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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 21, 1997
REGISTRATION NO. 333-31457
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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, TX 77027
(713) 877-2311
(Address, including zip code, and telephone
number, including area code, of
registrant's principal executive offices)
ROBERT J. STRUDLER
CHAIRMAN AND CO-CHIEF EXECUTIVE OFFICER
U.S. HOME CORPORATION
1800 WEST LOOP SOUTH
HOUSTON, TX 77027
(713) 877-2311
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
Copy to:
STEPHEN C. KOVAL, ESQ.
KAYE, SCHOLER, FIERMAN, HAYS & HANDLER, LLP
425 PARK AVENUE
NEW YORK, NEW YORK 10022
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE
PUBLIC: From time to time after the effective date of this Registration
Statement as determined by market conditions.
If the only securities being registered on this Form are being
offered pursuant to dividend or interest reinvestment plans, please check the
following box. / /
If any of the securities being registered on this Form are to
be offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered in connection with
dividend or interest reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement from the same offering. / /
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If this Form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /
If delivery of the prospectus is expected to be made pursuant
to Rule 434, please check the following box. / /
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=======================================================================================================
Title of each class of Amount to be Proposed maximum Proposed maximum Amount of
securities to be registered offering price per aggregate offering registration fee
registered unit price
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Senior, Senior $300,000,000 (1) 100% (1) $300,000,000 (1) $90,909.09 (2)(3)
Subordinated and/or
Subordinated Debt
Securities, Various
Series
=======================================================================================================
</TABLE>
(1) Estimated solely for purposes of determining the registration fee. If
any such Debt Securities are issued at an original issue discount, then
the amount to be registered shall be in such greater principal amount
as shall result in an aggregate initial offering price of up to
$300,000,000.
(2) An additional filing fee of $8,620.75 was previously paid for
$25,000,000 of unsold Debt Securities registered under Registration No.
33-00583.
(3) The filing fee was previously paid on filing the Registration Statement
on Form S-3 on July 17, 1997.
Pursuant to Rule 429 under the Securities Act of 1933, the Prospectus included
herein contains a combined Prospectus that also relates to a total of
$25,000,000 of Debt Securities of the Registrant previously registered under the
Registrant's Registration Statement No. 33-00583 (which was declared effective
on February 8, 1996) and not issued. This Amendment No. 1 to No. 333-31457
Registration Statement constitutes Post-Effective Amendment No. 2 to the
Registrant's Registration Statement on Form S-3 No. 33- 00583 pursuant to which
the total amount of unsold Debt Securities previously registered under the
Registrant's Registration Statement on Form S-3 No. 33-00583 may be offered and
sold as Debt Securities, without limitation as to class, together with the Debt
Securities registered hereunder, through the use of the combined Prospectus
included herein relating to Debt Securities. In the event that any of such
previously registered Debt Securities are offered and sold prior to the
effective date of this Registration Statement, the amount of such Debt
Securities will not be included in any Prospectus hereunder.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
SUBJECT TO COMPLETION, DATED AUGUST 21, 1997
$325,000,000
U.S. HOME CORPORATION
Debt Securities
__________
U.S. Home Corporation ("U.S. Home" or the "Company") may offer
from time to time, in one or more series, its debt securities, consisting of
bonds, debentures, notes and/or other unsecured evidences of indebtedness. The
debt securities may consist of the Company's unsecured senior debt securities
(the "Senior Debt Securities"), unsecured senior subordinated debt securities
(the "Senior Subordinated Debt Securities") or unsecured subordinated debt
securities (the "Subordinated Debt Securities," and together with the Senior
Debt Securities and the Senior Subordinated Debt Securities, the "Debt
Securities"). The Debt Securities will have a maximum aggregate principal amount
of $325,000,000 and will be offered on terms to be determined at the time of
sale.
The specific terms of the Debt Securities in respect of which
this Prospectus is being delivered will be set forth in the supplement
accompanying this Prospectus (the "Prospectus Supplement") and will include,
where applicable, the specific title, the aggregate principal amount, the
currency, authorized denominations, the maturity, the rate (or method of
calculation) and time of payment of interest, if any, any redemption or sinking
fund provisions, any additional covenants or events of default, the initial
public offering price and the other material terms of the Debt Securities. The
Prospectus Supplement will also disclose whether the Debt Securities will be
listed on a national securities exchange and if they are not to be listed, the
possible effects thereof on their marketability.
Debt Securities may be offered by the Company directly to one
or more purchasers, through agents designated from time to time by the Company
or to or through underwriters and/or dealers. If any agent of the Company or any
underwriter or dealer is involved in the sale of the Debt Securities, the name
of such agent, underwriter or dealer and any applicable purchase price, fee,
commission or discount arrangement between or among them will be set forth, or
will be calculable from the information set forth, in the applicable Prospectus
Supplement. See "Plan of Distribution." No Debt Securities may be sold without
delivery of the applicable Prospectus Supplement describing the method and terms
of the offering of such series of Debt Securities.
__________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
__________
The date of this Prospectus is _________________, 199
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AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement (together with all amendments and
exhibits thereto, the "Registration Statement") under the Securities Act of
1933, as amended (the "Securities Act"), with respect to the Debt Securities
offered hereby. This Prospectus, which constitutes part of the Registration
Statement, does not contain all of the information set forth in the Registration
Statement, certain parts of which are omitted in accordance with the rules and
regulations of the Commission. For further information with respect to the
Company and the Debt Securities, reference is made to the Registration
Statement.
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, files reports, proxy and information statements and other
information with the Commission. The Registration Statement, as well as such
reports, proxy and information statements and other information filed by the
Company with the Commission, may be inspected and copied (at prescribed rates)
at the public reference facilities maintained by the Commission at 450 Fifth
Street, N.W., Room 1024, Washington, D.C. 20549 and at the Commission's regional
offices located at Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661 and Seven World Trade Center, 13th Floor, New York, New
York 10048. The Commission also maintains an Internet Web Site at
http://www.sec.gov that contains reports, proxy and information statements, and
other information regarding registrants that file electronically with the
Commission. In addition, such reports, proxy and information statements and
other information concerning the Company may also be inspected at the offices of
the New York Stock Exchange, at 20 Broad Street, New York, New York 10005.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents filed by the Company with the Commission (File
No. 1-5899) pursuant to the Exchange Act are incorporated herein by reference:
(i) the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1996;
(ii) the Company's Quarterly Report on Form 10-Q for the quarterly
period ended March 31, 1997; and
(iii) the Company's Quarterly Report on Form 10-Q for the quarterly
period ended June 30, 1997.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act subsequent to the date of this Prospectus and prior
to the termination of the offering of the Debt Securities offered hereby shall
be deemed incorporated by reference into this Prospectus and to be a part hereof
from the date such documents are filed.
Any statement contained herein or in a document incorporated or deemed
to be incorporated by reference herein will be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in the applicable Prospectus Supplement or in any
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded will not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom a copy
of this Prospectus is delivered, upon the written or oral request of such
person, a copy of each document incorporated herein by reference. Requests for
such copies should be directed to Kelly F. Somoza, Vice President, U.S. Home
Corporation, 1800 West Loop South, Houston, Texas 77027, (713) 877-2311.
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THE COMPANY
U.S. Home, organized in 1954 and incorporated in the State of Delaware
in 1959, is one of the largest single-family home builders in the United States
based on homes delivered. The Company currently builds and sells homes in more
than 215 new home communities in 31 market areas in 12 states. Since its
formation, the Company has delivered more than 271,000 homes. In 1996, the
Company was the fifth largest single-family on-site home builder in the United
States based on homes completed and delivered and has been among the ten largest
single-family on-site home builders in the United States for more than 20 years.
The Company conducts substantially all of its homebuilding business through U.S.
Home, the parent company.
The Company offers a wide variety of moderately-priced homes that are
designed to appeal to the affordable, move-up and retirement and active-adult
buyers. In each of its markets, the Company's primary strategy is to build
quality homes, utilizing its Zero Defect Program, which the Company believes
offers prospective home buyers a high level of new home value. The Company
believes that many home purchasers compare homes on the basis of location,
perceived quality and dollars of purchase price per square foot of living area.
As a result, the Company attempts to purchase land and lots in popular growth
corridors, maintain high quality standards and design homes to maximize living
space.
In addition to building and selling single-family homes, the Company
provides mortgage banking services to its customers. The Company originates,
processes and sells mortgages to third-party investors. The Company does not
retain or service the mortgages that it originates but, rather, sells the
mortgages and related servicing rights to investors.
The principal executive offices of the Company are located at 1800 West
Loop South, Houston, Texas 77027 (telephone: (713) 877-2311).
USE OF PROCEEDS
Unless otherwise set forth in the applicable Prospectus Supplement, the
Company intends to use the net proceeds from the sale of the Debt Securities for
general corporate purposes.
CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the consolidated ratio of earnings to
fixed charges for the Company for the periods indicated:
<TABLE>
<CAPTION>
Six Months Ended
June 30, Fiscal Year Ended December 31,
---------------- ----------------------------------------------
1997 1996 1996 1995 1994 1993 1992
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges 2.68 2.53 2.44 2.57 2.51 2.78 3.26
(unaudited) (1)............................
</TABLE>
- ----------------------------
(1) The ratio of earnings to fixed charges is calculated by dividing
earnings by fixed charges. For this purpose, "earnings" means income
(loss) before reorganization items plus (a) provision (benefit) for
income taxes, and (b) fixed charges (including the proportionate share
thereof of unconsolidated affiliates). "Fixed charges" means total
interest, whether capitalized or expensed, and the portion of rent
expense representative of interest costs (including the proportionate
share thereof of unconsolidated affiliates), plus (i) debt-related fees
and (ii) amortization of deferred financing costs.
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DESCRIPTION OF DEBT SECURITIES
The Debt Securities will constitute direct, unsecured obligations of
the Company, unless otherwise provided in the applicable Prospectus Supplement.
Senior Debt Securities may be issued from time to time in series under an
indenture (the "Senior Indenture") between the Company and IBJ Schroder Bank &
Trust Company, as trustee (the "Trustee"). See "-- Concerning the Trustee." The
Senior Indenture has been filed as an exhibit to the Registration Statement of
which this Prospectus is a part. Senior Subordinated Debt Securities may be
issued from time to time in series under an indenture (the "Senior Subordinated
Indenture") between the Company and the Trustee. The Senior Subordinated
Indenture has been filed as an exhibit to the Registration Statement of which
this Prospectus is a part. Subordinated Debt Securities may be issued from time
to time in series under an indenture (the "Subordinated Indenture") between the
Company and the Trustee. The Subordinated Indenture has been filed as an exhibit
to the Registration Statement of which this Prospectus is a part. The Senior
Indenture, the Senior Subordinated Indenture and the Subordinated Indenture are
sometimes referred to individually as the "Indenture" and collectively as the
"Indentures." The Indentures will be subject to and governed by the Trust
Indenture Act of 1939, as amended (the "TIA"). As used under this caption,
unless the context otherwise requires, "Offered Debt Securities" shall mean the
Debt Securities offered by this Prospectus and the accompanying Prospectus
Supplement; "Offered Senior Debt Securities" shall mean the Senior Debt
Securities so offered; "Offered Senior Subordinated Debt Securities" shall
mean the Senior Subordinated Debt Securities so offered and "Offered
Subordinated Debt Securities" shall mean Subordinated Debt Securities so
offered.
The following summaries of certain provisions of the Indentures do not
purport to be complete and are subject to, and are qualified in their entirety
by reference to, all of the provisions of the Indentures, including the
definitions therein of certain capitalized terms used in this Prospectus. The
following sets forth certain general terms and provisions of the Debt Securities
to which any Prospectus Supplement may relate. Further terms of the Offered Debt
Securities will be described in the Prospectus Supplement. Except (i) with
respect to the covenants described herein for Senior Debt Securities and Senior
Subordinated Debt Securities, (ii) with respect to the provisions relating to
subordination and (iii) to the extent set forth in a Prospectus Supplement with
respect to a particular series of Debt Securities, the Indentures are
substantially identical. See "-- Senior Indenture Covenants", "-- Senior
Subordinated Indenture Covenants" and "-- Status of Debt Securities."
GENERAL
Each Indenture will provide for the issuance of Debt Securities in one
or more series. The Debt Securities will be unsecured senior, senior
subordinated or subordinated obligations of the Company, as set forth in the
accompanying Prospectus Supplement. Except as may be set forth in the
accompanying Prospectus Supplement and as described herein relating to the
Senior Indenture and the Senior Subordinated Indenture, the Indentures will not
restrict the business or operations of the Company or its subsidiaries, limit
their indebtedness or prohibit any liens, charges or other encumbrances on any
properties or other assets they may have from time to time. See "--Senior
Indenture Covenants" and "-- Senior Subordinated Indenture Covenants."
The applicable Prospectus Supplement or Prospectus Supplements will
describe the following terms of the series of Offered Debt Securities in respect
of which this Prospectus is being delivered, if applicable: (i) the title of the
Offered Debt Securities; (ii) whether the Offered Debt Securities are Senior
Debt Securities, Senior Subordinated Debt Securities or Subordinated Debt
Securities; (iii) the aggregate principal amount of the Offered Debt Securities
and any limit on such aggregate principal amount; (iv) the person to whom
interest on an Offered Debt Security will be payable, if other than the person
in whose name the Offered Debt Security is registered on the record date for the
payment of such interest; (v) the date or dates, or method by which such date or
dates will be determined, on which the principal of the Offered Debt Securities
will be payable; (vi) the rate or rates at which the Offered Debt Securities
will bear interest, if any, or the method by which such rate or rates will be
determined; (vii) the date or dates from which interest, if any, will accrue, or
the method by which such date or dates will be determined, the interest payment
dates on which any such interest will be payable and the record date, if any,
for the interest payable on any Offered Debt Security on any interest payment
date, or the method by which such date or dates will be determined, and the
basis upon which interest will be calculated if other than on the basis of
actual days elapsed over a 365 or 366-day year; (viii) the place or places, if
any, other than or in addition to New York,
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New York, where the principal of and interest on Offered Debt Securities will be
payable, any Offered Debt Securities may be surrendered for registration of
transfer, any Offered Debt Securities may be surrendered for exchange and the
place or places where notices or demands to or upon the Company in respect of
the Offered Debt Securities and the applicable Indenture may be served; (ix) the
period or periods within, the price or prices at and the terms and conditions
upon, which the Offered Debt Securities may be redeemed or purchased, in whole
or in part, at the option of the Company; (x) the obligation, if any, of the
Company to redeem or repurchase the Offered Debt Securities pursuant to any
sinking fund or analogous provisions or at the option of a holder thereof and
the period or periods within which, the prices at which and the terms and
conditions upon which Offered Debt Securities will be redeemed or purchased, in
whole or in part, pursuant to such obligation; (xi) if other than denominations
of $1,000 and any integral multiple thereof, the denomination in which the
Offered Debt Securities will be issuable; (xii) the currency, currencies or
currency units in which payment of the principal of and interest on any Offered
Debt Securities will 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 the applicable
Indenture; (xiii) if the principal of or interest on any Offered Debt Securities
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 Offered
Debt Securities are stated to be payable, the currency, currencies or currency
units in which payment of the principal of and interest on Offered Debt
Securities as to which such election is made will be payable, and the periods
within which and the terms and conditions upon which such election is to be
made; (xiv) if the amount of principal of or interest on any Offered Debt
Securities may be determined with reference to an index, the manner in which
such amounts will be determined; (xv) if other than the principal amount of the
Offered Debt Securities, the portion of the principal amount thereof which will
be payable upon declaration of acceleration of the maturity thereof; (xvi) if
the Offered Debt Securities will be issuable in whole or in part in the form of
one or more Global Securities (as defined) and, in such case, the Depository or
Depositories for such Global Security or Global Securities and any circumstances
other than those set forth herein in which any such Global Security may be
transferred to, and registered and exchanged for Offered Debt 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;
(xvii) if other than the Trustee, the identity of each paying agent and
registrar for the Offered Debt Securities; (xviii) any Events of Default (as
defined) with respect to the Offered Debt Securities, if not otherwise set forth
under the caption "-- Events of Default" or if different from these set forth
herein; (xix) any material covenants with respect to the Offered Debt
Securities, if not otherwise set forth herein or if different from those set
forth herein; (xx) the applicability of the provisions described under the
caption "-- Discharge of the Indenture"; and (xxi) any other material terms of
the Offered Debt Securities.
Debt Securities may be issued at a discount from their principal
amount. Federal income tax considerations and other special considerations
applicable to any such Offered Debt Securities will be described in the
applicable Prospectus Supplement.
If the purchase price of any of the Offered Debt Securities is
denominated in a foreign currency or currencies or a foreign currency unit or
units or if the principal of, or interest, if any, on, any series of Debt
Securities is payable in a foreign currency or currencies or a foreign currency
unit or units, the restrictions, elections, general tax considerations, specific
terms and other information with respect to such Offered Debt Securities and
such foreign currency or currencies or foreign currency unit or units will be
set forth in the applicable Prospectus Supplement.
GLOBAL SECURITIES
Unless otherwise provided in the applicable Prospectus Supplement, the
Offered Debt Securities will be issued as fully-registered securities in the
form of one or more global securities (each a "Global Security") registered in
the name of a nominee of The Depository Trust Company (the "Depository"). One
fully registered Global Security certificate will be issued for each issue of
the global securities, each in the aggregate principal amount of such issue, and
will be deposited with the Depository. If, however, the aggregate principal
amount of any issue of the global securities exceeds $200 million, one
certificate will be issued with respect to each $200 million of principal amount
and an additional certificate will be issued with respect to any remaining
principal
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amount of such issue. The identity of the nominee appointed by the Depository
will be set forth in the applicable Prospectus Supplement. The Global Security
will be issued in a denomination or aggregate denominations equal to the portion
of the aggregate principal amount of the outstanding Debt Securities of the
series represented by such Global Security. Except as described herein or in the
applicable Prospectus Supplement, Debt Securities will not be issued in
definitive form.
The specific terms of the depositary arrangement with respect to any
portion of a series of Debt Securities to be represented by a Global Security
will be described in the applicable Prospectus Supplement. The Company expects
that the following provisions will apply to depositary arrangements.
Upon the issuance of a Global Security, the Depository or its nominee
will credit the accounts of persons holding through it with the respective
principal amounts of the Debt Securities represented by such Global Security.
Such accounts will be designated by the underwriter, if any, with respect to
Debt Securities placed by the underwriter for the Company. Ownership of
beneficial interests in a Global Security will be limited to persons that have
accounts with the Depository ("participants") or persons that may hold interests
through participants. Ownership of beneficial interests by participants in a
Global Security will be shown on, and the transfer of that ownership interest
will be effected only through, records maintained by the Depository for such
Global Security. Ownership of beneficial interests in such Global Security by
persons that hold through participants will be shown on, and the transfer of
that ownership interest through such participant will be effected only through,
records maintained by such participant. Beneficial owners of the Global Security
will not receive written confirmation from the Depository of their purchase of
the Global Security, but beneficial owners are expected to receive written
confirmations providing details of the transaction, as well as periodic
statements of their holdings, from the participant through which the beneficial
owner entered into the transaction. Transfer of ownership interest in the Global
Security are to be accomplished by entries made on the books of participants
acting on behalf of beneficial owners. Beneficial owners will not receive
certificates representing their ownership interests in the Global Security,
except in the event that use of the book-entry system for the Global Security is
discontinued. The foregoing may impair the ability to transfer beneficial
interests in a Global Security.
To facilitate subsequent transfers, all Global Securities deposited by
participants with the Depository are registered in the name of the Depository's
nominee. The deposit of the Global Security with the Depository and their
registration in the name of the Depository's nominee effect no change in
beneficial ownership. The Depository has no knowledge of the actual beneficial
owners of the Global Security; the Depository's records reflect only the
identity of the direct participants (which include securities brokers and
dealers, banks, trust companies, clearing corporations, and certain other
organizations) to whose accounts the Global Security is credited, which may or
may not be the beneficial owners. The participants will remain responsible for
keeping account of their holdings on behalf of their customers.
Except as provided in the applicable Prospectus Supplement, payment of
principal and interest, if any, on Debt Securities represented by any such
Global Security will be made to the Depository or its nominee, as the case may
be, as the sole registered holder of the Debt Securities represented thereby for
all purposes under the applicable Indenture. None of the Company, the Trustee,
any agent of the Company or the Trustee or the underwriter, if any, 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 representing any Debt Securities or for maintaining, supervising
or reviewing any of the Depository's records relating to such beneficial
ownership interests.
The Company has been advised by the Depository that, upon receipt of
any payment of principal or interest on any Global Security, the Depository will
immediately credit, on its book-entry registration and transfer system, the
accounts of participants with payments in amounts proportionate to their
respective beneficial interests in the principal amount of such Global Security
as shown on the records of the Depository. Payments by participants to owners of
beneficial interests in a Global Security held through such participants will be
governed by standing instructions and customary practices as is now the case
with securities held for customer accounts in bearer form or registered in
"street name," and will be the sole responsibility of such participants.
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<PAGE> 9
Except as described in the applicable Prospectus Supplement, a Global
Security may not be transferred except as a whole by the Depository for such
Global Security 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 of such Depository or a nominee of
such successor. If the Depository is at any time unwilling or unable to continue
as depository and a successor depository is not appointed by the Company or the
Depository within 90 days, the Company will issue Debt Securities in definitive
form in exchange for the Global Security. In addition, the Company or the
Depository may at any time and in its sole discretion determine not to have the
Debt Securities represented by the Global Security and, in such event, the
Company will issue Debt Securities in definitive form in exchange for the Global
Security. In either instance, an owner of a beneficial interest in the Global
Security will be entitled to have Debt Securities equal in principal amount to
such beneficial interest registered in its name and will be entitled to physical
delivery of such Debt Securities in definitive form. Except as described in the
applicable Prospectus Supplement, Debt Securities so issued in definitive form
will be issued in denominations of $1,000 and integral multiples thereof and
will be issued in registered form only, without coupons. Except as described in
the applicable Prospectus Supplement, principal and interest, if any, on the
Debt Securities will be payable, and the Debt Securities may be presented for
registration of transfer or exchange, at the offices of the Trustee.
So long as the Depository for a Global Security, or its nominees, is
the registered owner of such Global Security, such Depository or such nominee,
as the case may be, will be considered the sole registered holder of the Debt
Securities represented by such Global Security for all purposes of receiving
payment on the Debt Securities, receiving notices and for all other purposes
under the Indenture and the Debt Securities. Beneficial interests in Debt
Securities will be evidenced only by, and transfers thereof will be effected
only through, records maintained by the Depository and its participants. Except
as provided above, owners of beneficial interests in a Global Security will not
be entitled to and will not be considered the registered holders thereof for any
purposes under the Indenture. Accordingly, any such person owning a beneficial
interest in such a Global Security must rely on the procedures of the
Depository, and, if any such person is not a participant, on the procedures of
the participant through which such person owns its interest, to exercise any
rights of a registered holder under the Indenture. The Indenture provides that
the Depository may grant proxies and otherwise authorize participants to give or
take any request, demand, authorization, direction, notice, consent, waiver or
other action which a registered holder is entitled to give or take under the
Indenture. The Company understands that under existing industry practices, in
the event that the Company requests any action of registered holders or that an
owner of a beneficial interest in such a Global Security desires to give or take
any action which a registered holder is entitled to give or take under the
Indenture, the Depository would authorize the participants holding the relevant
beneficial interest to give or take such action and such participants would
authorize beneficial owners owning through such participants to give or take
such action or would otherwise act upon the instructions of beneficial owners
owning through them.
The Depository has advised the Company that the Depository is a
limited-purpose trust company organized under the New York Banking Law, a
"banking organization" within the meaning of the New York Banking Law, a member
of the Federal Reserve System, a "clearing corporation" within the meaning of
the New York Uniform Commercial Code, and a "clearing agency" registered under
the Exchange Act. The Depository was created to hold the securities of its
participants and to facilitate the clearance and settlement of securities
transactions among its participants in such securities through electronic
book-entry changes in accounts of the participants, thereby eliminating the need
for physical movement of securities certificates. The Depository's participants
include securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations, some of whom (and/or their
representatives) own the Depository. Access to the Depository's book-entry
system is also available to others, such as banks, brokers, dealers and trust
companies, that clear through or maintain a custodial relationship with a
participant, either directly or indirectly. The rules applicable to the
Depositary and its participants are on file with the Commission.
The above-mentioned information concerning the Depository and its
book-entry system has been obtained from sources that the Company believes to be
reliable, but the Company takes no responsibility for the accuracy thereof.
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<PAGE> 10
STATUS OF DEBT SECURITIES
The Senior Debt Securities will be unsecured and unsubordinated
obligations of the Company and will rank on a parity with all other unsecured
and unsubordinated indebtedness of the Company. All series of Senior Debt
Securities of the Company issued under the Senior Indenture will rank on parity
in right of payment with each other, with indebtedness under the Company's
principal credit facility, with the Company's 9-3/4% senior notes due 2003,
previously issued in the original principal amount of $200,000,000 under an
Indenture, dated as of June 21, 1993, between the Company and IBJ Schroder Bank
& Trust Company, as trustee (the "1993 Senior Notes"), and with the Company's
7.95% senior notes due 2001, previously issued in the original principal amount
of $75,000,000 under an Indenture, dated as of February 16, 1996, between the
Company and IBJ Schroder Bank & Trust Company, as trustee (the "1996 Senior
Notes"). The Senior Debt Securities offered hereby will be senior in right of
payment to the Company's 4-7/8% convertible subordinated debentures due 2005,
previously issued in the original principal amount of $80,000,000 under an
Indenture, dated as of November 3, 1993, between the Company and Marine Midland
Bank, N.A., as trustee (the "Debentures").
The Senior Subordinated Debt Securities will be unsecured obligations
of the Company and will be subordinate and junior in right of payment, to the
extent and in the manner to be set forth in the Senior Subordinated Indenture to
the prior payment in full in cash (or cash equivalents) of amounts then due on
"Senior Indebtedness" of the Company. Except to the extent set forth in the
applicable Prospectus Supplement, the Senior Subordinated Indenture will define
"Senior Indebtedness" of the Company as the principal of (and premium, if any),
and interest on (including, without limitation, interest accruing subsequent to
the filing of a petition under applicable Bankruptcy Law (as defined in the
Senior Subordinated Indenture) or the appointment of a Custodian (as defined in
the Senior Subordinated Indenture)), (i) any and all indebtedness and
obligations of the Company (including indebtedness of others guaranteed by the
Company), whether or not contingent and whether or not outstanding on the Issue
Date (as defined in the Senior Subordinated Indenture) or thereafter created,
incurred or assumed (including, without limitation, all charges, fees, expenses
and other amounts incurred by or owing to holders of such indebtedness), which
(a) is for money borrowed, (b) is evidenced by any bond, note, debenture or
similar instrument, (c) represents the unpaid balance on the purchase price of
any property, business or asset of any kind, (d) is an obligation of the Company
as lessee under any and all leases of property, equipment or other assets
required to be capitalized on the balance sheet of the lessee under generally
accepted accounting principles, (e) is a reimbursement obligation of the Company
with respect to letters of credit, (f) is an obligation of the Company with
respect to an interest swap obligation or foreign exchange agreement or (g) is
an obligation of another secured by a lien to which any of the properties or
assets (including, without limitation, leasehold interests and any other
tangible or intangible property rights) of the Company is subject, whether or
not the obligations secured thereby shall have been assumed by the Company or
will otherwise be the Company's legal liability and (ii) any deferrals,
amendments, renewals, extensions, modifications and refundings of any
indebtedness or obligations of the types referred to in clause (i) of this
paragraph; provided that Senior Indebtedness will not include (A) the Senior
Subordinated Debt Securities or the Subordinated Debt Securities, (B) the
Debentures, (C) any indebtedness or obligation of the Company (or the instrument
creating or evidencing it) which expressly provides that such indebtedness is
not superior in right of payment to the Senior Subordinated Debt Securities, or
which expressly provides that such indebtedness is subordinate in right of
payment to all other indebtedness of the Company (including the Senior
Subordinated Debt Securities), (D) any indebtedness or obligation of the Company
to any of its subsidiaries and (E) any indebtedness or obligation incurred by
the Company in connection with the purchase of assets, materials or services in
the ordinary course of business and which constitutes a trade payable.
The Subordinated Debt Securities will be unsecured obligations of the
Company and will be subordinate and junior in right of payment, to the extent
and in the manner to be set forth in the Subordinated Indenture to the prior
payment in full in cash (or cash equivalents) of amounts then due on "Senior
Indebtedness" of the Company. Except to the extent set forth in the applicable
Prospectus Supplement, the Subordinated Indenture will define "Senior
Indebtedness" of the Company as the principal of (premium, if any), and interest
on (including, without limitation, interest accruing subsequent to the filing of
a petition under applicable Bankruptcy Law (as defined in the Subordinated
Indenture) or the appointment of a Custodian (as defined in the Subordinated
Indenture)), (i) any and all indebtedness and obligations of the Company
(including indebtedness of others guaranteed by the
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<PAGE> 11
Company), whether or not contingent and whether or not outstanding on the Issue
Date (as defined in the Subordinated Indenture) or thereafter created, incurred
or assumed (including, without limitation, all charges, fees, expenses and other
amounts incurred by or owing to holders of such indebtedness), which (a) is for
money borrowed, (b) is evidenced by any bond, note, debenture or similar
instrument, (c) represents the unpaid balance on the purchase price of any
property, business or asset of any kind, (d) is an obligation of the Company as
lessee under any and all leases of property, equipment or other assets required
to be capitalized on the balance sheet of the lessee under generally accepted
accounting principles, (e) is a reimbursement obligation of the Company with
respect to letters of credit, (f) is an obligation of the Company with respect
to an interest swap obligation or foreign exchange agreement or (g) is an
obligation of another secured by a lien to which any of the properties or assets
(including, without limitation, leasehold interests and any other tangible or
intangible property rights) of the Company is subject, whether or not the
obligations secured thereby shall have been assumed by the Company or will
otherwise be the Company's legal liability and (ii) any deferrals, amendments,
renewals, extensions, modifications and refundings of any indebtedness or
obligations of the types referred to in clause (i) of this paragraph; provided
that Senior Indebtedness will not include (A) the Subordinated Debt Securities,
(B) the Debentures, (C) any indebtedness or obligation of the Company (or the
instrument creating or evidencing it) which expressly provides that such
indebtedness is not superior in right of payment to the Subordinated Debt
Securities, or which expressly provides that such indebtedness is subordinate in
right of payment to all other indebtedness of the Company (including the
Subordinated Debt Securities), (D) any indebtedness or obligation of the Company
to any of its subsidiaries and (E) any indebtedness or obligation incurred by
the Company in connection with the purchase of assets, materials or services in
the ordinary course of business and which constitutes a trade payable.
The Senior Subordinated Debt Securities will constitute "Senior
Indebtedness" with respect to the Subordinated Debt Securities and the
Debentures.
The Senior Subordinated Indenture will provide that the Company will
not issue any indebtedness that is subordinated in right of payment to any
Senior Indebtedness of the Company and is senior in right of payment to the
Senior Subordinated Debt Securities. The Subordinated Indenture will not contain
a similar provision.
By reason of such subordination, in the event of dissolution,
winding-up, liquidation, insolvency, bankruptcy or other similar proceedings,
upon any distribution of assets of the Company: (i) holders of Senior
Indebtedness will be entitled to be paid in full before payments may be made on
Senior Subordinated Debt Securities and the Subordinated Debt Securities and the
holders of Senior Subordinated Debt Securities and Subordinated Debt Securities
will be required to pay over their share of such distributions to the holders of
Senior Indebtedness until such Senior Indebtedness is paid in full, except that
holders of Senior Subordinated Debt Securities and Subordinated Debt Securities
may receive securities that are subordinated at least to the same extent as such
Senior Subordinated Debt Securities or Subordinated Debt Securities, as the case
may be; (ii) in addition, holders of Senior Subordinated Debt Securities will be
entitled to be paid in full before payments may be made on Subordinated Debt
Securities and holders of Subordinated Debt Securities will be required to pay
over their share of such distributions to the holders of Senior Subordinated
Debt Securities until such Senior Subordinated Debt Securities are paid in full,
except that holders of Subordinated Debt Securities may receive securities that
are subordinated at least to the same extent as such Subordinated Debt
Securities; and (iii) creditors of the Company who are not holders of Senior
Subordinated Debt Securities or Subordinated Debt Securities may recover less,
ratably, than holders of Senior Indebtedness and may recover more, ratably, than
the holders of the Senior Subordinated Debt Securities or Subordinated Debt
Securities. Accordingly, such subordination may result in a reduction or
elimination of payments to the holders of all Senior Subordinated Debt
Securities and Subordinated Debt Securities.
Except as may otherwise be described in the applicable Prospectus
Supplement, no payment of principal or interest on any of the Offered Debt
Securities that are Senior Subordinated Debt Securities or Subordinated Debt
Securities may be made by the Company, nor may the Company acquire any Offered
Debt Securities that are Senior Subordinated Debt Securities or Subordinated
Debt Securities for cash or property (other than securities that are
subordinated at least to the same extent as such Senior Subordinated Debt
Securities or Subordinated Debt Securities, as the case may be), in each case
except as set forth in the Indenture for such Offered Debt Securities, if (i) a
default in the payment of principal, premium, if any, or interest on any
Designated Senior Indebtedness
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<PAGE> 12
occurs and continues beyond the applicable period of grace, if any, specified in
the applicable instrument, lease, contract, agreement or other document
evidencing such Designated Senior Indebtedness, or (ii) a default, other than a
payment default, with respect to any Designated Senior Indebtedness occurs and
is continuing that permits the holders of the Designated Senior Indebtedness to
accelerate its maturity and the Trustee receives a notice of the default from a
person permitted to give such notice under the Indenture requesting that payment
of principal or interest with respect to the Offered Debt Securities that are
Senior Subordinated Debt Securities or Subordinated Debt Securities be
prohibited; provided that the foregoing will not prohibit payments made in
accordance with the defeasance or satisfaction and discharge provisions of the
applicable Indenture from monies deposited with the Trustee in accordance with
such provisions prior to any such default, judicial proceeding or notice.
However, except as may otherwise be described in the applicable Prospectus
Supplement, the Company may resume payments in respect of the Offered Debt
Securities that are Senior Subordinated Debt Securities or Subordinated Debt
Securities and may acquire such Senior Subordinated Debt Securities or
Subordinated Debt Securities upon the earlier of (a) the date upon which the
default or event of default with respect to such Designated Senior Indebtedness
is cured or waived or ceases to exist or (b) in the case of an event of default
referred to in (ii) above, the expiration of 179 days after notice is received
(a "Payment Blockage Period"); provided that the terms of the Indenture
otherwise permit the payment or acquisition of such Offered Debt Securities at
the time in question. Only one Payment Blockage Period may be commenced within
any consecutive 365-day period in respect of the Offered Debt Securities that
are Senior Subordinated Debt Securities or Subordinated Debt Securities, and in
no event will a Payment Blockage Period extend beyond 179 days from the date
payment on such Offered Debt Securities is due. For the purpose of the
provisions described in this paragraph, no default which, to the knowledge of
certain specified authorized persons, existed or was continuing on the date of
the commencement of any Payment Blockage Period by such person, shall be made
the basis for the commencement of a subsequent Payment Blockage Period by such
person, whether or not within any consecutive 365-day period, unless such
default is cured or waived or ceases to exist, or the benefits of the provisions
of the applicable Indenture described in this paragraph are waived in writing by
such authorized persons for a period of not less than 90 consecutive days.
Except to the extent set forth in the applicable Prospectus Supplement, the
Senior Subordinated Indenture and the Subordinated Indenture will define
"Designated Senior Indebtedness" of the Company as (i) Senior Indebtedness of
the Company permitted to be incurred under the applicable Indenture under any
institutional credit agreement (including, the Company's existing principal
credit facility) and (ii) any other Senior Indebtedness permitted to be incurred
under the applicable Indenture the principal amount of which is $25,000,000 or
more.
Except as may otherwise be described in the applicable Prospectus
Supplement, the subordination provision described herein will not prevent the
occurrence of any Event of Default under the Senior Subordinated Indenture or
the Subordinated Indenture.
The Indentures for the 1993 Senior Notes and the 1996 Senior Notes and
the Company's principal credit facility restrict the acquisition by the Company
of its subordinated indebtedness, including any Senior Subordinated Debt
Securities or Subordinated Debt Securities.
For example, the Indentures for the 1993 Senior Notes and the 1996
Senior Notes contain similar covenants limiting the amount of "restricted
payments" made by the Company, including the acquisition of subordinated debt.
The amount of restricted payments permitted to be made by the Company will vary
depending upon, among other things, the Company's cumulative earnings and
restricted payments made other than acquisitions of subordinated debt (e.g.,
repurchases of stock by the Company). The Company's principal credit facility
generally prohibits the Company from acquiring subordinated debt, except for a
limited dollar basket or using the proceeds of new subordinated debt or equity
securities.
In addition, the claims of third parties to the assets of the Company's
subsidiaries incurring obligations to such third parties will be superior to
those of the Company as a stockholder, and therefore the Offered Debt Securities
may be deemed to be effectively subordinated to the claims of such third
parties.
CERTAIN COVENANTS OF THE COMPANY APPLICABLE TO BOTH SENIOR AND SENIOR
SUBORDINATED DEBT SECURITIES
Affirmative Covenants. In addition to such other covenants, if any, as
may be described in the applicable Prospectus Supplement and as described herein
relating to the Senior Indenture and the Senior Subordinated Indenture, the
Indentures for the Offered Debt Securities will require the Company, subject to
certain limitations described therein, to, among other things, do the following:
(i) pay the principal of, and interest on, the Offered Debt Securities when the
same shall be due and payable; (ii) maintain an office or agency where Offered
Debt Securities may be surrendered for payment or registration of transfer or
exchange and where notices and demands to or upon the Company in respect of the
Offered Debt Securities and the Indentures may be served; (iii) deliver to the
Trustee copies of all reports filed with the Commission; (iv) deliver to the
Trustee annual officers' certificates with respect to the Company's compliance
with its obligations under each Indenture; (v) maintain its
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<PAGE> 13
corporate existence subject to the provisions described below under the captions
"-- Senior Indenture Covenants --Limitations on Mergers and Consolidations and
"-- Senior Subordinated Indenture Covenants -- Limitations on Mergers and
Consolidations;" (vi) pay its taxes when due except where such taxes are being
contested in good faith; and (vii) maintain insurance in at least such amounts
and against such risks as are usually and prudently insured against in the same
general area by companies engaged in the same or a similar business. Except as
may be set forth in the accompanying Prospectus Supplement and as described
herein relating to the Senior Indenture and the Senior Subordinated Indenture,
the Indentures will not restrict the business or operations of the Company or
its subsidiaries, limit their indebtedness or prohibit any liens, charges or
other encumbrances on any properties or other assets they may have from time to
time. See "-- Senior Indenture Covenants" and "-- Senior Subordinated Indenture
Covenants."
SENIOR INDENTURE COVENANTS
In addition to the other covenants set forth in the Prospectus and
except as otherwise provided in a Prospectus Supplement relating to the Offered
Senior Debt Securities, the Senior Indenture will include the following
covenants:
Reports to Holders of Senior Debt Securities. The Senior Indenture will
provide that as long as more than 10 percent of the original amount of the
Offered Senior Debt Securities 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
Commission all periodic reports as may be required thereunder and (ii) file with
the Commission, and with the Trustee within 15 days after the Company is
required to file the same with the Commission, copies of the periodic reports
which the Company may be required to file with the Commission 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 Offered
Senior Debt Securities, securities analysts and broker-dealers upon their
written request.
The Senior Indenture will also provide that in the event that (i) 10
percent or less of the original principal amount of the Offered Senior Debt
Securities are outstanding and (ii) the Company is not required to file with the
Commission such reports and other information referred to in the preceding
paragraph, 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 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.
The Senior Indenture will also provide that the Company will also
comply with the other provisions of Section 314(a) of the TIA.
Limitations on Restricted Payments. The Senior Indenture will provide
that 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 if at the time of such Restricted Payment:
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<PAGE> 14
(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, exceeds the sum
of: (1) $100,000,000, plus (2) 50 percent of the Company's Consolidated
Net Income accrued during the period (taken as a single period) since
January 1, 1997 (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 but only to the extent not applied under clause (d) of the
definition of "Restricted Payment" set forth herein, 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 Consolidated Net Income in clause (i)(2)
above and (y) that the making of such Investment constituted a
Restricted Investment made pursuant to the provisions of the Senior
Indenture described in this paragraph, 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, but only to the
extent that the granting of such guaranty constituted a "Restricted
Payment" under the definition thereof set forth in the Senior Indenture
and described herein; or
(ii) the Company would be unable to incur an additional $1.00
of Indebtedness under the Consolidated Fixed Charge Coverage Ratio set
forth under the caption "--Limitations on Additional Indebtedness"; or
(iii) a Default or Event of Default has occurred and is
continuing or occurs as a consequence thereof.
Notwithstanding the foregoing, the provisions of the Senior Indenture
described above 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 the Senior 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).
Limitations on Additional Indebtedness. The Senior Indenture will
provide that the Company will not, and will not permit any of its Restricted
Subsidiaries to, Incur any additional 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 (a) Company's Consolidated
Fixed Charge Coverage Ratio on the date thereof would be at least 2.0 to 1.0;
and (b) ratio of the Company's Indebtedness (excluding, for purposes of this
calculation, Non-Recourse Indebtedness) to Consolidated Tangible Net Worth on
the date thereof is not greater than 2.25 to 1.0.
Notwithstanding the foregoing, the provisions of the Senior Indenture
will not prevent: (i) in addition to the Indebtedness permitted to be Incurred
under clauses (ii), (iii) and (iv) of this sentence and Indebtedness permitted
to be Incurred under the provisions of the Senior Indenture described in the
preceding paragraph, the Company and/or any Restricted Subsidiary 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 clauses (i)(A) and (i)(B) of this paragraph) less
the amount of any Indebtedness repaid pursuant to the provisions of the Senior
Indenture described in clause (ii)(A) of the first paragraph under the caption
"-- Disposition of Proceeds of Asset Sales,"
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<PAGE> 15
(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 any 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.
Change of Control. The Senior Indenture will provide that, 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
Offered Senior Debt Securities 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 the "Change of
Control" covenant of the Senior Indenture.
In addition, the Senior Indenture will provide that, 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
such Holders of such occurrence and of such Holder's rights arising as a result
thereof. Such notice will contain all instructions and materials necessary to
enable such Holders to tender their Offered Senior Debt Securities to the
Company.
The Senior Indenture will also provide that:
(a) In the event of a Change of Control Offer, the Company
will only be required to accept Offered Senior Debt Securities in
denominations of $1,000 or integral multiples thereof.
(b) 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 Offered Senior Debt Securities tendered for
purchase in accordance with the provisions of the Senior Indenture
described under the caption "--Change of Control."
(c) 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 Offered
Senior Debt Securities 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 Offered Senior Debt Securities or portions thereof so accepted
and (iii) deliver to the Paying Agent an Officers' Certificate
identifying the Offered Senior Debt Securities or portions thereof
accepted for payment by the Company. The Paying Agent will promptly
authenticate and mail or deliver to Holders of Offered Senior Debt
Securities so accepted payment in an amount equal to the Change of
Control Price of the Offered Senior Debt Securities 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 Offered Senior
Debt Security equal in principal amount to any unpurchased portion of
the Offered Senior Debt Security surrendered. Any Offered Senior Debt
Securities 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
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<PAGE> 16
of Control Offer on the Change of Control Payment Date. For purposes of
the provisions of the Senior Indenture described above, 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.
(d) 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, if applicable.
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 Company's
failure to make any required repurchases in the event of a Change of Control
Offer will create an Event of Default under the Senior Indenture.
No quantitative or other established meaning has been given to the
phrase "all or substantially all" (which appears in the definition of Change of
Control) by courts which have interpreted this phrase in various contexts. In
interpreting this phrase, courts make a subjective determination as to the
portion of assets conveyed, considering such factors as the value of the assets
conveyed and the proportion of an entity's income derived from the assets
conveyed. Accordingly, there may be uncertainty as to whether a Holder of
Offered Senior Debt Securities can determine whether a Change of Control has
occurred and exercise any remedies such Holder may have upon a Change of
Control.
Limitations on Transactions with Affiliates. The Senior Indenture will
provide that the Company will not, and will not permit any of its Restricted
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 Restricted 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 Restricted Subsidiaries (each an "Affiliate
Transaction"), except on terms that are no less favorable to the Company or the
relevant Restricted 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.
The Senior Indenture will also provide that the Company will not, and
will not permit any of its Restricted Subsidiaries to, enter into an 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.
The Senior Indenture will also provide that the Company will not, and
will not permit any of its Restricted Subsidiaries to, enter into any 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 Restricted Subsidiary, as the case may be, from a financial point of
view.
The Senior Indenture will also provide that, 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 or employees of
the Company or its Subsidiaries pursuant to plans approved by the stockholders
of the Company, (iii) any Restricted Payment otherwise permitted under the
provisions of the Senior Indenture described under the caption "--Limitations on
Restricted Payments", (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 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 $50,000,000.
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<PAGE> 17
Limitations on Restrictions on Distributions from Restricted
Subsidiaries. The Senior Indenture will provide that 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, (c) any restrictions or encumbrances arising in
connection with the Existing Credit Facility; provided that any such
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 the Senior Indenture if such
agreement does not expressly restrict the ability of a Subsidiary of the Company
to pay dividends or make loans or advances, (f) reasonable and customary
borrowing base covenants set forth in credit agreements evidencing Indebtedness
otherwise permitted by the Senior 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 and (g) any restrictions under any instrument
creating or evidencing any Acquisition Debt that was permitted to be Incurred
pursuant to the Senior Indenture and the Offered Senior Debt Securities and
which (1) only apply to assets that were subject to such restrictions and
encumbrances prior to the acquisition of such assets by the Company or any of
its Restricted Subsidiaries and (2) were not created in connection with, or in
contemplation of, such acquisition, and any restrictions replacing those
permitted by this clause (g) which are not more restrictive than, and do not
extend to any Persons or assets other than the Persons or assets subject to, the
restrictions and encumbrances so replaced.
Maintenance of Consolidated Tangible Net Worth. The Senior Indenture
will provide that in the event that 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 Offered Senior Debt Securities (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 the "Maintenance of Consolidated Tangible Net Worth"
covenant of the Senior Indenture. To the extent that the aggregate amount of
Offered Senior Debt Securities 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 Offered Senior Debt Securities
tendered, or a portion thereof, for general corporate purposes.
The Senior Indenture will also provide that in the event that 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 such Holders
of such occurrence and of each Holder's rights arising as a result thereof. Such
notice will contain all instructions and materials necessary to enable Holders
to tender their Offered Senior Debt Securities to the Company.
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<PAGE> 18
The Senior Indenture will also provide that:
(a) In the event that the aggregate principal amount of
Offered Senior Debt Securities surrendered by Holders exceeds the Net
Worth Amount, the Company will select the Offered Senior Debt
Securities to be purchased on a pro rata basis from all Offered Senior
Debt Securities so surrendered, with such adjustments as may be deemed
appropriate by the Company so that only Offered Senior Debt Securities
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 Offered Senior Debt Securities are
purchased only in part will be issued new Offered Senior Debt
Securities equal in principal amount to the unpurchased portion of the
Offered Senior Debt Securities surrendered.
(b) 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 Offered Senior Debt Securities tendered for
purchase in accordance with the provisions of the Senior Indenture
described under the caption "--Maintenance of Consolidated Tangible Net
Worth."
(c) 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 Offered Senior Debt Securities
or portions thereof tendered pursuant to the Net Worth Offer (on a pro
rata basis if required pursuant to the provisions of the Senior
Indenture described in paragraph (a) above), (ii) deposit with the
Paying Agent money sufficient, in immediately available funds, to pay
the purchase price of all Offered Senior Debt Securities or portions
thereof so accepted and (iii) deliver to the Paying Agent with an
Officers' Certificate identifying the Offered Senior Debt Securities or
portions thereof accepted for payment by the Company. The Paying Agent
will promptly after acceptance mail or deliver to Holders of Offered
Senior Debt Securities so accepted payment in an amount equal to the
Net Worth Offer Price of the Offered Senior Debt Securities 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
Offered Senior Debt Security equal in principal amount to any
unpurchased portion of the Offered Senior Debt Security surrendered.
Any Offered Senior Debt Securities 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 the
provisions of the Senior Indenture described above, 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.
(d) 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.
There can be no assurance that sufficient funds will be available at
the time of a Net Worth Offer to make any required repurchases. The Company's
failure to make any required repurchases in the event of a Net Worth Offer will
create an Event of Default under the Senior Indenture.
Limitations on Mergers and Consolidations. The Senior Indenture will
provide that 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 thereunder or under the Offered Senior Debt Securities
(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
16
<PAGE> 19
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
Offered Senior Debt Securities and the Senior Indenture, (ii) immediately after
giving effect to such transaction, no Default or Event of Default under the
Senior Indenture 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, 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. However, any such
consolidation, merger, sale, lease, conveyance or disposition may result in a
Change of Control, thereby requiring the Company to make a Change of Control
Offer. See "-- Change of Control."
No quantitative or other established meaning has been given to the
phrase "all or substantially all" by courts which have interpreted this phrase
in various contexts. In interpreting this phrase, courts make a subjective
determination as to the portion of assets conveyed, considering such factors as
the value of the assets conveyed and the proportion of an entity's income
derived from the assets conveyed. Accordingly, there may be uncertainty as to
whether a Holder of Offered Senior Debt Securities can determine whether the
Company has sold, leased, conveyed or otherwise disposed of all or substantially
all of its assets and exercise any remedies such Holder may have upon the
occurrence of any such transaction.
Disposition of Proceeds of Asset Sales. The Senior Indenture will
provide, subject to the provisions of the Senior Indenture described under the
caption "-- Limitations on Mergers and Consolidations", that 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 noncash
consideration received by the Company and its Restricted Subsidiaries from all
previous Asset Sales since the Issue Date 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 the Issue
Date as follows: (A) to repay any outstanding Indebtedness of the Company that
is not subordinated to the Offered Senior Debt 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
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 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."
The Senior Indenture also will provide that, notwithstanding the
foregoing, 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 the provisions of the Senior Indenture described in the
preceding paragraph 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 the provisions of the
Senior Indenture described in the preceding paragraph 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.
The Senior Indenture will also provide that, 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
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<PAGE> 20
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 Offered Senior
Debt Securities 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 the
"Disposition of Proceeds of Asset Sales" covenant in the Senior Indenture. To
the extent that the aggregate amount of Offered Senior Debt Securities 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 Offered Senior Debt Securities 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.
In addition, the Senior Indenture will provide that, within 30 days
after the date on which the amount of Excess Proceeds equals $5,000,000 or more,
the Company (with 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 of such occurrence and of such Holders' rights arising as a result
thereof.
The Senior Indenture will also provide that:
(a) In the event the aggregate principal amount of Offered
Senior Debt Securities surrendered by Holders exceeds the amount of
Excess Proceeds, the Company will select the Offered Senior Debt
Securities to be purchased on a pro rata basis from all Offered Senior
Debt Securities so surrendered, with such adjustments as may be deemed
appropriate by the Company so that only Offered Senior Debt Securities
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 Offered Senior Debt Securities are
purchased only in part will be issued new Offered Senior Debt
Securities equal in principal amount to the unpurchased portion of the
Offered Senior Debt Securities surrendered.
(b) 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 Offered Senior Debt Securities tendered for
purchase in accordance with the provisions of the Senior Indenture
described under the caption "-- Disposition of Proceeds of Asset
Sales."
(c) 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 Offered Senior Debt
Securities or portions thereof tendered pursuant to the Excess Proceeds
Offer (on a pro rata basis if required pursuant to the provisions of
the Senior Indenture described in paragraph (a) above), (ii) deposit
with the Paying Agent money sufficient, in immediately available funds,
to pay the purchase price of all Offered Senior Debt Securities or
portions thereof so accepted and (iii) deliver to the Paying Agent an
Officers' Certificate identifying the Offered Senior Debt Securities or
portions thereof accepted for payment by the Company. The Paying Agent
will promptly mail or deliver to Holders of Offered Senior Debt
Securities so accepted payment in an amount equal to the Asset Sale
Offer Price of the Offered Senior Debt Securities 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 Offered Senior
Debt Security equal in principal amount to any unpurchased portion of
the Offered Senior Debt Security surrendered. Any Offered Senior Debt
Securities 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
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<PAGE> 21
Date. For purposes of the provisions of the Senior Indenture described
above, the Company will choose a Paying Agent which will not be the
Company or a Subsidiary thereof.
(d) 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.
(e) Whenever Excess Proceeds are received by the Company, and
prior to the allocation of such Excess Proceeds pursuant to the
provisions of the Senior Indenture described under the caption
"--Disposition of Proceeds of Asset Sales", 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 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.
There can be no assurance that sufficient funds will be available at
the time of an Excess Proceeds Offer to make any required repurchases. In
addition, the Company's principal credit facility imposes restrictions on the
Company's ability to purchase the Offered Senior Debt Securities. The Company's
failure to make any required repurchases in the event of an Excess Proceeds
Offer will create an Event of Default under the Senior Indenture.
Restrictions on Restricted Subsidiary Indebtedness. The Senior
Indenture will provide that the Company will not permit any Restricted
Subsidiaries to, directly or indirectly, Incur any additional Indebtedness after
the Issue Date 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 percent of the Company's Consolidated Tangible Net Assets.
Limitations and Restrictions on Issuance of Capital Stock of Restricted
Subsidiaries. The Senior Indenture will provide that the Company will not permit
any Restricted Subsidiaries to issue, or permit to be outstanding at any time,
Preferred Stock or any other Capital Stock constituting Disqualified Stock.
Limitations on Liens. The Senior Indenture will provide that 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 under the Senior
Indenture and the Offered Senior Debt Securities 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.
For purposes solely of this "Senior Indenture Covenants" section of
this Prospectus, the terms set forth below shall have the following meanings:
"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).
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<PAGE> 22
"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 the Senior 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 the Senior 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.
"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 the Offered
Senior Debt Securities or subsequently acquired in one transaction or a series
of related transactions, in which such Person and/or 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.
"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"
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<PAGE> 23
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 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.
"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.
"Consolidated 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 for such period, all as determined on a
consolidated basis for the Company and its Restricted Subsidiaries in accordance
with GAAP.
"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 includable 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
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(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) 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 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.
"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.
"Defeasance" has the meaning set forth in Section 11.02 of the Senior
Indenture.
"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 Offered Senior Debt Securities; 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 Offered Senior Debt 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 of the Senior Indenture described under the caption "Change
of Control" 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
Offered Senior Debt Securities pursuant to the "Change of Control" covenant set
forth in the Senior Indenture.
"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.
"Event of Default" has the meaning set forth under the caption "--
Events of Default."
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<PAGE> 25
"Existing Credit Facility" means the Amended and Restated Credit
Agreement, dated as of May 28, 1997, 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.
"Existing Indebtedness" means all of the Indebtedness of the Company
and its Subsidiaries that is outstanding on the Issue Date.
"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.
"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 an Offered Senior Debt 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 the Senior
Indenture or that fix the exchange rate in connection with indebtedness
denominated in a foreign currency and otherwise permitted by the Senior
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 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
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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.
"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 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 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.
"Investments" of any Person means all (i) investments by such Person in
any other Person in the form of loans, advances or capital contributions, (ii)
guarantees of Indebtedness or other obligations of any other Person by such
Person, (iii) purchases (or other acquisitions for consideration) by such Person
of Indebtedness, Capital Stock or other securities of any other Person and (iv)
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 Offered Senior
Debt Securities.
"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
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<PAGE> 27
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.
"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).
"Maturity", when used with respect to an Offered Senior Debt Security,
means the date on which the principal of such Offered Senior Debt Security or an
installment of principal becomes due and payable as therein provided or provided
in the Senior Indenture, 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.
"Non-Recourse Indebtedness" means Indebtedness of the Company or a
Restricted Subsidiary 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 the Company or such Restricted Subsidiary 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.
"Outstanding", when used with respect to Offered Senior Debt
Securities, means, as of the date of determination, all Offered Senior Debt
Securities theretofore authenticated and delivered under the Senior Indenture,
except:
(i) Offered Senior Debt Securities theretofore canceled by the
Trustee or delivered to the Trustee for cancellation;
(ii) Offered Senior Debt 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)
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<PAGE> 28
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
Offered Senior Debt Securities; provided that, if such Offered Senior
Debt Securities are to be redeemed, notice of such redemption has been
duly given pursuant to the Senior Indenture or provision therefor
satisfactory to the Trustee has been made;
(iii) Offered Senior Debt Securities as to which the
Defeasance has been effected pursuant to the defeasance provisions, if
any, of the Senior Indenture; and
(iv) Offered Senior Debt Securities which have been paid
pursuant to the "Mutilated, Destroyed, Lost and Stolen Securities"
section of the Senior Indenture or in exchange for or in lieu of which
other Offered Senior Debt Securities have been authenticated and
delivered pursuant to the Senior Indenture, other than any such Offered
Senior Debt Securities in respect of which there shall have been
presented to the Trustee proof satisfactory to it that such Offered
Senior Debt Securities are held by a bona fide purchaser in whose hands
such Offered Senior Debt Securities are valid obligations of the
Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Offered Senior Debt Securities have given
any request, demand, authorization, direction, notice, consent or waiver under
the Senior Indenture, (a) the principal amount of an Offered Senior Debt
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 of the Senior Indenture on the Issue Date, of the principal
amount of such Offered Senior Debt Security, and (b) Offered Senior Debt
Securities owned by the Company or any other obligor of the Offered Senior Debt
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 Offered Senior Debt
Securities which the Trustee knows to be so owned shall be so disregarded.
Offered Senior Debt 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 Offered Senior
Debt Securities and that the pledgee is not the Company or any other obligor
upon the Offered Senior Debt Securities or any Subsidiary of the Company or of
such other obligor.
"Paying Agent" means any Person, including the Company, authorized by
the Company to pay the principal of or any interest on any Offered Senior Debt
Security.
"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 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
the Senior 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,
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(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) 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 the Senior Indenture, (xiii) Liens
existing on the Issue Date, 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 the Senior
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 Offered Senior Debt
Securities, means the place or places where the principal of and interest on the
Offered Senior Debt Securities are payable.
"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
the Senior Indenture, but only to the extent that (i) the Refinancing
Indebtedness is subordinated to the Offered Senior Debt Securities 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, refinanced or extended, or (b) after the
maturity date of the Offered Senior Debt Securities, (iii) the portion, if any,
of the Refinancing Indebtedness that is scheduled to mature on or prior to the
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Maturity date of the Offered Senior Debt Securities 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 Offered Senior Debt Securities, (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
before or 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 before or after the repayment of an equal amount of
Indebtedness under the Existing Credit Facility which was Incurred pursuant to
the provisions of the Senior Indenture described in the first paragraph under
the caption "-- Limitations on Additional Indebtedness."
"Registrar" has the meaning set forth in the "Registration,
Registration of Transfer and Exchange" section of the Senior Indenture.
"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.
"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, defeasance 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 Offered Senior Debt Securities (provided, however, that the payment,
redemption, repurchase, defeasance or other acquisition or retirement of any
such subordinated Indebtedness by the Company or any Restricted Subsidiary on
its scheduled final Maturity date or on any other scheduled date for the payment
of any installment of principal thereof (whether pursuant to a sinking fund,
mandatory redemption or otherwise) shall not be a Restricted Payment); provided,
further, that with respect to the Company and its Subsidiaries, Restricted
Payments will not include (a) any payment or other obligation described in
clause (i), (ii) or (iii) above made to, or on behalf of or for the benefit of,
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 principal payment, redemption, repurchase, defeasance or other
acquisition or retirement of Indebtedness of the Company or its Restricted
Subsidiaries which is subordinated to the Offered Senior Debt Securities if the
consideration therefor consists solely of, or is the proceeds from, Indebtedness
subordinated to the Offered Senior Debt Securities to the same extent as the
Indebtedness being paid, redeemed, repurchased, defeased or otherwise acquired
or retired, or (d) any principal payment, redemption, repurchase, defeasance or
other acquisition or retirement of Indebtedness or Capital Stock of such Person
or its Subsidiaries if the consideration therefor consists solely of Capital
Stock (other than
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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 $50,000,000, or (f) any principal payment,
redemption, repurchase, defeasance, or other acquisition or retirement of the
Debentures.
"Restricted Subsidiary" means each of the Subsidiaries of the Company
which is not an Unrestricted Subsidiary.
"Security Register" has the meaning set forth in the "Registration,
Registration of Transfer and Exchange" section of the Senior Indenture.
"Stated Maturity", when used with respect to any Offered Senior Debt
Security or any installment of principal thereof or interest thereon, means the
date specified in such Offered Senior Debt Security as the fixed date on which
the principal of such Offered Senior Debt Security or such installment of
principal or interest is due and payable.
"Subsidiary" of any Person means any (i) 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) entity other
than a corporation of which such Person directly or indirectly beneficially owns
at least a majority of the Common Equity.
"Trustee" means the Person named as Trustee in the first paragraph of
the Senior Indenture until a successor Trustee shall have become such pursuant
to the applicable provisions of the Senior Indenture, and thereafter "Trustee"
shall mean or include each Person who is then a Trustee thereunder.
"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 provisions of the Senior Indenture
described under the caption "--Limitations on Additional Indebtedness" 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. Subject to the
foregoing, the Board of Directors of the Company also 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 provisions of the Senior Indenture described under the caption
"--Limitations on Restricted Payments" and (ii) immediately after giving effect
to such designation and reduction of amounts available for Restricted Payments
under such provisions, the Company and its Restricted Subsidiaries could Incur
$1.00 of additional Indebtedness under the Consolidated Fixed Charge Coverage
Ratio. 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.
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"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.
SENIOR SUBORDINATED INDENTURE COVENANTS
In addition to the other covenants set forth in the Prospectus and
except as otherwise provided in a Prospectus Supplement relating to the Offered
Senior Subordinated Debt Securities, the Senior Subordinated Indenture will
include the following covenants:
Reports to Holders of Senior Subordinated Debt Securities. The Senior
Subordinated Indenture will provide that as long as more than 10 percent of the
original amount of the Offered Senior Subordinated Debt Securities 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 Commission all periodic reports as may
be required thereunder and (ii) file with the Commission, and with the Trustee
within 15 days after the Company is required to file the same with the
Commission, copies of the periodic reports which the Company may be required to
file with the Commission 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 Offered Senior Subordinated Debt Securities,
securities analysts and broker-dealers upon their written request.
The Senior Subordinated Indenture will also provide that in the event
that (i) 10 percent or less of the original principal amount of the Offered
Senior Subordinated Debt Securities are outstanding and (ii) the Company is not
required to file with the Commission such reports and other information referred
to in the preceding paragraph, 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 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.
The Senior Subordinated Indenture will also provide that the Company
will also comply with the other provisions of Section 314(a) of the TIA.
Limitations on Restricted Payments. The Senior Subordinated Indenture
will provide that 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 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, exceeds the sum
of: (1) $100,000,000, plus (2) 50 percent of the Company's Consolidated
Net Income accrued during the period (taken as a single period) since
January 1, 1997 (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 but only to the extent not applied under clause (c) of the
definition of "Restricted Payment" set forth herein, plus (4) 100
percent of the principal amount
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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 Consolidated Net
Income in clause (i)(2) above and (y) that the making of such
Investment constituted a Restricted Investment made pursuant to the
provisions of the Senior Subordinated Indenture described in this
paragraph, 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, but only to the extent that the granting
of such guaranty constituted a "Restricted Payment" under the
definition thereof set forth in the Senior Subordinated Indenture and
described herein; or
(ii) the Company would be unable to incur an additional $1.00
of Indebtedness under the ratio of the Company's Indebtedness
(excluding Non-Recourse Indebtedness) to Consolidated Tangible Net
Worth set forth under the caption "--Limitations on Additional
Indebtedness"; or
(iii) a Default or Event of Default has occurred and is
continuing or occurs as a consequence thereof.
Notwithstanding the foregoing, the provisions of the Senior
Subordinated Indenture described above 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 the Senior Subordinated
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).
Limitations on Additional Indebtedness. The Senior Subordinated
Indenture will provide that the Company will not, and will not permit any of its
Restricted Subsidiaries to, Incur any additional 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 ratio of the Company's
Indebtedness (excluding, for purposes of this calculation, Non-Recourse
Indebtedness) to Consolidated Tangible Net Worth on the date thereof is not
greater than 3.0 to 1.0.
Notwithstanding the foregoing, the provisions of the Senior
Subordinated Indenture will not prevent: (i) in addition to the Indebtedness
permitted to be Incurred under clauses (ii), (iii) and (iv) of this sentence and
Indebtedness permitted to be Incurred under the provisions of the Senior
Subordinated Indenture described in the preceding paragraph, the Company and/or
any Restricted Subsidiary 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 $50,000,000
(excluding any Indebtedness referred to in clauses (i)(A), (i)(B), (ii), (iii)
and (iv) of this paragraph), (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 any Restricted Subsidiary
consistent with past practice and (iv) Restricted Subsidiaries from guaranteeing
Indebtedness of the Company or another Restricted Subsidiary.
Change of Control. The Senior Subordinated Indenture will provide that,
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
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Control Payment Date"), the Outstanding Offered Senior Subordinated Debt
Securities 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 the "Change of Control" covenant of
the Senior Subordinated Indenture.
In addition, the Senior Subordinated Indenture will provide that,
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 such Holders of such occurrence and of such Holder's rights
arising as a result thereof. Such notice will contain all instructions and
materials necessary to enable such Holders to tender their Offered Senior
Subordinated Debt Securities to the Company.
The Senior Subordinated Indenture will also provide that:
(a) In the event of a Change of Control Offer, the Company
will only be required to accept Offered Senior Subordinated Debt
Securities in denominations of $1,000 or integral multiples thereof.
(b) 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 Offered Senior Subordinated Debt Securities
tendered for purchase in accordance with the provisions of the Senior
Subordinated Indenture described under the caption "--Change of
Control."
(c) 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 Offered
Senior Subordinated Debt Securities 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 Offered Senior Subordinated Debt Securities or
portions thereof so accepted and (iii) deliver to the Paying Agent an
Officers' Certificate identifying the Offered Senior Subordinated Debt
Securities or portions thereof accepted for payment by the Company. The
Paying Agent will promptly authenticate and mail or deliver to Holders
of Offered Senior Subordinated Debt Securities so accepted payment in
an amount equal to the Change of Control Price of the Offered Senior
Subordinated Debt Securities 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 Offered Senior Subordinated Debt Security equal in
principal amount to any unpurchased portion of the Offered Senior
Subordinated Debt Security surrendered. Any Offered Senior Subordinated
Debt Securities 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 the
provisions of the Senior Subordinated Indenture described above, 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.
(d) 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, if applicable.
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 Company's
failure to make any required repurchases in the event of a Change of Control
Offer will create an Event of Default under the Senior Subordinated Indenture.
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For example, the Indentures for the 1993 Senior Notes and the 1996
Senior Notes contain similar covenants limiting the amount of "restricted
payments" made by the Company, including the acquisition of subordinated debt.
The amount of restricted payments permitted to be made by the Company will vary
depending upon, among other things, the Company's cumulative earnings and
restricted payments made other than acquisitions of subordinated debt (e.g.,
repurchases of stock by the Company). The Company's principal credit facility
generally prohibits the Company from acquiring subordinated debt, except for a
limited dollar basket or using the proceeds of new subordinated debt or equity
securities.
No quantitative or other established meaning has been given to the
phrase "all or substantially all" (which appears in the definition of Change of
Control) by courts which have interpreted this phrase in various contexts. In
interpreting this phrase, courts make a subjective determination as to the
portion of assets conveyed, considering such factors as the value of the assets
conveyed and the proportion of an entity's income derived from the assets
conveyed. Accordingly, there may be uncertainty as to whether a Holder of
Offered Senior Subordinated Debt Securities can determine whether a Change of
Control has occurred and exercise any remedies such Holder may have upon a
Change of Control.
Limitations on Transactions with Affiliates. The Senior Subordinated
Indenture will provide that the Company will not, and will not permit any of its
Restricted 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 Restricted
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 Restricted
Subsidiaries (each an "Affiliate Transaction"), except on terms that are no less
favorable to the Company or the relevant Restricted 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.
The Senior Subordinated Indenture will also provide that the Company
will not, and will not permit any of its Restricted Subsidiaries to, enter into
an 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.
The Senior Subordinated Indenture will also provide that the Company
will not, and will not permit any of its Restricted Subsidiaries to, enter into
any 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 Restricted Subsidiary, as the case may be, from a financial point
of view.
The Senior Subordinated Indenture will also provide that,
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 or employees of the Company or its Subsidiaries pursuant to plans
approved by the stockholders of the Company, (iii) any Restricted Payment
otherwise permitted under the provisions of the Senior Subordinated Indenture
described under the caption "--Limitations on Restricted Payments", (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 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 $50,000,000.
Limitations on Restrictions on Distributions from Restricted
Subsidiaries. The Senior Subordinated Indenture will provide that 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, (c) any restrictions or encumbrances arising in
connection with the Existing Credit Facility; provided
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that any such 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 the Senior Subordinated Indenture if
such agreement does not expressly restrict the ability of a Subsidiary of the
Company to pay dividends or make loans or advances, (f) reasonable and customary
borrowing base covenants set forth in credit agreements evidencing Indebtedness
otherwise permitted by the Senior Subordinated 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 and (g) any restrictions
under any instrument creating or evidencing any Acquisition Debt that was
permitted to be Incurred pursuant to the Senior Subordinated Indenture and the
Offered Senior Subordinated Debt Securities and which (1) only apply to assets
that were subject to such restrictions and encumbrances prior to the acquisition
of such assets by the Company or any of its Restricted Subsidiaries and (2) were
not created in connection with, or in contemplation of, such acquisition, and
any restrictions replacing those permitted by this clause (g) which are not more
restrictive than, and do not extend to any Persons or assets other than the
Persons or assets subject to, the restrictions and encumbrances so replaced.
Maintenance of Consolidated Tangible Net Worth. The Senior Subordinated
Indenture will provide that in the event that 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 Offered Senior Subordinated Debt Securities
(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 the "Maintenance of Consolidated Tangible Net Worth"
covenant of the Senior Subordinated Indenture. To the extent that the aggregate
amount of Offered Senior Subordinated Debt Securities 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 Offered Senior
Subordinated Debt Securities tendered, or a portion thereof, for general
corporate purposes.
The Senior Subordinated Indenture will also provide that in the event
that 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
such Holders of such occurrence and of each Holder's rights arising as a result
thereof. Such notice will contain all instructions and materials necessary to
enable Holders to tender their Offered Senior Subordinated Debt Securities to
the Company.
The Senior Subordinated Indenture will also provide that:
(a) In the event that the aggregate principal amount of
Offered Senior Subordinated Debt Securities surrendered by Holders
exceeds the Net Worth Amount, the Company will select the Offered
Senior Subordinated Debt Securities to be purchased on a pro rata basis
from all Offered Senior Subordinated Debt Securities so surrendered,
with such adjustments as may be deemed appropriate by the Company so
that only Offered Senior Subordinated Debt Securities 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 Offered Senior Subordinated Debt Securities are purchased
only in part will be issued new Offered
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Senior Subordinated Debt Securities equal in principal amount to the
unpurchased portion of the Offered Senior Subordinated Debt Securities
surrendered.
(b) 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 Offered Senior Subordinated Debt Securities
tendered for purchase in accordance with the provisions of the Senior
Subordinated Indenture described under the caption "--Maintenance of
Consolidated Tangible Net Worth."
(c) 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 Offered Senior Subordinated
Debt Securities or portions thereof tendered pursuant to the Net Worth
Offer (on a pro rata basis if required pursuant to the provisions of
the Senior Subordinated Indenture described in paragraph (a) above),
(ii) deposit with the Paying Agent money sufficient, in immediately
available funds, to pay the purchase price of all Offered Senior
Subordinated Debt Securities or portions thereof so accepted and (iii)
deliver to the Paying Agent an Officers' Certificate identifying the
Offered Senior Subordinated Debt Securities or portions thereof
accepted for payment by the Company. The Paying Agent will promptly
after acceptance mail or deliver to Holders of Offered Senior
Subordinated Debt Securities so accepted payment in an amount equal to
the Net Worth Offer Price of the Offered Senior Subordinated Debt
Securities 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 Offered Senior Subordinated Debt Security equal in
principal amount to any unpurchased portion of the Offered Senior
Subordinated Debt Security surrendered. Any Offered Senior Subordinated
Debt Securities 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 the provisions of the Senior
Subordinated Indenture described above, 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.
(d) 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.
For example, the Indentures for the 1993 Senior Notes and the 1996
Senior Notes contain similar covenants limiting the amount of "restricted
payments" made by the Company, including the acquisition of subordinated debt.
The amount of restricted payments permitted to be made by the Company will vary
depending upon, among other things, the Company's cumulative earnings and
restricted payments made other than acquisitions of subordinated debt (e.g.,
repurchases of stock by the Company). The Company's principal credit facility
generally prohibits the Company from acquiring subordinated debt, except for a
limited dollar basket or using the proceeds of new subordinated debt or equity
securities.
There can be no assurance that sufficient funds will be available at
the time of a Net Worth Offer to make any required repurchases. The Company's
failure to make any required repurchases in the event of a Net Worth Offer will
create an Event of Default under the Senior Subordinated Indenture.
Limitations on Mergers and Consolidations. The Senior Subordinated
Indenture will provide that 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 thereunder or under the Offered
Senior Subordinated Debt Securities (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 Offered Senior
Subordinated Debt Securities and the Senior Subordinated 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
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transaction and (iv) the ratio of the Company's Indebtedness (excluding
Non-Recourse Indebtedness) to Consolidated Tangible Net Worth set forth in the
Senior Subordinated Indenture and described under the caption "--Limitations on
Additional Indebtedness" 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 ratio. However, any such
consolidation, merger, sale, lease, conveyance or disposition may result in a
Change of Control, thereby requiring the Company to make a Change of Control
Offer. See "-- Change of Control."
No quantitative or other established meaning has been given to the
phrase "all or substantially all" by courts which have interpreted this phrase
in various contexts. In interpreting this phrase, courts make a subjective
determination as to the portion of assets conveyed, considering such factors as
the value of the assets conveyed and the proportion of an entity's income
derived from the assets conveyed. Accordingly, there may be uncertainty as to
whether a Holder of Offered Senior Subordinated Debt Securities can determine
whether the Company has sold, leased, conveyed or otherwise disposed of all or
substantially all of its assets and exercise any remedies such Holder may have
upon the occurrence of any such transaction.
For purposes solely of this "Senior Subordinated Indenture Covenants"
section of this Prospectus, the terms set forth below shall have the following
meanings:
"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 the Senior Subordinated 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 the Senior Subordinated
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.
"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.
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"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 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.
"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.
"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 includable 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) the sale or
other disposition (including, without limitation, dispositions pursuant to sale
and leaseback transactions) of any asset of the Company which is not sold or
disposed of in the ordinary course of business and (c) 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 Restricted Subsidiaries.
"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
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<PAGE> 40
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.
"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.
"Defeasance" has the meaning set forth in Section 11.02 of the Senior
Subordinated Indenture.
"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 Offered Senior Subordinated Debt Securities; 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 Offered Senior Subordinated
Debt 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 of the Senior Subordinated Indenture
described under the caption "Change of Control" 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 Offered Senior Subordinated Debt
Securities pursuant to the "Change of Control" covenant set forth in the Senior
Subordinated Indenture.
"Event of Default" has the meaning set forth under the caption "--
Events of Default."
"Existing Credit Facility" means the Amended and Restated Credit
Agreement, dated as of May 28, 1997, 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.
"Existing Indebtedness" means all of the Indebtedness of the Company
and its Subsidiaries that is outstanding on the Issue Date.
"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.
"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 an Offered Senior Subordinated
Debt Security is registered.
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"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 the Senior
Subordinated Indenture or that fix the exchange rate in connection with
indebtedness denominated in a foreign currency and otherwise permitted by the
Senior Subordinated 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 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.
"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 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.
"Investments" of any Person means all (i) investments by such Person in
any other Person in the form of loans, advances or capital contributions, (ii)
guarantees of Indebtedness or other obligations of any other Person by such
Person, (iii) purchases (or other acquisitions for consideration) by such Person
of Indebtedness, Capital Stock or other securities of any other Person and (iv)
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 Offered Senior
Subordinated Debt Securities.
"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.
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"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).
"Maturity", when used with respect to an Offered Senior Subordinated
Debt Security, means the date on which the principal of such Offered Senior
Subordinated Debt Security or an installment of principal becomes due and
payable as therein provided or provided in the Senior Subordinated Indenture,
whether at the Stated Maturity or by declaration of acceleration, call for
redemption or otherwise.
"Non-Recourse Indebtedness" means Indebtedness of the Company or a
Restricted Subsidiary 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 the Company or such Restricted Subsidiary 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.
"Outstanding", when used with respect to Offered Senior Subordinated
Debt Securities, means, as of the date of determination, all Offered Senior
Subordinated Debt Securities theretofore authenticated and delivered under the
Senior Subordinated Indenture, except:
(i) Offered Senior Subordinated Debt Securities theretofore
canceled by the Trustee or delivered to the Trustee for cancellation;
(ii) Offered Senior Subordinated Debt 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 Offered Senior Subordinated Debt Securities; provided
that, if such Offered Senior Subordinated Debt Securities are to be
redeemed, notice of such redemption has been duly given pursuant to the
Senior Subordinated Indenture or provision therefor satisfactory to the
Trustee has been made;
(iii) Offered Senior Subordinated Debt Securities as to which
the Defeasance has been effected pursuant to the defeasance provisions,
if any, of the Senior Subordinated Indenture; and
(iv) Offered Senior Subordinated Debt Securities which have
been paid pursuant to the "Mutilated, Destroyed, Lost and Stolen
Securities" section of the Senior Subordinated Indenture or in exchange
for or in lieu of which other Offered Senior Subordinated Debt
Securities have been authenticated and delivered pursuant to the Senior
Subordinated Indenture, other than any such Offered Senior Subordinated
Debt Securities in respect of which there shall have been presented to
the Trustee proof satisfactory to it that such Offered Senior
Subordinated Debt Securities are held by a bona fide purchaser in whose
hands such Offered Senior Subordinated Debt Securities are valid
obligations of the Company;
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provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Offered Senior Subordinated Debt Securities
have given any request, demand, authorization, direction, notice, consent or
waiver under the Senior Subordinated Indenture, (a) the principal amount of an
Offered Senior Subordinated Debt 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 of the Senior Subordinated
Indenture on the Issue Date, of the principal amount of such Offered Senior
Subordinated Debt Security, and (b) Offered Senior Subordinated Debt Securities
owned by the Company or any other obligor of the Offered Senior Subordinated
Debt 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 Offered Senior
Subordinated Debt Securities which the Trustee knows to be so owned shall be so
disregarded. Offered Senior Subordinated Debt 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 Offered Senior Subordinated Debt Securities and that the
pledgee is not the Company or any other obligor upon the Offered Senior
Subordinated Debt Securities or any Subsidiary of the Company or of such other
obligor.
"Paying Agent" means any Person, including the Company, authorized by
the Company to pay the principal of or any interest on any Offered Senior
Subordinated Debt Security.
"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 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
the Senior Subordinated Indenture.
"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 Offered Senior
Subordinated Debt Securities, means the place or places where the principal of
and interest on the Offered Senior Subordinated Debt Securities are payable.
"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
the Senior Subordinated Indenture, but only to the extent that (i) the
Refinancing Indebtedness is subordinated to the Offered Senior Subordinated Debt
Securities 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, refinanced or
extended, or (b) after the maturity date of the Offered Senior Subordinated Debt
Securities, (iii) the portion, if any, of the Refinancing Indebtedness
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that is scheduled to mature on or prior to the Maturity date of the Offered
Senior Subordinated Debt Securities 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 Offered Senior Subordinated Debt Securities, (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
before or 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 before or after the repayment of an equal amount of
Indebtedness under the Existing Credit Facility which was Incurred pursuant to
the provisions of the Senior Subordinated Indenture described in the first
paragraph under the caption "-- Limitations on Additional Indebtedness."
"Registrar" has the meaning set forth in the "Registration,
Registration of Transfer and Exchange" section of the Senior Subordinated
Indenture.
"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.
"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, defeasance 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 Offered Senior Subordinated Debt Securities (provided, however, that the
payment, redemption, repurchase, defeasance or other acquisition or retirement
of any such subordinated Indebtedness by the Company or any Restricted
Subsidiary on its scheduled final Maturity date or on any other scheduled date
for the payment of any installment of principal thereof (whether pursuant to a
sinking fund, mandatory redemption or otherwise) shall not be a Restricted
Payment); provided, further, that with respect to the Company and its
Subsidiaries, Restricted Payments will not include (a) any payment or other
obligation described in clause (i), (ii) or (iii) above made to, or on behalf of
or for the benefit of, 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 principal payment, redemption, repurchase,
defeasance or other acquisition or retirement of Indebtedness of the Company or
its Restricted Subsidiaries which is subordinated to the Offered Senior
Subordinated Debt Securities if the consideration therefor consists solely of,
or is the proceeds from, Indebtedness subordinated to the Offered Senior
Subordinated Debt Securities to the same extent as the Indebtedness being paid,
redeemed, repurchased, defeased or otherwise acquired or retired, or (d) any
principal payment, redemption, repurchase, defeasance or other acquisition or
retirement of Indebtedness or Capital Stock of such Person or its Subsidiaries
if the consideration therefor consists solely of Capital Stock (other
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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 $50,000,000 or (f) any principal payment,
redemption repurchase, defeasance, or other acquisition or retirement of the
Debentures.
"Restricted Subsidiary" means each of the Subsidiaries of the Company
which is not an Unrestricted Subsidiary.
"Security Register" has the meaning set forth in the "Registration,
Registration of Transfer and Exchange" section of the Senior Subordinated
Indenture.
"Stated Maturity", when used with respect to any Offered Senior
Subordinated Debt Security or any installment of principal thereof or interest
thereon, means the date specified in such Offered Senior Subordinated Debt
Security as the fixed date on which the principal of such Offered Senior
Subordinated Debt Security or such installment of principal or interest is due
and payable.
"Subsidiary" of any Person means any (i) 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) entity other
than a corporation of which such Person directly or indirectly beneficially owns
at least a majority of the Common Equity.
"Trustee" means the Person named as Trustee in the first paragraph of
the Senior Subordinated Indenture until a successor Trustee shall have become
such pursuant to the applicable provisions of the Senior Subordinated Indenture,
and thereafter "Trustee" shall mean or include each Person who is then a Trustee
thereunder.
"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 provisions of the Senior
Subordinated Indenture described under the caption "--Limitations on Additional
Indebtedness" 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 ratio of the Company's Indebtedness (excluding
Non-Recourse Indebtedness) to Consolidated Tangible Net Worth set forth in the
first paragraph under the caption "--Limitations on Additional Indebtedness."
Subject to the foregoing, the Board of Directors of the Company also 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 provisions of the Senior Subordinated Indenture described
under the caption "--Limitations on Restricted Payments" and (ii) immediately
after giving effect to such designation and reduction of amounts available for
Restricted Payments under such provisions, the Company and its Restricted
Subsidiaries could Incur $1.00 of additional Indebtedness under the ratio of the
Company's Indebtedness (excluding Non-Recourse Indebtedness) to Consolidated
Tangible Net Worth set forth in the first paragraph under the caption
"--Limitations on Additional Indebtedness." 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
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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.
REDEMPTION
If and to the extent set forth in the applicable Prospectus Supplement,
the Company will have the right to redeem any class of Offered Debt Securities,
in whole or from time to time in part, after the date and at the redemption
prices set forth in the applicable Prospectus Supplement.
EVENTS OF DEFAULT
Except as may be described in the accompanying Prospectus Supplement,
an "Event of Default" will be defined in each Indenture for the Offered Debt
Securities as 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 any 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 such
Offered Debt Security 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
such Offered Debt Security when the same becomes due and payable at
Maturity, upon acceleration or otherwise;
(iii) the failure by the Company to make any sinking fund
payment when the same becomes due and payable;
(iv) the failure by the Company to comply with any of its
agreements or covenants in, or provisions of, such Offered Debt
Security or the applicable Indenture relating to such Offered Debt
Security (other than an agreement or covenant a default in whose
performance or whose breach is elsewhere in such Indenture specifically
dealt with) and such failure continues for the period and after the
notice specified below;
(v) the acceleration of any indebtedness for borrowed money
or guarantees thereof (other than Non-Recourse Indebtedness (as defined
in the applicable Indenture)) of the Company or any of its subsidiaries
that has an outstanding principal amount of $10,000,000 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 the provisions of the applicable Indenture described in
this clause (v) relating to such Offered Debt Securities will be deemed
to be cured and any acceleration under such Indenture will be deemed
withdrawn or rescinded;
(vi) the failure by the Company or any of its subsidiaries to
make any principal or interest payment in respect of indebtedness for
borrowed money or guarantees thereof (other than Non-Recourse
Indebtedness) of the Company or any of its subsidiaries with an
outstanding aggregate principal amount of $10,000,000 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);
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(vii) a final judgment or judgments that exceed $10,000,000
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 are 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 in the
supplemental indenture under which the applicable class of Offered Debt
Securities are issued or in the form of such Offered Debt Security.
For purposes hereof, "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, all computed in accordance with generally accepted
accounting principles.
The Indentures relating to the Offered Debt Securities will provide
that 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.
The Indentures relating to the Offered Debt Securities will provide
that a default as described in sub-clause (iv) above 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 then outstanding applicable class of Offered
Debt Securities under such Indenture, or such other percentage as may be
specified in the applicable Prospectus Supplement, 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, or for such other period as may be specified in the
applicable Prospectus Supplement. 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 the applicable time period, it ceases.
Except to the extent otherwise stated in the applicable Prospectus
Supplement, the Indentures for each class of Offered Debt Securities will
provide that if an Event of Default (other than an Event of Default described in
sub-clause (viii) or (ix) above) shall have occurred and be continuing under the
Indenture, the Trustee (after receiving indemnities from the holders of such
Offered Debt Securities to its satisfaction) by notice to the
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<PAGE> 48
Company, or the holders of at least 25 percent in principal amount of such
Offered Debt Securities then outstanding, or such other percentage as may be
specified in the Prospectus Supplement, by notice to the Company and the
Trustee, may declare all of such Offered Debt Securities to be due and payable
immediately. Upon such declaration, the amounts due and payable on such Offered
Debt Securities, as determined pursuant to the provisions of the "Acceleration"
section of the Indenture, will be due and payable immediately. Except to the
extent otherwise stated in the Prospectus Supplement, the Indentures for the
Offered Debt Securities will provide that if an Event of Default described in
sub-clause (viii) or (ix) above occurs, such Offered Debt Securities 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 principal amount of such Offered Debt Securities then
outstanding, or such other percentage as may be specified in the applicable
Prospectus Supplement, 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 of or interest on such
Offered Debt Securities) if the rescission would not conflict with any judgment
or decree and if all existing Events of Default have been cured or waived.
Except to the extent otherwise stated in the applicable Prospectus
Supplement, the Indentures for the Offered Debt Securities will contain a
provision entitling the Trustee, subject to the duty of the Trustee during a
default to act with the required standard of care, to be indemnified by the
holders of the applicable class of Offered Debt Securities before proceeding to
exercise any right or power under the Indenture at the request of such holders.
Subject to such provisions in the Indentures for the Offered Debt Securities for
the indemnification of the Trustee and certain other limitations, the holders of
a majority in principal amount of the applicable class of Offered Debt
Securities then outstanding, or such other percentage as may be specified in the
applicable Prospectus Supplement, may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred on the Trustee. The Trustee may withhold from the
holders of such Offered Debt Securities notice of any continuing default or
Event of Default (except any default or Event of Default in payment of principal
or interest on the Offered Debt Securities) if the Trustee determines that
withholding such notice is in the holders' interest.
Except to the extent otherwise stated in the applicable Prospectus
Supplement, the Indentures for the Offered Debt Securities will provide that no
holder of Offered Debt Securities may institute any action against the Company
under the Indenture unless (i) such holder previously has given the Trustee
written notice of the default and continuance thereof, (ii) the holders of not
less than 25 percent in principal amount of the applicable class of Offered Debt
Securities then outstanding, or such other percentage as may be specified in the
applicable Prospectus Supplement, have requested the Trustee to institute such
action and offered the Trustee reasonable indemnity, (iii) the Trustee has not
instituted such action within 60 days of the request and (iv) the Trustee has
not received direction inconsistent with such written request from the holders
of a majority in principal amount of such Offered Debt Securities then
outstanding, or such other amount as may be specified in the applicable
Prospectus Supplement. Notwithstanding any other provision of the applicable
Indenture, the right of any holder of the applicable class of Offered Debt
Securities to receive payment of principal and interest on such Offered Debt
Security on or after the respective due dates thereof, or, subject to the
provisions of the applicable Indenture described in the preceding sentence, 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 such holder.
The Indentures and the Offered Debt Securities will provide that no
director, officer or employee of the Company, as such, will have any liability
for any obligations of the Company under the Offered Debt Securities or the
Indentures. The Indentures and the Offered Debt Securities will also each
provide that each holder of the Offered Debt Securities, by accepting the
Offered Debt Securities, waives and releases all such liability.
Except to the extent otherwise stated in the Prospectus Supplement, the
Indentures for the Offered Debt Securities will provide that the Company will be
required to deliver to the Trustee an annual statement regarding compliance with
the Indenture, and include in such statement, if any officer of the Company is
aware of any default or Event of Default, a statement specifying such default or
Event of Default and what action the Company is taking or proposes to take with
respect thereto. In addition, the Company will be required to deliver to the
Trustee prompt written notice of the occurrence of any default or Event of
Default.
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DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE
The Company can discharge or defease its obligations under the
Indentures for the Offered Debt Securities as set forth below.
The Company may discharge certain obligations to holders of the Notes
that have not already been delivered to the Trustee for cancellation and that
have either become due and payable or are by their terms due and payable within
one year by irrevocably depositing with the Trustee cash or U.S. Government
Obligations, or a combination thereof, as trust funds in an amount sufficient to
pay at maturity the principal of and interest on the Notes.
The Company may also discharge any and all of its obligations to
holders of the Offered Debt Securities at any time ("defeasance"), but may not
thereby avoid its duty to register the transfer or exchange of the Offered Debt
Securities, to replace any temporary, mutilated, destroyed, lost or stolen Notes
or to maintain an office or agency in respect of the Offered Debt Securities and
certain other obligations. Alternatively, the Company may be released with
respect to the Offered Debt Securities from the obligations imposed by certain
covenants of the Senior Indenture or the Senior Subordinated Indenture described
under the caption "-- Certain Covenants of the Company", "-- Senior Indenture
Covenants" and "-- Senior Subordinated Indenture Covenants" herein and omit to
comply with such covenants without creating an Event of Default ("covenant
defeasance"). Defeasance or covenant defeasance may be effected only if, among
other things: (a) the Company irrevocably deposits with the Trustee cash or U.S.
Government Obligations, or a combination thereof, as trust funds in an amount
certified to be sufficient to pay at maturity the principal of and interest on
all outstanding Notes; (b) no Event of Default under the Offered Debt Securities
has occurred and is then continuing; (c) the defeasance or covenant defeasance
will not result in an event of default under any agreement to which the Company
is a party or by which it is bound; and (d) the Company delivers to the Trustee
an opinion of counsel to the effect that the holders of the Offered Debt
Securities will not recognize income, gain or loss for federal income tax
purposes as a result of such defeasance or covenant defeasance will not
otherwise alter such holders' federal income tax treatment of principal and
interest payments on the Offered Debt Securities.
For purposes hereof, "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) 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.
TRANSFER AND EXCHANGE
A holder of an Offered Debt Security will be able to transfer or
exchange the Offered Debt Securities only in accordance with the provisions of
the applicable Indenture. The registrar may require a holder, among other
things, to furnish appropriate endorsements and transfer documents, and to pay
any taxes and fees required by law or permitted by such Indenture.
MODIFICATIONS TO THE INDENTURES
Except as may otherwise be set forth in the applicable Prospectus
Supplement, the Indenture for the Offered Debt Securities will provide that the
Company and the Trustee may enter into supplemental indentures without the
consent of the holders of Offered Debt Securities to, among other things: (i)
cure any ambiguity, defect or inconsistency in the applicable Indenture for such
Offered Debt Securities; (ii) comply with the
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"Limitations on Mergers and Consolidations" section set forth in such Indenture;
(iii) provide for uncertificated Offered Debt Securities in addition to
certificated Offered Debt Securities; (iv) make any change that does not
adversely affect the legal rights under the Indenture of holders of Offered Debt
Securities; (v) add to the covenants of the Company for the benefit of the
holders of Offered Debt Securities or to surrender any right or power in the
Indenture conferred upon the Company; (vi) add any additional Events of Default
for the benefit of the holders of Offered Debt Securities; (vii) change or
eliminate any of the provisions of each Indenture before Offered Debt Securities
are issued thereunder; (viii) establish the form or terms of the Offered Debt
Securities; (ix) evidence and provide for the acceptance of appointment under
the Indenture of a successor Trustee with respect to the Offered Debt Securities
and to add to or change any of the provisions of the Indenture as shall be
necessary to provide for or facilitate the administration of the trusts under
the Indenture by more than one Trustee; (x) supplement any of the provisions of
the Indentures to such extent as shall be necessary to permit or facilitate the
defeasance or discharge of Offered Debt Securities pursuant to the applicable
Indenture; provided that any such action shall not adversely affect the
interests of the holders of Offered Debt Securities; or (xi) comply with the
qualification of the Indenture under the TIA.
Except as may otherwise be set forth in the applicable Prospectus
Supplement, the Indentures for the Offered Debt Securities also will contain
provisions permitting the Company and the Trustee, with the consent of the
holders of not less than a majority in principal amount of each class of Offered
Debt Securities outstanding, or such other percentage as may be specified in the
applicable Prospectus Supplement, to add any provision to, change in any manner
or eliminate any of the provisions of the Indentures for the Offered Debt
Securities or modify in any manner the rights of the holders of the Offered Debt
Securities so affected; provided that the Company and the Trustee may not,
without the consent of the holder of each outstanding Offered Debt Security
affected thereby, do, among other things, any of the following: (i) change the
stated maturity of the principal of, or any installment of principal of, or
interest on, any Offered Debt 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 where any Offered Debt Security or
interest thereon is payable, or change the coin or currency in which any Offered
Debt 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); (ii) reduce the percentage
in principal amount of the outstanding Offered Debt Securities, 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 the
Indenture or certain defaults thereunder and their consequences provided for in
the Indenture; (iii) modify Section 13.02(d)(iii) or 8.07 of the Indentures; or
(iv) modify the ranking or priority of the Offered Debt Securities in a manner
adverse to the holders of Offered Debt Securities. The Senior Subordinated
Indenture and the Subordinated Indenture may not be amended to alter the
subordination of any outstanding Senior Subordinated Debt Securities or
Subordinated Debt Securities without the consent of each holder of Senior
Indebtedness then outstanding that would be adversely affected thereby.
Except as provided in the applicable Prospectus Supplement, the holders
of at least a majority in principal amount of each class of the then outstanding
Offered Debt Securities may on behalf of the holders of all Offered Debt
Securities, or such other amount as may be specified in the applicable
Prospectus Supplement, waive (i) insofar as the Offered Debt Securities are
concerned, compliance by the Company with certain covenants of the applicable
Indenture and (ii) any past default under the Indenture with respect to the
Offered Debt Securities, except a default in the payment of the principal of or
interest on any Offered Debt Security or in respect of a provision which under
the Indenture cannot be modified or amended without the consent of the holder of
each outstanding Offered Debt Security affected.
CONCERNING THE TRUSTEE
IBJ Schroder Bank & Trust Company is to be Trustee under each of the
Indentures and has been appointed by the Company as paying agent and registrar.
The Indenture will provide that upon execution and delivery of the Debt
Securities by the Company the Trustee shall authenticate and deliver the Debt
Securities in accordance with the order of the Company. IBJ Schroder Bank &
Trust Company is the trustee under the Indenture, dated as of June 21, 1993,
relating to the 1993 Senior Notes and the Indenture, dated as of February 16,
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<PAGE> 51
1996, relating to the 1996 Senior Notes, and it or any other Trustee, or their
respective affiliates, may from time to time have lender or other business
arrangements with the Company. The Indentures will contain certain limitations
on the rights of the Trustee, should it or its affiliates become a creditor of
the Company, to obtain payment of claims in certain cases or to realize on
certain property received in respect of any such claim as security or otherwise.
The Trustee and its affiliates will be permitted to engage in other
transactions; however, if they acquire any conflicting interest, the conflict
must be eliminated or the Trustee must resign.
GOVERNING LAW
Unless otherwise specified in the accompanying Prospectus Supplement,
the Indentures for the Offered Debt Securities and the Offered Debt Securities
will be governed by the laws of the State of New York.
PLAN OF DISTRIBUTION
The Company may sell the Debt Securities offered hereby (i) through
agents, (ii) through underwriters, (iii) through dealers, (iv) directly to
purchasers (through a specific bidding or auction process or otherwise) or (v)
through a combination of any such methods of sale. The distribution of Debt
Securities may be effected from time to time in one or more transactions at a
fixed price or prices, which may be changed, or at market prices prevailing at
the time of sale, at prices relating to such prevailing market prices or at
negotiated prices.
Each Prospectus Supplement will set forth the terms of the offering of
the particular issuance of Debt Securities to which such Prospectus Supplement
relates, including (i) the name or names of any underwriters or agents with whom
the Company has entered into arrangements with respect to the sale of such Debt
Securities, (ii) the initial public offering or purchase price of such Debt
Securities, (iii) any underwriting discounts, commissions and other items
constituting underwriters' compensation from the Company and any other
discounts, concessions or commissions allowed or reallowed or paid by any
underwriters to other dealers, (iv) any commissions paid to any agents, (v) the
net proceeds to the Company, and (vi) the securities exchange, if any, on which
such Debt Securities will be listed.
If an underwriter or underwriters are utilized in the sale of Debt
Securities, the Company will execute an underwriting agreement with such
underwriter or underwriters at the time an agreement for such sale is reached,
and the names of the specific managing underwriter or underwriters, as well as
any other underwriters, and the terms of the transactions, including
compensation of the underwriters and dealers, if any, will be set forth in the
applicable Prospectus Supplement, which will be used by the underwriters to make
resales of the Debt Securities.
If a dealer is utilized in the sale of Debt Securities, the Company
will sell such Debt Securities to the dealer, as principal. The dealer may then
resell such Debt Securities to the public at varying prices to be determined by
such dealer at the time of resale. The name of the dealer and the terms of the
transactions will be set forth in the applicable Prospectus Supplement relating
thereto.
Offers to purchase the Debt Securities may be solicited directly by the
Company and sales thereof may be made by the Company directly to institutional
investors or others. The terms of any such sales, including the terms of any
bidding or auction process, if utilized, will be described in the applicable
Prospectus Supplement.
Agents, underwriters and dealers may be entitled under agreements which
may be entered into with the Company to indemnification by the Company against
certain liabilities, including liabilities under the Securities Act, and any
such agents, underwriters or dealers, or their affiliates may be customers of,
engage in transactions with or perform services for, the Company in the ordinary
course of business.
If so indicated in the applicable Prospectus Supplement, the Company
will authorize agents, underwriters and other persons to solicit offers by
certain institutions to purchase Debt Securities from the Company pursuant to
contracts providing for payment and delivery on a future date. Institutions with
which such contracts may be made include commercial and savings banks, insurance
companies, pension funds, investment companies, educational and charitable
institutions and others, but in all cases such institutions must be approved by
the
49
<PAGE> 52
Company. The obligations of any purchaser under any such contract will be
subject to the condition that the purchase of the Debt Securities shall not at
the time of delivery be prohibited under the laws of the jurisdiction to which
such purchaser is subject. The underwriters and such other agents will not have
any responsibility in respect of the validity or performance of such contracts.
The Company may grant underwriters who participate in the distribution
of Debt Securities an option to purchase additional Debt Securities to cover
over-allotments, if any.
The place and date of delivery for Debt Securities in respect of which
this Prospectus is being delivered will be set forth in the applicable
Prospectus Supplement.
Unless otherwise indicated in the applicable Prospectus Supplement, the
Debt Securities in respect of which this Prospectus is being delivered will be a
new issue of securities, will not have an established trading market when issued
and will not be listed on any securities exchange. Any underwriters or agents to
or through whom such Debt Securities are sold by the Company for public offering
and sale may make a market in such Debt Securities, but such underwriters or
agents will not be obligated to do so and may discontinue any market making at
any time without notice. No assurance can be given as to the liquidity of the
trading market for any such Debt Securities.
LEGAL MATTERS
The legality of the Debt Securities will be passed upon for the Company
by Kaye, Scholer, Fierman, Hays & Handler, LLP, New York, New York. Certain
legal matters in connection with offerings made by this Prospectus may be passed
on for the underwriters, if any, by counsel named in the Prospectus Supplement.
EXPERTS
The audited financial statements of the Company and subsidiaries
incorporated by reference in this Prospectus and elsewhere in the Registration
Statement have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their reports with respect thereto, and are so
included herein in reliance upon the authority of said firm as experts in giving
said reports.
50
<PAGE> 53
================================================================================
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT, AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR BY ANY UNDERWRITER, AGENT OR DEALER. THIS
PROSPECTUS AND ANY PROSPECTUS SUPPLEMENT SHALL NOT CONSTITUTE AN OFFER TO SELL
OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY
JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS AND
ANY PROSPECTUS SUPPLEMENT SHALL NOR ANY SALE MADE HEREUNDER OR THEREUNDER SHALL,
UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN
THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THEREOF OR THAT THE
INFORMATION CONTAINED HEREIN IS CORRECT AT ANY TIME SUBSEQUENT TO THE DATE
HEREOF OR THEREOF.
TABLE OF CONTENTS
PAGE
----
Available Information 2
Incorporation of Certain Information
by Reference 2
The Company 3
Use of Proceeds 3
Consolidated Ratio of Earnings to Fixed
Charges 3
Description of Debt Securities 4
Plan of Distribution 48
Legal Matters 49
Experts 49
================================================================================
================================================================================
U.S. HOME CORPORATION
$325,000,000
DEBT SECURITIES
PROSPECTUS
,199
================================================================================
<PAGE> 54
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses in connection with the offering are as follows:
<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee............... $ 90,909.09
Accounting Fees and Expenses...................................... $ 60,000(1)
Blue Sky Fees and Expenses (including counsel fees)............... $ 5,000(1)
Legal Fees and Expenses........................................... $ 150,000(1)
Printing and Engraving Expenses................................... $ 50,000(1)
Trustee Fees and Expenses......................................... $ 30,000(1)
Rating Agency Fees................................................ $ 125,000(1)
Miscellaneous..................................................... $ 10,000(1)
-----------
Total........................................................ $520,909.09(1)
===========
</TABLE>
- ----------------
(1) Estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's Restated Certificate of Incorporation, as amended (the
"Certificate of Incorporation"), provides, as do the charters of many other
publicly held companies incorporated in the State of Delaware, that the personal
liability of directors of the Company to the Company is eliminated to the
maximum extent permitted by applicable law. The Certificate of Incorporation
provides for the indemnification of the directors, officers, employees, and
agents of the Company and its subsidiaries to the full extent that may be
permitted by applicable law from time to time. Certain provisions of the
Certificate of Incorporation protect the Company's directors against personal
liability for monetary damages resulting from breaches of their fiduciary duty
of care, except as set forth below. Under the Delaware General Corporation Law,
absent these provisions, directors could be held liable for gross negligence in
the performance of their duty of care but not for simple negligence. The
Company's directors remain liable for breaches of their duty of loyalty to the
Company and its stockholders, as well as for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law and
transactions from which a director derives improper personal benefit. The
Certificate of Incorporation also does not absolve directors of liability under
section 174 of the Delaware General Corporation Law, which makes directors
personally liable for unlawful dividends or unlawful stock repurchases or
redemptions in certain circumstances and expressly sets forth a negligence
standard with respect to such liability.
Under the Delaware General Corporation Law, directors, officers,
employees and other individuals may be indemnified against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement in connection
with specified actions, suits, or proceedings, whether civil, criminal,
administrative, or investigative (other than an action by or in the right of the
corporation -- a "derivative action") if they acted in good faith and in a
manner they reasonably believed to be in or not opposed to the best interests of
the Company and, with respect to any criminal action or proceeding, had no
reasonable cause to believe their conduct was unlawful. A similar standard of
care is applicable in the case of a derivative action, except that
indemnification only extends to expenses (including attorneys' fees) incurred in
connection with defense or settlement of such an action, and the Delaware
General Corporation Law requires court approval before there can be any
indemnification of expenses where the person seeking indemnification has been
found liable to the Company.
The Certificate of Incorporation provides, among other things, that
each person who was or is made a party to, or is threatened to be made a party
to, or is otherwise involved in any action, suit or proceeding, whether civil,
criminal, administrative or investigative (a "proceeding"), by reason of the
fact that he or she, or a person for whom he or she is the legal representative,
is or was a director or officer of the Company (or was serving at the request of
the Company as a director, officer, employee or agent for another entity), will
be indemnified and
II-1
<PAGE> 55
held harmless by the Company to the fullest extent permitted by applicable law
as it presently exists or may be amended, against all expense, liability or loss
(including attorneys' fees), reasonably incurred by such person in connection
therewith. The Company will pay the expenses (including attorneys' fees)
incurred in defending any proceeding in advance of its final disposition.
However, the payment of expenses incurred by a director or officer in advance of
the final disposition of the proceeding will be made only upon receipt by the
Company of an undertaking by the director or officer to repay all amounts
advanced if it should be ultimately determined that the director or officer is
not entitled to be indemnified under the Certificate of Incorporation or
otherwise. The foregoing right of indemnification will not be deemed exclusive
of any other right to which those indemnified may be entitled against the
Company, and the Company may provide additional rights to such persons.
If a claim for indemnification or payment of expenses is not paid in
full within 60 days after a written claim therefor has been received by the
Company, the claimant may file suit to recover the unpaid amount of such claim
and, if successful in whole or in part, will be entitled to be paid the expense
of prosecuting such claim. In any such action, the Company will have the burden
of proving that the claimant was not entitled to the requested indemnification
or payment of expenses under applicable law.
The rights conferred on any person under the Certificate of
Incorporation will not be exclusive of any other rights which such person may
have or acquire under any statute, provision of the Certificate of
Incorporation, the Company's Amended and Restated By-Laws, agreement, vote of
stockholders of the Company or disinterested directors or otherwise.
The Company's obligation, if any, to indemnify any person who was or is
serving at its request as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust, enterprise or nonprofit entity
will be reduced by any amount such person may collect as indemnification from
such other corporation, partnership, joint venture, trust, enterprise or
nonprofit entity.
Subject to the availability of insurance at substantially similar rates
for similar coverage (as determined in the sole discretion of the Company), the
Company will maintain insurance at (i) the levels in effect as of June 21, 1993
with respect to each director, officer, employee or agent of the Company until
June 21, 1996, or (ii) the levels in effect as of the date of the expiration of
the term, death, removal, retirement or resignation of any such person for a
period of three years after such event, whichever level is greater, in either
case, with respect to any proceeding by reason of the fact that such person, or
the person for whom he or she is the legal representative, is or was a director
or officer of the Company or is or was serving at the request of the Company as
a director, officer, employee or agent of another corporation or of a
partnership, joint venture, trust, enterprise or nonprofit entity, including
service with respect to employee benefit plans, against all liability and loss
suffered and expenses (including attorneys' fees) reasonably incurred by such
person at the Company's expense, to protect the Company and any such person
against any such liability, cost, payment or expense; provided, however, that
subject to the provisions described herein, the Company will only be required to
maintain insurance until the earlier of the date which is (a) three years after
the expiration of the term, death, removal, retirement or resignation of any
such person and (b) June 21, 1999.
Any repeal or modification of the provisions described above will not
adversely affect any right or protection under the Certificate of Incorporation
of any person in respect of any act or omission occurring prior to the time of
such repeal or modification.
Under the Company's First Amended Consolidated Plan of Reorganization,
dated May 24, 1993, as modified (the "Plan"), and the confirmation order
relating thereto of the United States Bankruptcy Court for the Southern District
of New York, the obligations of the Company and each of its affiliates to
indemnify any person serving as one of its directors, officers or employees as
of or following April 15, 1991, by reason of such person's past or future
service in such a capacity, or as a director, officer, or employee of another
corporation, partnership, or other legal entity, to the extent provided in the
applicable certificate of incorporation, by-laws, or similar constituent
documents or by statutory law or written agreement of or with the Company or any
of its affiliates, were, except as provided below, deemed and treated as
executory contracts that were assumed by the Company or any of its affiliates
pursuant to the Plan and section 365 of the United States Bankruptcy Code, upon
the confirmation of the Plan. Accordingly, such indemnification obligations
survived and were unaffected by entry
II-2
<PAGE> 56
of the confirmation order with respect to the Plan, irrespective of whether such
indemnification is owed for an act or event occurring before or after April 15,
1991.
The Company entered into indemnification agreements effective as of
June 21, 1993 with each of its directors and officers. These indemnification
agreements provide for, among other things, the (i) indemnification by the
Company of the indemnitees thereunder to the extent described above and (ii)
advancement of attorneys' fees and other expenses. Accordingly, the Company will
in certain circumstances be obligated to indemnify its former directors and its
directors and officers from and after June 21, 1993, including as to matters
arising out of service as directors or officers of certain entities other than
the Company or any of its affiliates prior to June 21, 1993.
Certain of the Company's compensation and stock option plans provide
for the indemnification of certain of the Company's officers and directors in
connection with certain matters relating to such plans.
ITEM 16. EXHIBITS
(a) EXHIBITS
EXHIBIT
NO. DESCRIPTION OF DOCUMENT
- ------- -----------------------
2.1 First Amended Consolidated Plan of Reorganization of U.S. Home
Corporation and certain of i s affiliates dated April 1, 1993.
Incorporated by reference from exhibit 2.1 to U.S. Home Corporation's
Current Report on Form 8-K filed June 9, 1993.
2.2 Modification to First Amended Consolidated Plan of Reorganization of
U.S. Home Corporation and certain of its affiliates. Incorporated by
reference from exhibit 2.2 to U.S. Home Corporation's Current Report on
Form 8-K filed June 9, 1993.
2.3 First Amended Joint Plan of Reorganization of certain affiliates of
U.S. Home Corporation dated April 1, 1993. Incorporated by reference
from exhibit 2.3 to U.S. Home Corporation's Current Report on Form 8-K
filed June 9, 1993.
2.4 Findings of Fact, Conclusions of Law and Order Confirming the First
Amended Consolidated Plan of Reorganization of U.S. Home Corporation
and certain of its affiliates. Incorporated by reference from exhibit
28.1 to U.S. Home Corporation's Current Report on Form 8-K filed June
9, 1993.
2.5 Findings of Fact, Conclusions of Law and Order Confirming the First
Amended Joint Plan of Reorganization of certain affiliates of U.S. Home
Corporation. Incorporated by reference from exhibit 28.2 to U.S. Home
Corporation's Current Report on Form 8-K filed June 9, 1993.
4.1 Form of Senior Indenture by and between U.S. Home Corporation and IBJ
Schroder Bank & Trust Company, as trustee.
4.2 Form of Senior Subordinated Indenture by and between U.S. Home
Corporation and IBJ Schroder Bank & Trust Company, as trustee.
4.3 Form of Subordinated Indenture by and between U.S. Home Corporation and
IBJ Schroder Bank & Trust Company, as trustee.(1)
5.1 Opinion of Kaye, Scholer, Fierman, Hays & Handler, LLP.(1)
12 Statements re: Computation of Ratio of Earnings to Fixed Charges.
II-3
<PAGE> 57
EXHIBIT
NO. DESCRIPTION OF DOCUMENT
- ------- -----------------------
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Kaye, Scholer, Fierman, Hays & Handler, LLP. Included in
such firm's opinion filed as Exhibit 5.1.
24 Power of Attorney. Included on the signature page at Page II-6.
25.1 Statement of Eligibility under the Trust Indenture Act of 1939 of a
Corporation Designated to Act as Trustee on Form T-1.(1)
25.2 Statement of Eligibility under the Trust Indenture Act of 1939 of a
Corporation Designated to Act as Trustee on Form T-1.
25.3 Statement of Eligibility under the Trust Indenture Act of 1939 of a
Corporation Designated to Act as Trustee on Form T-1.
(1) Previously filed.
ITEM 17. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this Registration
Statement:
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act of 1933, unless the
information required to be included in such post-effective
amendment is contained in a periodic report filed with or
furnished to the Securities and Exchange Commission by the
registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 and incorporated herein by
reference;
(ii) To reflect in the Prospectus any facts or
events arising after the effective date of the registration
statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the
registration statement, unless the information required to be
included in such post-effective amendment is contained in a
periodic report filed with or furnished to the Securities and
Exchange Commission by the registrant pursuant to Section 13
or Section 15(d) of the Securities Exchange Act of 1934 and
incorporated herein by reference. Notwithstanding the
foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would
not exceed that which was registered) and any deviation from
the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) (Section230.424(b) of this
chapter), if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration
statement; and
(iii) To include any material information with
respect to the plan of distribution not previously disclosed
in the registration statement or any material change to such
information in the Registration Statement;
II-4
<PAGE> 58
(2) That, for the purpose of determining any
liability under the Securities Act of 1933, each such
post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered
therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof;
(3) To remove from registration by means of a
post-effective amendment any of the securities being
registered which remain unsold at the termination of the
offering.
(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933, each
filing of the registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 that is incorporated by reference
in the registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the provisions described in Item 15 above,
or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question of whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
(d) The undersigned registrant hereby further undertakes that:
(1) For purposes of determining any liability under
the Securities Act of 1933, the information omitted from the
form of prospectus filed as a part of this registration
statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the registrant pursuant to Rule
424(b)(1) or (4), or 497(h) under the Securities Act of 1933
shall be deemed to be part of this registration statement as
of the time it was declared effective.
(2) For the purpose of determining any liability
under the Securities Act of 1933, each post-effective
amendment that contains a form of prospectus shall be deemed
to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering
thereof.
(e) The undersigned Registrant hereby undertakes to file an
application for the purpose of determining the eligibility of the trustee to act
under subsection (a) of section 310 of the Trust Indenture Act ("Act") in
accordance with the rules and regulations prescribed by the Commission under
Section 305(b)(2) of the Act.
II-5
<PAGE> 59
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing this Amendment No. 1 to Form S-3 and has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Houston, State of Texas,
on August 21, 1997.
U.S. HOME CORPORATION
By: /s/ Chester P. Sadowski
-------------------------------
Chester P. Sadowski
Vice President - Controller and
Chief Accounting Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
*
- ------------------------------- Chairman and Co-Chief August 21, 1997
Robert J. Strudler Executive Officer and
Director
*
- ------------------------------- President, Co-Chief Executive August 21, 1997
Isaac Heimbinder Officer, Chief Operating
Officer and Director
* Vice President -- August 21, 1997
- ------------------------------- Controller and Chief
Chester P. Sadowski Accounting Officer
* Vice President -- August 21, 997
- ------------------------------- Corporate Finance
Thomas A. Napoli and Treasurer
(Principal Financial Officer)
* Director August 21, 1997
- -------------------------------
Glen Adams
* Director August 21, 1997
- -------------------------------
Steven L. Gerard
* Director August 21, 1997
- -------------------------------
Kenneth J. Hanau, Jr.
* Director August 21, 1997
- -------------------------------
Malcolm T. Hopkins
</TABLE>
II-6
<PAGE> 60
SIGNATURE TITLE DATE
- --------- ----- ----
* Director August 21, 1997
________________________
Jack L. McDonald
* Director August 21, 1997
________________________
Charles A. McKee
* Director August 21, 1997
________________________
George A. Poole, Jr.
* Director August 21, 1997
________________________
Herve Ripault
* Director August 21, 1997
________________________
James W. Sight
*By Thomas A. Napoli , as attorney-in-fact
________________________
II-7
<PAGE> 61
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT SEQUENTIALLY
NO. DESCRIPTION OF DOCUMENT NUMBERED PAGE
- ------- ----------------------- -------------
<S> <C> <C>
2.1 First Amended Consolidated Plan of Reorganization of U.S. Home
Corporation and certain of i s affiliates dated April 1, 1993.
Incorporated by reference from exhibit 2.1 to U.S. Home Corporation's
Current Report on Form 8-K filed June 9, 1993.
2.2 Modification to First Amended Consolidated Plan of Reorganization of
U.S. Home Corporation and certain of its affiliates. Incorporated by
reference from exhibit 2.2 to U.S. Home Corporation's Current Report on
Form 8-K filed June 9, 1993.
2.3 First Amended Joint Plan of Reorganization of certain affiliates of
U.S. Home Corporation dated April 1, 1993. Incorporated by reference
from exhibit 2.3 to U.S. Home Corporation's Current Report on Form 8-K
filed June 9, 1993.
2.4 Findings of Fact, Conclusions of Law and Order Confirming the First
Amended Consolidated Plan of Reorganization of U.S. Home Corporation
and certain of its affiliates. Incorporated by reference from exhibit
28.1 to U.S. Home Corporation's Current Report on Form 8-K filed June
9, 1993.
2.5 Findings of Fact, Conclusions of Law and Order Confirming the First
Amended Joint Plan of Reorganization of certain affiliates of U.S. Home
Corporation. Incorporated by reference from exhibit 28.2 to U.S. Home
Corporation's Current Report on Form 8-K filed June 9, 1993.
4.1 Form of Senior Indenture by and between U.S. Home Corporation and IBJ
Schroder Bank & Trust Company, as trustee.
4.2 Form of Senior Subordinated Indenture by and between U.S. Home
Corporation and IBJ Schroder Bank & Trust Company, as trustee.
4.3 Form of Subordinated Indenture by and between U.S. Home Corporation and
IBJ Schroder Bank & Trust Company, as trustee.(1)
5.1 Opinion of Kaye, Scholer, Fierman, Hays & Handler, LLP.(1)
12 Statements re: Computation of Ratio of Earnings to Fixed Charges.
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Kaye, Scholer, Fierman, Hays & Handler, LLP. Included in
such firm's opinion filed as Exhibit 5.1.
24 Power of Attorney. Included on the signature page at Page II-6.
25.1 Statement of Eligibility under the Trust Indenture Act of 1939 of a
Corporation Designated to Act as Trustee on Form T-1.(1)
25.2 Statement of Eligibility under the Trust Indenture Act of 1939 of a
Corporation Designated to Act as Trustee on Form T-1.
25.3 Statement of Eligibility under the Trust Indenture Act of 1939 of a
Corporation Designated to Act as Trustee on Form T-1.
</TABLE>
(1) Previously filed.
<PAGE> 1
EXHIBIT 4.1
FORM OF
SENIOR INDENTURE,
DATED AS OF _________ __, 199_,
BETWEEN
U.S. HOME CORPORATION
AND
IBJ SCHRODER BANK & TRUST COMPANY
TRUSTEE
<PAGE> 2
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
<PAGE> 3
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.
2
<PAGE> 4
TABLE OF CONTENTS
PAGE
----
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 Expense ...................... 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
i
<PAGE> 5
PAGE
----
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
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 ................................... 10
Interest Expense .................................... 10
Interest Incurred ................................... 10
Interest Payment Date ............................... 10
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
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PAGE
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Permitted Investment ................................ 13
Permitted Liens ..................................... 14
Person .............................................. 15
Place of Payment .................................... 15
Preferred Stock ..................................... 15
Refinancing Indebtedness ............................ 15
Registrar ........................................... 16
Regular Record Date ................................. 16
Restricted Investment ............................... 16
Restricted Payment .................................. 16
SEC ................................................. 17
Securities .......................................... 17
Security Register ................................... 17
Special Record Date ................................. 17
Stated Maturity ..................................... 18
Subsidiary .......................................... 18
Successor ........................................... 18
TIA ................................................. 18
Trustee ............................................. 18
Trust Officer ....................................... 18
U.S. Government Obligations ......................... 18
"Unrestricted Subsidiary ............................ 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 ........................................................... 22
Section 3.01 Amount Unlimited; Issuable in Series ................ 22
Section 3.02 Denominations ....................................... 24
Section 3.03 Execution, Authentication, Delivery and Dating ...... 25
Section 3.04 Temporary Securities ................................ 27
Section 3.05 Registration, Registration of Transfer and Exchange . 27
Section 3.06 Mutilated, Destroyed, Lost and Stolen Securities .... 31
Section 3.07 Payment of Interest; Interest Rights Preserved ...... 32
Section 3.08 Persons Deemed Owners ............................... 33
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PAGE
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Section 3.09 Cancellation ........................................ 33
Section 3.10 Computation of Interest ............................. 34
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 .................................. 35
Section 4.05 Effect of Notice of Redemption ...................... 36
Section 4.06 Deposit of Redemption Price ......................... 36
Section 4.07 Securities Redeemed in Part ......................... 36
Section 4.08 Optional Redemption ................................. 36
ARTICLE 5
SINKING FUNDS ............................................................ 37
Section 5.01 Applicability of Article ............................ 37
Section 5.02 Satisfaction of Sinking Fund Payments with Securities 37
Section 5.03 Redemption of Securities for Sinking Fund ........... 37
ARTICLE 6
COVENANTS ................................................................ 39
Section 6.01 Payment of Securities ............................... 39
Section 6.02 Maintenance of Office or Agency ..................... 39
Section 6.03 SEC Reports; Financial Statements ................... 40
Section 6.04 Money for Security Payments to Be Held in Trust ..... 40
Section 6.05 Compliance Certificate .............................. 42
Section 6.06 Corporate Existence, etc. ........................... 42
Section 6.07 Payment of Taxes and Other Claims ................... 42
Section 6.08 Insurance ........................................... 43
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 7.01 Limitations on Mergers and Consolidations ........... 57
Section 7.02 Successor Corporation Substituted ................... 58
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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 ................................. 62
Section 8.06 Limitations on Suits ................................ 62
Section 8.07 Rights of Holders to Receive Payment ................ 62
Section 8.08 Collection Suit by Trustee .......................... 63
Section 8.09 Trustee May File Proofs of Claim .................... 63
Section 8.10 Priorities .......................................... 63
Section 8.11 Undertaking for Costs ............................... 64
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 ................................... 66
Section 9.03 Individual Rights of Trustee ........................ 67
Section 9.04 Trustee's Disclaimer ................................ 67
Section 9.05 Notice of Defaults .................................. 67
Section 9.06 Reports by Trustee to Holders ....................... 67
Section 9.07 Compensation and Indemnity .......................... 68
Section 9.08 Replacement of Trustee .............................. 68
Section 9.09 Successor Trustee by Merger, etc. ................... 69
Section 9.10 Eligibility; Disqualification ....................... 70
Section 9.11 Preferential Collection of Claims Against Company ... 70
ARTICLE 10
HOLDERS' LISTS ........................................................... 70
Section 10.01 Company to Furnish Trustee Names and Addresses of
Holders ............................................. 70
Section 10.02 Preservation of Information ......................... 71
ARTICLE 11
DEFEASANCE AND COVENANT DEFEASANCE ....................................... 71
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PAGE
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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 .......................... 77
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
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 Law ....................................... 86
Section 14.12 No Adverse Interpretation of Other Agreements ....... 86
Section 14.13 Successors .......................................... 86
Section 14.14 Severability ........................................ 87
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PAGE
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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
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INDENTURE, dated as of _________ __, 199_, 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.
<PAGE> 12
Section 1.02 Definitions
Capitalized terms used herein will have the following respective
meanings when used herein:
"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
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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.
"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
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<PAGE> 14
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 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.
"Consolidated 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
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<PAGE> 15
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. "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
5
<PAGE> 16
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) 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.
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<PAGE> 17
"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. "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 Default " 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 Amended and Restated Credit
Agreement, dated as of May 28, 1997, 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,
7
<PAGE> 18
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.
"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
8
<PAGE> 19
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 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.
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<PAGE> 20
"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 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 Payment Date ", when used with respect to a Security of
any series, means the Stated Maturity of an installment of interest on such
Security.
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<PAGE> 21
"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.
"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
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<PAGE> 22
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.
"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 " means Indebtedness of the Company or
a Restricted Subsidiary 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 the Company or such Restricted Subsidiary 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:
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<PAGE> 23
(i) Securities theretofore canceled by the Trustee or delivered
to the Trustee for cancellation;
(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, including the Company,
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
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<PAGE> 24
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 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
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<PAGE> 25
purchase money security interests), (x) 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, refinanced or extended, or (b) after the maturity
date of the Securities of such series,
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(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 before or 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 before or 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.
"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
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(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 the principal payment, redemption, repurchase, defeasance or other
acquisition or retirement of any such subordinated Indebtedness by the Company
or any Restricted Subsidiary on its scheduled final Maturity date or on any
other scheduled date for the payment of any installment of principal thereof
(whether pursuant to a sinking fund, mandatory redemption or otherwise) shall
not be a Restricted Payment); provided, further, that with respect to the
Company and its Subsidiaries, Restricted Payments will not include (a) any
payment or other obligation described in clause (i), (ii) or (iii) above made to
or on behalf or for the benefit of 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 principal payment,
redemption, repurchase, defeasance or other acquisition or retirement of
Indebtedness of the Company or its Restricted Subsidiaries which is subordinated
to the Securities if the consideration therefor consists solely of, or is the
proceeds from, Indebtedness subordinated to the Securities to the same extent as
the Indebtedness being paid, redeemed, repurchased, defeased or otherwise
acquired or retired, or (d) any principal payment, redemption, repurchase,
defeasance or other acquisition or retirement 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 $50,000,000 or (f)
any principal payment, redemption, repurchase, defeasance or other acquisition
or retirement of the Company's 4 % Convertible Subordinated Debentures due 2005.
"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.
"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.
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"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.
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"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.
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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' 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 Off ears 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:
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
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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 Officer
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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
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calculated if other than on the basis of actual days elapsed over a 365
or 366-day year;
(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;
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(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;
(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
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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 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 of rices 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. 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 31 5(a) through 31 5(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
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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. 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 refuse to authenticate and
deliver such Securities if the Trustee, being advised by counsel, determines
that such action may not lawn fly 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
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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.
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
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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 of flee 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.
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
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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.
(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
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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 receipt of such Securities in
definitive form and Officers' 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 of flee 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
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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.
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.
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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 of
rice 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:
(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).
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(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).
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
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Indenture. All cancelled Securities held by the Trustee shall be destroyed
(subject to the applicable provisions of record retention laws) and the Trustee
shall deliver a certificate of destruction to the Company.
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.
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 15 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.
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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;
(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 or
optional redemption (whichever is applicable), if such is the case;
(viii) the aggregate principal amount
of Securities that are being redeemed; and
(ix) that, unless the Company defaults in making the
redemption payment, interest on Securities called for redemption ceases
to accrue on and after the redemption date, and the only remaining
right of the Holders of such Securities is to receive payment of the
redemption price upon surrender to the Paying Agent of the Securities
redeemed.
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(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.
(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.
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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.
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,
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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.
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.
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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, or otherwise sent or given, 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.
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.
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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 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
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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;
(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
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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.
(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.
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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, 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
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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."
(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.
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(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;
(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
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(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.
(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
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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.
(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) $100,000,000, plus (2) 50
percent of the Company's Consolidated Net Income accrued during the
period (taken as a single period) since January 1, 1997 (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
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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
(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 additional 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), (iii) and (iv) of this sentence and Indebtedness permitted
to be Incurred under Section 6.13(a) hereof, the
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Company and/or any Restricted Subsidiary 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), (iii) and (iv) 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 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.
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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.
(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;
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(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
(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
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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.
(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 Restricted
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 Restricted 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 Restricted Subsidiaries (each an "Affiliate
Transaction"), except on terms that are no less favorable to the Company or the
relevant Restricted 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 Restricted
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 Restricted
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
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Financial Advisor to the effect that the transaction is fair to the Company or
the relevant Restricted Subsidiary, as the case may be, from a financial point
of view.
(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 or 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 $50,000,000.
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
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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, (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 and (g) any restrictions under any instrument
creating or evidencing any Acquisition Debt that was permitted to be Incurred
pursuant to this Indenture and the Securities of any series and which (1) only
apply to assets that were subject to such restrictions and encumbrances prior to
the acquisition of such assets by the Company or any of its Restricted
Subsidiaries and (2) were not created in connection with, or in contemplation
of, such acquisition, and any restrictions replacing those permitted by this
clause (g) which are not more restrictive than, and do not extend to any Persons
or assets other than the Persons or assets subject to, the restrictions and
encumbrances so replaced.
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
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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 Holder's 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;
(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
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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.
(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
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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.
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) 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
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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 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
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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) for borrowed money or guarantees thereof of
the Company or any of its Subsidiaries that has an outstanding
principal amount of $10,000,000 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;
(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) for borrowed money
or guarantees thereof of the Company or any of its Subsidiaries with an
outstanding aggregate amount of $10,000,000 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
$10,000,000 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,
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(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.
(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
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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.
(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.
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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;
(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 Sec-
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tion 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, its 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, 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
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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.
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:
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(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).
(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.
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(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;
(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.
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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.
SECTION 9.06 REPORTS BY TRUSTEE TO HOLDERS
(a) Within 60 days after each _________ __, beginning with ________ __,
199_, 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.
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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.
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:
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(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.
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 have been authenticated, but not delivered,
by the Trustee then in office, any successor by merger, conversion or
consolidation to such
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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.
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;
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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.
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
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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 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.
SECTION 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
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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 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
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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.
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.
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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 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
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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,
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.
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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 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 than all series of
Securities, stating that such Events of Default are being included
solely for the benefit of such series);
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(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
(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
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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
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
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(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.
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
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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 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
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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) 858-2815
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.
(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.
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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, 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.
83
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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.
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:
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(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.
(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
85
<PAGE> 96
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.
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.
86
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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.
87
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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:
(A) 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;
(B) to remove the Trustee and appoint a successor Trustee pursuant to
the provisions of Section 9.08 hereof;
(C) 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
(D) 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
88
<PAGE> 99
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.
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.
89
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IN WITNESS WHEREOF, the undersigned have duly executed this Indenture
as of the date first above written.
U.S. HOME CORPORATION
By:_______________________________
IBJ SCHRODER BANK & TRUST COMPANY,
as Trustee
By:_______________________________
90
<PAGE> 1
EXHIBIT 4.2
----------------------------
FORM OF
SENIOR SUBORDINATED INDENTURE,
DATED AS OF _________ __, 199_,
BETWEEN
U.S. HOME CORPORATION
AND
IBJ SCHRODER BANK & TRUST COMPANY
TRUSTEE
----------------------------
<PAGE> 2
<TABLE>
CROSS-REFERENCE TABLE
<S> <C>
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
</TABLE>
<PAGE> 3
<TABLE>
<S> <C>
317(a)(1).................................................... 8.08
(a)(2).................................................... 8.09
(b)....................................................... 3.05
318(a)....................................................... 14.01
</TABLE>
N.A. means not applicable
NOTE: This cross-reference table will not, for any purpose, be
deemed to be a part of this Indenture.
2
<PAGE> 4
<TABLE>
TABLE OF CONTENTS
<S> <C>
Page
----
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
Bankruptcy Law.........................................2
Board of Directors.....................................2
Board Resolution.......................................2
Business Day...........................................2
Capital Stock..........................................2
Capitalized Lease Obligations..........................3
Cash Equivalents.......................................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 Net Income................................4
Consolidated Tangible Net Worth........................5
Corporate Trust Office of the Trustee..................5
Covenant Defeasance....................................5
Custodian..............................................5
Default................................................5
Defaulted Interest.....................................5
Defeasance.............................................5
Defeasible Series......................................5
Depository.............................................5
Designated Senior Indebtedness.........................5
Disqualified Stock.....................................6
DTC....................................................6
Event of Default.......................................6
Exchange Act...........................................6
Excluded Debt..........................................6
Existing Credit Facility...............................6
</TABLE>
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<TABLE>
<S> <C>
Page
----
Existing Indebtedness..................................6
Fair Market Value......................................6
GAAP...................................................7
Global Security........................................7
Hedging Obligations....................................7
Holder.................................................7
Incur..................................................7
Indebtedness...........................................7
Indenture..............................................8
Independent Financial Advisor..........................8
Intangible Assets......................................8
Interest Payment Date..................................8
Investments............................................8
Issue Date.............................................8
Legal Holiday..........................................9
Lien...................................................9
Material Subsidiary....................................9
Maturity...............................................9
Net Worth Amount.......................................9
Net Worth Offer........................................9
Net Worth Offer Date...................................9
Net Worth Offer Price..................................9
Non-Recourse Indebtedness..............................9
Officer................................................9
Officers' Certificate.................................10
Opinion of Counsel....................................10
Outstanding...........................................10
Paying Agent..........................................11
Payment Blockage Period...............................11
Permitted Investment..................................11
Person................................................11
Place of Payment......................................11
Preferred Stock.......................................11
Refinancing Indebtedness..............................11
Registrar.............................................12
Regular Record Date...................................12
Restricted Investment.................................12
Restricted Payment....................................12
Restricted Subsidiary.................................13
SEC...................................................13
Securities............................................13
Security Register.....................................13
</TABLE>
ii
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<TABLE>
<S> <C>
Page
----
Senior Indebtedness....................................13
Special Record Date....................................14
Stated Maturity........................................14
Subsidiary.............................................14
Successor..............................................14
TIA....................................................14
Trustee................................................15
Trust Officer..........................................15
U.S. Government Obligations............................15
Unrestricted Subsidiary................................15
Weighted Average Life to Maturity......................16
Wholly Owned Subsidiary................................16
Section 1.03 Incorporation by Reference of TIA......................16
ARTICLE 2 SECURITY FORMS..................................................16
Section 2.01 Forms Generally........................................16
Section 2.02 Form of Legend for Global Securities...................17
Section 2.03 Form of Trustee's Certificate of Authentication........18
ARTICLE 3 THE SECURITIES..................................................18
Section 3.01 Amount Unlimited; Issuable in Series...................18
Section 3.02 Denominations..........................................21
Section 3.03 Execution, Authentication, Delivery and Dating.........21
Section 3.04 Temporary Securities...................................23
Section 3.05 Registration, Registration of Transfer and Exchange....23
Section 3.06 Mutilated, Destroyed, Lost and Stolen Securities.......27
Section 3.07 Payment of Interest; Interest Rights Preserved.........27
Section 3.08 Persons Deemed Owners..................................29
Section 3.09 Cancellation...........................................29
Section 3.10 Computation of Interest................................29
ARTICLE 4 REDEMPTION......................................................30
Section 4.01 Applicability of Article...............................30
Section 4.02 Election to Redeem; Notice to Trustee..................30
Section 4.03 Selection of Securities to Be Redeemed.................30
Section 4.04 Notices to Holders.....................................30
Section 4.05 Effect of Notice of Redemption.........................31
Section 4.06 Deposit of Redemption Price............................31
Section 4.07 Securities Redeemed in Part............................32
Section 4.08 Optional Redemption....................................32
</TABLE>
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<TABLE>
<S> <C>
Page
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ARTICLE 5 SINKING FUNDS........................................................................32
Section 5.01 Applicability of Article....................................................32
Section 5.02 Satisfaction of Sinking Fund Payments with Securities.......................33
Section 5.03 Redemption of Securities for Sinking Fund...................................33
ARTICLE 6 COVENANTS............................................................................34
Section 6.01 Payment of Securities.......................................................34
Section 6.02 Maintenance of Office or Agency.............................................35
Section 6.03 SEC Reports; Financial Statements...........................................35
Section 6.04 Money for Security Payments to Be Held in Trust.............................36
Section 6.05 Compliance Certificate......................................................37
Section 6.06 Corporate Existence, etc....................................................37
Section 6.07 Payment of Taxes and Other Claims...........................................38
Section 6.08 Insurance...................................................................38
Section 6.09 Stay, Extension and Usury Laws..............................................38
Section 6.10 Maintenance of Properties...................................................38
Section 6.11 Prohibition on Issuance of Other Subordinated Indebtedness Senior to
the Securities..............................................................39
Section 6.12 Limitations on Restricted Payments..........................................39
Section 6.13 Limitations on Additional Indebtedness......................................40
Section 6.14 Change of Control...........................................................41
Section 6.15 Limitations on Transactions With Affiliates.................................43
Section 6.16 Limitations on Restrictions on Distributions from Restricted
Subsidiaries................................................................44
Section 6.17 Maintenance of Consolidated Tangible Net Worth..............................45
ARTICLE 7 SUCCESSORS...........................................................................48
Section 7.01 Limitations on Mergers and Consolidations...................................48
Section 7.02 Successor Corporation Substituted...........................................48
ARTICLE 8 DEFAULTS AND REMEDIES................................................................49
Section 8.01 Events of Default...........................................................49
Section 8.02 Acceleration................................................................51
Section 8.03 Other Remedies..............................................................52
Section 8.04 Waiver of Past Defaults and Compliance With Indenture
Provisions..................................................................52
Section 8.05 Control by Majority.........................................................52
Section 8.06 Limitations on Suits........................................................52
Section 8.07 Rights of Holders to Receive Payment........................................53
Section 8.08 Collection Suit by Trustee..................................................53
</TABLE>
iv
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<TABLE>
<S> <C>
Page
----
Section 8.09 Trustee May File Proofs of Claim.......................................53
Section 8.10 Priorities.............................................................54
Section 8.11 Undertaking for Costs..................................................54
Section 8.12 Restoration of Rights and Remedies.....................................54
ARTICLE 9 TRUSTEE............................................................................55
Section 9.01 Duties of Trustee......................................................55
Section 9.02 Rights of Trustee......................................................56
Section 9.03 Individual Rights of Trustee...........................................57
Section 9.04 Trustee's Disclaimer...................................................57
Section 9.05 Notice of Defaults.....................................................57
Section 9.06 Reports by Trustee to Holders..........................................58
Section 9.07 Compensation and Indemnity.............................................58
Section 9.08 Replacement of Trustee.................................................59
Section 9.09 Successor Trustee by Merger, etc.......................................60
Section 9.10 Eligibility; Disqualification..........................................60
Section 9.11 Preferential Collection of Claims Against Company......................60
ARTICLE 10 HOLDERS' LISTS....................................................................61
Section 10.01 Company to Furnish Trustee Names and Addresses of Holders..............61
Section 10.02 Preservation of Information............................................61
ARTICLE 11 DEFEASANCE AND COVENANT DEFEASANCE................................................61
Section 11.01 Company's Option to Effect Defeasance or Covenant Defeasance...........61
Section 11.02 Defeasance and Discharge...............................................62
Section 11.03 Covenant Defeasance....................................................62
Section 11.04 Conditions to Defeasance or Covenant Defeasance........................63
Section 11.05 Deposited Money and U.S. Government Obligations to
Be Held in Trust; Other Miscellaneous Provisions......................65
Section 11.06 Reinstatement..........................................................65
ARTICLE 12 SATISFACTION AND DISCHARGE........................................................66
Section 12.01 Satisfaction and Discharge of Indenture................................66
Section 12.02 Application of Trust Money.............................................67
ARTICLE 13 SUPPLEMENTAL INDENTURES...........................................................67
Section 13.01 Supplemental Indentures Without Consent of Holders.....................67
Section 13.02 Supplemental Indentures With Consent of Holders........................69
Section 13.03 Compliance With TIA....................................................70
Section 13.04 Revocation and Effect of Consents......................................70
Section 13.05 Notation on or Exchange of Securities..................................71
</TABLE>
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<TABLE>
<S> <C>
Page
----
Section 13.06 Trustee to Sign Amendments, etc..............................................71
Section 13.07 Subordination Unimpaired.....................................................71
ARTICLE 14 MISCELLANEOUS...........................................................................71
Section 14.01 TIA Controls.................................................................71
Section 14.02 Notices......................................................................72
Section 14.03 Communication by Holders With Other Holders..................................73
Section 14.04 Action by Securityholders....................................................73
Section 14.05 Proof of Execution of Instruments and Holding of Securities..................74
Section 14.06 Obligation to Disclose Beneficial Ownership of Securities....................74
Section 14.07 Certificate and Opinion as to Conditions Precedent...........................74
Section 14.08 Statements Required in Certificate or Opinion................................75
Section 14.09 Rules by Trustee and Agents..................................................76
Section 14.10 No Recourse Against Others...................................................76
Section 14.11 Governing Law................................................................76
Section 14.12 No Adverse Interpretation of Other Agreements................................76
Section 14.13 Successors...................................................................76
Section 14.14 Severability.................................................................76
Section 14.15 Counterpart Originals........................................................76
Section 14.16 Trustee as Paying Agent and Registrar........................................77
Section 14.17 Table of Contents, Headings, etc.............................................77
Section 14.18 Benefits of Indenture........................................................77
Section 14.19 Acceptance of Trust..........................................................77
ARTICLE 15 MEETINGS OF HOLDERS OF SECURITIES.......................................................77
Section 15.01 Purposes of Meetings.........................................................77
Section 15.02 Call of Meetings by Trustee..................................................78
Section 15.03 Call of Meetings by Company or Securityholders...............................78
Section 15.04 Person Entitled to Vote at Meeting...........................................78
Section 15.05 Regulations for Meeting......................................................78
ARTICLE 16 SUBORDINATION; SENIORITY................................................................79
Section 16.01 Securities Subordinated to Senior Indebtedness...............................79
Section 16.02 Company Not To Make Payments with Respect to Securities in Certain
Circumstances................................................................80
Section 16.03 Subrogation of Securities....................................................82
Section 16.04 Authorization by Holders.....................................................83
Section 16.05 Notices to Trustee...........................................................83
Section 16.06 Trustee's Relation to Senior Indebtedness....................................84
Section 16.07 No Impairment of Subordination...............................................85
Section 16.08 Article 16 Not to Prevent Events of Default..................................85
</TABLE>
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<TABLE>
<S> <C>
Page
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Section 16.09 Paying Agents Other Than the Trustee........................................85
</TABLE>
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INDENTURE, dated as of _________ __, 199_, 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.
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SECTION 1.02 DEFINITIONS
Capitalized terms used herein will have the following
respective meanings when used herein:
"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
6.15(a) hereof.
"Agent" means any Registrar or Paying Agent.
"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
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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.
"Cash Equivalents" means any of the following, to the extent
owned by the Company, free and clear of all Liens and having a maturity of not
greater than 90 days from the date of issuance thereof: (i) readily marketable
direct obligations of the United States or any agency or instrumentality thereof
or obligations unconditionally guaranteed by the full faith and credit of the
United States, (ii) insured certificates of deposit of or time deposits with any
commercial bank that (a) is a member of the Federal Reserve System, (b) issues
(or the parent of which issues) commercial paper rated as described in clause
(iii) below, (c) is organized under the laws of the United States or any State
thereof and (d) has combined capital and surplus of at least $1,000,000,000 or
(iii) commercial paper in an aggregate amount of no more than $5,000,000 per
issuer outstanding at any time, issued by any corporation organized under the
laws of any State of the United States or the District of Columbia that is not
an Affiliate of the Company and rated at least "Prime-1" (or the then equivalent
grade) by Moody's Investor Service, Inc. or "A-1" (or the then equivalent grade)
by Standard & Poor's Corporation.
"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 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
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<PAGE> 14
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
6.14(a) hereof.
"Change of Control Payment Date" has the meaning set forth in
Section 6.14(a) hereof.
"Change of Control Price" has the meaning set forth in Section
6.14(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.
"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
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<PAGE> 15
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) the sale or other disposition (including,
without limitation, dispositions pursuant to sale and leaseback transactions) of
any asset of the Company which is not sold or disposed of in the ordinary course
of business, and (c) 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 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
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<PAGE> 16
Exchange Act that is designated to act as Depository for such Securities as
contemplated by Section 3.01.
"Designated Senior Indebtedness" means (i) Senior Indebtedness
permitted to be incurred pursuant to this Indenture under or in respect of an
institutional credit agreement, including the Existing Credit Facility, and (ii)
any other Senior Indebtedness permitted to be incurred pursuant to this
Indenture the principal amount of which is $25,000,000 or more.
"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 6.15 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
6.15 hereof.
"DTC" has the meaning set forth in Section 2.02 hereof.
"Event of Default" has the meaning set forth in Section
8.01(a) hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Existing Credit Facility" means the Amended and Restated
Credit Agreement, dated as of May 28, 1997, 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.
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<PAGE> 17
"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
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<PAGE> 18
accrued expenses 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 Payment Date", when used with respect to a Security
of any series, means the Stated Maturity of an installment of interest on such
Security.
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"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.
"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" has the meaning set forth in the
Indenture, dated as of June 21, 1993, between the Company and IBJ Schroder Bank
& Trust Company, as trustee, relating to the Company's 9-3/4% Senior Notes due
2003 as in effect on the date hereof.
"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 Worth Amount" has the meaning set forth in Section
6.17(a) hereof.
"Net Worth Offer" has the meaning set forth in Section 6.17(a)
hereof.
"Net Worth Offer Date" has the meaning set forth in Section
6.17(a) hereof.
"Net Worth Offer Price" has the meaning set forth in Section
6.17(a) hereof.
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<PAGE> 20
"Non-Recourse Indebtedness" means Indebtedness of the Company
or a Restricted Subsidiary 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 the Company or such Restricted Subsidiary 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;
(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
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<PAGE> 21
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, including the Company,
authorized by the Company to pay the principal of or any interest on any
Securities of any series.
"Payment Blockage Period" has the meaning set forth in
Section 16.02 hereof.
"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 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.
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<PAGE> 22
"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, 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 before or 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 before or 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.
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"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.
"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 the payment,
redemption, repurchase, defeasance or other acquisition or retirement of any
such subordinated Indebtedness by the Company or any Restricted Subsidiary on
its scheduled final Maturity date or on any other scheduled date for the payment
of any installment of principal thereof (whether pursuant to a sinking fund,
mandatory redemption or otherwise) shall not be a Restricted Payment); provided,
further, that with respect to the Company and its Subsidiaries, Restricted
Payments will not include (a) any payment or other obligation described in
clause (i), (ii) or (iii) above made to, or on behalf or for the benefit of, 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 principal payment, redemption, repurchase, defeasance or other
acquisition or retirement 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 paid, redeemed, repurchased, defeased or otherwise acquired
or retired, or (d) any principal payment, redemption, repurchase, defeasance or
other acquisition or retirement 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
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any Restricted Subsidiary to Unrestricted Subsidiaries which in an aggregate
amount at any one time outstanding do not exceed $50,000,000 or (f) any
principal payment, redemption, repurchase, defeasance or other acquisition or
retirement of the Company's 4 7/8% Convertible Subordinated Debentures due 2005.
"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.
"Senior Indebtedness" means the principal of (and premium, if
any) and interest on (including, without limitation, interest accruing
subsequent to the filing of a petition under applicable Bankruptcy Law or the
appointment of a Custodian), (i) any and all indebtedness and obligations of the
Company (including indebtedness of others guaranteed by the Company), whether or
not contingent and whether or not outstanding on the Issue Date of the
Securities of any series or thereafter created, incurred or assumed, including,
without limitation, all charges, fees, expenses (including, without limitation,
reasonable attorneys' fees and expenses and other amounts incurred by or owing
to holders of such indebtedness), which (a) is for money borrowed, (b) is
evidenced by any bond, note, debenture or similar instrument, (c) represents the
unpaid balance on the purchase price of any property, business or asset of any
kind, (d) is a Capitalized Lease Obligation, (e) is a reimbursement obligation
of the Company with respect to letters of credit, (f) is an obligation of the
Company with respect to an interest swap obligation or a foreign exchange
agreement or (g) is an obligation of another secured by a Lien to which any of
the properties or assets (including, without limitation, leasehold interests and
any other tangible or intangible property rights) of the Company are subject,
whether or not the obligation secured thereby will have been assumed by the
Company or will otherwise be the Company's legal liability and (ii) any
deferrals, amendments, renewals, extensions, modifications and refundings of any
indebtedness or obligations of the types referred to above; provided that Senior
Indebtedness will not include (A) (x) the Securities or (y) the Company's 4-7/8%
Convertible Subordinated Debentures due 2005, (B) any indebtedness or obligation
of the Company (or the instrument creating or evidencing it) which expressly
provides that such indebtedness is not superior in right of payment to the
Securities or which expressly provides that such indebtedness is subordinate in
right of payment to all other indebtedness of the Company (including the
Securities), (C) any indebtedness or obligation of the Company to any of its
Subsidiaries and (D) any indebtedness or obligation incurred by the Company in
connection with the purchase of assets, materials or services in the ordinary
course of business and which constitutes a trade payable.
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"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.
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"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 ratio of the Company's Indebtedness (excluding
Non-Recourse Indebtedness) to Consolidated Tangible Net Worth 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 ratio of the Company's
Indebtedness (excluding Non-Recourse Indebtedness) to Consolidated Tangible Net
Worth 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.
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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:
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
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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 Officer
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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 and the
Securities of each such series shall rank equally and pari passu with the
Securities of each other series, but all Securities issued hereunder shall be
subordinated and junior in right of payment, to the extent and in the manner
set forth in Article 16, to all Senior Indebtedness of the Company. 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
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calculated if other than on the basis of actual days elapsed over a 365
or 366-day year;
(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;
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(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;
(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
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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. 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
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<PAGE> 33
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. 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 refuse 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.
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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.
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.
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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.
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
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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.
(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.
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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 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.
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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.
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.
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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:
(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.
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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).
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 destroyed (subject to applicable provisions of record retention laws) and
the Trustee shall deliver a certificate of destruction to the Company.
SECTION 3.10 COMPUTATION OF INTEREST
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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.
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.
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(b) The notice will identify the Securities of the series to
be redeemed and will state:
(i) the redemption date;
(ii) the redemption price;
(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 or
optional redemption (whichever is applicable), if such is the case;
(viii) the aggregate principal amount of Securities that
are being redeemed; and
(ix) that, unless the Company defaults in making the
redemption payment, interest on Securities called for redemption ceases
to accrue on or after the redemption date, and the only remaining right
of the Holders of such Securities is to receive payment of the
redemption price upon surrender to the Paying Agent of the Securities
redeemed.
(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
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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.
(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
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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.
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.
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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.
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, or otherwise sent or given, to the Holders entitled to
such payments.
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(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.
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
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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 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
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Securities and the Trustee entitled thereto until such sums will be paid to such
Persons or otherwise disposed of as herein provided;
(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
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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.
(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 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.
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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, 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 effect 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 PROHIBITION ON ISSUANCE OF OTHER SUBORDINATED INDEBTEDNESS
SENIOR TO THE SECURITIES
The Company will not create, incur or suffer to exist any
Indebtedness that is expressly subordinated by the terms of the instrument
evidencing such Indebtedness or pursuant to which such Indebtedness is issued in
right of payment to any Senior Indebtedness unless such Indebtedness is pari
passu with the Securities of any series or subordinate in right of payment to
the Securities of any series pursuant to provisions substantially similar to
those contained in Article 16 hereof.
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) $100,000,000, plus (2) 50 percent of the
Company's Consolidated Net Income
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accrued during the period (taken as a single period) since
January 1, 1997 (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
(ii) the Company would be unable to incur an
additional $1.00 of Indebtedness under the ratio of the
Company's Indebtedness (excluding Non-Recourse Indebtedness)
to Consolidated Tangible Net Worth 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 additional Indebtedness (other than
Indebtedness between the Company and its Restricted Subsidiaries which are
Wholly Owned Subsidiaries or among such Restricted
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Subsidiaries which are Wholly Owned Subsidiaries), including Acquisition Debt,
unless, after giving effect thereto or the application of the proceeds
therefrom, the ratio of the Company's Indebtedness (excluding, for purposes of
this calculation, Non-Recourse Indebtedness) to Consolidated Tangible Net Worth
on the date thereof is not greater than 3.0 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), (iii) and (iv) of this sentence and Indebtedness
permitted to be Incurred under Section 6.13(a) hereof, the Company and/or any
Restricted Subsidiary 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 $50,000,000
(excluding any Indebtedness referred to in Section 6.13(a) hereof and clauses
(i)(A), (i)(B), (ii), (iii) and (iv) of this Section 6.13(b)), (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 any
Restricted Subsidiary consistent with past practice and (iv) Restricted
Subsidiaries from guaranteeing Indebtedness of the Company or another Restricted
Subsidiary.
SECTION 6.14 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 6.14.
(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
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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 6.14(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
(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)
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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 6.14.
(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 6.14(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.
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(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 6.15 LIMITATIONS ON TRANSACTIONS WITH AFFILIATES
(a) The Company will not, and will not permit any of its
Restricted 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 Restricted
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 Restricted
Subsidiaries (each an "Affiliate Transaction"), except on terms that are no less
favorable to the Company or the relevant Restricted 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
Restricted 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
Restricted 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 Restricted 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 or 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 $50,000,000.
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SECTION 6.16 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, (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, and (g) any restrictions under any instrument creating or evidencing any
Acquisition Debt that was permitted to be Incurred pursuant to this Indenture
and the Securities of any series and which (1) only apply to assets that were
subject to such restrictions and encumbrances prior to the acquisition of such
assets by the Company or any of its Restricted Subsidiaries and (2) were not
created in connection with, or in contemplation of, such acquisition, and any
restrictions replacing those permitted by this clause (g) which are not more
restrictive than, and do not extend to any Persons or assets other than the
Persons or assets subject to, the restrictions and encumbrances so replaced.
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SECTION 6.17 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 6.17. 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 Holder's 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 6.17(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;
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(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.
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(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 6.17.
(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 6.17(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 6.17(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.
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
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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 ratio of the Company's Indebtedness (excluding Non-Recourse Indebtedness) to
Consolidated Tangible Net Worth contained in Section 6.13(a) 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 ratio.
(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 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.
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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 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) for borrowed money or guarantees
thereof of the Company or any of its Subsidiaries that has an
outstanding principal amount of $10,000,000 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;
(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
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Indebtedness) for the borrowed money or guarantees thereof of the
Company or any of its Subsidiaries with an outstanding aggregate amount
of $10,000,000 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
$10,000,000 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.
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(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.
(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 6.14 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
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interest on the Securities of any series or to enforce the performance of any
provision of the Securities of any series or this Indenture.
(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;
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(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;
(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,
its agents and counsel) and the Holders allowed in any judicial proceedings
relative to the Company, its creditors or property and will be entitled and
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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, 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) Subject to Article 16 hereof, 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.
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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.
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;
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(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).
(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
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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;
(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.
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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.
SECTION 9.06 REPORTS BY TRUSTEE TO HOLDERS
(a) Within 60 days after each _________ __, beginning with
_________ __, 199_, 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
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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.
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.
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(e) If the Trustee with respect to any series of Securities
fails to comply with Section 9.10 hereof, any Holder may petition any court of
competent jurisdiction for the removal of the Trustee with respect to such
series and the appointment of a successor Trustee.
(f) A successor Trustee will deliver a written acceptance of
its appointment to the retiring Trustee with respect to such series 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.
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.
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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.
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.
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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.
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.
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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 6.17, 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 6.17
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 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.
SECTION 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
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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 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.
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(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.
(x) No event or condition shall exist that, pursuant to the
provisions of Article 16 hereof, would prevent the Company from making
payments of the principal of or interest on the Securities of such
series on the date of such deposit or at any time during the period
ending on the 91st day after the date of such deposit (it being
understood that this condition shall not be deemed satisfied until the
expiration of such period).
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.
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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 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
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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,
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.
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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
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);
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(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 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;
(x) 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
(xi) 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.
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(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 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 provisions of this Indenture relating
to the subordination of the Securities in a manner adverse to
the Holders.
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(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.
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.
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(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 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.
SECTION 13.07 SUBORDINATION UNIMPAIRED.
This Indenture may not be amended to alter the subordination
of any Outstanding Securities without the written consent of each holder of
Senior Indebtedness then outstanding that would be adversely affected thereby.
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.
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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) 858-2815
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.
(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.
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(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, 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.
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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.
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:
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(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.
(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
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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.
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.
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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, the holders of Senior Indebtedness 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.
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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:
(A) 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;
(B) to remove the Trustee and appoint a successor Trustee
pursuant to the provisions of Section 9.08 hereof;
(C) 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
(D) 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
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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.
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.
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ARTICLE 16
SUBORDINATION; SENIORITY
SECTION 16.01 SECURITIES SUBORDINATED TO SENIOR INDEBTEDNESS
(a) The Company agrees, and each Holder of a Security of any
series by such Holder's acceptance thereof likewise agrees, that the payment of
the principal of, and interest on (including, without limitation, interest
accruing subsequent to the filing of a petition under applicable Bankruptcy Law
or the appointment of a Custodian), the Securities of each series hereunder is
subordinated and junior in right of payment, to the extent and in the manner
provided in this Article 16, except as provided in Section 9.07, to the prior
payment in full in cash or Cash Equivalents or all Senior Indebtedness whether
outstanding on the Issue Date of the Securities of any series or created,
incurred, assumed or guaranteed thereafter. The Securities of any series shall
rank senior to the Company's 4 7/8% Convertible Subordinated Debentures due 2005
and shall constitute "Senior Indebtedness" for the purposes of the Indenture,
dated as of November 3, 1993, between the Company and Marine Midland Bank, N.A.,
as trustee, relating to such Convertible Subordinated Debentures.
(b) All the provisions of this Indenture and the Securities of
any series will be subject to the provisions of this Article 16 so far as they
may be applicable thereto, except that nothing in this Article 16 will apply to
claims for, or payments to, the Trustee under or pursuant to Section 9.07
hereof.
SECTION 16.02 COMPANY NOT TO MAKE PAYMENTS WITH RESPECT TO SECURITIES IN
CERTAIN CIRCUMSTANCES
(a) No payment will be made by the Company on account of
principal of or interest on the Securities of any series, nor may the Company
purchase or otherwise acquire such Securities for cash or property (other than
Capital Stock or other securities of the Company that are subordinated to Senior
Indebtedness to at least the same extent as the Securities) if at the time of
such payment or immediately after giving effect thereto there will have occurred
and be continuing (i) a default in the payment of principal of (or premium, if
any, on) or interest on any Designated Senior Indebtedness continuing beyond the
applicable period of grace, if any, specified in the applicable instrument,
lease, contract, agreement or other document evidencing such Designated Senior
Indebtedness or (ii) a default, other than a payment default as specified in
clause (i) of this Section 16.02(a), that permits the holders of Designated
Senior Indebtedness to accelerate the maturity thereof, and the Trustee shall
have received notice thereof from the trustee or other representative of the
holders of Designated Senior Indebtedness, which notice shall request that
payment of principal of or interest on the Securities be prohibited (provided,
however, that in the case of Designated Senior Indebtedness issued pursuant to
an indenture, such notice may be validly given only by the trustee under such
indenture), provided, that the foregoing will not prohibit payments made
pursuant to Articles 11 or 12 hereof from monies
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deposited with the Trustee pursuant thereto prior to any such default, judicial
proceeding or notice.
(b) Notwithstanding Section 1602(a) hereof, the Company shall
resume payments on the Securities of any series and may acquire such Securities
upon the earlier of:
(i) the date upon which the default or event of default
as specified in Section 16.02(a) hereof is cured or waived or ceases to exist,
or
(ii) in the case of an event of default as specified in
clause (ii) of Section 16.02(a), the expiration of 179 days after such notice as
set forth in such clause (ii) of Section 16.02(a) is received (each such period
under this clause (ii) of Section 16.02(b), a "Payment Blockage Period").
Notwithstanding anything in this Section 16.02(b) to the contrary, (A) only one
such Payment Blockage Period may be commenced within any 365 consecutive day
period and (B) in no event will a Payment Blockage Period extend beyond 179 days
from the date the payment on the Securities of any series is due. For purposes
of this Section 16.02, no default which, to the knowledge of the trustee or
other representative of Designated Senior Indebtedness, existed or was
continuing on the date of the commencement of any Payment Blockage Period shall
be, or be made, the basis for the commencement of a second Payment Blockage
Period by such trustee or representative, whether or not within a period of 365
consecutive days, unless such default shall have been cured or waived or shall
have ceased to exist, or the benefits of this Section 16.02(b) shall have been
waived in writing by such trustee or representative for a period of not less
than 90 consecutive days.
(c) Upon any acceleration of the principal of the Securities
of any series or any payment by the Company, or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
creditors upon any dissolution or winding up or liquidation or reorganization of
the Company, whether voluntary or involuntary, or in bankruptcy, insolvency,
receivership or other proceedings, all amounts due or to become due upon all
Senior Indebtedness (including, without limitation, interest accruing subsequent
to the filing of a petition under applicable Bankruptcy Law or the appointment
of a Custodian) will first be paid in full in cash or Cash Equivalents, or
payment thereof provided for, before any payment is made on account of the
principal of or interest on the Securities (except payments made pursuant to
Articles 11 or 12 hereof from monies deposited with the Trustee pursuant thereto
prior to the happening of such dissolution, winding up, liquidation or
reorganization); and upon any such dissolution or winding up or liquidation or
reorganization, any payment by the Company, or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
which the Holders or the Trustee would be entitled except for the provisions of
this Article 16, will (except as aforesaid) be paid by the Company or by any
Custodian or other Person, or by the Holders or the Trustee, making such payment
or distribution directly to the holders of Senior Indebtedness (pro rata to such
holders on the basis of the respective amounts of Senior Indebtedness held by
such holders, as calculated by the Company) or their representative or
representatives, or to the trustee or trustees under any indenture pursuant to
which any instruments evidencing any Senior Indebtedness may have been issued,
as their respective interests may appear, to the extent necessary so that the
holders of all Senior Indebtedness have been paid in full in cash or Cash
Equivalents, after giving effect to any concurrent payment or distribution to or
for the holders of Senior Indebtedness, before any payment or distribution is
made to the Holders, except that Holders shall be entitled to receive
securities that are subordinated to Senior Indebtedness to at least the same
extent as the Securities.
(d) If the Trustee or any Holder does not file a proper claim
or proof of debt in the form required in any proceeding referred to above prior
to 30 days before the expiration of the time to file such claim in such
proceeding, then the holder of any Senior Indebtedness is hereby authorized, and
has the right, to file an appropriate claim or claims for or on behalf of the
Trustee or such Holder.
(e) In the event that, notwithstanding the foregoing, any
payment by or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, prohibited by the foregoing, is
received by the Trustee or the Holders before all Senior Indebtedness is paid in
full in cash or Cash Equivalents, or provision is made for such payment in cash
or Cash Equivalents, such payment or distribution will be paid over or delivered
to the holders of Senior Indebtedness or their representative or
representatives, or to the trustee or trustees under any indenture pursuant to
which any instruments evidencing any Senior Indebtedness may have been issued,
as their respective interests may appear, for application to
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the payment of all Senior Indebtedness remaining unpaid to the extent necessary
to pay the holders of all Senior Indebtedness in full in cash or Cash
Equivalents, after giving effect to any concurrent payment or distribution to or
for the holders of such Senior Indebtedness, and, until so delivered, the same
will be held in trust by the Trustee or any Holder as the property of the
holders of Senior Indebtedness (but subject to the power of a court of competent
jurisdiction to make other equitable provision, which will have been determined
by such court to give effect to the rights conferred in this Article 16 upon the
Senior Indebtedness and the holders thereof with respect to the Securities or
the Holders or the Trustee, by a lawful plan of reorganization or readjustment
under applicable Bankruptcy Laws). The Trustee will not have any obligation or
duty to recover any such amounts so distributed.
(f) The consolidation of the Company with, or the merger of
the Company into, another corporation or the liquidation or dissolution of the
Company following the conveyance or transfer of its property as an entirety, or
substantially as an entirety, to another corporation upon the terms and
conditions provided in Article 7 hereof will not be deemed a dissolution,
winding up, liquidation or reorganization for the purposes of this Section 16.02
if such other corporation will, as a part of such consolidation, merger,
conveyance or transfer, comply with the conditions stated in Article 7 hereof.
Nothing in this Section 16.02 will apply to claims of, or payments to, the
Trustee under or pursuant to Section 9.07 hereof.
(g) The holders of Senior Indebtedness may, at any time and
from time to time, without the consent of, or notice to, the Holders or the
Trustee, without incurring responsibility to the Holders or the Trustee and
without impairing or releasing the rights of any holder of Senior Indebtedness
or in any way altering or affecting any of the provisions of this Article 16:
(i) change the amount, manner, place or terms of payment or change or extend the
time of payment of, or renew or alter, Senior Indebtedness, or otherwise amend
in any manner Senior Indebtedness or any instrument evidencing the same or any
agreement under which Senior Indebtedness is outstanding, (ii) sell, exchange,
release or otherwise deal with any property pledged, mortgaged or otherwise
securing Senior Indebtedness, (iii) release any Person liable in any manner for
the collection of Senior Indebtedness, and (iv) exercise or refrain from
exercising any rights against the Company and any other Person.
SECTION 16.03 SUBROGATION OF SECURITIES
(a) Subject to the payment in full of all Senior Indebtedness
at the time outstanding, the Holders will be subrogated (without any duty on the
part of the holders of Senior Indebtedness to warrant, create, effectuate,
preserve or protect each subrogation) to the rights of the holders of Senior
Indebtedness to receive payments or distributions of cash, property or
securities of the Company applicable to the Senior Indebtedness until the
principal of and interest on the Securities will be paid in full; and, for the
purposes of such subrogation, no payments or distributions to the holders of
Senior Indebtedness of any cash, property or securities to which the Holders or
the Trustee on their behalf would be entitled except for the
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provisions of this Article 16, and no payments over pursuant to the provisions
of this Article 16, to the holders of Senior Indebtedness by Holders or the
Trustee on their behalf will, as between the Company, its creditors (other than
holders of Senior Indebtedness), and the Holders, be deemed to be a payment by
the Company to or on account of the Senior Indebtedness. It is understood that
the provisions of this Article 16 are and are intended solely for the purpose of
defining the relative rights of the Holders, on the one hand, and the holders of
Senior Indebtedness, on the other.
(b) Nothing contained in this Article 16 or elsewhere in this
Indenture or in the Securities of any series is intended to or will impair, as
among the Company, its creditors other than the holders of Senior Indebtedness
and the Holders, the obligation of the Company, which is absolute and
unconditional, to pay to the Holders the principal of and interest on the
Securities of each series as and when the same will become due and payable in
accordance with their terms, or is intended to or will affect the relative
rights of the Holders and creditors of the Company other than the holders of
Senior Indebtedness, nor will anything herein or therein prevent the Trustee or
any Holder from exercising all remedies otherwise permitted by applicable law
upon default under this Indenture, subject to the rights, if any, under this
Article 16 of the holders of Senior Indebtedness in respect of cash, property or
securities of the Company received upon the exercise of any such remedy.
(c) Upon any payment or distribution of assets of the Company
referred to in this Article 16, the Trustee and the Holders will be entitled to
rely upon any order or decree made by any court of competent jurisdiction in
which such dissolution, winding up, liquidation or reorganization proceedings
are pending, or certificate of the Custodian or other Person making such payment
or distribution, delivered to the Trustee or to the Holders, for the purpose of
ascertaining the holders of Senior Indebtedness and other Indebtedness of the
Company and the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article 16.
SECTION 16.04 AUTHORIZATION BY HOLDERS
Each Holder by such Holder's acceptance of a Security of any
series authorizes and directs the Trustee on such Holder's behalf to take such
action as may be necessary or appropriate to effectuate, as between the Holder
and the holders of Senior Indebtedness, the subordination provided in this
Article 16 and appoints the Trustee such Holder's attorney-in-fact for any and
all such purposes.
SECTION 16.05 NOTICES TO TRUSTEE
(a) The Company will give prompt written notice in the form of
an Officers' Certificate to the Trustee of any fact known to the Company which
would prohibit the making of any payment of monies to or by the Trustee in
respect of the Securities of any series pursuant to
86
<PAGE> 97
the provisions of this Article 16. Notwithstanding the provisions of this
Article 16 or any other provision of this Indenture, the Trustee will not be
charged with knowledge of the existence of any facts which would prohibit the
making of any payment of monies to or by the Trustee in respect of the
Securities of any series pursuant to the provisions of this Article 16, unless
and until the Trustee will have received at its Corporate Trust Office written
notice thereof from the Company or a holder or holders of Senior Indebtedness or
from a representative or trustee therefor; provided, that in the case of Senior
Indebtedness issued pursuant to an indenture, such notice may be validly given
only by the trustee under such indenture; and before the receipt of any such
written notice, the Trustee will be entitled in all respects to assume that no
such facts exist; provided further, that if the Trustee will not have received,
at least three Business Days prior to the date upon which by the terms hereof
any such monies may become payable for any purpose (including, without
limitation, the payment of the principal of or interest on any Security of any
series), with respect to such monies, the notice provided for in this Section
16.05, then, anything herein contained to the contrary notwithstanding, the
Trustee will have the full power and authority to receive such monies and to
apply the same to the purpose for which they were received and will not be
affected by any notice to the contrary which may be received by it within three
Business Days prior to such date.
(b) The Trustee will be entitled to rely on the delivery to it
of a written notice by a Person representing himself or herself to be a holder
of Senior Indebtedness (or a trustee on behalf of such holder) to establish that
such notice has been given by a holder of Senior Indebtedness or a trustee or a
representative on behalf of any such holder. In the event that the Trustee
determines in good faith that further evidence is required with respect to the
right of any Person as a holder of Senior Indebtedness to participate in any
payment or distribution pursuant to this Article 16, the Trustee may request
such Person to provide evidence to the reasonable satisfaction of the Trustee as
to the amount of Senior Indebtedness held by such Person, the extent to which
such Person is entitled to participate in such payment or distribution and any
other facts pertinent to the rights of such Person under this Article 16, and if
such evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment.
(c) Notwithstanding anything to the contrary hereinbefore set
forth, nothing will prevent any payment by the (i) Company or the Trustee to the
Holders of monies in connection with a redemption of Securities of any series if
(A) notice of such redemption had been given pursuant to Article 4 hereof prior
to the receipt by the Company or the Trustee, as applicable, of written notice
as aforesaid, and (B) such notice of redemption is given not earlier than 60
days before the redemption date, or (ii) Trustee to the Holders of amounts
deposited with the Trustee pursuant to Articles 11 or 12 hereof.
(d) The Company agrees that if any default occurs with respect
to any Senior Indebtedness, which default permits the holders of such Senior
Indebtedness to accelerate the maturity thereof, the Company will give prompt
notice in writing of such happening to all known
87
<PAGE> 98
holders of Senior Indebtedness and will certify to each such holder the name of
the Trustee and current notice address.
SECTION 16.06 TRUSTEE'S RELATION TO SENIOR INDEBTEDNESS
(a) The Trustee in its individual capacity will be entitled to
all the rights set forth in this Article 16 in respect of any Senior
Indebtedness at any time held by it, to the same extent as any other holder of
Senior Indebtedness, and nothing in Section 9.03 or elsewhere in this Indenture
will deprive the Trustee of any of its rights as such holder.
(b) With respect to the holders of Senior Indebtedness, the
Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article 16, and no implied
covenants or obligations with respect to the holders of Senior Indebtedness will
be read into this Indenture against the Trustee. The Trustee will not owe any
fiduciary duty to the holders of Senior Indebtedness but will have only such
obligations to such holders as are expressly set forth in this Article 16.
SECTION 16.07 NO IMPAIRMENT OF SUBORDINATION
No right of any present or future holder of any Senior
Indebtedness to enforce subordination as herein provided will at any time in any
way be prejudiced or impaired by any act or failure to act on the part of the
Company or by an act or failure to act, in good faith, by any such holder, or by
any noncompliance by the Company with the terms, provisions and covenants of
this Indenture, regardless of any knowledge thereof which any such holder may
have or otherwise be charged with.
SECTION 16.08 ARTICLE 16 NOT TO PREVENT EVENTS OF DEFAULT
No provision of this Article 16 will prevent the occurrence of
an Event of Default hereunder.
SECTION 16.09 PAYING AGENTS OTHER THAN THE TRUSTEE
In any case at any time any Paying Agent other than the
Trustee has been appointed by the Company and be then acting hereunder, the term
"Trustee" as used in this Article 16 will in such case (unless the context will
otherwise require) be construed as extending to and including such Paying Agent
within its meaning as fully for all intents and purposes as if such place of the
Trustee; provided, however, that Sections 16.05 and 16.06 hereof will not apply
to the Company or any Subsidiary if it acts as Paying Agent.
88
<PAGE> 99
IN WITNESS WHEREOF, the undersigned have duly executed this
Indenture as of the date first above written.
U.S. HOME CORPORATION
By:_____________________________________
IBJ SCHRODER BANK & TRUST COMPANY,
as Trustee
By:_____________________________________
Name:
Title:
89
<PAGE> 1
EXHIBIT 12
U.S. HOME CORPORATION AND SUBSIDIARIES
COMPUTATION OF EARNINGS TO FIXED CHARGES
FOR THE FIVE YEARS ENDED DECEMBER 31, 1996
AND FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND 1997
(Dollars in thousands)
<TABLE>
<CAPTION>
6 MONTHS ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
- -----------------------------------------------------------------------------------------------------------------------------------
1992 1993 1994 1995 1996 1996 1997
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
COMPUTATION OF HISTORICAL RATIOS:
EARNINGS--
NET INCOME (LOSS) FROM CONTINUING OPERATIONS $ 29,349 $ 78,606 $ 32,829 $ 36,920 $ 44,188 $ 19,369 $ 21,176
ADD:
PROVISION (BENEFIT) FOR INCOME TAXES OF U.S.
HOME CORPORATION -- (33,966) 19,697 22,152 11,713 11,133 12,437
FIXED CHARGES OF U.S. HOME CORPORATION:
INTEREST EXPENSE, NET 2,483 1,453 537 692 1,507 825 663
PREVIOUSLY CAPITALIZED INTEREST CHARGED
TO COST OF SALES 23,338 22,342 28,871 27,555 30,786 14,056 16,782
PORTION OF RENT EXPENSE REPRESENTATIVE OF THE
INTEREST FACTOR 1,381 1,562 1,820 1,833 1,941 1,007 949
FIXED CHARGES OF JOINT VENTURES (PRINCIPALLY
INTEREST) 355 97 183 238 1,129 74 80
-------- -------- -------- -------- -------- -------- -------
EARNINGS AS ADJUSTED $ 56,906 $ 70,094 $ 83,937 $ 89,390 $ 91,264 $ 46,464 $ 52,087
======== ======== ======== ======== ======== ======== =======
FIXED CHARGES, AS ADJUSTED, OF U.S. HOME CORPORATION:
TOTAL INTEREST PAID OR ACCRUED $ 15,693 $ 23,373 $ 31,357 $ 32,687 $ 34,991 17,152 18,218
PORTION OF RENT EXPENSE AS ABOVE 1,381 1,562 1,820 1,833 1,941 1,007 949
FIXED CHARGES OF JOINT VENTURES 376 239 227 269 472 202 260
-------- -------- -------- -------- -------- -------- --------
$ 17,450 $ 25,174 $ 33,404 $ 34,789 $ 37,404 $ 18,361 $ 19,427
======== ======== ======== ======== ======== ======== ========
RATIO OF EARNINGS TO FIXED CHARGES 3.26 2.78 2.51 2.57 2.44 2.53 2.68
======== ======== ======== ======== ======== ======== ========
</TABLE>
<PAGE> 1
Exhibit 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated February 12, 1997
included in U.S. Home Corporation's Annual Report on Form 10-K for the year
ended December 31, 1996, and to all references to our firm included in this
registration statement.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
Houston, Texas
August 21, 1997
<PAGE> 1
EXHIBIT 25-2
REGISTRATION NO. 333-31457
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
-----------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939, AS AMENDED, OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305 (b)(2)
-----------
IBJ SCHRODER BANK & TRUST COMPANY
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)
New York 13-5375195
(State of Incorporation (I.R.S. Employer
if not a U.S. national bank) Identification No.)
One State Street, New York, New York 10004
(Address of principal executive offices) (Zip code)
Luis Perez, Assistant Vice President
IBJ Schroder Bank & Trust Company
One State Street
New York, New York 10004
(212) 858-2000
(Name, Address and Telephone Number of Agent for Service)
U.S. HOME CORPORATION
(Exact name of obligor as specified in its charter)
Delaware 21-0718930
(State or jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1800 West Loop South
Houston, Texas 77027
(Address of principal executive office) (Zip code)
Senior Subordinated Debt Securities
to be registered under U.S. Home Corporation's
Form S-3 under the Securities Act of 1933
to be offered on a delay or continuous
basis pursuant to Rule 415 under the
Securities Act of 1933, as amended
(Title of Indenture Securities)
-------------------------------
<PAGE> 2
Item 1. General information
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
New York State Banking Department
Two Rector Street
New York, New York
Federal Deposit Insurance Corporation
Washington, D.C.
Federal Reserve Bank of New York Second District
33 Liberty Street
New York, New York
(b) Whether it is authorized to exercise corporate trust powers.
Yes
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
The obligor is not an affiliate of the trustee.
Item 3. Voting securities of the trustee.
Furnish the following information as to each class of voting securities
of the trustee:
As of July 14, 1997
<TABLE>
<CAPTION>
Col. A Col. B
-------------- ------------------
<S> <C>
Title of class Amount Outstanding
</TABLE>
Not Applicable
2
<PAGE> 3
Item 4. Trusteeships under other indentures.
If the trustee is a trustee under another indenture under which any
other securities, or certificates of interest or participation in any
other securities, of the obligor are outstanding, furnish the following
information:
(a) Title of the securities outstanding under each such other
indenture
9 3/4% Senior Notes Due 2003
7.95% Senior Notes Due 2001
(b) A brief statement of the facts relied upon as a basis for the
claim that no conflicting interest within the meaning of
Section 310 (b) (1) of the Act arises as a result of the
trusteeship under any such other indenture, including a
statement as to how the indenture securities will rank as
compared with the securities issued under such other
indenture.
Not Applicable
Item 5. Interlocking directorates and similar relationships with the obligor or
underwriters.
If the trustee or any of the directors or executive officers of the
trustee is a director, officer, partner, employee, appointee, or
representative of the obligor or of any underwriter for the obligor,
identify each such person having any such connection and state the
nature of each such connection.
Not Applicable
Item 6. Voting securities of the trustee owned by the obligor or its officials.
Furnish the following information as to the voting securities of the
trustee owned beneficially by the obligor and each director, partner,
and executive officer of the obligor:
As of July 14, 1997
<TABLE>
<CAPTION>
Col A Col. B Col. C Col. D
- ------------- -------------- ------------ -------------------------
<S> <C> <C> <C>
Name of Owner Title of class Amount owned Percent of voting
beneficially securities represented
by amount given in Col. C
</TABLE>
Not Applicable
Item 7. Voting securities of the trustee owned by underwriters or their
officials.
3
<PAGE> 4
Furnish the following information as to the voting securities of the
trustee owned beneficially by each underwriter for the obligor and each
director, partner and executive officer of each such underwriter:
As of July 14, 1997
<TABLE>
<CAPTION>
Col A Col. B Col. C Col. D
- ------------- -------------- ------------ -------------------------
<S> <C> <C> <C>
Name of Owner Title of class Amount owned Percent of voting
beneficially securities represented by
amount given in Col. C
</TABLE>
Not Applicable
Item 8. Securities of the obligor owned or held by the trustee
Furnish the following information as to securities of the
obligor owned beneficially or held as collateral security for
obligations in default by the trustee:
As of July 14, 1997
<TABLE>
<CAPTION>
Col A Col. B Col. C Col. D
- ------------- -------------- ---------------------- -------------------------
<S> <C> <C> <C>
Name of Owner Title of class Amount owned Percent of voting
beneficially or held as securities represented by
collateral security for amount given in Col. C
obligations in default
</TABLE>
Not Applicable
Item 9. Securities of underwriters owned or held by the trustee.
If the trustee owns beneficially or holds as collateral security for
obligations in default any securities of an underwriter for the
obligor, furnish the following information as to each class of
securities of such
4
<PAGE> 5
underwriter any of which are so owned or held by the trustee:
As of July 14, 1997
<TABLE>
<CAPTION>
Col A Col. B Col. C Col. D
- ------------- -------------- ------------ -------------------------
<S> <C> <C> <C>
Name of Owner Title of class Amount owned Percent of voting
beneficially or held as securities represented by
collateral security for amount given in Col. C
obligations in default
</TABLE>
Not Applicable
Item 10. Ownership or holdings by the trustee of voting securities of certain
affiliates or securityholders of the obligor.
If the trustee owns beneficially or holds as collateral security for
obligations in default voting securities of a person who, to the
knowledge of the trustee (1) owns 10 percent or more of the voting
securities of the obligor or (2) is an affiliate, other than a
subsidiary, of the obligor, furnish the following information as to the
voting securities of such person:
As of July 14, 1997
<TABLE>
<CAPTION>
Col A Col. B Col. C Col. D
- ------------- -------------- ---------------------- -------------------------
<S> <C> <C> <C>
Name of Owner Title of class Amount owned Percent of voting
beneficially or held as securities represented by
collateral security for amount given in Col. C
obligations in default
</TABLE>
Not Applicable
5
<PAGE> 6
Item 11. Ownership or holdings by the trustee of any securities of a person
owning 50 percent or more of the voting securities of the obligor.
If the trustee owns beneficially or holds as collateral security for
obligations in default any securities of a person who, to the knowledge
of the trustee, owns 50 percent or more of the voting securities of the
obligor, furnish the following information as to each class of
securities of such any of which are so owned or held by the trustee:
As of July 14, 1997
<TABLE>
<CAPTION>
Col. A Col. B Col. C
- ---------------------- ------------------ --------
<S> <C> <C>
Nature of Indebtedness Amount Outstanding Date Due
</TABLE>
Not Applicable
Item 12. Indebtedness of the Obligor to the Trustee.
Except as noted in the instructions, if the obligor is indebted to the
trustee, furnish the following information:
As of July 14, 1997
<TABLE>
<CAPTION>
Col A Col. B Col. C Col. D
- ------------- -------------- ---------------------- -------------------------
<S> <C> <C> <C>
Name of Owner Title of class Amount owned Percent of voting
beneficially or held as securities represented by
collateral security for amount given in Col. C
obligations in default
</TABLE>
Not Applicable
Item 13. Defaults by the Obligor.
(a) State whether there is or has been a default with respect to
the securities under this indenture. Explain the nature of any
such default.
Not Applicable
(b) If the trustee is a trustee under another indenture under
which any other securities, or certificates of interest or
participation in any other securities, of the obligor are
outstanding, or is trustee for more than one outstanding
series of securities under the indenture, state whether there
has been a default under any such indenture or series,
identify the indenture or series affected, and explain the
nature of any such default.
6
<PAGE> 7
Not Applicable
Item 14. Affiliations with the Underwriters
If any underwriter is an affiliate of the trustee, describe each such
affiliation.
Not Applicable
Item 15. Foreign Trustees.
Identify the order or rule pursuant to which the foreign trustee is
authorized to act as sole trustee under indentures qualified or to be
qualified under the Act.
Not Applicable
Item 16. List of Exhibits.
List below all exhibits filed as part of this statement of eligibility.
*1. A copy of the Charter of IBJ Schroder Bank & Trust Company as
amended to date. (See Exhibit 1A to Form T-1, Securities and
Exchange Commission File No. 22-18460).
*2. A copy of the Certificate of Authority of the Trustee to
Commence Business (Included in Exhibit I above).
*3. A copy of the Authorization of the Trustee, as amended to date
(See Exhibit 4 to Form T-1, Securities and Exchange Commission
File No. 22-19146).
*4. A copy of the existing By-Laws of the Trustee, as amended to
date (See Exhibit 4 to Form T-1, Securities and Exchange
Commission File No. 22-19146).
7
<PAGE> 8
5. A copy of each Indenture referred to in Item 4, if the Obligor
is in default. Not Applicable.
6. The consent of the United States institutional trustee
required by Section 321(b) of the Act.
7. A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority.
* The Exhibits thus designated are incorporated herein by reference as
exhibits hereto. Following the description of such Exhibits is a
reference to the copy of the Exhibit heretofore filed with the
Securities and Exchange Commission, to which there have been no
amendments or changes.
NOTE
In answering any item in this Statement of Eligibility which relates to
matters peculiarly within the knowledge of the obligor and its
directors or officers, the trustee has relied upon information
furnished to it by the obligor.
Inasmuch as this Form T-1 is filed prior to the ascertainment by the
trustee of all facts on which to base responsive answers to Item 2, the
answer to said Item are based on incomplete information.
Item 2, may, however, be considered as correct unless amended by an
amendment to this Form T-1.
Pursuant to General Instruction B, the trustee has responded to Items
1, 2 and 16 of this form since to the best knowledge of the trustee as
indicated in Item 13, the obligor is not in default under any indenture
under which the applicant is trustee.
8
<PAGE> 9
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, IBJ Schroder Bank & Trust Company, a corporation
organized and existing under the laws of the State of New York, has
duly caused this statement of eligibility & qualification to be signed
on its behalf by the undersigned, thereunto duly authorized, all in the
City of New York, and State of New York, on the 21st day of August, 1997.
IBJ SCHRODER BANK & TRUST COMPANY
By: /s/Luis Perez
-------------------------------
Luis Perez
Assistant Vice President
<PAGE> 10
EXHIBIT 6
CONSENT OF TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust Indenture
Act of 1939, as amended, in connection with the proposed issue of Debt
Securities of U.S. Home Corporation, we hereby consent that reports of
examinations by Federal, State, Territorial, or District authorities
may be furnished by such authorities to the Securities and Exchange
Commission upon request therefor.
IBJ SCHRODER BANK & TRUST COMPANY
By: /s/Luis Perez
-------------------------------
Luis Perez
Assistant Vice President
Dated: August 21, 1997
<PAGE> 11
EXHIBIT 7
CONSOLIDATED REPORT OF CONDITION OF
IBJ SCHRODER BANK & TRUST COMPANY
OF NEW YORK, NEW YORK
AND FOREIGN AND DOMESTIC SUBSIDIARIES
REPORT AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
DOLLAR AMOUNTS
IN THOUSANDS
------------
ASSETS
<S> <C>
Cash and balance due from depository institutions:
Noninterest-bearing balances and currency and coin ..........................................................$ 37,521
Interest-bearing balances......................................................................................$ 325,073
Securities: Held-to-maturity securities.........................................................................$ 177,447
Available-for-sale securities.......................................................................$ 47,358
Federal funds sold and securities purchased under agreements to resell in
domestic offices of the bank and of its Edge and Agreement subsidiaries and in
IBFs:
Federal Funds sold and Securities purchased under agreements to resell.........................................$ 75,273
Loans and lease financing receivables:
Loans and leases, net of unearned income.....................................................$1,820,213
LESS: Allowance for loan and lease losses....................................................$ 58,785
LESS: Allocated transfer risk reserve........................................................$ -0-
Loans and leases, net of unearned income, allowance, and reserve...............................................$1,761,428
Trading assets held in trading accounts............................................................................$ 602
Premises and fixed assets (including capitalized leases)...........................................................$ 3,817
Other real estate owned............................................................................................$ 202
Investments in unconsolidated subsidiaries and associated companies................................................$ -0-
Customers' liability to this bank on acceptances outstanding.......................................................$ 310
Intangible assets..................................................................................................$ -0-
Other assets.......................................................................................................$ 74,528
TOTAL ASSETS.......................................................................................................$2,503,559
</TABLE>
<PAGE> 12
LIABILITIES
<TABLE>
<S> <C>
Deposits:
In domestic offices............................................................................................$ 792,944
Noninterest-bearing .......................................................................$ 260,196
Interest-bearing ..........................................................................$ 394,562
In foreign offices, Edge and Agreement subsidiaries, and IBFs..................................................$1,149,176
Noninterest-bearing .......................................................................$ 13,875
Interest-bearing ......................................................................... $1,135,301
Federal funds purchased and securities sold under agreements to repurchase in
domestic offices of the bank and of its Edge and Agreement subsidiaries, and in
IBFs:
Federal Funds purchased and Securities sold under agreements to repurchase.....................................$ 344,500
Demand notes issued to the U.S. Treasury...........................................................................$ 30,000
Trading Liabilities................................................................................................$ 178
Other borrowed money:
a) With a remaining maturity of one year or less...............................................................$ 23,037
b) With a remaining maturity of more than one year.............................................................$ 4,958
Mortgage indebtedness and obligations under capitalized leases.....................................................$ -0-
Bank's liability on acceptances executed and outstanding...........................................................$ 310
Subordinated notes and debentures..................................................................................$ -0-
Other liabilities..................................................................................................$ 71,245
TOTAL LIABILITIES..................................................................................................$2,278,162
Limited-life preferred stock and related surplus...................................................................$ -0-
EQUITY CAPITAL
Perpetual preferred stock and related surplus......................................................................$ -0-
Common stock.......................................................................................................$ 29,649
Surplus (exclude all surplus related to preferred stock)...........................................................$ 217,008
Undivided profits and capital reserves.............................................................................$ (21,223)
Net unrealized gains (losses) on available-for-sale securities.....................................................$ 37
Cumulative foreign currency translation adjustments................................................................$ -0-
TOTAL EQUITY CAPITAL...............................................................................................$ 225,397
TOTAL LIABILITIES AND EQUITY CAPITAL...............................................................................$2,503,559
</TABLE>
<PAGE> 1
EXHIBIT 25-3
REGISTRATION NO. 333-31457
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
-----------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939, AS AMENDED, OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305 (b)(2)
IBJ SCHRODER BANK & TRUST COMPANY
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)
New York 13-5375195
(State of Incorporation (I.R.S. Employer
if not a U.S. national bank) Identification No.)
One State Street, New York, New York 10004
(Address of principal executive offices) (Zip code)
Luis Perez, Assistant Vice President
IBJ Schroder Bank & Trust Company
One State Street
New York, New York 10004
(212) 858-2000
(Name, Address and Telephone Number of Agent for Service)
U.S. HOME CORPORATION
(Exact name of obligor as specified in its charter)
Delaware 21-0718930
(State or jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1800 West Loop South
Houston, Texas 77027
(Address of principal executive office) (Zip code)
Subordinated Debt Securities
to be registered under U.S. Home Corporation's
Form S-3 under the Securities Act of 1933
to be offered on a delay or continuous
basis pursuant to Rule 415 under the
Securities Act of 1933, as amended
(Title of Indenture Securities)
<PAGE> 2
Item 1. General information
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
New York State Banking Department
Two Rector Street
New York, New York
Federal Deposit Insurance Corporation
Washington, D.C.
Federal Reserve Bank of New York Second District
33 Liberty Street
New York, New York
(b) Whether it is authorized to exercise corporate trust powers.
Yes
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
The obligor is not an affiliate of the trustee.
Item 3. Voting securities of the trustee.
Furnish the following information as to each class of voting securities
of the trustee:
As of July 14, 1997
<TABLE>
<CAPTION>
Col. A Col. B
-------------- ------------------
<S> <C>
Title of class Amount Outstanding
</TABLE>
Not Applicable
2
<PAGE> 3
Item 4. Trusteeships under other indentures.
If the trustee is a trustee under another indenture under which any
other securities, or certificates of interest or participation in any
other securities, of the obligor are outstanding, furnish the following
information:
(a) Title of the securities outstanding under each such other
indenture
9 3/4% Senior Notes Due 2003
7.95% Senior Notes Due 2001
(b) A brief statement of the facts relied upon as a basis for the
claim that no conflicting interest within the meaning of
Section 310 (b) (1) of the Act arises as a result of the
trusteeship under any such other indenture, including a
statement as to how the indenture securities will rank as
compared with the securities issued under such other
indenture.
Not Applicable
Item 5. Interlocking directorates and similar relationships with the obligor or
underwriters.
If the trustee or any of the directors or executive officers of the
trustee is a director, officer, partner, employee, appointee, or
representative of the obligor or of any underwriter for the obligor,
identify each such person having any such connection and state the
nature of each such connection.
Not Applicable
Item 6. Voting securities of the trustee owned by the obligor or its officials.
Furnish the following information as to the voting securities of the
trustee owned beneficially by the obligor and each director, partner,
and executive officer of the obligor:
As of July 14, 1997
<TABLE>
<CAPTION>
Col A Col. B Col. C Col. D
- ------------- -------------- ------------ -------------------------
<S> <C> <C> <C>
Name of Owner Title of class Amount owned Percent of voting
beneficially securities represented
by amount given in Col. C
</TABLE>
Not Applicable
Item 7. Voting securities of the trustee owned by underwriters or their
officials.
3
<PAGE> 4
Furnish the following information as to the voting securities of the
trustee owned beneficially by each underwriter for the obligor and each
director, partner and executive officer of each such underwriter:
As of July 14, 1997
<TABLE>
<CAPTION>
Col A Col. B Col. C Col. D
- ------------- -------------- ------------ -------------------------
<S> <C> <C> <C>
Name of Owner Title of class Amount owned Percent of voting
beneficially securities represented by
amount given in Col. C
</TABLE>
Not Applicable
Item 8. Securities of the obligor owned or held by the trustee
Furnish the following information as to securities of the
obligor owned beneficially or held as collateral security for
obligations in default by the trustee:
As of July 14, 1997
<TABLE>
<CAPTION>
Col A Col. B Col. C Col. D
- ------------- -------------- ---------------------- -------------------------
<S> <C> <C> <C>
Name of Owner Title of class Amount owned Percent of voting
beneficially or held as securities represented by
collateral security for amount given in Col. C
obligations in default
</TABLE>
Not Applicable
Item 9. Securities of underwriters owned or held by the trustee.
If the trustee owns beneficially or holds as collateral security for
obligations in default any securities of an underwriter for the
obligor, furnish the following information as to each class of
securities of such
4
<PAGE> 5
underwriter any of which are so owned or held by the trustee:
As of July 14, 1997
<TABLE>
<CAPTION>
Col A Col. B Col. C Col. D
- ------------- -------------- ------------ -------------------------
<S> <C> <C> <C>
Name of Owner Title of class Amount owned Percent of voting
beneficially securities represented by
or held as amount given in Col. C
collateral
security for
obligations in
default
</TABLE>
Not Applicable
Item 10. Ownership or holdings by the trustee of voting securities of certain
affiliates or securityholders of the obligor.
If the trustee owns beneficially or holds as collateral security for
obligations in default voting securities of a person who, to the
knowledge of the trustee (1) owns 10 percent or more of the voting
securities of the obligor or (2) is an affiliate, other than a
subsidiary, of the obligor, furnish the following information as to the
voting securities of such person:
<TABLE>
<CAPTION>
Col A Col. B Col. C Col. D
- ------------- -------------- ---------------------- -------------------------
<S> <C> <C> <C>
Name of Owner Title of class Amount owned Percent of voting
beneficially or held as securities represented by
collateral security for amount given in Col. C
obligations in default
</TABLE>
Not Applicable
5
<PAGE> 6
Item 11. Ownership or holdings by the trustee of any securities of a person
owning 50 percent or more of the voting securities of the obligor.
If the trustee owns beneficially or holds as collateral security for
obligations in default any securities of a person who, to the knowledge
of the trustee, owns 50 percent or more of the voting securities of the
obligor, furnish the following information as to each class of
securities of such any of which are so owned or held by the trustee:
As of July 14, 1997
<TABLE>
<CAPTION>
Col. A Col. B Col. C
- ---------------------- ------------------ --------
<S> <C> <C>
Nature of Indebtedness Amount Outstanding Date Due
</TABLE>
Not Applicable
Item 12. Indebtedness of the Obligor to the Trustee.
Except as noted in the instructions, if the obligor is indebted to the
trustee, furnish the following information:
As of July 14, 1997
<TABLE>
<CAPTION>
Col A Col. B Col. C Col. D
- ------------- -------------- ---------------------- -------------------------
<S> <C> <C> <C>
Name of Owner Title of class Amount owned Percent of voting
beneficially or held as securities represented by
collateral security for amount given in Col. C
obligations in default
</TABLE>
Not Applicable
Item 13. Defaults by the Obligor.
(a) State whether there is or has been a default with respect to
the securities under this indenture. Explain the nature of any
such default.
Not Applicable
(b) If the trustee is a trustee under another indenture under
which any other securities, or certificates of interest or
participation in any other securities, of the obligor are
outstanding, or is trustee for more than one outstanding
series of securities under the indenture, state whether there
has been a default under any such indenture or series,
identify the indenture or series affected, and explain the
nature of any such default.
6
<PAGE> 7
Not Applicable
Item 14. Affiliations with the Underwriters
If any underwriter is an affiliate of the trustee, describe each such
affiliation.
Not Applicable
Item 15. Foreign Trustees.
Identify the order or rule pursuant to which the foreign trustee is
authorized to act as sole trustee under indentures qualified or to be
qualified under the Act.
Not Applicable
Item 16. List of Exhibits.
List below all exhibits filed as part of this statement of eligibility.
*1. A copy of the Charter of IBJ Schroder Bank & Trust Company as
amended to date. (See Exhibit 1A to Form T-1, Securities and
Exchange Commission File No. 22-18460).
*2. A copy of the Certificate of Authority of the Trustee to
Commence Business (Included in Exhibit I above).
*3. A copy of the Authorization of the Trustee, as amended to date
(See Exhibit 4 to Form T-1, Securities and Exchange Commission
File No. 22-19146).
*4. A copy of the existing By-Laws of the Trustee, as amended to
date (See Exhibit 4 to Form T-1, Securities and Exchange
Commission File No. 22-19146).
7
<PAGE> 8
5. A copy of each Indenture referred to in Item 4, if the Obligor
is in default. Not Applicable.
6. The consent of the United States institutional trustee
required by Section 321(b) of the Act.
7. A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority.
* The Exhibits thus designated are incorporated herein by reference as
exhibits hereto. Following the description of such Exhibits is a
reference to the copy of the Exhibit heretofore filed with the
Securities and Exchange Commission, to which there have been no
amendments or changes.
NOTE
In answering any item in this Statement of Eligibility which relates to
matters peculiarly within the knowledge of the obligor and its
directors or officers, the trustee has relied upon information
furnished to it by the obligor.
Inasmuch as this Form T-1 is filed prior to the ascertainment by the
trustee of all facts on which to base responsive answers to Item 2, the
answer to said Item are based on incomplete information.
Item 2, may, however, be considered as correct unless amended by an
amendment to this Form T-1.
Pursuant to General Instruction B, the trustee has responded to Items
1, 2 and 16 of this form since to the best knowledge of the trustee as
indicated in Item 13, the obligor is not in default under any indenture
under which the applicant is trustee.
8
<PAGE> 9
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, IBJ Schroder Bank & Trust Company, a corporation
organized and existing under the laws of the State of New York, has duly
caused this statement of eligibility & qualification to be signed on its
behalf by the undersigned, thereunto duly authorized, all in the City of
New York, and State of New York, on the 21st day of August, 1997.
IBJ SCHRODER BANK & TRUST COMPANY
By: /s/Luis Perez
-------------------------------
Luis Perez
Assistant Vice President
<PAGE> 10
EXHIBIT 6
CONSENT OF TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust Indenture
Act of 1939, as amended, in connection with the proposed issue of Debt
Securities of U.S. Home Corporation, we hereby consent that reports of
examinations by Federal, State, Territorial, or District authorities
may be furnished by such authorities to the Securities and Exchange
Commission upon request therefor.
IBJ SCHRODER BANK & TRUST COMPANY
By: /s/Luis Perez
-------------------------------
Luis Perez
Assistant Vice President
Dated: August 21, 1997
<PAGE> 11
EXHIBIT 7
CONSOLIDATED REPORT OF CONDITION OF
IBJ SCHRODER BANK & TRUST COMPANY
OF NEW YORK, NEW YORK
AND FOREIGN AND DOMESTIC SUBSIDIARIES
REPORT AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
DOLLAR AMOUNTS
IN THOUSANDS
------------
ASSETS
<S> <C>
Cash and balance due from depository institutions:
Noninterest-bearing balances and currency and coin ..........................................................$ 37,521
Interest-bearing balances......................................................................................$ 325,073
Securities: Held-to-maturity securities.........................................................................$ 177,447
Available-for-sale securities.......................................................................$ 47,358
Federal funds sold and securities purchased under agreements to resell in
domestic offices of the bank and of its Edge and Agreement subsidiaries and in
IBFs:
Federal Funds sold and Securities purchased under agreements to resell.........................................$ 75,273
Loans and lease financing receivables:
Loans and leases, net of unearned income.....................................................$1,820,213
LESS: Allowance for loan and lease losses....................................................$ 58,785
LESS: Allocated transfer risk reserve........................................................$ -0-
Loans and leases, net of unearned income, allowance, and reserve...............................................$1,761,428
Trading assets held in trading accounts............................................................................$ 602
Premises and fixed assets (including capitalized leases)...........................................................$ 3,817
Other real estate owned............................................................................................$ 202
Investments in unconsolidated subsidiaries and associated companies................................................$ -0-
Customers' liability to this bank on acceptances outstanding.......................................................$ 310
Intangible assets..................................................................................................$ -0-
Other assets.......................................................................................................$ 74,528
TOTAL ASSETS.......................................................................................................$2,503,559
</TABLE>
<PAGE> 12
LIABILITIES
<TABLE>
<S> <C>
Deposits:
In domestic offices............................................................................................$ 792,944
Noninterest-bearing .......................................................................$ 260,196
Interest-bearing ..........................................................................$ 394,562
In foreign offices, Edge and Agreement subsidiaries, and IBFs..................................................$1,149,176
Noninterest-bearing .......................................................................$ 13,875
Interest-bearing ......................................................................... $1,135,301
Federal funds purchased and securities sold under agreements to repurchase in
domestic offices of the bank and of its Edge and Agreement subsidiaries, and in
IBFs:
Federal Funds purchased and Securities sold under agreements to repurchase.....................................$ 344,500
Demand notes issued to the U.S. Treasury...........................................................................$ 30,000
Trading Liabilities................................................................................................$ 178
Other borrowed money:
a) With a remaining maturity of one year or less...............................................................$ 23,037
b) With a remaining maturity of more than one year.............................................................$ 4,958
Mortgage indebtedness and obligations under capitalized leases.....................................................$ -0-
Bank's liability on acceptances executed and outstanding...........................................................$ 310
Subordinated notes and debentures..................................................................................$ -0-
Other liabilities..................................................................................................$ 71,245
TOTAL LIABILITIES..................................................................................................$2,278,162
Limited-life preferred stock and related surplus...................................................................$ -0-
EQUITY CAPITAL
Perpetual preferred stock and related surplus......................................................................$ -0-
Common stock.......................................................................................................$ 29,649
Surplus (exclude all surplus related to preferred stock)...........................................................$ 217,008
Undivided profits and capital reserves.............................................................................$ (21,223)
Net unrealized gains (losses) on available-for-sale securities.....................................................$ 37
Cumulative foreign currency translation adjustments................................................................$ -0-
TOTAL EQUITY CAPITAL...............................................................................................$ 225,397
TOTAL LIABILITIES AND EQUITY CAPITAL...............................................................................$2,503,559
</TABLE>
