its obligations hereunder or under any other Applicable Document to which it is
a party.
"Obligations" is defined in Section 2.1.2.
----------- -------------
"Obligor" is defined in Section 2.3.
------- -----------
Section 1.2. Related Matters.
---------------
1.2.1. Construction. Unless the context of this Guaranty clearly
------------
requires otherwise, references to the plural include the singular, the
singular includes the plural, the part includes the whole, "including" is
not limiting, and "or" has the inclusive meaning represented by the phrase
"and/or." The words "hereof," "herein," "hereby," "hereunder" and similar
terms in this Guaranty refer to this Guaranty as a whole (including the
Preamble, the Recitals, the Schedules and the Exhibits) and not to any
particular provision of this Guaranty. Article, section, subsection,
exhibit, schedule, recital and preamble references in this Guaranty are to
this Guaranty unless otherwise specified. References in this Guaranty to
any agreement, other document or law "as amended" or "as amended from time
to time," or to amendments of any document or law, shall include any
amendments, supplements, replacements, renewals, waivers or other
modifications not prohibited by the Note Documents. References in this
Guaranty to any law (or any part thereof) include any rules and regulations
promulgated thereunder (or with respect to such part) by the relevant
Governmental Authority, as amended from time to time.
1.2.2. Governing Law. This Guaranty shall be governed by, and
-------------
construed in accordance with, the laws of the State of New York (other than
choice of law rules that would require the application of the laws of any
other jurisdiction). No reference herein to any provision of California
law shall be construed as a waiver of or otherwise impair the foregoing
choice of New York law.
1.2.3. Headings. The Article and Section headings used in this
--------
Guaranty are for convenience of reference only and shall not affect the
construction hereof.
1.2.4. Severability. If any provision of this Guaranty shall be held
------------
to be invalid, illegal or unenforceable under applicable law in any
jurisdiction, such provision shall be ineffective only to the extent of
such invalidity, illegality or unenforceability, which shall not affect any
other provisions hereof or the validity, legality or enforceability of such
provision in any other jurisdiction.
1.2.5. Independence of Covenants. All covenants under this Guaranty
-------------------------
shall each be given independent effect so that if a particular action or
condition is not permitted by any such covenant, the fact that it would be
permitted by another covenant,
2
by an exception thereto, or be otherwise within the limitations thereof,
shall not avoid the occurrence of a Default or an Event of Default if such
action is taken or condition exists.
1.2.6. Exhibits, Etc. All of the appendices, exhibits and schedules
--------------
attached to this Guaranty shall be deemed incorporated herein by reference.
1.2.7. Time of the Essence. Time and exactitude in the performance
-------------------
of each of the covenants, conditions and agreements contained in this
Guaranty are hereby declared to be of the essence.
ARTICLE 2.
GUARANTY
Section 2.1. Guaranty.
--------
2.1.1. The Guarantors unconditionally jointly and severally guaranty
and promise to pay to the order of the Beneficiary on demand, in lawful
money of the United States of America, any and all Obligations of the
Principal Obligor from time to time owed to the Beneficiary. Each
Guarantor further agrees that if Principal Obligor shall fail to pay in
full when due any of its Obligations, such Guarantor will pay the same on
demand, in like currency, as a principal obligor, and not a surety.
2.1.2. The term "Obligations" means any and all present and future
-----------
obligations and liabilities of the Principal Obligor to the Beneficiary, or
any of its successors or assigns, or any Person entitled to indemnification
under the Indenture or the other Applicable Documents which arise under or
are evidenced by the Zero Coupon Notes, the Indenture and/or any of the
other Applicable Documents, whether for principal, premium, interest,
letter of credit or other reimbursement obligations, cash collateral cover,
fees, expenses, indemnities or other amounts (including attorneys' fees and
expenses), in each case whether due or not due, direct or indirect, joint
and/or several, absolute or contingent, voluntary or involuntary,
liquidated or unliquidated, determined or undetermined, now or hereafter
existing, renewed or restructured, whether or not from time to time
decreased or extinguished and later increased, created or incurred, whether
or not arising after the commencement of a proceeding under the Bankruptcy
Code (including post-petition interest) and whether or not allowed or
allowable as a claim in any such proceeding, and whether or not recovery of
any such obligation or liability may be barred by a statute of limitations
or such obligation or liability may otherwise be unenforceable. All
Obligations shall be conclusively presumed to have been created in reliance
on this Guaranty.
2.1.3. All payments hereunder shall be made free and clear of any and
all deductions, withholdings and setoffs, including withholdings on account
of Taxes. If any deduction or withholding shall be required by applicable
law, each Guarantor shall be required to pay such additional amounts as may
be required so that the net amount received by the Beneficiary, after such
deduction or withholding (including with respect to such additional
amounts), shall be equal to the amount otherwise required to be paid
hereunder.
3
Section 2.2. Termination. This is a continuing guaranty of the
-----------
Obligations and may not be revoked and shall not otherwise terminate unless and
until the Obligations have been indefeasibly paid and performed in full. If,
notwithstanding the foregoing, any Guarantor shall have any right under
applicable law to terminate this Guaranty prior to indefeasible payment in full
of the Obligations, no such termination shall be effective until noon the next
Business Day after the Beneficiary shall receive written notice thereof, signed
by such Guarantor. Any such termination shall not affect this Guaranty in
relation to (a) any Obligation that was incurred or arose prior to the effective
time of such notice, (b) any Obligation incurred or arising after such effective
time where such Obligation is incurred or arises either pursuant to commitments
existing at such effective time or incurred for the purpose of protecting or
enforcing rights against Principal Obligor, any Guarantor or other guarantor of
or any security given for the Obligations ("Collateral") or any other guaranties
----------
of the Obligations or any portion thereof or (c) any renewals, extensions,
readvances, modifications or rearrangements of any of the foregoing or (d) the
liability of any other Guarantor hereunder.
Section 2.3. Nature of Guaranty. The liability of each Guarantor
------------------
hereunder is independent of and not in consideration of or contingent upon the
liability of Principal Obligor or any other Person directly or indirectly liable
on the Obligations or any portion thereof (each of the Principal Obligor, the
Guarantors and any such other Person is referred to herein as an "Obligor") and
-------
a separate action or actions may be brought and prosecuted against any
Guarantor, whether or not any action is brought or prosecuted against Principal
Obligor or any other Obligor or whether Principal Obligor or any other Obligor
is joined in any such action or actions. This Guaranty shall be construed as a
continuing, absolute and unconditional guaranty of payment (and not merely of
collection) without regard to:
2.3.1. the legality, validity or enforceability of the Indenture or
any other Applicable Document, any of the Obligations, any Lien or any
Collateral or any other guaranties of the Obligations or any portion
thereof;
2.3.2. any defense (other than payment), set-off or counterclaim that
may at any time be available to Principal Obligor or any other Obligor
against, and any right of setoff at any time held by, the Beneficiary; or
2.3.3. any other circumstance whatsoever (with or without notice to
or knowledge of any Guarantor or any other Obligor), whether or not similar
to any of the foregoing, that constitutes, or might be construed to
constitute, an equitable or legal discharge of Principal Obligor or any
other Obligor, in bankruptcy or in any other instance.
Section 2.4. Authorization. Each Guarantor authorizes the Beneficiary,
-------------
without notice to or further assent by such Guarantor, and without affecting any
Guarantor's liability hereunder (regardless of whether any subrogation or
similar right that such Guarantor may have or any other right or remedy of such
Guarantor is extinguished or impaired), from time to time to:
2.4.1. permit Principal Obligor to increase or create Obligations, or
terminate, release, compromise, subordinate, extend, accelerate or
otherwise change the amount or
4
time, manner or place of payment of, or rescind any demand for payment or
acceleration of, the Obligations or any part thereof, or otherwise amend
the terms and conditions of the Indenture, any other Applicable Document or
any provision thereof,
2.4.2. take and hold Collateral from Principal Obligor or any other
Person, perfect or refrain from perfecting a Lien on such Collateral, and
exchange, enforce, subordinate, release (whether intentionally or
unintentionally), or take or fail to take any other action in respect of,
any such Collateral or Lien or any part thereof,
2.4.3. exercise in such manner and order as it elects in its sole
discretion fail to exercise, waive, suspend, terminate or suffer expiration
of, any of the remedies or rights of the Beneficiary against Principal
Obligor or any other Obligor in respect of any Obligations or any
Collateral;
2.4.4. release, add or settle with any Obligor in respect of this
Guaranty, any other Applicable Document or the Obligations;
2.4.5. accept partial payments on the Obligations;
2.4.6. refund at any time, at the Beneficiary's sole discretion, any
payments or recoveries received by the Beneficiary in respect of any
Obligations or Collateral; and
2.4.7. otherwise deal with Principal Obligor, any other Obligor and
any Collateral as the Beneficiary may elect in its sole discretion.
Section 2.5. Certain Waivers. Each Guarantor waives:
---------------
2.5.1. the right to require the Beneficiary to proceed against
Principal Obligor or any other Obligor, to proceed against or exhaust any
Collateral or to pursue any other remedy in the Beneficiary's power
whatsoever and the right to have the property of the Principal Obligor or
any other Obligor first applied to the discharge of the Obligations;
2.5.2. all rights and benefits under applicable law purporting to
reduce a guarantor's obligations in proportion to the obligation of the
principal or providing that the obligation of a surety or guarantor must
neither be larger nor in other respects more burdensome than that of the
principal;
2.5.3. the benefit of any statute of limitations affecting the
Obligations or any Guarantor's liability hereunder;
2.5.4. any requirement of marshalling or any other principle of
election of remedies and all rights and defenses arising out of an election
of remedies by the Beneficiary, even though that election of remedies, such
as nonjudicial foreclosure with respect to the security for a guaranteed
obligation, has destroyed any Guarantor's rights of subrogation and
reimbursement against Principal Obligor by the operation of Section 580d of
the California Code of Civil Procedure or otherwise;
5
2.5.5. any right to assert against the Beneficiary any defense (legal
or equitable), set-off, counterclaim and other right that any Guarantor may
now or any time hereafter have against Principal Obligor or any other
Obligor;
2.5.6. presentment, demand for payment or performance (including
diligence in making demands hereunder), notice of dishonor or
nonperformance, protest, acceptance and notice of acceptance of this
Guaranty, and all other notices of any kind;
2.5.7. any rights, defenses and other benefits any Guarantor may have
by reason of (i) any failure of the Beneficiary to hold a commercially
reasonable public or private foreclosure sale or otherwise to comply with
applicable law in connection with a disposition of Collateral; and
2.5.8. all defenses that at any time may be available to any
Guarantor by virtue of any valuation, stay, moratorium or other law now or
hereafter in effect and ALL RIGHTS AND DEFENSES THAT, NOTWITHSTANDING
SECTION 1.2.2, ARE OR MAY BECOME AVAILABLE TO SUCH GUARANTOR BY REASON OF
-------------
SECTIONS 2787 TO 2855, INCLUSIVE, AND SECTION 3433 OF THE CALIFORNIA CIVIL
CODE OR OTHER SIMILAR APPLICABLE LAW.
Section 2.6. Subrogation; Certain Agreements.
-------------------------------
2.6.1. EACH GUARANTOR WAIVES ANY AND ALL RIGHTS OF SUBROGATION,
INDEMNITY OR REIMBURSEMENT, AND ANY AND ALL BENEFITS OF AND RIGHTS TO
ENFORCE ANY POWER, RIGHT OR REMEDY THAT THE BENEFICIARY MAY NOW OR
HEREAFTER HAVE IN RESPECT OF THE OBLIGATIONS AGAINST PRINCIPAL OBLIGOR OR
ANY OTHER OBLIGOR, ANY AND ALL BENEFITS OF AND RIGHTS TO PARTICIPATE IN ANY
COLLATERAL, WHETHER REAL OR PERSONAL PROPERTY, NOW OR HEREAFTER HELD BY THE
BENEFICIARY, AND ANY AND ALL OTHER RIGHTS AND CLAIMS (AS DEFINED IN THE
BANKRUPTCY CODE) ANY GUARANTOR MAY HAVE AGAINST PRINCIPAL OBLIGOR, UNDER
APPLICABLE LAW OR OTHERWISE, AT LAW OR IN EQUITY, BY REASON OF ANY PAYMENT
HEREUNDER, UNLESS AND UNTIL THE OBLIGATIONS SHALL HAVE BEEN PAID IN FULL.
2.6.2. Each Guarantor assumes the responsibility for being and
keeping itself informed of the financial condition of Principal Obligor and
each other Obligor and of all other circumstances bearing upon the risk of
nonpayment of the Obligations that diligent inquiry would reveal, and
agrees that the Beneficiary shall have no duty to advise any Guarantor of
information regarding such condition or any such circumstances.
Section 2.7. Bankruptcy No Discharge.
-----------------------
2.7.1. Without limiting Section 2.3, this Guaranty shall not be
-----------
discharged or otherwise affected by any bankruptcy, reorganization or
similar proceeding commenced by or against Principal Obligor or any other
Obligor, including (i) any discharge of, or
6
bar or stay against collecting, all or any part of the Obligations in or as
a result of any such proceeding, whether or not assented to by the
Beneficiary, and (ii) any disallowance of all or any portion of the
Beneficiary's claim for repayment of the Obligations. Each Guarantor
understands and acknowledges that by virtue of this Guaranty, it has
specifically assumed any and all risks of any such proceeding with respect
to Principal Obligor and each other Obligor.
2.7.2. Any Event of Default under Section 7.1 of the Indenture shall
render all Obligations automatically due and payable for purposes of this
Guaranty, notwithstanding any stay of the right of the Beneficiary to
accelerate the Obligations.
2.7.3. Notwithstanding anything to the contrary herein contained,
this Guaranty shall continue to be effective or be reinstated, as the case
may be, if at any time any payment, or any part thereof, of any or all of
the Obligations is rescinded, invalidated, declared to be fraudulent or
preferential or otherwise required to be restored or returned by the
Beneficiary in connection with any bankruptcy, reorganization or similar
proceeding involving Principal Obligor, any other Obligor or otherwise, if
the proceeds of any Collateral are required to be returned by the
Beneficiary under any such circumstances, or if the Beneficiary elects to
return any such payment or proceeds or any part thereof in its sole
discretion, all as though such payment had not been made or such proceeds
not been received.
Section 2.8. Maximum Liability of Guarantors.
-------------------------------
If the obligations of any Guarantor hereunder otherwise would be subject to
avoidance under Section 548 of the Bankruptcy Code or any applicable state law
relating to fraudulent conveyances or fraudulent transfers, taking into
consideration such Guarantor's (i) rights of reimbursement and indemnity from
the Principal Obligor with respect to amounts paid by such Guarantor, (ii)
rights of subrogation to the rights of the Beneficiary and (iii) rights of
contribution from each other Obligor (including pursuant to Section 2.9), then
-----------
such obligations hereby are reduced to the largest amount that would make them
not subject to such avoidance.
Section 2.9. Right of Contribution. In order to provide for just and
---------------------
equitable contribution among the Guarantors and any other Obligors, other than
the Principal Obligor (for purposes of this Section 2.9 only, each Guarantor and
-----------
each such other Obligor is referred to as a "Guarantor"), in connection with the
---------
execution of this Guaranty, the Guarantors have agreed among themselves that if
any Guarantor satisfies some or all of the Obligations (a "Funding Guarantor"),
-----------------
the Funding Guarantor shall be entitled to contribution from the other
Guarantors that have positive Maximum Net Worth (as defined below) for all
payments made by the Funding Guarantor in satisfying the Obligations, so that
each Guarantor that remains obligated under this Guaranty or any other guaranty
for the Obligations at the time that a Funding Guarantor makes such payment (a
"Remaining Guarantor") and has a positive Maximum Net Worth shall bear a portion
--------------------
of such payment equal to the percentage that such Remaining Guarantor's Maximum
Net Worth bears to the aggregate Maximum Net Worth of all Remaining Guarantors
that have positive Maximum Net Worth.
7
As used herein, "Net Worth" means, with respect to any Guarantor, the
---------
amount, as of the respective date of calculation, by which the sum of a Person's
assets (including subrogation, indemnity, contribution, reimbursement and
similar rights that the Guarantor may have), determined on the basis of a "fair
valuation" or their "fair saleable value" (whichever is the applicable test
under Section 548 and other relevant provisions of the Bankruptcy Code and the
relevant state fraudulent conveyance or transfer laws), is greater than the
amount that will be required to pay all of such Person's debts, in each case
matured or unmatured, contingent or otherwise, as of the date of calculation,
but excluding liabilities arising under this Guaranty or any other guaranty for
the Obligations and excluding, to the maximum extent permitted by applicable law
with the objective of avoiding rendering such Person insolvent, liabilities
subordinated to the Obligations arising out of loans or advances made to such
Person by any other Person. "Maximum Net Worth" means, with respect to any
-----------------
Guarantor, the greatest of the Net Worths of such Guarantor calculated as of the
following dates: (A) the date on which such Person becomes a Guarantor, (B) the
date on which such Guarantor expressly reaffirms this Guaranty or the other
guaranty to which it is a party, (C) the date on which demand for payment is
made on such Guarantor hereunder or under such other guaranty, (D) the date on
which payment is made by such Guarantor hereunder or thereunder or (E) the date
on which any judgment, order or decree is entered requiring such Guarantor to
make payment hereunder or in respect hereof or under or in respect of such other
guaranty. The meaning of the terms "fair valuation" and "fair saleable value"
-------------- -------------------
and the calculation of assets and liabilities shall be determined and made in
accordance with the relevant provisions of the Bankruptcy Code and applicable
state fraudulent conveyance or transfer laws.
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES
Each Guarantor makes the following representations and warranties, all of
which shall survive until termination of this Guaranty pursuant to Section 2.2.
-----------
Section 3.1. Organization, Powers and Good Standing. Each Guarantor is a
--------------------------------------
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its organization, and has all requisite power and
authority and the legal right to own and operate its properties and to carry on
its business as heretofore conducted and proposed to be conducted. Each
Guarantor has all requisite power and authority to enter into this Guaranty and
the other Applicable Documents to which it is a party and to carry out the
transactions contemplated hereby and thereby. Each Guarantor possesses all
governmental approvals, in full force and effect, free from burdensome
restrictions, that are necessary in all Material respects for the ownership,
maintenance and operation of its properties and conduct of its business as now
conducted, and is not in Material violation thereof. Each Guarantor is duly
qualified and in good standing as a foreign entity and authorized to do business
in each state where the nature of its business activities conducted or
properties owned or leased requires it to be so qualified and where the failure
to be so qualified would have a Material Adverse Effect.
Section 3.2. Authorization, Binding, Effect, No Conflict, Etc. The
------------------------------------------------
execution, delivery and performance by each Guarantor of this Guaranty and each
other Applicable Document to which it is a party have been duly authorized by
all necessary action. This
8
Guaranty and each such other Applicable Document has been duly executed and
delivered by each Guarantor party thereto and is a legal, valid and binding
obligation of such Guarantor, enforceable against it in accordance with its
terms, except as enforcement may be limited by equitable principles and by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to
creditors' rights generally. The execution, delivery and performance by the
Guarantors of this Guaranty and each other Applicable Document to which any
Guarantor is a party, and the consummation of the transactions contemplated
hereby or thereby, do not and will not (a) violate any provision of the charter
or bylaws of such Guarantor, (b) conflict with, result in a breach of or
constitute (or, with the giving of notice or lapse of time, or both, would
constitute) a default under, or require the approval or consent of any Person
pursuant to, any Material Contractual Obligation of such Guarantor or violate
any provision of applicable law binding on such Guarantor, except where such
conflict, breach, default or violation would not, individually or in the
aggregate, have a Material Adverse Effect or subject the Beneficiary to any
liability, or (c) result in the creation or imposition of any Lien of any nature
whatsoever upon any of such Guarantor's assets except for Liens created under
the Applicable Documents. Except for filings and recordings in connection with
the perfection of Liens created by the Collateral Documents, all of which have
been made and are in full force and effect, no governmental approval is or will
be required in connection with the execution, delivery and performance by any
Guarantor of this Guaranty or any other Applicable Document to which any
Guarantor is a party, or the consummation of transactions contemplated hereby or
thereby, or to ensure the legality, validity or enforceability hereof or
thereof, except where the failure to obtain such governmental approval would not
have a Material Adverse Effect or subject the Beneficiary to any liability.
Section 3.3. Financial Benefit. Each Guarantor hereby acknowledges and
-----------------
warrants it has derived or expects to derive a financial advantage from each
loan or other extension of credit and each renewal, extension, release of
Collateral, or other relinquishment of legal rights, made or granted or to be
made or granted by the Beneficiary in connection with the Obligations.
Section 3.4. Solvency. After giving effect to this Guaranty and any
--------
Applicable Documents to which any Guarantor is a party, and the transactions
contemplated hereby and thereby, each Guarantor is not Insolvent or left with
assets that are, or capital that is, unreasonably small in relation to its
business or the Obligations. No Guarantor intends to incur, and in connection
with this Guaranty and any Applicable Documents to which any Guarantor is a
party, and the performance of its obligations contemplated hereby and thereby,
no Guarantor will incur, debts beyond its ability to pay them as they mature. No
Guarantor has executed this Guaranty and any other Applicable Documents to which
such Guarantor is a party, or made any transfer or incurred any obligations
thereunder, with actual intent to hinder, delay or defraud either present or
future creditors. "Insolvent" means, with respect to any Guarantor,
---------
that (a) determined on the basis of a "fair valuation" or their "fair saleable
value" (whichever is the applicable test under Section 548 and other relevant
provisions of the Bankruptcy Code and the relevant state fraudulent conveyance
or transfer laws) the sum of such Guarantor's assets is less than its debts, or
(b) such Guarantor is generally not paying its debts as they become due. The
meaning of the terms "fair valuation" and "fair saleable value" and the
-------------- -------------------
calculation of assets and liabilities shall be determined and made in accordance
with the relevant provisions of the Bankruptcy Code and applicable state
fraudulent conveyance or transfer laws.
9
Section 3.5. Review of Documents; Understanding With Respect to Waivers.
----------------------------------------------------------
Each Guarantor hereby acknowledges that it has copies of and is fully familiar
with the Indenture and each other Applicable Document executed and delivered by
such Guarantor or any other Obligor. Each Guarantor warrants and agrees that
each waiver set forth in this Guaranty is made with such Guarantor's full
knowledge of its significance and consequences and after opportunity to consult
with counsel of its own choosing and that, under the circumstances, each such
waiver is reasonable and should not be found contrary to public policy or law.
ARTICLE 4.
COVENANTS
Each Guarantor covenants that it will comply with all covenants pertaining
to it, its assets and its obligations under of the Indenture and that it shall
perform each and all of the following until termination of this Guaranty
pursuant to Section 2.3.
-----------
Section 4.1. Existence; Properties; Etc. Each Guarantor will at all times
--------------------------
preserve and maintain its existence as a corporation, and any rights and
franchises material to its business and maintain in good repair, working order
and condition (ordinary wear and tear excepted), all of the Material properties
useful or necessary to its business, and from time to time each Guarantor will
make or cause to be made all appropriate repairs, renewals and replacements
thereto.
ARTICLE 5.
MISCELLANEOUS
Section 5.1. Expenses. Each Guarantor shall pay to the Beneficiary any
--------
and all costs, fees and expenses, (including attorneys' fees and expenses), that
the Beneficiary may incur in connection with (a) the collection of all sums
guarantied hereunder or (b) the exercise or enforcement of any of the rights,
powers or remedies of the Beneficiary under this Guaranty or applicable law. All
such amounts and all other amounts payable hereunder shall be payable on demand,
together with interest at a rate equal to 10% per annum so long as no Event of
Default has occured and is continuing and, during the existence of an Event of
Default at a rate equal to the lesser of (i) 18% per annum (based on a year
of 365 or 366 days, as the case may be), or (ii) the maximum rate allowed by
applicable law, from and including the due date to and excluding the date of
payment.
Section 5.2. Amendments and Other Modifications. No amendment of any
----------------------------------
provision of this Guaranty (including a waiver thereof or consent relating
thereto) shall be effective unless the same shall be in writing and signed by
the parties hereto. Any waiver or consent relating to any provision of this
Guaranty shall be effective only in the specific instance and for the specific
purpose for which given. No notice to or demand on any Guarantor in any case
shall entitle such Guarantor to any other or further notice or demand in similar
or other circumstances.
Section 5.3. Cumulative Remedies; Failure or Delay. The rights and
-------------------------------------
remedies provided for under this Guaranty are cumulative and are not exclusive
of any rights and remedies that may be available to the Beneficiary under
applicable law or otherwise. No failure or delay on the part of the Beneficiary
in the exercise of any power, right or remedy under this Guaranty shall impair
such power, right or remedy or shall operate as a waiver thereof, nor shall any
single
10
or partial exercise of any such power, right or remedy preclude other or further
exercise of such or any other power, right or remedy.
Section 5.4. Notices, Etc. All notices and other communications under
------------
this Guaranty shall be in writing and shall be personally delivered or sent by
prepaid courier, by overnight, registered or certified mail (postage prepaid),
or by prepaid telex, telecopy or telegraph and shall be deemed given when
received by the intended recipient thereof. Unless otherwise specified in a
notice given in accordance with the foregoing provisions of this Section 5.4,
-----------
all notices and other communications shall be given to the parties hereto at
their respective addresses (or to their respective telex or telecopier numbers)
indicated on Schedule 5.4.
------------
Section 5.5. Successors and Assigns. This Guaranty and each amendment
----------------------
hereof shall be binding upon and, subject to the next sentence, inure to the
benefit of each Guarantor, the Beneficiary and their respective successors and
assigns. No Guarantor shall assign any of its rights or obligations hereunder
without the prior written consent of the Beneficiary, other than assignment to
the New Entities. The benefit of this Guaranty shall automatically pass with any
assignment of the Obligations (or any portion thereof), to the extent of such
assignment.
Section 5.6. Choice of Forum.
---------------
5.6.1. Pursuant to Section 5-1402 of the New York General
Obligations Law, all actions or proceedings arising in connection with this
Guaranty may be tried and litigated in state or Federal courts located in
the Borough of Manhattan, New York City, State of New York, unless such
actions or proceedings are required to be brought in another court to
obtain subject matter jurisdiction over the matter in controversy. EACH OF
THE GUARANTORS AND THE BENEFICIARY/BENEFICIARIES WAIVES ANY RIGHT IT MAY
HAVE TO ASSERT THE DOCTRINE OF FORUM NON COVENIENS, TO ASSERT THAT IT IS
----- --- ---------
NOT SUBJECT TO THE JURISDICTION OF SUCH COURTS OR TO OBJECT TO VENUE TO THE
EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION.
5.6.2. Each Guarantor hereby irrevocably appoints CT Corporation
System (the "Process Agent," which has consented thereto) with offices on
-------------
the date hereof at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇ as Process
Agent to receive for and on behalf of such Guarantor service of process in
the County of New York relating to this Guaranty. SERVICE OF PROCESS IN ANY
ACTION OR PROCEEDING AGAINST ANY GUARANTOR MAY BE MADE ON THE PROCESS AGENT
BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, OR BY ANY OTHER
METHOD OF SERVICE PROVIDED FOR UNDER APPLICABLE LAWS IN EFFECT IN THE STATE
OF NEW YORK, AND THE PROCESS AGENT IS HEREBY AUTHORIZED AND DIRECTED TO
ACCEPT SUCH SERVICE FOR AND ON BEHALF OF SUCH GUARANTOR AND TO ADMIT
SERVICE WITH RESPECT THERETO. SUCH SERVICE UPON THE PROCESS AGENT SHALL BE
DEEMED EFFECTIVE PERSONAL SERVICE ON SUCH GUARANTOR, SUFFICIENT FOR
PERSONAL JURISDICTION, 10 DAYS AFTER MAILING, AND SHALL BE LEGAL AND
BINDING UPON SUCH GUARANTOR FOR ALL PURPOSES,
11
NOTWITHSTANDING ANY FAILURE OF THE PROCESS AGENT TO MAIL COPIES OF SUCH
LEGAL PROCESS TO SUCH GUARANTOR, OR ANY FAILURE ON THE PART OF SUCH
GUARANTOR TO RECEIVE THE SAME. Each Guarantor confirms that it has
instructed the Process Agent to mail to such Guarantor, upon service of
process being made on the Process Agent pursuant to this Section, a copy of
the summons and complaint or other legal process served upon it, by
registered mail, return receipt requested, at such Guarantor's address set
forth in Schedule 5.4, or to such other address as such Guarantor may
------------
notify the Process Agent in writing. Each Guarantor agrees that it will at
all times maintain a process agent to receive service of process in the
County of New York on its behalf with respect to this Guaranty. If for any
reason the Process Agent or any successor thereto shall no longer serve as
such process agent or shall have changed its address without notification
thereof to the Beneficiary, such Guarantor, immediately after gaining
knowledge thereof, irrevocably shall appoint a substitute process agent
acceptable to the Beneficiary in the County of New York and advise the
Beneficiary thereof.
Section 5.7. Execution in Counterparts. This Guaranty may be executed
-------------------------
in any number of counterparts, each of which counterparts, when so executed and
delivered, shall be deemed to be an original and all of which counterparts,
taken together, shall constitute but one and the same Guaranty. This Guaranty
shall become effective upon the execution of a counterpart hereof by each of the
parties hereto.
Section 5.8. Complete Agreement. This Guaranty, together with the
------------------
exhibits and schedules hereto and the other Applicable Documents, is intended by
the parties as the final expression of their agreement regarding the subject
matter hereof and as a complete and exclusive statement of the terms and
conditions of such agreement.
Section 5.9. Limitation of Liability. No claim shall be made by any
-----------------------
Guarantor against the Beneficiary or the affiliates, directors, officers,
employees or agents of the Beneficiary for any special, indirect, consequential
or punitive damages in respect of any claim for breach of contract or under any
other theory of liability arising out of or related to the transactions
contemplated by this Guaranty, or any act, omission or event occurring in
connection therewith; and each Guarantor waives, releases and agrees not to ▇▇▇
upon any claim for any such damages, whether or not accrued and whether or not
known or suspected to exist in its favor.
Section 5.10. WAIVER OF TRIAL BY JURY. EACH GUARANTOR AND THE
-----------------------
BENEFICIARY/BENEFICIARIES (BY ACCEPTANCE HEREOF) WAIVE THE RIGHT TO A TRIAL BY
JURY IN ANY ACTION UNDER THIS GUARANTY OR ANY ACTION ARISING OUT OF THE
TRANSACTIONS CONTEMPLATED HEREBY, REGARDLESS OF WHICH PARTY INITIATES SUCH
ACTION OR ACTIONS.
12
IN WITNESS WHEREOF, the parties hereto have duty executed this Guaranty as
of the date set forth above.
GUARANTORS
----------
NM HOMES ONE, INC., a Delaware
corporation
By:
-------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President
NM HOMES TWO, INC., a Delaware
corporation
By:
-------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President
13
SCHEDULE 5.4
ADDRESSES
---------
NM Homes One, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Chief Executive Officer and Chief Financial Officer
NM Homes Two, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Chief Executive Officer and Chief Financial Officer
with a copy to:
▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
14
EXHIBIT B
FORM OF NOTE
------------
AND
---
CERTIFICATE OF AUTHENTICATION
-----------------------------
A-1
NEW MILLENNIUM HOMES, LLC
ZERO COUPON SENIOR NOTE DUE DECEMBER 31, 2004
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR PURSUANT TO THE SECURITIES OR
"BLUE SKY" LAWS OF ANY STATE. SUCH SECURITIES MAY NOT BE OFFERED, SOLD,
TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE ASSIGNED, EXCEPT PURSUANT TO (i)
A REGISTRATION STATEMENT WITH RESPECT TO SUCH SECURITIES WHICH IS EFFECTIVE
UNDER SUCH ACT, (ii) RULE 144 OR RULE 144A UNDER SUCH ACT, OR (iii) ANY OTHER
EXEMPTION FROM REGISTRATION UNDER SUCH ACT RELATING TO SUCH ACT, PROVIDED THAT,
IF REQUESTED BY THE COMPANY, AN OPINION OF COUNSEL REASONABLY SATISFACTORY IN
FORM AND SUBSTANCE IS FURNISHED TO THE COMPANY THAT AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF SUCH ACT IS AVAILABLE.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED WITH
ORIGINAL ISSUE DISCOUNT FOR FEDERAL INCOME TAX PURPOSES. PLEASE CONTACT THE
CHIEF EXECUTIVE OFFICER OF NEW MILLENNIUM HOMES, LLC AT ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ FOR THE INFORMATION DESCRIBED IN TREASURY REGULATIONS
SECTION 1.1275-3(B)(1)(i).
Zero Coupon Note due December 31, 2004
No.
New Millennium Homes, LLC a Delaware limited liability company (the
"Company") which term includes any successor corporation, for value received
promises to pay to the order of the Holder, or registered assigns, the principal
sum of _____________ on December 31, 2004.
This Security is continued on the following page and the additional
provisions set forth therein shall for all purposes have the same effect as if
set forth at this place.
IN WITNESS WHEREOF, the Company has caused this Security to be signed
manually or by facsimile by its duly authorized officers and a facsimile of its
corporate seal to be affixed to, or imprinted on, this Security.
NEW MILLENNIUM HOMES, LLC
By:
---------------------------------------
Name:
Title:
Attest:
-------------------------
Assistant Secretary
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities described in the within mentioned Indenture.
Dated: U.S. BANK TRUST NATIONAL
ASSOCIATION as Trustee
By:
------------------------------
Authorized Signature
2
NEW MILLENNIUM HOMES, LLC
ZERO COUPON NOTE DUE DECEMBER 31, 2004
1. Method of Payment.
-----------------
The Company will pay the principal of this Security to the Holder that
surrenders this Security to a Paying Agent on or after December 31, 2004 or, in
the event of a redemption of this Security, on or after the Redemption Date, as
described below. To the extent lawful, the Company shall pay interest on
overdue principal and premium (if any) at the rate of 6.62% per annum. The
Company will pay principal and interest, if any, in U.S. Legal Tender by check.
If this Security is a Global Security, all payments in respect of this Security
will be made to the Depository or its nominee in immediately available funds in
accordance with customary procedures established from time to time by the
Depository.
2. Paying Agent and Registrar.
--------------------------
Initially, U.S. Bank Trust National Association (the "Trustee") will act as
Paying Agent and registrar for the Securities. The Company may change any
Paying Agent, co-Paying Agent, registrar or co-registrar without notice. Except
as provided in the Indenture, the Company or any of its Subsidiaries may,
subject to certain exceptions, act as Paying Agent, registrar or co-registrar.
3. Indenture.
---------
The Company issued this Security under an Indenture dated as of August __,
2000 (the "Indenture") among the Company and the Trustee. Capitalized terms
herein are used as defined in the Indenture unless otherwise defined herein.
The terms of the Securities include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.
Code (S)(S) 77aaa - 77bbbb). The Securities are subject to all such terms, and
Holders of the Securities are referred to the Indenture and said Act for a
statement of such terms. In the event of any conflict between this Security and
the Indenture, the Indenture shall govern. The Securities are secured
obligations of the Company limited in aggregate principal amount to
$116,843,000.
The Holder hereof, by accepting this Security, agrees to be bound by all of
the terms and provisions of the Indenture applicable to such Holder.
The Company will furnish to any Holder of a Security upon written request
and without charge a copy of the Indenture. Requests may be made to: New
Millennium Homes, LLC, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
3
4. Security.
--------
The Securities are secured by a lien in favor of the Trustee on the Pledged
Collateral, which consists of the Capital of the Company's Subsidiaries, and the
Guaranty. Reference is hereby made to the Indenture, the Pledge Agreement and
Guaranty for a description of the Pledged Collateral thereby pledged and
assigned and the nature and extent of the security.
5. Optional Redemption.
-------------------
The Securities may be redeemed at any time in whole or in part, at a
Redemption Price equal to 100% of the aggregate principal amount of the
Securities then Outstanding, plus accrued and unpaid interest thereon to the
Redemption Date.
6. Mandatory Redemption.
--------------------
As more fully set forth in the Indenture, under certain circumstances the
Company is required to redeem Securities with Excess Cash Proceeds at a
Redemption Price equal to 100% of the aggregate principal amount of the
Securities so redeemed.
7. Notice of Redemption.
--------------------
Notice of Redemption will be mailed at least 30 days but not more than 60
days before the Redemption Date to each Holder of Securities to be redeemed at
his registered address. Securities in denominations larger than $1,000 may be
redeemed in part, but not in denominations of less than $1,000.
From and after any Redemption Date, if monies for the redemption of the
Securities called for redemption shall have been made available for redemption
on such Redemption Date, the only right of the Holders of such Securities will
be to receive payment of the Redemption Price.
8. Put Provisions.
--------------
As provided in and subject to the terms of the Indenture, upon a Change of
Control, each Holder will have the right to cause the Company to repurchase all
or any part of the Securities of such Holder at a repurchase price equal to 101%
of the principal amount of the Securities to be repurchased.
9. Restrictive Covenants.
---------------------
The Indenture imposes certain limitations on the ability of the Company and
its Subsidiaries to, among other things, incur additional Indebtedness, make
payments in respect of its Capital or certain Indebtedness, merge or consolidate
with any other person or sell, lease, transfer or otherwise dispose of all or
substantially all of its properties or assets and undertake certain transactions
with Affiliates. The limitations are subject to a number of important
qualifications and exceptions. The Company must annually (and in certain
instances, more frequently) report to the Trustee on compliance with such
limitations.
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10. Asset Sales.
-----------
As more fully set forth in the Indenture, the Indenture provides that the
Company must apply certain proceeds resulting from certain Asset Sales to the
repurchase of Securities under certain circumstances in an Excess Proceeds Offer
at a purchase price equal to 100% of the principal amount thereof plus accrued
and unpaid interest thereon to the date of purchase. A Holder of Securities may
tender or refrain from tendering in any Excess Proceeds Offer all or any portion
of its Securities at its discretion by completing the form entitled "Option of
Holder to Elect Purchase" appearing on the reverse side of this Security.
11. Defaults and Remedies.
---------------------
If an Event of Default occurs and is continuing, subject to certain
exceptions, the Trustee or the Holders of at least 25% in principal amount of
Securities may declare all the Securities to be due and payable immediately in
the manner and with the effect provided in the Indenture. Holders of Securities
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 then outstanding may
direct the Trustee in its exercise of any trust or power. The Trustee may
withhold notice in certain circumstances.
12. Denominations; Transfer; Exchange.
---------------------------------
The Securities are in fully registered form, without coupons, in
denominations of $1,000 and integral multiples of $1,000. A Holder may register
the transfer of or exchange Securities in accordance with the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay any taxes and fees required by
law or permitted by the Indenture. The Company need not register the transfer
of or exchange any Securities selected for redemption. Also, the Company need
not issue, exchange or register the transfer of any Securities for a period of
15 days prior to the selection of the Securities to be redeemed.
In accordance with the provisions of the Indenture and subject to certain
limitations therein set forth, an owner of a beneficial interest in a Global
Security may request a Security in certificated form, in exchange in whole or in
part, as the case may be, for such beneficial owner's interest in the Global
Security. In any such instance, an owner of a beneficial interest in a Global
Security will be entitled to physical delivery in certificated form of
Securities in authorized denominations equal in principal amount to such
beneficial interest and to have such Securities registered in its name.
13. Persons Deemed Owners.
---------------------
The registered Holder of a Security may be treated as the owner of it for
all purposes.
With respect to Global Securities, the Depository shall grant proxies and
otherwise authorize Holders of Global Securities to give or take any request,
demand, authorization, direction, notice, consent, waiver or other action which
a Holder of a Security is entitled to give or take under the Indenture.
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14. Unclaimed Money.
---------------
If money deposited with or paid to the Trustee or any Paying Agent for the
payment of principal, premium (if any) or interest (if any) on the Securities
remains unclaimed for 2 years, the Trustee and any such Paying Agent will pay
the money back to the Company at its request. After that, all liability of the
Trustee and such Paying Agent with respect to such money shall cease.
15. Discharge Prior to Redemption or Maturity.
-----------------------------------------
If the Company at any time deposits with the Trustee U.S. Legal Tender or
U.S. Government Obligations sufficient to pay the principal of and interest on
the Securities to redemption or maturity and complies with the other provisions
of the Indenture relating thereto, the Company will be discharged from certain
provisions of the Indenture and the Securities (including the financial
covenants, but excluding certain obligations, including without limitation its
obligation to pay the principal of the Securities).
16. Amendment; Supplement; Waiver.
-----------------------------
Subject to certain exceptions, the Indenture or the Securities may be
amended or supplemented with the consent of the Holders of at least a majority
in aggregate principal amount of the outstanding Securities and certain existing
Defaults or Events of Default or compliance with any provisions may be waived
with the consent of the Holders of at least a majority in aggregate principal
amount of the outstanding Securities. Without notice to or consent of any
Holder, the parties thereto may amend or supplement the Indenture or the
Securities to, among other things, cure any ambiguity, correct or supplement any
provision which may be inconsistent with any other provision, or to make any
other provisions with respect to matters or questions arising under the
Indenture which shall not be inconsistent with the provisions of the Indenture
(provided such amendment or supplement does not adversely affect the rights of
any of the Holders), provide for any additional rights or benefits to Holders or
make any change that does not adversely affect the rights of any Holder.
17. Successors.
----------
When a successor assumes all the obligations of its predecessor under the
Securities and the Indenture, the predecessor will be released from those
obligations.
18. Trustee Dealings with Company.
-----------------------------
The Trustee under the indenture, in its individual or any other capacity,
may make loans to, accept deposits from, and perform services for the Company or
its Affiliates, and may otherwise deal with the Company or its Affiliates as if
it were not the Trustee.
19. No Recourse Against Others.
--------------------------
No stockholder, director, officer, employee, manager, incorporator or
direct or indirect equityholder, past, present or future, of the Company or any
successor corporation shall have any liability for any obligation of the Company
under the Securities or the Indenture or for any claim
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based on, in respect of or by reason of, such obligations or their creation.
Each Holder of a Security by accepting a Security waives and releases all such
liability. The waiver and release are part of the consideration for the issue of
the Securities.
20. Authentication.
--------------
This Security shall not be valid until the Trustee or authenticating agent
signs the certificate of authentication on the face of this Security.
21. Abbreviation.
------------
Customary abbreviations may be used in the name of a Holder of a Security
or an assignee, such as: TEN COM (= tenants in common), TENANT (= tenants by
the entireties), 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).
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[FORM OF ASSIGNMENT]
I or we assign and transfer this Security to
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type name, address and zip code of assignee)
Please insert social security or other
identifying number of assignee
-----------------------
and irrevocably appoint ________ agent to transfer this Security on the books of
the Company. The agent may substitute another to act for him.
Dated Signed
---------------- -------------------
---------------------------------------------------------------------------
(Sign exactly as name appears on the other side of this Security)
Signature Guarantee
by a member of the
Medallion Program:
---------------------
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OPTION OF HOLDER TO ELECT PURCHASE
If you elect to have this Security purchased by the Company pursuant to
Section 4.12 or 4.16 of the Indenture, check the box: [_]
If you wish to have a portion of this Security purchased by the Company
pursuant to Section 4.12 or 4.16 of the Indenture, state the amount (in original
principal amount):
$
-------------------
Date: Your Signature:
----------------------- ----------------------
(Sign exactly as your
name appears on the other
side of this Security)
Signature Guarantee
by a member of the
Medallion Program:
---------------------
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