<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to .
Commission File Number 1-5899
U.S. HOME CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 21-0718930
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1800 West Loop South, Houston, Texas 77027
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (713) 877-2311
Not Applicable
(Former name, former address and former fiscal year,
if changed since last report.)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. YES X NO
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a
plan confirmed by a court. YES X NO
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Class Outstanding at March 31, 1996
Common stock, $.01 par value 11,253,180 shares
<PAGE> 2
U.S. HOME CORPORATION
INDEX
Page
Number
------
Part I. Financial Information
Item 1. Financial Statements
Consolidated Condensed Balance Sheets--
March 31, 1996 and December 31, 1995 3
Consolidated Condensed Statements of
Operations--Three Months Ended
March 31, 1996 and 1995 5
Consolidated Condensed Statements of Cash
Flows--Three Months Ended March 31, 1996
and 1995 6
Notes to Consolidated Condensed Financial
Statements 7
Review by Independent Public Accountants 10
Report of Independent Public Accountants 11
Item 2. Management's Discussion and Analysis of
Financial Condition and Results
of Operations 12
Part II. Other Information
Item 5. Other Information 15
Item 6. Exhibits and Reports on Form 8-K 16
<PAGE> 3
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
U.S. HOME CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(Dollars in Thousands, Except Per Share Data)
ASSETS
March 31, December 31,
1996 1995
--------- ------------
(Unaudited)
HOUSING:
Cash (including restricted funds) $ 25,530 $ 5,110
Receivables, net ................ 44,236 33,454
Single-Family Housing Inventories 648,919 632,035
Option Deposits on Real Estate .. 68,668 63,375
Other Assets .................... 49,080 43,437
-------- --------
836,433 777,411
-------- --------
FINANCIAL SERVICES:
Cash (including restricted funds) 5,787 5,456
Residential Mortgage Loans ...... 50,030 43,292
Other Assets .................... 16,276 15,925
-------- --------
72,093 64,673
-------- --------
$908,526 $842,084
======== ========
The accompanying notes are an integral part of these balance sheets.
<PAGE> 4
U.S. HOME CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(Dollars in Thousands, Except Per Share Data)
LIABILITIES AND STOCKHOLDERS' EQUITY
March 31, December 31,
1996 1995
---------- ------------
(Unaudited)
HOUSING: ....................................
Accounts Payable .......................... $ 89,753 $ 88,234
Accrued Expenses and Other Current
Liabilities ............................. 57,238 46,070
Revolving Credit Facility ................. -- 24,000
Senior and Convertible Subordinated Debt
and Notes Payable ....................... 368,796 300,599
--------- ---------
515,787 458,903
--------- ---------
FINANCIAL SERVICES:
Accrued Expenses and Other
Current Liabilities ..................... 22,485 18,818
Revolving Credit Facility ................. 31,790 35,371
--------- ---------
54,275 54,189
--------- ---------
Total Liabilities ....................... 570,062 513,092
--------- ---------
STOCKHOLDERS' EQUITY:
Convertible Preferred Stock, $25 per share
redemption value, authorized 396,454 and
403,597 shares at March 31, 1996 and
December 31, 1995, outstanding 312,111
and 319,254 shares at March 31, 1996
and December 31, 1995 ................... 7,803 7,981
Common Stock, $.01 par value, authorized
50,000,000 shares, outstanding
11,253,180 and 11,243,147 shares at
March 31, 1996 and December 31, 1995 .... 112 112
Capital In Excess of Par Value ............ 348,836 348,577
Retained Earnings (Deficit) ............... (16,048) (25,367)
Unearned Compensation on Restricted
Stock ................................... (2,239) (2,311)
--------- ---------
Total Stockholders' Equity .............. 338,464 328,992
--------- ---------
$ 908,526 $ 842,084
========= =========
The accompanying notes are an integral part of these balance sheets.
<PAGE> 5
U.S. HOME CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Dollars in Thousands, Except Per Share Data)
(Unaudited)
Three Months Ended
March 31,
--------------------
1996 1995
-------- --------
HOUSING:
Operating Revenues .................. $267,907 $260,127
-------- --------
Operating Costs and Expenses -
Cost of products sold ............. 224,974 218,346
Selling, general and administrative 29,411 29,142
-------- --------
254,385 247,488
-------- --------
Housing Operating Income ............ 13,522 12,639
-------- --------
FINANCIAL SERVICES:
Operating Revenues .................. 4,855 3,075
-------- --------
Operating Costs and Expenses -
General and administrative ........ 3,240 2,624
Interest .......................... 461 66
-------- --------
3,701 2,690
-------- --------
Financial Services Operating
Income ............................ 1,154 385
-------- --------
INCOME BEFORE INCOME TAXES ............ 14,676 13,024
PROVISION FOR INCOME TAXES ............ 5,357 4,884
-------- --------
NET INCOME ............................ $ 9,319 $ 8,140
======== ========
INCOME PER COMMON AND COMMON
EQUIVALENT SHARE:
Primary ........................... $ .77 $ .70
======== ========
Fully diluted ..................... $ .69 $ .62
======== ========
The accompanying notes are an integral part of these statements.
<PAGE> 6
U.S. HOME CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
(Unaudited)
Three Months Ended
March 31,
1996 1995
-------- --------
Net Cash Used by Operating Activities .......... $(18,210) $ (9,689)
-------- --------
Net Cash Flows From Investing Activities:
Purchase of property, plant and equipment,
net of disposals ........................... (573) (719)
Proceeds from investments in mortgages ....... 774 68
Increase in restricted cash .................. (330) (124)
Other ...................................... (262) (227)
-------- --------
Net cash used by investing activities ........ (391) (1,002)
-------- --------
Net Cash Flows From Financing Activities:
Repayment of revolving credit facilities,
net of proceeds ............................ (27,581) 14,190
Net proceeds from sale of 7.95% senior notes . 73,406 --
Repayment of notes and mortgage notes payables (6,803) (3,992)
-------- --------
Net cash provided by financing activities .... 39,022 10,198
-------- --------
Net Increase (Decrease) in Cash ................ 20,421 (493)
Cash At Beginning of Period .................... 6,228 2,050
-------- --------
Cash At End of Period .......................... $ 26,649 $ 1,557
======== ========
Supplemental Disclosure:
Interest paid, before amount capitalized -
Housing .................................... $ 1,833 $ 1,991
Financial Services ......................... 416 87
-------- --------
$ 2,249 $ 2,078
======== ========
The accompanying notes are an integral part of these statements.
<PAGE> 7
U.S. HOME CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
March 31, 1996
(Dollars in Thousands)
(Unaudited)
(1) PRINCIPLES OF CONSOLIDATION AND BASIS OF PRESENTATION
The accompanying consolidated condensed balance sheet as of
December 31, 1995, which has been derived from audited financial
statements, and the accompanying unaudited consolidated condensed
financial statements have been prepared pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain
information and note disclosures normally included in annual
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to
those rules and regulations. Although the Company believes that the
disclosures made are adequate to ensure that the information
presented is not misleading, it is suggested that these
consolidated condensed financial statements should be read in
conjunction with the financial statements and notes thereto
included in the Company's latest Annual Report on Form 10-K.
The preparation of consolidated condensed financial statements
requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of
any contingent assets and liabilities at the date of the financial
statements and revenues and expenses during the reporting period.
Management's estimates and assumptions are reflective of, among
other things, prevailing market conditions, expected market
conditions based on published economic forecasts, current operating
strategies and the availability of capital which are all subject to
change. Changes to the aforementioned or other conditions could in
turn cause changes to such estimates and assumptions and, as a
result, actual results could differ from the original estimates.
In the opinion of the Company, the accompanying consolidated
condensed financial statements contain all adjustments (all of
which were normal and recurring adjustments) necessary to present
fairly the Company's financial position as of March 31, 1996 and
December 31, 1995 and its results of operations and cash flows for
the three month periods ended March 31, 1996 and 1995.
Because of the seasonal nature of the Company's business, the
results of operations for the three month periods ended March 31,
1996 and 1995 are not necessarily indicative of the results for the
full year.
<PAGE> 8
(2) INVENTORIES
The components of single-family housing inventories are as follows:
March 31, December 31,
1996 1995
Housing completed and under construction $235,868 $238,508
Models ................................. 64,819 63,475
Finished lots .......................... 139,306 129,260
Land under development ................. 64,513 50,714
Land held for development or sale ...... 144,413 150,078
-------- --------
$648,919 $632,035
======== ========
(3) REVOLVING CREDIT FACILITIES, SENIOR AND CONVERTIBLE SUBORDINATED DEBT
AND NOTES PAYABLE
Housing -
Revolving credit facility, senior and convertible subordinated debt
and notes payable consist of the following:
March 31, December 31,
1996 1995
-------- ------------
Revolving credit facility ...... $ -- $ 24,000
-------- --------
7.95% Senior notes due 2001 .... 75,000 --
9.75% Senior notes due 2003 .... 200,000 200,000
4.875% Convertible subordinated
debentures due 2005 .......... 80,000 80,000
Notes and mortgage notes payable 13,796 20,599
-------- --------
368,796 300,599
-------- --------
$368,796 $324,599
======== ========
In September 1995, the Company entered into a three-year unsecured
revolving credit facility (the "Credit Facility") with a group of
banks. The Credit Facility provides up to a maximum of $130,000 of
which up to $20,000 may be used for letter of credit obligations,
subject to a borrowing base limitation. At March 31, 1996, $48,010
of the Credit Facility was available for borrowing after giving
effect to the $275,000 of Senior Notes. The amount available for
borrowing is based on housing inventories, finished lots and
closing proceeds receivable less the outstanding senior debt,
including the Credit Facility; as the amount invested in these
categories changes, the amount of available borrowings will
increase or decrease. Borrowings bear interest at a premium over
<PAGE> 9
the Eurodollar rate or a bank corporate base rate announced by the
agent bank. The Credit Facility expires on September 29, 1998, but
may be extended annually for successive one-year periods with the
consent of the banks and contains numerous real estate and
financial covenants, including restrictions on incurring additional
debt, creation of liens and the levels of land and housing
inventories maintained by the Company and a prohibition on the
payment of dividends, other than stock dividends.
On February 16, 1996, the Company completed the sale of $75,000
principal amount of its 7.95% senior notes ("Senior Notes") due
March 1, 2001. Interest on the Senior Notes is payable on March 1
and September 1 of each year, commencing on September 1, 1996. Upon
a change of control of the Company, holders of the notes will have
the right to require the Company to redeem the Senior Notes at a
price of 101% of the principal amount thereof, together with
accrued and unpaid interest. There can be no assurance that
sufficient funds will be available at the time of a change of
control to make any required repurchases. The indenture relating to
the Senior Notes contains numerous convenants, including a minimum
tangible net worth requirement and a limitation on the incurrance
of additional debt.
Financial Services -
Financial Services revolving credit facility consists of an
agreement with a financial institution whereby the Company's
mortgage banking subsidiary, U.S. Home Mortgage Corporation
("Mortgage"), may borrow up to $45,000 under a revolving line of
credit (the "Mortgage Credit Facility") secured by residential
mortgage loans and mortgage notes receivables. The Mortgage Credit
Facility is not guaranteed by the Company, matures on August 31,
1996 and bears interest at a premium over the London Interbank
Offered Rate. The Company expects the Mortgage Credit Facility to
be extended or replaced by a credit facility similar to the terms
and conditions of its present credit facility.
(4) HOUSING INTEREST
A summary of housing interest for the three month periods ended
March 31, 1996 and 1995 follows:
1996 1995
-------- --------
Capitalized at beginning of period $ 59,898 $ 56,082
Capitalized ...................... 7,939 7,839
Included in cost of sales ........ (6,629) (7,022)
Included in other ................ (24) (150)
-------- --------
Capitalized at end of period ..... $ 61,184 $ 56,749
======== ========
<PAGE> 10
(5) INCOME PER SHARE
The following weighted average number of common and common
equivalent shares were used to compute income per share for the
three month periods ended March 31, 1996 and 1995:
1996 1995
---------- ----------
Primary 12,115,484 11,580,628
Fully diluted 14,369,005 13,834,149
The weighted average number of common and common equivalent shares
outstanding for 1996 primary income per share includes the dilutive
effect of the convertible redeemable preferred stock and Class B
warrants and the assumed exercise of stock options. No effect was
given to the shares that would be issuable on exercise of the
warrants and stock options in 1995 since they would be antidilutive
or were immaterial. Fully diluted income per share includes the
assumed conversion of the convertible subordinated debentures.
<PAGE> 11
REVIEW BY INDEPENDENT PUBLIC ACCOUNTANTS
----------------------------------------
Arthur Andersen LLP, independent public accountants, have performed a
review of the consolidated condensed balance sheet as of March 31, 1996
and the related consolidated condensed statements of operations and
cash flows for the three month periods ended March 31, 1996 and 1995
included in this report. Such review was made in accordance with
standards established by the American Institute of Certified Public
Accountants.
<PAGE> 12
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
TO U.S. HOME CORPORATION:
We have reviewed the accompanying consolidated condensed balance sheet of
U.S. Home Corporation (a Delaware corporation) and subsidiaries as of March
31, 1996, and the related consolidated condensed statements of operations
and cash flows for the three month periods ended March 31, 1996 and 1995.
These financial statements are the responsibility of the Company's
management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical
procedures to financial data and making inquiries of persons responsible
for financial and accounting matters. It is substantially less in scope
than an audit conducted in accordance with generally accepted auditing
standards, the objective of which is the expression of an opinion regarding
the financial statements taken as a whole. Accordingly, we do not express
such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the financial statements referred to above for them to be
in conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of U.S. Home Corporation and
subsidiaries as of December 31, 1995, and the related consolidated
statements of operations, stockholders' equity and cash flows for the year
then ended (not presented herein), and in our report dated February 1,
1996, we expressed an unqualified opinion on those statements. In our
opinion, the information set forth in the accompanying consolidated
condensed balance sheet as of December 31, 1995, is fairly stated, in all
material respects, in relation to the consolidated balance sheet from which
it has been derived.
/s/ Arthur Andersen LLP
------------------------
ARTHUR ANDERSEN LLP
Houston, Texas
April 24, 1996
<PAGE> 13
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Results of Operations
Housing
The following table sets forth certain financial information for the
periods indicated (dollars in thousands, except average sales price):
Three Months Ended
March 31,
1996 1995
-------- --------
Revenues -
Single-family homes ........... $264,725 $256,373
Land and other ................ 3,182 3,754
-------- --------
Total ....................... $267,907 $260,127
======== ========
Single-family homes -
Gross margin amount ........... $ 42,492 $ 41,246
Gross margin percentage........ 16.1% 16.1%
Units delivered ............... 1,643 1,649
Average sales price ........... $161,100 $155,500
New orders taken .............. 2,699 2,277
Backlog at end of period ...... 3,787 3,179
Selling, general and
administrative expenses as
a percentage of housing
revenues ...................... 11.0% 11.2%
Interest expense -
Paid and accrued .............. $ 7,939 $ 7,839
Capitalized ................... $ 7,939 $ 7,839
Percent capitalized ........... 100.0% 100.0%
Capitalized interest included
in cost of products sold ...... $ 6,629 $ 7,022
Revenues -
Revenues from sales of single-family homes for the three month period ended
March 31, 1996 increased 3% compared to the three month period ended March
31, 1995. The increase resulted primarily from a 4% increase in the average
sales price. The increase in the average sales price in 1996 was primarily
due to price increases.
New orders taken for the three month period ended March 31, 1996 increased
19% compared to the same period in 1995. The Company believes that new
orders taken in the first quarter of 1995 were adversely affected due to
higher mortgage interest rates. Mortgage interest rates trended down in the
second quarter of 1995 to a level that generally continued through the
<PAGE> 14
first quarter of 1996 and not only had a positive impact on the number of
new orders taken but also the comparison of new orders taken between the
three month period ended March 31, 1996 and the same period in 1995.
No assurances can be given that new orders taken for the remainder of
1996 will continue at the first quarter pace due to possible future
fluctuations in economic activity, interest rates and the level of consumer
confidence. See Part II, "Item 5 - Other Information" on page 15 for a table
of unit activity by market for the three month periods ended March 31, 1996
and 1995.
Selling, General and Administrative Expenses -
As a percentage of housing revenues, selling, general and administrative
expenses for 1996 decreased when compared to 1995. This decrease is due to
the Company's continued effort to improve operating efficiencies and
control fixed costs.
Financial Services
Revenues -
Revenues for the financial services segment for the periods indicated were
as follows (dollars in thousands):
Three Months
Ended
March 31,
-------------------
1996 1995
------- ------
U.S. Home Mortgage Corporation and
Subsidiary $ 3,834 $2,272
Other financial services operations 1,021 803
------- ------
$ 4,855 $3,075
======= ======
The increase in U.S. Home Mortgage Corporation and subsidiary's
("Mortgage") revenues for the three month period ended March 31, 1996 when
compared to the three month period ended March 31, 1995 was primarily due
to an increase in mortgage loan originations and income from the sale of
mortgage loans and servicing rights.
Financial Condition and Liquidity
Housing
The Company's most significant needs for capital resources are land and
finished lot purchases, land development and housing construction. The
Company's ability to generate cash adequate to meet these needs is
principally achieved from the sale of homes and the margins thereon, the
utilization of Company-owned lots and borrowings under its financing
facilities.
<PAGE> 15
Access to quality land and lot locations is an integral part of the
Company's success. Typically, in order to secure the rights to quality
locations and provide sufficient lead time for development, the Company
must acquire land rights well in advance of when orders for housing units
are expected to occur. The Company attempts to minimize its exposure to the
cyclical nature of the housing market and its use of working capital by
employing rolling lot options, which enable the Company to initially pay a
small portion of the total lot cost and then purchase the lots on a
scheduled basis. The increase in land inventories in 1996 from 1995 was
primarily the result of increased activities, including the increase in the
Company's retirement and active-adult communities activities.
In February 1996, the Company sold $75 million principal amount of its
7.95% senior notes due 2001. The net proceeds thereof were used to repay
the outstanding balance under the Credit Facility (see below) and for
working capital and general corporate purposes. See Note 3 of Notes to
Consolidated Condensed Financial Statements.
The Company has financed, and expects to continue to finance, its working
capital needs from operations and borrowings, including those made under
the Company's unsecured revolving credit facility ("Credit Facility"). The
Credit Facility (and previous credit facilities) have enabled the Company
to meet peak operating needs. See Note 3 of Notes to Consolidated Condensed
Financial Statements.
The net cash provided or used by the operating, investing and financing
activities of the housing operations for the three month periods ended
March 31, 1996 and 1995 is summarized below (dollars in thousands):
1996 1995
-------- ---------
Net cash provided (used) by:
Operating activities $(15,448) $(15,231)
Investing activities (862) (719)
Financing activities 42,603 15,751
-------- --------
Net increase (decrease) in cash $ 26,293 $ (199)
======== ========
Cash flow from housing financing activities for 1996 provided cash
reflecting the sale of the Company's 7.95% senior notes, offset primarily
by the repayment of the outstanding amount under the revolving credit
facility, while 1995 provided cash reflecting primarily net borrowings
under the revolving credit facility.
The Company believes that cash flow from operations and amounts available
under the Credit Agreement will be sufficient to meet its working capital
obligations and other needs. However, should the Company require capital in
excess of that which is currently available there can be no assurance that
it will be available.
<PAGE> 16
Financial Services
Mortgage's activities represent a substantial portion of the financial
services segment's activities. As loan originations by Mortgage are
primarily from housing units delivered by the Company's home building
operations, Mortgage's financial condition and liquidity are to a
significant extent dependent upon the financial condition of the Company.
Financial services operating activities are affected primarily by
Mortgage's loan originations which result in the sale of mortgage loans and
related servicing rights to third party investors. Cash flows from
financial services operating activities are also affected by the timing of
the sales of loans and servicing rights which generally are sold to
investors within 30 days after homes are delivered. In this regard, cash
flows from financial services operating activities for 1996 used more cash
compared to 1995 primarily due to an increase in residential mortgage loan
receivables.
The Company finances its financial services operations primarily from
internally generated funds, such as from the origination and sale of
residential mortgage loans and related servicing rights, and short-term
debt. As more fully discussed in Note 3 of Notes to Consolidated Condensed
Financial Statements, the short-term debt consists of a $45 million secured
revolving line of credit (the "Mortgage Credit Facility") which matures on
August 31, 1996. While the Mortgage Credit Facility contains numerous
covenants, including a debt to tangible net worth ratio and a minimum
tangible net worth requirement, these covenants are not anticipated to
significantly limit Mortgage's operations.
The Company has no obligation to provide funding to its financial services
operations, nor does it guarantee any of its financial services
subsidiaries' debt. The Company believes that the internally generated
funds and the Mortgage Credit Facility will be sufficient to provide for
Mortgage's working capital needs.
<PAGE> 17
Part II. OTHER INFORMATION
Item 2. Changes in Securities
On February 16, 1996, the Company issued $75 million principal
amount of 7.95% Senior Notes due 2001 pursuant to a Senior
Indenture with IBJ Schroder Bank & Trust Company, as trustee (the
"Senior Indenture"). The Senior Indenture includes a limitation on
the Company's ability to make certain payments on its capital
stock. For a description of such limitation, reference is made to
the text under the caption "Description of Debt Securities" set
forth on pages 3 through 32 of the Company's Prospectus dated
February 13, 1996 forming Part I of the Company's Registration
Statement on Form S-3 (File No. 33-00583).
Item 5. Other Information
The following table provides information (expressed in number of
housing units) with respect to new orders taken, deliveries to
purchasers of single-family homes and backlog by market for the
three month periods ended March 31, 1996 and 1995:
States New Orders Deliveries Backlog
------ ---------- ---------- -------
1996 1995 1996 1995 1996 1995
----- ----- ---- ----- ----- -----
Arizona 270 286 273 187 382 362
California 160 179 112 101 159 164
Colorado 610 425 262 255 810 560
Florida 847 785 569 670 1,264 1,261
Indiana/Ohio 77 15 32 7 107 18
Maryland/Virginia 108 111 73 72 148 121
Minnesota 103 70 64 60 158 97
Nevada 135 77 78 64 176 103
New Jersey 171 70 60 79 294 160
Texas 218 259 120 154 289 333
------ ----- ----- ----- ----- -----
2,699 2,277 1,643 1,649 3,787 3,179
====== ===== ===== ===== ===== =====
<PAGE> 18
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 4.1 - Senior Indenture, dated February 16, 1996, by
and between U.S. Home Corporation and IBJ
Schroder Bank & Trust Company, as trustee
Exhibit 4.2 - Officers' Certificate, dated February 16,
1996, establishing the form and terms of the
$75 million aggregate principal amount of
unsecured senior notes ("Senior Notes")
Exhibit 11 - Computation of Income Per Common Share
Exhibit 15 - Letter with respect to unaudited interim
financial information
Exhibit 27 - Financial Data Schedule
(b) Reports on Form 8-K
On February 12, 1996, under Item 5 "Other Events" of Form
8-K, the Company filed a Current Report on Form 8-K
reporting that the Company intended to offer by means of a
prospectus, in an underwritten public offering, Senior Notes
under the Company's effective Shelf Registration on Form S-3
(File No. 1-5899).
No other Current Report on Form 8-K was filed by the Company
during January, February or March 1996.
<PAGE> 19
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
U.S. HOME CORPORATION
Date: May 1, 1996 /s/ Isaac Heimbinder
-------------------------------------
Isaac Heimbinder
President, Co-Chief Executive Officer
and Chief Operating Officer
Date: May 1, 1996 /s/ Chester P. Sadowski
-------------------------------------
Chester P. Sadowski
Vice President, Controller
and Chief Accounting Officer
<PAGE> 20
INDEX OF EXHIBITS
Sequential
Exhibit Numbered
Number Page
4.1 Senior Indenture, dated February 16, 1996, by
and between U.S. Home Corporation and
IBJ Schroder Bank & Trust company, as trustee 21
4.2 Officers' Certificate, dated February 16, 1996,
establishing the form and terms of the $75
million aggregate principal amount of unsecured
senior notes ("Senior Notes") 119
11 Computation of Income Per Common Share 134
15 Letter with respect to unaudited interim financial 136
information
27 Financial Data Schedule 137
<PAGE> 21
EXHIBIT 4.1
SENIOR INDENTURE,
dated as of February 16, 1996,
between
U.S. HOME CORPORATION
and
IBJ SCHRODER BANK & TRUST COMPANY
Trustee
<PAGE> 22
CROSS-REFERENCE TABLE
TIA
Section Indenture Section
------- -----------------
310(a)(1)........................... 9.10
(a)(2)......................... 9.10
(a)(3)......................... N.A.
(a)(4)......................... N.A.
(b)............................ 9.08; 9.10
(c)............................ N.A.
311(a).............................. 9.11
(b)............................ 9.11
(c)............................ N.A.
312 (a)............................ 10.01; 10.02
(b)............................ 10.02; 14.03
(c)............................ 10.02
313(a).............................. 9.06
(b)(1)......................... 9.06
(b)(2)......................... 9.06
(c)............................ 9.06
(d)............................ 9.06
314(a).............................. 6.03
(b)............................ N.A.
(c)(1)......................... 14.04; 14.05
(c)(2)......................... 14.04; 14.05
(c)(3)......................... 14.05
(d)............................ N.A.
(e)............................ 14.05
(f)............................ N.A.
315 (a)............................ 9.01
(b)............................ 9.05
(c)............................ 9.01
(d)............................ 9.01
(e)............................ 8.11
316(a)(last sentence)............... 8.05
(a)(1)(A)...................... 8.05
(a)(1)(B)...................... 8.04
(a)(2)......................... Not applicable
(b)............................ 8.07
317(a)(1)........................... 8.08
(a)(2)......................... 8.09
(b)............................ 3.05
318(a).............................. 14.01
N.A. means not applicable
Note: This cross-reference table will not, for any
purpose, be deemed to be a part of this Indenture.
<PAGE> 23
TABLE OF CONTENTS
Page
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ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE 1
Section 1.01 Rules of Construction 1
Section 1.02 Definitions 2
Acquisition Debt 2
Affiliate 2
Affiliate Transaction 2
Agent 2
Asset Sale 2
Asset Sale Offer Date 3
Asset Sale Offer Price 3
Bankruptcy Law 3
Board of Directors 3
Board Resolution 3
Business Day 3
Capital Stock 3
Capitalized Lease Obligations 3
Change of Control 3
Change of Control Offer 4
Change of Control Payment Date 4
Change of Control Price 4
Common Equity 4
Company 4
Company Request or Company Order 4
Consolidated Cash Flow Available
for Fixed Charges 4
Consolidated Fixed Charge
Coverage Ratio 5
Consolidated Income Tax Expens 5
Consolidated Interest Expense 5
Consolidated Interest Incurred 5
Consolidated Net Income 5
Consolidated Tangible Net Assets 6
Consolidated Tangible Net Worth 6
Corporate Trust Office of the
Trustee 6
Covenant Defeasance 6
Custodian 6
<PAGE> 24
PAGE
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Default 6
Defaulted Interest 6
Defeasance 6
Defeasible Series 7
Depository 7
Disqualified Stock 7
Disqualified Stock Dividend 7
DTC 7
Event of Default 7
Excess Proceeds 7
Excess Proceeds Offer 7
Exchange Act 7
Existing Credit Facility 7
Existing Indebtedness 8
Fair Market Value 8
GAAP 8
Global Security 8
Hedging Obligations 8
Holder 8
Incur 8
Indebtedness 8
Indenture 9
Independent Financial Advisor 9
Intangible Assets 9
Interest Expense 10
Interest Incurred 10
Interest Payment Date 10
Investments 11
Issue Date 11
Legal Holiday 11
Lien 11
Material Subsidiary 11
Maturity 11
Net Proceeds 11
Net Worth Amount 12
Net Worth Offer 12
Net Worth Offer Date 12
Net Worth Offer Price 12
Non-Recourse Indebtedness 12
Officer 12
Officers' Certificate 12
Opinion of Counsel 12
Outstanding 12
Paying Agent 13
Permitted Investment 13
Permitted Liens 14
Person 15
Place of Payment 15
Preferred Stock 15
<PAGE> 25
PAGE
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Refinancing Indebtedness 15
Registrar 16
Regular Record Date 16
Restricted Investment 16
Restricted Payment 16
Restricted Subsidiary 17
SEC 17
Securities 17
Security Register 17
Special Record Date 17
Stated Maturity 17
Subsidiary 17
Successor 18
TIA 18
Trustee 18
Trust Officer 18
U.S. Government Obligations 18
Unrestricted Subsidiary 18
Weighted Average Life to
Maturity 19
Wholly Owned Subsidiary 19
Section 1.03 Incorporation by Reference
of TIA 19
ARTICLE 2
SECURITY FORMS 20
Section 2.01 Forms Generally 20
Section 2.02 Form of Legend for Global
Securities 20
Section 2.03 Form of Trustee's Certificate
of Authentication 21
ARTICLE 3
THE SECURITIES 21
Section 3.01 Amount Unlimited; Issuable
in Series 21
Section 3.02 Denominations 24
Section 3.03 Execution, Authentication,
Delivery and Dating 24
Section 3.04 Temporary Securities 26
Section 3.05 Registration, Registration
of Transfer and Exchange 27
Section 3.06 Mutilated, Destroyed, Lost
and Stolen Securities 30
Section 3.07 Payment of Interest; Interest
Rights Preserved 31
Section 3.08 Persons Deemed Owners 33
Section 3.09 Cancellation 33
Section 3.10 Computation of Interest 33
<PAGE> 26
PAGE
----
ARTICLE 4
REDEMPTION 34
Section 4.01 Applicability of Article 34
Section 4.02 Election to Redeem; Notice
to Trustee 34
Section 4.03 Selection of Securities to
Be Redeemed 34
Section 4.04 Notices to Holders 34
Section 4.05 Effect of Notice of Redemption 35
Section 4.06 Deposit of Redemption Price 35
Section 4.07 Securities Redeemed in Part 36
Section 4.08 Optional Redemption 36
ARTICLE 5
SINKING FUNDS 36
Section 5.01 Applicability of Article 36
Section 5.02 Satisfaction of Sinking Fund
Payments with Securities 37
Section 5.03 Redemption of Securities
for Sinking Fund 37
ARTICLE 6
COVENANTS 38
Section 6.01 Payment of Securities 38
Section 6.02 Maintenance of Office or Agency 39
Section 6.03 SEC Reports; Financial
Statements 39
Section 6.04 Money for Security Payments to
Be Held in Trust 40
Section 6.05 Compliance Certificate 41
Section 6.06 Corporate Existence, etc. 42
Section 6.07 Payment of Taxes and Other
Claims 42
Section 6.08 Insurance 42
Section 6.09 Stay, Extension and Usury Laws 43
Section 6.10 Maintenance of Properties 43
Section 6.11 Disposition of Proceeds of
Asset Sales 43
Section 6.12 Limitations on Restricted
Payments 47
Section 6.13 Limitations on Additional
Indebtedness 48
Section 6.14 Restrictions on Restricted
Subsidiary Indebtedness 49
Section 6.15 Limitations and Restrictions
on Capital Stock of Subsidiaries 49
Section 6.16 Change of Control 49
<PAGE> 27
PAGE
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Section 6.17 Limitations on Transactions
With Affiliates 52
Section 6.18 Limitations on Liens 53
Section 6.19 Limitations on Restrictions on
Distributions from Restricted
Subsidiaries 53
Section 6.20 Maintenance of Consolidated
Tangible Net Worth 54
ARTICLE 7
SUCCESSORS 57
Section 7.01 Limitations on Mergers and
Consolidations 57
Section 7.02 Successor Corporation
Substituted 57
ARTICLE 8
DEFAULTS AND REMEDIES 58
Section 8.01 Events of Default 58
Section 8.02 Acceleration 60
Section 8.03 Other Remedies 61
Section 8.04 Waiver of Past Defaults and
Compliance With Indenture
Provisions 61
Section 8.05 Control by Majority 61
Section 8.06 Limitations on Suits 62
Section 8.07 Rights of Holders to Receive
Payment 62
Section 8.08 Collection Suit by Trustee 62
Section 8.09 Trustee May File Proofs of
Claim 63
Section 8.10 Priorities 63
Section 8.11 Undertaking for Costs 63
Section 8.12 Restoration of Rights and
Remedies 64
ARTICLE 9
TRUSTEE 64
Section 9.01 Duties of Trustee 64
Section 9.02 Rights of Trustee 65
Section 9.03 Individual Rights of Trustee 66
Section 9.04 Trustee's Disclaimer 66
Section 9.05 Notice of Defaults 67
Section 9.06 Reports by Trustee to Holders 67
Section 9.07 Compensation and Indemnity 67
Section 9.08 Replacement of Trustee 68
Section 9.09 Successor Trustee by
Merger, etc. 69
Section 9.10 Eligibility; Disqualification 69
Section 9.11 Preferential Collection of
Claims Against Company 70
<PAGE> 28
PAGE
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ARTICLE 10
HOLDERS' LISTS 70
Section 10.01 Company to Furnish Trustee
Names and Addresses of Holders 70
Section 10.02 Preservation of Information 70
ARTICLE 11
DEFEASANCE AND COVENANT DEFEASANCE 71
Section 11.01 Company's Option to Effect
Defeasance or Covenant
Defeasance 71
Section 11.02 Defeasance and Discharge 71
Section 11.03 Covenant Defeasance 72
Section 11.04 Conditions to Defeasance or
Covenant Defeasance 72
Section 11.05 Deposited Money and U.S.
Government Obligations to
Be Held in Trust; Other
Miscellaneous Provisions 74
Section 11.06 Reinstatement 75
ARTICLE 12
SATISFACTION AND DISCHARGE 75
Section 12.01 Satisfaction and Discharge
of Indenture 75
Section 12.02 Application of Trust Money 76
ARTICLE 13
SUPPLEMENTAL INDENTURES 77
Section 13.01 Supplemental Indentures
Without Consent of Holders 77
Section 13.02 Supplemental Indentures With
Consent of Holders 78
Section 13.03 Compliance With TIA 80
Section 13.04 Revocation and Effect of
Consents 80
Section 13.05 Notation on or Exchange
of Securities 81
Section 13.06 Trustee to Sign Amendments,
etc. 81
<PAGE> 29
PAGE
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ARTICLE 14
MISCELLANEOUS 81
Section 14.01 TIA Controls 81
Section 14.02 Notices 81
Section 14.03 Communication by Holders With
Other Holders 83
Section 14.04 Action by Securityholders 83
Section 14.05 Proof of Execution of
Instruments and Holding of
Securities 84
Section 14.06 Obligation to Disclose
Beneficial Ownership of
Securities 84
Section 14.07 Certificate and Opinion as
to Conditions Precedent 84
Section 14.08 Statements Required in
Certificate or Opinion 85
Section 14.09 Rules by Trustee and Agents 86
Section 14.10 No Recourse Against Others 86
Section 14.11 Governing Law86
Section 14.12 No Adverse Interpretation of
Other Agreements 86
Section 14.13 Successors 86
Section 14.14 Severability 87
Section 14.15 Counterpart Originals 87
Section 14.16 Trustee as Paying Agent
and Registrar 87
Section 14.17 Table of Contents,
Headings, etc. 87
Section 14.18 Benefits of Indenture 87
Section 14.19 Acceptance of Trust 87
ARTICLE 15
MEETINGS OF HOLDERS OF SECURITIES 88
Section 15.01 Purposes of Meetings 88
Section 15.02 Call of Meetings by Trustee 88
Section 15.03 Call of Meetings by Company
or Securityholders 88
Section 15.04 Person Entitled to Vote at
Meeting 89
Section 15.05 Regulations for Meeting 89
<PAGE> 30
INDENTURE, dated as of February 16, 1996, between U.S.
Home Corporation, a Delaware corporation, and IBJ Schroder Bank & Trust
Company, a banking organization organized under the laws of New York, as
trustee.
RECITALS OF THE COMPANY
A. The Company has duly authorized the execution and
delivery of this Indenture to provide for the issuance from time to time of
its unsecured debentures, notes or other evidences of indebtedness (the
"Securities") to be issued in one or more series as provided herein.
B. All things necessary have been done to make the
Securities, when executed by the Company and authenticated and delivered
hereunder and duly issued by the Company, the valid obligations of the
Company and to make this Indenture a valid agreement of the Company.
NOW, THEREFORE, in consideration of the above premises
and the acquisition of the Securities by the Holders thereof, it is
mutually covenanted and agreed, for the equal and proportionate benefit of
all Holders of the Securities or of any series thereof, as follows:
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01 Rules of Construction
For all purposes of this Indenture, except as otherwise
expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article have the
meanings assigned to them in this Article, and include the plural as well
as the singular;
(b) all accounting terms not otherwise defined
herein have the meanings assigned to them in accordance with GAAP;
(c) 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 hereof;
(d) "or" is not exclusive; and
(e) provisions apply to successive events and
transactions.
Section 1.02 Definitions
Capitalized terms used herein will have the following
respective meanings when used herein:
<PAGE> 31
"Acquisition Debt" means Indebtedness of any Person existing at
the time such Person became a Subsidiary of the Company (or such Person is
merged into the Company or one of the Company's Subsidiaries) or assumed in
connection with the acquisition of assets from any such Person (other than
assets acquired in the ordinary course of business of the Company and its
Subsidiaries), including, without limitation, Indebtedness Incurred in
connection with, or in contemplation of, such Person becoming a Subsidiary
of the Company (but excluding Indebtedness of such Person which is
extinguished, retired or repaid in connection with such Person becoming a
Subsidiary of the Company).
"Affiliate" of any Person means any Person directly or indirectly
controlling or controlled by, or under direct or indirect common control
with, such Person. For purposes of this Indenture, each executive officer
and director of the Company and each Restricted Subsidiary will be an
Affiliate of the Company. In addition, for purposes of this Indenture,
control of a Person means the power to direct the management and policies
of such Person, directly or indirectly, whether through the ownership of
voting securities, by contract or otherwise. Notwithstanding the foregoing,
the term "Affiliate" will not include, with respect to the Company or any
Restricted Subsidiary which is a Wholly Owned Subsidiary of the Company,
any Restricted Subsidiary which is a Wholly Owned Subsidiary of the
Company.
"Affiliate Transaction" has the meaning set forth in Section
6.17(a) hereof.
"Agent" means any Registrar or Paying Agent.
"Asset Sale" for any Person means the sale, lease, conveyance or
other disposition (including, without limitation, by merger, consolidation
or sale and leaseback transaction, and whether by operation of law or
otherwise) of any of that Person's assets (including, without limitation,
the sale or other disposition of Capital Stock of any Subsidiary of such
Person, whether by such Person or such Subsidiary), whether owned on the
Issue Date of Securities of any series or subsequently acquired in one
transaction or a series of related transactions, in which such Person
and/or its Subsidiaries receive cash and/or other consideration (including,
without limitation, the unconditional assumption of Indebtedness of such
Person and/or its Subsidiaries) having an aggregate Fair Market Value of
$5,000,000 or more as to such transaction or series of related
transactions; provided, however, (i) sales of homes and sales of mortgages
on homes in the ordinary course of business consistent with past practices
will not constitute Asset Sales, (ii) sales, leases, conveyances or other
dispositions, including, without limitation, exchanges or swaps, of real
estate or other assets in the ordinary course of business consistent with
past practices will not constitute Asset Sales, (iii) sales, leases,
sale-leasebacks or other dispositions of amenities and other improvements
at the Company's or its Subsidiaries' communities in the ordinary course of
business consistent with past practices will not constitute Asset Sales,
and (iv) transactions between the Company and any of its Restricted
Subsidiaries which are Wholly Owned Subsidiaries, or among such Restricted
Subsidiaries which are Wholly Owned Subsidiaries of the Company will not
constitute Asset Sales.
<PAGE> 32
"Asset Sale Offer Date" has the meaning set forth in Section
6.11(c) hereof.
"Asset Sale Offer Price" has the meaning set forth in Section
6.11(c) hereof.
"Bankruptcy Law" means title 11 of the United States Code, as
amended, or any similar federal or state law for the relief of debtors.
"Board of Directors" means the board of directors of a Person or
any authorized committee of the board of directors of such Person.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly
adopted by the Board of Directors and to be in full force and effect on the
date of such certification, and delivered to the Trustee.
"Business Day" means any day other than a Legal Holiday.
"Capital Stock" of any Person means any and all shares, rights to
purchase, warrants or options (whether or not currently exercisable),
participations, or other equivalents of or interests in (however
designated) the equity (which includes, but is not limited to, common
stock, preferred stock and partnership and joint venture interests) of such
Person (excluding any debt securities that are convertible into, or
exchangeable for, such equity).
"Capitalized Lease Obligations" of any Person means any
obligation of such Person to pay rent or other amounts under a lease that
is required to be capitalized for financial reporting purposes in
accordance with GAAP, and the amount of such obligation will be the
capitalized amount thereof determined in accordance with GAAP.
"Change of Control" means any of the following: (i) the sale,
lease, conveyance or other disposition of all or substantially all of the
Company's assets as an entirety or substantially as an entirety to any
Person or group of Persons (within the meaning of Section 13(d)(3) of the
Exchange Act) in one or a series of transactions; provided that a
transaction where the holders of all classes of Common Equity of the
Company immediately prior to such transaction own, directly or indirectly,
50 percent or more of the aggregate voting power of all classes of Common
Equity of such Person or group immediately after such transaction will not
be a Change of Control, (ii) the acquisition by the Company and/or any of
its Subsidiaries of 50 percent or more of the aggregate voting power of all
classes of Common Equity of the Company in one transaction or a series of
related transactions, (iii) the liquidation or dissolution of the Company;
provided that a liquidation or dissolution of the Company which is part of
a transaction or series of related transactions that does not constitute a
Change of Control under the "provided" clause of clause (i) above will not
constitute a Change of Control under this clause (iii) or (iv) any
transaction or a series of related transactions (as a result of a tender
offer, merger, consolidation or otherwise) that results in, or that is in
connection with, (a) any Person, including, a "group" (within the meaning
<PAGE> 33
of Section 13(d)(3) of the Exchange Act) acquiring beneficial ownership (as
determined in accordance with Rule 13d-3 under the Exchange Act), directly
or indirectly, of 50 percent or more of the aggregate voting power of all
classes of Common Equity 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 percent or more of the
aggregate voting power of all classes of Common Equity of the Company or
(b) less than 50 percent (measured by the aggregate voting power of all
classes) of the Common Equity of the Company being registered under Section
12(b) or 12(g) of the Exchange Act.
"Change of Control Offer" has the meaning set forth in Section
6.16(a) hereof.
"Change of Control Payment Date" has the meaning set forth in
Section 6.16(a) hereof.
"Change of Control Price" has the meaning set forth in Section
6.16(a) hereof.
"Common Equity" of any Person means all Capital Stock of such
Person that is generally entitled (i) to vote in the election of directors
of such Person, or (ii) if such Person is not a corporation, to vote or
otherwise participate in the selection of the governing body, partners,
managers or others that will control the management and policies of such
Person.
"Company" means U.S. Home Corporation, a Delaware corporation,
and any successor thereof.
"Company Request or Company Order" means a written request or
order signed in the name of the Company by its Chairman of the Board, its
President, its Senior Vice President or a Vice President, and by its
Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary,
and delivered to the Trustee.
"Consolidate Cash Flow Available for Fixed Charges" of the
Company means, for any period, the sum of the amounts for such period of
(i) Consolidated Net Income, plus (ii) Consolidated Income Tax Expense
(other than income tax expense (either positive or negative) attributable
to extraordinary and nonrecurring gains or losses on Asset Sales), plus
(iii) Consolidated Interest Expense, plus (iv) all depreciation, and
without duplication, amortization (including, without limitation,
previously capitalized interest amortized to cost of sales), plus (v) all
other noncash items reducing Consolidated Net Income for such period, minus
(vi) all other noncash items increasing Consolidated Net Income during such
period; all as determined on a consolidated basis for the Company and its
Restricted Subsidiaries in accordance with GAAP.
<PAGE> 34
"Consolidated Fixed Charge Coverage Ratio" of the Company means,
with respect to any determination date, the ratio of (i) Consolidated Cash
Flow Available for Fixed Charges of the Company for the prior four full
fiscal quarters for which financial results have been reported immediately
preceding the determination date, to (ii) the aggregate Consolidated
Interest Incurred of the Company for the prior four fiscal quarters for
which financial results have been reported immediately preceding the
determination date.
"Consolidated Income Tax Expense" of the Company for any period
means the income tax expense of the Company and its Restricted Subsidiaries
for such period, determined on a consolidated basis in accordance with
GAAP.
"Consolidated Interest Expense" of the Company for any period
means the Interest Expense of the Company and its Restricted Subsidiaries
for such period, determined on a consolidated basis in accordance with
GAAP.
" Consolidated Interest Incurred" of the Company for any period
means the Interest Incurred of the Company and its Restricted Subsidiaries
for such period, determined on a consolidated basis in accordance with
GAAP.
"Consolidated Net Income" of the Company for any period means the
aggregate net income (or loss) of the Company and its Restricted
Subsidiaries for such period, determined on a consolidated basis in
accordance with GAAP; provided that there will be excluded from such net
income (to the extent otherwise included therein), without duplication: (i)
the net income (or loss) of any Person (other than a Restricted Subsidiary)
in which any Person (including, without limitation, an Unrestricted
Subsidiary) other than the Company has an ownership interest, except to the
extent that any such income has actually been received by the Company or
any Restricted Subsidiary in the form of dividends or similar distributions
during such period, (ii) except to the extent includible in the
Consolidated Net Income pursuant to the foregoing clause (i), the net
income (or loss) of any Person that accrued prior to the date that (a) such
Person becomes a Restricted Subsidiary or is merged into or consolidated
with the Company or any of its Restricted Subsidiaries or (b) the assets of
such Person are acquired by the Company or any of its Restricted
Subsidiaries, (iii) the net income of any Restricted Subsidiary to the
extent that (but only so long as) the declaration or payment of dividends
or similar distributions by such Restricted Subsidiary of that income is
not permitted by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to that Restricted Subsidiary during such period,
(iv) in the case of a successor to the Company by consolidation, merger or
transfer of its assets, any earnings of the successor prior to such merger,
consolidation or transfer of assets and (v) the gains (but not losses)
resulting from (a) the acquisition of securities issued by the Company or
extinguishment of Indebtedness of the Company, (b) Asset Sales and (c)
<PAGE> 35
other extraordinary items. Notwithstanding the foregoing, in calculating
Consolidated Net Income, the Company will be entitled to take into
consideration the tax benefits associated with any extraordinary loss, but
only to the extent such tax benefits are recognized by the Company.
Consolidated Net Income will exclude any noncash losses, whether or not
extraordinary, incurred in connection with the issuance of Capital Stock
(other than Disqualified Stock) in exchange for Indebtedness of the Company
or its Wholly Owned Subsidiaries which are Restricted Subsidiaries.
"Consolidated Tangible Net Assets" of the Company as of any date
means the total amount of assets of the Company and its Restricted
Subsidiaries (less applicable reserves) on a consolidated basis at the end
of the fiscal quarter immediately preceding such date, as determined in
accordance with GAAP, less: (i) Intangible Assets and (ii) appropriate
adjustments on account of minority interests of other Persons holding
equity investments in Restricted Subsidiaries, in the case of each of
clauses (i) and (ii) above as reflected on the consolidated balance sheet
of the Company and its Restricted Subsidiaries as of the end of the fiscal
quarter immediately preceding such date.
"Consolidated Tangible Net Worth" of the Company as of any date
means the stockholders' equity (including any Preferred Stock that is
classified as equity under GAAP, other than Disqualified Stock) of the
Company and its Restricted Subsidiaries on a consolidated basis at the end
of the fiscal quarter immediately preceding such date, as determined in
accordance with GAAP, less the amount of Intangible Assets reflected on the
consolidated balance sheet of the Company and its Restricted Subsidiaries
as of the end of the fiscal quarter immediately preceding such date.
" Corporate Trust Office of the Trustee" will be at the address
of the Trustee specified in Section 14.02 hereof or such other address as
the Trustee may give notice to the Company.
"Covenant Defeasance" has the meaning set forth in Section 11.03
hereof.
"Custodian" means any receiver, trustee, assignee, liquidator or
similar official under any Bankruptcy Law.
"Default" means any event, act or condition that is, or after
notice or the passage of time or both would be, an Event of Default.
"Defaulted Interest" has the meaning set forth in Section 3.07
hereof.
"Defeasance" has the meaning set forth in Section 11.02 hereof.
"Defeasible Series" has the meaning set forth in Section 11.01
hereof.
"Depository" means, with respect to Securities of any series
issuable in whole or in part in the form of one or more Global Securities,
a clearing agency registered under the Exchange Act that is designated to
act as Depository for such Securities as contemplated by Section 3.01.
<PAGE> 36
"Disqualified Stock" means any Capital Stock that, by its terms
(or by the terms of any security into which it is convertible or for which
it is exchangeable), or upon the happening of any event, matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise,
or is redeemable at the option of the holder thereof, in whole or in part,
on or prior to the final Maturity date of the Securities of any series;
provided that any Capital Stock which would not constitute Disqualified
Stock but for provisions thereof giving holders thereof the right to
require the Company to repurchase or redeem such Capital Stock upon the
occurrence of a change of control occurring prior to the final Maturity of
the Securities will not constitute Disqualified Stock if the change of
control provisions applicable to such Capital Stock are no more favorable
to the holders of such Capital Stock than the provisions contained in
Section 6.16 hereof and such Capital Stock specifically provides that the
Company will not repurchase or redeem (or be required to repurchase or
redeem) any such Capital Stock pursuant to such provisions prior to the
Company's repurchase of Securities pursuant to Section 6.16 hereof.
"Disqualified Stock Dividend" of any Person means, for any
dividend payable with regard to Disqualified Stock issued by such Person,
the amount of such dividend multiplied by a fraction, the numerator of
which is one and the denominator of which is one minus the maximum
statutory combined federal, state and local income tax rate (expressed as a
decimal number between 1 and 0) then applicable to such Person.
"DTC" has the meaning set forth in Section 2.02 hereof.
"Event of Defualt" has the meaning set forth in Section 8.01(a)
hereof.
"Excess Proceeds" has the meaning set forth in Section 6.11(a)
hereof.
"Excess Proceeds Offer" has the meaning set forth in Section
6.11(c) hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Existing Credit Facility" means the Credit Agreement, dated as
of September 29, 1995, between the Company and the lenders named therein
and The First National Bank of Chicago, as Agent (together with the
documents related thereto (including, without limitation, any guaranty
agreements)), as such Facility may be amended, restated, supplemented or
otherwise modified from time to time, and includes any facility extending
the maturity of, increasing the total commitment of, or restructuring
(including, without limitation, the inclusion of additional borrowers
thereunder that are Subsidiaries of the Company and whose obligations
thereunder are guaranteed by the Company) all or any portion of, the
Indebtedness under such Facility or any successor or replacement facilities
and includes any facility with one or more agents or lenders refinancing or
replacing all or any portion of the Indebtedness under such Facility or any
successor facilities.
<PAGE> 37
"Existing Indebtedness" means all of the Indebtedness of the
Company and its Subsidiaries that is outstanding on the Issue Date of
Securities of any series.
"Fair Market Value" with respect to any asset or property means
the sale value that would be obtained in an arm's-length transaction
between an informed and willing seller under no compulsion to sell and an
informed and willing buyer under no compulsion to buy.
"GAAP" means generally accepted accounting principles 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 or in such other
statements by such other entity as may be approved by a significant segment
of the accounting profession of the United States, as in effect on the
Issue Date of the Securities of any series.
"Global Security" means a Security that evidences all or part of
the Securities of any series and is authenticated and delivered to, and
registered in the name of, the Depository for such Securities or a nominee
thereof.
"Hedging Obligations" of any Person means the obligations of such
Person pursuant to any interest rate swap agreement, foreign currency
exchange agreement, interest rate collar agreement, option or futures
contract or other similar agreement or arrangement relating to interest
rates or foreign exchange rates.
"Holder" means a Person in whose name a Security is registered.
"Incur" means to, directly or indirectly, create, incur, assume,
guaranty, extend the maturity of, or otherwise become liable with respect
to any Indebtedness.
"Indebtedness" of any Person at any date means, without
duplication, (i) all indebtedness of such Person for borrowed money
(whether or not the recourse of the lender is to the whole of the assets of
such Person or only to a portion thereof), (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments,
(iii) all obligations of such Person in respect of letters of credit or
other similar instruments (or reimbursement obligations with respect
thereto), other than standby letters of credit issued for the benefit of,
or surety and performance bonds issued by, such Person in the ordinary
course of business, (iv) all obligations of such Person with respect to
Hedging Obligations (other than those that fix or cap the interest rate on
variable rate indebtedness otherwise permitted by this Indenture or that
fix the exchange rate in connection with indebtedness denominated in a
foreign currency and otherwise permitted by this Indenture and other than
the purchase of mortgage commitments in the ordinary course of business),
(v) all obligations of such Person to pay the deferred and unpaid purchase
price of property or services, including, without limitation, all
conditional sale obligations of such Person and all obligations under any
title retention agreement (except trade payables and accrued expenses
<PAGE> 38
incurred in the ordinary course of business), (vi) all Capitalized Lease
Obligations of such Person, (vii) all indebtedness of others secured by a
Lien on any asset of such Person, whether or not such indebtedness is
assumed by such Person, (viii) all indebtedness of others guaranteed by, or
otherwise the liability of, such Person to the extent of such guaranty or
liability, and (ix) all Disqualified Stock issued by such Person (the
amount of indebtedness represented by any Disqualified Stock will equal the
greater of the voluntary or involuntary liquidation preference plus accrued
and unpaid dividends). The amount of indebtedness of any Person at any date
will be (a) the outstanding balance at such date of all unconditional
obligations as described above, (b) the maximum liability of such Person
for any contingent obligations under clause (v) above and (c) in the case
of clause (vii) (if the indebtedness referred to therein is not assumed by
such Person), the lesser of the (A) Fair Market Value of all assets subject
to a Lien securing the indebtedness of others on the date that the Lien
attaches and (B) amount of the indebtedness secured.
"Indenture" means this instrument as originally executed or as it
may from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions
hereof, including, for all purposes of this instrument, and any such
supplemental indenture, the provisions of the TIA that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively. The term "Indenture" shall also include the terms of
particular series of Securities established as contemplated by Section 3.01
hereof upon receipt by the Trustee of an Opinion of Counsel in accordance
with Section 3.03 hereof.
"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, (i) qualified to
perform the task for which it has been engaged, and (ii) 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.
"Intangible Assets" of the Company means all unamortized debt
discount and expense, unamortized deferred charges, goodwill, patents,
trademarks, service marks, trade names, copyrights, write-ups of assets
over their carrying value at the end of the last fiscal quarter ended prior
to the Issue Date of the Securities of any series or the date of
acquisition, if acquired subsequent thereto, and all other items which
would be treated as intangibles on the consolidated balance sheet of the
Company and its Restricted Subsidiaries prepared in accordance with GAAP.
"Interest Expense" of any Person for any period means, without
duplication, the aggregate amount of (i) interest which, in conformity with
GAAP, would be set opposite the caption "interest expense" or any like
caption on an income statement for such Person (including, without
limitation, imputed interest included on Capitalized Lease Obligations, all
commissions, discounts and other fees and charges owed with respect to
letters of credit securing financial obligations and bankers' acceptance
financing, the net costs associated with Hedging Obligations, amortization
of other financing fees and expenses, the interest portion of any deferred
payment obligation, amortization of discount or premium, if any, and all
<PAGE> 39
other noncash interest expense other than interest and other charges
amortized to cost of sales) and includes, with respect to the Company and
its Restricted Subsidiaries, without duplication (including duplication of
the foregoing items), all interest included as a component of cost of sales
for such period, and (ii) the amount of Disqualified Stock Dividends
recognized by the Company on any Disqualified Stock whether or not paid
during such period.
"Interest Incurred" of any Person for any period means, without
duplication, the aggregate amount of (i) interest which, in conformity with
GAAP, would be set opposite the caption "interest expense" or any like
caption on an income statement for such Person (including, without
limitation, imputed interest included on Capitalized Lease Obligations, all
commissions, discounts and other fees and charges owed with respect to
letters of credit securing financial obligations and bankers' acceptance
financing, the net costs associated with Hedging Obligations, amortization
of other financing fees and expenses, the interest portion of any deferred
payment obligation, amortization of discount or premium, if any, and all
other noncash interest expense other than interest and other charges
amortized to cost of sales) and includes, with respect to the Company and
its Restricted Subsidiaries, without duplication (including duplication of
the foregoing items), all capitalized interest for such period, all
interest attributable to discontinued operations for such period to the
extent not set forth on the income statement under the caption "interest
expense" or any like caption, and all interest actually paid by the Company
or a Restricted Subsidiary under any guaranty of Indebtedness (including,
without limitation, a guaranty of principal, interest or any combination
thereof) of any other Person during such period and (ii) the amount of
Disqualified Stock Dividends recognized by the Company on any Disqualified
Stock whether or not declared during such period.
"Interest Pyament Date", when used with respect to a Security of
any series, means the Stated Maturity of an installment of interest on such
Security.
"Investments" of any Person means (i) all investments by such
Person in any other Person in the form of loans, advances or capital
contributions, (ii) all guaranties of Indebtedness or other obligations of
any other Person by such Person, (iii) all purchases (or other acquisitions
for consideration) by such Person of Indebtedness, Capital Stock or other
securities of any other Person and (iv) all other items that would be
classified as investments (including, without limitation, purchases of
assets outside the ordinary course of business) on a balance sheet of such
Person determined in accordance with GAAP.
"Issue Date" means the date of original issuance of the
Securities of each series established pursuant to Section 3.01 hereof.
"Legal Holiday" means Saturday, Sunday or a day on which banking
institutions in New York, New York or at a Place of Payment are authorized
or obligated by law, regulation or executive order to remain closed. If a
payment date is a Legal Holiday at a Place of Payment, payment shall be
made at that place on the next succeeding day that is not a Legal Holiday
and no interest shall accrue for the intervening period.
<PAGE> 40
"Lien" means with respect to any asset, any mortgage, lien,
pledge, charge, security interest or other similar encumbrance of any kind
upon or in respect of such asset, whether or not filed, recorded or
otherwise perfected under applicable law (including, without limitation,
any conditional sale or other title retention agreement, and any lease in
the nature thereof, any option or other agreement to sell, and any filing
of, or agreement to give, any financing statement under the Uniform
Commercial Code (or equivalent statutes) of any jurisdiction).
"Material Subsidiary" means any Subsidiary of the Company which
accounted for three percent or more of the Consolidated Tangible Net Assets
or Consolidated Cash Flow Available for Fixed Charges of the Company on a
consolidated basis for the fiscal year ending immediately prior to any
Default or Event of Default.
"Maturity", when used with respect to a Security of any series,
means the date on which the principal of such Security or an installment of
principal becomes due and payable as therein or herein provided, whether at
the Stated Maturity or by declaration of acceleration, call for redemption
or otherwise.
"Net Proceeds" means cash (in U.S. dollars or freely convertible
into U.S. dollars) received by the Company or any Restricted Subsidiary
from an Asset Sale net of (i) (a) all brokerage commissions, investment
banking fees and all other fees and expenses (including, without
limitation, fees and expenses of counsel and investment bankers) related to
such Asset Sale, (b) provisions for all income and other taxes measured by
or resulting from such Asset Sale, (c) payments made to retire Indebtedness
where payment of such Indebtedness is required in connection with such
Asset Sale, (d) amounts required to be paid to any Person (other than the
Company or a Restricted Subsidiary) owning a beneficial interest in the
assets subject to the Asset Sale and (e) appropriate amounts to be provided
by the Company or any Restricted Subsidiary thereof, as the case may be, as
a reserve, in accordance with GAAP, against any liabilities associated with
such Asset Sale and retained by the Company or any Restricted Subsidiary
thereof, as the case may be, after 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
reflected in an Officers' Certificate delivered to the Trustee, and (ii)
all noncash consideration received by the Company or any of its Restricted
Subsidiaries from such Asset Sale upon the liquidation or conversion of
such consideration into cash, without duplication, net of all items
enumerated in subclauses (a) through (e) of clause (i) hereof.
"Net Worth Amount" has the meaning set forth in Section 6.20(a)
hereof.
<PAGE> 41
"Net Worth Offer" has the meaning set forth in Section 6.20(a)
hereof.
"Net Worth Offer Date" has the meaning set forth in Section
6.20(a) hereof.
"Net Worth Offer Price" has the meaning set forth in Section
6.20(a) hereof.
"Non-Recourse Indebtedness" with respect to any Person means
Indebtedness of such Person for which (i) the sole legal recourse for
collection of principal and interest on such Indebtedness is against the
specific property identified in the instruments evidencing or securing such
Indebtedness and such property was acquired with the proceeds of such
Indebtedness or such Indebtedness was Incurred within 90 days after the
acquisition of such property and (ii) no other assets of such Person may be
realized upon in collection of principal or interest on such Indebtedness.
"Officer" means the Chairman of the Board, the President, the
Senior Vice President, the Treasurer, any Assistant Treasurer, the
Controller, the Secretary, any Assistant Secretary or any Vice President of
a Person.
"Officers' Certificate" means a certificate signed by two
Officers, one of whom must be the Person's Chief Executive Officer (or
Co-Chief Executive Officer), Chief Operating Officer, Chief Financial
Officer or Chief Accounting Officer.
"Opinion of Counsel" means an opinion from legal counsel who is
reasonably acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company or the Trustee.
"Outstanding", when used with respect to Securities, means, as of
the date of determination, all Securities theretofore authenticated and
delivered under this Indenture, except:
(i) Securities theretofore canceled by the Trustee or
delivered to the Trustee for cancellation;
<PAGE> 42
(ii) Securities for whose payment or redemption money
in the necessary amount has been theretofore deposited with the
Trustee or any Paying Agent (other than the Company) in trust or
set aside and segregated in trust by the Company (if the Company
shall act as its own Paying Agent) for the Holders of such
Securities; provided that, if such Securities are to be redeemed,
notice of such redemption has been duly given pursuant to this
Indenture or provision therefor satisfactory to the Trustee has
been made;
(iii) Securities as to which the Defeasance has been
effected pursuant to Section 11.02 hereof; and
(iv) Securities which have been paid pursuant to Section
3.06 or in exchange for or in lieu of which other Securities has
been authenticated and delivered pursuant to this Indenture, other
than any such Securities in respect of which there shall have been
presented to the Trustee proof satisfactory to it that such
Securities are held by a bona fide purchaser in whose hands such
Securities are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request,
demand, authorization, direction, notice, consent or waiver hereunder, (a)
the principal amount of a Security denominated in one or more foreign
currencies or currency units shall be the U.S. dollar equivalent,
determined in the manner provided as contemplated by Section 3.01 hereof on
the Issue Date of such Security, of the principal amount of such Security,
and (b) Securities owned by the Company or any other obligor of the
Securities or any Subsidiary of the Company or of such other obligor shall
be disregarded and deemed not to be Outstanding, except that, in
determining whether the Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only
Securities which the Trustee knows to be so owned shall be so disregarded.
Securities so owned which 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 Subsidiary of the Company or of such other obligor.
"Paying Agent" means any Person authorized by the Company to pay
the principal of or any interest on any Securities of any series.
"Permitted Investment" of any Person means any Investment of such
Person in (i) direct obligations of the United States or any agency thereof
or obligations guaranteed by the United States or any agency thereof, in
each case maturing within 180 days of the date of acquisition thereof, (ii)
certificates of deposit maturing within 180 days of the date of acquisition
thereof issued by a bank, trust company or savings and loan association
which is organized under the laws of the United States or any state thereof
having capital, surplus and undivided profits aggregating in excess of $250
<PAGE> 43
million and a Keefe Bank Watch Rating of C or better (or a similar rating
by any successor thereof), (iii) certificates of deposit maturing within
180 days of the date of acquisition thereof issued by a bank, trust company
or savings and loan association organized under the laws of the United
States or any state thereof other than banks, trust companies or savings
and loan associations satisfying the criteria in (ii) above; provided that
the aggregate amount of all certificates of deposit issued to the Company
at any one time by such bank, trust company or savings and loan association
will not exceed $100,000, (iv) commercial paper given the highest rating by
two established national credit rating agencies and maturing not more than
180 days from the date of the acquisition thereof, (v) repurchase
agreements or money-market accounts which are fully secured by direct
obligations of the United States or any agency thereof and (vi) in the case
of the Company and its Subsidiaries, any receivables or loans taken by the
Company or a Subsidiary in connection with the sale of any asset otherwise
permitted by this Indenture.
"Permitted Liens" means (i) Liens for taxes, assessments or
governmental charges or claims that either (a) are not yet delinquent or
(b) are being contested in good faith by appropriate proceedings and as to
which appropriate reserves have been established or other provisions have
been made in accordance with GAAP, (ii) 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 and with respect to amounts that, to the extent
applicable, either (a) are not yet delinquent or (b) are being contested in
good faith by appropriate proceedings and as to which appropriate reserves
have been established or other provisions have been made in accordance with
GAAP, (iii) Liens (other than any Lien imposed by the Employee Retirement
Income Security Act of 1974, as amended) incurred or deposits made in the
ordinary course of business in connection with workers' compensation,
unemployment insurance and other types of social security, (iv) Liens
incurred or deposits made to secure the performance of tenders, bids,
leases, statutory obligations, surety and appeal bonds, progress payments,
government contracts and other obligations of like nature (exclusive of
obligations for the payment of borrowed money), in each case incurred in
the ordinary course of business of the Company and its Subsidiaries, (v)
attachment or judgment Liens not giving rise to a Default or an Event of
Default and which are being contested in good faith by appropriate
proceedings, (vi) easements, rights-of-way, restrictions and other similar
charges or encumbrances not materially interfering with the ordinary course
of business of the Company and its Subsidiaries, (vii) 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, (viii) leases or subleases granted to others not materially
interfering with the ordinary course of business of the Company and its
Subsidiaries, (ix) purchase money mortgages (including, without limitation,
Capitalized Lease Obligations and purchase money security interests), (x)
<PAGE> 44
Liens securing Refinancing Indebtedness; provided that such Liens only
extend to assets which are similar to the type of assets securing the
Indebtedness being refinanced and such refinanced Indebtedness was
previously secured by such similar assets, (xi) Liens securing Indebtedness
of the Company and its Restricted Subsidiaries; provided that the aggregate
amount of Indebtedness secured by Liens (other than Non-Recourse
Indebtedness secured by Liens) will not exceed 40 percent of Consolidated
Tangible Net Assets, (xii) any interest in or title of a lessor to property
subject to any Capitalized Lease Obligations incurred in compliance with
the provisions of this Indenture, (xiii) Liens existing on the Issue Date
for Securities of any series, including, without limitation, Liens securing
Existing Indebtedness, (xiv) any option, contract or other agreement to
sell an asset; provided such sale is not otherwise prohibited under this
Indenture, (xv) Liens securing Non-Recourse Indebtedness of the Company or
a Restricted Subsidiary thereof, (xvi) Liens on property or assets of any
Restricted Subsidiary securing Indebtedness of such Restricted Subsidiary
owing to the Company or one or more Restricted Subsidiaries, (xvii) Liens
securing Indebtedness of an Unrestricted Subsidiary, (xviii) any right of a
lender or lenders to which the Company or a Restricted Subsidiary may be
indebted to offset against, or appropriate and apply to the payment of,
such Indebtedness any and all balances, credits, deposits, accounts or
monies of the Company or a Restricted Subsidiary with or held by such
lender or lenders and (xix) any pledge or deposit of cash or property in
conjunction with obtaining surety and performance bonds and letters of
credit required to engage in constructing on-site and off-site improvements
required by municipalities or other governmental authorities in the
ordinary course of business of the Company, by the Company or any
Restricted Subsidiary.
"Person" means any individual, corporation, partnership, joint
venture, limited liability company, incorporated or unincorporated
association, joint stock company, trust, unincorporated organization or
government or other agency or political subdivision thereof or other entity
of any kind.
"Place of Payment", when used with respect to the Securities of
any series, means the place or places where the principal of and interest
on the Securities of that series are payable as specified as contemplated
by Section 3.01 hereof.
"Preferred Stock" of any Person means all Capital Stock of such
Person which has a preference in liquidation or with respect to the payment
of dividends.
"Refinancing Indebtedness" means Indebtedness that refunds,
refinances or extends any Existing Indebtedness or other Indebtedness
permitted to be Incurred by the Company or its Restricted Subsidiaries
pursuant to the terms of this Indenture, but only to the extent that (i)
the Refinancing Indebtedness is subordinated to the Securities of any
series to the same extent as the Indebtedness being refunded, refinanced or
extended, if at all, (ii) the Refinancing Indebtedness is scheduled to
mature either (a) no earlier than the Indebtedness being refunded,
<PAGE> 45
refinanced or extended, or (b) after the maturity date of the Securities of
such series, (iii) the portion, if any, of the Refinancing Indebtedness
that is scheduled to mature on or prior to the Maturity date of the
Securities of such series has a Weighted Average Life to Maturity at the
time such Refinancing Indebtedness is Incurred that is equal to or greater
than the Weighted Average Life to Maturity of the portion of the
Indebtedness being refunded, refinanced or extended that is scheduled to
mature on or prior to the maturity date of the Securities of such series,
(iv) such Refinancing Indebtedness is in an aggregate amount that is equal
to or less than the aggregate amount then outstanding under the
Indebtedness being refunded, refinanced or extended, (v) such Refinancing
Indebtedness is Incurred by the same Person that initially Incurred the
Indebtedness being refunded, refinanced or extended, except that the
Company may Incur Refinancing Indebtedness to refund, refinance or extend
Indebtedness of any Restricted Subsidiary and (vi) such Refinancing
Indebtedness is Incurred within 180 days after the Indebtedness being
refunded, refinanced or extended is so refunded, refinanced or extended;
provided that Refinancing Indebtedness shall include the amount of any
Indebtedness under the Existing Credit Facility which is Incurred within
180 days after the repayment of an equal amount of Indebtedness under the
Existing Credit Facility which was Incurred pursuant to Section 6.13(a)
hereof.
"Registrar" has the meaning set forth in Section 3.05 hereof.
"Regular Record Date" for the interest payable on any Security of
any series on any Interest Payment Date means the date specified for that
purpose as contemplated by Section 3.01 hereof.
"Restricted Investment" with respect to any Person means any
Investment (other than any Permitted Investment) by such Person in any (i)
of its Affiliates, (ii) executive officer or director of any Affiliate of
such Person, or (iii) other Person other than a Restricted Subsidiary which
is a Wholly Owned Subsidiary of the referent Person; provided, however,
that with respect to the Company and its Restricted Subsidiaries, any loan
or advance to an executive officer or director of the Company or a
Subsidiary will not constitute a Restricted Investment provided such loan
or advance is made in the ordinary course of business consistent with past
practices, and, if such loan or advance exceeds $100,000 (other than a
readily marketable mortgage loan not exceeding $500,000), such loan or
advance has been approved by the Board of Directors of the Company or a
disinterested committee thereof.
<PAGE> 46
"Restricted Payment" with respect to any Person means (i) the
declaration of any dividend or the making of any other payment or
distribution of cash, securities or other property or assets in respect of
such Person's Capital Stock (except that a dividend payable solely in
Capital Stock (other than Disqualified Stock) of such Person will not
constitute a Restricted Payment), (ii) any payment on account of the
purchase, redemption, retirement or other acquisition for value of such
Person's Capital Stock or any other payment or distribution made in respect
thereof (other than payments or distributions excluded from the definitions
of Restricted Payment in clause (i) above), either directly or indirectly,
(iii) any Restricted Investment and (iv) any principal payment, redemption,
repurchase, defeasances or other acquisition or retirement of any
Indebtedness of any Unrestricted Subsidiary or of Indebtedness of the
Company or its Restricted Subsidiaries which is subordinated in right of
payment to the Securities of any series; provided, however, that with
respect to the Company and its Subsidiaries, Restricted Payments will not
include (a) any payment described in clause (i), (ii) or (iii) above made
to the Company or any of its Restricted Subsidiaries which are Wholly Owned
Subsidiaries by any of the Company's Subsidiaries, or (b) any proportionate
payment in respect of minority interests in Restricted Subsidiaries of the
Company to the extent that the payment constitutes a return of capital that
was not included in the Company's shareholders' equity or a dividend or
similar distribution not included in determining the Company's Consolidated
Net Income, or (c) any purchase, redemption, retirement or other
acquisition for value of Indebtedness of the Company or its Restricted
Subsidiaries which is subordinated to the Offered Debt Securities if the
consideration therefor consists solely of, or is the proceeds from,
Indebtedness subordinated to the Offered Debt Securities to the same extent
as the Indebtedness being purchased, redeemed, retired or otherwise
acquired, or (d) any purchase, redemption, retirement or other acquisition
for value of Indebtedness or Capital Stock of such Person or its
Subsidiaries if the consideration therefor consists solely of Capital Stock
(other than Disqualified Stock) of such Person, or the proceeds from such
sale of such Capital Stock, or (e) any loans or advances by the Company or
any Restricted Subsidiary to Unrestricted Subsidiaries which in an
aggregate amount at any one time outstanding do not exceed $25,000,000.
"Restricted Subsidiary" means each of the Subsidiaries of the
Company which is not an Unrestricted Subsidiary.
"SEC" means the Securities and Exchange Commission, and any
successor thereto.
"Securities" has the meaning set forth in the first recital of
this Indenture and more particularly means any securities of any series
authenticated and delivered under this Indenture.
" Security Register" has the meaning set forth in Section 3.05
hereof.
<PAGE> 47
"Special Record Date" for the payment of any Defaulted Interest
on any Security means a date fixed by the Trustee pursuant to Section 3.07
hereof.
"Stated Maturity", when used with respect to any Security of any
series or any installment of principal thereof or interest thereon, means
the date specified in such Security as the fixed date on which the
principal of such Security or such installment of principal or interest is
due and payable.
"Subsidiary" of any Person means (i) any corporation of which at
least a majority of the aggregate voting power of all classes of the Common
Equity is directly or indirectly beneficially owned by such Person, and
(ii) any entity other than a corporation of which such Person directly or
indirectly beneficially owns at least a majority of the Common Equity.
"Successor" has the meaning set forth in Section 7.01(a) hereof.
"TIA" means the Trust Indenture Act of 1939, as amended.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of the Indenture until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include the Person who is then the Trustee
hereunder.
"Trust Officer" means any Senior Vice President, Vice President,
Assistant Vice President, Assistant Secretary or Assistant Treasurer of the
Trustee assigned by the Trustee to administer its corporate trust matters.
"U.S. Government Obligations" means (i) any security that is (a)
a direct obligation of the United States for the payment of which the full
faith and credit of the United States is pledged or (b) an obligation of a
Person controlled or supervised by and acting as an agency or
instrumentality of the United States the payment of which is
unconditionally guaranteed as a full faith and credit obligation by the
United States, which, in either case (a) or (b), is not callable or
redeemable at the option of the issuer thereof, and (ii) any depositary
receipt issued by a bank (as defined in Section 3(a)(2) of the Securities
Act of 1933, as amended) as custodian with respect to any U.S. Government
Obligation specified in clause (i) and held by such custodian for the
account of the holder of such depositary receipt, or with respect to any
specific payment of principal of or interest on any such U.S. Government
Obligation; provided that (except as required by law) such custodian is not
authorized to make any deduction from the amount payable to the holder of
such depositary receipt from any amount received by the custodian in
respect of the U.S. Government Obligation or the specific payment of
principal or interest evidenced by such depositary receipt.
<PAGE> 48
"Unrestricted Subsidiary" means each of the Subsidiaries of the
Company so designated by a Board Resolution. The Board of Directors of the
Company may designate an Unrestricted Subsidiary to be a Restricted
Subsidiary; provided that (i) any such redesignation will be deemed to be
an Incurrence by the Company and its Restricted Subsidiaries of the
Indebtedness (if any) of such redesignated Subsidiary for purposes of the
covenant set forth in Section 6.13 hereof as of the date of such
redesignation and (ii) immediately after giving effect to such
redesignation and the Incurrence of any such additional Indebtedness, the
Company and its Restricted Subsidiaries could Incur $1.00 of additional
Indebtedness under the Consolidated Fixed Charge Coverage Ratio contained
in the covenant set forth in Section 6.13(a) hereof. Subject to the
foregoing, the Board of Directors of the Company may designate any
Restricted Subsidiary to be an Unrestricted Subsidiary; provided that (i)
all previous Investments by the Company and its Restricted Subsidiaries in
such Restricted Subsidiary will be deemed to be Restricted Payments at the
time of such designation and will reduce the amount available for
Restricted Payments under the covenant set forth in Section 6.12 hereof and
(ii) immediately after giving effect to such designation and reduction of
amounts available for Restricted Payments under the covenant set forth in
Section 6.12 hereof, the Company and its Restricted Subsidiaries could
Incur $1.00 of additional Indebtedness under the Consolidated Fixed Charge
Coverage Ratio contained in the covenant set forth in Section 6.13(a)
hereof. Any such designation or redesignation by the Board of Directors of
the Company will be evidenced to the Trustee by the filing with the Trustee
of a Board Resolution giving effect to such designation or redesignation
and an Officers' Certificate certifying that such designation or
redesignation complied with the foregoing conditions and setting forth the
underlying calculations of such Officers' Certificate.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness or portion thereof, at any date, the number of years obtained
by dividing (i) the sum of the products obtained by multiplying (a) the
amount of each then remaining installment, sinking fund, serial maturity or
other required payment of principal, including, without limitation, payment
at final maturity, in respect thereof, by (b) the number of years
(calculated to the nearest one-twelfth) that will elapse between such date
and the making of such payment by (ii) the then outstanding principal
amount of such Indebtedness or portion thereof.
"Wholly Owned Subsidiary" of any Person means (i) a Subsidiary,
of which 100 percent of the Common Equity (except for directors' qualifying
shares or certain minority interests owned by other Persons solely due to
local law requirements that there be more than one stockholder, but which
interest is not in excess of what is required for such purpose) is owned
directly by such Person or through one or more other Wholly Owned
Subsidiaries of such Person, or (ii) any entity other than a corporation in
which such Person, directly or indirectly, owns all of the Common Equity of
such entity.
<PAGE> 49
Section 1.03 Incorporation by Reference of TIA
Whenever this Indenture refers to a provision of the TIA,
such provision is incorporated by reference in and made a part of this
Indenture.
ARTICLE 2
SECURITY FORMS
Section 2.01 Forms Generally
Each Security and Global Security issued pursuant to this
Indenture shall be in substantially the form established by or pursuant to
an Officers' Certificate or a Board Resolution or in one or more indentures
supplemental hereto, shall have such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by or
pursuant to this Indenture or any indenture supplemental hereto and may
have such letters, numbers or other marks of identification and such
legends or endorsements placed thereon as may, consistent herewith, be
determined by the Officers executing such Security as evidenced by their
execution of such Security. If temporary Securities of any series are
issued as Global Securities as permitted by Section 3.04 hereof, the form
thereof shall also be established as provided in the previous sentence. If
the form of Securities of any series is established by action taken
pursuant to an Officers' Certificate or a Board Resolution, a copy thereof
shall be delivered to the Trustee at or prior to the delivery of the
Company Order contemplated by Section 3.03 hereof for the authentication
and delivery of such Securities. If all of the Securities of any series
established by action taken pursuant to an Officers' Certificate or a Board
Resolution are not to be issued at one time, it shall not be necessary to
deliver a copy thereof at the time of issuance of each Security of such
series, but such Officers' Certificate or Board Resolution shall be
delivered at or prior to the time of issuance of the first Security of such
series.
Securities shall be printed, lithographed or engraved or
produced by any combination of these methods or may be produced in any
other manner, all as determined by the Officers of the Company executing
such Securities, as evidenced by their execution of such Securities.
Section 2.02 Form of Legend for Global Securities
Every Global Security authenticated and delivered
hereunder shall bear a legend in substantially the following form:
<PAGE> 50
This Security is a Global Security within the meaning of
the Indenture hereinafter referred to and is registered in the name of a
Depository or a nominee of a Depository. This Global Security is
exchangeable for Securities registered in the name of a Person other than
the Depository or its nominee only in the limited circumstances described
in the Indenture, and no transfer of this Security (other than a transfer
of this Security as a whole by the Depository to a nominee of the
Depository or by a nominee of the Depository to the Depository or another
nominee of the Depository) may be registered except in such limited
circumstances. Every Security delivered upon registration of transfer of,
or in exchange for, or in lieu of, this Global Security shall be a Global
Security subject to the foregoing, except in the limited circumstances
described above.
Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation
("DTC"), to the Company or its agent for registration of transfer, exchange
or payment, and any certificate issued is registered in the name of Cede &
Co. or in such other name as is requested by an authorized representative
of DTC (and any payment is to be made to Cede & Co. or to such other entity
as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an
interest herein.
Section 2.03 Form of Trustee's Certificate of Authentication
The Trustee's certificate of authentication shall be in
substantially the following form:
This is one of the Securities of the series designated
therein referred to in the within-mentioned Indenture.
IBJ SCHRODER BANK & TRUST COMPANY,
As Trustee
By...............
Authorized Signatory
<PAGE> 51
ARTICLE 3
THE SECURITIES
Section 3.01 Amount Unlimited; Issuable in Series
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There
shall be established in or pursuant to a Board Resolution and, set forth,
or determined in the manner provided, in an Officers' Certificate, or
established in one or more indentures supplemental hereto, which, in each
case, shall be deemed incorporated herein by this reference and made a part
hereof but only with respect to the series of Securities established
pursuant to such Board Resolution, Officers' Certificate or supplemental
indenture, prior to the issuance of Securities of any series of the
following:
(1) the title of the Securities of the series (which shall
distinguish the Securities of the series from Securities of any
other series);
(2) any limit upon the aggregate principal amount of the
Securities of the series which may be authenticated and delivered
under this Indenture (except for Securities authenticated and
delivered upon registration of transfer of, or in exchange for, or
in lieu of, other Securities of the series pursuant to Section
3.04, 3.05, 3.06, 4.07 or 13.05 hereof and except for any
Securities which, pursuant to Section 3.03 hereof, are deemed
never to have been authenticated and delivered hereunder);
(3) the Person to whom any interest on a Security of the
series shall be payable, if other than the Person in whose name
that Security is registered at the close of business on the
Regular Record Date for such interest;
(4) the date or dates, or the method by which such date
or dates will be determined, on which the principal of the
Securities of the series is payable;
(5) the rate or rates at which the Securities of the
series shall bear interest, if any, or the method by which such
rate or rates shall be determined, the date or dates from which
such interest shall accrue, or the method by which such date or
dates shall be determined, the Interest Payment Dates on which any
such interest shall be payable and the Regular Record Date, if
any, for the interest payable on any Security on any Interest
Payment Date, or the method by which such date or dates shall be
determined, and the basis upon which interest shall be calculated
if other than on the basis of actual days elapsed over a 365 or
366-day year;
<PAGE> 52
(6) the place or places, if any, other than or in
addition to New York, New York, where the principal of and
interest on Securities of the series shall be payable, any
Securities of the series may be surrendered for registration of
transfer, Securities of the same series may be surrendered for
exchange and, if different from the location specified in Section
14.02 hereof, the place or places where notices or demands to or
upon the Company in respect of the Securities of the series and
this Indenture may be served;
(7) the period or periods within, the price or prices at
and the terms and conditions upon, which Securities of the series
may be redeemed or purchased, in whole or in part, at the option
of the Company;
(8) the obligation, if any, of the Company to redeem or
repurchase Securities of the series pursuant to any sinking fund
or analogous provisions or at the option of a Holder thereof and
the period or periods within which, the price or prices at which
and the terms and conditions upon which Securities of the series
shall be redeemed or repurchased, in whole or in part, pursuant to
such obligation;
(9) if other than denominations of $1,000 and any integral
multiple thereof, the denominations in which Securities of the
series shall be issuable;
(10) the currency, currencies or currency units in which
payment of the principal of and interest on any Securities of the
series shall be payable if other than the currency of the United
States and the manner of determining the equivalent thereof in the
currency of the United States for purposes of the definition of
"Outstanding" in Section 1.01 hereof;
(11) if the principal of or interest on any Securities of
the series is to be payable, at the election of the Company or a
Holder thereof, in one or more currencies or currency units other
than that or those in which the Securities are stated to be
payable, the currency, currencies or currency units in which
payment of the principal of and interest on Securities of such
series as to which such election is made shall be payable, and the
periods within which and the terms and conditions upon which such
election is to be made;
(12) if the amount of payments of principal of or
interest on any Securities of the series may be determined with
reference to an index, the manner in which such amounts shall be
determined;
(13) if other than the principal amount of the Securities
of any series, the portion of the principal amount of such
Securities which shall be payable upon declaration of acceleration
of the Maturity thereof;
<PAGE> 53
(14 if applicable, that the Securities of the series shall
be defeasible as provided in Article 11 hereof;
(15) if and as applicable, that the Securities of the
series shall be issuable in whole or in part in the form of one or
more Global Securities and, in such case, the Depository or
Depositories for such Global Security or Global Securities and any
circumstances other than those set forth in Section 3.05 hereof in
which any such Global Security may be transferred to, and
registered and exchanged for Securities registered in the name of,
a Person other than the Depository for such Global Security or a
nominee thereof and in which any such transfer may be registered;
(16) any deletions from, modifications of or additions to
the Events of Default or covenants of the Company with respect to
Securities of any series, whether or not such Events of Default or
covenants are consistent with the Events of Default or covenants
set forth herein;
(17) if other than the Trustee, the identity of each Paying
Agent and Registrar for the Securities of the series; and
(18) any other terms of the series.
All Securities of any one series shall be substantially
identical except as to denomination and except as may otherwise be provided
in or pursuant to the Board Resolution referred to above and set forth, or
determined in the manner provided, in the Officers' Certificate referred to
above or in any such indenture supplemental hereto.
If any of the terms of the series are established by
action taken pursuant to a Board Resolution, a copy thereof shall be
delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of the series.
Section 3.02 Denominations
In the absence of any specified denomination with respect
to the Securities of any series, the Securities of such series shall be
issuable in denominations of $1,000 and any integral multiple thereof.
Section 3.03 Execution, Authentication, Delivery and Dating
The Securities shall be executed on behalf of the Company
by two Officers, under its corporate seal reproduced thereon. The signature
of any of the Officers on the Securities may be manual or by facsimile.
Securities bearing the manual or facsimile signatures of
individuals who were at any time the proper Officers of the Company shall
bind the Company, notwithstanding that such individuals or any of them have
ceased to hold such offices prior to the authentication and delivery of
such Securities or did not hold such offices at the date of such
Securities.
At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Securities of any
series, executed by the Company to the Trustee for authentication, together
with a Company Order for the authentication and delivery of such
Securities, and the Trustee in accordance with the Company Order shall
authenticate and deliver such Securities. The Trustee may appoint an
authenticating agent acceptable to the Company to authenticate Securities.
<PAGE> 54
An authenticating agent may authenticate Securities whenever the Trustee
may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such an agent. An authenticating agent
has the same rights as an Agent to deal with the Company. The Company shall
pay the reasonable fees and expenses of any authenticating agent.
If the form or terms of the Securities of the series have
been established in or pursuant to one or more Officers' Certificate or
Board Resolutions as permitted by Sections 2.01 and 3.01 hereof, in
authenticating such Securities, and accepting the additional
responsibilities under this Indenture in relation to such Securities, the
Trustee shall be entitled to receive, and (subject to TIA Sections 315(a)
through 315(d)) shall be fully protected in relying upon, an Opinion of
Counsel stating:
(1) if the form or forms of such Securities have been
established by or pursuant to Board Resolution or an Officers'
Certificate as permitted by Section 2.01 hereof, that such form or
forms have been established in conformity with the provisions of
this Indenture;
(2) if the terms of such Securities have been established
by or pursuant to an Officers' Certificate or a Board Resolution
as permitted by Section 3.01 hereof, that such terms have been
established in conformity with the provisions of this Indenture;
and
(3) that such Securities, when completed by appropriate
insertions and executed and delivered by the Company to the
Trustee for authentication in accordance with this Indenture,
authenticated and delivered by the Trustee in accordance with this
Indenture and issued by the Company in the manner and subject to
any conditions specified in such Opinion of Counsel, will
constitute the legal, valid and legally binding obligations of the
Company, enforceable in accordance with their terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights, to
general equity principles and to such other qualifications as such
counsel shall conclude do not materially affect the rights of
Holders of such Securities.
Notwithstanding the provisions of Section 3.01 hereof and
of the preceding paragraph, if all of the Securities of any series are not
to be issued at one time, it shall not be necessary to deliver the
Officers' Certificate or Board Resolution otherwise required pursuant to
Section 3.01 hereof or the Company Order and Opinion of Counsel otherwise
required pursuant to such preceding paragraph at the time of issuance of
each Security of such series, but such documents shall be delivered at or
prior to the time of issuance of the first Security of such series.
<PAGE> 55
Notwithstanding the immediately preceding sentence, any subsequent request
by the Company to the Trustee to authenticate Securities of such series
upon original issuance shall constitute a representation and warranty by
the Company that, as of the date of such request, the statements made in
the Opinion of Counsel delivered pursuant to this Section 3.03 shall be
true and correct as if made on such date.
The Trustee shall have the right to decline to
authenticate and deliver such Securities if the Trustee, being advised by
counsel, determines that such action may not lawfully be taken or if the
Trustee in good faith by its board of directors or trustees, executive
committee or a trust committee of directors or trustees and/or officers of
the Trustee shall determine that such action would expose the Trustee to
personal liability to existing Holders or would adversely affect the
Trustee's own rights, duties or immunities under this Indenture or
otherwise.
Each Security shall be dated the date of its
authentication.
No Security shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there appears on
such Security a certificate of authentication substantially in the form
provided for herein duly executed by the Trustee by manual signature of an
authorized signatory, and such certificate upon any Security shall be
conclusive evidence, and the only evidence, that such Security has been
duly authenticated and delivered hereunder and is entitled to the benefits
of this Indenture. Notwithstanding the foregoing, if any Security shall
have been authenticated and delivered hereunder but never issued and sold
by the Company, and the Company shall deliver such Security to the Trustee
for cancellation as provided in Section 3.09 hereof together with a Company
Order (which need not comply with Section 14.08 hereof and need not be
accompanied by an Opinion of Counsel) stating that such Security has never
been issued or sold by the Company, for all purposes of this Indenture such
Security shall be deemed never to have been authenticated and delivered
hereunder and shall never be entitled to the benefits of this Indenture.
Section 3.04 Temporary Securities
Pending the preparation of definitive Securities of any
series, the Company may execute, and upon Company Order, the Trustee shall
authenticate and deliver, temporary Securities which are printed,
lithographed, typewritten, mimeographed or otherwise produced, in any
authorized denomination, substantially of the tenor of the definitive
Securities in lieu of which they are issued, and with such appropriate
insertions, omissions, substitutions and other variations as the Officers
executing such Securities may determine, as evidenced by their execution of
such Securities.
Every temporary Security shall be executed by the Company
and authenticated by the Trustee and registered by the Registrar, upon the
same conditions, and with like effect, as a definitive Security.
<PAGE> 56
If temporary Securities (other than a Global Security) of
any series are issued, the Company will cause definitive Securities of that
series to be prepared without unreasonable delay. After the preparation of
definitive Securities of such series, the temporary Securities of such
series shall be exchangeable for definitive Securities of such series upon
surrender of the temporary Securities of such series at the office or
agency of the Company in a Place of Payment for that series, without charge
to the Holder. Upon surrender for cancellation of any one or more temporary
Securities of any series, the Company shall execute and the Trustee shall
authenticate and deliver in exchange a like aggregate principal amount of
definitive Securities of the same series of authorized denominations. Until
so exchanged, the temporary Securities of any series shall in all respects
be entitled to the same benefits under this Indenture as definitive
Securities of such series.
Section 3.05 Registration, Registration of Transfer and Exchange
(a) The Company shall maintain a register of the
Securities of each series including any Global Security (the "Security
Register") in an office or agency of the Company in a Place of Payment (the
"Registrar") where, subject to Section 3.05(c) hereof and such reasonable
regulations as the Company may prescribe, Securities may be presented for
registration of transfer or for exchange. The Company may appoint one or
more co-Registrars. The term "Registrar" includes any co-Registrar. The
Company may change any Registrar without notice to any Holder. The Company
or any of its Subsidiaries may act as Registrar.
Subject to Section 3.05(c), upon surrender for
registration of transfer of any Security of any series at the office or
agency of the Company in a Place of Payment for that series, the Company
shall execute, and the Trustee shall authenticate and deliver, in the name
of the designated transferee or transferees, one or more new Securities of
the same series, of any authorized denominations and of a like aggregate
principal amount.
Subject to Section 3.05(c), at the option of the Holder,
Securities of any series may be exchanged for other Securities of the same
series, of any authorized denominations and of a like aggregate principal
amount, upon surrender of the Securities to be exchanged at such office or
agency. Whenever any Securities are so surrendered for exchange, the
Company shall execute, and the Trustee shall authenticate and deliver, the
Securities which the Holder making the exchange is entitled to receive.
All Securities issued upon any registration of transfer
or exchange of Securities shall be the valid obligations of the Company,
evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Securities surrendered upon such registration of transfer
or exchange.
<PAGE> 57
Every Security presented or surrendered for registration
of transfer or for exchange shall (if so required by the Company or the
Registrar) be duly endorsed, or be accompanied by a written instrument of
transfer, in form satisfactory to the Company and the Registrar, duly
executed by the Holder thereof or its attorney duly authorized in writing.
No service charge shall be made for any registration of
transfer or exchange of Securities, but the Company may require payment of
a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any registration of transfer or exchange of
Securities, other than exchanges pursuant to Section 3.04, 4.07 or 13.05
hereof not involving any transfer.
The Company shall not be required (i) to issue, register
the transfer of or exchange Securities of any series during a period
beginning at the opening of business 15 days before the day of the mailing
of a notice of redemption of Securities of that series selected for
redemption under Section 4.08 hereof and ending at the close of business on
the day of such mailing, or (ii) to register the transfer or exchange of
any Security so selected for redemption in whole or in part, except the
unredeemed portion of any Security being redeemed in part, or (iii) to
issue, register the transfer of or exchange any Security which has been
surrendered for repayment at the option of the Holder, except the portion,
if any, of such Security not to be so repaid.
(b) In case the Company, pursuant to Article 7 hereof,
will be consolidated or merged with or into any other Person or will
convey, transfer or lease substantially all of its properties and assets to
any Person, and the Successor resulting from such consolidation, or
surviving such merger, or into which the Company will have been merged, or
the Person which will have received a conveyance, transfer or lease as
aforesaid, will have executed an indenture supplemental hereto with the
Trustee pursuant to Article 7 hereof, any of the Securities authenticated
or delivered prior to such consolidation, merger, conveyance, transfer or
lease may, from time to time, at the request of the Successor, be exchanged
for other Securities executed in the name of the Successor with such
changes in phraseology and form as may be appropriate, but otherwise in
substance and of like tenor as the Securities surrendered for such exchange
and of like principal amount; and the Trustee, upon receipt of an Officers'
Certificate from the Successor, will authenticate and deliver Securities as
specified in such request for the purpose of such exchange. If Securities
will at any time be authenticated and delivered in any new name of a
Successor pursuant to this Section 3.05(b) hereof in exchange or
substitution for or upon registration of transfer of any Securities, such
Successor, at the option of the Holders but without expense to them, will
provide for the exchange of all Securities at the time outstanding for
Securities authenticated and delivered in such new name.
<PAGE> 58
(c) The Company will execute and the Trustee will, in
accordance with this Section 3.05(c) for so long as the Securities of any
series are to be issued in whole or in part in the form of one or more
Global Securities, authenticate and deliver one or more Global Securities
that will (i) represent and will be denominated in an amount equal to the
aggregate outstanding principal amount of the Securities to be represented
by such Global Security or Securities, (ii) be registered in the name of
the Depository for such Global Security or Securities or the nominee of
such Depository, (iii) be delivered by the Trustee to such Depository or
pursuant to such Depository's instructions and (iv) bear the legends set
forth in Section 2.02 hereof.
Each Depository appointed in accordance with Section 3.01
hereof for a Global Security must, at the time of its appointment 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.
Notwithstanding any other provision of this Section
3.05(c), unless and until it is exchanged in whole for Securities in
definitive form of any series, a Global Security representing all or a
portion of the Securities of any series 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 is unwilling or unable to
continue as Depository or if at any time the Depository will no longer be
eligible to act as such under this Section 3.05(c), the Company will
appoint a successor Depository. If (i) a successor Depository is not
appointed by the Company within 90 days after the Company receives notice
from the Depository or otherwise becomes aware of such unwillingness,
inability or ineligibility or (ii) an Event of Default has occurred and is
continuing, the Company will execute and deliver to the Trustee as promptly
as practicable Securities in definitive form, together with an Officers'
Certificate relating to the authentication and delivery of such Securities,
and the Trustee, as promptly as practicable after the receipt of such
Securities and Officers' Certificate, will authenticate and deliver
Securities in definitive form in an aggregate principal amount equal to the
principal amount of, and containing terms and provisions identical to, the
Global Security or Securities in exchange for such Global Security or
Securities.
The Company may at any time and in its sole discretion
determine that the Securities of any series issued in the form of one or
more Global Securities will no longer be represented by such Global
Security or Securities. In such event, the Company will execute and deliver
to the Trustee Securities in definitive form, together with an Officers'
Certificate relating to the authentication and delivery of Securities in
definitive form, and the Trustee, as promptly as practicable after the
<PAGE> 59
receipt of such Securities in definitive form and Officers' Certificate,
will authenticate and deliver Securities in definitive form in an aggregate
principal amount equal to the principal amount of, and containing terms and
provisions identical to, the Global Security or Securities in exchange for
such Global Security or Securities.
Upon the exchange of a Global Security in whole or in
part for Securities in definitive form, such Global Security shall be
cancelled by the Trustee. Securities in definitive form issued in exchange
for a Global Security pursuant to this Section 3.05(c) will be registered
in such names and in such authorized denominations as the Depository,
pursuant to instructions from its direct or indirect participants or
otherwise, will instruct the Trustee in writing. The Trustee will deliver
such Securities in definitive form to the Persons in whose names such
Securities are so registered or as it may otherwise be directed by the
Depository. Upon the exchange of less than the entire principal amount of a
Global Security for Securities in definitive form, the Company will also
execute, and the Trustee, upon receipt of an Officers' Certificate will
also authenticate and deliver, a new Global Security in aggregate principal
amount equal to the difference between the principal amount of the
surrendered Global Security and the aggregate principal amount of
Securities in definitive form issuable upon such exchange.
In any exchange provided for in any of the preceding
three paragraphs, the Company will execute and the Trustee will
authenticate and deliver Securities in definitive form in authorized
denominations.
If a Security in definitive form is issued in exchange
for any portion of a Global Security after the close of business at the
office or agency where such exchange occurs on or after any Regular Record
Date for an Interest Payment Date and before the opening of business at
such office or agency on the next Interest Payment Date, interest will not
be payable on such Interest Payment Date or proposed date for payment, as
the case may be, in respect of such Security in definitive form, but will
be payable on such Interest Payment Date only to the Person to whom
interest in respect of such portion of such Global Security is payable in
accordance with the provisions of this Indenture.
None of the Company, the Trustee, any agent of the
Trustee, any Paying Agent or the Registrar will have any responsibility or
liability for any aspect of the Depository's records relating to or
payments made on account of beneficial ownership interests in a Global
Security or for maintaining, supervising or reviewing any of the
Depository's records relating to such beneficial ownership interests.
Section 3.06 Mutilated, Destroyed, Lost and Stolen Securities
If any mutilated Security is surrendered to the Trustee,
the Company shall execute and the Trustee shall authenticate and deliver in
exchange therefor a new Security of the same series and of like principal
amount and bearing a number not contemporaneously outstanding.
<PAGE> 60
If there shall be delivered to the Company and the
Trustee (i) evidence to their satisfaction of the destruction, loss or
theft of any Security and (ii) such security or indemnity as may be
required by them and to save each of them and any agent of either of them
harmless, then, in the absence of notice to the Company or the Trustee that
such Security has been acquired by a bona fide purchaser, the Company shall
execute and upon receipt of a Company Order the Trustee shall authenticate
and deliver, in lieu of any such destroyed, lost or stolen Security, a new
Security of the same series and of like principal amount and bearing a
number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen
Security has become or is about to become due and payable, the Company in
its discretion may, instead of issuing a new Security, instruct the Paying
Agent to pay such Security.
Upon the issuance of any new Security under this Section
3.06, 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)
connected therewith.
Every new Security of any series issued pursuant to this
Section 3.06 in lieu of any mutilated, destroyed, lost or stolen Security,
shall constitute an original additional contractual obligation of the
Company, whether or not the mutilated, destroyed, lost or stolen Security
shall be at any time enforceable by anyone, and shall be entitled to all
the benefits of this Indenture equally and proportionately with any and all
other Securities of that series duly issued hereunder.
The provisions of this Section 3.06 are exclusive and
shall preclude (to the extent lawful) all other rights and remedies with
respect to the replacement or payment of mutilated, destroyed, lost or
stolen Securities.
Section 3.07 Payment of Interest; Interest Rights Preserved
Except as otherwise provided as contemplated by Section
3.01 hereof with respect to any series of Securities, interest on any
Security which is payable, and is punctually paid or duly provided for, on
any Interest Payment Date shall be paid to the Person in whose name that
Security is registered at the close of business on the Regular Record Date
for such interest at the office or agency of the Company maintained for
such purpose pursuant to Section 6.02 hereof.
Any interest on any Security of any series which is
payable, but is not punctually paid or duly provided for, on any Interest
Payment Date shall forthwith cease to be payable to the Holder on the
relevant Regular Record Date by virtue of having been such Holder, and such
defaulted interest and, if applicable, interest on such defaulted interest
(to the extent lawful) at the rate specified in the Securities of such
series (such defaulted interest and, if applicable, interest thereon herein
collectively called "Defaulted Interest") may be paid by the Company, at
its election in each case, as provided in clause (i) or (ii) below:
<PAGE> 61
(i) The Company may elect to make payment of any
Defaulted Interest to the Persons in whose names the Securities of
such series are registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest, which
shall be fixed in the following manner. The Company shall notify
the Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each Security of such series and the date
of the proposed payment, and at the same time the Company shall
deposit with the Trustee an amount of money (except as otherwise
specified pursuant to Section 3.01 hereof for the Securities of
such series) equal to the aggregate amount proposed to be paid in
respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit on or prior to the
date of the proposed payment, such money when deposited to be held
in trust for the benefit of the Persons entitled to such Defaulted
Interest as in this clause provided. Thereupon, the Trustee shall
fix a Special Record Date for the payment of such Defaulted
Interest which shall be not more than 15 days and not less than 10
days prior to the date of the proposed payment and not less than
10 days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company of
such Special Record Date and, in the name and at the expense of
the Company, shall cause notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor to be
mailed, first class postage prepaid, to each Holder of Securities
of such series at its address as it appears in the Security
Register, not less than 10 days prior to such Special Record Date
and notice shall be considered given whether or not received by
the Holder. If notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor have been so mailed,
such Defaulted Interest shall be paid to the Persons in whose
names the Securities of such series are registered at the close of
business on such Special Record Date and shall no longer be
payable pursuant to the following clause (ii).
(ii) The Company may make payment of any Defaulted
Interest on the Securities of any series in any other lawful
manner not inconsistent with the requirements of the securities
exchange on which such Securities may be listed, if any, and upon
such notice as may be required by such exchange, if, after written
notice given by the Company to the Trustee of the proposed payment
pursuant to this clause, such manner of payment shall be deemed
practicable by the Trustee.
The provisions of this Section 3.07 may be applicable to
any series of Securities pursuant to Section 3.01 hereof (with such
modifications, additions or substitutions as may be specified pursuant to
such Section 3.01 hereof).
<PAGE> 62
Subject to the foregoing provisions of this Section 3.07
and Section 3.05 hereof, each Security delivered under this Indenture upon
registration of transfer of or in exchange for or in lieu of any other
Security shall carry the rights to interest accrued and unpaid, and to
accrue, which were carried by such other Security.
Section 3.08 Persons Deemed Owners
Subject to Section 3.05(c), prior to due presentment of a
Security for registration of transfer, the Company, the Trustee and any
agent of the Company or the Trustee may treat the Person in whose name such
Security is registered as the owner of such Security for the purpose of
receiving payment of principal of and (except as contemplated by Section
3.05 hereof and subject to Section 3.07 hereof) interest on such Security
and for all other purposes whatsoever, whether or not such Security be
overdue, and neither the Company, the Trustee nor any agent of the Company
or Trustee shall be affected by notice to the contrary.
Section 3.09 Cancellation
All Securities surrendered for payment, redemption,
repayment at the option of the Holder, if applicable, registration of
transfer or exchange or for credit against any current or future sinking
fund payment shall, if surrendered to any Person other than the Trustee, be
delivered to the Trustee and shall be promptly cancelled by it. The Company
may at any time deliver to the Trustee for cancellation any Securities
previously authenticated and delivered hereunder which the Company may have
acquired in any manner whatsoever, and may deliver to the Trustee (or to
any other Person for delivery to the Trustee) for cancellation any
Securities previously authenticated hereunder which the Company has not
issued and sold, and all Securities so delivered shall be accompanied by an
Officers' Certificate authorizing such cancellation, and shall be promptly
cancelled by the Trustee. If the Company shall so acquire any of the
Securities, however, such acquisition shall not operate as a redemption or
satisfaction of the Indebtedness represented by such Securities unless and
until the same are surrendered to the Trustee for cancellation. No
Securities shall be authenticated in lieu of or in exchange for any
Securities cancelled as provided in this Section, except as expressly
permitted by this Indenture. All cancelled Securities held by the Trustee
shall be disposed of as directed by a Company Order.
Section 3.10 Computation of Interest
Except as otherwise specified as contemplated by Section
3.01 hereof for Securities of any series, interest on the Securities of
each series shall be computed on the basis of a 365 or 366-day year.
<PAGE> 63
ARTICLE 4
REDEMPTION
Section 4.01 Applicability of Article
If so provided as contemplated by Section 3.01 hereof for
Securities of any series, Securities of any series which are redeemable
before their Stated Maturity shall be redeemable in accordance with their
terms and in accordance with this Article 4.
Section 4.02 Election to Redeem; Notice to Trustee
In the event the Company elects to redeem Securities of
any series pursuant to the optional redemption provisions of Section 4.08
hereof, it will notify the Trustee in writing, at least 30 days but not
more than 60 days before a redemption date, of the redemption date and the
principal amount of Securities of a series to be redeemed.
Section 4.03 Selection of Securities to Be Redeemed
(a) In the event less than all of the Outstanding
Securities of a series are to be redeemed, the Trustee will select the
Securities of such series to be redeemed pro rata or by lot or by any other
method the Trustee deems fair and appropriate but only in integral
multiples of $1,000. The particular Securities of a series to be redeemed
will be selected, unless otherwise provided herein, not less than 20 nor
more than 60 days prior to the redemption date by the Trustee from the
Outstanding Securities of such series not previously called for redemption.
(b) The Trustee will promptly notify the Company in
writing of the Securities of such series selected for redemption and, in
the case of any Security of a series selected for partial redemption, the
principal amount thereof to be redeemed but not in integral multiples of
less than $1,000. Provisions of this Indenture that apply to Securities of
a series called for redemption also apply to portions of Securities of a
series called for redemption.
Section 4.04 Notices to Holders
(a) At least 15 days but not more than 60 days before a
redemption date, the Company will mail a notice to each Holder whose
Securities are to be redeemed.
(b) The notice will identify the Securities of the series
to be redeemed and will state:
(i) the redemption date;
(ii) the redemption price;
<PAGE> 64
(iii) if any Outstanding Security of any series
is being redeemed in part, the portion of the principal amount of
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 issued;
(iv) the name and address of the Paying Agent;
(v) that Securities called for redemption must be
surrendered to the Paying Agent at the address specified in such
notice to collect the redemption price;
(vi) that interest on Securities called for
redemption ceases to accrue on and after the redemption date;
(vii) that the redemption is for a sinking fund,
if such is the case;
(viii) the aggregate principal amount of Securities
that are being redeemed; and
(ix) that funds for the redemption price shall
be deposited in accordance with Section 4.06 hereof, failing which
the notice shall be deemed cancelled.
(c) At the Company's written request, the Trustee will
give the notice required in this Section 4.04 in the Company's name and at
its expense.
Section 4.05 Effect of Notice of Redemption
Once notice of redemption is mailed, Outstanding
Securities of such series called for redemption become due and payable on
the redemption date at the redemption price and, subject to Section 4.06(b)
hereof, interest on such Securities ceases to accrue on and after the
redemption date.
Section 4.06 Deposit of Redemption Price
(a) At least one Business Day prior to the redemption
date, the Company will deposit with the Trustee or with the Paying Agent
(or, if the Company is acting as its own Paying Agent, segregate and hold
in trust as provided in Section 6.04 hereof) money sufficient to pay the
redemption price of, and accrued and previously unpaid interest on, all
Securities of such series to be redeemed on that date, and the Trustee will
remit the redemption price to Holders entitled thereto. The Trustee or the
Paying Agent will return to the Company any money not required for that
purpose.
<PAGE> 65
(b) If the Company complies with Section 4.06(a) hereof,
interest on the Securities of such series or portions thereof to be
redeemed (whether or not such Securities are presented for payment) will
cease to accrue on the applicable redemption date. If any Security of such
series called for redemption is not so paid upon surrender because of the
failure of the Company to comply with Section 4.06(a) hereof, then interest
will be paid on the unpaid principal from the last Interest Payment Date
until such principal is paid in full at the rate determined pursuant to
Section 3.01 hereof for the Securities of such series.
Section 4.07 Securities Redeemed in Part
Upon surrender of a Security of such series that is
redeemed in part, the Company will issue and the Trustee will authenticate
for the Holder at the expense of the Company a new Security of the same
series, maturity date, interest rate and Issue Date equal in principal
amount to the unredeemed portion of the Security of such series
surrendered.
Section 4.08 Optional Redemption
The Company may redeem all or any portion of the
Outstanding Securities of any series at any time and from time to time that
are redeemable before their maturity except as otherwise specified as
contemplated by Section 3.01 hereof for Securities of such series at the
redemption prices together in each case, with accrued interest, if any, to
the date fixed for redemption, determined pursuant to Section 3.01 hereof.
ARTICLE 5
SINKING FUNDS
Section 5.01 Applicability of Article
If so provided as contemplated by Section 3.01 hereof for
Securities of any series, retirements of Securities of any series pursuant
to any sinking fund shall be made in accordance with their terms and in
accordance with this Article 5.
The minimum amount of any sinking fund payment provided
for by the terms of Securities of any series is herein referred to as a
"mandatory sinking fund payment", and any payment in excess of such minimum
amount provided for by the terms of Securities of any series is herein
referred to as an "optional sinking fund payment." If provided for by the
terms of Securities of any series, the cash amount of any sinking fund
payment may be subject to reduction as provided in Section 5.02 hereof.
Each sinking fund payment shall be applied to the redemption of Securities
of any series as provided for by the terms of Securities of such series.
<PAGE> 66
Section 5.02 Satisfaction of Sinking Fund Payments with Securities
Subject to Section 5.03 hereof, in lieu of making all or
any part of any mandatory sinking fund payment with respect to any
Securities of a series in cash, the Company may at its option (i) deliver
to the Trustee Outstanding Securities of a series (other than any
previously called for redemption) theretofore purchased or acquired by the
Company and/or (ii) receive credit for the principal amount of Securities
of a series which have been previously delivered to the Trustee by the
Company or for Securities of such series which have been redeemed either at
the election of the Company pursuant to the terms of such Securities or
through the application of permitted optional sinking fund payments
pursuant to the terms of such Securities, in each case in satisfaction of
all or any part of any mandatory sinking fund payment with respect to the
Securities of the same series required to be made pursuant to the terms of
such Securities as provided for by the terms of such series; provided that
such Securities have not been previously so credited. Such Securities shall
be received and credited for such purpose by the Trustee at the redemption
price specified in such Securities for redemption through operation of the
sinking fund and the amount of such mandatory sinking fund payment shall be
reduced accordingly.
Section 5.03 Redemption of Securities for Sinking Fund
Not less than 60 days prior to each sinking fund payment
date for any series of Securities, the Company will deliver to the Trustee
an Officers' Certificate specifying the amount of the next ensuing sinking
fund payment for that series pursuant to the terms of that series, the
portion thereof, if any, which is to be satisfied by payment of cash and
the portion thereof, if any, which is to be satisfied by delivering or
crediting Securities of that series pursuant to Section 5.02 hereof (which
Securities will, if not previously delivered, accompany such Officers'
Certificate) and whether the Company intends to exercise its right to make
a permitted optional sinking fund payment with respect to such series. Such
Officers' Certificate shall be irrevocable and upon its delivery the
Company shall be obligated to make the cash payment or payments therein
referred to, if any, on or before the next succeeding sinking fund payment
date. In the case of the failure of the Company to deliver such Officers'
Certificate, the sinking fund payment due on the next succeeding sinking
fund payment date for that series shall be paid entirely in cash and shall
be sufficient to redeem the principal amount of such Securities subject to
a mandatory sinking fund payment without the option to deliver or credit
Securities as provided in Section 5.02 hereof and without the right to make
any optional sinking fund payment, if any, with respect to such series.
Not more than 60 days before each such sinking fund
payment date the Trustee shall select the Securities to be redeemed upon
such sinking fund payment date in the manner specified in Section 4.03
hereof and cause notice of the redemption thereof to be given in the name
of and at the expense of the Company in the manner provided in Section 4.04
hereof. Such notice having been duly given, the redemption of such
Securities shall be made upon the terms and in the manner stated in Article
4 hereof.
<PAGE> 67
Prior to any sinking fund payment date, the Company shall
pay to the Trustee or a Paying Agent (or, if the Company is acting as its
own Paying Agent, segregate and hold in trust as provided in Section 6.04
hereof) in cash a sum equal to any interest that will accrue to the date
fixed for redemption of Securities or portion thereof to be redeemed on
such sinking fund payment date pursuant to this Section 5.03.
Notwithstanding the foregoing, with respect to a sinking
fund for any series of Securities, if at any time the amount of cash to be
paid into such sinking fund on the next succeeding sinking fund payment
date, together with any unused balance of any preceding sinking fund
payment or payments for such series, does not exceed in the aggregate
$100,000, the Company shall not instruct the Trustee to give the next
succeeding notice of the redemption of Securities of such series through
the operation of the sinking fund. Any such unused balance of moneys
deposited in such sinking fund shall be added to the sinking fund payment
for such series to be made in cash on the next succeeding sinking fund
payment date or, at the request of the Company, shall be applied at any
time or from time to time to the purchase of Securities of such series, by
public or private purchase as negotiated by the Company, in the open market
or otherwise, at a purchase price for such Securities (excluding accrued
interest and brokerage commissions, for which the Trustee or any Paying
Agent will be reimbursed by the Company) not in excess of the principal
amount thereof.
ARTICLE 6
COVENANTS
Section 6.01 Payment of Securities
(a) The Company will pay the principal of, and interest
on, the Securities of each series on the dates and in the manner provided
herein and in the Securities. In the event the Company is not the Paying
Agent, principal and interest 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 principal and interest
then due. In the event the Company is the Paying Agent, principal and
interest will be considered paid on the date actual payment is mailed to
the Holders entitled to such payments.
(b) The Company will pay interest on overdue principal at
the applicable interest rate on the Securities of each series as determined
in accordance with Section 3.01 hereof.
<PAGE> 68
Section 6.02 Maintenance of Office or Agency
(a) The Company will maintain in each Place of Payment
for any series of Securities, in New York, New York, an office or agency
(which may be an office of the Trustee or the Registrar) where Securities
of such series may be presented or surrendered for payment, where
Securities of that series may be presented for registration of transfer or
exchange and where notices and demands to or upon the Company in respect of
the Securities of such series and this Indenture may be served. The Company
will give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the
Company fails to maintain any such required office or agency or fails to
furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate
Trust Office of the Trustee.
(b) The Company may also from time to time designate one
or more other offices or agencies where the Securities of each series may
be presented or surrendered for any or all such purposes and may from time
to time rescind such designations; provided, however, that no such
designation or rescission will in any manner relieve the Company of its
obligation to maintain an office or agency in New York, New York for such
purposes. The Company will give prompt written notice to the Trustee of any
such designation or rescission and of any change in the location of any
such other office or agency.
(c) The Company hereby designates the Corporate Trust
Office of the Trustee as one such office or agency of the Company in
accordance with this Section 6.02.
Section 6.03 SEC Reports; Financial Statements
(a) As long as more than 10 percent of the original
principal amount of the Securities of any series is Outstanding, the
Company will (i) remain subject to the requirements of Section 13 or 15(d)
of the Exchange Act whether or not it is required to do so by the
provisions thereof and will file with the SEC all periodic reports as may
be required thereunder and (ii) file with the SEC, and the Trustee within
15 days after the Company is required to file the same with the SEC, copies
of the periodic reports which the Company may be required to file with the
SEC pursuant to Section 13(a), 13(c) or 15(d) of the Exchange Act. The
Company will also make such reports available to the Holders, prospective
purchasers of the Securities of any such series, securities analysts and
broker-dealers upon their written request.
(b) In the event that (i) 10 percent or less of the
original principal amount of the Securities of any series is Outstanding
and (ii) the Company is not required to file with the SEC such reports and
other information referred to in Section 6.03(a) hereof, the Company will
furnish to the Trustee (A) within 120 days after the end of each fiscal
year, annual reports containing the information required to be contained in
<PAGE> 69
Items 1, 2, 3, 5, 6, 7, 8 and 9 of the Annual Report on Form 10-K
promulgated under the Exchange Act, or substantially the same information
required to be contained in comparable items of any successor form, (B)
within 60 days after the end of each of the first three fiscal quarters of
each fiscal year, quarterly reports containing the information required to
be contained in the Quarterly Report on Form 10-Q promulgated under the
Exchange Act, or substantially the same information required to be
contained in any successor form and (C) promptly from the time after the
occurrence of an event which would be required to be reported in the
Current Report on Form 8-K if the Company was required to file such Report,
such other reports containing information required to be contained in the
Current Report on Form 8-K promulgated under the Exchange Act, or
substantially the same information required to be contained in any
successor form.
(c) The Company will also comply with the other provisions
of TIA Section 314(a).
Section 6.04 Money for Security Payments to Be Held in Trust
(a) In the event the Company will at any time act as its
own Paying Agent with respect to any series of Securities, it will, not
less than one Business Day before each due date of the principal of or
interest on any of the Securities of any series, segregate and hold in
trust for the benefit of the Holders entitled thereto a sum sufficient to
pay the principal or interest so becoming due until such sums will be paid
to such Persons or otherwise disposed of as herein provided, and will
promptly notify the Trustee of its action or failure to so act.
(b) In the event the Company is not acting as Paying
Agent with respect to any series of Securities, the Company will, not less
than one Business Day before each due date of the principal of or interest
on, any Securities of any series, deposit with a Paying Agent a sum in same
day funds sufficient to pay the principal or interest so becoming due, such
sum to be held in trust for the benefit of the Persons entitled to such
principal or interest, and (unless such Paying Agent is the Trustee) the
Company will promptly notify the Trustee of such action or any failure to
so act.
(c) In the event the Company is not acting as Paying
Agent with respect to any series of Securities, the Company will cause each
Paying Agent other than the Trustee to execute and deliver to the Trustee
an instrument in which such Paying Agent will agree with the Trustee,
subject to the provisions of this Section, that such Paying Agent will:
(i) hold all sums held by it for the payment of the
principal of or interest on Securities of such series in trust for the
benefit of the Holders of such series of Securities and the Trustee entitled
thereto until such sums will be paid to such Persons or otherwise disposed
of as herein provided;
<PAGE> 70
(ii) give the Trustee notice of any Default by the
Company in the making of any payment of principal or interest;
(iii) at any time during the continuance of any such
Default, upon the written request of the Trustee, forthwith pay to the Trustee
all sums so held in trust by such Paying Agent; and
(iv) 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.
(d) The Company may at any time, for the purpose of
obtaining the satisfaction and discharge of this Indenture or for any other
purpose, pay, or by Company Order direct any Paying Agent to pay, to the
Trustee all sums held in trust by the Company or such Paying Agent, such
sums to be held by the Trustee upon the same trusts as those upon which
sums were held by the Company or such Paying Agent; and, upon such payment
by any Paying Agent to the Trustee, such Paying Agent shall be released
from all further liability with respect to such sums.
(e) Except as provided in the Securities of any series,
any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of or interest on
any Security of any series and remaining unclaimed for two years after such
principal or interest has become due and payable shall be paid to the
Company on Company Request, or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Security shall
thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in a newspaper published
in the English language, customarily published on each Business Day and of
general circulation in New York, New York, notice that such money remains
unclaimed and that, after a date specified therein, which shall not be less
than 30 days from the date of such notification or publication, any
unclaimed balance of such money then remaining will be repaid to the
Company.
Section 6.05 Compliance Certificate
(a) The Company will deliver to the Trustee within 120
days after the end of each fiscal year of the Company an Officers'
Certificate stating whether or not the signers know of any Default or Event
of Default that occurred during such period. If they do know of a Default
or an Event of Default, the Officers' Certificate will describe the Default
or Event of Default and the action the Company is taking or proposes to
take with respect thereto.
<PAGE> 71
(b) The Company will give prompt written notice to the
Trustee of the occurrence of any Default or Event of Default.
Section 6.06 Corporate Existence, etc.
Subject to the provisions of Article 7 hereof, the
Company will do or cause to be done all things necessary to preserve and
keep in full force and effect its corporate existence and the rights
(charter and statutory), licenses and franchises of the Company, except in
such cases where a failure to do so would not in the judgment of management
have a 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 of Securities
of any series.
Section 6.07 Payment of Taxes and Other Claims
The Company will pay or discharge or cause to be paid or
discharged, before the same will become delinquent, (i) all taxes,
assessments and governmental charges levied or imposed upon the Company or
upon the income, profits or property of the Company other than any such
tax, assessment, charge or claim whose amount, applicability or validity is
being contested in good faith by appropriate proceedings and for which
appropriate provision has been made in accordance with GAAP and (ii) all
lawful claims for labor, materials and supplies which, if unpaid, might by
law become a Lien (other than a Permitted Lien) upon the property of the
Company, in each case except to the extent the failure to do so would not
have, in the judgment of management, a material adverse effect on the
Company and its Subsidiaries taken as a whole.
Section 6.08 Insurance
The Company will maintain and will cause each of its
Restricted Subsidiaries to maintain (either in the name of the Company or
in such Restricted Subsidiary's own name) with third party insurance
companies or pursuant to self-insurance, (i) insurance on all their
respective properties, (ii) public liability insurance against claims for
personal injury or death as a result of the use of any products sold by it
and (iii) insurance coverage against other business risks, in each case, in
at least such amounts and against at least such other risks (and with such
risk retention) as are usually and prudently insured against in the same
general area by companies engaged in the same or a similar business.
Section 6.09 Stay, Extension and Usury Laws
The Company covenants (to the extent that it may lawfully
do so) that it will not at any time insist upon, plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay, extension
or usury law wherever enacted, now or at any time hereafter in force, that
may affect the Company's obligation to pay the Securities of each series,
<PAGE> 72
and the Company (to the extent that it may lawfully do so) hereby expressly
waives all benefit or advantage of any such law insofar as such law applies
to the Securities of each series, and covenants that it will not, by resort
to any such law, hinder, delay or impede the execution of any power herein
granted to the Trustee, but will suffer and permit the execution of every
such power as though no such law has been enacted.
Section 6.10 Maintenance of Properties
The Company will take reasonable action 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 affect on the financial condition of the Company
and its Subsidiaries taken as a whole. Nothing contained in this Section
6.10 will prevent or restrict the sale, abandonment or other disposition of
any property which management deems advisable.
Section 6.11 Disposition of Proceeds of Asset Sales
(a) Subject to the provisions set forth in Section 7.01
hereof, the Company will not, and will not permit any Restricted Subsidiary
to, directly or indirectly, make any Asset Sale unless (i) the Company or
the Restricted Subsidiary, as the case may be, receives consideration at
the time of such Asset Sale at least equal to the Fair Market Value for the
shares or assets sold or otherwise disposed of (which will be determined in
good faith by the Board of Directors of the Company); provided, that the
aggregate Fair Market Value of the consideration received from any Asset
Sale that is not in the form of cash or cash equivalents will not, when
aggregated with the Fair Market Value of all other non-cash consideration
received by the Company and its Restricted Subsidiaries from all previous
Asset Sales since the Issue Date for Securities of any series that has not
been converted into cash or cash equivalents, exceed five percent of the
Consolidated Tangible Net Assets of the Company at the time of the Asset
Sale under consideration, and (ii) the Company will apply the aggregate Net
Proceeds received by the Company or any Restricted Subsidiary from all
Asset Sales occurring subsequent to such Issue Date as follows: (A) to
repay any outstanding Indebtedness of the Company that is not subordinated
to the Securities, or other Indebtedness of the Company, or to the payment
of any Indebtedness of any Restricted Subsidiary, in each case within one
year after such Asset Sale or (B) to replace the properties and assets that
were the subject of the Asset Sale or in properties and assets that (as
determined by the Board of Directors of the Company, whose determination
will be conclusive) will be used in the businesses existing on the Issue
Date of Securities of such series of the Company and its Restricted
Subsidiaries or in businesses reasonably related thereto within one year
after such Asset Sale. The amount of such Net Proceeds neither used to
repay the Indebtedness described above nor used or invested as set forth in
the preceding sentence constitutes "Excess Proceeds."
<PAGE> 73
(b) Notwithstanding Section 6.11(a)(ii) hereof, to the
extent the Company or any of its Restricted Subsidiaries receives
securities or other noncash property or assets as proceeds of an Asset
Sale, the Company will not be required to make any application of such
noncash proceeds required by Section 6.11(a) hereof until it receives cash
or cash equivalent proceeds from a sale, repayment, exchange, redemption or
retirement of or extraordinary dividend or return of capital on such
noncash property. Any amounts deferred pursuant to the preceding sentence
will be applied in accordance with Section 6.11(a) hereof when cash
proceeds are thereafter received from a sale, repayment, exchange,
redemption or retirement of an extraordinary dividend or return of capital
on such noncash property.
(c) When the aggregate amount of Excess Proceeds equals
$5,000,000 or more, the Company will so notify the Trustee in writing by
delivery of an Officers' Certificate and will offer to purchase from all
Holders (an "Excess Proceeds Offer"), and will purchase from Holders
accepting such Excess Proceeds Offer on the date fixed for the closing of
such Excess Proceeds Offer (the "Asset Sale Offer Date"), the maximum
principal amount (expressed as a multiple of $1,000) of Securities of each
series that may be purchased out of the Excess Proceeds, at an offer price
(the "Asset Sale Offer Price") in cash in an amount equal to 100 percent of
the principal amount thereof plus accrued and unpaid interest, if any, to
the Asset Sale Offer Date, in accordance with the procedures set forth in
this Section 6.11. To the extent that the aggregate amount of Securities of
each series tendered pursuant to an Excess Proceeds Offer is less than the
Excess Proceeds relating thereto, then the Company may use the Excess
Proceeds which exceed the aggregate amount of Securities of each series
tendered pursuant to such Excess Proceeds Offer for general corporate
purposes. Upon completion of an Excess Proceeds Offer, the amount of Excess
Proceeds will be reset at zero.
(d) Within 30 days after the date on which the amount of
Excess Proceeds equals $5,000,000 or more, the Company (with written notice
to the Trustee) or the Trustee at the Company's request (and at the expense
of the Company) will send or cause to be sent by first-class mail, postage
prepaid, to all Holders on the date such Excess Proceeds equals $5,000,000,
at their respective addresses appearing in the Security Register, a notice,
prepared by the Company advising the Holders of such series, of such
occurrence and of such Holders' rights arising as a result thereof. Such
notice will contain all instructions and materials necessary to enable
Holders to tender their Securities of any series to the Company. Such
notice, which will govern the terms of the Excess Proceeds Offer, will
state:
(i) that the Excess Proceeds Offer is being made pursuant to
this Section 6.11 and the length of time such Excess Proceeds Offer will
remain open; (ii) that the Holder has the right to require the Company to
repurchase such Holder's Securities of such series at the Asset Sale Offer
Price;
<PAGE> 74
(iii) that any Security of such series not tendered
will continue to accrue interest;
(iv) that any Security of such series accepted for payment
pursuant to the Excess Proceeds Offer will cease to accrue interest on the
Asset Sale Offer Date;
(v) that the Asset Sale Offer Date will be no earlier than
45 days nor later than 60 days from the date such notice is mailed;
(vi) that Holders electing to have a Security of such series
purchased pursuant to any Excess Proceeds Offer will be required to
surrender the Security of such series, with the appropriate form on the
Security of such series completed, to the Company, a depositary, if
appointed by the Company, or a Paying Agent at the address specified in the
notice prior to termination of the Excess Proceeds Offer;
(vii) that Holders will be entitled to withdraw their
election if the Company, depositary or Paying Agent, as the case may be,
receives, not later than the expiration of the Excess Proceeds Offer, or
such longer period as may be required by law, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Security of such series the Holder delivered for purchase and
a statement that such Holder is withdrawing its election to have the
Security of such series purchased;
(viii) that Holders whose Securities of such series are
purchased only in part will be issued Securities of the same series,
Maturity date, interest rate and Issue Date equal in principal amount to
the unpurchased portion of the Securities of such series surrendered; and
(ix) information concerning the details of the Excess
Proceeds Offer and the business of the Company which the Company in good
faith believes will enable such Holders to make an informed decision (which
at a minimum will include (A) the most recently filed Annual Report on Form
10-K (including audited consolidated financial statements) of the Company,
the most recent subsequently filed Quarterly Report on Form 10-Q and any
Current Report on Form 8-K of the Company filed subsequent to such
Quarterly Report, other than Current Reports describing Asset Sales
otherwise described in the offering materials relating to the Excess
Proceeds Offer (or corresponding successor reports) (or in the event the
Company is not required to prepare any of the foregoing Forms, the
comparable information required pursuant to Section 6.03(b) hereof);
provided that the Company may at its option incorporate by reference any
such filed reports in the notice, (B) a description of material
developments in the Company's business subsequent to the date of the latest
of such reports and (C) if material, appropriate pro forma financial
information.
<PAGE> 75
(e) In the event the aggregate principal amount of
Securities of any series surrendered by Holders exceeds the amount of
Excess Proceeds, the Company will select the Securities of each series to
be purchased on a pro rata basis from all Securities of any series so
surrendered, with such adjustments as may be deemed appropriate by the
Company so that only Securities of any series in denominations of $1,000,
or integral multiples thereof, will be purchased. To the extent that the
Excess Proceeds remaining are less than $1,000, the Company may use such
Excess Proceeds for general corporate purposes. Holders whose Securities of
any series are purchased only in part will be issued new Securities of the
same series, Maturity date, interest rate and Issue Date equal in principal
amount to the unpurchased portion of the Securities of such series
surrendered.
(f) The Company will not, and will not permit any
Restricted Subsidiary to, create or permit to exist or become effective any
restriction (other than any restriction set forth in any agreement,
indenture, document or instrument relating to any Existing Indebtedness or
Refinancing Indebtedness with respect thereto) that would materially impair
the ability of the Company to make an Excess Proceeds Offer.
Notwithstanding the foregoing, if an Excess Proceeds Offer is made, the
Company will pay for Securities of any series tendered for purchase in
accordance with the terms of this Section 6.11.
(g) Not later than one Business Day prior to the Asset
Sale Offer Date in connection with which the Excess Proceeds Offer is being
made, the Company will (i) accept for payment Securities of any series or
portions thereof tendered pursuant to the Excess Proceeds Offer (on a pro
rata basis if required pursuant to Section 6.11(e) hereof), (ii) deposit
with the Paying Agent money sufficient, in immediately available funds, to
pay the purchase price of all Securities of any series or portions thereof
so accepted and (iii) deliver to the Paying Agent an Officers' Certificate
identifying the Securities of such series or portions thereof accepted for
payment by the Company. The Paying Agent will promptly after acceptance
mail or deliver to Holders of Securities of any series so accepted payment
in an amount equal to the Asset Sale Offer Price of the Securities of such
series purchased from each such Holder, and the Company will execute and
upon receipt of an Officers' Certificate of the Company the Trustee will
promptly authenticate and mail or deliver to such Holder a new Security of
the same series, Maturity date, interest rate and Issue Date equal in
principal amount to any unpurchased portion of the Security surrendered.
Any Securities of such series not so accepted will be promptly mailed or
delivered by the Paying Agent at the Company's expense to the Holder
thereof. The Company will publicly announce the results of the Excess
Proceeds Offer on the Asset Sale Offer Date. For purposes of this Section
6.11(g), the Company will choose a Paying Agent which will not be the
Company or a Subsidiary thereof. Any excess cash held by the Trustee after
the expiration of the Excess Proceeds Offer will be returned to the
Company.
(h) Any Excess Proceeds Offer will be conducted by the
Company in compliance with applicable law, including, without limitation,
Section 14(e) of the Exchange Act and Rule 14e-1 thereunder, if applicable.
<PAGE> 76
(i) Whenever Excess Proceeds are received by the Company,
and prior to the allocation of such Excess Proceeds pursuant to this
Section 6.11, such Excess Proceeds will be set aside by the Company in a
separate account to be held in trust for the benefit of the Holders;
provided, however, that in the event the Company will be unable to set
aside such Excess Proceeds in a separate account because of provisions of
applicable law or of any agreement, indenture, document or instrument
relating to Existing Indebtedness or Refinancing Indebtedness with respect
thereto, the Company will not be required to set aside such Excess
Proceeds.
Section 6.12 Limitations on Restricted Payments
(a) The Company will not, and will not permit any of its
Restricted Subsidiaries to, make any Restricted Payment, directly or
indirectly, after the Issue Date of Securities of any series if at the time
of such Restricted Payment:
(i) the amount of such Restricted Payment (the
amount of such Restricted Payment, if other than in cash,
will be determined by the Board of Directors of the
Company), when added to the aggregate amount of all
Restricted Payments made after the Issue Date of the
Securities of any series, exceeds the sum of: (1)
$50,000,000, plus (2) 50 percent of the Company's
Consolidated Net Income accrued during the period (taken
as a single period) since January 1, 1995 (or, if such
aggregate Consolidated Net Income is a deficit, minus 100
percent of such aggregate deficit), plus (3) the net cash
proceeds derived from the issuance and sale of Capital
Stock of the Company and its Restricted Subsidiaries that
is not Disqualified Stock (other than a sale to a
Subsidiary of the Company) after the Issue Date of
Securities of any series but only to the extent not
applied under clause (d) of the definition of "Restricted
Payment" set forth in Section 1.02 hereof, plus (4) 100
percent of the principal amount of any Indebtedness of
the Company or a Restricted Subsidiary that is converted
into or exchanged for Capital Stock of the Company that
is not Disqualified Stock, plus (5) 100 percent of the
aggregate amounts received by the Company or any
Restricted Subsidiary upon the sale, disposition or
liquidation (including by way of dividends) of any
Investment but only to the extent (x) not included in
Section 6.12(a)(i)(2) above and (y) that the making of
such Investment constituted a Restricted Investment made
pursuant to this Section 6.12(a)(i), plus (6) 100 percent
of the principal amount of, or if issued at a discount
the accreted value of, any Indebtedness or other
obligation that is the subject of a guaranty by the
Company which is released after the Issue Date of
Securities of any series, but only to the extent that the
granting of such guaranty constituted a "Restricted
Payment" under the definition set forth in Section 1.02
hereof; or
<PAGE> 77
(ii) the Company would be unable to incur an
additional $1.00 of Indebtedness under the Consolidated
Fixed Charge Coverage Ratio contained in the covenant set
forth in Section 6.13(a) hereof; or
(iii) a Default or Event of Default has occurred and is
continuing or occurs as a consequence thereof.
(b) Notwithstanding the foregoing, the provisions of this
Section 6.12 will not prevent: (i) the payment of any dividend within 60
days after the date of declaration thereof if the payment thereof would
have complied with the limitations of this Indenture on the date of
declaration or (ii) the retirement of shares of the Company's Capital Stock
or the Company's or a Subsidiary of the Company's Indebtedness for, in
exchange for or out of the proceeds of a substantially concurrent sale
(other than a sale to a Subsidiary of the Company) of, other shares of its
Capital Stock (other than Disqualified Stock).
Section 6.13 Limitations on Additional Indebtedness
(a) The Company will not, and will not permit any of its
Restricted Subsidiaries to Incur any Indebtedness (other than Indebtedness
between the Company and its Restricted Subsidiaries which are Wholly Owned
Subsidiaries or among such Restricted Subsidiaries which are Wholly Owned
Subsidiaries), including Acquisition Debt, unless, after giving effect
thereto or the application of the proceeds therefrom, the (i) Company's
Consolidated Fixed Charge Coverage Ratio on the date thereof would be at
least 2.0 to 1.0; and (ii) ratio of the Company's Indebtedness (excluding
Non-Recourse Indebtedness) to Consolidated Tangible Net Worth on the date
thereof is not greater than 2.25 to 1.0.
(b) Notwithstanding the foregoing, the provisions of this
Indenture will not prevent: (i) in addition to the Indebtedness permitted
to be Incurred under clauses (ii) and (iii) of this sentence and
Indebtedness permitted to be Incurred under Section 6.13(a) hereof, the
Company from Incurring (A) Refinancing Indebtedness, (B) Non-Recourse
Indebtedness and (C) Indebtedness Incurred for working capital purposes or
to finance the acquisition, holding or development of property by the
Company and its Restricted Subsidiaries (including, without limitation, the
financing of any related interest reserve) in the ordinary course of
business in an aggregate amount at any one time outstanding not to exceed
$130,000,000 (excluding any Indebtedness referred to in Section 6.13(a)
hereof and subclauses (i)(A), (i)(B), (ii) and (iii) of this Section
6.13(b)), less the amount of any Indebtedness repaid pursuant to Section
6.11(a)(ii)(A) hereof, (ii) Unrestricted Subsidiaries from Incurring
Indebtedness, (iii) the Company and its Restricted Subsidiaries from
Incurring Indebtedness under any deposits made to secure performance of
tenders, bids, leases, statutory obligations, surety and appeal bonds,
progress statements, government contracts and other obligations of like
nature (exclusive of the obligation for the payment of borrowed money), in
each case Incurred in the ordinary course of business of the Company or the
<PAGE> 78
Restricted Subsidiary consistent with past practice and (iv) Restricted
Subsidiaries from guaranteeing Indebtedness of the Company or another
Restricted Subsidiary; provided that the tangible net assets of all
Restricted Subsidiaries guaranteeing Indebtedness of the Company or other
Restricted Subsidiaries at the end of the fiscal quarter immediately
preceding the date of Incurring any such guaranty, as determined in
accordance with GAAP, shall not exceed 10% of the Company's Consolidated
Tangible Net Assets.
Section 6.14 Restrictions on Restricted Subsidiary Indebtedness
The Company will not permit any of its Restricted
Subsidiaries to, directly or indirectly, Incur any additional Indebtedness
after the Issue Date of Securities of any series other than: (i)
Refinancing Indebtedness, (ii) Non-Recourse Indebtedness, (iii)
Indebtedness to the Company, (iv) any deposits made to secure performance
of tenders, bids, leases, statutory obligations, surety and appeal bonds,
progress statements, government contracts, and other obligations of like
nature (exclusive of the obligation for the payment of borrowed money), in
each case Incurred in the ordinary course of business of the Restricted
Subsidiary and (v) any guaranty of Indebtedness of the Company or another
Restricted Subsidiary; provided that the tangible net assets of all
Restricted Subsidiaries guaranteeing Indebtedness of the Company or other
Restricted Subsidiaries at the end of the fiscal quarter immediately
preceding the date of Incurring any such guaranty, as determined in
accordance with GAAP, shall not exceed 10% of the Company's Consolidated
Tangible Net Assets.
Section 6.15 Limitations and Restrictions on Capital Stock of
Subsidiaries
The Company will not permit any of its Restricted
Subsidiaries to issue, or permit to be outstanding at any time, Preferred
Stock or any other Capital Stock constituting Disqualified Stock.
Section 6.16 Change of Control
(a) Following the occurrence of any Change of Control,
the Company will so notify the Trustee in writing by delivery of an
Officers' Certificate and will offer to purchase (a "Change of Control
Offer") from all Holders, and will purchase from Holders accepting such
Change of Control Offer on the date fixed for the closing of such Change of
Control Offer (the "Change of Control Payment Date"), the Outstanding
Securities of each series at an offer price (the "Change of Control Price")
in cash in an amount equal to 101 percent of the aggregate principal amount
thereof plus accrued and unpaid interest, if any, to the Change of Control
Payment Date in accordance with the procedures set forth in this Section
6.16.
<PAGE> 79
(b) Within 30 days after the date of any Change of
Control, the Company (with written notice to the Trustee) or the Trustee at
the Company's request (and at the expense of the Company), will send or
cause to be sent by first class mail, postage prepaid, to all Holders on
the date of the Change of Control at their respective addresses appearing
in the Security Register a notice, prepared by the Company advising the
Holders of such series, of the occurrence of such Change of Control and of
the Holders' rights arising as a result thereof. Such notice will contain
all instructions and materials necessary to enable Holders to tender their
Securities of such series to the Company. Such notice, which will govern
the terms of the Change of Control Offer, will state:
(i) that the Change of Control Offer is being made
pursuant to Section 6.16(a) hereof and the length of time the Change of
Control Offer will remain open;
(ii) that the Holder has the right to require the
Company to repurchase such Holder's Securities of such series at the Change
of Control Price;
(iii) that any Security of such series not tendered
will continue to accrue interest;
(iv) that any Security of such series accepted for
payment pursuant to the Change of Control Offer will cease to accrue
interest on the Change of Control Payment Date;
(v) that the Change of Control Payment Date will be no
earlier than 45 days nor later than 60 days from the date such notice is
mailed;
(vi) that Holders electing to have a Security of such
series purchased pursuant to any Change of Control Offer will be required
to surrender the Security of such series, with the appropriate form on the
Security of such series completed, to the Company, a depositary, if
appointed by the Company, or a Paying Agent at the address specified in the
notice prior to termination of the Change of Control Offer;
(vii) that Holders will be entitled to withdraw their
election if the Company, depositary or Paying Agent, as the case may be,
receives, not later than the expiration of the Change of Control Offer, or
such longer period as may be required by law, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Security of such series the Holder delivered for purchase and
a statement that such Holder is withdrawing its election to have the
Security of such series purchased;
(viii) that Holders which elect to have their
Securities purchased only in part will be issued new Securities of the same
series, Maturity date, interest rate and Issue Date in a principal amount
equal to the unpurchased portion of the Securities of such series
surrendered; and
<PAGE> 80
(ix) information concerning the date and details of the
Change of Control and the business of the Company which the Company in good
faith believes will enable such Holders to make an informed decision (which
at a minimum will include (A) the most recently filed Annual Report on Form
10-K (including audited consolidated financial statements) of the Company,
the most recent subsequently filed Quarterly Report on Form 10-Q and any
Current Report on Form 8-K of the Company filed subsequent to such
Quarterly Report, other than Current Reports describing Asset Sales
otherwise described in the offering materials relating to the Change of
Control Offer (or corresponding successor reports) (or in the event the
Company is not required to prepare any of the foregoing Forms, the
comparable information required pursuant to Section 6.03(b) hereof);
provided that the Company may at its option incorporate by reference any
such filed reports in the notice, (B) a description of material
developments in the Company's business subsequent to the date of the latest
of such reports, and (C) if material, appropriate pro forma financial
information).
(c) In the event of a Change of Control Offer, the
Company will only be required to accept Securities of each series in
denominations of $1,000 or integral multiples thereof.
(d) The Company will not, and will not permit any
Restricted Subsidiary to, create or permit to exist or become effective any
restriction (other than any restriction set forth in any agreement,
indenture, document or instrument relating to any Existing Indebtedness or
Refinancing Indebtedness with respect thereto) that would materially impair
the ability of the Company to make a Change of Control Offer.
Notwithstanding the foregoing, if a Change of Control Offer is made, the
Company will pay for Securities of each series tendered for purchase in
accordance with the terms of this Section 6.16.
(e) Not later than one Business Day prior to the Change
of Control Payment Date in connection with which the Change of Control
Offer is being made, the Company will (i) accept for payment Securities of
each series or portions thereof tendered pursuant to the Change of Control
Offer, (ii) deposit with the Paying Agent money sufficient, in immediately
available funds, to pay the purchase price of all Securities of each series
or portions thereof so accepted and (iii) deliver to the Paying Agent an
Officers' Certificate identifying the Securities of each series or portions
thereof accepted for payment by the Company. The Paying Agent will promptly
after acceptance mail or deliver to Holders of Securities of each series so
accepted payment in an amount equal to the Change of Control Price of the
Securities of each series purchased from each such Holder, and the Company
will execute and, upon receipt of an Officers' Certificate of the Company,
the Trustee will promptly authenticate and mail or deliver to such Holder a
new Security of the same series, Maturity date, interest rate and Issue
Date equal in principal amount to any unpurchased portion of the Security
of such series surrendered. Any Securities of each series not so accepted
will be promptly mailed or delivered by the Paying Agent at the Company's
expense to the Holder thereof. The Company will publicly announce the
results of the Change of Control Offer on the Change of Control Payment
Date. For purposes of this Section 6.16(e), the Company will choose a
Paying Agent which will not be the Company or a Subsidiary thereof. Any
excess cash held by the Trustee after the expiration of the Change of
Control Offer will be returned to the Company.
<PAGE> 81
(f) Any Change of Control Offer will be conducted by the
Company in compliance with applicable law, including, without limitation,
Section 14(e) of the Exchange Act and Rule 14e-1 thereunder.
Section 6.17 Limitations on Transactions With Affiliates
(a) The Company will not, and will not permit any of its
Subsidiaries to, make any loan, advance, guaranty or capital contribution
to, or for the benefit of, or sell, lease, transfer or otherwise dispose of
any of its properties or assets to, or for the benefit of, or purchase or
lease any property or assets from, or enter into or amend any contract,
agreement or understanding with, or for the benefit of, (i) any Affiliate
of the Company or any Affiliate of the Company's Subsidiaries or (ii) any
Person (or any Affiliate of such Person) holding 10 percent or more of the
Common Equity of the Company or any of its Subsidiaries (each an "Affiliate
Transaction"), except on terms that are no less favorable to the Company or
the relevant Subsidiary, as the case may be, than those that could have
been obtained in a comparable transaction on an arms' length basis from a
Person that is not an Affiliate.
(b) The Company will not, and will not permit any of its
Subsidiaries to, enter into any Affiliate Transaction involving or having a
value of more than $10,000,000, unless in each case such Affiliate
Transaction has been approved by a majority of the disinterested members of
the Company's Board of Directors.
(c) The Company will not, and will not permit any of its
Subsidiaries to, enter into an Affiliate Transaction involving or having a
value of more than $20,000,000 unless the Company has delivered to the
Trustee 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.
(d) Notwithstanding the foregoing, an Affiliate
Transaction will not include (i) any contract, agreement or understanding
with, or for the benefit of, or plan for the benefit of, employees or
directors of the Company or its Subsidiaries (in their capacity as such)
that has been approved by the Company's Board of Directors, (ii) Capital
Stock issuances to members of the Board of Directors, officers and
employees, of the Company or its Subsidiaries pursuant to plans approved by
the stockholders of the Company, (iii) any Restricted Payment otherwise
permitted under Section 6.12 hereof, (iv) any transaction between the
Company or a Restricted Subsidiary and another Restricted Subsidiary, (v)
any contract, agreement or understanding as in effect on the Issue Date of
Securities of any series or any amendment thereto or any transaction
contemplated thereby (including any amendment thereto) or (vi) loans or
advances by the Company or any Restricted Subsidiary to Unrestricted
Subsidiaries which in an aggregate amount at any one time outstanding do
not exceed $25,000,000.
<PAGE> 82
Section 6.18 Limitations on Liens
The Company will not, and will not permit any of its
Restricted Subsidiaries to, create, Incur, assume or suffer to exist any
Liens, other than Permitted Liens, on any of its or their assets, property,
income or profits therefrom unless contemporaneously therewith or prior
thereto all payments due hereunder and under the Securities of any series
are secured on an equal and ratable basis with the obligation or liability
so secured until such time as such obligation or liability is no longer
secured by a Lien.
Section 6.19 Limitations on Restrictions on Distributions from
Restricted Subsidiaries
The Company will not, and will not permit any of its
Restricted Subsidiaries to, create, assume or otherwise cause or suffer to
exist or become effective any consensual encumbrance or restriction (other
than encumbrances or restrictions imposed by law or by judicial or
regulatory action or by provisions in leases or other agreements that
restrict the assignability thereof) on the ability of any Restricted
Subsidiary to (i) pay dividends or make any other distributions on its
Capital Stock or any other interest or participation in, or measured by,
its profits, owned by the Company or any of its other Restricted
Subsidiaries, or pay interest on or principal of any Indebtedness owed to
the Company or any of its other Restricted Subsidiaries, (ii) make loans or
advances to the Company or any of its other Restricted Subsidiaries, or
(iii) transfer any of its properties or assets to the Company or any of its
other Restricted Subsidiaries, except for encumbrances or restrictions
existing under or by reason of (a) applicable law, (b) covenants or
restrictions contained in Existing Indebtedness as in effect on the Issue
Date of Securities of any series, (c) any restrictions or encumbrances
arising in connection with the Existing Credit Facility; provided that any
restrictions and encumbrances relating to any extension or renewal of the
Existing Credit Facility are not more restrictive than those in the
Existing Credit Facility being extended or renewed, (d) any restrictions or
encumbrances arising in connection with Refinancing Indebtedness; provided
that any restrictions and encumbrances of the type described in this clause
(d) that arise under such Refinancing Indebtedness are not more restrictive
than those under the agreement creating or evidencing the Indebtedness
being refunded or refinanced, (e) any agreement restricting the sale or
other disposition of property securing Indebtedness permitted by this
Indenture if such agreement does not expressly restrict the ability of a
Subsidiary of the Company to pay dividends or make loans or advances, and
(f) reasonable and customary borrowing base covenants set forth in credit
agreements evidencing Indebtedness otherwise permitted by this Indenture
which covenants restrict or limit the distribution of revenues or sale
proceeds from real estate or a real estate project based upon the amount of
Indebtedness outstanding on such real estate or real estate project and the
value of some or all of the remaining real estate or the project's
remaining assets.
<PAGE> 83
Section 6.20 Maintenance of Consolidated Tangible Net Worth
(a) In the event the Consolidated Tangible Net Worth of
the Company for any two consecutive fiscal quarters is less than
$115,000,000, within 30 days after the end of each such period the Company
will so notify the Trustee in writing by delivery of an Officers'
Certificate and will offer to purchase from all Holders (a "Net Worth
Offer"), and will purchase from Holders accepting such Net Worth Offer on
the date fixed for the closing of such Net Worth Offer (the "Net Worth
Offer Date"), ten percent of the original Outstanding principal amount of
the Securities of each series (the "Net Worth Amount") at an offer price
(the "Net Worth Offer Price") in cash in an amount equal to 100 percent of
the principal amount thereof plus accrued and unpaid interest, if any, to
the Net Worth Offer Date, in accordance with the procedures set forth in
this Section 6.20. To the extent that the aggregate amount of Securities of
each series tendered pursuant to a Net Worth Offer is less than the Net
Worth Amount relating thereto, then the Company may use the excess of the
Net Worth Amount over the amount of Securities of each series tendered, or
a portion thereof, for general corporate purposes.
(b) In the event the Consolidated Tangible Net Worth of
the Company for any two consecutive fiscal quarters is less than
$115,000,000, within 30 days after the end of such period, the Company
(with written notice to the Trustee) or the Trustee at the Company's
request (and at the expense of the Company) will send or cause to be sent
by first-class mail, postage prepaid, to all Holders on the date of the end
of the second such consecutive fiscal quarter, at their respective
addresses appearing in the Security Register, a notice, prepared by the
Company advising the Holders of such series, of such occurrence and of each
Holders' rights arising as a result thereof. Such notice will contain all
instructions and materials necessary to enable Holders to tender their
Securities of each series to the Company. Such notice, which will govern
the terms of the Net Worth Offer, will state:
(i) that the Net Worth Offer is being made pursuant to
Section 6.20(a) hereof and the length of time such Net Worth Offer will
remain open;
(ii) that the Holder has the right to require the
Company to repurchase such Holder's Securities of such series at the Net
Worth Offer Price;
(iii) that any Security of such series not tendered
will continue to accrue interest;
(iv) that any Security of such series accepted for
payment pursuant to the Net Worth Offer will cease to accrue interest on
the Net Worth Offer Date;
(v) that the Net Worth Offer Date will be no earlier
than 45 days nor later than 60 days from the date such notice is mailed;
<PAGE> 84
(vi) that Holders electing to have a Security of such
series purchased pursuant to any Net Worth Offer will be required to
surrender the Security of such series, with the appropriate form on the
Security of such series completed, to the Company, a depositary, if
appointed by the Company, or a Paying Agent at the address specified in the
notice prior to termination of the Net Worth Offer;
(vii) that Holders will be entitled to withdraw their
election if the Company, depositary or Paying Agent, as the case may be,
receives, not later than the expiration of the Net Worth Offer, or such
longer period as may be required by law, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Security the Holder delivered for purchase and a statement
that such Holder is withdrawing its election to have the Security of such
series purchased;
(viii) that Holders whose Securities of such series are
purchased only in part will be issued Securities of the same series,
Maturity date, interest rate and Issue Date equal in principal amount to
the unpurchased portion of the Securities of such series surrendered; and
(ix) information concerning the period and details of
the events requiring the Net Worth Offer and the business of the Company
which the Company in good faith believes will enable such Holders to make
an informed decision (which at a minimum will include (A) the most recently
filed Annual Report on Form 10-K (including audited consolidated financial
statements) of the Company, the most recent subsequently filed Quarterly
Report on Form 10-Q and any Current Report on Form 8-K of the Company filed
subsequent to such Quarterly Report, other than Current Reports describing
Asset Sales otherwise described in the offering materials relating to the
Net Worth Offer (or corresponding successor reports) (or in the event the
Company is not required to prepare any of the foregoing Forms, the
comparable information required pursuant to Section 6.03(b) hereof);
provided that the Company may at its option incorporate by reference any
such filed reports in the notice, (B) a description of material
developments in the Company's business subsequent to the date of the latest
of such reports, and (C) if material, appropriate pro forma financial
information).
(c) In the event the aggregate principal amount of
Securities of such series surrendered by Holders exceeds the Net Worth
Amount, the Company will select the Securities of such series to be
purchased on a pro rata basis from all Securities of such series so
surrendered, with such adjustments as may be deemed appropriate by the
Company so that only Securities of any series in denominations of $1,000,
or integral multiples thereof, will be purchased. To the extent that the
Net Worth Amount remaining is less than $1,000, the Company may use such
Net Worth Amount for general corporate purposes. Holders whose Securities
of such series are purchased only in part will be issued new Securities of
the same series, Maturity date, interest rate and Issue Date equal in
principal amount to the unpurchased portion of the Securities of such
series surrendered.
<PAGE> 85
(d) The Company will not, and will not permit any
Restricted Subsidiary to, create or permit to exist or become effective any
restriction (other than any restriction set forth in any agreement,
indenture, document or instrument relating to any Existing Indebtedness or
Refinancing Indebtedness with respect thereto) that would materially impair
the ability of the Company to make a Net Worth Offer. Notwithstanding the
foregoing, if a Net Worth Offer is made, the Company will pay for
Securities of any series tendered for purchase in accordance with the terms
of this Section 6.20.
(e) Not later than one Business Day prior to the Net
Worth Offer Date in connection with which the Net Worth Offer is being
made, the Company will (i) accept for payment Securities of each series or
portions thereof tendered pursuant to the Net Worth Offer (on a pro rata
basis if required pursuant to Section 6.20(c) above), (ii) deposit with the
Paying Agent money sufficient, in immediately available funds, to pay the
purchase price of all Securities of each series or portions thereof so
accepted and (iii) deliver to the Paying Agent an Officers' Certificate
identifying the Securities of each series or portions thereof accepted for
payment by the Company. The Paying Agent will promptly after acceptance
mail or deliver to Holders of Securities of such series so accepted payment
in an amount equal to the Net Worth Offer Price of the Securities of such
series purchased from each such Holder, and the Company will execute and
the Trustee will promptly authenticate and mail or deliver to such Holder a
new Security of the same series, Maturity date, interest rate and Issue
Date equal in principal amount to any unpurchased portion of the Security
of such series surrendered. Any Securities of such series not so accepted
will be promptly mailed or delivered by the Paying Agent at the Company's
expense to the Holder thereof. The Company will publicly announce the
results of the Net Worth Offer on the Net Worth Offer Date. For purposes of
this Section 6.20(e), the Company will choose a Paying Agent which will not
be the Company or a Subsidiary thereof. Any excess cash held by the Trustee
after the expiration of the Net Worth Offer will be returned to the
Company.
(f) Any Net Worth Offer will be conducted by the Company
in compliance with applicable law, including, without limitation, Section
14(e) of the Exchange Act and Rule 14e-1 thereunder, if applicable.
<PAGE> 86
ARTICLE 7
SUCCESSORS
Section 7.01 Limitations on Mergers and Consolidations
(a) The Company will not consolidate or merge with or
into, or sell, lease, convey or otherwise dispose of all or substantially
all of its assets (including, without limitation, by way of liquidation or
dissolution), or assign any of its obligations hereunder or under the
Securities of any series (as an entirety or substantially an entirety in
one transaction or series of related transactions), to any Person unless:
(i) the Person formed by or surviving such consolidation or merger (if
other than the Company), or to which sale, lease, conveyance or other
disposition or assignment will be made (collectively, the "Successor"), is
a solvent corporation or other legal entity organized and existing under
the laws of the United States or any state thereof or the District of
Columbia, and the Successor assumes by supplemental indenture in a form
reasonably satisfactory to the Trustee all of the obligations of the
Company under the Securities of any series and this Indenture, (ii)
immediately after giving effect to such transaction, no Default or Event of
Default has occurred and is continuing, (iii) immediately after giving
effect to such transaction and the use of any net proceeds therefrom on a
pro forma basis, the Consolidated Tangible Net Worth of the Company or the
Successor, as the case may be, would be at least equal to the Consolidated
Tangible Net Worth of the Company immediately prior to such transaction and
(iv) the Consolidated Fixed Charge Coverage Ratio contained in Section
6.13(a)(i) hereof of the Company or the Successor, as the case may be,
immediately after giving effect to such transaction, would be such that the
Company or the Successor, as the case may be, would be entitled to Incur at
least $1 of additional Indebtedness under such Consolidated Fixed Charge
Coverage Ratio test.
(b) The Company will deliver to the Trustee prior to the
consummation of the proposed transaction an Officers' Certificate to the
foregoing effect and an Opinion of Counsel stating that the proposed
transaction and such supplemental indenture comply with this Indenture.
Section 7.02 Successor Corporation Substituted
Upon any consolidation or merger, or any sale, lease,
conveyance or other disposition of all or substantially all of the assets
of the Company or any assignment of its obligations under this Indenture or
the Securities of any series in accordance with Section 7.01 hereof, upon
assumption by the successor corporation, by supplemental indenture,
executed and delivered to the Trustee and satisfactory in form to the
Trustee, of the due and punctual payment of the principal of and interest
on all of the Securities of any series and the due and punctual performance
and observance of all the covenants and conditions of this Indenture to be
performed or observed by the Company, the Successor formed by such
consolidation or into or with which the Company is merged or to which such
sale, lease, conveyance or other disposition or assignment is made will
succeed to, and be substituted for, and may exercise every right and power
<PAGE> 87
of, the Company under this Indenture with the same effect as if such
Successor has been named as the Company herein and such Successor may cause
to be signed and may issue in its own name or in the name of the Company,
any or all Securities of any series issuable hereunder and the predecessor
Company, in the case of a sale, lease, conveyance or other disposition or
assignment, will be released from all obligations under this Indenture and
the Securities of any series.
ARTICLE 8
DEFAULTS AND REMEDIES
Section 8.01 Events of Default
(a) "Event of Default", wherever used herein with respect
to Securities of any series, means any of the following events (whatever
the reason for such Event of Default and whether it will be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(i) the failure by the Company to pay interest on any
Security of that series when the same becomes due and payable and the
continuance of any such failure for a period of 30 days;
(ii) the failure by the Company to pay the principal of
any Security of that series when the same becomes due and payable at
Maturity, upon acceleration or otherwise (including the failure to make
payment pursuant to a Change of Control Offer, an Excess Proceeds Offer or
a Net Worth Offer);
(iii) the failure by the Company to make any sinking
fund payment when the same becomes due and payable by the terms of a
Security of that series and Article 5 hereof;
(iv) the failure by the Company to comply with any of
its agreements or covenants in, or provisions of, the Security of that
series or this Indenture (other than an agreement or covenant a default in
whose performance or whose breach is elsewhere in this Section specifically
dealt with or which has expressly been included in this Indenture solely
for the benefit of a series of Securities other than that series) and such
failure continues for the period and after the notice specified below;
(v) the acceleration of any Indebtedness (other than
Non-Recourse Indebtedness) of the Company or any of its Subsidiaries that
has an outstanding principal amount of $5,000,000 or more in the aggregate;
provided that, in the event any such acceleration is withdrawn or otherwise
rescinded within a period of five days after such acceleration by the
holders of such Indebtedness, any Event of Default under this Section
8.01(a)(v) will be deemed to be cured and any acceleration hereunder will
be deemed withdrawn or rescinded;
<PAGE> 88
(vi) the failure by the Company or any of its
Subsidiaries to make any principal or interest payment in respect of
Indebtedness (other than Non-Recourse Indebtedness) of the Company or any
of its Subsidiaries with an outstanding aggregate amount of $5,000,000 or
more within five days of such principal or interest payment becoming due
and payable (after giving effect to any applicable grace period set forth
in the documents governing such Indebtedness);
(vii) a final judgment or judgments that exceed
$5,000,000 or more in the aggregate, for the payment of money, having been
entered by a court or courts of competent jurisdiction against the Company
or any of its Subsidiaries and such judgment or judgments is not satisfied,
stayed, annulled or rescinded within 60 days of being entered;
(viii) the Company or any Material Subsidiary pursuant
to or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief
against it in an involuntary case,
(C) consents to the appointment of a Custodian of
it or for all or substantially all of its property, or
(D) makes a general assignment for the benefit of
its creditors;
(ix) a court of competent jurisdiction enters an order
or decree under any Bankruptcy Law that:
(A) is for relief against the Company or any
Material Subsidiary as debtor in an involuntary case,
(B) appoints a Custodian of the Company or any
Material Subsidiary or a Custodian for all or
substantially all of the property of the Company or any
Material Subsidiary, or
(C) orders the liquidation of the Company or any
Material Subsidiary,
and the order or decree remains unstayed and in effect for
60 days; or
(x) any other Event of Default provided with respect to
Securities of that series.
(b) The Trustee will not be deemed to know of a Default
unless a Trust Officer has actual knowledge of such Default or receives
written notice of such Default with specific reference to such Default.
<PAGE> 89
(c) A Default under Section 8.01(a)(iv) hereof is not an
Event of Default until the Trustee notifies the Company, or the Holders of
at least 25 percent in aggregate principal amount of the Outstanding
Securities of all series affected thereby notify the Company and the
Trustee, of the Default and the Company does not cure the Default within 60
days after receipt of the notice. The notice must specify the Default,
demand that it be remedied and state that the notice is a "Notice of
Default." If such a Default is cured within such time period, it ceases.
Section 8.02 Acceleration
(a) If an Event of Default with respect to Securities of
any series at the time Outstanding (other than an Event of Default with
respect to the Company specified in clause (viii) or (ix) of Section
8.01(a) hereof) occurs and is continuing, the Trustee (after receiving
indemnities from the Holders to its satisfaction) by notice to the Company,
or the Holders of at least 25 percent in aggregate principal amount of the
Outstanding Securities of such series by notice to the Company and the
Trustee, may declare all Outstanding Securities of such series to be due
and payable immediately. Upon such declaration, the amounts due and payable
on the Securities of such series, as determined in Section 8.02(b) hereof,
will be due and payable immediately. If an Event of Default specified in
clause (viii) or (ix) of Section 8.01(a) hereof occurs, such an amount will
ipso facto become and be immediately due and payable without any
declaration, notice or other act on the part of the Trustee and the Company
or any Holder. The Holders of a majority in aggregate principal amount of
the Outstanding Securities of any series by written notice to the Trustee
and the Company may waive such Event of Default, rescind an acceleration
and its consequences (except an acceleration due to nonpayment of principal
or interest on the Securities of such series) if the rescission would not
conflict with any judgment or decree and if all existing Events of Default
have been cured or waived.
(b) In the event that the maturity of the Securities of
any series is accelerated pursuant to Section 8.02(a) hereof, 100 percent
of the principal amount of the Securities of such series (or in the case of
a default under Section 8.01(a)(ii) or (iv) hereof resulting from a breach
of the covenant set forth in Section 6.16 hereof, 101 percent of the
principal amount of the Securities of such series) will become due and
payable plus accrued interest, if any, to the date of payment.
Section 8.03 Other Remedies
(a) If an Event of Default occurs and is continuing, the
Trustee may pursue any available remedy by proceeding at law or in equity
to collect the payment of principal or interest on the Securities of any
series or to enforce the performance of any provision of the Securities of
any series or this Indenture.
<PAGE> 90
(b) The Trustee may maintain a proceeding even if it does
not possess any of the Securities of any series or does not produce any of
them in the proceeding. A delay or omission by the Trustee or any Holder in
exercising any right or remedy accruing upon an Event of Default will not
impair the right or remedy or constitute a waiver of or acquiescence in the
Event of Default. All remedies are cumulative to the extent permitted by
law.
Section 8.04 Waiver of Past Defaults and Compliance With Indenture
Provisions
Subject to Sections 8.07 and 13.02 hereof, the Holders of
a majority in aggregate principal amount of the Outstanding Securities of
any series by notice to the Trustee may waive an existing Default or Event
of Default and its consequences (including waivers obtained in connection
with a tender offer or exchange offer for Securities), except a continuing
Default or Event of Default in the payment of the principal of or interest
on any Security of such series. Upon any such waiver, such Default will
cease to exist, and any Event of Default arising therefrom will be deemed
to have been cured for every purpose of this Indenture, but no such waiver
will extend to any subsequent or other Default or Event of Default or
impair any right consequent thereon.
Section 8.05 Control by Majority
The Holders of a majority in aggregate principal amount
of the Outstanding Securities of any series may direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee
(after providing indemnities to the Trustee's satisfaction) or exercising
any trust or power conferred on it. However, the Trustee may refuse to
follow any direction that conflicts with law or this Indenture that the
Trustee determines may be unduly prejudicial to the rights of other Holders
of Securities of such series, or that may subject the Trustee to legal
liability; provided that the Trustee may take any other action deemed
proper by the Trustee which is not inconsistent with such direction.
Section 8.06 Limitations on Suits
(a) A Holder may pursue a remedy with respect to this
Indenture or the Securities of any series only if:
(i) the Holder gives to the Trustee written notice
of a continuing Event of Default with respect to the Securities of
that series;
(ii) the Holder(s) of at least 25 percent in
aggregate principal amount of all of the Outstanding Securities of
that series make a written request to the Trustee to pursue the
remedy;
(iii) such Holder or Holders offer to the Trustee
indemnity reasonably satisfactory to the Trustee against any loss,
liability or expense;
<PAGE> 91
(iv) the Trustee does not comply with the request
within 60 days after receipt of the request and the offer of
indemnity; and
(v) during such 60-day period the Holders of a
majority in aggregate principal amount of the Outstanding
Securities of such series do not give the Trustee a direction
inconsistent with the request.
(b) A Holder of a Security of any series may not use
this Indenture to prejudice the rights of another Holder or to obtain a
preference or priority over another Holder.
Section 8.07 Rights of Holders to Receive Payment
Notwithstanding any other provision of this Indenture,
the right of any Holder of a Security of any series to receive payment of
principal and interest on the Security of such series, on or after the
respective due dates expressed in the Security of such series, or, subject
to Section 8.06 hereof, to bring suit for the enforcement of any such
payment on or after such respective dates, will not be impaired or affected
without the consent of the Holder.
Section 8.08 Collection Suit by Trustee
If an Event of Default specified in Section 8.01(a)(i) or
8.01(a)(ii) hereof occurs and is continuing, the Trustee is authorized to
recover judgment in its own name and as trustee of an express trust against
the Company for the amount of principal and interest remaining unpaid on
the Securities of such series, determined in accordance with Section
8.02(b) hereof, and such further amount as will be sufficient to cover the
costs and expenses of collection, including, without limitation, the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel. Section 8.09 Trustee May File Proofs of
Claim
The Trustee is authorized to file such proofs of claim
and other papers or documents as may be necessary or advisable in order to
have the claims of the Trustee (including, without limitation, any claim
for the reasonable compensation, expenses, disbursements and advances of
the Trustee, it agents and counsel) and the Holders allowed in any judicial
proceedings relative to the Company, its creditors or property and will be
entitled and empowered to collect, receive and distribute any money or
other property payable or deliverable on any such claims and any Custodian
in any such judicial proceeding is hereby authorized by each Holder to make
such payments to the Trustee, and in the event that the Trustee consents to
the making of such payments directly to the Holders, to pay to the Trustee
any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any
other amounts due the Trustee under Section 9.07 hereof. Nothing contained
herein will be deemed to authorize the Trustee to authorize or consent to
or accept or adopt on behalf of any Holder any plan of reorganization,
<PAGE> 92
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.
Section 8.10 Priorities
(a) In the event the Trustee collects any money pursuant
to this Article 8, it will pay out the money in the following order:
FIRST: to the Trustee for amounts due under Section
9.07 hereof;
SECOND: to Holders for amounts due and unpaid on the
Securities for principal and interest, ratably, without
preference or priority of any kind, according to the
amounts due and payable on the Securities for principal
and interest, respectively; and
THIRD: to the Company or such other Person legally
entitled thereto.
(b) The Trustee may fix a record date and payment date
for any payment to Holders pursuant to this Section 8.10.
Section 8.11 Undertaking for Costs
In any suit for the enforcement of any right or remedy
under this Indenture or in any suit against the Trustee for any action
taken or omitted by it as a Trustee, a court in its discretion may require
the filing by any party litigant (other than the Trustee) in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion
may assess reasonable costs, including reasonable attorneys' fees, against
any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section
8.11 does not apply to a suit by the Trustee, a suit by a Holder pursuant
to Section 8.07 hereof, or a suit by Holders of more than ten percent in
aggregate principal amount of all of the Outstanding Securities of any
series.
Section 8.12 Restoration of Rights and Remedies
If the Trustee or any Holder has instituted any
proceeding to enforce any right or remedy under this Indenture and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Trustee or to such Holder, then and in every
such case the Company, the Trustee and the Holders will, subject to any
determination in such proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter all rights and remedies of
the Trustee and the Holders will continue as though no such proceeding had
been instituted.
<PAGE> 93
ARTICLE 9
TRUSTEE
Section 9.01 Duties of Trustee
(a) If an Event of Default has occurred and is
continuing, the Trustee will exercise such of the rights and powers vested
in it by this Indenture, and use the same degree of care and skill in such
exercise, as a prudent man would exercise or use under the circumstances in
the conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Trustee need perform only those duties
that are specifically set forth in this Indenture and no
others, and no implied covenants or obligations will be
read into this Indenture against the Trustee; and
(ii) in the absence of bad faith on its part,
the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this
Indenture. However, in the case of any such certificates
or opinions which are specifically required to be
furnished to the Trustee by any of the provisions hereof,
the Trustee will examine the certificates and opinions to
determine whether or not, on their face, they appear to
conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liabilities for
its own gross negligent action, its own gross negligent failure to act, or
its own willful misconduct, except that:
(i) this Section 9.01(c) does not limit the effect
of Section 9.01(b) hereof;
(ii) the Trustee will not be liable for any error of
judgment made in good faith by a Trust Officer, unless it is
proved that the Trustee was grossly negligent in ascertaining the
pertinent facts; and
(iii) the Trustee will not be liable with respect to
any action it takes or omits to take in good faith in accordance
with a direction received by it pursuant to Section 9.05 hereof or
when exercising any other trust or power conferred upon the
Trustee under this Indenture.
Whether or not therein expressly so provided, every provision of this
Indenture that in any way relates to the Trustee is subject to clauses (i),
(ii) and (iii) of this Section 9.01(c).
<PAGE> 94
(d) No provision of this Indenture will require the
Trustee to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or in the
exercise of any of its rights or powers if it has reasonable grounds for
believing that repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured to it.
(e) The Trustee will not be liable for interest on any
money received by it except as the Trustee may agree in writing with the
Company. Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law. Subject to Sections 9.03
and 9.07 hereof, all money received by the Trustee will, until applied as
herein provided, be held in trust for the payment of principal and interest
on the Securities.
(f) The Trustee shall not be required to give any bond or
surety in respect of the exercise of its powers and performance of its
duties hereunder.
Section 9.02 Rights of Trustee
(a) Subject to Section 9.01 hereof:
(i) the Trustee may rely and will be protected in
acting or refraining from acting upon any document believed by it
to be genuine and to have been signed or presented by the proper
Person. The Trustee need not investigate any fact or matter stated
in the document but the Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as it
may see fit, and, if the Trustee determines to make such further
inquiry or investigation, it will be entitled to examine the
books, records, and premises of the Company, personally or by
agent or attorney;
(ii) before the Trustee acts or refrains from
acting, it may require an Officers' Certificate. The Trustee will
not be liable for any action it takes or omits to take in good
faith in reliance on such Officers' Certificate. The Trustee may
consult with counsel satisfactory to it and the written advice of
such counsel or any Opinion of Counsel will be full and complete
authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance
thereon;
(iii) the Trustee may act through agents and will not
be responsible for the misconduct or negligence of any agent
appointed with due care; provided, however, that the Trustee will
in any event be liable for the misappropriation of funds deposited
with it or in an account within its dominion and control;
<PAGE> 95
(iv) the Trustee will not be liable for any action
it takes or omits to take in good faith which it believes to be
authorized or within its rights or powers conferred upon it by
this Indenture; and
(v) unless otherwise specifically provided in this
Indenture, any demand, request, direction or notice from the
Company will be sufficient if signed by an Officer of the Company.
(b) The Trustee will be under no obligation to exercise
and may refuse to exercise any of the rights or powers vested in it by this
Indenture at the request or direction of any of the Holders pursuant to
this Indenture, unless such Holders have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities which
might be incurred by it in compliance with such request or direction.
Section 9.03 Individual Rights of Trustee
The Trustee in its individual or any other capacity may
become the owner or pledgee of Securities and may otherwise deal with the
Company or any of its Affiliates with the same rights it would have if it
were not Trustee. Any Agent may do the same with like rights. However, the
Trustee is subject to Sections 9.10 and 9.11 hereof.
Section 9.04 Trustee's Disclaimer
The Trustee makes no representation as to the validity or
adequacy of this Indenture or the Securities of any series, it will not be
accountable for any actions taken by the Company or any action taken by the
Trustee hereunder at the direction of the Company or in reliance upon an
Opinion of Counsel, and it will not be responsible for any statement or
recital herein or any statement in the Securities of any series other than
its certificate of authentication. The immunities and exemptions from
liability of the Trustee hereunder shall extend to its directors, officers,
employees and agents.
Section 9.05 Notice of Defaults
If a Default or Event of Default with respect to any
series of Securities occurs and is continuing and if it is known to the
Trustee, the Trustee will mail to Holders of such Securities a notice of
the Default or Event of Default within 90 days after it occurs. However,
except in the case of a Default or Event of Default in payment of principal
or interest on any Security of such series or a breach of the Change of
Control covenant, the Trustee may withhold such notice if and so long as a
committee of its Trust Officers in good faith determines that withholding
the notice is in the interests of such Holders.
<PAGE> 96
Section 9.06 Reports by Trustee to Holders
(a)Within 60 days after each May 15, beginning with May
15, 1996, the Trustee will mail to Holders a brief report dated as of such
reporting date that complies with TIA Section 313(a); provided, however, if
no event described in TIA Section 313(a) has occurred within such calendar
year, no report need be transmitted. The Trustee also will comply with TIA
Sections 313(b) and 313(c).
(b)A copy of each report at the time of its mailing to
Holders will be filed with the SEC and each stock exchange, if any, on
which the Securities of any series are listed. The Company will notify the
Trustee when the Securities of any series are listed on any stock exchange.
Section 9.07 Compensation and Indemnity
(a)The Company agrees:
(i) to pay to the Trustee from time to time
reasonable compensation for all services rendered by it
hereunder (which compensation will not be limited by any
provision of law in regard to the compensation of a
trustee of an express trust);
(ii) to reimburse the Trustee upon its request
for all reasonable expenses, disbursements and advances
incurred or made by the Trustee in accordance with any
provision of this Indenture (including, without
limitation, the reasonable compensation and the expenses,
advances and disbursements of its agents and counsel),
except any such expense, disbursement or advance as may
be attributable to its gross negligence or bad faith; and
(iii) to indemnify the Trustee and its agents
for, and to hold them harmless against, any loss,
liability or expense incurred without gross negligence or
bad faith on their part, arising out of or in connection
with the acceptance or administration of this trust,
including the costs and expenses of defending themselves
against any claim or liability in connection with the
exercise or performance of any of their powers or duties
hereunder.
(b) To secure the Company's payment obligations in this
Section 9.07, the Trustee will have a Lien prior to the Securities on all
money or property held or collected by the Trustee, except that held in
trust to pay principal and interest on particular Securities.
(c) When the Trustee incurs expenses or renders services
after an Event of Default specified in Section 8.01(a)(viii) or (a)(ix)
occurs, the expenses and the compensation for the services are intended to
constitute expenses of administration under any Bankruptcy Law.
<PAGE> 97
Section 9.08 Replacement of Trustee
(a) A resignation or removal of the Trustee and
appointment of a successor Trustee will become effective only upon the
successor Trustee's acceptance of appointment as provided in this Section
9.08.
(b) The Trustee may resign and be discharged from the
trust hereby created by so notifying the Company in writing. The Holders of
a majority in principal amount of the Outstanding Securities of any series
may remove the Trustee by so notifying the Trustee and the Company. The
Company may remove the Trustee if:
(i) the Trustee fails to comply with Section 9.10
hereof;
(ii) the Trustee is adjudged a bankrupt or an
insolvent or an order for relief is entered with respect
to the Trustee under any Bankruptcy Law;
(iii) a Custodian or public officer takes charge of
the Trustee or its property; or
(iv) the Trustee becomes incapable of acting.
(c) If the Trustee resigns or is removed or if a vacancy
exists in the office of Trustee for any reason, the Company will promptly
appoint a successor Trustee.
(d) If a successor Trustee does not take office within 60
days after the retiring Trustee resigns or is removed, the retiring
Trustee, the Company or the Holders of at least ten percent in principal
amount of the Outstanding Securities of any series may petition any court
of competent jurisdiction for the appointment of a successor Trustee.
(e) If the Trustee fails to comply with Section 9.10
hereof, any Holder may petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.
(f) A successor Trustee will deliver a written acceptance
of its appointment to the retiring Trustee and to the Company. Thereupon
the resignation or removal of the retiring Trustee will become effective,
and the successor Trustee will have all the rights, powers and duties of
the Trustee under this Indenture. The successor Trustee will mail a notice
of its succession to the Holders. The retiring Trustee will promptly
transfer all property held by it as Trustee to the successor Trustee,
subject to the Lien provided for in Section 9.07 hereof. Notwithstanding
replacement of the Trustee pursuant to this Section 9.08, the Company's
obligations under Section 9.07 hereof will continue for the benefit of the
retiring Trustee.
<PAGE> 98
Section 9.09 Successor Trustee by Merger, etc.
(a) Subject to Section 9.10 hereof, if the Trustee
consolidates, merges or converts into, or transfers all or substantially
all of its corporate trust business to, another corporation, the successor
corporation without any further act will be the successor Trustee; provided
that in the case of a transfer of all or substantially all of its corporate
trust business to another corporation, the transferee corporation expressly
assumes all of the Trustee's liabilities hereunder.
(b) In case any Securities of any series have been
authenticated, but not delivered, by the Trustee then in office, any
successor by merger, conversion or consolidation to such authenticating
Trustee may adopt such authentication and deliver the Securities so
authenticated, with the same effect as if such successor Trustee had itself
authenticated such Securities.
Section 9.10 Eligibility; Disqualification
(a) There will at all times be a Trustee hereunder which
will (i) be a corporation organized and doing business under the laws of
the United States, any state thereof or the District of Columbia,
authorized under such laws to exercise corporate trustee power, (ii) be
subject to supervision or examination by federal or state (or the District
of Columbia) authority and (iii) have a combined capital and surplus of at
least $150 million as set forth in its most recent published annual report
of condition.
(b) This Indenture will always have a Trustee who
satisfies the requirements of TIA Sections 310(a)(1) and 310(a)(2). The
Trustee is subject to TIA Section 310(b). If at any time the Trustee ceases
to be eligible in accordance with the provisions of this Section 9.10, it
will resign immediately in the manner and with the effect specified in
Section 9.08 hereof.
Section 9.11 Preferential Collection of Claims Against Company
The Trustee is subject to TIA Section 311(a), excluding
any creditor relationship listed in TIA Section 311(b). A Trustee who has
resigned or been removed will be subject to TIA Section 311(a) to the
extent indicated therein.
<PAGE> 99
ARTICLE 10
HOLDERS' LISTS
Section 10.01 Company to Furnish Trustee Names and Addresses of Holders
The Company will furnish or cause to be furnished to the
Trustee:
(i) semi-annually, not more than 15 days before
each Interest Payment Date, a list, in such form as the
Trustee may reasonably require, of the names and
addresses of the Holders of such series of Securities as
of the Regular Record Date of such Interest Payment Date;
and
(ii) at such other times as the Trustee may
request in writing, within 30 days after receipt by the
Company of any such request, a list of similar form and
content as of a date not more than 15 days prior to the
time such list is furnished;
provided, however, that if and so long as the Trustee will be the
Registrar, no such list need be furnished.
Section 10.02 Preservation of Information
The Trustee will preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders of each series
of Securities contained in the most recent list furnished to the Trustee as
provided in Section 10.01 hereof and the names and addresses of such
Holders received by the Trustee in its capacity as Registrar or Paying
Agent (if so acting). The Trustee may destroy any list furnished to it as
provided in Section 10.01 hereof upon receipt of a new list so furnished.
ARTICLE 11
DEFEASANCE AND COVENANT DEFEASANCE
Section 11.01 Company's Option to Effect Defeasance or Covenant Defeasance
The Company may elect, at its option by Board Resolution
at any time, to have either Section 11.02 or 11.03 hereof applied to the
Outstanding Securities of any series designated pursuant to Section 3.01
hereof as being defeasible pursuant to this Article 11 (hereinafter called
a "Defeasible Series"), upon compliance with the conditions set forth below
in this Article 11.
<PAGE> 100
Section 11.02 Defeasance and Discharge
Upon the Company's exercise of the option provided in
Section 11.01 hereof to have this Section 11.02 applied to the Outstanding
Securities of any Defeasible Series, the Company shall be deemed to have
been discharged from its obligations with respect to the Outstanding
Securities of such series as provided in this Section 11.02 on and after
the date the conditions set forth in Section 11.04 hereof are satisfied
(hereinafter called "Defeasance"). For this purpose, such Defeasance means
that the Company shall be deemed to have paid and discharged the entire
Indebtedness represented by the Outstanding Securities of such series,
which shall thereafter be deemed to be "Outstanding" only for the purposes
of Section 11.05 hereof and the other Sections of this Indenture referred
to in (i) and (ii) below, and to have satisfied all its other obligations
under the Securities of such series and this Indenture insofar as such
Securities are concerned (and the Trustee, at the expense of the Company,
shall execute proper instruments acknowledging the same), except for the
following which shall survive until otherwise terminated or discharged
hereunder: (i) the rights of Holders of Outstanding Securities of such
series to receive solely from the trust fund described in Section 11.04
hereof and as more fully set forth in such Section, payments in respect of
the principal of and interest on such Securities of such series when
payments are due, (ii) the Company's obligations with respect to the
Securities of such series under Sections 3.04, 3.05, 3.06, 6.02 and 6.04
hereof, (iii) the rights, powers, trusts, duties and immunities of the
Trustee hereunder and (iv) this Article 11. Subject to compliance with this
Article 11, the Company may exercise its option provided in Section 11.01
hereof to have this Section 11.02 applied to the Outstanding Securities of
any Defeasible Series notwithstanding the prior exercise of its option
provided in Section 11.01 hereof to have Section 11.03 hereof applied to
such Outstanding Securities.
Section 11.03 Covenant Defeasance
Upon the Company's exercise of the option provided in
Section 11.01 hereof to have this Section 11.03 applied to the Outstanding
Securities, (i) the Company shall be released from its obligations under
Sections 6.03 and 6.06 through 6.20, inclusive, Article 7, and any other
covenants specified in or pursuant to this Indenture and (ii) the
occurrence of any event specified in Sections 8.01(a)(iv) (with respect to
any of Sections 6.03 and 6.06 through 6.20 inclusive, and any other
covenants specified in or pursuant to this Indenture) and 8.01(a)(x) shall
be deemed not to be or result in an Event of Default, in each case with
respect to the Outstanding Securities of such series as provided in this
Section 11.03 on and after the date the conditions set forth in Section
11.04 hereof are satisfied (hereinafter called "Covenant Defeasance"), and
such Securities shall thereafter be deemed not to be "Outstanding" for the
purposes of any direction, waiver, consent, declaration or act of Holders
(and the consequences thereof) in connection with such covenants, but shall
continue to be "Outstanding" for all other purposes hereunder. For this
purpose, such Covenant Defeasance means that, with respect to such
Outstanding Securities, the Company may omit to comply with and shall have
<PAGE> 101
no liability in respect of any term, condition or limitation set forth in
any such covenant, whether directly or indirectly by reason of any
reference elsewhere herein to any such covenant to any other provision
herein or in any other document and such omission to comply shall not
constitute a Default or Event of Default under Section 8.01(a)(iv) or
8.01(a)(x), or otherwise, as the case may be, but, except as specified
above, the remainder of this Indenture and the Securities of such series
shall be unaffected thereby.
ction 11.04 Conditions to Defeasance or Covenant Defeasance
The following shall be the conditions to application of
either Section 11.02 or 11.03 hereof to the Outstanding Securities of any
Defeasible Series:
(i) The Company shall irrevocably have deposited or
caused to be deposited with the Trustee (or another trustee that
satisfies the requirements contemplated by Section 9.10 hereof and
agrees to comply with the provisions of this Article 11 applicable
to it) as trust funds in trust for the purpose of making the
following payments, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of Outstanding
Securities of such series, (A) money in an amount, or (B) U.S.
Government Obligations that through the scheduled payment of
principal and interest in respect thereof in accordance with their
terms will provide, not later than one day before the due date of
any payment, money in an amount, or (C) a combination thereof, in
each case 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, and which shall be applied by the Trustee (or any such
other qualifying trustee) to pay and discharge, (1) the principal
of and interest on the Securities of such series on the respective
Stated Maturities (or redemption date, if applicable) of such
principal or installment of interest and (2) any mandatory sinking
fund payments or analogous payments applicable to such Outstanding
Securities on the day on which such payments are due and payable
in accordance with the terms of this Indenture and such
Securities; provided that the Trustee shall have been irrevocably
instructed to apply such money or the proceeds of such U.S.
Government Obligations to said payments with respect to such
Securities. Before such a deposit, the Company may give to the
Trustee, in accordance with Section 4.02 hereof, a notice of its
election to redeem all or any portion of such Outstanding
Securities at a future date in accordance with the terms of the
Securities of such series and Article 4 hereof, which notice shall
be irrevocable. Such irrevocable redemption notice, if given,
shall be given effect in applying the foregoing.
(ii) In the case of an election under Section 11.02
<PAGE> 102
hereof, the Company shall have delivered to the Trustee an Opinion
of Counsel stating that (A) the Company has received from, or
there has been published by, the Internal Revenue Service a ruling
or (B) since the date first set forth hereinabove, there has been
a change in the applicable Federal income tax law, in either case,
to the effect that, and based thereon such opinion shall confirm
that, the Holders of the Outstanding Securities of such series
will not recognize income, gain or loss for Federal income tax
purposes as a result of such Defeasance and will be subject to
Federal income tax on the same amounts, in the same manner and at
the same times as would be the case if such deposit, Defeasance
and discharge were not to occur.
(iii) In the case of an election under Section 11.03
hereof, the Company shall have delivered to the Trustee an Opinion
of Counsel to the effect that the Holders of the Outstanding
Securities of such series will not recognize income, gain or loss
for Federal income tax purposes as result of such Covenant
Defeasance and will be subject to Federal income tax on the same
amounts, in the same manner and at the same times as would be the
case if such deposit and Covenant Defeasance were not to occur.
(iv) The Company shall have delivered to the Trustee an
Officers' Certificate to the effect that the Securities of such
series, if then listed on any securities exchange, will not be
delisted as a result of such Defeasance or Covenant Defeasance.
(v) No Default or Event of Default shall have occurred
and be continuing at the time of such deposit.
(vi) Such Defeasance or Covenant Defeasance shall not
cause the Trustee to have a conflicting interest within the
meaning of the TIA (assuming all Securities are in default within
the meaning of the TIA).
(vii) Such Defeasance or Covenant Defeasance shall not
result in a breach or violation of, or constitute a default under,
any other agreement or instrument to which the Company is a party
or by which it is bound.
(viii) Notwithstanding any other provisions of this
Section, such Defeasance or Covenant Defeasance shall be effected
in compliance with any additional or substitute terms, conditions
or limitations in connection therewith pursuant to Section 3.01
hereof.
(ix) The Company shall have delivered to the Trustee an
Officers' Certificate, stating that all conditions precedent with
respect to such Defeasance or Covenant Defeasance have been
complied with.
<PAGE> 103
Such Defeasance or Covenant Defeasance shall not result
in the trust arising from such deposit constituting an investment company
within the meaning of the Investment Company Act of 1940, as amended,
unless such trust shall be qualified under such Act or exempt from
regulation thereunder.
Section 11.05 Deposited Money and U.S. Government Obligations to
Be Held in Trust; Other Miscellaneous Provisions
Subject to the provisions of Section 6.04(e) hereof, all
money and U.S. Government Obligations (or other property as may be provided
pursuant to Section 3.01 hereof) (including the proceeds thereof) deposited
with the Trustee or other qualifying trustee (solely for purposes of this
Section 11.05 and Section 11.06 hereof, the Trustee and any such other
trustee are referred to collectively as the "Trustee") pursuant to Section
11.04 hereof in respect of the Outstanding Securities of any Defeasible
Series shall be held in trust and applied by the Trustee, in accordance
with the provisions of the Outstanding Securities of such series and this
Indenture, to the payment, either directly or through any such Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Holders of such Securities of all sums due and to become
due thereon in respect of principal and interest, but such money so held in
trust need not be segregated from other funds except to the extent required
by law.
The Company shall pay and indemnify the Trustee against
any tax, fee or other charge imposed on or assessed against the U.S.
Government Obligations deposited pursuant to Section 11.04 hereof or the
principal and interest received in respect thereof other than any such tax,
fee or other charge that by law is for the account of the Holders of
Outstanding Securities.
Anything in this Article 11 to the contrary
notwithstanding, the Trustee shall deliver or pay to the Company any money
or U.S. Government Obligations (or other property and any proceeds
therefrom) held by it with respect to Outstanding Securities of any
Defeasible Series that are in excess of the amount thereof that was used to
pay the Securities of such series upon Maturity.
Section 11.06 Reinstatement
If the Trustee or the Paying Agent is unable to apply any
money in accordance with this Article 11 with respect to the Securities of
any series by reason of any notification, order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's obligations under this Indenture and the
Securities of such series shall be revived and reinstated as though no
deposit had occurred pursuant to this Article 11 with respect to Securities
of such series until such time as the Trustee or Paying Agent is permitted
to apply all money held in trust pursuant to Section 11.05 hereof with
<PAGE> 104
respect to Securities of such series in accordance with this Article 11;
provided, however, that if the Company makes any payment of principal of or
interest on any Security of such series following the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders
of Securities of such series to receive such payment from the money so held
in trust.
ARTICLE 12
SATISFACTION AND DISCHARGE
Section 12.01 Satisfaction and Discharge of Indenture
This Indenture shall upon Company Request cease to be of
further effect with respect to any series of Securities (except as to any
surviving rights of registration of transfer or exchange of Securities of
such series herein expressly provided for) and the Trustee, at the expense
of the Company, shall execute proper instruments acknowledging satisfaction
and discharge of this Indenture as to such series when
(i) either
(A) all Securities of such series theretofore
authenticated and delivered (other than (i) Securities of
such series which have been destroyed, lost or stolen and
which have been replaced or paid as provided in Section
3.06 hereof, and (ii) Securities of such series for whose
payment money has theretofore been deposited in trust
with the Trustee or any Paying Agent or segregated and
held in trust by the Company and thereafter repaid to the
Company, as provided in Section 6.04 hereof) have been
delivered to the Trustee for cancellation; or
(B) all Securities of such series and, in
the case of (1) or (2) below, not theretofore delivered
to the Trustee for cancellation
(1) have become due and payable, or
(2) will become due and payable at
their Stated Maturity within one year, or
(3) if redeemable at the option of the
Company, are to be called for redemption within
one year under arrangements satisfactory to the
Trustee for the giving of notice of redemption
by the Trustee in the name, and at the expense,
of the Company,
<PAGE> 105
and the Company, in the case of (1), (2) or (3) above,
has irrevocably deposited or caused to be deposited with
the Trustee as trust funds in trust for such purpose an
amount in cash sufficient to pay and discharge the entire
Indebtedness on such Securities not theretofore delivered
to the Trustee for cancellation, for principal and
interest to the date of such deposit (in the case of
Securities which have become due and payable) or to the
Stated Maturity or redemption date, as the case may be;
(ii) the Company has paid or caused to be paid all
other sums payable hereunder by the Company; and
(iii) the Company has delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, stating that all
conditions precedent herein provided for relating to the
satisfaction and discharge of this Indenture as to such series
have been complied with.
Notwithstanding the satisfaction and discharge of this
Indenture, the obligations of the Company to the Trustee under Section 9.07
hereof and, if money shall have been deposited with the Trustee pursuant to
subclause (B) of clause (i) of this Section 12.01, the obligations of the
Trustee under Sections 12.02 and 6.04(e) hereof shall survive.
Section 12.02 Application of Trust Money
Subject to the provisions of Section 6.04(e) hereof, all
money deposited with the Trustee pursuant to Section 12.01 hereof shall be
held in trust and applied by it, in accordance with the provisions of the
Securities and this Indenture, to the payment, either directly or through
any Paying Agent (including the Company acting as its own Paying Agent) as
the Trustee may determine, to the Persons entitled thereto, of the
principal and interest for whose payment such money has been deposited with
the Trustee; but such money need not be segregated from other funds except
to the extent required by law.
ARTICLE 13
SUPPLEMENTAL INDENTURES
Section 13.01 Supplemental Indentures Without Consent of Holders
(a) The Company and the Trustee may amend this Indenture
or the Securities or waive any provision hereof without the consent of any
Holder:
(i) to cure any ambiguity, defect or inconsistency;
(ii) to comply with Section 7.01 hereof;
(iii) to provide for uncertificated Securities in
<PAGE> 106
addition to certificated Securities;
(iv) to make any change that does not adversely
affect the legal rights hereunder of any Holder of a
Security of any series;
(v) to add to the covenants of the Company for
the benefit of the Holders of all or any series of
Securities (and if such covenants are to be for the
benefit of less than all series of Securities, stating
that such covenants are expressly being included solely
for the benefit of such series) or to surrender any right
or power herein conferred upon the Company;
(vi) to add any additional Events of Default
for the benefit of the Holders of all or any series of
Securities (and if such Events of Default are to be for
the benefit of less then all series of Securities,
stating that such Events of Default are being included
solely for the benefit of such series);
(vii) to change or eliminate any of the
provisions of this Indenture in respect of one or more
series of Securities; provided that any such addition,
change or elimination shall become effective only when
there is no Security Outstanding of any series created
prior to the execution of such supplemental indenture
which is entitled to the benefit of such provision;
(viii) to establish the form or terms of Securities
of any series as permitted by Sections 2.01 and 3.01
hereof;
(ix) to secure the Securities pursuant to the
requirements of Section 6.18 hereof;
(x) to evidence and provide for the acceptance
of appointment hereunder of a successor Trustee with
respect to the Securities of one or more series and
to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder
by more than one Trustee, pursuant to the requirements
of Section 9.08 hereof;
(xi) to supplement any of the provisions of the
Indenture to such extent as shall be necessary to
implement the provisions of Article 11 hereof or
discharge of any series of Securities pursuant to
Sections 12.01, 12.02 and 12.03 hereof; provided that any
such action shall not adversely affect the interests of
the Holders of Securities of such series or any other
series in any material respect; or
<PAGE> 107
(xii) to comply with the qualification of this
Indenture under the TIA.
(b) Upon the request of the Company, accompanied by a
Board Resolution authorizing the execution of any such supplemental
indenture, and upon receipt by the Trustee of the documents described in
Section 13.06 hereof, the Trustee will join with the Company in the
execution of any supplemental indenture authorized or permitted by the
terms of this Indenture and make any further appropriate agreements and
stipulations that may be contained therein. After an amendment or waiver
under this Section 13.01 becomes effective, the Company will mail to the
Holders of each Security affected thereby a notice describing the amendment
or waiver. Any failure of the Company to mail such notice, will not,
however, affect the validity of any such supplemental indenture.
Section 13.02 Supplemental Indentures With Consent of Holders
(a) Except as provided below in this Section 13.02, the
Company and the Trustee may amend this Indenture or the Securities with the
written consent (including consents obtained in connection with a tender
offer or exchange offer for Securities) of the Holders of at least a
majority in principal amount of the Outstanding Securities of each series
affected by such amendment.
(b) Upon the request of the Company, accompanied by a
Board Resolution authorizing the execution of any such supplemental
indenture, and upon the filing with the Trustee of evidence of the consent
of the Holders as aforesaid, and upon receipt by the Trustee of the
documents described in Section 13.06 hereof, the Trustee will join with the
Company in the execution of such supplemental indenture.
(c) It will not be necessary for the consent of the
Holders under this Section 13.02 to approve the particular form of any
proposed amendment or waiver, but it will be sufficient if such consent
approves the substance thereof.
(d) The Holders of a majority in principal amount of the
Outstanding Securities of each series affected may waive compliance in a
particular instance by the Company with any provision of this Indenture
(including waivers obtained in connection with a tender offer or exchange
offer for Securities). However, without the consent of each Holder of an
Outstanding Security affected thereby, an amendment or waiver under this
Section 13.02 may not:
(i) change the Stated Maturity of the principal
of, or any installment of principal of or interest on,
any Security, or reduce the principal amount thereof or
the rate of interest thereon or any premium payable upon
the redemption thereof, or change the Place of Payment
<PAGE> 108
where any Security or interest thereon is payable, or
change the coin or currency in which any Security or
interest thereon is payable, or impair the right to
institute suit for the enforcement of any such payment on
or after the Stated Maturity thereof (or, in the case of
redemption or repayment at the option of the Holder, on
or after the redemption date or repayment date), or
(ii) reduce the percentage in principal amount
of the Outstanding Securities of any series, the consent
of whose Holders is required for any such amendment, or
the consent of whose Holders is required for any waiver
of compliance with certain provisions of this Indenture
or certain defaults hereunder and their consequences
provided for in this Indenture, or
(iii) modify any of the provisions of this
Section or Section 8.07, except to increase any such
percentage or to provide that certain other provisions of
this Indenture cannot be modified or waived without the
consent of the Holder of each Outstanding Security
affected thereby, or
(iv) modify the ranking or priority of the
Securities in a manner adverse to the Holders.
(e) A supplemental indenture which changes or eliminates
any covenant or other provision of this Indenture which has expressly been
included solely for the benefit of one or more particular series of
Securities, or which modifies the rights of the Holders of Securities of
such series with respect to such covenant or other provision, shall be
deemed not to affect the rights under this Indenture of the Holders of
Securities of any other series.
(f) The right of any Holder to participate in any consent
required or sought pursuant to any provision of this Indenture (and the
obligation of the Company to obtain any such consent otherwise required
from such Holder) may be subject to the requirement that such Holder has
been the Holder of record of any Securities of any series with respect to
which such consent is required or sought as of a date identified by the
Trustee in a notice furnished to Holders in accordance with the terms of
this Indenture.
Section 13.03 Compliance With TIA
Every amendment to this Indenture or the Securities will
comply in form and substance with the TIA as then in effect.
<PAGE> 109
Section 13.04 Revocation and Effect of Consents
(a) Until an amendment (which includes any supplement) or
waiver becomes effective, a consent to it by a Holder of a Security of any
series is a continuing consent by the Holder and every subsequent Holder of
a Security or portion of a Security that evidences the same debt as the
consenting Holder's Security, even if notation of the consent is not made
on any Security. However, any such Holder or subsequent Holder may revoke
the consent as to such Holder's Security or portion of a Security if the
Trustee receives written notice of revocation before the date the amendment
or waiver becomes effective. An amendment or waiver becomes effective in
accordance with its terms and thereafter binds every Holder.
(b) The Company may, but will not be obligated to, fix a
record date for the purpose of determining the Holders entitled to consent
to any amendment or waiver. If the Company elects to fix a record date for
such purpose, the record date will be fixed at (i) the later of 30 days
prior to the first solicitation of such consent or the date of the most
recent list of Holders furnished to the Trustee prior to such solicitation
pursuant to Section 10.02 hereof or (ii) such other date as the Company
will designate. If a record date is fixed, then notwithstanding the
provisions of Section 13.04(a) hereof, those Persons who were Holders at
such record date (or their duly designated proxies), and only those
Persons, will 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 after such record date. No consent will be valid or effective
for more than 90 days unless consents from Holders of the principal amount
of Securities required hereunder for such amendment or waiver to be
effective has also been given and not revoked within such 90-day period.
(c) After an amendment or waiver becomes effective it
will bind every Holder of a Security of any series affected thereby, unless
it is of the type described in any of clauses (i) through (iv) of Section
13.02(d) hereof. Any amendment or waiver will bind each Holder of a
Security who has consented to it and every subsequent Holder of a Security
that evidences the same debt as the consenting Holder's Security.
Section 13.05 Notation on or Exchange of Securities
The Trustee may place an appropriate notation about an
amendment or waiver on any Security of any series affected thereby
thereafter authenticated. The Company in exchange for all Securities of
such series may issue and the Trustee will authenticate new Securities of
such series that reflect the amendment or waiver.
Section 13.06 Trustee to Sign Amendments, etc.
The Trustee will sign any amendment or supplemental
indenture authorized pursuant to this Article 13 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 or
refusing to sign such amendment or supplemental indenture, the Trustee will
be entitled to receive and, subject to Section 9.01 hereof, will be fully
<PAGE> 110
protected in relying upon, an Officers' Certificate and an 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.
ARTICLE 14
MISCELLANEOUS
Section 14.01 TIA Controls
If any provision of this Indenture limits, qualifies or
conflicts with the duties imposed by TIA Section 318(c), the imposed duties
will control.
Section 14.02 Notices
(a) Any notice or communication by the Company or the
Trustee to the other is duly given if in writing and delivered in person or
mailed by first class mail (registered or certified, return receipt
requested), telex, telecopier or overnight air courier guaranteeing next
day delivery, to the other's address:
If to the Company:
U.S. Home Corporation
1800 West Loop South
Houston, Texas 77027
Telecopier No.: (713) 877-2387
Confirmation No.: (713) 877-2311
Attention: President
If to the Trustee:
IBJ Schroder Bank & Trust Company
One State Street
New York, New York 10004
Telecopier No.: (212) 858-2952
Confirmation No.: (212) 858-2529
Attention: Corporate Trust Agency & Administration
(b) The Company or the Trustee, by notice to the other,
may designate additional or different addresses for subsequent notices or
communications.
<PAGE> 111
(c) All notices and communications will be deemed to have
been duly given: at the time delivered by hand, if personally delivered;
five Business Days after being deposited in the mail, if mailed; when
answered back, if telexed; when receipt acknowledged by the Trustee's
transmission result report, if telecopied; and the next Business Day after
timely delivery to the courier, if sent by overnight air courier
guaranteeing next day delivery.
(d) Any notice or communication to a Holder will be
mailed by first-class, postage-prepaid mail, return receipt requested, to
the Holder's address shown on the register kept by the Registrar. Failure
to mail a notice or communication to a Holder or any defect in it will not
affect its sufficiency with respect to other Holders.
(e) If a notice or communication is mailed in the manner
provided above within the time prescribed, it is duly given, whether or not
the addressee receives it.
(f) If the Company mails a notice or communication to
Holders, it will mail a copy to the Trustee and each Agent at the same
time.
Section 14.03 Communication by Holders With Other Holders
Holders may communicate pursuant to TIA Section 312(b)
with other Holders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Securities Register and anyone
else will have the protection of TIA Section 312(c).
Section 14.04 Action by Securityholders
Whenever in this Indenture it is provided that the
Holders of a specified percentage in aggregate principal amount of the
Outstanding Securities may take any action (including the making of any
demand or request, the giving of any notice, consent or waiver or the
taking of any other action), the fact that at the time of taking any such
action the Holders of such specified percentage have joined therein may be
evidenced by any instrument or any number of instruments of similar tenor
executed by (i) Holders in person or (ii) agent or proxy appointed in
writing, or by the record of the Holders in favor thereof, at any meeting
of Holders duly called and held in accordance with the provisions of
Article 15 hereof, or (iii) a combination of such instrument or instruments
of any such record of such meeting of Holders, but in each case only to the
extent that the Holders shall not have revoked such action pursuant to
Section 13.04 hereof.
Without limiting the generality of this Section 14.04, a
Holder, including a Depository that is a Holder of one or more Global
Securities, may make, give or take, by a proxy or proxies duly appointed in
writing, any request, demand, authorization, direction, notice, consent,
<PAGE> 112
waiver or other action provided in this Indenture to be made, given or
taken by Holders and a Depository that is a Holder of one or more Global
Securities may provide its proxy or proxies to the beneficial owners of
interests in any such Global Securities through such Depository's standing
instructions and customary practices.
The Company, with advance approval by the Trustee, will
fix a record date for the purpose of determining the Persons who are
beneficial owners of interests in any Global Security held by a Depository
entitled under the procedures of such Depository to make, give or take, by
a proxy or proxies duly appointed in writing, any request, demand,
authorization, direction, notice, consent, waiver or other action provided
in this Indenture to be made, given or taken by Holders. If such a record
date is fixed, the Persons who are such beneficial owners at the close of
business on such record date or their duly appointed proxy or proxies will
be entitled to make, give or take such request, demand, authorization,
direction, notice, consent, waiver or other actions, whether or not such
Persons remain such beneficial owners after such record date. No such
request, demand, authorization, direction, notice, consent, waiver or other
action will be valid or effective if made, given or taken more than six
months after such record date.
Section 14.05 Proof of Execution of Instruments and Holding of Securities
Proof of the execution of any instrument by a Holder or
such Holder's agent or proxy and proof of the holding by any Person of any
of the Securities shall be sufficient if made in the following manner:
(1) The fact and date of the execution by any
such Person 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
to be recorded in such jurisdiction that the Person
executing such instrument acknowledged to him the
execution thereof, or by an affidavit of a witness to
such execution sworn to before any such notary or other
officer. Such certificate or affidavit shall also
constitute sufficient proof of the authority of the
Person executing any instrument in cases where Securities
are not held by Persons in their individual capacities.
(2) The fact and date of execution of any such
instrument may also be proved in any other manner which
the Trustee deems sufficient.
(3) The ownership of Securities shall be proved
by the Securities Register for such Security or by a
certificate of the Registrar.
(4) The Trustee shall not be bound to recognize
any Person as a Securityholder unless such Holder's title
to any Security held by such Holder is proved in the
manner provided in this Section 14.05.
<PAGE> 113
The Trustee may require such additional proof of any
matter referred to in this Section 14.05 as it shall deem necessary.
Section 14.06 Obligation to Disclose Beneficial Ownership of Securities
All Securities shall be held and owned upon the express
condition that, upon demand of any regulatory agency having jurisdiction
over the Company, and pursuant to law or regulation empowering such agency
to assert such demand, any Holder shall disclose to such agency the
identity of the beneficial owner of all Securities held by such Holder.
Section 14.07 Certificate and Opinion as to Conditions Precedent
Upon any request or application by the Company to the
Trustee to take any action under this Indenture, the Company will furnish
to the Trustee and the Trustee may rely upon, as conclusive evidence:
(i) an Officers' Certificate (which will include
the statements set forth in Section 14.08 hereof) stating
that, in the opinion of the signers, all conditions
precedent and covenants, if any, provided for in this
Indenture relating to the proposed action have been
complied with; and
(ii) an Opinion of Counsel (which will include
the statements set forth in Section 14.08 hereof) stating
that, in the opinion of such counsel, all such conditions
precedent and covenants have been complied with.
Section 14.08 Statements Required in Certificate or Opinion
(a) Each certificate or opinion with respect to
compliance with a condition or covenant provided for in this Indenture
(other than a certificate provided pursuant to TIA Section 314(a)(4)) will
include:
(i) a statement that the Person making such
certificate or opinion has read such condition or covenant;
(ii) 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;
(iii) a statement that, in the opinion of such
Person, such Person has made such examination or
investigation as is necessary to enable him or her to
express an informed opinion as to whether or not such
condition or covenant has been complied with; and
(iv) a statement as to whether or not, in the
opinion of such person, such condition or covenant has
been complied with.
<PAGE> 114
(b) Any Officers' Certificate may be based, insofar as it
relates to legal matters, upon an Opinion of Counsel, unless such Officer
knows that the opinion with respect to the matters upon which his
certificate may be based as aforesaid is erroneous, or in the exercise of
reasonable care should know that the same are erroneous. Any Opinion of
Counsel may be based, insofar as it relates to factual matters, upon the
certificate, statement or opinion of or representations by an officer or
officers of the Company, or other Persons or firms deemed appropriate by
such counsel, unless such counsel has actual knowledge 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.
(c) Any Officers' Certificate, statement or Opinion of
Counsel may be based, insofar as it relates to accounting matters, upon a
certificate or opinion of or representation by an accountant (who may be an
employee of the Company), or firm of accountants, unless such Officer or
counsel, as the case may be, has actual knowledge that the certificate or
opinion or representation with respect to the accounting matters upon which
his certificate, statement or opinion may be based as aforesaid are
erroneous.
Section 14.09 Rules by Trustee and Agents
The Trustee may make reasonable rules for action by or at
a meeting of Holders. The Registrar or Paying Agent may make reasonable
rules and set reasonable requirements for its functions.
Section 14.10 No Recourse Against Others
A director, officer or employee of the Company, as such,
will have no liability for any obligations of the Company under the
Securities or this Indenture. Each Holder by accepting a Security waives
and releases all such liability.
Section 14.11 Governing Law
This Indenture and the Securities will be governed by and
construed in accordance with the laws of the State of New York, without
regard to principles of conflicts of law.
Section 14.12 No Adverse Interpretation of Other Agreements
This Indenture may not be used to interpret another
indenture, loan or debt agreement of the Company or a Subsidiary thereof.
Any such indenture, loan or debt agreement may not be used to interpret
this Indenture. This writing constitutes the entire agreement of the
parties with respect to the subject matter hereof. Unless expressly
otherwise indicated herein, an action or transaction permitted by one
provision hereof must nonetheless comply with all other applicable
provisions hereof; and any action or transaction not permitted by any
provision of this Indenture will not be permitted regardless of whether any
other provision hereof might permit such action or transaction.
<PAGE> 115
Section 14.13 Successors
All agreements of the Company in this Indenture and the
Securities will bind its successors. All agreements of the Trustee in this
Indenture will bind its successors.
Section 14.14 Severability
In case any provision in this Indenture or in the
Securities is invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions will not in any way be affected
or impaired thereby.
Section 14.15 Counterpart Originals
The parties may sign any number of copies of this
Indenture. Each signed copy will be an original, but all of them together
represent the same agreement.
Section 14.16 Trustee as Paying Agent and Registrar
The Company initially appoints the Trustee as Paying Agent
and Registrar.
Section 14.17 Table of Contents, Headings, etc.
The Table of Contents, Cross-Reference Table and Headings
of the Articles and Sections of this Indenture have been inserted for
convenience of reference only, are not to be considered a part hereof and
will in no way modify or restrict any of the terms or provisions hereof.
Section 14.18 Benefits of Indenture
Nothing in this Indenture or in the Securities, express
or implied, will give to any Person, other than the parties hereto and
their successors hereunder and the Holders, any benefit or any legal or
equitable right, remedy or claim under this Indenture.
Section 14.19 Acceptance of Trust
IBJ Schroder Bank & Trust Company, the Trustee named
herein, hereby accepts the trusts in this Indenture declared and provided,
upon the terms and conditions hereinabove set forth.
ARTICLE 15
MEETINGS OF HOLDERS OF SECURITIES
Section 15.01 Purposes of Meetings
A meeting of Holders may be called at any time and from
time to time pursuant to the provisions of this Article 15 for any of the
following purposes:
<PAGE> 116
1. to give any notice to the Company or to the Trustee,
or to give any direction to the Trustee, or to waive any non-performance
hereunder, and its consequences, or to take any other action authorized to
be taken by Holders pursuant to any of the provisions of this Indenture;
2. to remove the Trustee and appoint a successor
Trustee pursuant to the provisions of Section 9.08 hereof;
3. to consent to the amendment of the provisions
contained herein and the execution of an indenture or indentures
supplemental hereto pursuant to the provisions of Article 13 hereof; or
4. to take any other action authorized to be taken by
or on behalf of the Holders of any specified aggregate principal amount of
the Outstanding Securities under any other provision of this Indenture or
under applicable law.
Section 15.02 Call of Meetings by Trustee
The Trustee may at any time call a meeting of Holders to
take any action specified in Section 15.01, to be held at such time and at
such place in the State of New York, as the Trustee shall determine. Notice
of each meeting of the Holders of Securities, setting forth the time and
the place of such meeting and, in general terms, the action proposed to be
taken at such meeting, shall be mailed by the Trustee to the Holders, not
less than 20 nor more than 60 days prior to the date fixed for the meeting,
at their last addresses as they shall appear on the Security Register.
Section 15.03 Call of Meetings by Company or Securityholders
If at any time the Company, pursuant to a Board
Resolution, or the Holders of at least 20 percent in aggregate principal
amount of the Outstanding Securities, shall have requested the Trustee to
call a meeting of Holders to take any action authorized in Section 15.01
hereof, by written request setting forth in reasonable detail the action
proposed to be taken at the meeting, and the Trustee shall not have mailed
notice of such meeting within 20 days after receipt of such request, then
the Company or the Holders in the amount above specified may determine the
time and the place in the State of New York for such meeting, and may call
such meeting by mailing notice thereof as provided in Section 15.02.
Section 15.04 Person Entitled to Vote at Meeting
To be entitled to vote at any meeting of Holders, a
Person shall be a Holder or be a Person appointed by an instrument in
writing as proxy by a Holder. The only Persons who shall be entitled to be
present or speak at any meeting of the Holders shall be the Persons
entitled to vote at such meeting and their counsel and any representatives
of the Company and its counsel.
<PAGE> 117
Section 15.05 Regulations for Meeting
Notwithstanding any provisions of this Indenture, the
Trustee may make such reasonable regulations as it may deem advisable for
any meeting of Holders in regard to the appointment of proxies, the proof
of the holding of Securities, the appointment and duties of inspectors of
votes, the submission and examination of proxies and other evidence of the
right to vote, and such other matters concerning the conduct of the meeting
as it shall think fit. Except as otherwise permitted or required by any
such regulations, the holding of Securities shall be proved in the manner
specified in Section 14.05 hereof and the appointment of any proxy shall be
proved in the manner specified in such Section 14.05 or by having the
signature of the person executing the proxy witnessed or guaranteed by any
bank, banker, trust company or New York Stock Exchange, Inc.
member firm satisfactory to the Trustee.
The Trustee shall, by an instrument in writing, appoint a
temporary chairperson of the meeting, unless the meeting shall have been
called by the Company or by the Holders as provided in Section 15.03, in
which case the Company or the Holders calling the meeting, as the case may
be, shall appoint a temporary chairman. A permanent chairperson and a
permanent secretary of the meeting shall be elected by vote of the Holders
of a majority in principal amount of the Securities represented at the
meeting and entitled to vote.
At any meeting of Holders, the presence of Persons
holding or representing Securities in an aggregate principal amount
sufficient to take action upon the business for the transaction of which
such meeting was called shall be necessary to constitute a quorum; but, if
less than a quorum be present, the Persons holding or representing a
majority in aggregate principal amount of the Securities represented at the
meeting may adjourn such meeting with the same effect, for all intents and
purposes, as though a quorum had been present.
<PAGE> 118
IN WITNESS WHEREOF, the undersigned have duly executed
this Indenture as of the date first above written.
U.S. HOME CORPORATION
By: /s/ Thomas A. Napoli
-----------------------------------
Thomas A. Napoli
Vice President - Finance and
Chief Financial Officer
IBJ SCHRODER BANK & TRUST COMPANY,
as Trustee
By: /s/ Barbara McCluskey
-----------------------------------
Name: Barbara McCluskey
Title: Assistant Vice President
<PAGE> 119
EXHIBIT 4.2
U.S. HOME CORPORATION
OFFICERS' CERTIFICATE
Pursuant to Sections 2.01 and 3.01 of the Indenture,
dated as of February 16, 1996 (the "Indenture"), between U.S. Home
Corporation, a Delaware corporation (the "Company"), and IBJ Schroder Bank
& Trust Company, as Trustee (the "Trustee"), each of the undersigned, Isaac
Heimbinder and Thomas A. Napoli, the President, Co-Chief Executive Officer
and Chief Operating Officer and Vice President-Finance and Chief Financial
Officer of the Company, respectively, hereby certify on behalf of the
Company as follows:
1. Capitalized terms used but not defined herein have the
meanings set forth in the Indenture.
2. The establishment of 7.95% Senior Notes due 2001 as a
series of Securities of the Company (the "Senior Notes") has been
approved and authorized in accordance with the provisions of the
Indenture pursuant to resolutions of the Board of Directors of the
Company (a copy of which, certified by an Assistant Secretary or
the Secretary of the Company, is delivered herewith) duly adopted
on December 7-8, 1995, resolutions of the Finance Committee of the
Board of Directors of the Company (a copy of which, certified by
the Assistant Secretary or the Secretary of the Company, is
delivered herewith) duly adopted on February 9, 1996, and
resolutions of the Pricing Committee of the Board of Directors of
the Company (a copy of which, certified by the Assistant Secretary
or the Secretary of the Company, is delivered herewith) duly
adopted on February 13, 1996. Pursuant to such resolutions and
this Officers' Certificate, the terms set forth below for the
Senior Notes to be issued under the Indenture are authorized and
approved. The form of Senior Note attached hereto as Exhibit A has
been approved and authorized in accordance with the provisions of
the Indenture.
3. That he has read and is familiar with the provisions
of Articles 2 and 3 of the Indenture relating to the establishment
of a series of Securities thereunder and the establishment of
forms of Securities representing a series of Securities thereunder
and, in each case, the definitions therein relating thereto; that
he is generally familiar with the other provisions of the
Indenture and with the affairs of the Company and its acts and
proceedings and that the statements and opinions made by him in
this Officers' Certificate are based upon such familiarity; and
that, in his opinion, he has made such examination or
investigation as is necessary to enable him to express an informed
opinion as to whether or not the conditions and covenants referred
to above have been complied with; and in his opinion, such
conditions and covenants have been complied with.
<PAGE> 120
4. The terms of the series of Securities established
pursuant to this Officers' Certificate shall be as follows:
(a) Title. The title of the series of Securities
established hereby is the "7.95% Senior Notes due 2001."
(b) Aggregate Principal Amount. The limit upon
the aggregate principal amount of the Senior Notes which
may be authenticated and delivered under the Indenture
(except for Senior Notes authenticated and delivered upon
registration of transfer of, or in exchange for, or in
lieu of, other Senior Notes pursuant to Section 3.04,
3.05, 3.06 or 13.05 of the Indenture and except for any
Senior Notes which, pursuant to Section 3.03 of the
Indenture, are deemed never to have been authorized and
delivered thereunder) is $75,000,000.
(c) Persons to Whom Interest Payable. Interest on
the Senior Notes shall be payable to the Person in whose
name a Senior Note is registered at the close of business
(whether or not a Business Day) on the Regular Record
Date, for such interest payment, except that default
interest shall be payable in the manner provided in
Section 3.07 of the Indenture.
(d) Stated Maturity. The date on which the
principal of the Senior Notes shall be payable, unless
accelerated pursuant to the Indenture, is March 1, 2001.
(e) Rate of Interest; Interest Payment Dates;
Regular Record Dates.
(i) Rate of Interest. The principal
amount of each of the Senior Notes shall bear
simple interest at the rate of 7.95% per annum.
The date from which interest shall accrue for
each of the Senior Notes shall be February 16,
1996. Interest shall be calculated on the basis
of actual days elapsed over a 365 or 366-day
year.
<PAGE> 121
(ii) Interest Payment Dates. Interest on
the Senior Notes shall be payable semi-annually
on March 1 and September 1 of each year,
commencing on September 1, 1996.
If any Interest Payment Date or the
Maturity of the Senior Notes falls on a day that
is not a Business Day, the payment due on such
Interest Payment Date or at Maturity will be
made on the following day that is a Business Day
as if it were made on the date such payment was
due and no interest shall accrue on the amount
so payable for the period from and after such
Interest Payment Date or Maturity, as the case
may be.
(iii) Regular Record Dates. The Regular
Record Dates for interest payable on each March 1
and September 1 will be the immediately preceding
February 15 and August 15 (whether or not a
Business Day), respectively.
(f) Place of Payment; Registration of Transfer and
Exchange; Notices to the Company.
(i) Place of Payment. Payment of the
principal of and interest on the Senior Notes
will be made at the Corporate Trust Office of
the Trustee in New York, New York, and at any
other office or agency designated by the Company
for such purpose; provided, however, that at the
option of the Company, payment of interest due
(other than at Maturity) may be made by check
mailed to the address of the Person entitled
thereto as such address shall appear in the
Security Register.
(ii) Registration of Exchange and Transfer.
The Senior Notes may be presented for exchange and
registration of transfer at the Corporate Trust
Office of the Trustee in New York, New York, or
at the office of any Registrar hereafter
designated by the Company for such purpose.
(iii) Notices to Company. Notices and
demands to or upon the Company in respect of the
Senior Notes and the Indenture may be served at
U.S. Home Corporation, 1800 West Loop South,
Houston, Texas 77027, Attention: President.
<PAGE> 122
(g) Optional Redemption. The Senior Notes are not
redeemable at the option of the Company prior to Maturity.
(h) Mandatory Redemption/Sinking Fund. The
Company shall not be obligated to make any mandatory
redemption or sinking fund payments or repurchase the Senior
Notes at the option of the Holders.
(i) Denominations. The Senior Notes shall be
issuable in denominations of $1,000 and any integral
multiple thereof.
(j) Acceleration. The principal amount of the
Senior Notes shall be payable upon declaration of
acceleration of the Maturity thereof pursuant to Section
8.02(b) of the Indenture.
(k) Defeasance. The Senior Notes shall be
defeasible as provided in Article 11 of the Indenture.
(l) Global Securities; Depository. The Senior
Notes shall be issued in the form of one or more Global
Securities and the Depository for the Global Securities
shall be The Depository Trust Company, a New York
corporation, and the Global Securities shall be
registered in the name of Cede & Co., the nominee of the
Depository.
(m) Registrar; Paying Agent. The Company hereby
appoints the Trustee as the initial Registrar and Paying
Agent with respect to the Senior Notes. The books of the
Registrar for the Senior Notes will be initially maintained
at the Corporate Trust Office of the Trustee.
(n) Events of Default. Section 8.01(a)(iii) of
the Indenture shall not be applicable to the Senior Notes.
<PAGE> 123
IN WITNESS WHEREOF, we have executed this Officers'
Certificate on behalf of the Company this 16th day of February, 1996.
U.S. HOME CORPORATION
By: /s/ Isaac Heimbinder
----------------------------
Isaac Heimbinder
President, Co-Chief Executive
Officer and Chief Operating
Officer
By: /s/ Thomas A. Napoli
-----------------------------
Thomas A. Napoli
Vice President-Finance and
Chief Financial Officer
<PAGE> 124
EXHIBIT A
(FACE OF SECURITY)
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF
A DEPOSITORY OR A NOMINEE OF A DEPOSITORY. THIS GLOBAL SECURITY IS
EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON
OTHER THAN THE DEPOSITORY OR ITS NOMINEE ONLY IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS
SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY THE
DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE
DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY)
MAY BE REGISTERED EXCEPT IN SUCH LIMITED CIRCUMSTANCES. EVERY
SECURITY DELIVERED UPON REGISTRATION OF TRANSFER OF, OR IN
EXCHANGE FOR, OR IN LIEU OF, THIS GLOBAL SECURITY SHALL BE A
GLOBAL SECURITY SUBJECT TO THE FOREGOING, EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED ABOVE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), TO THE COMPANY OR ITS AGENT FOR REGISTRATION
OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
IS TO BE MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.
CUSIP
No.______ U.S. HOME CORPORATION $_______
Promises to pay to _______________________________________ or registered
assigns the principal sum of _____________________ Dollars on March 1,
2001.
<PAGE> 125
7.95% SENIOR NOTE DUE 2001
Interest Payment Dates: March 1 and September 1
Regular Record Dates: February 15 and August 15
Dated: February 16, 1996
U.S. HOME CORPORATION
By:
Name:
Title:
By:
Name:
Title:
[Corporate Seal]
This Security is one of the
Securities of the series
designated herein referred
to in the within mentioned
Indenture.
IBJ SCHRODER BANK &
TRUST COMPANY, as Trustee
By:________________________
Authorized Signatory
<PAGE> 126
(REVERSE OF SECURITY)
U.S. HOME CORPORATION
7.95% SENIOR NOTE DUE 2001
1. Interest.
U.S. Home Corporation, a Delaware corporation (the "Company"),
promises to pay interest on the principal amount of this Security, which is
one of the Securities of the series designated under the Indenture as the
"7.95% Senior Notes due 2001" (the "Senior Notes"), at the rate per annum
shown above. The Company will pay interest semiannually on March 1 and
September 1 of each year (each an "Interest Payment Date"), commencing
September 1, 1996. Interest on the Senior Notes will accrue from the most
recent date to which interest has been paid or, if no interest has been
paid, from February 16, 1996. Interest will be computed on the basis of
actual days elapsed over a 365 or 366-day year.
2. Method of Payment.
The Company will pay interest on the Senior Notes (except default
interest, which shall be payable in the manner provided in Section 3.07 of
the Indenture) to the Persons who are Holders of Securities at the close of
business on the February 15 or August 15 next preceding the Interest
Payment Date (the "Regular Record Date"). Holders must surrender Senior
Notes to a Paying Agent to collect principal payments. The Company will pay
principal and interest in money of the United States that at the time of
payment is legal tender for payment of public and private debts. However,
the Company may pay principal and interest by its check payable in such
money. It may mail, or cause to be mailed, an interest check to a Holder's
address set forth on the Security Register.
3. Paying Agent and Registrar.
Initially, IBJ Schroder Bank & Trust Company (the "Trustee") will
act as Paying Agent and Registrar. The Company may change any Paying Agent,
Registrar or co-Registrar without notice to any Holder. The Company
or any of its Subsidiaries may act as Paying Agent, Registrar or co-Registrar.
4. Indenture.
The Company issued the Senior Notes under an Indenture, dated as
of February 16, 1996 (the "Indenture"), between the Company and the
Trustee. The terms of the Senior Notes include those stated in the
Indenture, those made part of the Indenture by reference to the Trust
Indenture Act of 1939 (15 U.S. Code ss.ss.77aaa-77bbbb) (the "TIA") as in
effect on the date of the Indenture and as may be amended from time to
time, and those incorporated by reference into the Indenture pursuant to an
Officers' Certificate of the Company, dated February 16, 1996 (the
"Officers' Certificate") delivered pursuant to Sections 2.01 and 3.01 of
<PAGE> 127
the Indenture. The Senior Notes are subject to and governed by all such
terms, and Holders are referred to the Indenture, the Officers' Certificate
and the TIA for a statement of them. Capitalized terms used in this Senior
Note and not otherwise defined herein shall have the meanings set forth in
the Indenture and the Officers' Certificate. The Senior Notes are general
unsecured obligations of the Company limited to the aggregate principal
amount of $75,000,000.
5. Optional Redemption.
The Senior Notes are not redeemable at the option of the Company
prior to Maturity.
6. Mandatory Redemption/Sinking Fund.
The Company shall not be obligated to make any mandatory
redemption or sinking fund payments or repurchase the Senior Notes at the
option of the Holders.
7. Mandatory Repurchase Obligation.
Within 30 days after the occurrence of any Change of Control, the
Company will offer to purchase all Outstanding Senior Notes at a purchase
price equal to 101 percent of the aggregate principal amount thereof, plus
accrued and unpaid interest to the Change of Control Payment Date.
Within 30 days after the date on which the aggregate amount of
Excess Proceeds (from an Asset Sale) equals at any time and from time to
time $5,000,000 or more, the Company will offer to purchase the maximum
principal amount of Senior Notes that may be purchased out of the Excess
Proceeds at a purchase price equal to 100 percent of the principal amount
thereof, plus accrued and unpaid interest to the Asset Sale Offer Date.
Within 30 days after the end of any two consecutive fiscal
quarters during which the Consolidated Tangible Net Worth of the Company is
at any time and from time to time less than $115,000,000, the Company will
offer to purchase 10 percent of the original Outstanding principal amount
of the Senior Notes at a purchase price equal to 100 percent of the
original principal amount thereof, plus accrued and unpaid interest to the
Net Worth Offer Date.
A Change of Control Offer, an Excess Proceeds Offer or a Net Worth
Offer will remain open for the period specified in the Indenture. Promptly
after the termination of a Change of Control Offer, an Excess Proceeds
Offer or a Net Worth Offer, subject to the terms of the Indenture, the
Company will purchase and mail, or cause to be mailed, or deliver, or cause
to be delivered, payment for all Senior Notes tendered and accepted
pursuant to such Offer.
<PAGE> 128
A Holder may tender in response to a Change of Control Offer, an
Excess Proceeds Offer or a Net Worth Offer all or any portion of its Senior
Notes at its discretion by completing the form entitled "OPTION OF HOLDER
TO ELECT PURCHASE" appearing on the reverse of this Senior Note. Any
portion of Senior Notes tendered must be an integral multiple of $1,000.
8. Denominations, Transfer, Exchange.
The Senior Notes are issuable in registered form, without coupons,
in denominations of $1,000 and any amount in excess thereof which is an
integral multiple of $1,000. As provided in the Indenture and subject to
certain limitations therein set forth, Senior Notes are exchangeable for a
like aggregate principal amount of Senior Notes of any authorized
denomination, as requested by the Holder surrendering the same, upon
surrender of the Senior Note or Senior Notes to be exchanged at any office
or agency where Senior Notes may be presented for registration of transfer.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of Senior Notes is registrable in the
Security Register upon surrender of a Senior Note for registration of
transfer at the Corporate Trust Office of the Trustee in New York, or at
the office of any Registrar hereafter designated by the Company for such
purpose, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Company and the Registrar duly
executed by the Holder hereof or his attorney duly authorized in writing,
and thereupon one or more new Senior Notes, of authorized denominations and
for the same aggregate principal amount, will be issued to the designated
transferee or transferees.
No service charge shall be made by the Company, the Trustee or the
Registrar for any such registration of transfer or exchange, but the
Company may require payment of a sum sufficient to cover any tax,
assessment or other governmental charge payable in connection therewith
(other than exchanges pursuant to Section 3.04 or 13.05 of the Indenture,
not involving any transfer).
9. Person Deemed Owner.
The Holder of a Senior Note may be treated as the owner of it for
all purposes.
10. Amendment, Waiver.
The Indenture permits, in certain circumstances therein specified,
the amendment thereof without the consent of the Holders. The Indenture
also permits, with certain exceptions as therein provided, the amendment
thereof and the modification of the rights and obligations under the
Indenture of the Company and the rights of Holders at any time by the
Company and the Trustee with the consent of the Holders of a majority in
aggregate principal amount of the Senior Notes at the time Outstanding. The
Indenture also contains provisions permitting the Holders of a majority in
<PAGE> 129
aggregate principal amount of the Senior Notes at the time Outstanding, on
behalf of the Holders of all the Senior Notes, to waive compliance by the
Company with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by
the Holders shall be conclusive and binding upon the Holder of this Senior
Note and upon all future Holders of this Senior Note and of any Senior Note
issued upon the registration of transfer hereof or in exchange hereof or in
lieu hereof, whether or not notation of such consent or waiver is made upon
this Senior Note.
11. Successor Corporation.
When a successor corporation assumes all the obligations of its
predecessor under the Senior Notes and the Indenture, the predecessor
corporation will be released from those obligations.
12. Defaults and Remedies.
The following are Events of Default: (i) failure by the Company to
pay interest on any Senior Note when the same becomes due and the
continuance of such failure for 30 days; (ii) failure by the Company to pay
the principal of any Senior Note when the same becomes due and payable at
Maturity, upon acceleration or otherwise (including the failure to make
payment pursuant to a Change of Control Offer, an Excess Proceeds Offer or
a Net Worth Offer); (iii) failure by the Company to comply with any of its
agreements or covenants in, or provisions of, the Senior Notes, the
Officers' Certificate or the Indenture and such failure continues for 60
days after notice; (iv) acceleration of any Indebtedness (other than
Non-Recourse Indebtedness) of the Company or any of its Subsidiaries that
has an outstanding principal amount of $5,000,000 or more in the aggregate;
provided that, in the event any such acceleration is withdrawn or otherwise
rescinded within a period of five days after such acceleration by the
holders of such Indebtedness, any Event of Default pursuant to this clause
(iv) will be deemed to be cured and any acceleration under the Indenture
will be deemed withdrawn or rescinded; (v) failure by the Company or any of
its Subsidiaries to make any principal or interest payment in respect of
Indebtedness (other than Non-Recourse Indebtedness) of the Company or any
of its Subsidiaries with an outstanding aggregate amount of $5,000,000 or
more within five days of such principal or interest payment becoming due
and payable (after giving effect to any applicable grace period set forth
in the documents governing such Indebtedness); (vi) a final judgment or
judgments that exceed $5,000,000 or more in the aggregate, for the payment
of money, having been entered by a court or courts of competent
jurisdiction against the Company or any of its Subsidiaries and such
judgment or judgments is not satisfied, stayed, annulled or rescinded
within 60 days of being entered; or (vii) certain events of bankruptcy,
insolvency or reorganization, involving the Company or a Material
Subsidiary.
<PAGE> 130
If an Event of Default with respect to the Senior Notes at the
time Outstanding (other than certain Events of Default arising out of
certain events of bankruptcy, insolvency or reorganization involving the
Company or a Material Subsidiary) occurs and is continuing, the Trustee
(after receiving indemnities from the Holders to its satisfaction) by
notice to the Company, or the Holders of at least 25 percent in aggregate
principal amount of the Outstanding Senior Notes by notice to the Company
and the Trustee, may declare all Outstanding Senior Notes to be due and
payable immediately. Upon such declaration, the amounts due and payable on
the Senior Notes as determined in Section 8.02(b) of the Indenture, will be
due and payable immediately. If an Event of Default arising out of certain
events of bankruptcy, insolvency or reorganization involving the Company or
a Material Subsidiary occurs, such an amount will ipso facto become and be
immediately due and payable without any declaration, notice or other act on
the part of the Trustee and the Company or any Holder. The Holders of a
majority in aggregate principal amount of the Outstanding Senior Notes by
written notice to the Trustee and the Company may waive such Event of
Default, rescind an acceleration and its consequences (except an
acceleration due to nonpayment of principal or interest on the Senior
Notes) if the rescission would not conflict with any judgment or decree and
if all existing Events of Default have been cured or waived.
Subject to Sections 8.07 and 13.02 of the Indenture, the Holders
of a majority in aggregate principal amount of the Outstanding Senior Notes
by notice to the Trustee may waive an existing Default or Event of Default
and its consequences (including waivers obtained in connection with a
tender offer or exchange offer for Senior Notes), except a continuing
Default or Event of Default in the payment of the principal of or interest
on any Senior Note. Upon any such waiver, such Default will cease to exist,
and any Event of Default arising therefrom will be deemed to have been
cured for every purpose of the Indenture and the Senior Notes, but no such
waiver will extend to any subsequent or other Default or Event of Default
or impair any right consequent thereon.
13. Trustee Dealings with Company.
IBJ Schroder Bank & Trust Company, the Trustee under the
Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with the Company or its
Affiliates with the same rights it would have if it were not Trustee. Any
Agent may do the same with like rights. However, the Trustee is subject to
Sections 9.10 and 9.11 of the Indenture.
14. No Recourse Against Others.
A director, officer or employee of the Company, as such, shall
have no liability for any obligations of the Company under the Senior Notes
or the Indenture. Each Holder and each other owner of any beneficial
interest in a Senior Note, by accepting a Senior Note waives and releases
all such liability.
<PAGE> 131
15. Authentication.
This Senior Note shall not be valid until the Trustee signs the
certificate of authentication on the other side of this Senior Note.
16. Abbreviations.
Customary abbreviations may be used in the name of a Holder or an
assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to
Minors Act).
The Company will furnish to any Holder, upon written request and
without charge, a copy of the Indenture. Request may be made to:
U.S. Home Corporation
1800 West Loop South
Houston, Texas 77027
Attention: President
<PAGE> 132
ASSIGNMENT FORM
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto
Please insert Social Security or Employer
Identification Number of Assignee
- -------------------------------------------------------------------
- -
- -------------------------------------------------------------------
- --------------------------------------------------------------------------
Please Print or Typewrite Name and Address
including Postal Zip Code of Assignee
- --------------------------------------------------------------------------
the within Senior Note and all rights thereunder, hereby irrevocably
constituting and appointing
_________________________________________________________________ attorney
to Transfer said Senior Note on the books of the Company, with full power
of substitution in the premises.
Dated: ___________________________ Signature ________________________
NOTICE: The signature to this assignment must correspond with the name
as it appears upon the face of the within note in every
particular, without alteration or enlargement or any change
whatever.
<PAGE> 133
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Senior Note purchased
by the Company pursuant to Section 6.11, 6.16 or 6.20 of the Indenture,
check the box below:
Section 6.11 (Excess Proceeds Offer)
Section 6.16 (Change of Control Offer)
Section 6.20 (Net Worth Offer)
If you want to elect to have only part of the Senior Note
purchased by the Company pursuant to Section 6.11, 6.16 or 6.20 of the
Indenture, as applicable, state the principal amount you elect to have
purchased: $_________. Note: The amount you elect to have purchased must be
an integral multiple of $1,000.
Date:_______________ Your signature:_______________________
(Sign exactly as your name appears
on the Senior Note)
Signature Guarantee:_________________________________
<PAGE> 134
EXHIBIT 11
(Unaudited)
U.S. HOME CORPORATION AND SUBSIDIARIES
INCOME PER COMMON SHARE FOR THE CONSOLIDATED CONDENSED
STATEMENTS OF OPERATIONS
INCOME HAS BEEN COMPUTED ON THE WEIGHTED AVERAGE NUMBER OF
COMMON SHARES AND COMMON SHARE EQUIVALENTS OUTSTANDING
AS FOLLOWS:
(Dollars in Thousands, Except Per Share Data)
Three Months Ended
March 31,
------------------
1996 1995
------------ -----------
Income Per Common And Common
Equivalent Share -
Net income $ 9,319 $ 8,140
=========== ===========
Weighted average common shares
outstanding 11,569,078 11,580,628
Effect of assumed exercise of
dilutive stock options and warrants 546,406 -
---------- -----------
Total common and common equivalent
shares 12,115,484 11,580,628
=========== ==========
Income per common and common
equivalent share $ .77 $ .70
=========== ===========
Income Per Common Share, Assuming
Full Dilution -
Net income $ 9,319 $ 8,140
Add interest applicable to 4.875%
convertible subordinated
debentures, net of income
tax effect 613 481
----------- -----------
Income per common share,
assuming full dilution $ 9,932 $ 8,621
=========== ===========
Total common and common equivalent
shares 12,115,484 11,580,628
<PAGE> 135
Assumed conversion of 4.875%
convertible subordinated
debentures at $35.50 per share
at date of issuance 2,253,521 2,253,521
----------- -----------
Total common shares, assuming
full dilution 14,369,005 13,834,149
=========== ===========
Income per common share,
assuming full dilution $ .69 $ .62
=========== ===========
Note: See Note 5 of Notes to Consolidated Condensed Financial
Statements.
<PAGE> 136
Exhibit 15
To U.S. HOME CORPORATION:
We are aware that U.S. Home Corporation has incorporated by reference in
its Registration Statements No. 33-64712, 33-52993, 33-00583 and 33-02775
its Form 10-Q for the quarter ended March 31, 1996, which includes our
report dated April 24, 1996 covering the unaudited interim financial
information contained therein. Pursuant to Regulation C of the Securities
Act of 1933, that report is not considered a part of the registration
statement prepared or certified by our firm within the meaning of Sections
7 and 11 of the Act.
/s/ Arthur Andersen LLP
------------------------
ARTHUR ANDERSEN LLP
Houston, Texas
May 1, 1996
<TABLE> <S> <C>
<S> <C>
<ARTICLE> 5
<LEGEND>
This Schedule Contains Summary Financial Information Extracted From The
Consolidated Condensed Financial Statements As Of March 31, 1996 And For The
Three Months Then Ended And Is Qualified In Its Entirety By Reference To Such
Financial Statements.
Page 137
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 31,317
<SECURITIES> 0
<RECEIVABLES> 94,266
<ALLOWANCES> 0
<INVENTORY> 648,919
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 908,526
<CURRENT-LIABILITIES> 0
<BONDS> 368,796
0
7,803
<COMMON> 112
<OTHER-SE> 330,549
<TOTAL-LIABILITY-AND-EQUITY> 908,526
<SALES> 0
<TOTAL-REVENUES> 272,762
<CGS> 224,974
<TOTAL-COSTS> 257,625
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 461
<INCOME-PRETAX> 14,676
<INCOME-TAX> 5,357
<INCOME-CONTINUING> 9,319
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9,319
<EPS-PRIMARY> .77
<EPS-DILUTED> .69
</TABLE>
