<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1997
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _______________ to _________________.
Commission File Number 1-5899
U.S. HOME CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 21-0718930
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1800 West Loop South, Houston, Texas 77027
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (713) 877-2311
Not Applicable
(Former name, former address and former fiscal year,
if changed since last report.)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that
the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days. YES X NO
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a
plan confirmed by a court. YES X NO
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Class Outstanding at October 31, 1997
Common stock, $.01 par value 11,901,248 shares
<PAGE> 2
U.S. HOME CORPORATION
---------------------
INDEX
-----
Page
Number
------
Part I. Financial Information
Item 1. Financial Statements
Consolidated Condensed Balance Sheets--
September 30, 1997 and December 31, 1996 3
Consolidated Condensed Statements of
Operations--Three and Nine Months Ended
September 30, 1997 and 1996 5
Consolidated Condensed Statements of
Cash Flows--Nine Months Ended
September 30, 1997 and 1996 6
Notes to Consolidated Condensed Financial
Statements 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 13
Part II. Other Information
Item 2. Changes in Securities 18
Item 4. Submission of Matters to a Vote of
Security Holders 18
Item 5. Other Information 18
Item 6. Exhibits and Reports on Form 8-K 20
<PAGE> 3
PART I. FINANCIAL INFORMATION
---------------------
Item 1. Financial Statements
--------------------
U.S. HOME CORPORATION AND SUBSIDIARIES
--------------------------------------
CONSOLIDATED CONDENSED BALANCE SHEETS
-------------------------------------
(Dollars in Thousands, Except Per Share Data)
ASSETS
------
September 30, December 31,
1997 1996
------------- ------------
(Unaudited)
HOUSING:
Cash (including restricted funds) ........... $ 5,498 $ 8,786
Receivables, net ............................ 55,005 28,028
Single-Family Housing Inventories ........... 764,252 709,344
Option Deposits on Real Estate .............. 81,041 70,688
Other Assets ................................ 52,473 49,036
---------- ----------
958,269 865,882
---------- ----------
FINANCIAL SERVICES:
Cash (including restricted funds) ........... 5,357 4,463
Residential Mortgage Loans .................. 75,453 63,656
Other Assets ................................ 8,475 13,410
---------- ----------
89,285 81,529
---------- ----------
$1,047,554 $ 947,411
========== ==========
The accompanying notes are an integral part of these balance sheets.
<PAGE> 4
U.S. HOME CORPORATION AND SUBSIDIARIES
--------------------------------------
CONSOLIDATED CONDENSED BALANCE SHEETS
-------------------------------------
(Dollars in Thousands, Except Per Share Data)
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
September 30, December 31,
1997 1996
-------------- ------------
HOUSING: (Unaudited)
Accounts Payable ........................... $ 105,007 $ 96,594
Accrued Expenses and Other Current
Liabilities .............................. 57,017 50,972
Revolving Credit Facility .................. 14,000 --
Senior, Senior Subordinated and Convertible
Subordinated Debt and Notes Payable ...... 396,936 362,887
----------- -----------
572,960 510,453
----------- -----------
FINANCIAL SERVICES:
Accrued Expenses and Other Current
Liabilities .............................. 30,348 20,854
Revolving Credit Facility .................. 37,955 42,414
----------- -----------
68,303 63,268
----------- -----------
Total Liabilities ........................ 641,263 573,721
----------- -----------
STOCKHOLDERS' EQUITY:
Convertible Preferred Stock,
$25 per share redemption value,
authorized 84,343 shares at
September 30, 1997 and 202,206
shares at December 31, 1996,
none outstanding at September 30,
1997 and 117,863 shares at
December 31, 1996 ........................ -- 2,947
Common Stock, $.01 par value, authorized
50,000,000 shares, outstanding 11,896,246
shares at September 30, 1997 and
11,452,290 shares at December 31, 1996 ... 119 114
Capital In Excess of Par Value ............. 367,810 353,830
Retained Earnings .......................... 44,375 18,821
Unearned Compensation on Restricted
Stock .................................... (1,844) (2,022)
----------- -----------
410,460 373,690
Less Treasury Stock, at cost, 157,743 shares
of common stock at September 30, 1997 .... (4,169) --
----------- -----------
Total Stockholders' Equity ............... 406,291 373,690
----------- -----------
$ 1,047,554 $ 947,411
=========== ===========
The accompanying notes are an integral part of these balance sheets.
<PAGE> 5
U.S. HOME CORPORATION AND SUBSIDIARIES
--------------------------------------
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
-----------------------------------------------
(Dollars in Thousands, Except Per Share Data)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------- ----------------------
1997 1996 1997 1996
--------- --------- --------- ---------
HOUSING:
<S> <C> <C> <C> <C>
Operating Revenues ....................... $ 330,379 $ 312,275 $ 975,038 $ 868,610
--------- --------- --------- ---------
Operating Costs and Expenses -
Cost of products sold .................. 269,314 253,756 800,535 707,669
Selling, general and administrative .... 31,818 29,868 92,708 84,610
Interest ............................... 8,449 8,007 25,231 22,063
--------- --------- --------- ---------
309,581 291,631 918,474 814,342
--------- --------- --------- ---------
Housing Operating Income ................. 20,798 20,644 56,564 54,268
--------- --------- --------- ---------
FINANCIAL SERVICES:
Operating Revenues ....................... 6,888 5,397 18,803 15,060
General, Administrative and Other Expenses 4,455 3,970 12,520 11,008
--------- --------- --------- ---------
Financial Services Operating Income ...... 2,433 1,427 6,283 4,052
--------- --------- --------- ---------
CORPORATE GENERAL AND ADMINISTRATIVE ....... 2,553 2,945 8,556 8,692
--------- --------- --------- ---------
INCOME BEFORE INCOME TAXES AND EXTRAORDINARY
LOSS ..................................... 20,678 19,126 54,291 49,628
PROVISION FOR INCOME TAXES ................. 7,650 6,981 20,087 18,114
--------- --------- --------- ---------
INCOME BEFORE EXTRAORDINARY LOSS ........... 13,028 12,145 34,204 31,514
EXTRAORDINARY LOSS FROM EARLY RETIREMENT OF
DEBT, NET OF INCOME TAX BENEFIT OF $5,080 8,650 -- 8,650 --
--------- --------- --------- ---------
NET INCOME ................................. $ 4,378 $ 12,145 $ 25,554 $ 31,514
========= ========= ========= =========
</TABLE>
<PAGE> 6
<TABLE>
<CAPTION>
INCOME PER COMMON AND COMMON
EQUIVALENT SHARE:
Primary -
<S> <C> <C> <C> <C>
Income before extraordinary loss ..... $ 1.04 $ 1.03 $ 2.79 $ 2.63
Extraordinary loss ................... $ (.69) $ -- $ (.71) $ --
Net income ........................... $ .35 $ 1.03 $ 2.08 $ 2.63
Fully diluted -
Income before extraordinary loss ..... $ .93 $ .91 $ 2.41 $ 2.34
Extraordinary loss ................... $ (.59) $ -- $ (.58) $ --
Net income ........................... $ .34 $ .91 $ 1.83 $ 2.34
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE> 7
U.S. HOME CORPORATION AND SUBSIDIARIES
--------------------------------------
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
-----------------------------------------------
(Dollars in Thousands)
(Unaudited)
Nine Months Ended
September 30,
----------------------
1997 1996
--------- ---------
Net Cash Used by Operating Activities ............ $ (37,706) $ (39,051)
--------- ---------
Net Cash Flows From Investing Activities:
Decrease (increase) in restricted cash ......... (256) 179
Principal collections on investments in
mortgage loans ............................... 4,697 1,543
Purchase of property, plant and equipment,
net of disposals ............................. (2,080) (2,120)
Other .......................................... 85 (405)
--------- ---------
Net cash provided (used) by investing activities 2,446 (803)
--------- ---------
Net Cash Flows From Financing Activities:
Proceeds from revolving credit facilities,
net of repayments ............................ 9,541 (14,985)
Net proceeds from sale of senior and
senior subordinated notes .................... 220,937 73,406
Purchase of senior notes and convertible
subordinated debentures ...................... (188,444) --
Repayment of notes and mortgage notes payable .. (5,110) (11,149)
Repurchase of common stock and
Class B warrants ............................. (4,229) --
Other .......................................... (85) --
--------- ---------
Net cash provided by financing activities ...... 32,610 47,272
--------- ---------
Net Increase (Decrease) in Cash .................. (2,650) 7,418
Cash At Beginning of Period ...................... 8,138 6,228
--------- ---------
Cash At End of Period ............................ $ 5,488 $ 13,646
========= =========
Supplemental Disclosure:
Interest paid, before amount capitalized -
Housing ...................................... $ 26,471 $ 18,656
Financial Services ........................... 1,066 1,152
--------- ---------
$ 27,537 $ 19,808
========= =========
Income taxes paid .............................. $ 21,102 $ 9,589
========= =========
The accompanying notes are an integral part of these statements.
<PAGE> 8
U.S. HOME CORPORATION AND SUBSIDIARIES
--------------------------------------
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
----------------------------------------------------
September 30, 1997
------------------
(Dollars in Thousands)
(Unaudited)
(1) PRINCIPLES OF CONSOLIDATION AND BASIS OF PRESENTATION
The accompanying consolidated condensed balance sheet as of
December 31, 1996, which has been derived from audited financial
statements, and the accompanying unaudited consolidated condensed
financial statements have been prepared pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain
information and note disclosures normally included in annual
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to
those rules and regulations. Although the Company believes that the
disclosures made are adequate to ensure that the information
presented is not misleading, it is suggested that these
consolidated condensed financial statements should be read in
conjunction with the financial statements and notes thereto
included in the Company's latest Annual Report on Form 10-K.
The preparation of consolidated condensed financial statements
requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of
any contingent assets and liabilities at the date of the financial
statements and revenues and expenses during the reporting period.
Management's estimates and assumptions are reflective of, among
other things, prevailing market conditions, expected market
conditions based on published economic forecasts, current operating
strategies and the availability of capital, which are all subject
to change. Changes to the aforementioned or other conditions could
in turn cause changes to such estimates and assumptions and, as a
result, actual results could differ from the original estimates.
In the opinion of the Company, the accompanying consolidated
condensed financial statements contain all adjustments (all of
which were normal and recurring adjustments) necessary to present
fairly the Company's financial position as of September 30, 1997
and December 31, 1996 and its results of operations for the three
and nine month periods ended September 30, 1997 and 1996 and cash
flows for the nine month periods ended September 30, 1997 and 1996.
Because of the seasonal nature of the Company's business, the
results of operations for the three and nine month periods ended
September 30, 1997 and 1996 are not necessarily indicative of the
results for the full year.
<PAGE> 9
(2) INVENTORIES
The components of single-family housing inventories are as follows:
September 30, December 31,
1997 1996
------------ -----------
Housing completed and under construction $ 294,821 $ 280,390
Models 80,287 74,167
Finished lots 147,459 147,893
Land under development 54,606 59,840
Land held for development or sale 187,079 147,054
--------- ---------
$ 764,252 $ 709,344
========= =========
(3) REVOLVING CREDIT FACILITIES, SENIOR, SENIOR SUBORDINATED AND CONVERTIBLE
SUBORDINATED DEBT AND NOTES PAYABLE
Housing -
Revolving credit facility, senior, senior subordinated and
convertible subordinated debt and notes payable consist of the
following:
September 30, December 31,
------------- ------------
1997 1996
Revolving credit facility $ 14,000 $ -
----------- ----------
7.95% Senior notes due 2001 75,000 75,000
9.75% Senior notes due 2003 79,703 200,000
8.25% Senior notes due 2004 100,000 -
8.88% Senior subordinated notes due 2007 125,000 -
4.875% Convertible subordinated
debentures due 2005 - 80,000
Notes and mortgage notes payable 17,233 7,887
--------- ---------
396,936 362,887
--------- ---------
$ 410,936 $ 362,887
========= ==========
The Company has an unsecured revolving credit facility (the "Credit
Facility") with a group of banks. In October 1997, the maximum
amount which the Company may borrow under the Credit Facility was
increased from $130,000 to $180,000, of which up to $20,000 may be
used for letter of credit obligations, subject to a borrowing base
limitation. The amount available for borrowing under the Credit
Facility is based on housing inventories, land, finished lots and
closing proceeds receivable less the outstanding senior debt
borrowings (as defined), including amounts outstanding under the
<PAGE> 10
Credit Facility; as the amount invested in these categories
changes, the amount of available borrowings will increase or
decrease. At September 30, 1997, $110,396 of the Credit Facility
commitment ($160,396 after giving effect to the increase in the
commitment to $180,000) was available for borrowing. Borrowings
bear interest at a premium over the London Interbank Offered Rate
("LIBOR") or the rate announced by the agent bank. The Credit
Facility expires on May 31, 2001, but may be extended annually
beginning in 1999 for successive one-year periods with the consent
of the banks, and contains numerous real estate and financial
covenants, including restrictions on incurring additional debt,
creation of liens and levels of land and housing inventories
maintained by the Company and a prohibition on the payment of
dividends, other than stock dividends.
From time to time, the Company may utilize interest rate swap
agreements to manage interest costs and hedge against risks
associated with changing interest rates. The Company designates
interest rate swaps as hedges of specific debt instruments and
recognizes interest rate differentials as adjustments to interest
paid or accrued as the differentials occur. Counterparties to these
agreements are major financial institutions. The Company believes
that credit loss from counterparty non-performance is remote. At
September 30, 1997, the Company had an interest rate swap agreement
outstanding with a notional amount of $50,000 which will mature in
2000 and effectively fixed the interest rate on a portion of its
Credit Facility borrowings. While the outstanding balance of the
Credit Facility may fluctuate, the Company anticipates that the
average balance of the borrowings in future periods will generally
be in excess of the notional amount.
In August 1997, the Company completed the sale of $100,000 principal
amount of its 8.25% senior notes due 2004 (the "2004 Senior Notes")
and $125,000 principal amount of its 8.88% senior subordinated notes
due 2007 (the "Senior Subordinated Notes") for the purpose of
raising funds to redeem its 4.875% convertible subordinated
debentures due 2005 (the "Debentures") and purchase its 9.75% senior
notes due 2003 (the "2003 Senior Notes"). Interest on the 2004
Senior Notes and Senior Subordinated Notes is payable on February 15
and August 15 of each year, commencing on February 15, 1998. On or
after August 15, 2002, the Senior Subordinated Notes may be redeemed
at the option of the Company, in whole or in part, at prices ranging
from 104.44% (during the 12-month period beginning August 15, 2002)
to 100% (on or after August 15, 2005) of the principal amount
thereof, together with accrued and unpaid interest. Upon a change of
control of the Company, holders of the 2004 Senior Notes and the
Senior Subordinated Notes will have the right to require the Company
to redeem their notes at a price of 101% of the principal amount
thereof, together with accrued and unpaid interest. There can be no
assurance that sufficient funds will be available at the time of a
change of control to make any required repurchases. The indentures
relating to the 2004 Senior Notes and Senior Subordinated Notes
contain numerous covenants, including a minimum tangible net worth
requirement and a limitation on the incurrence of additional debt.
<PAGE> 11
In August 1997, pursuant to a tender offer, the Company offered to
purchase any and all of the $200,000 principal amount of its 2003
Senior Notes. In September 1997, the Company purchased $110,480
principal amount of the 2003 Senior Notes pursuant to the tender
offer and, subsequent to the expiration of the tender offer,
purchased in an open market transaction $9,817 principal amount of
the 2003 Senior Notes. Also in September 1997, the Company redeemed
$69,248 principal amount of the Debentures, and $10,752 principal
amount of the Debentures was converted, prior to the redemption
date, into 302,866 shares of the Company's common stock. The early
retirement of the 2003 Senior Notes and redemption of the Debentures
resulted in an extraordinary loss of $8,650, net of income tax
benefit of $5,080. In connection with the purchase of the 2003
Senior Notes pursuant to the tender offer, the indenture for the
2003 Senior Notes was amended to eliminate certain restrictive
covenants, including the limitation on the incurrence of additional
debt, as well as certain events of default.
During 1997, the Company purchased land in one transaction for
approximately $15,654, of which $13,151 was financed by the seller.
The financed portion of this purchase was treated as a non-cash
transaction for purposes of the consolidated condensed statements of
cash flows.
Financial Services -
The Company's mortgage banking subsidiary, U.S. Home Mortgage
Corporation ("Mortgage"), may borrow up to $65,000 under a
revolving line of credit (the "Mortgage Credit Facility") secured
by residential mortgage loans and mortgage notes receivable. The
Mortgage Credit Facility is not guaranteed by the Company, matures
on August 31, 1998 and bears interest at a premium over the LIBOR
rate.
<PAGE> 12
(4) INTEREST
A summary of housing interest for the three and nine month periods
ended September 30, 1997 and 1996 follows:
Three Month Period
------------------
1997 1996
--------- --------
Capitalized at beginning of period $ 59,396 $ 62,165
Capitalized 10,493 8,526
Previously capitalized interest included in
interest expense (8,449) (8,008)
Other (4) (22)
-------- --------
Capitalized at end of period $ 61,436 $ 62,661
======== ========
Nine Month Period
-----------------
1997 1996
--------- --------
Capitalized at beginning of period $ 58,566 $ 59,898
Capitalized 28,048 24,853
Previously capitalized interest included in
interest expense (25,231) (22,064)
Other 53 (26)
-------- --------
Capitalized at end of period $ 61,436 $ 62,661
======== ========
Financial services interest expense for the three and nine month
periods ended September 30, 1997 and 1996, is included in "general,
administrative and other expenses" in the accompanying consolidated
condensed statements of operations, as follows:
1997 1996
-------- ------
Three month period $ 423 $ 345
Nine month period 1,086 1,170
<PAGE> 13
(5) INCOME PER SHARE
The following weighted average number of common and common
equivalent shares was used to compute income per share for the
three and nine month periods ended September 30, 1997 and 1996:
Three Month Period Nine Month Period
------------------ -----------------
1997 1996 1997 1996
---------- ---------- ---------- ----------
Primary 12,569,359 11,788,111 12,278,093 11,977,570
Fully diluted 14,573,584 14,041,632 14,918,868 14,231,091
The weighted average number of common and common equivalent shares
outstanding for primary income per share includes the dilutive
effect of the convertible redeemable preferred stock (all of which
had been converted to common stock or redeemed as of March 18,
1997) and Class B warrants and the assumed exercise of stock
options. Fully diluted income per share includes the assumed
conversion of the Debentures through their redemption and
conversion in September 1997.
During April 1997, the Company's Board of Directors authorized the
repurchase of up to 750,000 shares of outstanding common stock or
Class B warrants, in the aggregate, from time to time in the open
market and/or in private transactions. In addition, the Board of
Directors authorized an odd-lot repurchase program for holders of
less than 100 shares of the Company's common stock. Through
September 30, 1997, the Company had repurchased 157,743 shares of
common stock (including 57,343 shares in the odd-lot program) and
8,100 Class B warrants for an aggregate purchase price of $4,229.
The cost of the repurchased shares has been included in "Treasury
Stock" and the cost of the repurchased warrants has been deducted
from "Capital in Excess of Par Value" in the accompanying
consolidated condensed balance sheets.
<PAGE> 14
Item 2. Management's Discussion and Analysis of Financial Condition and
---------------------------------------------------------------
Results of Operations
---------------------
Results of Operations
- ---------------------
Housing
-------
The following table sets forth certain financial information for the
periods indicated (dollars in thousands, except average sales price):
Three Months Ended Nine Months Ended
September 30, September 30,
------------------- -----------------
1997 1996 1997 1996
-------- -------- -------- --------
Revenues -
Single-family homes $323,707 $308,727 $962,217 $859,285
Land and other 6,672 3,548 12,821 9,325
-------- -------- -------- --------
Total $330,379 $312,275 $975,038 $868,610
======== ======== ======== ========
Single-family homes -
Gross margin amount $ 58,670 $ 58,214 $170,899 $159,473
Gross margin percentage 18.1% 18.9% 17.8% 18.6%
Units delivered 1,873 1,848 5,672 5,213
Average sales price $172,800 $167,100 $169,600 $164,800
New orders taken 1,882 1,669 6,545 6,147
Backlog at end of period 3,911 3,665
Selling, general and
administrative expenses
as a percentage of
housing revenues 9.6% 9.6% 9.5% 9.7%
Interest -
Paid or accrued $ 10,493 $ 8,526 $ 28,048 $ 24,853
Percentage capitalized 100.0% 100.0% 100.0% 100.0%
Previously capitalized
interest included in
interest expense $ 8,449 $ 8,008 $ 25,231 $ 22,064
Percentage of housing
revenues 2.6% 2.6% 2.6% 2.5%
<PAGE> 15
Revenues and Sales -
- --------------------
Revenues from sales of single-family homes for the three and nine month
periods ended September 30, 1997 increased 5% and 12% compared to the three
and nine month periods ended September 30, 1996. The increases resulted
primarily from a 9% increase in the number of housing units delivered in
the nine month period and 3% increases in the average sales price for both
periods. The average sales price is impacted by product mix, geographical
mix and changing prices on units delivered.
New orders taken for the three and nine month periods ended September 30,
1997 increased 13% and 6% compared to the same periods in 1996. See Part
II, "Item 5 - Other Information" on page 19 for a table of unit activity by
market for the three and nine month periods ended September 30, 1997 and
1996.
Gross Margins -
- ---------------
The decreases in the gross margin percentages for the three and nine month
periods ended September 30, 1997 from the same periods in 1996 were
primarily due to a more competitive housing environment, resulting in the
increased use of sales price incentives, the cost of which the Company was
not able to offset by increases in the average sales prices.
While gross margins continue to remain under pressure in 1997, margins on
housing units delivered during the third quarter showed improvement over
the first two quarters of 1997. The Company expects that operating margins
in the fourth quarter of 1997 will continue to exceed those in the first
half of the year. However, there can be no assurance margins will continue
to improve because they may be adversely affected by future events,
including a change in the competitive housing environment and increases in
construction, labor and material costs.
Selling, General and Administrative Expenses -
- ----------------------------------------------
As a percentage of housing revenues, selling, general and administrative
expenses for the three month period ended September 30, 1997 remained the
same when compared to the same period in 1996; however, selling, general
and administrative expenses decreased for the nine month period ended
September 30, 1997 when compared to the same period in 1996. Actual
selling, general and administrative expenses for the three and nine month
periods ended September 30, 1997 increased $2.0 million and $8.1 million
when compared to the same periods in 1996. These increases were primarily
due to increased payroll costs and marketing center expenses resulting from
increased activities.
<PAGE> 16
Interest -
- ----------
Interest paid or accrued for the three and nine month periods ended
September 30, 1997 increased approximately 23% and 13% compared to the same
periods in 1996. The increases in 1997 were primarily due to increased
borrowings under the Company's Credit Facility and the sale of the 2004
Senior Notes and Senior Subordinated Notes in August 1997, offset in part
by the redemption and conversion of the Debentures and the purchase of a
portion of the 2003 Senior Notes in September 1997.
The Company capitalizes interest cost into housing inventories and charges
the previously capitalized interest to interest expense when the related
inventories are delivered. The amount of interest capitalized and
previously capitalized interest expensed in any period is a function of the
amount of housing assets, land sales and the number of housing units
delivered, average outstanding debt levels and average interest rates.
Capitalized interest amounts charged to interest expense in the three and
nine month periods ended September 30, 1997 were greater than the same
periods in 1996 primarily due to the increases in the number of housing
units delivered and higher average debt levels, offset in part by increases
in the amount of housing assets qualifying for interest capitalization.
Financial Services
------------------
Revenues -
- ----------
Revenues for the financial services segment for the periods indicated were
as follows (dollars in thousands):
Three Months Nine Months
Ended Ended
September 30, September 30,
---------------- -----------------
1997 1996 1997 1996
------- ------- ------- -------
U.S. Home Mortgage Corporation and
Subsidiary $ 5,914 $ 4,265 $15,870 $12,092
Other financial services operations 974 1,132 2,933 2,968
------- ------- ------- -------
$ 6,888 $ 5,397 $18,803 $15,060
======= ======= ======= =======
<PAGE> 17
Approximately 81% of the housing units delivered by the Company in both the
three and nine month periods ended September 30, 1997 and 83% delivered by
the Company in both the three and nine month periods ended September 30,
1996 were purchased using mortgage financing. Of the total housing units
financed, 78% and 74% were financed by U.S. Home Mortgage Corporation
("Mortgage") for the three and nine month periods ended September 30, 1997
compared to 58% and 60% for the three and nine month periods ended
September 30, 1996.
The increases in Mortgage's revenues for the three and nine month periods
ended September 30, 1997 when compared to the three and nine month periods
ended September 30, 1996 were primarily due to the increase in mortgage
loan originations and income from the sale of mortgage loans and servicing
rights.
Other
-----
Corporate General and Administrative -
- --------------------------------------
Corporate general and administrative includes the operations of the
Company's corporate office. As a percentage of total revenues, such
expenses were .8% and .9% for the three and nine month periods ended
September 30, 1997 and were .9% and 1.0% for the three and nine month
periods ended September 30, 1996. Actual corporate general and
administrative expenses for the three and nine month periods ended
September 30, 1997 were $2.6 million and $8.6 million, compared to $2.9
million and $8.7 million for the three and nine month periods ended
September 30, 1996.
Income Per Share -
- ------------------
For the third quarter of 1997, fully diluted earnings per share were based
on 14.6 million common shares (the "shares") including the dilutive effect
of the weighted average number of shares potentially issuable (i) for the
conversion of the Debentures through their redemption on September 10, 1997
(1.74 million shares) and (ii) for the exercise of the Class B warrants (.9
million shares). Fully diluted earnings per share in subsequent quarters
compared to the third quarter of 1997 will be impacted by the redemption of
the Debentures which eliminated 1.95 million shares, net of shares issued
for conversion, from dilution and by the potential dilutive effect,
depending upon the price of the Company's common stock, of up to 1.0
million additional shares issuable upon exercise of the Class B warrants,
which expire in June 1998.
<PAGE> 18
Financial Condition and Liquidity
- ---------------------------------
Housing
-------
The Company is significantly affected by the cyclical nature of the
homebuilding industry, which is sensitive to fluctuations in economic
activity and interest rates and the level of consumer confidence. Sales of
new homes are also affected by market conditions for rental properties and
by the condition of the resale market for used homes, including foreclosed
homes. For example, an oversupply of resale units depresses prices and
reduces the margins available on sales of new homes. The sale of new homes
and profitability from sales are heavily influenced by the level and
expected direction of interest rates. Increases in interest rates tend to
have a depressing effect on the market for new homes in view of increased
monthly mortgage costs to potential home buyers.
The Company's most significant needs for capital resources are land and
finished lot purchases, land development and housing construction. The
Company's ability to generate cash adequate to meet these needs is
principally achieved from the sale of homes and the margins thereon, the
utilization of Company-owned lots and borrowings under its financing
facilities, including the Credit Facility.
During the three month period ended September 30, 1997, the Company
completed a refinancing of a substantial portion of its public debt. In
August 1997, the Company sold $100 million principal amount of its 2004
Senior Notes and $125 million principal amount of its Senior Subordinated
Notes for the purpose of raising funds to redeem its Debentures and
purchase its 2003 Senior Notes. In September 1997, the Company redeemed
$69.2 million principal amount of its Debentures and purchased $120.3
million principal amount of its 2003 Senior Notes for $198.8 million in the
aggregate. Also in September 1997, $10,752 principal amount of the
Debentures was converted into 302,866 shares of the Company's common stock.
The balance of the 2003 Senior Notes ($79.7 million) are first callable in
June 1998. The Company currently intends to redeem these notes, though the
Company may purchase such notes in the open market prior to such date.
However, there can be no assurance that the Company will make such purchase
or redeem such notes. See Note 3 of Notes to Consolidated Condensed
Financial Statements.
The refinancing strengthens the Company's capital structure by extending a
substantial portion of its public debt maturities which were due in 2003
and 2005 to due dates of 2004 and 2007.
Access to quality land and lot locations is an integral part of the
Company's success. Typically, in order to secure the rights to quality
locations and provide sufficient lead time for development, the Company
must acquire land rights well in advance of when orders for housing units
are expected to occur. The Company attempts to minimize its exposure to the
<PAGE> 19
cyclical nature of the housing market and its use of working capital by
employing rolling lot options, primarily in its affordable and move-up home
communities, which enable the Company to initially pay a small portion of
the total lot cost and then purchase the lots on a scheduled basis. The
increase in land inventories in 1997 from 1996 was primarily the result of
increased activities, including the increased activities in the Company's
retirement and active-adult communities.
The Company has financed, and expects to continue to finance, its working
capital needs from operations and borrowings, including those made under
the Credit Facility. The Credit Facility (and previous credit facilities)
have enabled the Company to meet peak operating needs. In August 1997, the
Company entered into an interest rate swap agreement which has effectively
fixed the interest rate on $50 million of its Credit Facility borrowings
until August 2000 and in October 1997 the Credit Facility borrowing
commitment was increased from $130 million to $180 million. See Note 3 of
Notes to Consolidated Condensed Financial Statements.
The net cash provided or used by the operating, investing and financing
activities of the housing operations for the nine month periods ended
September 30, 1997 and 1996 is summarized below (dollars in thousands):
1997 1996
--------- ---------
Net cash provided (used) by:
Operating activities $(42,406) $(40,327)
Investing activities (1,772) (2,608)
Financing activities 37,154 54,257
-------- --------
Net increase (decrease) in cash $ (7,024) $ 11,322
======== ========
Housing operating activities are, at any time, affected by a number of
factors, including the number of housing units under construction and
housing units delivered. Cash flows from housing operating activities for
1997 used more cash than 1996 primarily due to an increase in housing
proceeds receivables and the timing of payments related to construction and
land asset activities, offset in part by a decrease in construction and
land asset activities and the increase in the number of housing units
delivered.
Cash flow from housing financing activities for 1997 provided cash
reflecting the sale of the Company's 2004 Senior Notes and Senior
Subordinated Notes and net borrowings under the Credit Facility, offset by
the purchase of the Company's 2003 Senior Notes and Debentures and
repurchase of common stock and Class B warrants. Cash flow from housing
financing activities in 1996 provided cash reflecting the sale of the
Company's 7.95% senior notes due 2001, offset primarily by the repayment of
outstanding amounts under the Credit Facility.
The Company believes that cash flow from operations and amounts available
under the Credit Facility will be sufficient to meet its working capital
obligations and other needs. However, should the Company require capital in
excess of that which is currently available, there can be no assurance that
it will be available.
<PAGE> 20
Financial Services
------------------
Mortgage's activities represent a substantial portion of the financial
services segment's activities. As loan originations by Mortgage are
primarily from housing units delivered by the Company's home building
operations, Mortgage's financial condition and liquidity are to a
significant extent dependent upon the financial condition of the Company.
Financial services operating activities are affected primarily by
Mortgage's loan originations which result in the sale of mortgage loans and
related servicing rights to third party investors. Cash flows from
financial services operating activities are also affected by the timing of
the sales of loans and servicing rights which generally are sold to
investors within 30 days after homes are delivered. In this regard, cash
flows from financial services operating activities for 1997 provided more
cash compared to 1996 primarily due to increased profitability and the
timing of payments related to Mortgage's origination activities, offset in
part by an increase in residential mortgage loan receivables.
The Company finances its financial services operations primarily from
internally generated funds, such as from the origination and sale of
residential mortgage loans and related servicing rights, and short-term
debt. As more fully discussed in Note 3 of Notes to Consolidated Condensed
Financial Statements, the short-term debt consists of a $65 million secured
revolving line of credit (the "Mortgage Credit Facility") which matures on
August 31, 1998. While the Mortgage Credit Facility contains numerous
convenants, including a debt to tangible net worth ratio and a minimum
tangible net worth requirement, these convenants are not anticipated to
significantly limit Mortgage's operations.
The Company has no obligation to provide funding to its financial services
operations, nor does it guarantee any of its financial services
subsidiaries' debt. The Company believes that the internally generated
funds and the Mortgage Credit Facility will be sufficient to provide for
Mortgage's working capital needs.
<PAGE> 21
Item 2. Changes in Securities and Item 4. Submission of Matters to a Vote of
--------------------- ----------------------------------
Security Holders
----------------
In connection with the Company's repurchase of greater than a
majority of the outstanding principal amount of the 2003 Senior
Notes, the Company amended the indenture pursuant to which the
Notes were issued. This amendment eliminated many of the
restrictive covenants and two events of default from such
indenture.
The indentures relating to the 2004 Senior Notes and Senior
Subordinated Notes contain numerous covenants, including a
limitation on the declaration of dividends to holders of equity
securities.
Item 5. Other Information
-----------------
Additional Operating Data -
The following table provides information (expressed in number of
housing units) with respect to new orders taken, deliveries to
purchasers of single-family homes and backlog by state for the
three and nine month periods ended September 30, 1997 and 1996:
States New Orders Deliveries
------ ---------- ----------
1997 1996 1997 1996
---- ---- ---- ----
Three Month Period -
Arizona 253 192 237 221
California 160 113 123 139
Colorado 302 329 332 320
Florida 588 448 534 520
Indiana/Ohio 25 36 32 43
Maryland/Virginia 88 76 95 102
Minnesota 78 60 104 77
Nevada 71 64 79 91
New Jersey 112 128 135 151
Texas 205 223 202 184
----- ----- ----- -----
1,882 1,669 1,873 1,848
===== ===== ===== =====
<PAGE> 22
States New Orders Deliveries Backlog
------ ---------- ---------- -------
1997 1996 1997 1996 1997 1996
---- ---- ---- ---- ---- ----
Nine Month Period -
Arizona 729 686 637 737 361 334
California 507 430 404 370 252 171
Colorado 1,055 1,146 1,071 876 625 732
Florida 2,142 1,776 1,733 1,582 1,442 1,180
Indiana/Ohio 103 161 117 103 70 120
Maryland/Virginia 303 313 257 255 146 171
Minnesota 317 251 226 222 198 148
Nevada 249 302 271 278 112 143
New Jersey 363 399 338 322 204 260
Texas 777 683 618 468 501 406
----- ----- ----- ----- ----- -----
6,545 6,147 5,672 5,213 3,911 3,665
===== ===== ===== ===== ===== =====
Board of Directors Resignation -
During the quarter ended September 30, 1997, Jack L. McDonald
accepted a position as Chief Executive Officer with New Millennium
Homes, another home building company, and accordingly, resigned as
a member of the Company's Board of Directors.
Cautionary Disclosure Regarding Forward-Looking Statements -
Certain statements contained herein, in the Company's press
releases, oral communications and other filings with the Securities
and Exchange Commission that are not historical facts are, or may
be considered to be, forward-looking statements within the meaning
of Section 21E of the Securities Exchange Act of 1934, as amended.
Such matters involve risks and uncertainties, including general
economic conditions, fluctuations in interest rates, the impact of
competitive products and prices, the supply of raw materials and
prices, levels of consumer confidence and other risks referred to
under the caption "Management's Discussion and Analysis of
Financial Condition and Results of Operations, Other -- Cautionary
Disclosure Regarding Forward-Looking Statements" in the Company's
Annual Report on Form 10-K for the fiscal year ended December 31,
1996.
<PAGE> 23
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits
Exhibit 3.1 - Certificate of Retirement, dated as of June 16, 1997
Exhibit 10.1 - Fifth Amendment to First Amended and Restated
Warehousing Credit and Security Agreement (single
family mortgage loans), dated as of August 28, 1997
between U.S. Home Mortgage Corporation and
Residential Funding Corporation
Exhibit 10.2 - Senior Indenture, dated as of August 28, 1997,
by and between U.S. Home Corporation
and IBJ Schroder Bank & Trust Company,
as trustee, relating to U.S. Home Corporation's
8.25% Senior Notes due 2004
Exhibit 10.3 - Senior Subordinated Indenture, dated as of
August 28, 1997, by and between U.S. Home
Corporation and IBJ Schroder Bank & Trust
Company, as trustee, relating to U.S. Home
Corporation's 8.88% Senior Subordinated Notes
due 2007
Exhibit 10.4 - Acknowledgment of Satisfaction and Discharge,
dated as of September 10, 1997, by
Marine Midland Bank, as trustee, with respect
to the indenture relating to the 4.875%
Convertible Subordinated Debentures
Exhibit 10.5 - Supplemental Indenture, dated as of
September 23, 1997 between U.S. Home
Corporation and IBJ Schroder Bank & Trust
Company, as trustee, with respect to the
indenture relating to the 9.75% Senior Notes
due 2003
Exhibit 10.6 - Amended and Restated Retirement Plan for
Non-Employee Directors
Exhibit 10.7 - Commitments and Acceptances, each dated
October 8, 1997, among U.S. Home Corporation,
as borrower, The First National Bank of Chicago,
as agent, and each of AmSouth Bank,
Credit Lyonnais New York Branch, The First
National Bank of Chicago, and Guaranty
Federal Bank, F.S.B., each as an Accepting
Lender relating to the Amended and Restated
Credit Agreement with First National Bank of
Chicago, as Agent
Exhibit 11 - Computation of Income Per Common Share
Exhibit 27 - Financial Data Schedule
<PAGE> 24
(b) Reports on Form 8-K
On August 26, 1997, under Item 5 "Other Events" of Form 8-K,
the Company filed a Current Report on Form 8-K, including the
documents attached as exhibits, in connection with its
Registration Statement on Form S-3 (Registration No.
333-31457) filed with the Securities and Exchange Commission
on July 17, 1997.
No other Current Report on Form 8-K was filed by the Company during
July, August or September 1997.
<PAGE> 25
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
U.S. HOME CORPORATION
Date: November 6, 1997 /s/Isaac Heimbinder
-------------------------------------
Isaac Heimbinder
President, Co-Chief Executive Officer
and Chief Operating Officer
Date: November 6, 1997 /s/Chester P. Sadowski
-------------------------------------
Chester P. Sadowski
Vice President, Controller
and Chief Accounting Officer
<PAGE> 26
INDEX OF EXHIBITS
-----------------
Sequential
Exhibit Numbered
Number Page
- ------ -----------
3.1 Certificate of Retirement, dated as of June 16, 1997 28
10.1 Fourth Amendment to First Amended and Restated
Warehousing Credit and Security Agreement (single
family mortgage loans), dated as of September 25,
1997 between U.S. Home Mortgage Corporation and
Residential Funding Corporation 54
10.2 Senior Indenture, dated as of August 28, 1997, by
and between U.S. Home Corporation and IBJ Schroder
Bank & Trust Company, as trustee, relating to U.S.
Home Corporation's 8.25% Senior Notes due 2004 155
10.3 Senior Subordinated Indenture, dated as of
August 28, 1997, by and between U.S. Home
Corporation and IBJ Schroder Bank & Trust Company,
as trustee, relating to U.S. Home Corporation's
8.88% Senior Subordinated Notes due 2007 254
10.4 Acknowledgment of Satisfaction and Discharge, dated
as of September 10, 1997, by Marine Midland Bank
as trustee with respect to the indenture relating
to the 4.875% Convertible Subordinated Debentures 257
10.5 Supplemental Indenture, dated as of September 23,
1997 between U.S. Home Corporation and IBJ Schroder
Bank & Trust Company, as trustee, with respect to
the indentures relating to the 9.75% Senior Notes
due 2003 260
10.6 Amended and Restated Retirement Plan for
Non-Employee Directors 268
10.7 Commitments and Acceptances, each dated
October 8, 1997, among U.S. Home Corporation, as
borrower, The First National Bank of Chicago, as
agent, and each of AmSouth Bank, Credit Lyonnais
New York Branch, The First National Bank of
Chicago, and Guaranty Federal Bank, F.S.B., each
as an Accepting Lender relating to the Amended
and Restated Credit Agreement with First National
Bank of Chicago, as Agent 279
11 Computation of Income Per Common Share 281
27 Financial Data Schedule
<PAGE> 27
EXHIBIT 3.1
U.S. HOME CORPORATION
CERTIFICATE OF RETIREMENT
(Pursuant to Section 243 of the
General Corporation Law of the State of Delaware)
U.S. Home Corporation, a corporation organized and
existing under the General Corporation Law of the State of Delaware
(the "Corporation"),
DOES HEREBY CERTIFY:
FIRST: That at a meeting of the Board of Directors of the
Corporation, a resolution was duly adopted which identified shares of the
capital stock of the Corporation, which, to the extent hereinafter set
forth, have the status of retired shares (the "Retired Shares").
SECOND: The Retired Shares, which were either converted
into an equal number of shares of the Corporation=s common stock, $.01 par
value per share, or redeemed since the Corporation=s previous filing of a
Certificate of Retirement with the Secretary of State of the State of
Delaware on September 4, 1996, are identified as being an aggregate of One
Hundred Twenty-Two Thousand Eight Hundred Sixty-Three (122,863) shares of
Convertible Redeemable Preferred Stock, $0.10 par value per share (the
A Convertible Redeemable Preferred Stock).
THIRD: That the Restated Certificate of Incorporation of
the Corporation, as filed on June 18, 1993 with the Secretary of State of
the State of Delaware, as amended (the A Restated Certificate), prohibits
the reissue of the shares of Convertible Redeemable Preferred Stock when so
retired and provides that such shares will be restored to the status of
authorized but unissued shares of preferred stock of the Corporation
without designation as to series; and pursuant to the provisions of Section
243 of the General Corporation Law of the State of Delaware, upon the
effective date of the filing of this Certificate, it shall have the effect
of amending the Restated Certificate so as to reduce the authorized number
of shares of the Convertible Redeemable Preferred Stock to the extent of
One Hundred Twenty-Two Thousand Eight Hundred Sixty-Three (122,863) shares,
being the total number of shares retired pursuant to this Certificate of
Retirement. As a result of such amendment, the aggregate number of
authorized but unissued shares of Preferred Stock shall not be reduced and
the authorized number of shares of Convertible Redeemable Preferred Stock
shall be reduced to Eighty-Four Thousand Three Hundred Forty-Three (84,343)
shares.
FOURTH: The capital of the Corporation shall not be
reduced by or in connection with the retirement of the shares of Convertible
Redeemable Preferred Stock.
<PAGE> 28
IN WITNESS WHEREOF, the Corporation has caused this
Certificate to be signed by Isaac Heimbinder, its Co-Chief Executive
Officer and President, this 16th day of June, 1997.
By: /s/ Isaac Heimbinder
---------------------------------
ISAAC HEIMBINDER
Co-Chief Executive Officer and President
<PAGE> 29
EXHIBIT 10.1
FIFTH AMENDMENT TO
------------------
FIRST AMENDED AND RESTATED
--------------------------
WAREHOUSING CREDIT AND SECURITY AGREEMENT
-----------------------------------------
THIS FIFTH AMENDMENT TO FIRST AMENDED AND RESTATED WAREHOUSING CREDIT
AND SECURITY AGREEMENT (this "Amendment") is entered into as of this 28th
day of August 1997, by and between U.S. HOME MORTGAGE CORPORATION, a
Florida corporation (the "Company"), and RESIDENTIAL FUNDING CORPORATION, a
Delaware corporation (the "Lender").
WHEREAS, the Company and the Lender have entered into a single family
revolving warehouse facility with a present Commitment Amount of Sixty-Five
Million Dollars ($65,000,000), to finance the origination and acquisition
of Mortgage Loans as evidenced by a Third Amended and Restated Warehousing
Promissory Note in the principal sum of Sixty-Five Million Dollars
($65,000,000), dated June 25, 1997, and a Warehousing Credit and Security
Agreement dated August 31, 1995, as the same may have been amended or
supplemented (the "Agreement");
WHEREAS, the Company has requested the Lender to extend the period for
which the Commitment under the Agreement has been made and to amend certain
other terms of the Agreement, and the Lender has agreed to such extension
and amendment subject to the terms and conditions of this Amendment;
NOW, THEREFORE, for and in consideration of the foregoing and of the
mutual covenants, agreements and conditions hereinafter set forth and for
other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto hereby agree as follows:
1. All capitalized terms used herein and not otherwise defined shall
have their respective meanings set forth in the Agreement.
2. The effective date ("Effective Date") of this Amendment shall be
08-28-97, the date on which the Company has complied with all the terms
and conditions of this Amendment.
3. Section 1.1 of the Agreement shall be amended by adding the
following definitions in the appropriate alphabetical order:
"Designated Bank Charges" means any fees, interest or other
charges that would otherwise be payable to a Designated Bank,
including Federal Deposit Insurance Corporation insurance premiums,
service charges and such other charges as may be imposed by
governmental authorities from time to time.
<PAGE> 30
"High LTV Mortgage Loan" means a Mortgage Loan of which the sum
of the maximum amount available to be borrowed thereunder (whether or
not borrowed), at the time of origination plus the Mortgage Note
Amounts of all other Mortgage Loans secured by the related improved
real property exceeds one hundred percent (100%) of the appraised
value of such related improved real property.
"Manufactured Home" means a structure that is built on a
permanent chassis (steel frame) with the wheel assembly necessary for
transportation in one or more sections to a permanent site or
semi-permanent site and which has been built in compliance with the
National Manufactured Housing Construction and Safety Standards
established by HUD.
4. Section 1.1 of the Agreement shall be amended to delete the
definitions of "Conventional Mortgage Loan," "Eligible Balances," "Home
Equity Loan," "Maturity Date," "Mortgage," "Mortgage Note Amount,"
"Nonconforming Mortgage Loan" and "Second Mortgage Loan" in their entirety,
replacing them with the following
definitions:
"Conventional Mortgage Loan" means a closed-end First Mortgage
Loan other than an FHA insured Mortgage Loan, a VA guaranteed Mortgage
Loan, an FmHA guaranteed Mortgage Loan or a High LTV Mortgage Loan.
"Eligible Balances" means all funds of or maintained by the
Company and its Subsidiaries in accounts at a Designated Bank, less
balances to support float, reserve requirements, and such other
reductions as may be imposed by governmental authorities from time to
time.
"Home Equity Loan" means an open-ended revolving line of credit
that is a Mortgage Loan secured by either a First Mortgage or a Second
Mortgage, which is not a High LTV Mortgage Loan or a Title I Mortgage
Loan.
"Maturity Date" shall mean the earlier of: (a) the close of
business on August 31, 1998, as such date may be extended from time to
time in writing by the Lender, in its sole discretion, on which date
the Commitment shall expire of its own term, and without the necessity
of action by the Lender, and (b) the date the Advances become due and
payable pursuant to Section 8.2 below.
"Mortgage" means a first mortgage or first deed of trust on
improved real property (including, without limitation, real property
to which a manufactured home has been affixed in a manner such that
the Lien of a mortgage or deed of trust would attach to such
manufactured home under applicable real property law).
"Mortgage Note Amount" means, as of the date of determination,
the then outstanding unpaid principal amount of a Mortgage Note
(whether or not an additional amount is available to be drawn
thereunder).
<PAGE> 31
"Nonconforming Mortgage Loan" means a Conventional Mortgage Loan
which is not a Conforming Mortgage Loan or a Jumbo Mortgage Loan,
which has a credit risk rating C- or better (determined using
underwriting standards which comply with industry standards in the
sole judgment of the Lender), and which is underwritten and approved
for purchase by an Investor prior to funding if its original principal
amount exceeds Six Hundred Thousand Dollars ($600,000).
"Second Mortgage Loan" means a closed-end Mortgage Loan secured
by a Second Mortgage, which is not a Title I Mortgage Loan or a High
LTV Mortgage Loan.
5. Section 2.1(b)(3) of the Agreement shall be deleted in its entirety
and the following is substituted in lieu thereof:
(3) No Advance shall be made against a High LTV Mortgage
Loan, a Home Equity Loan, a Second Mortgage Loan, a Title I
Mortgage Loan or a HUD
203(K) Mortgage Loan.
6. Section 2.2(c) of the Agreement shall be amended to add the
following sentence to the end thereof:
"The Lender shall have no obligation to make a Wet Settlement Advance
directly to the Parent against a Mortgage Loan unless the Lender has
received satisfactory evidence from the title company closing the
Mortgage Loan that such Mortgage Loan is closed and funded."
7. Section 2.4(d) of the Agreement shall be deleted in its entirety
and the following shall be substituted in lieu thereof:
2.4(d) The Company is entitled to receive a benefit in the form
of an "Earnings Credit" on the portion of the Eligible Balances
maintained in time deposit accounts with a Designated Bank, and the
Company is entitled to receive a benefit in the form of an "Earnings
Allowance" on the portion of the Eligible Balances maintained in
demand deposit accounts with a Designated Bank. Any Earnings Allowance
shall be used first and any Earnings Credit shall be used second as a
credit against accrued Designated Miscellaneous Charges and fees,
including, but not limited to Commitment Fees, Usage Fees and
Warehousing Fees, and may be used, at the Lender's option, to reduce
accrued interest. Any Earnings Allowance not used during the month in
which the benefit was received shall be accumulated for use and must
be used within six (6) months of the month in which the benefit was
received. Any Earnings Credit not used during the month in which the
benefit was received shall be used to provide a cash benefit to the
Company. The Lender's determination of the Earnings Credit and the
Earnings Allowance for any month shall be determined by the Lender in
its sole discretion and shall be conclusive and binding absent
manifest error. In no event shall the benefit received by the Company
exceed the Depository Benefit.
<PAGE> 32
Either party hereto may terminate the benefits provided for in
this Section effective immediately upon Notice to the other party, if
the terminating party shall have determined (which determination shall
be conclusive and binding absent manifest error) at any time that any
applicable law, rule, regulation, order or decree or any
interpretation or administration thereof by any governmental authority
charged with the interpretation or administration thereof, or
compliance by such party with any request or directive (whether or not
having the force of law) of any such authority, shall make it unlawful
or impossible for such party to continue to offer or receive the
benefits provided for in this Section.
8. Section 2.4(g) of the Agreement shall be deleted in its entirety
and the following shall be substituted in lieu thereof:
2.4(g) Upon Notice to the Company, after the occurrence and
during the continuation of an Event of Default, the unpaid amount of
each Advance shall bear interest until paid in full at a per annum
rate of interest (the "Default Rate") equal to four percent (4%) in
excess of the rate of interest otherwise applicable to such Advance
pursuant to any other subsection of this Section 2.4 or, if no rate is
applicable, the highest rate then applicable to any outstanding
Advances.
9. Sections 2.5(d)(1) and (2) of the Agreement shall be deleted in
their entirety and the following shall be substituted in lieu thereof:
(1) For a Pledged Mortgage, other than a Construction
Mortgage Loan or an Unimproved Mortgage Loan, with respect to
which a shorter or longer period is not prescribed elsewhere in
this Section 2.5(d), one hundred twenty (120) days elapse from
the date of the initial Advance made by the Lender against such
Pledged Mortgage, whether or not such Pledged Mortgage is
included in an Eligible Mortgage Pool.
(2) Forty-five (45) days elapse from the date the Pledged
Mortgage was delivered to an Investor or an Approved Custodian
for examination and purchase or inclusion in an Eligible Mortgage
Pool, without the purchase being made or the Eligible Mortgage
Pool being initially certified, or upon rejection of the Pledged
Mortgage as unsatisfactory by an Investor or an Approved
Custodian.
10. Section 3.2(d) of the Agreement shall be deleted in its entirety
and the following shall be substituted in lieu thereof:
<PAGE> 33
3.2(d) The Lender shall have the exclusive right to the
possession of the Pledged Securities or, if the Pledged Securities are
issued in book-entry form or issued in certificated form and delivered
to a clearing corporation (as such term is defined in the Uniform
Commercial Code of Minnesota) or its nominee, the Lender shall have
the right to have the Pledged Securities registered in the name of a
securities intermediary (as such term is defined in the Uniform
Commercial Code of Minnesota) in an account containing only customer
securities for the account of the Lender, and the Lender shall have
the right to cause delivery of the Pledged Securities to be made to
the Investor or the book entries registered in the name of the
Investor or the Investor's designee only against payment therefor. The
Company acknowledges that the Lender may enter into one or more
standing arrangements with other financial institutions for the
issuance of Pledged Securities in book entry form in the name of such
other financial institutions, as agent or securities intermediary for
the Lender, and the Company agrees upon request of the Lender, to
execute and deliver to such other financial institutions the Company's
written concurrence in any such standing arrangements.
11. Section 5.15 of the Agreement is hereby amended to add the
following section immediately after Section 5.15(i):
5.15(j) Each Pledged Mortgage secured by real property to which a
Manufactured Home is affixed will create a valid Lien on such
Manufactured Home that will have priority over any other Lien on such
Manufactured Home, whether or not arising under applicable real
property law.
12. Section 9 of the Agreement shall be amended to delete the
telecopier number of the Lender set forth therein and substitute telecopier
number "(954) 846-8352" in lieu thereof and all references in the Agreement
to the telecopier number of the Lender shall be deemed to refer to the new
telecopier number.
13. Upon execution of this Amendment, the Company agrees to pay to the
Lender the Commitment Fee on the Commitment Amount for the time period from
the Effective Date to and including September 30, 1997.
14. Exhibits C-SF, D-SF, C-SF/UNI, D/UNI, C-SF/CONSTRUCTION and
D-SF/CONSTRUCTION to the Agreement are hereby deleted in their entirety and
replaced with the new Exhibits C-SF, D-SF, C-SF/UNI, D-SF/UNI,
C-SF/CONSTRUCTION and D-SF/CONSTRUCTION attached to this Amendment. All
references in the Agreement to Exhibits C-SF, D-SF, C-SF/UNI, D/UNI,
C-SF/CONSTRUCTION and D-SF/CONSTRUCTION shall be deemed to refer to the new
Exhibits C-SF, D-SF, C-SF/UNI, D-SF/UNI, C-SF/CONSTRUCTION and
D-SF/CONSTRUCTION.
<PAGE> 34
15. The Company shall deliver to the Lender (a) an executed original
of this Amendment; (b) an executed Certificate of Secretary with corporate
resolutions; (c) an executed Funding Bank Agreement; (d) a current
certified tax, lien and judgment search of the appropriate public records
for the Company, including a search of Uniform Commercial Code financing
statements, which search shall not have disclosed the existence of any
prior Lien on the Collateral other than in favor of the Lender or as
permitted hereunder; (e) current Certificates of Good Standing of the
Company; (f) current insurance information; (g) the Commitment Fee for the
month of September, 1997; and (h) a Five Hundred Dollar ($500) document
production fee.
16. The Company represents, warrants and agrees that (a) there exists
no Default or Event of Default under the Loan Documents, (b) the Loan
Documents continue to be the legal, valid and binding agreements and
obligations of the Company enforceable in accordance with their terms, as
modified herein, (c) the Lender is not in default under any of the Loan
Documents and the Company has no offset or defense to its performance or
obligations under any of the Loan Documents, (d) the representations
contained in the Loan Documents remain true and accurate in all respects,
and (e) there has been no material adverse change in the financial
condition of the Company from the date of the Agreement to the date of this
Amendment.
17. Except as hereby expressly modified, the Agreement shall otherwise
be unchanged and shall remain in full force and effect, and the Company
ratifies and reaffirms all of its obligations thereunder.
18. This Amendment may be executed in any number of counterparts and
by the different parties hereto on separate counterparts, each of which
when so executed and delivered shall be an original, but all of which shall
together constitute one and the same instrument.
IN WITNESS WHEREOF, the Company and the Lender have caused this
Amendment to be duly executed on their behalf by their duly authorized
officers as of the day and year above written.
U.S. HOME MORTGAGE CORPORATION
By: Thomas A. Napoli
-----------------------------
/s/ Thomas A. Napoli
Its: Vice President
RESIDENTIAL FUNDING CORPORATION,
a Delaware corporation
By: Donna A. West
----------------------------
/s/ Donna A. West
Its: Director
<PAGE> 35
STATE OF Texas )
) ss
COUNTY OF Harris)
On August 29, 1997, before me, a Notary Public, personally appeared
Thomas A. Napoli, the Vice President of U.S. HOME MORTGAGE CORPORATION,
a Florida corporation, personally known to me (or proved to me on the
basis of satisfactory evidence) to be the person whose name is subscribed
to the within instrument and acknowledged to me that he/she executed the
same in his/her authorized capacity, and that by his/her signature on the
instrument the person, or the entity upon behalf of which the person acted,
executed the instrument.
WITNESS my hand and official seal.
By: Donna Monroe
-------------------------
/s/ Donna Monroe
Notary Public
(SEAL) My Commission Expires: 03-26-99
STATE OF Florida )
) ss
COUNTY OF Broward )
On September 2, 1997, before me, a Notary Public, personally
appeared Donna West, the Director of RESIDENTIAL FUNDING CORPORATION,
a Delaware corporation, personally known to me (or proved to me on the
basis of satisfactory evidence to be the person whose name is
subscribed to the within instrument and acknowledged to me that he/she
executed the same in his/her authorized capacity, and that by his/her
signature on the instrument the person, or the entity upon behalf of
which the person acted, executed the instrument.
WITNESS my hand and official seal.
By: Marsha S. Grabin
----------------------------
/s/ Marsha S. Grabin
Notary Public
(SEAL) My Commission Expires: 09-15-98
<PAGE> 36
EXHIBIT C-SF
REQUEST FOR ADVANCE SINGLE FAMILY MORTGAGE LOAN
Mortgage Company: U.S. HOME MORTGAGE CORPORATION
Mortgagor:_________________________ Loan Number: __________________________
_________________________ Reviewed By: __________________________
Address: _________________________ Warehouse Date:__________________________
_________________________ Effective Date:__________________________
Status: Committed _______________ Loan Type: Conforming _______Jumbo_______
Uncommitted _____________ Nonconforming _______Grade____
Wet Settlement __________ VA ____________ FHA __________
Received ________________ FmHA _________________________
3rd Party Fixed __________ Term ________
Originated____________ ARM ____________ Type ________
Section 32_______________ Balloon _______ Type _________
Home Equity ____ High LTV_____
Second________ Title I ______
203(K) _______ RFC ___________
"D" Mortgage _________________
Mortgage Note Amount: _____________ Interest Rate: __________________________
Mortgage Note Date: _______________ Requested Warehouse Amt: ________________
Investor: _________________________ Expiration Date: ________________________
Purchase Commitment No: ___________ Title Company: __________________________
Committed Purchase Price: ___________
METHOD OF ADVANCE
-----------------
( ) Check Funding/Disbursement
Check No: ________________________ Amount: ___________________________
Checking Account No: _____________
( ) Wire Transfer
Amount of Wire: __________________ Date of Wire: _____________________
Credit Acct. No.: ________________ Credit Acct. Name: _________________
ABA No.: _________________________ Bank Name: __________________________
Account to Debit: ________________ City & State:_______________________
Ref: ________________ Advise: ___________________ Phone:_____________
<PAGE> 37
REQUIRED DOCUMENTATION
----------------------
Attached please find the following documents in connection with the above
request (Please check attached documents below):
Right
( ) Original and one copy of Mortgage Note
( ) Certified copy of Mortgage
( ) Section 32 Compliance Documents (if applicable)
( ) *Copy of Investor Purchase Commitment (or satisfactory evidence thereof)
( ) *Copy of HUD-1 Settlement Statement or equivalent
(Home Equity Loans and Title I Mortgage Loans only)
( ) *HUD 203(K) Maximum Mortgage Worksheet (HUD 203(K) Mortgage Loans only)
Left
( ) *Request for Advance (original and one (1) copy)
( ) *Copy of settlement or funding check (if applicable)
( ) Recordable assignment of Mortgage
( ) Certified copies of interim assignments of Mortgage (if applicable)
( ) *Bailee Pledge Agreement (only required for Wet Settlement Advance)
( ) *Evidence from title company that Mortgage Loan is closed and funded
(only required if Wet Settlement Advance is directly to the Parent)
Please Note: Items designated with the "*" are required prior to a Wet
Settlement Advance.
Authorized Signature:____________________________________
<PAGE> 38
EXHIBIT C-SF/UNI
REQUEST FOR ADVANCE UNIMPROVED MORTGAGE LOAN
Mortgage Company: U.S. HOME MORTGAGE CORPORATION
Mortgagor:_________________________ Loan Number:____________________________
_________________________ Reviewed By:____________________________
Address: _________________________ Warehouse Date:_________________________
_________________________
Property Type: Residential ____________________
Commercial _____________________
Original Mortgage Note Amount: _____________ Interest Rate: ________________
Mortgage Note Date: ________________________ Approved Warehouse Amt:________
Current Mortgage Note Amount: ______________ Title Company:_________________
Purchase Price for Property: ________________
Company Valuation of Property:* _____________
METHOD OF ADVANCE
-----------------
( ) Check Funding/Disbursement
Check No: ________________________ Amount: ___________________________
Checking Account No: _____________
( ) Wire Transfer
Amount of Wire: __________________ Date of Wire: _____________________
Credit Acct. No.: ________________ Credit Acct. Name: ________________
ABA No.: _________________________ Bank Name: ________________________
Account to Debit: ________________ City & State:______________________
Ref: ______________ Advise: _________________ Phone: __________________
REQUIRED DOCUMENTATION
----------------------
Attached please find the following documents in connection with the above
request (Please check attached documents below):
Right
( ) Original and one copy of Mortgage Note
( ) Certified copy of Mortgage or Deed of Trust
Left
( ) Request for Advance (original and one (1) copy)
( ) Recorded assignment of Mortgage or Deed of Trust, or Certified True Copy
of assignment sent for recording
( ) Recordable assignments of Security Agreement/financing statement; if any
( ) Certified copies of interim assignments of Mortgage (if applicable)
( ) Evidence from title company that Mortgage Loan is closed and funded
Authorized Signature:
- ------------------------------------
*Unimproved Mortgage Loans secured by property intended for commercial
development only.
<PAGE> 39
EXHIBIT C-SF/CONSTRUCTION
REQUEST FOR ADVANCE SINGLE-FAMILY CONSTRUCTION/PERM MORTGAGE LOANS
Mortgage Company: U.S. HOME MORTGAGE CORPORATION
Mortgagor:_________________________ Loan Number: _________________________
_________________________ Reviewed By: _________________________
Address: _________________________ Warehouse Date:_________________________
_________________________ Effective Date:_________________________
Status: Committed ________________ Loan Type: ARM _________ Type ________
Wet Settlement __________
Received_________________
Mortgage Loan Type: Construction/Perm______
Mortgage Note Amount: _____________ Interest Rate:__________________________
Mortgage Note Date: _______________ Requested Warehouse Amount (Total):_____
Investor: _________________________ Warehouse Price: _______________________
Purchase Commitment No: ___________ Expiration Date: _______________________
Committed Purchase Price: _________ Title Company: _________________________
As Completed Appraised Value:_______________________________________________
Costs: Total___________ Acquisition/Land_________
Advance: Initial Construction:____________ Requested Amount: __________
Interim Construction:____________ Staged Draw #:______________
Final Construction:______________ Percentage of
Completion:_________________
METHOD OF ADVANCE
( ) Check Funding/Disbursement (for Initial Construction Advance only)
Check No._________________________ Amount: ___________________________
Checking Account No:__________________________________________________
( ) Wire Transfer
Amount of Wire: __________________ Date of Wire:______________________
Credit Acct. No.: ________________ Credit Acct. Name: ________________
ABA No.: _________________________ Bank Name:_________________________
City & State:______________________
Account to Debit: ________________
Ref: ________________ Advise: ___________________ Phone:_____________
<PAGE> 40
REQUIRED DOCUMENTATION
----------------------
Attached please find the following documents in connection with the above
request (Please check attached documents below):
Initial Construction Advance
- ----------------------------
Right
( ) Original and one copy of Mortgage Note with Construction Rider(s), if any
( ) Certified copy of Mortgage with Construction Rider(s), if any
( ) *Certified copy of Construction/Building Loan Agreement including
construction draw schedule (Construction/Perm Mortgage Loans)
( ) Certified copy of ALTA Mortgagor's/Lender's Title Policy
( ) *Copy of Appraisal indicating the As Completed Appraised Value
( ) *Copy of Cost Breakdown
( ) *Copy of Purchase Commitment executed by Investor (if applicable)
( ) Copy of Company's Permanent Mortgage Loan commitment to mortgagor(s) Left
( ) *Request for Advance (original and one (1) copy)
( ) *Copy of settlement or funding check (if applicable)
( ) Recordable assignment of Mortgage
( ) Certified copies of interim assignments of Mortgage (if applicable)
( ) *Bailee Pledge Agreement (only required for Wet Settlement Advance)
( ) *Evidence from title company that Mortgage Loan is closed and the
initial construction advance has been funded (only required if Wet
Settlement Advance is directly to the Parent)
Construction Advances
In addition to the documentation required per "Initial Construction
Advance" above, the following Collateral Documents will be required to
support Construction Advances for Construction/Perm Mortgage Loans:
( ) Request for Advance (original and one (1) copy)
( ) Title update endorsement for previous Construction Advance, if applicable
( ) Title update endorsement for modification of construction Mortgage Loan
to permanent Mortgage Loan, if applicable, (Final Construction Advance
only)
( ) Copy of final survey (Final Construction Advance only)
( ) Purchase Commitment executed by Investor (Final Construction Advance only)
( ) Final appraiser's inspection (Final Construction Advance only)
( ) Evidence from title company that the construction advance has been funded
(only required if Wet Settlement Advance is directly to the Parent)
Please Note: Items designated with the "*" are required prior to a Wet
Settlement Advance.
Authorized Signature:
- ------------------------------------
<PAGE> 41
EXHIBIT D-SF
PROCEDURES AND DOCUMENTATION FORWAREHOUSING SINGLE FAMILY MORTGAGE LOANS
The following procedures and documentation requirements must be
observed in all respects by the Company. All documents must be satisfactory
to the Lender in its sole discretion. Terms used below, which are not
otherwise defined, shall have the meanings given them in the Agreement. The
HUD, FNMA and FHLMC form numbers referred to herein are for convenience
only and the Company shall use the equivalent forms required at the time of
delivery of the Mortgage Loans or Mortgage-backed Securities. All Requests
for Advance and Collateral Documents, should be submitted to the Lender in
a top tabbed, legal size manila file folder, hole-punched and acco-fastened
in the order specified in the Request for Advance. Each folder should be
labelled with the mortgagor name(s), Company loan number and Company name.
If a Wet Settlement Advance is being requested, the Request for Advance and
required Collateral Documents should be submitted in accordance with the
above instructions. The remaining Collateral Documents should be submitted
with a cover letter identifying the mortgagor name(s) and Company loan
number.
IV. Prior to making an Wet Settlement Advance, the Lender must receive the
following:
(1) Estimate of the amount of the requested Advance one (1) Business
Day prior to such Advance.
(2) Copy of settlement or funding check issued to the escrow/title
company, if applicable.
(3) Original Request for Advance against Single Family Mortgage Loans
(Exhibit C-SF) and one (1) copy of same.
(4) Copy of the Purchase Commitment or satisfactory evidence thereof.
(5) Bailee Pledge Agreement (only required for Wet Settlement
Advance) (Exhibit M).
(6) A copy of the HUD-1 Settlement Statement or equivalent (Home
Equity Loans and Title I Mortgage Loans only).
(7) A copy of HUD 203(K) Maximum Mortgage Worksheet (HUD 203(K)
Mortgage Loans only).
(8) Evidence satisfactory to the Lender from the title company
closing the Mortgage Loan that such Mortgage Loan is closed and
funded (only required if Wet Settlement Advance is directly to
the Parent).
<PAGE> 42
The following must be received by the Lender within five (5) Business
Days of the date of the Wet Settlement Advance:
(9) Original signed Mortgage Note, endorsed by the Company in blank
with corresponding interim endorsements, if applicable, and one
copy of same.
(10) Copy of the Mortgage certified true by the escrow/title company.
(11) Copies of all interim assignments of the Mortgage certified true
by the escrow/title company (recorded or sent for recordation).
Mortgage Note must bear corresponding endorsements.
(12) An assignment of the Mortgage, endorsed by the Company in blank,
in recordable form but unrecorded.
(13) Completed Company Worksheet Concerning Applicability of Section
32 of Regulation Z (12 CFR Section 226.32) and, if Section 32
applies, copies of the disclosure and other related documentation
delivered to the mortgagor, or executed by the mortgagor,
evidencing compliance with Section 32 (if applicable).
V. Prior to the making of an Advance (other than a Wet Settlement
Advance), the Lender must receive all of the Collateral Documents
listed in Section I above.
VI. The Lender exclusively shall deliver the Mortgage Notes and other
original Collateral Documents evidencing Pledged Mortgages or Pledged
Securities and related pool documents to the Investor or pool
custodian, unless otherwise agreed in
writing.
A. The following procedures are to be followed for deliveries of
Pledged Mortgages:
No later than one (1) Business Day prior to the requested shipment
date and no later than one (1) Business Day prior to the expiration
date of the Purchase Commitment, the Lender must receive the
following:
(1) Signed shipping instructions for the delivery of the
Pledged Mortgages including the following:
(a) Name and address of the office of the Investor to
which the loan documents are to be shipped, the
desired shipping date and the preferred method of
delivery;
(b) Instructions for endorsement of the Mortgage Note;
(c) Names of mortgagor(s), Mortgage Note Amounts of
Pledged Mortgages to be shipped and the Company's
loan number; and
(d) Commitment number and expiration date of the Purchase
Commitment.
<PAGE> 43
(2) For deliveries of Pledged Mortgages to FNMA for cash purchase,
the following additional documents are required:
(a) Copy of Loan Schedule (FNMA Form 1068 or 1069)showing the
Lender's designated FNMA payee code as recipient of the loan
purchase proceeds.
(3) For deliveries of Pledged Mortgages to FHLMC for cash
purchase, the following additional documents are
required:
(a) Original completed Warehouse Lender Release of
Security Interest (FHLMC Form 996) to be executed by the
Lender, designating the Lender as the Warehouse Lender and
showing the Cash Collateral Account designated by the Lender
as the receiving account for loan purchase proceeds.
(b) Copy of Wire Transfer Authorization for a Cash Warehouse
Delivery (FHLMC Form 987), designating the Lender as the
Warehouse Lender and showing the Cash Collateral Account
designated by the Lender as the receiving account for loan
purchase proceeds.
B. In the event Pledged Mortgages are delivered to a pool custodian,
other than an Approved Custodian, payment of the related Advance is
required within two (2) Business Days of shipment.
The following procedures are to be followed for deliveries of Pledged
Mortgages to Approved Custodians:
No later than one (1) Business Day prior to the requested shipment
date and no later than one (1) Business Day prior to required delivery
date to the Approved Custodian, the Lender must receive the following:
(1) Signed shipping instructions for the delivery of the
Pledged Mortgages to the Approved Custodian including the
following:
(a) Name and address of the office of the Approved
Custodian to which the loan documents are to be
shipped, the desired shipping date and the
preferred method of delivery;
(b) Instructions for endorsement of the Mortgage Note;
(c) Names of mortgagor(s) and Mortgage Note Amounts of
Pledged Mortgages to be shipped and the Company's
loan number; and
(d) Commitment number and expiration date of the Purchase
Commitment for the Pledged Securities.
<PAGE> 44
(2) For FNMA Mortgage-backed Securities issuance, the following
additional documents are required: (a) Copy of Schedule of
Mortgages (FNMA Form 2005 or
2025).
(b) Copy of Delivery Schedule (FNMA Form 2014), instructing FNMA
to issue the Mortgage-backed Securities in the name of the
Company with the Lender as pledgee and to deliver the
Mortgage-backed Securities to the Lender's custody account
at The Chase Manhattan Bank (CHASE NYC/GEOCUST/MR9229490)
and bearing the following instructions: "These instructions
may not be changed without the prior written consent of
Residential Funding Corporation, Preston A. Lyvers,
Director or Patti Erfan, Director."
(3) For FHLMC Mortgage-backed Securities issuance, the
following additional documents are required:
(a) Copy of Settlement Information and Delivery
Authorization (FHLMC Form 939), designating the Lender as
the Warehouse Lender and instructing FHLMC to deliver the
Mortgage-backed Securities to the Lender's custody account
at The Chase Manhattan Bank (CHASE NYC/GEOCUST/MR9229490).
(b) Original Warehouse Lender Release of Security Interest
(FHLMC Form 996) to be executed by the Lender, designating
the Lender as the Warehouse Lender and instructing FHLMC to
deliver the Mortgage-backed Securities to the Lender's
custody account at The Chase Manhattan Bank (CHASE
NYC/GEOCUST/MR9229490).
(4) For GNMA Mortgage-backed Securities issuance, the following
additional documents are required:
(a) Signed original Schedule of Mortgages (HUD Form 11706).
(b) Signed original Schedule of Subscribers (HUD Form
11705) instructing GNMA to issue the Mortgage-backed
Securities in the name of the Company and designating The
Chase Manhattan Bank as Agent for
the Lender as the subscriber, using the following
language: THE CHASE MANHATTAN BANK AS AGENT FOR
RESIDENTIAL FUNDING CORPORATION SEG ACCT
MANUF/CUST/MR9229490). The following instructions
must also be included on the form: "These
instructions may not be changed without the prior
written consent of Residential Funding Corporation,
Preston A. Lyvers, Director or Patti Erfan,
Director."
(c) Completed original Release of Security Interest (HUD Form
11711A) to be executed by the Lender.
(5) No later than two (2) Business Days prior to the Settlement Date
for the Mortgage-backed Securities, the Lender must receive
signed Securities Delivery Instructions form attached hereto as
Schedule I.
<PAGE> 45
Upon instruction by the Company, the Lender will complete the endorsement
of the Mortgage Note and make arrangements for the delivery of the original
Collateral Documents evidencing Pledged Mortgages or Pledged Securities and
related original pool documents with the appropriate bailee letter to the
Investor, Approved Custodian, or other pool custodian. Upon receipt of
Mortgage-backed Securities, the Lender will cause such Mortgage-backed
Securities to be delivered to the Investor which issued the Purchase
Commitment. Mortgage-backed Securities will be released to the Investor
only upon payment of the purchase proceeds to the Lender. Cash proceeds of
sales of Pledged Mortgages and Pledged Securities shall be applied to
related Advances outstanding under the Commitment. Provided no Default
exists, the Lender shall return any excess proceeds of the sale of
Mortgage Loans or Mortgage-backed Securities to the Company, unless
otherwise instructed in writing.
<PAGE> 46
EXHIBIT D-SF/CONSTRUCTION
PROCEDURES AND DOCUMENTATION FOR WAREHOUSING SINGLE-FAMILY
CONSTRUCTION/PERM MORTGAGE LOANS
The following procedures and documentation requirements must be
observed in all respects by the Company. All documents must be satisfactory
to the Lender in its sole discretion. Terms used below, which are not
otherwise defined, shall have the meanings given them in the Agreement. The
HUD, FNMA and FHLMC form numbers referred to herein are for convenience
only and the Company shall use the equivalent forms required at the time of
delivery of the Mortgage Loans or Mortgage-backed Securities. All Requests
for Advance and Collateral Documents, should be submitted to the Lender in
a top tabbed, legal size manila file folder, hole-punched and acco-fastened
in the order specified in the Request for Advance. Each folder should be
labelled with the mortgagor name(s), Company loan number and Company name.
If a Wet Settlement Advance and/or Initial Construction Advance is being
requested, the Request for Advance and required Collateral Documents should
be submitted in accordance with the above instructions. The remaining
Collateral Documents should be submitted with a cover letter identifying
the mortgagor name(s) and Company loan number. If a Construction Advance
other than an Initial Construction Advance is being requested, the Request
for Advance and required Collateral Documents should be submitted with a
cover letter identifying the mortgage name(s) and Company loan number.
I. Prior to making a Wet Settlement Advance, the Lender must receive the
following:
(1) Estimate of the amount of the requested Advance one (1) Business
Day prior to such Advance.
(2) Copy of settlement or funding check issued to the escrow/title
company, if applicable. (Funding via check available for Initial
Construction Advance only.)
(3) Original Request for Advance against Single-Family
Construction/Perm Mortgage Loans (Exhibit C-SF/CONSTRUCTION) and
one (1) copy of same.
(4) Bailee Pledge Agreement (only required for a Wet Settlement
Advance) (Exhibit M).
(5) A copy of the Appraisal for the Construction/Perm, Mortgage Loan
indicating the As Completed Appraised
Value.
(6) A copy of the Cost Breakdown detailing the Total Costs to
complete the proposed improvements.
(7) Copy of the Purchase Commitment executed by Investor (if
applicable).
<PAGE> 47
(8) A Copy of the Construction/Building Loan Agreement certified true
by the escrow/title company, including construction draw
schedule.
(9) Evidence satisfactory to the Lender from the title company
closing the Mortgage Loan that such Mortgage Loan is closed and
the initial construction advance has been funded (only required
if Wet Settlement Advance is directly to the Parent).
Items (2) through (9) above must be received by Lender at least two
(2) Business Days prior to the Advance.
The following must be received by the Lender within five (5) Business
Days of the date of the Wet Settlement Advance:
(10) Original signed Mortgage Note, endorsed by the Company in blank
and one copy of same. The Mortgage Note must include all required
riders including the Construction Rider, if any.
(11) Copy of the Mortgage and required riders including the
Construction Rider, if any, certified true by the escrow/title
company.
(12) Copies of all interim assignments of the Mortgage certified true
by the escrow/title company (recorded or sent for recordation).
Mortgage Note must bear corresponding endorsements.
(13) An assignment of the Mortgage to the Lender in recordable form
but unrecorded.
(14) A Copy of the ALTA Mortgagor's/Lender's Title Policy. The ALTA
Title Policy must be in an amount not less than the Mortgage Note
Amount, include a pending disbursement clause or be written in
the full amount of the Mortgage Loan and all but the standard
exceptions must be removed.
(15) A Copy of the Company's Permanent Mortgage Loan commitment to
mortgagor(s)
II. Prior to the making of an Advance (other than a Wet Settlement Advance
or a Construction Advance), the Lender must receive all of the
Collateral Documents listed in Section I above. Such Collateral
Documents must be received by Lender at least two (2) Business Days
prior to the Advance.
<PAGE> 48
III. Prior to the making of a Construction Advance, the Lender must receive
the following:
(1) All of the Collateral Documents listed in Section I above.
(2) Request for Construction Advance (original and one (1) copy).
(3) An original or certified copy (by the title company) of
endorsement to the ALTA Mortgagor's/Lender's Title
Insurance Policy through the date of the previous
Construction Advance for the Mortgage Loan. The
endorsement must indicate the title has been reviewed and
updated through the date of the previous Construction
Advance, the transaction amount must be at least in the
amount of the previous Construction Advance and the
cumulative amount of title insurance must be at least
equal to the aggregate of the Initial Construction
Advance and the Construction Advances to date by RFC
against the Mortgage Loan. The endorsement must also
include the mortgagor name(s) and the title policy number
and be executed by an authorized representative of the
title company.
(4) Evidence satisfactory to the Lender from the title company which
closed the Mortgage Loan that the interim construction advance
for such Mortgage Loan has been funded (only required if Wet
Settlement Advance is directly to the Parent).
Items (1) through (4) above must be received by Lender at least two
(2) Business Days prior to the Advance.
IV. Prior to the making of the Final Construction Advance, the Lender must
receive the following:
(1) All of the Collateral Documents listed in Sections I and III
above.
(2) An original or certified copy (by the title company) of
endorsement to the ALTA Mortgagor's/Lender's Title
Insurance Policy through the date of the Final
Construction Advance for the Mortgage Loan and showing
the modification from a construction Mortgage Loan to a
permanent Mortgage Loan. The endorsement must indicate
the title has been reviewed and updated through the date
of the Final Construction Advance, the transaction amount
must be at least in the amount of the Final Construction
Advance and the cumulative amount of title insurance must
be at least equal to the aggregate of the all
Construction Advances made by RFC against the Mortgage
Loan. The endorsement must also include the mortgagor
name(s) and the title policy number and be executed by an
authorized representative of the title company.
<PAGE> 49
(3) Copy of the final survey. This survey must indicate that
the unit has been constructed within the boundaries of
the subject property and that it does not encroach on any
set-back lines, easements or adjacent property (ies). It
must be dated within five (5) days of the advance request
date, include the correct legal description, be certified
by a registered surveyor and include a raised seal.
(4) Purchase Commitment executed by Investor.
(5) Final of appraiser inspection certifying that the final appraised
value of premises encumbered by the Pledged Mortgage equals the
As Completed Appraised Value.
(6) Evidence satisfactory to the Lender from the title company which
closed the Mortgage Loan that the final construction advance for
such Mortgage Loan has been funded (only required if Wet
Settlement Advance is directly to the Parent).
Items (1) through (6) above must be received by Lender at least two
(2) Business Days prior to the Advance.
V. The Lender exclusively shall deliver the Mortgage Notes and other
original Collateral Documents evidencing Pledged Mortgages or Pledged
Securities and related pool documents to the Investor or pool
custodian, unless otherwise agreed in
writing.
A. The following procedures are to be followed for deliveries of
Pledged Mortgages:
No later than one (1) Business Day prior to the requested shipment
date and no later than one (1) Business Day prior to the expiration
date of the Purchase Commitment, the Lender must receive the
following:
(1) Signed shipping instructions for the delivery of the
Pledged Mortgages including the following:
(a) Name and address of the office of the Investor to
which the loan documents are to be shipped, the
desired shipping date and the preferred method of
delivery;
(b) Instructions for endorsement of the Mortgage Note;
(c) Names of mortgagor(s), Mortgage Note Amounts of
Pledged Mortgages to be shipped and the Company's
loan number; and
(d) Commitment number and expiration date of the Purchase
Commitment.
(2) For deliveries of Pledged Mortgages to FNMA for cash purchase,
the following additional documents are required:
(a) Copy of Loan Schedule (FNMA Form 1068 or 1069)
showing the Lender's designated FNMA payee code as recipient
of the loan purchase proceeds.
<PAGE> 50
(3) For deliveries of Pledged Mortgages to FHLMC for cash
purchase, the following additional documents are
required:
(a) Original completed Warehouse Lender Release of
Security Interest (FHLMC Form 996) to be executed by the
Lender, designating the Lender as the Warehouse Lender and
showing the Cash Collateral Account designated by the Lender
as the receiving account for loan purchase proceeds.
(b) Copy of Wire Transfer Authorization for a Cash Warehouse
Delivery (FHLMC Form 987), designating the Lender as the
Warehouse Lender and showing the Cash Collateral Account
designated by the Lender as the receiving account for loan
purchase proceeds.
B. In the event Pledged Mortgages are delivered to a pool custodian,
other than an Approved Custodian, payment of the related Advance is
required within two (2) Business Days of shipment.
The following procedures are to be followed for deliveries of Pledged
Mortgages to Approved Custodians:
No later than one (1) Business Day prior to the requested shipment
date and no later than one (1) Business Day prior to required delivery
date to the Approved Custodian, the Lender must receive the following:
(1) Signed shipping instructions for the delivery of the
Pledged Mortgages to the Approved Custodian including the
following:
(a) Name and address of the office of the Approved
Custodian to which the loan documents are to be
shipped, the desired shipping date and the
preferred method of delivery;
(b) Instructions for endorsement of the Mortgage Note;
(c) Names of Mortgagor and Mortgage Note Amounts of
Pledged Mortgages to be shipped; and
(d) Commitment number and expiration date of the
Purchase Commitment for the Pledged Securities.
(2) For FNMA Mortgage-backed Securities issuance, the
following additional documents are required:
(a) Copy of Schedule of Mortgages (FNMA Form 2005 or
2025).
(b) Copy of Delivery Schedule (FNMA Form 2014), instructing FNMA
to issue the Mortgage-backed Securities in the name of the
Company with the Lender as pledgee and to deliver the
Mortgage-backed Securities to the Lender's custody account
at Chemical Bank NY (CHEMICAL NYC/GEOCUST/MR9229490) and
bearing the following instructions: "These instructions
may not be changed without the prior written consent of
Residential Funding Corporation, Preston A. Lyvers,
Director or Patti Erfan, Regional Operations
Manager."
<PAGE> 51
(3) For FHLMC Mortgage-backed Securities issuance, the
following additional documents are required:
(a) Copy of Settlement Information and Delivery Authorization
(FHLMC Form 939), designating the Lender as the Warehouse
Lender and instructing FHLMC to deliver the Mortgage-backed
Securities to the Lender's custody account at Chemical Bank
NY (CHEMICAL NYC/GEOCUST/MR9229490).
(b) Original Warehouse Lender Release of Security Interest
(FHLMC Form 996) to be executed by the Lender, designating
the Lender as the Warehouse Lender and instructing FHLMC to
deliver the Mortgage-backed Securities to the Lender's
custody account at Chemical Bank NY (CHEMICAL
NYC/GEOCUST/MR9229490).
(4) For GNMA Mortgage-backed Securities issuance, the following
additional documents are required:
(a) Signed original Schedule of Mortgages (HUD Form 11706).
(b) Signed original Schedule of Subscribers (HUD Form
11705) instructing GNMA to issue the Mortgage-backed
Securities in the name of the Company and designating
Chemical Bank as Agent for the Lender as the subscriber,
using the following language: CHEMICAL BANK AS AGENT FOR
RESIDENTIAL FUNDING CORPORATION SEG ACCT
MANUF/CUST/MR9229490). The following instructions must also
be included on the form: "These instructions may not be
changed without the prior written consent of Residential
Funding Corporation, Preston A. Lyvers, Director or Patti
Erfan, Regional Operations Manager."
(c) Completed original Release of Security Interest (HUD Form
11711A) to be executed by the Lender.
(5) No later than two (2) Business Days prior to the Settlement Date
for the Mortgage-backed Securities, the Lender must receive
signed Securities Delivery Instructions form attached hereto as
Schedule I.
Upon instruction by the Company, the Lender will complete the endorsement
of the Mortgage Note and make arrangements for the delivery of the original
Collateral Documents evidencing Pledged Mortgages or Pledged Securities and
related original pool documents with the appropriate bailee letter to the
Investor, Approved Custodian, or other pool custodian. Upon receipt of
Mortgage-backed Securities, the Lender will cause such Mortgage-backed
Securities to be delivered to the Investor which issued the Purchase
Commitment. Mortgage-backed Securities will be released to the Investor
only upon payment of the purchase proceeds to the Lender. Cash proceeds of
sales of Pledged Mortgages and Pledged Securities shall be applied to
related Advances outstanding under the Commitment. Provided no Default
exists, the Lender shall return any excess proceeds of the sale of Mortgage
Loans or Mortgage-backed Securities to the Company, unless otherwise
instructed in writing.
<PAGE> 52
EXHIBIT D-SF/UNI
PROCEDURES AND DOCUMENTATION FOR WAREHOUSING
UNIMPROVED MORTGAGE LOANS
The following procedures and documentation requirements must be
observed in all respects by the Company. All documents must be satisfactory
to the Lender in its sole discretion. Terms used below, which are not
otherwise defined, shall have the meanings given them in the Agreement. All
Requests for Advance and Collateral Documents, should be submitted to the
Lender in a top
tabbed, legal size manila file folder, hole-punched and acco-fastened in
the order specified in the Request for Advance. Each folder should be
labelled with the mortgagor name(s), Company loan number and Company name.
I. AT LEAST FIVE (5) BUSINESS DAYS PRIOR TO THE ADVANCE DATE (except in
the initial Unimproved Advances, in which case the following documents
must be received at least one (1) Business Days prior to the Advance
Date):
The Lender must receive a letter signed by the Company providing the
following information on the Pledged Mortgage:
(1) Mortgagor's name;
(2) Company's case/loan number;
(3) Expected Advance date;
(4) Original Mortgage Note Amount;
(5) Current Mortgage Note Amount;
(6) Purchase Price for Related Property;
(7) Estimation of Fair Market Value of
Related Property, Prepared by the Company
(Properties Intended for Commercial
Development only); and
(8) Original signed Request for Advance (Exhibit C-UNI).
II. AT LEAST ONE (1) BUSINESS DAY PRIOR TO THE DATE OF AN ADVANCE:
The Lender must receive the following:
(1) The original Mortgage Note, endorsed by the Company in blank and
without recourse. If the Company is not the named holder of the
Mortgage Note, the Mortgage Note must bear an endorsement from
the holder to the Company.
(2) If the Company is not the mortgagee on the Mortgage, a copy of
the assignment of Mortgage by the mortgagee to the Company which
was sent for recordation on or before the date of the Advance.
(3) Original recorded assignment of the Mortgage to the Lender, or
certified true copy of assignment of the Mortgage sent for
recording;
<PAGE> 53
(4) Original assignment of the security agreement, if any, to the
Lender;
(5) Original assignment of the UCC financing statements, if any, to
the Lender in recordable form but unrecorded;
(6) A copy of the title insurance commitment to issue a policy of
title insurance marked to show the final policy exceptions or, if
available, a copy of the title insurance policy;
(7) Check payable to the Lender for the Warehousing Fee; and
(8) Evidence satisfactory to the Lender from the title company closing
the Mortgage Loan that such Mortgage Loan is closed and funded
(only required if Wet Settlement Advance is directly to the Parent).
III. The Lender exclusively shall deliver the Mortgage Notes and other
original Collateral Documents in connection with any sale,
refinancing, foreclosure or other satisfaction of any Pledged
Mortgage. Such deliveries shall be made in accordance with procedures
specified from time to time by the Lender.
<PAGE> 54
SCHEDULE I
RESIDENTIAL FUNDING CORPORATION
WAREHOUSING LENDING DIVISION
Security Delivery Instructions
INSTRUCTIONS MUST BE RECEIVED TWO (2) BUSINESS DAYS IN ADVANCE OF
PICK-UP/DELIVERY
BOOK-ENTRY DATE: ______________________ SETTLEMENT DATE:__________________
ISSUER:________________________________ SECURITY: $_______________________
NO. OF CERTIFICATES: __________________ 1)________________
2)________________
3)________________
CUSIP #______________
Pool #_______________ MI#______________ Coupon Rate:_____________
Issue Date:(M/D/Y) ________________ Maturity Date:(M/D/Y)_____________
POOL TYPE (circle one):
GNMA: GNMA I GNMA II
FHLMC: FIXED ARM DISCOUNT NOTE
FNMA: FIXED ARM DISCOUNT NOTE DEBENTURES REMIC
DELIVER TO:_______________________________ ( ) Versus Payment
_______________________________ DVP AMT. $
_______________________________ ( ) Free Delivery
DELIVER TO:_______________________________ ( ) Versus Payment
_______________________________ DVP AMT. $
_______________________________ ( ) Free Delivery
DELIVER TO:_______________________________ ( ) Versus Payment
_______________________________ DVP AMT. $
_______________________________ ( ) Free Delivery
AUTHORIZED SIGNATURE:___________________________________
TITLE:__________________________________________________
<PAGE> 55
EXHIBIT 10.2
SENIOR INDENTURE,
dated as of August 28, 1997,
between
U.S. HOME CORPORATION
and
IBJ SCHRODER BANK & TRUST COMPANY
Trustee
<PAGE> 56
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> 57
317(a)(1).................................................. 8.08
(a)(2).................................................. 8.09
(b)..................................................... 3.05
318(a)..................................................... 14.01
N.A. means not applicable
Note: This cross-reference table will not, for any purpose, be deemed
to be a part of this Indenture.
<PAGE> 58
TABLE OF CONTENTS
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
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
<PAGE> 59
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
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
<PAGE> 60
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
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
<PAGE> 61
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
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
<PAGE> 62
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
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
<PAGE> 63
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
Section 14.15 Counterpart Originals...........................87
Section 14.16 Trustee as Paying Agent and Registrar...........87
Section 14.17 Table of Contents, Headings, etc................87
Section 14.18 Benefits of Indenture...........................87
Section 14.19 Acceptance of Trust.............................87
ARTICLE 15
MEETINGS OF HOLDERS OF SECURITIES.....................................88
Section 15.01 Purposes of Meetings............................88
Section 15.02 Call of Meetings by Trustee.....................88
Section 15.03 Call of Meetings by Company or Securityholders..88
Section 15.04 Person Entitled to Vote at Meeting..............89
Section 15.05 Regulations for Meeting.........................89
<PAGE> 64
INDENTURE, dated as of August 28, 1997, 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> 65
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)
<PAGE> 66
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.
"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
<PAGE> 67
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.
"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.
<PAGE> 68
"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 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
<PAGE> 69
Person becomes a Restricted Subsidiary or is merged into or consolidated
with the Company or any of its Restricted Subsidiaries or (b) the assets of
such Person are acquired by the Company or any of its Restricted
Subsidiaries, (iii) the net income of any Restricted Subsidiary to the
extent that (but only so long as) the declaration or payment of dividends
or similar distributions by such Restricted Subsidiary of that income is
not permitted by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to that Restricted Subsidiary during such period,
(iv) in the case of a successor to the Company by consolidation, merger or
transfer of its assets, any earnings of the successor prior to such merger,
consolidation or transfer of assets and (v) the gains (but not losses)
resulting from (a) the acquisition of securities issued by the Company or
extinguishment of Indebtedness of the Company, (b) Asset Sales and (c)
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.
<PAGE> 70
"Default" means any event, act or condition that is, or
after notice or the passage of time or both would be, an Event of Default.
"Defaulted Interest" has the meaning set forth in Section
3.07 hereof.
"Defeasance" has the meaning set forth in Section 11.02
hereof.
"Defeasible Series" has the meaning set forth in
Section 11.01 hereof.
"Depository" means, with respect to Securities of any
series issuable in whole or in part in the form of one or more Global
Securities, a clearing agency registered under the Exchange Act that is
designated to act as Depository for such Securities as contemplated by
Section 3.01.
"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
<PAGE> 71
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, 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.
<PAGE> 72
"Incur" means to, directly or indirectly, create, incur,
assume, guaranty, extend the maturity of, or otherwise become liable with
respect to any Indebtedness.
"Indebtedness" of any Person at any date means, without
duplication, (i) all indebtedness of such Person for borrowed money
(whether or not the recourse of the lender is to the whole of the assets of
such Person or only to a portion thereof), (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments,
(iii) all obligations of such Person in respect of letters of credit or
other similar instruments (or reimbursement obligations with respect
thereto), other than standby letters of credit issued for the benefit of,
or surety and performance bonds issued by, such Person in the ordinary
course of business, (iv) all obligations of such Person with respect to
Hedging Obligations (other than those that fix or cap the interest rate on
variable rate indebtedness otherwise permitted by this Indenture or that
fix the exchange rate in connection with indebtedness denominated in a
foreign currency and otherwise permitted by this Indenture and other than
the purchase of mortgage commitments in the ordinary course of business),
(v) all obligations of such Person to pay the deferred and unpaid purchase
price of property or services, including, without limitation, all
conditional sale obligations of such Person and all obligations under any
title retention agreement (except trade payables and accrued expenses
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.
<PAGE> 73
"Independent Financial Advisor" means an accounting,
appraisal or investment banking firm of nationally recognized standing that
is, in the reasonable judgment of the Company's Board of Directors, (i)
qualified to perform the task for which it has been engaged, and (ii)
disinterested and independent with respect to the Company, all of its
Subsidiaries, and each Affiliate of the Company and/or its Subsidiaries
that is involved in the Affiliate Transaction with respect to which such
firm has been engaged.
"Intangible Assets" of the Company means all unamortized
debt discount and expense, unamortized deferred charges, goodwill, patents,
trademarks, service marks, trade names, copyrights, write-ups of assets
over their carrying value at the end of the last fiscal quarter ended prior
to the Issue Date of the Securities of any series or the date of
acquisition, if acquired subsequent thereto, and all other items which
would be treated as intangibles on the consolidated balance sheet of the
Company and its Restricted Subsidiaries prepared in accordance with GAAP.
"Interest Expense" of any Person for any period means,
without duplication, the aggregate amount of (i) interest which, in
conformity with GAAP, would be set opposite the caption "interest expense"
or any like caption on an income statement for such Person (including,
without limitation, imputed interest included on Capitalized Lease
Obligations, all commissions, discounts and other fees and charges owed
with respect to letters of credit securing financial obligations and
bankers' acceptance financing, the net costs associated with Hedging
Obligations, amortization of other financing fees and expenses, the
interest portion of any deferred payment obligation, amortization of
discount or premium, if any, and all 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
<PAGE> 74
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.
"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.
<PAGE> 75
"Net Proceeds" means cash (in U.S. dollars or freely
convertible into U.S. dollars) received by the Company or any Restricted
Subsidiary from an Asset Sale net of (i) (a) all brokerage commissions,
investment banking fees and all other fees and expenses (including, without
limitation, fees and expenses of counsel and investment bankers) related to
such Asset Sale, (b) provisions for all income and other taxes measured by
or resulting from such Asset Sale, (c) payments made to retire Indebtedness
where payment of such Indebtedness is required in connection with such
Asset Sale, (d) amounts required to be paid to any Person (other than the
Company or a Restricted Subsidiary) owning a beneficial interest in the
assets subject to the Asset Sale and (e) appropriate amounts to be provided
by the Company or any Restricted Subsidiary thereof, as the case may be, as
a reserve, in accordance with GAAP, against any liabilities associated with
such Asset Sale and retained by the Company or any Restricted Subsidiary
thereof, as the case may be, after such Asset Sale, including, without
limitation, pension and other post-employment benefit liabilities,
liabilities related to environmental matters and liabilities under any
indemnification obligations associated with such Asset Sale, all as
reflected in an Officers' Certificate delivered to the Trustee, and (ii)
all noncash consideration received by the Company or any of its Restricted
Subsidiaries from such Asset Sale upon the liquidation or conversion of
such consideration into cash, without duplication, net of all items
enumerated in subclauses (a) through (e) of clause (i) hereof.
"Net Worth Amount" has the meaning set forth in Section
6.20(a) hereof.
"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.
<PAGE> 76
"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 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.
<PAGE> 77
"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 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,
<PAGE> 78
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 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.
<PAGE> 79
"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.
"Regular Record Date" for the interest payable on any
Security of any series on any Interest Payment Date means the date
specified for that purpose as contemplated by Section 3.01 hereof.
"Restricted Investment" with respect to any Person means
any Investment (other than any Permitted Investment) by such Person in any
(i) of its Affiliates, (ii) executive officer or director of any Affiliate
of such Person, or (iii) other Person other than a Restricted Subsidiary
which is a Wholly Owned Subsidiary of the referent Person; provided,
however, that with respect to the Company and its Restricted Subsidiaries,
any loan or advance to an executive officer or director of the Company or a
Subsidiary will not constitute a Restricted Investment provided such loan
or advance is made in the ordinary course of business consistent with past
practices, and, if such loan or advance exceeds $100,000 (other than a
readily marketable mortgage loan not exceeding $500,000), such loan or
advance has been approved by the Board of Directors of the Company or a
disinterested committee thereof.
<PAGE> 80
"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
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 7/8%
Convertible Subordinated Debentures due 2005.
<PAGE> 81
"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.
"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.
<PAGE> 82
"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.
"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.
<PAGE> 83
"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.
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
<PAGE> 84
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 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
<PAGE> 85
ARTICLE 3
THE SECURITIES
Section 3.01 Amount Unlimited; Issuable in Series
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There
shall be established in or pursuant to a Board Resolution and, set forth,
or determined in the manner provided, in an Officers' Certificate, or
established in one or more indentures supplemental hereto, which, in each
case, shall be deemed incorporated herein by this reference and made a part
hereof but only with respect to the series of Securities established
pursuant to such Board Resolution, Officers' Certificate or supplemental
indenture, prior to the issuance of Securities of any series of the
following:
(1) the title of the Securities of the series (which
shall distinguish the Securities of the series from Securities of
any other series);
(2) any limit upon the aggregate principal amount of the
Securities of the series which may be authenticated and delivered
under this Indenture (except for Securities authenticated and
delivered upon registration of transfer of, or in exchange for, or
in lieu of, other Securities of the series pursuant to Section
3.04, 3.05, 3.06, 4.07 or 13.05 hereof and except for any
Securities which, pursuant to Section 3.03 hereof, are deemed
never to have been authenticated and delivered hereunder);
(3) the Person to whom any interest on a Security of the
series shall be payable, if other than the Person in whose name
that Security is registered at the close of business on the
Regular Record Date for such interest;
(4) the date or dates, or the method by which such date
or dates will be determined, on which the principal of the
Securities of the series is payable;
(5) the rate or rates at which the Securities of the
series shall bear interest, if any, or the method by which such
rate or rates shall be determined, the date or dates from which
such interest shall accrue, or the method by which such date or
dates shall be determined, the Interest Payment Dates on which any
such interest shall be payable and the Regular Record Date, if
any, for the interest payable on any Security on any Interest
Payment Date, or the method by which such date or dates shall be
determined, and the basis upon which interest shall be calculated
if other than on the basis of actual days elapsed over a 365 or
366-day year;
<PAGE> 86
(6) the place or places, if any, other than or in
addition to New York, New York, where the principal of and
interest on Securities of the series shall be payable, any
Securities of the series may be surrendered for registration of
transfer, Securities of the same series may be surrendered for
exchange and, if different from the location specified in Section
14.02 hereof, the place or places where notices or demands to or
upon the Company in respect of the Securities of the series and
this Indenture may be served;
(7) the period or periods within, the price or prices at
and the terms and conditions upon, which Securities of the series
may be redeemed or purchased, in whole or in part, at the option
of the Company;
(8) the obligation, if any, of the Company to redeem or
repurchase Securities of the series pursuant to any sinking fund
or analogous provisions or at the option of a Holder thereof and
the period or periods within which, the price or prices at which
and the terms and conditions upon which Securities of the series
shall be redeemed or repurchased, in whole or in part, pursuant to
such obligation;
(9) if other than denominations of $1,000 and any
integral multiple thereof, the denominations in which Securities
of the series shall be issuable;
(10) the currency, currencies or currency units in which
payment of the principal of and interest on any Securities of the
series shall be payable if other than the currency of the United
States and the manner of determining the equivalent thereof in the
currency of the United States for purposes of the definition of
"Outstanding" in Section 1.01 hereof;
(11) if the principal of or interest on any Securities of
the series is to be payable, at the election of the Company or a
Holder thereof, in one or more currencies or currency units other
than that or those in which the Securities are stated to be
payable, the currency, currencies or currency units in which
payment of the principal of and interest on Securities of such
series as to which such election is made shall be payable, and the
periods within which and the terms and conditions upon which such
election is to be made;
(12) if the amount of payments of principal of or
interest on any Securities of the series may be determined with
reference to an index, the manner in which such amounts shall be
determined;
(13) if other than the principal amount of the Securities
of any series, the portion of the principal amount of such
Securities which shall be payable upon declaration of acceleration
of the Maturity thereof;
<PAGE> 87
(14) if applicable, that the Securities of the series
shall be defeasible as provided in Article 11 hereof;
(15) if and as applicable, that the Securities of the
series shall be issuable in whole or in part in the form of one or
more Global Securities and, in such case, the Depository or
Depositories for such Global Security or Global Securities and any
circumstances other than those set forth in Section 3.05 hereof in
which any such Global Security may be transferred to, and
registered and exchanged for Securities registered in the name of,
a Person other than the Depository for such Global Security or a
nominee thereof and in which any such transfer may be registered;
(16) any deletions from, modifications of or additions to
the Events of Default or covenants of the Company with respect to
Securities of any series, whether or not such Events of Default or
covenants are consistent with the Events of Default or covenants
set forth herein;
(17) if other than the Trustee, the identity of each
Paying Agent and Registrar for the Securities of the series; and
(18) any other terms of the series.
All Securities of any one series shall be substantially
identical except as to denomination and except as may otherwise be provided
in or pursuant to the Board Resolution referred to above and set forth, or
determined in the manner provided, in the Officers' Certificate referred to
above or in any such indenture supplemental hereto.
If any of the terms of the series are established by
action taken pursuant to a Board Resolution, a copy thereof shall be
delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of the series.
Section 3.02 Denominations
In the absence of any specified denomination with respect
to the Securities of any series, the Securities of such series shall be
issuable in denominations of $1,000 and any integral multiple thereof.
Section 3.03 Execution, Authentication, Delivery and Dating
The Securities shall be executed on behalf of the Company
by two Officers, under its corporate seal reproduced thereon. The signature
of any of the Officers on the Securities may be manual or by facsimile.
Securities bearing the manual or facsimile signatures of
individuals who were at any time the proper Officers of the Company shall
bind the Company, notwithstanding that such individuals or any of them have
ceased to hold such offices prior to the authentication and delivery of
such Securities or did not hold such offices at the date of such
Securities.
<PAGE> 88
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 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.
<PAGE> 89
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.
<PAGE> 90
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 ARegistrar@ 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.
<PAGE> 91
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 otherwise in
substance and of like tenor as the Securities surrendered for such exchange
<PAGE> 92
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.
<PAGE> 93
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.
<PAGE> 94
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.
<PAGE> 95
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 ADefaulted 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.
<PAGE> 96
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 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.
<PAGE> 97
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.
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.
<PAGE> 98
(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.
(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.
<PAGE> 99
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.
<PAGE> 100
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, 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=
<PAGE> 101
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.
<PAGE> 102
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.
<PAGE> 103
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.
<PAGE> 104
(b) In the event the Company is not acting as Paying
Agent with respect to any series of Securities, the Company will, not less
than one Business Day before each due date of the principal of or interest
on, any Securities of any series, deposit with a Paying Agent a sum in same
day funds sufficient to pay the principal or interest so becoming due, such
sum to be held in trust for the benefit of the Persons entitled to such
principal or interest, and (unless such Paying Agent is the Trustee) the
Company will promptly notify the Trustee of such action or any failure to
so act.
(c) In the event the Company is not acting as Paying
Agent with respect to any series of Securities, the Company will cause each
Paying Agent other than the Trustee to execute and deliver to the Trustee
an instrument in which such Paying Agent will agree with the Trustee,
subject to the provisions of this Section, that such Paying Agent will:
(i) hold all sums held by it for the
payment of the principal of or interest on Securities of such series in
trust for the benefit of the Holders of such series of Securities and the
Trustee entitled thereto until such sums will be paid to such Persons or
otherwise disposed of as herein provided;
(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.
<PAGE> 105
(e) Except as provided in the Securities of any series,
any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of or interest on
any Security of any series and remaining unclaimed for two years after such
principal or interest has become due and payable shall be paid to the
Company on Company Request, or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Security shall
thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in a newspaper published
in the English language, customarily published on each Business Day and of
general circulation in New York, New York, notice that such money remains
unclaimed and that, after a date specified therein, which shall not be less
than 30 days from the date of such notification or publication, any
unclaimed balance of such money then remaining will be repaid to the
Company.
Section 6.05 Compliance Certificate
(a) The Company will deliver to the Trustee within 120
days after the end of each fiscal year of the Company an Officers'
Certificate stating whether or not the signers know of any Default or Event
of Default that occurred during such period. If they do know of a Default
or an Event of Default, the Officers' Certificate will describe the Default
or Event of Default and the action the Company is taking or proposes to
take with respect thereto.
(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.
<PAGE> 106
Section 6.07 Payment of Taxes and Other Claims
The Company will pay or discharge or cause to be paid or
discharged, before the same will become delinquent, (i) all taxes,
assessments and governmental charges levied or imposed upon the Company or
upon the income, profits or property of the Company other than any such
tax, assessment, charge or claim whose amount, applicability or validity is
being contested in good faith by appropriate proceedings and for which
appropriate provision has been made in accordance with GAAP and (ii) all
lawful claims for labor, materials and supplies which, if unpaid, might by
law become a Lien (other than a Permitted Lien) upon the property of the
Company, in each case except to the extent the failure to do so would not
have, in the judgment of management, a material adverse effect on the
Company and its Subsidiaries taken as a whole. Section 6.08 Insurance
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.
<PAGE> 107
Section 6.11 Disposition of Proceeds of Asset Sales
(a) Subject to the provisions set forth in Section 7.01
hereof, the Company will not, and will not permit any Restricted Subsidiary
to, directly or indirectly, make any Asset Sale unless (i) the Company or
the Restricted Subsidiary, as the case may be, receives consideration at
the time of such Asset Sale at least equal to the Fair Market Value for the
shares or assets sold or otherwise disposed of (which will be determined in
good faith by the Board of Directors of the Company); provided, that the
aggregate Fair Market Value of the consideration received from any Asset
Sale that is not in the form of cash or cash equivalents will not, when
aggregated with the Fair Market Value of all other non-cash consideration
received by the Company and its Restricted Subsidiaries from all previous
Asset Sales since the Issue Date for Securities of any series that has not
been converted into cash or cash equivalents, exceed five percent of the
Consolidated Tangible Net Assets of the Company at the time of the Asset
Sale under consideration, and (ii) the Company will apply the aggregate Net
Proceeds received by the Company or any Restricted Subsidiary from all
Asset Sales occurring subsequent to such Issue Date as follows: (A) to
repay any outstanding Indebtedness of the Company that is not subordinated
to the Securities, or other Indebtedness of the Company, or to the payment
of any Indebtedness of any Restricted Subsidiary, in each case within one
year after such Asset Sale or (B) to replace the properties and assets that
were the subject of the Asset Sale or in properties and assets that (as
determined by the Board of Directors of the Company, whose determination
will be conclusive) will be used in the businesses existing on the Issue
Date of Securities of such series of the Company and its Restricted
Subsidiaries or in businesses reasonably related thereto within one year
after such Asset Sale. The amount of such Net Proceeds neither used to
repay the Indebtedness described above nor used or invested as set forth in
the preceding sentence constitutes "Excess Proceeds."
(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
<PAGE> 108
such Excess Proceeds Offer (the "Asset Sale Offer Date"), the maximum
principal amount (expressed as a multiple of $1,000) of Securities of each
series that may be purchased out of the Excess Proceeds, at an offer price
(the "Asset Sale Offer Price") in cash in an amount equal to 100 percent of
the principal amount thereof plus accrued and unpaid interest, if any, to
the Asset Sale Offer Date, in accordance with the procedures set forth in
this Section 6.11. To the extent that the aggregate amount of Securities of
each series tendered pursuant to an Excess Proceeds Offer is less than the
Excess Proceeds relating thereto, then the Company may use the Excess
Proceeds which exceed the aggregate amount of Securities of each series
tendered pursuant to such Excess Proceeds Offer for general corporate
purposes. Upon completion of an Excess Proceeds Offer, the amount of Excess
Proceeds will be reset at zero.
(d) Within 30 days after the date on which the amount of
Excess Proceeds equals $5,000,000 or more, the Company (with written notice
to the Trustee) or the Trustee at the Company's request (and at the expense
of the Company) will send or cause to be sent by first-class mail, postage
prepaid, to all Holders on the date such Excess Proceeds equals $5,000,000,
at their respective addresses appearing in the Security Register, a notice,
prepared by the Company advising the Holders of such series, of such
occurrence and of such Holders' rights arising as a result thereof. Such
notice will contain all instructions and materials necessary to enable
Holders to tender their Securities of any series to the Company. Such
notice, which will govern the terms of the Excess Proceeds Offer, will
state:
(i) that the Excess Proceeds Offer
is being made pursuant to this Section 6.11 and the length of time such
Excess Proceeds Offer will remain open;
(ii) that the Holder has the right to
require the Company to repurchase such Holder's Securities of such series at
the Asset Sale Offer Price;
(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 wil
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;
<PAGE> 109
(vii) that Holders will be entitled to
withdraw their election if the Company, depositary or Paying Agent, as the
case may be, receives, not later than the expiration of the Excess Proceeds
Offer, or such longer period as may be required by law, a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder, the
principal amount of the Security of such series the Holder delivered for
purchase and a statement that such Holder is withdrawing its election to
have the Security of such series purchased;
(viii) that Holders whose Securities of
such series are purchased only in part will be issued Securities of the same
series, Maturity date, interest rate and Issue Date equal in principal amount
to the unpurchased portion of the Securities of such series surrendered; and
(ix) information concerning the
details of the Excess Proceeds Offer and the business of the Company which
the Company in good faith believes will enable such Holders to make an
informed decision (which at a minimum will include (A) the most recently
filed Annual Report on Form 10-K (including audited consolidated financial
statements) of the Company, the most recent subsequently filed Quarterly
Report on Form 10-Q and any Current Report on Form 8-K of the Company filed
subsequent to such Quarterly Report, other than Current Reports describing
Asset Sales otherwise described in the offering materials relating to the
Excess Proceeds Offer (or corresponding successor reports) (or in the event
the Company is not required to prepare any of the foregoing Forms, the
comparable information required pursuant to Section 6.03(b) hereof);
provided that the Company may at its option incorporate by reference
any such filed reports in the notice, (B) a description of material
developments in the Company's business subsequent to the date of the latest
of such reports and (C) if material, appropriate pro forma financial
information.
(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.
<PAGE> 110
(f) The Company will not, and will not permit any
Restricted Subsidiary to, create or permit to exist or become effective any
restriction (other than any restriction set forth in any agreement,
indenture, document or instrument relating to any Existing Indebtedness or
Refinancing Indebtedness with respect thereto) that would materially impair
the ability of the Company to make an Excess Proceeds Offer.
Notwithstanding the foregoing, if an Excess Proceeds Offer is made, the
Company will pay for Securities of any series tendered for purchase in
accordance with the terms of this Section 6.11.
(g) Not later than one Business Day prior to the Asset
Sale Offer Date in connection with which the Excess Proceeds Offer is being
made, the Company will (i) accept for payment Securities of any series or
portions thereof tendered pursuant to the Excess Proceeds Offer (on a pro
rata basis if required pursuant to Section 6.11(e) hereof), (ii) deposit
with the Paying Agent money sufficient, in immediately available funds, to
pay the purchase price of all Securities of any series or portions thereof
so accepted and (iii) deliver to the Paying Agent an Officers' Certificate
identifying the Securities of such series or portions thereof accepted for
payment by the Company. The Paying Agent will promptly after acceptance
mail or deliver to Holders of Securities of any series so accepted payment
in an amount equal to the Asset Sale Offer Price of the Securities of such
series purchased from each such Holder, and the Company will execute and
upon receipt of an Officers' Certificate of the Company the Trustee will
promptly authenticate and mail or deliver to such Holder a new Security of
the same series, Maturity date, interest rate and Issue Date equal in
principal amount to any unpurchased portion of the Security surrendered.
Any Securities of such series not so accepted will be promptly mailed or
delivered by the Paying Agent at the Company's expense to the Holder
thereof. The Company will publicly announce the results of the Excess
Proceeds Offer on the Asset Sale Offer Date. For purposes of this Section
6.11(g), the Company will choose a Paying Agent which will not be the
Company or a Subsidiary thereof. Any excess cash held by the Trustee after
the expiration of the Excess Proceeds Offer will be returned to the
Company.
(h) Any Excess Proceeds Offer will be conducted by the
Company in compliance with applicable law, including, without limitation,
Section 14(e) of the Exchange Act and Rule 14e-1 thereunder, if applicable.
(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.
<PAGE> 111
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 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.
<PAGE> 112
(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
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.
<PAGE> 113
Section 6.14 Restrictions on Restricted Subsidiary Indebtedness
The Company will not permit any of its Restricted
Subsidiaries to, directly or indirectly, Incur any additional Indebtedness
after the Issue Date of Securities of any series other than: (i)
Refinancing Indebtedness, (ii) Non-Recourse Indebtedness, (iii)
Indebtedness to the Company, (iv) any deposits made to secure performance
of tenders, bids, leases, statutory obligations, surety and appeal bonds,
progress statements, government contracts, and other obligations of like
nature (exclusive of the obligation for the payment of borrowed money), in
each case Incurred in the ordinary course of business of the Restricted
Subsidiary and (v) any guaranty of Indebtedness of the Company or another
Restricted Subsidiary; provided that the tangible net assets of all
Restricted Subsidiaries guaranteeing Indebtedness of the Company or other
Restricted Subsidiaries at the end of the fiscal quarter immediately
preceding the date of Incurring any such guaranty, as determined in
accordance with GAAP, shall not exceed 10% of the Company's Consolidated
Tangible Net Assets.
Section 6.15 Limitations and Restrictions on Capital Stock of Subsidiaries
The Company will not permit any of its Restricted
Subsidiaries to issue, or permit to be outstanding at any time, Preferred
Stock or any other Capital Stock constituting Disqualified Stock.
Section 6.16 Change of Control
(a) Following the occurrence of any Change of Control,
the Company will so notify the Trustee in writing by delivery of an
Officers' Certificate and will offer to purchase (a "Change of Control
Offer") from all Holders, and will purchase from Holders accepting such
Change of Control Offer on the date fixed for the closing of such Change of
Control Offer (the "Change of Control Payment Date"), the Outstanding
Securities of each series at an offer price (the "Change of Control Price")
in cash in an amount equal to 101 percent of the aggregate principal amount
thereof plus accrued and unpaid interest, if any, to the Change of Control
Payment Date in accordance with the procedures set forth in this Section
6.16.
(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:
<PAGE> 114
(i) that the Change of Control Offer is being
made pursuant to Section 6.16(a) hereof and the length of time the Change
of Control Offer will remain open;
(ii) that the Holder has the right to require
the Company to repurchase such Holder's Securities of such series at the
Change of Control Price;
(iii) that any Security of such series not tendered
will continue to accrue interest;
(iv) that any Security of such series accepted for
payment pursuant to the Change of Control Offer will cease to accrue interest
on the Change of Control Payment Date;
(v) that the Change of Control Payment Date will
be no earlier than 45 days nor later than 60 days from the date such notice
is mailed;
(vi) that Holders electing to have a Security of
such series purchased pursuant to any Change of Control Offer will be
required to surrender the Security of such series, with the appropriate
form on the Security of such series completed, to the Company, a depositary,
if appointed by the Company, or a Paying Agent at the address specified in
the notice prior to termination of the Change of Control Offer;
(vii) that Holders will be entitled to withdraw
their election if the Company, depositary or Paying Agent, as the case may
be, receives, not later than the expiration of the Change of Control Offer,
or such longer period as may be required by law, a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder,
the principal amount of the Security of such series the Holder delivered for
purchase and a statement that such Holder is withdrawing its election to
have the Security of such series purchased;
(viii) that Holders which elect to have their
Securities purchased only in part will be issued new Securities of the same
series, Maturity date, interest rate and Issue Date in a principal amount
equal to the unpurchased portion of the Securities of such series
surrendered; and
(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
<PAGE> 115
Control Offer (or corresponding successor reports) (or in the event
the Company is not required to prepare any of the foregoing Forms, the
comparable information required pursuant to Section 6.03(b) hereof);
provided that the Company may at its option incorporate by reference
any such filed reports in the notice, (B) a description of material
developments in the Company's business subsequent to the date of the
latest of such reports, and (C) if material, appropriate pro forma
financial information).
(c) In the event of a Change of Control Offer, the
Company will only be required to accept Securities of each series in
denominations of $1,000 or integral multiples thereof.
(d) The Company will not, and will not permit any
Restricted Subsidiary to, create or permit to exist or become effective any
restriction (other than any restriction set forth in any agreement,
indenture, document or instrument relating to any Existing Indebtedness or
Refinancing Indebtedness with respect thereto) that would materially impair
the ability of the Company to make a Change of Control Offer.
Notwithstanding the foregoing, if a Change of Control Offer is made, the
Company will pay for Securities of each series tendered for purchase in
accordance with the terms of this Section 6.16.
(e) Not later than one Business Day prior to the Change
of Control Payment Date in connection with which the Change of Control
Offer is being made, the Company will (i) accept for payment Securities of
each series or portions thereof tendered pursuant to the Change of Control
Offer, (ii) deposit with the Paying Agent money sufficient, in immediately
available funds, to pay the purchase price of all Securities of each series
or portions thereof so accepted and (iii) deliver to the Paying Agent an
Officers' Certificate identifying the Securities of each series or portions
thereof accepted for payment by the Company. The Paying Agent will promptly
after acceptance mail or deliver to Holders of Securities of each series so
accepted payment in an amount equal to the Change of Control Price of the
Securities of each series purchased from each such Holder, and the Company
will execute and, upon receipt of an Officers' Certificate of the Company,
the Trustee will promptly authenticate and mail or deliver to such Holder a
new Security of the same series, Maturity date, interest rate and Issue
Date equal in principal amount to any unpurchased portion of the Security
of such series surrendered. Any Securities of each series not so accepted
will be promptly mailed or delivered by the Paying Agent at the Company's
expense to the Holder thereof. The Company will publicly announce the
results of the Change of Control Offer on the Change of Control Payment
Date. For purposes of this Section 6.16(e), the Company will choose a
Paying Agent which will not be the Company or a Subsidiary thereof. Any
excess cash held by the Trustee after the expiration of the Change of
Control Offer will be returned to the Company.
(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.
<PAGE> 116
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 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.
<PAGE> 117
Section 6.18 Limitations on Liens
The Company will not, and will not permit any of its
Restricted Subsidiaries to, create, Incur, assume or suffer to exist any
Liens, other than Permitted Liens, on any of its or their assets, property,
income or profits therefrom unless contemporaneously therewith or prior
thereto all payments due hereunder and under the Securities of any series
are secured on an equal and ratable basis with the obligation or liability
so secured until such time as such obligation or liability is no longer
secured by a Lien.
Section 6.19 Limitations on Restrictions on Distributions from
Restricted Subsidiaries
The Company will not, and will not permit any of its
Restricted Subsidiaries to, create, assume or otherwise cause or suffer to
exist or become effective any consensual encumbrance or restriction (other
than encumbrances or restrictions imposed by law or by judicial or
regulatory action or by provisions in leases or other agreements that
restrict the assignability thereof) on the ability of any Restricted
Subsidiary to (i) pay dividends or make any other distributions on its
Capital Stock or any other interest or participation in, or measured by,
its profits, owned by the Company or any of its other Restricted
Subsidiaries, or pay interest on or principal of any Indebtedness owed to
the Company or any of its other Restricted Subsidiaries, (ii) make loans or
advances to the Company or any of its other Restricted Subsidiaries, or
(iii) transfer any of its properties or assets to the Company or any of its
other Restricted Subsidiaries, except for encumbrances or restrictions
existing under or by reason of (a) applicable law, (b) covenants or
restrictions contained in Existing Indebtedness as in effect on the Issue
Date of Securities of any series, (c) any restrictions or encumbrances
arising in connection with the Existing Credit Facility; provided that any
restrictions and encumbrances relating to any extension or renewal of the
Existing Credit Facility are not more restrictive than those in the
Existing Credit Facility being extended or renewed, (d) any restrictions or
encumbrances arising in connection with Refinancing Indebtedness; provided
that any restrictions and encumbrances of the type described in this clause
(d) that arise under such Refinancing Indebtedness are not more restrictive
than those under the agreement creating or evidencing the Indebtedness
being refunded or refinanced, (e) any agreement restricting the sale or
other disposition of property securing Indebtedness permitted by this
Indenture if such agreement does not expressly restrict the ability of a
Subsidiary of the Company to pay dividends or make loans or advances, (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
<PAGE> 118
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 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;
<PAGE> 119
(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 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).
<PAGE> 120
(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 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.
<PAGE> 121
(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 stating that the proposed
transaction and such supplemental indenture comply with this Indenture.
<PAGE> 122
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 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;
<PAGE> 123
(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,
(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;
<PAGE> 124
(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 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.
<PAGE> 125
(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. Section 8.05 Control by Majority
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.
<PAGE> 126
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 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.
<PAGE> 127
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
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.
<PAGE> 128
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:
(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
<PAGE> 129
(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.
(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.
<PAGE> 130
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.
<PAGE> 131
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 May 15 beginning with May
15, 1998, 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.
<PAGE> 132
Section 9.07 Compensation and Indemnity
(a) The Company agrees:
(i) to pay to the Trustee from time to time
reasonable compensation for all services rendered by it
hereunder (which compensation will not be limited by any
provision of law in regard to the compensation of a
trustee of an express trust);
(ii) to reimburse the Trustee upon its request
for all reasonable expenses, disbursements and advances
incurred or made by the Trustee in accordance with any
provision of this Indenture (including, without
limitation, the reasonable compensation and the expenses,
advances and disbursements of its agents and counsel),
except any such expense, disbursement or advance as may
be attributable to its gross negligence or bad faith; and
(iii) to indemnify the Trustee and its agents
for, and to hold them harmless against, any loss,
liability or expense incurred without gross negligence or
bad faith on their part, arising out of or in connection
with the acceptance or administration of this trust,
including the costs and expenses of defending themselves
against any claim or liability in connection with the
exercise or performance of any of their powers or duties
hereunder.
(b) To secure the Company's payment obligations in this
Section 9.07, the Trustee will have a Lien prior to the Securities on all
money or property held or collected by the Trustee, except that held in
trust to pay principal and interest on particular Securities.
(c) When the Trustee incurs expenses or renders services
after an Event of Default specified in Section 8.01(a)(viii) or (a)(ix)
occurs, the expenses and the compensation for the services are intended to
constitute expenses of administration under any Bankruptcy Law.
<PAGE> 133
Section 9.08 Replacement of Trustee
(a) A resignation or removal of the Trustee and
appointment of a successor Trustee will become effective only upon the
successor Trustee's acceptance of appointment as provided in this Section
9.08.
(b) The Trustee may resign and be discharged from the
trust hereby created by so notifying the Company in writing. The Holders of
a majority in principal amount of the Outstanding Securities of any series
may remove the Trustee by so notifying the Trustee and the Company. The
Company may remove the Trustee if:
(i) the Trustee fails to comply with Section 9.10
hereof;
(ii) the Trustee is adjudged a bankrupt or an
insolvent or an order for relief is entered with respect
to the Trustee under any Bankruptcy Law;
(iii) a Custodian or public officer takes charge
of the Trustee or its property; or
(iv) the Trustee becomes incapable of acting.
(c) If the Trustee resigns or is removed or if a vacancy
exists in the office of Trustee for any reason, the Company will promptly
appoint a successor Trustee.
(d) If a successor Trustee does not take office within 60
days after the retiring Trustee resigns or is removed, the retiring
Trustee, the Company or the Holders of at least ten percent in principal
amount of the Outstanding Securities of any series may petition any court
of competent jurisdiction for the appointment of a successor Trustee.
(e) If the Trustee fails to comply with Section 9.10
hereof, any Holder may petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.
(f) A successor Trustee will deliver a written acceptance
of its appointment to the retiring Trustee and to the Company. Thereupon
the resignation or removal of the retiring Trustee will become effective,
and the successor Trustee will have all the rights, powers and duties of
the Trustee under this Indenture. The successor Trustee will mail a notice
of its succession to the Holders. The retiring Trustee will promptly
transfer all property held by it as Trustee to the successor Trustee,
subject to the Lien provided for in Section 9.07 hereof. Notwithstanding
replacement of the Trustee pursuant to this Section 9.08, the Company's
obligations under Section 9.07 hereof will continue for the benefit of the
retiring Trustee.
<PAGE> 134
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 authenticating Trustee may adopt such
authentication and deliver the Securities so authenticated, with the same
effect as if such successor Trustee had itself authenticated such
Securities.
Section 9.10 Eligibility; Disqualification
(a) There will at all times be a Trustee hereunder which
will (i) be a corporation organized and doing business under the laws of
the United States, any state thereof or the District of Columbia,
authorized under such laws to exercise corporate trustee power, (ii) be
subject to supervision or examination by federal or state (or the District
of Columbia) authority and (iii) have a combined capital and surplus of at
least $150 million as set forth in its most recent published annual report
of condition.
(b) This Indenture will always have a Trustee who
satisfies the requirements of TIA Sections 310(a)(1) and 310(a)(2). The
Trustee is subject to TIA Section 310(b). If at any time the Trustee ceases
to be eligible in accordance with the provisions of this Section 9.10, it
will resign immediately in the manner and with the effect specified in
Section 9.08 hereof.
Section 9.11 Preferential Collection of Claims Against Company
The Trustee is subject to TIA Section 311(a), excluding
any creditor relationship listed in TIA Section 311(b). A Trustee who has
resigned or been removed will be subject to TIA Section 311(a) to the
extent indicated therein.
<PAGE> 135
ARTICLE 10
HOLDERS' LISTS
Section 10.01 Company to Furnish Trustee Names and Addresses of Holders
The Company will furnish or cause to be furnished to the
Trustee:
(i) semi-annually, not more than 15 days before
each Interest Payment Date, a list, in such form as the
Trustee may reasonably require, of the names and
addresses of the Holders of such series of Securities as
of the Regular Record Date of such Interest Payment Date;
and
(ii) at such other times as the Trustee may
request in writing, within 30 days after receipt by the
Company of any such request, a list of similar form and
content as of a date not more than 15 days prior to the
time such list is furnished;
provided, however, that if and so long as the Trustee will be the
Registrar, no such list need be furnished.
Section 10.02 Preservation of Information
The Trustee will preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders of each series
of Securities contained in the most recent list furnished to the Trustee as
provided in Section 10.01 hereof and the names and addresses of such
Holders received by the Trustee in its capacity as Registrar or Paying
Agent (if so acting). The Trustee may destroy any list furnished to it as
provided in Section 10.01 hereof upon receipt of a new list so furnished.
ARTICLE 11
DEFEASANCE AND COVENANT DEFEASANCE
Section 11.01 Company's Option to Effect Defeasance or Covenant Defeasance
The Company may elect, at its option by Board Resolution
at any time, to have either Section 11.02 or 11.03 hereof applied to the
Outstanding Securities of any series designated pursuant to Section 3.01
hereof as being defeasible pursuant to this Article 11 (hereinafter called
a "Defeasible Series"), upon compliance with the conditions set forth below
in this Article 11.
<PAGE> 136
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 AOutstanding@ only for the purposes
of Section 11.05 hereof and the other Sections of this Indenture referred
to in (i) and (ii) below, and to have satisfied all its other obligations
under the Securities of such series and this Indenture insofar as such
Securities are concerned (and the Trustee, at the expense of the Company,
shall execute proper instruments acknowledging the same), except for the
following which shall survive until otherwise terminated or discharged
hereunder: (i) the rights of Holders of Outstanding Securities of such
series to receive solely from the trust fund described in Section 11.04
hereof and as more fully set forth in such Section, payments in respect of
the principal of and interest on such Securities of such series when
payments are due, (ii) the Company's obligations with respect to the
Securities of such series under Sections 3.04, 3.05, 3.06, 6.02 and 6.04
hereof, (iii) the rights, powers, trusts, duties and immunities of the
Trustee hereunder and (iv) this Article 11. Subject to compliance with this
Article 11, the Company may exercise its option provided in Section 11.01
hereof to have this Section 11.02 applied to the Outstanding Securities of
any Defeasible Series notwithstanding the prior exercise of its option
provided in Section 11.01 hereof to have Section 11.03 hereof applied to
such Outstanding Securities.
Section 11.03 Covenant Defeasance
Upon the Company's exercise of the option provided in
Section 11.01 hereof to have this Section 11.03 applied to the Outstanding
Securities, (i) the Company shall be released from its obligations under
Sections 6.03 and 6.06 through 6.20, inclusive, Article 7, and any other
covenants specified in or pursuant to this Indenture and (ii) the
occurrence of any event specified in Sections 8.01(a)(iv) (with respect to
any of Sections 6.03 and 6.06 through 6.20 inclusive, and any other
covenants specified in or pursuant to this Indenture) and 8.01(a)(x) shall
be deemed not to be or result in an Event of Default, in each case with
respect to the Outstanding Securities of such series as provided in this
Section 11.03 on and after the date the conditions set forth in Section
11.04 hereof are satisfied (hereinafter called "Covenant Defeasance"), and
such Securities shall thereafter be deemed not to be AOutstanding@ for the
purposes of any direction, waiver, consent, declaration or act of Holders
(and the consequences thereof) in connection with such covenants, but shall
<PAGE> 137
continue to be AOutstanding@ 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
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.
<PAGE> 138
(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.
(vi) Such Defeasance or Covenant Defeasance shall not
cause the Trustee to have a conflicting interest within the
meaning of the TIA (assuming all Securities are in default within
the meaning of the TIA).
(vii) Such Defeasance or Covenant Defeasance shall not
result in a breach or violation of, or constitute a default under,
any other agreement or instrument to which the Company is a party
or by which it is bound.
(viii) Notwithstanding any other provisions of this
Section, such Defeasance or Covenant Defeasance shall be effected
in compliance with any additional or substitute terms, conditions
or limitations in connection therewith pursuant to Section 3.01
hereof.
(ix) The Company shall have delivered to the Trustee an
Officers' Certificate, stating that all conditions precedent with
respect to such Defeasance or Covenant Defeasance have been
complied with.
<PAGE> 139
Such Defeasance or Covenant Defeasance shall not result
in the trust arising from such deposit constituting an investment company
within the meaning of the Investment Company Act of 1940, as amended,
unless such trust shall be qualified under such Act or exempt from
regulation thereunder.
Section 11.05 Deposited Money and U.S. Government Obligations to
be Held in Trust; Other Miscellaneous Provisions
Subject to the provisions of Section 6.04(e) hereof, all
money and U.S. Government Obligations (or other property as may be provided
pursuant to Section 3.01 hereof) (including the proceeds thereof) deposited
with the Trustee or other qualifying trustee (solely for purposes of this
Section 11.05 and Section 11.06 hereof, the Trustee and any such other
trustee are referred to collectively as the "Trustee") pursuant to Section
11.04 hereof in respect of the Outstanding Securities of any Defeasible
Series shall be held in trust and applied by the Trustee, in accordance
with the provisions of the Outstanding Securities of such series and this
Indenture, to the payment, either directly or through any such Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Holders of such Securities of all sums due and to become
due thereon in respect of principal and interest, but such money so held in
trust need not be segregated from other funds except to the extent required
by law.
The Company shall pay and indemnify the Trustee against
any tax, fee or other charge imposed on or assessed against the U.S.
Government Obligations deposited pursuant to Section 11.04 hereof or the
principal and interest received in respect thereof other than any such tax,
fee or other charge that by law is for the account of the Holders of
Outstanding Securities.
Anything in this Article 11 to the contrary
notwithstanding, the Trustee shall deliver or pay to the Company any money
or U.S. Government Obligations (or other property and any proceeds
therefrom) held by it with respect to Outstanding Securities of any
Defeasible Series that are in excess of the amount thereof that was used to
pay the Securities of such series upon Maturity.
Section 11.06 Reinstatement
If the Trustee or the Paying Agent is unable to apply any
money in accordance with this Article 11 with respect to the Securities of
any series by reason of any notification, order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's obligations under this Indenture and the
Securities of such series shall be revived and reinstated as though no
deposit had occurred pursuant to this Article 11 with respect to Securities
of such series until such time as the Trustee or Paying Agent is permitted
to apply all money held in trust pursuant to Section 11.05 hereof with
<PAGE> 140
respect to Securities of such series in accordance with this Article 11;
provided, however, that if the Company makes any payment of principal of or
interest on any Security of such series following the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders
of Securities of such series to receive such payment from the money so held
in trust.
ARTICLE 12
SATISFACTION AND DISCHARGE
Section 12.01 Satisfaction and Discharge of Indenture
This Indenture shall upon Company Request cease to be of
further effect with respect to any series of Securities (except as to any
surviving rights of registration of transfer or exchange of Securities of
such series herein expressly provided for) and the Trustee, at the expense
of the Company, shall execute proper instruments acknowledging satisfaction
and discharge of this Indenture as to such series when
(i) either
(A) all Securities of such series theretofore
authenticated and delivered (other than (i) Securities of
such series which have been destroyed, lost or stolen and
which have been replaced or paid as provided in Section
3.06 hereof, and (ii) Securities of such series for whose
payment money has theretofore been deposited in trust
with the Trustee or any Paying Agent or segregated and
held in trust by the Company and thereafter repaid to the
Company, as provided in Section 6.04 hereof) have been
delivered to the Trustee for cancellation; or
(B) all Securities of such series and, in the
case of (1) or (2) below, not theretofore delivered to
the Trustee for cancellation
(1) have become due and payable, or
(2) will become due and payable at
their Stated Maturity within one year, or
(3) if redeemable at the option of
the Company, are to be called for redemption
within one year under arrangements satisfactory
to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at
the expense, of the Company,
<PAGE> 141
and the Company, in the case of (1), (2) or (3) above,
has irrevocably deposited or caused to be deposited with
the Trustee as trust funds in trust for such purpose an
amount in cash sufficient to pay and discharge the entire
Indebtedness on such Securities not theretofore delivered
to the Trustee for cancellation, for principal and
interest to the date of such deposit (in the case of
Securities which have become due and payable) or to the
Stated Maturity or redemption date, as the case may be;
(ii) the Company has paid or caused to be paid all
other sums payable hereunder by the Company; and
(iii) the Company has delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, stating that all
conditions precedent herein provided for relating to the
satisfaction and discharge of this Indenture as to such series
have been complied with.
Notwithstanding the satisfaction and discharge of this
Indenture, the obligations of the Company to the Trustee under Section 9.07
hereof and, if money shall have been deposited with the Trustee pursuant to
subclause (B) of clause (i) of this Section 12.01, the obligations of the
Trustee under Sections 12.02 and 6.04(e) hereof shall survive.
Section 12.02 Application of Trust Money
Subject to the provisions of Section 6.04(e) hereof, all
money deposited with the Trustee pursuant to Section 12.01 hereof shall be
held in trust and applied by it, in accordance with the provisions of the
Securities and this Indenture, to the payment, either directly or through
any Paying Agent (including the Company acting as its own Paying Agent) as
the Trustee may determine, to the Persons entitled thereto, of the
principal and interest for whose payment such money has been deposited with
the Trustee; but such money need not be segregated from other funds except
to the extent required by law.
<PAGE> 142
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);
(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;
<PAGE> 143
(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 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.
<PAGE> 144
(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 ranking or priority of the
Securities in a manner adverse to the Holders.
<PAGE> 145
(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.
<PAGE> 146
(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.
<PAGE> 147
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.
(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.
<PAGE> 148
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.
<PAGE> 149
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.
<PAGE> 150
Section 14.07 Certificate and Opinion as to Conditions Precedent
Upon any request or application by the Company to the
Trustee to take any action under this Indenture, the Company will furnish
to the Trustee and the Trustee may rely upon, as conclusive evidence:
(i) an Officers' Certificate (which will include
the statements set forth in Section 14.08 hereof) stating
that, in the opinion of the signers, all conditions
precedent and covenants, if any, provided for in this
Indenture relating to the proposed action have been
complied with; and
(ii) an Opinion of Counsel (which will include
the statements set forth in Section 14.08 hereof) stating
that, in the opinion of such counsel, all such conditions
precedent and covenants have been complied with.
Section 14.08 Statements Required in Certificate or Opinion
(a) Each certificate or opinion with respect to
compliance with a condition or covenant provided for in this Indenture
(other than a certificate provided pursuant to TIA Section 314(a)(4)) will
include:
(i) a statement that the Person making such
certificate or opinion has read such condition or covenant;
(ii) a brief statement as to the nature and
scope of the examination or investigation upon which the
statements or opinions contained in such certificate or
opinion are based;
(iii) a statement that, in the opinion of such
Person, such Person has made such examination or
investigation as is necessary to enable him or her to
express an informed opinion as to whether or not such
condition or covenant has been complied with; and
(iv) a statement as to whether or not, in the
opinion of such person, such condition or covenant has
been complied with.
<PAGE> 151
(b) Any Officers' Certificate may be based, insofar as it
relates to legal matters, upon an Opinion of Counsel, unless such Officer
knows that the opinion with respect to the matters upon which his
certificate may be based as aforesaid is erroneous, or in the exercise of
reasonable care should know that the same are erroneous. Any Opinion of
Counsel may be based, insofar as it relates to factual matters, upon the
certificate, statement or opinion of or representations by an officer or
officers of the Company, or other Persons or firms deemed appropriate by
such counsel, unless such counsel has actual knowledge that the
certificate, statement or opinion or representations with respect to the
matters upon which his certificate, statement or opinion may be based as
aforesaid are erroneous.
(c) Any Officers' Certificate, statement or Opinion of
Counsel may be based, insofar as it relates to accounting matters, upon a
certificate or opinion of or representation by an accountant (who may be an
employee of the Company), or firm of accountants, unless such Officer or
counsel, as the case may be, has actual knowledge that the certificate or
opinion or representation with respect to the accounting matters upon which
his certificate, statement or opinion may be based as aforesaid are
erroneous.
Section 14.09 Rules by Trustee and Agents
The Trustee may make reasonable rules for action by or at
a meeting of Holders. The Registrar or Paying Agent may make reasonable
rules and set reasonable requirements for its functions.
Section 14.10 No Recourse Against Others
A director, officer or employee of the Company, as such,
will have no liability for any obligations of the Company under the
Securities or this Indenture. Each Holder by accepting a Security waives
and releases all such liability.
Section 14.11 Governing Law
This Indenture and the Securities will be governed by and
construed in accordance with the laws of the State of New York, without
regard to principles of conflicts of law.
Section 14.12 No Adverse Interpretation of Other Agreements
This Indenture may not be used to interpret another
indenture, loan or debt agreement of the Company or a Subsidiary thereof.
Any such indenture, loan or debt agreement may not be used to interpret
this Indenture. This writing constitutes the entire agreement of the
parties with respect to the subject matter hereof. Unless expressly
otherwise indicated herein, an action or transaction permitted by one
provision hereof must nonetheless comply with all other applicable
provisions hereof; and any action or transaction not permitted by any
provision of this Indenture will not be permitted regardless of whether any
other provision hereof might permit such action or transaction.
<PAGE> 152
Section 14.13 Successors
All agreements of the Company in this Indenture and the
Securities will bind its successors. All agreements of the Trustee in this
Indenture will bind its successors.
Section 14.14 Severability
In case any provision in this Indenture or in the
Securities is invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions will not in any way be affected
or impaired thereby.
Section 14.15 Counterpart Originals
The parties may sign any number of copies of this
Indenture. Each signed copy will be an original, but all of them together
represent the same agreement.
Section 14.16 Trustee as Paying Agent and Registrar
The Company initially appoints the Trustee as Paying Agent
and Registrar.
Section 14.17 Table of Contents, Headings, etc.
The Table of Contents, Cross-Reference Table and Headings
of the Articles and Sections of this Indenture have been inserted for
convenience of reference only, are not to be considered a part hereof and
will in no way modify or restrict any of the terms or provisions hereof.
Section 14.18 Benefits of Indenture
Nothing in this Indenture or in the Securities, express
or implied, will give to any Person, other than the parties hereto and
their successors hereunder and the Holders, any benefit or any legal or
equitable right, remedy or claim under this Indenture.
Section 14.19 Acceptance of Trust
IBJ Schroder Bank & Trust Company, the Trustee named
herein, hereby accepts the trusts in this Indenture declared and provided,
upon the terms and conditions hereinabove set forth.
<PAGE> 153
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 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.
<PAGE> 154
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.
<PAGE> 155
IN WITNESS WHEREOF, the undersigned have duly executed
this Indenture as of the date first above written.
U.S. HOME CORPORATION
By: /s/ Thomas A. Napoli
-----------------------------------
Name: Thomas A. Napoli
Title: Vice President-- Corporate Finance
and Treasurer
IBJ SCHRODER BANK & TRUST COMPANY,
as Trustee
By: /s/ Luis Perez
---------------------------------
Name: Luis Perez
Title: Vice President
<PAGE> 156
EXHIBIT 10.3
SENIOR SUBORDINATED INDENTURE,
dated as of August 28, 1997,
between
U.S. HOME CORPORATION
and
IBJ SCHRODER BANK & TRUST COMPANY
Trustee
<PAGE> 157
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> 158
TIA
Section.. Indenture Section
317(a)(1).................................................. 8.08
(a)(2).................................................. 8.09
(b)..................................................... 3.05
318(a)..................................................... 14.01
N.A. means not applicable
Note: This cross-reference table will not, for any purpose, be deemed
to be a part of this Indenture.
<PAGE> 159
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
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
Existing Credit Facility..................6
Existing Indebtedness.....................6
Fair Market Value.........................6
GAAP......................................7
Global Security...........................7
Hedging Obligations.......................7
Holder....................................7
Incur.....................................7
<PAGE> 160
Page
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
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
<PAGE> 161
Page
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...........................17
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
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
<PAGE> 162
Page
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
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
<PAGE> 163
Page
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
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
<PAGE> 164
Page
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
Section 16.09 Paying Agents Other Than the Trustee.....85
<PAGE> 165
INDENTURE, dated as of August 28, 1997, 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> 166
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.
<PAGE> 167
"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.
"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 APrime-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
<PAGE> 168
"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
6.14(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
<PAGE> 169
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 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.
<PAGE> 170
"Defaulted Interest" has the meaning set forth in Section 3.07
hereof.
"Defeasance" has the meaning set forth in Section 11.02 hereof.
"Defeasible Series" has the meaning set forth in Section 11.01
hereof.
"Depository" means, with respect to Securities of any series
issuable in whole or in part in the form of one or more Global
Securities, a clearing agency registered under the Exchange Act that
is designated to act as Depository for such Securities as contemplated
by Section 3.01.
"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.
<PAGE> 171
"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 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.
<PAGE> 172
"Indebtedness" of any Person at any date means, without
duplication, (i) all indebtedness of such Person for borrowed money
(whether or not the recourse of the lender is to the whole of the
assets of such Person or only to a portion thereof), (ii) all
obligations of such Person evidenced by bonds, debentures, notes or
other similar instruments, (iii) all obligations of such Person in
respect of letters of credit or other similar instruments (or
reimbursement obligations with respect thereto), other than standby
letters of credit issued for the benefit of, or surety and performance
bonds issued by, such Person in the ordinary course of business, (iv)
all obligations of such Person with respect to Hedging Obligations
(other than those that fix or cap the interest rate on variable rate
indebtedness otherwise permitted by this Indenture or that fix the
exchange rate in connection with indebtedness denominated in a foreign
currency and otherwise permitted by this Indenture and other than the
purchase of mortgage commitments in the ordinary course of business),
(v) all obligations of such Person to pay the deferred and unpaid
purchase price of property or services, including, without limitation,
all conditional sale obligations of such Person and all obligations
under any title retention agreement (except trade payables and accrued
expenses 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.
<PAGE> 173
"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.
"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.
"Interest Payment 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).
<PAGE> 174
"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.
"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.
<PAGE> 175
"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 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.
<PAGE> 176
"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.
"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.
<PAGE> 177
"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.
"Regular Record Date" for the interest payable on any Security of
any series on any Interest Payment Date means the date specified for
that purpose as contemplated by Section 3.01 hereof.
"Restricted Investment" with respect to any Person means any
Investment (other than any Permitted Investment) by such Person in any
(i) of its Affiliates, (ii) executive officer or director of any
Affiliate of such Person, or (iii) other Person other than a
Restricted Subsidiary which is a Wholly Owned Subsidiary of the
referent Person; provided, however, that with respect to the Company
and its Restricted Subsidiaries, any loan or advance to an executive
officer or director of the Company or a Subsidiary will not constitute
a Restricted Investment provided such loan or advance is made in the
ordinary course of business consistent with past practices, and, if
such loan or advance exceeds $100,000 (other than a readily marketable
mortgage loan not exceeding $500,000), such loan or advance has been
approved by the Board of Directors of the Company or a disinterested
committee thereof.
<PAGE> 178
"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 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 4-7/8%
Convertible Subordinated Debentures due 2005.
<PAGE> 179
"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.
<PAGE> 180
"Special Record Date" for the payment of any Defaulted Interest
on any Security means a date fixed by the Trustee pursuant to Section
3.07 hereof.
"Stated Maturity", when used with respect to any Security of any
series or any installment of principal thereof or interest thereon,
means the date specified in such Security as the fixed date on which
the principal of such Security or such installment of principal or
interest is due and payable.
"Subsidiary" of any Person means (i) any corporation of which at
least a majority of the aggregate voting power of all classes of the
Common Equity is directly or indirectly beneficially owned by such
Person, and (ii) any entity other than a corporation of which such
Person directly or indirectly beneficially owns at least a majority of
the Common Equity.
"Successor" has the meaning set forth in Section 7.01(a) hereof.
"TIA" means the Trust Indenture Act of 1939, as amended.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of the Indenture until a successor Trustee shall have become
such pursuant to the applicable provisions of this Indenture, and
thereafter "Trustee" shall mean or include the Person who is then the
Trustee hereunder.
"Trust Officer" means any Senior Vice President, Vice President,
Assistant Vice President, Assistant Secretary or Assistant Treasurer
of the Trustee assigned by the Trustee to administer its corporate
trust matters.
"U.S. Government Obligations" means (i) any security that is (a)
a direct obligation of the United States for the payment of which the
full faith and credit of the United States is pledged or (b) an
obligation of a Person controlled or supervised by and acting as an
agency or instrumentality of the United States the payment of which is
unconditionally guaranteed as a full faith and credit obligation by
the United States, which, in either case (a) or (b), is not callable
or redeemable at the option of the issuer thereof, and (ii) any
depositary receipt issued by a bank (as defined in Section 3(a)(2) of
the Securities Act of 1933, as amended) as custodian with respect to
any U.S. Government Obligation specified in clause (i) and held by
such custodian for the account of the holder of such depositary
receipt, or with respect to any specific payment of principal of or
interest on any such U.S. Government Obligation; provided that (except
as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depositary
receipt from any amount received by the custodian in respect of the
U.S. Government Obligation or the specific payment of principal or
interest evidenced by such depositary receipt.
<PAGE> 181
"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.
<PAGE> 182
"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.
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.
<PAGE> 183
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 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
ARTICLE 3
THE SECURITIES
<PAGE> 184
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 calculated
if other than on the basis of actual days elapsed over a 365 or
366-day year;
<PAGE> 185
(6) the place or places, if any, other than or in
addition to New York, New York, where the principal of and
interest on Securities of the series shall be payable, any
Securities of the series may be surrendered for registration of
transfer, Securities of the same series may be surrendered for
exchange and, if different from the location specified in Section
14.02 hereof, the place or places where notices or demands to or
upon the Company in respect of the Securities of the series and
this Indenture may be served;
(7) the period or periods within, the price or prices at
and the terms and conditions upon, which Securities of the series
may be redeemed or purchased, in whole or in part, at the option
of the Company;
(8) the obligation, if any, of the Company to redeem or
repurchase Securities of the series pursuant to any sinking fund
or analogous provisions or at the option of a Holder thereof and
the period or periods within which, the price or prices at which
and the terms and conditions upon which Securities of the series
shall be redeemed or repurchased, in whole or in part, pursuant to
such obligation;
(9) if other than denominations of $1,000 and any
integral multiple thereof, the denominations in which Securities
of the series shall be issuable;
(10) the currency, currencies or currency units in which
payment of the principal of and interest on any Securities of the
series shall be payable if other than the currency of the United
States and the manner of determining the equivalent thereof in the
currency of the United States for purposes of the definition of
"Outstanding" in Section 1.01 hereof;
(11) if the principal of or interest on any Securities of
the series is to be payable, at the election of the Company or a
Holder thereof, in one or more currencies or currency units other
than that or those in which the Securities are stated to be
payable, the currency, currencies or currency units in which
payment of the principal of and interest on Securities of such
series as to which such election is made shall be payable, and the
periods within which and the terms and conditions upon which such
election is to be made;
(12) if the amount of payments of principal of or
interest on any Securities of the series may be determined with
reference to an index, the manner in which such amounts shall be
determined;
(13) if other than the principal amount of the Securities
of any series, the portion of the principal amount of such
Securities which shall be payable upon declaration of acceleration
of the Maturity thereof;
<PAGE> 186
(14) if applicable, that the Securities of the series
shall be defeasible as provided in Article 11 hereof;
(15) if and as applicable, that the Securities of the
series shall be issuable in whole or in part in the form of one or
more Global Securities and, in such case, the Depository or
Depositories for such Global Security or Global Securities and any
circumstances other than those set forth in Section 3.05 hereof in
which any such Global Security may be transferred to, and
registered and exchanged for Securities registered in the name of,
a Person other than the Depository for such Global Security or a
nominee thereof and in which any such transfer may be registered;
(16) any deletions from, modifications of or additions to
the Events of Default or covenants of the Company with respect to
Securities of any series, whether or not such Events of Default or
covenants are consistent with the Events of Default or covenants
set forth herein;
(17) if other than the Trustee, the identity of each
Paying Agent and Registrar for the Securities of the series; and
(18) any other terms of the series.
All Securities of any one series shall be substantially
identical except as to denomination and except as may otherwise be provided
in or pursuant to the Board Resolution referred to above and set forth, or
determined in the manner provided, in the Officers' Certificate referred to
above or in any such indenture supplemental hereto.
If any of the terms of the series are established by
action taken pursuant to a Board Resolution, a copy thereof shall be
delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of the series.
Section 3.02 Denominations
In the absence of any specified denomination with respect
to the Securities of any series, the Securities of such series shall be
issuable in denominations of $1,000 and any integral multiple thereof.
Section 3.03 Execution, Authentication, Delivery and Dating
The Securities shall be executed on behalf of the Company
by two Officers, under its corporate seal reproduced thereon. The signature
of any of the Officers on the Securities may be manual or by facsimile.
Securities bearing the manual or facsimile signatures of
individuals who were at any time the proper Officers of the Company shall
bind the Company, notwithstanding that such individuals or any of them have
ceased to hold such offices prior to the authentication and delivery of
such Securities or did not hold such offices at the date of such
Securities.
<PAGE> 187
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 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.
<PAGE> 188
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.
<PAGE> 189
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.
<PAGE> 190
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.
<PAGE> 191
(b) In case the Company, pursuant to Article 7 hereof,
will be consolidated or merged with or into any other Person or will
convey, transfer or lease substantially all of its properties and assets to
any Person, and the Successor resulting from such consolidation, or
surviving such merger, or into which the Company will have been merged, or
the Person which will have received a conveyance, transfer or lease as
aforesaid, will have executed an indenture supplemental hereto with the
Trustee pursuant to Article 7 hereof, any of the Securities authenticated
or delivered prior to such consolidation, merger, conveyance, transfer or
lease may, from time to time, at the request of the Successor, be exchanged
for other Securities executed in the name of the Successor with such
changes in phraseology and form as may be appropriate, but otherwise in
substance and of like tenor as the Securities surrendered for such exchange
and of like principal amount; and the Trustee, upon receipt of an Officers'
Certificate from the Successor, will authenticate and deliver Securities as
specified in such request for the purpose of such exchange. If Securities
will at any time be authenticated and delivered in any new name of a
Successor pursuant to this Section 3.05(b) hereof in exchange or
substitution for or upon registration of transfer of any Securities, such
Successor, at the option of the Holders but without expense to them, will
provide for the exchange of all Securities at the time outstanding for
Securities authenticated and delivered in such new name.
(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.
<PAGE> 192
If at any time the Depository is unwilling or unable to
continue as Depository or if at any time the Depository will no longer be
eligible to act as such under this Section 3.05(c), the Company will
appoint a successor Depository. If (i) a successor Depository is not
appointed by the Company within 90 days after the Company receives notice
from the Depository or otherwise becomes aware of such unwillingness,
inability or ineligibility or (ii) an Event of Default has occurred and is
continuing, the Company will execute and deliver to the Trustee as promptly
as practicable Securities in definitive form, together with an Officers'
Certificate relating to the authentication and delivery of such Securities,
and the Trustee, as promptly as practicable after the receipt of such
Securities and Officers' Certificate, will authenticate and deliver
Securities in definitive form in an aggregate principal amount equal to the
principal amount of, and containing terms and provisions identical to, the
Global Security or Securities in exchange for such Global Security or
Securities.
The Company may at any time and in its sole discretion
determine that the Securities of any series issued in the form of one or
more Global Securities will no longer be represented by such Global
Security or Securities. In such event, the Company will execute and deliver
to the Trustee Securities in definitive form, together with an Officers'
Certificate relating to the authentication and delivery of Securities in
definitive form, and the Trustee, as promptly as practicable after the
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.
<PAGE> 193
If a Security in definitive form is issued in exchange
for any portion of a Global Security after the close of business at the
office or agency where such exchange occurs on or after any Regular Record
Date for an Interest Payment Date and before the opening of business at
such office or agency on the next Interest Payment Date, interest will not
be payable on such Interest Payment Date or proposed date for payment, as
the case may be, in respect of such Security in definitive form, but will
be payable on such Interest Payment Date only to the Person to whom
interest in respect of such portion of such Global Security is payable in
accordance with the provisions of this Indenture.
None of the Company, the Trustee, any agent of the
Trustee, any Paying Agent or the Registrar will have any responsibility or
liability for any aspect of the Depository's records relating to or
payments made on account of beneficial ownership interests in a Global
Security or for maintaining, supervising or reviewing any of the
Depository's records relating to such beneficial ownership interests.
Section 3.6Mutilated, Destroyed, Lost and Stolen Securities
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.
<PAGE> 194
The provisions of this Section 3.06 are exclusive and
shall preclude (to the extent lawful) all other rights and remedies with
respect to the replacement or payment of mutilated, destroyed, lost or
stolen Securities.
Section 3.07 Payment of Interest; Interest Rights Preserved
Except as otherwise provided as contemplated by Section
3.01 hereof with respect to any series of Securities, interest on any
Security which is payable, and is punctually paid or duly provided for, on
any Interest Payment Date shall be paid to the Person in whose name that
Security is registered at the close of business on the Regular Record Date
for such interest at the office or agency of the Company maintained for
such purpose pursuant to Section 6.02 hereof.
Any interest on any Security of any series which is
payable, but is not punctually paid or duly provided for, on any Interest
Payment Date shall forthwith cease to be payable to the Holder on the
relevant Regular Record Date by virtue of having been such Holder, and such
defaulted interest and, if applicable, interest on such defaulted interest
(to the extent lawful) at the rate specified in the Securities of such
series (such defaulted interest and, if applicable, interest thereon herein
collectively called "Defaulted Interest") may be paid by the Company, at
its election in each case, as provided in clause (i) or (ii) below:
(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
<PAGE> 195
of such Defaulted Interest and the Special Record Date therefor
have been so mailed, such Defaulted Interest shall be paid to the
Persons in whose names the Securities of such series are
registered at the close of business on such Special Record Date
and shall no longer be payable pursuant to the following clause
(ii).
(ii) The Company may make payment of any
Defaulted Interest on the Securities of any series in any other
lawful manner not inconsistent with the requirements of the
securities exchange on which such Securities may be listed, if
any, and upon such notice as may be required by such exchange, if,
after written notice given by the Company to the Trustee of the
proposed payment pursuant to this clause, such manner of payment
shall be deemed practicable by the Trustee.
The provisions of this Section 3.07 may be applicable to
any series of Securities pursuant to Section 3.01 hereof (with such
modifications, additions or substitutions as may be specified pursuant to
such Section 3.01 hereof).
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
<PAGE> 196
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
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.
<PAGE> 197
(b) The Trustee will promptly notify the Company in
writing of the Securities of such series selected for redemption and, in
the case of any Security of a series selected for partial redemption, the
principal amount thereof to be redeemed but not in integral multiples of
less than $1,000. Provisions of this Indenture that apply to Securities of
a series called for redemption also apply to portions of Securities of a
series called for redemption.
Section 4.04 Notices to Holders
(a) At least 15 days but not more than 60 days before a
redemption date, the Company will mail a notice to each Holder whose
Securities are to be redeemed.
(b) The notice will identify the Securities of the series
to be redeemed and will state:
(i) the redemption date;
(ii) the redemption price;
(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.
<PAGE> 198
(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.
<PAGE> 199
Section 4.08 Optional Redemption
The Company may redeem all or any portion of the
Outstanding Securities of any series at any time and from time to time that
are redeemable before their maturity except as otherwise specified as
contemplated by Section 3.01 hereof for Securities of such series at the
redemption prices together in each case, with accrued interest, if any, to
the date fixed for redemption, determined pursuant to Section 3.01 hereof.
ARTICLE 5
SINKING FUNDS
Section 5.01 Applicability of Article
If so provided as contemplated by Section 3.01 hereof for
Securities of any series, retirements of Securities of any series pursuant
to any sinking fund shall be made in accordance with their terms and in
accordance with this Article 5.
The minimum amount of any sinking fund payment provided
for by the terms of Securities of any series is herein referred to as a
"mandatory sinking fund payment", and any payment in excess of such minimum
amount provided for by the terms of Securities of any series is herein
referred to as an "optional sinking fund payment." If provided for by the
terms of Securities of any series, the cash amount of any sinking fund
payment may be subject to reduction as provided in Section 5.02 hereof.
Each sinking fund payment shall be applied to the redemption of Securities
of any series as provided for by the terms of Securities of such series.
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.
<PAGE> 200
Section 5.03 Redemption of Securities for Sinking Fund
Not less than 60 days prior to each sinking fund payment
date for any series of Securities, the Company will deliver to the Trustee
an Officers' Certificate specifying the amount of the next ensuing sinking
fund payment for that series pursuant to the terms of that series, the
portion thereof, if any, which is to be satisfied by payment of cash and
the portion thereof, if any, which is to be satisfied by delivering or
crediting Securities of that series pursuant to Section 5.02 hereof (which
Securities will, if not previously delivered, accompany such Officers'
Certificate) and whether the Company intends to exercise its right to make
a permitted optional sinking fund payment with respect to such series. Such
Officers' Certificate shall be irrevocable and upon its delivery the
Company shall be obligated to make the cash payment or payments therein
referred to, if any, on or before the next succeeding sinking fund payment
date. In the case of the failure of the Company to deliver such Officers'
Certificate, the sinking fund payment due on the next succeeding sinking
fund payment date for that series shall be paid entirely in cash and shall
be sufficient to redeem the principal amount of such Securities subject to
a mandatory sinking fund payment without the option to deliver or credit
Securities as provided in Section 5.02 hereof and without the right to make
any optional sinking fund payment, if any, with respect to such series.
Not more than 60 days before each such sinking fund
payment date the Trustee shall select the Securities to be redeemed upon
such sinking fund payment date in the manner specified in Section 4.03
hereof and cause notice of the redemption thereof to be given in the name
of and at the expense of the Company in the manner provided in Section 4.04
hereof. Such notice having been duly given, the redemption of such
Securities shall be made upon the terms and in the manner stated in Article
4 hereof.
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
<PAGE> 201
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.
(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.
<PAGE> 202
(c) The Company hereby designates the Corporate Trust
Office of the Trustee as one such office or agency of the Company in
accordance with this Section 6.02.
Section 6.03 SEC Reports; Financial Statements
(a) As long as more than 10 percent of the original
principal amount of the Securities of any series is Outstanding, the
Company will (i) remain subject to the requirements of Section 13 or 15(d)
of the Exchange Act whether or not it is required to do so by the
provisions thereof and will file with the SEC all periodic reports as may
be required thereunder and (ii) file with the SEC, and the Trustee within
15 days after the Company is required to file the same with the SEC, copies
of the periodic reports which the Company may be required to file with the
SEC pursuant to Section 13(a), 13(c) or 15(d) of the Exchange Act. The
Company will also make such reports available to the Holders, prospective
purchasers of the Securities of any such series, securities analysts and
broker-dealers upon their written request.
(b) In the event that (i) 10 percent or less of the
original principal amount of the Securities of any series is Outstanding
and (ii) the Company is not required to file with the SEC such reports and
other information referred to in Section 6.03(a) hereof, the Company will
furnish to the Trustee (A) within 120 days after the end of each fiscal
year, annual reports containing the information required to be contained in
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.
<PAGE> 203
(c) The Company will also comply with the other
provisions of TIA Section 314(a).
Section 6.04 Money for Security Payments to Be Held in Trust
(a) In the event the Company will at any time act as its
own Paying Agent with respect to any series of Securities, it will, not
less than one Business Day before each due date of the principal of or
interest on any of the Securities of any series, segregate and hold in
trust for the benefit of the Holders entitled thereto a sum sufficient to
pay the principal or interest so becoming due until such sums will be paid
to such Persons or otherwise disposed of as herein provided, and will
promptly notify the Trustee of its action or failure to so act.
(b) In the event the Company is not acting as Paying
Agent with respect to any series of Securities, the Company will, not less
than one Business Day before each due date of the principal of or interest
on, any Securities of any series, deposit with a Paying Agent a sum in same
day funds sufficient to pay the principal or interest so becoming due, such
sum to be held in trust for the benefit of the Persons entitled to such
principal or interest, and (unless such Paying Agent is the Trustee) the
Company will promptly notify the Trustee of such action or any failure to
so act.
(c) In the event the Company is not acting as Paying
Agent with respect to any series of Securities, the Company will cause each
Paying Agent other than the Trustee to execute and deliver to the Trustee
an instrument in which such Paying Agent will agree with the Trustee,
subject to the provisions of this Section, that such Paying Agent will:
(i) hold all sums held by it for the payment of
the principal of or interest on Securities of such series in trust
for the benefit of the Holders of such series of Securities and
the Trustee entitled thereto until such sums will be paid to such
Persons or otherwise disposed of as herein provided;
(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.
<PAGE> 204
(d) The Company may at any time, for the purpose of
obtaining the satisfaction and discharge of this Indenture or for any other
purpose, pay, or by Company Order direct any Paying Agent to pay, to the
Trustee all sums held in trust by the Company or such Paying Agent, such
sums to be held by the Trustee upon the same trusts as those upon which
sums were held by the Company or such Paying Agent; and, upon such payment
by any Paying Agent to the Trustee, such Paying Agent shall be released
from all further liability with respect to such sums.
(e) Except as provided in the Securities of any series,
any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of or interest on
any Security of any series and remaining unclaimed for two years after such
principal or interest has become due and payable shall be paid to the
Company on Company Request, or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Security shall
thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in a newspaper published
in the English language, customarily published on each Business Day and of
general circulation in New York, New York, notice that such money remains
unclaimed and that, after a date specified therein, which shall not be less
than 30 days from the date of such notification or publication, any
unclaimed balance of such money then remaining will be repaid to the
Company.
Section 6.05 Compliance Certificate
(a) The Company will deliver to the Trustee within 120
days after the end of each fiscal year of the Company an Officers'
Certificate stating whether or not the signers know of any Default or Event
of Default that occurred during such period. If they do know of a Default
or an Event of Default, the Officers' Certificate will describe the Default
or Event of Default and the action the Company is taking or proposes to
take with respect thereto.
(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.
<PAGE> 205
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.
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.
<PAGE> 206
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 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
<PAGE> 207
(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 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.
<PAGE> 208
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 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;
<PAGE> 209
(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;
(vii) 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 6.14.
<PAGE> 210
(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.
(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.
<PAGE> 211
(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.
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
<PAGE> 212
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.
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.
<PAGE> 213
(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;
(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;
<PAGE> 214
(vii) 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.
(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.
<PAGE> 215
(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
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
<PAGE> 216
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.
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):
<PAGE> 217
(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 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;
<PAGE> 218
(viii) the Company or any Material Subsidiary
pursuant to or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order
for relief against it in an involuntary case,
(C) consents to the appointment of a
Custodian of it or for all or substantially all of its
property, or
(D) makes a general assignment for
the benefit of its creditors;
(ix) a court of competent jurisdiction enters an
order or decree under any Bankruptcy Law that:
(A) is for relief against the Company
or any Material Subsidiary as debtor in an involuntary case,
(B) appoints a Custodian of the Company
or any Material Subsidiary or a Custodian for all or
substantially all of the property of the Company or any
Material Subsidiary, or
(C) orders the liquidation of the
Company or any Material Subsidiary,
and the order or decree remains unstayed and in effect for
60 days; or
(x) any other Event of Default provided with
respect to Securities of that series.
(b) The Trustee will not be deemed to know of a Default
unless a Trust Officer has actual knowledge of such Default or receives
written notice of such Default with specific reference to such Default.
(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.
<PAGE> 219
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 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.
<PAGE> 220
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 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.
<PAGE> 221
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) 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
<PAGE> 222
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:
(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
<PAGE> 223
(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.
(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.
<PAGE> 224
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.
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.
<PAGE> 225
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 May 15, beginning with May
15, 1998, 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);
<PAGE> 226
(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:
(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.
<PAGE> 227
(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 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 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 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.
<PAGE> 228
(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;
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.
<PAGE> 229
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.
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
<PAGE> 230
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
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.
<PAGE> 231
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.
(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.
<PAGE> 232
(vii) 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.
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.
<PAGE> 233
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 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
<PAGE> 234
(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.
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.
<PAGE> 235
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);
(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;
<PAGE> 236
(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.
(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:
<PAGE> 237
(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.
(e) A supplemental indenture which changes or eliminates
any covenant or other provision of this Indenture which has expressly been
included solely for the benefit of one or more particular series of
Securities, or which modifies the rights of the Holders of Securities of
such series with respect to such covenant or other provision, shall be
deemed not to affect the rights under this Indenture of the Holders of
Securities of any other series.
(f) The right of any Holder to participate in any consent
required or sought pursuant to any provision of this Indenture (and the
obligation of the Company to obtain any such consent otherwise required
from such Holder) may be subject to the requirement that such Holder has
been the Holder of record of any Securities of any series with respect to
which such consent is required or sought as of a date identified by the
Trustee in a notice furnished to Holders in accordance with the terms of
this Indenture.
Section 13.03 Compliance With TIA
Every amendment to this Indenture or the Securities will
comply in form and substance with the TIA as then in effect.
<PAGE> 238
Section 13.04 Revocation and Effect of Consents
(a) Until an amendment (which includes any supplement) or
waiver becomes effective, a consent to it by a Holder of a Security of any
series is a continuing consent by the Holder and every subsequent Holder of
a Security or portion of a Security that evidences the same debt as the
consenting Holder's Security, even if notation of the consent is not made
on any Security. However, any such Holder or subsequent Holder may revoke
the consent as to such Holder's Security or portion of a Security if the
Trustee receives written notice of revocation before the date the amendment
or waiver becomes effective. An amendment or waiver becomes effective in
accordance with its terms and thereafter binds every Holder.
(b) The Company may, but will not be obligated to, fix a
record date for the purpose of determining the Holders entitled to consent
to any amendment or waiver. If the Company elects to fix a record date for
such purpose, the record date will be fixed at (i) the later of 30 days
prior to the first solicitation of such consent or the date of the most
recent list of Holders furnished to the Trustee prior to such solicitation
pursuant to Section 10.02 hereof or (ii) such other date as the Company
will designate. If a record date is fixed, then notwithstanding the
provisions of Section 13.04(a) hereof, those Persons who were Holders at
such record date (or their duly designated proxies), and only those
Persons, will be entitled to consent to such amendment or waiver or to
revoke any consent previously given, whether or not such Persons continue
to be Holders after such record date. No consent will be valid or effective
for more than 90 days unless consents from Holders of the principal amount
of Securities required hereunder for such amendment or waiver to be
effective has also been given and not revoked within such 90-day period.
(c) After an amendment or waiver becomes effective it
will bind every Holder of a Security of any series affected thereby, unless
it is of the type described in any of clauses (i) through (iv) of Section
13.02(d) hereof. Any amendment or waiver will bind each Holder of a
Security who has consented to it and every subsequent Holder of a Security
that evidences the same debt as the consenting Holder's Security.
Section 13.05 Notation on or Exchange of Securities
The Trustee may place an appropriate notation about an
amendment or waiver on any Security of any series affected thereby
thereafter authenticated. The Company in exchange for all Securities of
such series may issue and the Trustee will authenticate new Securities of
such series that reflect the amendment or waiver.
Section 13.06 Trustee to Sign Amendments, etc.
The Trustee will sign any amendment or supplemental
indenture authorized pursuant to this Article 13 if the amendment does not
adversely affect the rights, duties, liabilities or immunities of the
Trustee. If it does, the Trustee may, but need not, sign it. In signing or
refusing to sign such amendment or supplemental indenture, the Trustee will
be entitled to receive and, subject to Section 9.01 hereof, will be fully
<PAGE> 239
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.
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.
<PAGE> 240
(c) All notices and communications will be deemed to have
been duly given: at the time delivered by hand, if personally delivered;
five Business Days after being deposited in the mail, if mailed; when
answered back, if telexed; when receipt acknowledged by the Trustee's
transmission result report, if telecopied; and the next Business Day after
timely delivery to the courier, if sent by overnight air courier
guaranteeing next day delivery.
(d) Any notice or communication to a Holder will be
mailed by first-class, postage-prepaid mail, return receipt requested, to
the Holder's address shown on the register kept by the Registrar. Failure
to mail a notice or communication to a Holder or any defect in it will not
affect its sufficiency with respect to other Holders.
(e) If a notice or communication is mailed in the manner
provided above within the time prescribed, it is duly given, whether or not
the addressee receives it.
(f) If the Company mails a notice or communication to
Holders, it will mail a copy to the Trustee and each Agent at the same time.
Section 14.03 Communication by Holders With Other Holders
Holders may communicate pursuant to TIA Section 312(b)
with other Holders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Securities Register and anyone
else will have the protection of TIA Section 312(c).
Section 14.04 Action by Securityholders
Whenever in this Indenture it is provided that the
Holders of a specified percentage in aggregate principal amount of the
Outstanding Securities may take any action (including the making of any
demand or request, the giving of any notice, consent or waiver or the
taking of any other action), the fact that at the time of taking any such
action the Holders of such specified percentage have joined therein may be
evidenced by any instrument or any number of instruments of similar tenor
executed by (i) Holders in person or (ii) agent or proxy appointed in
writing, or by the record of the Holders in favor thereof, at any meeting
of Holders duly called and held in accordance with the provisions of
Article 15 hereof, or (iii) a combination of such instrument or instruments
of any such record of such meeting of Holders, but in each case only to the
extent that the Holders shall not have revoked such action pursuant to
Section 13.04 hereof.
Without limiting the generality of this Section 14.04, a
Holder, including a Depository that is a Holder of one or more Global
Securities, may make, give or take, by a proxy or proxies duly appointed in
writing, any request, demand, authorization, direction, notice, consent,
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.
<PAGE> 241
The Company, with advance approval by the Trustee, will
fix a record date for the purpose of determining the Persons who are
beneficial owners of interests in any Global Security held by a Depository
entitled under the procedures of such Depository to make, give or take, by
a proxy or proxies duly appointed in writing, any request, demand,
authorization, direction, notice, consent, waiver or other action provided
in this Indenture to be made, given or taken by Holders. If such a record
date is fixed, the Persons who are such beneficial owners at the close of
business on such record date or their duly appointed proxy or proxies will
be entitled to make, give or take such request, demand, authorization,
direction, notice, consent, waiver or other actions, whether or not such
Persons remain such beneficial owners after such record date. No such
request, demand, authorization, direction, notice, consent, waiver or other
action will be valid or effective if made, given or taken more than six
months after such record date.
Section 14.05 Proof of Execution of Instruments and Holding of Securities
Proof of the execution of any instrument by a Holder or
such Holder's agent or proxy and proof of the holding by any Person of any
of the Securities shall be sufficient if made in the following manner:
(1) The fact and date of the execution by any
such Person of any instrument may be proved by the
certificate of any notary public or other officer of any
jurisdiction authorized to take acknowledgments of deeds
to be recorded in such jurisdiction that the Person
executing such instrument acknowledged to him the
execution thereof, or by an affidavit of a witness to
such execution sworn to before any such notary or other
officer. Such certificate or affidavit shall also
constitute sufficient proof of the authority of the
Person executing any instrument in cases where Securities
are not held by Persons in their individual capacities.
(2) The fact and date of execution of any such
instrument may also be proved in any other manner which
the Trustee deems sufficient.
(3) The ownership of Securities shall be proved
by the Securities Register for such Security or by a
certificate of the Registrar.
(4) The Trustee shall not be bound to recognize
any Person as a Securityholder unless such Holder's title
to any Security held by such Holder is proved in the
manner provided in this Section 14.05.
The Trustee may require such additional proof of any
matter referred to in this Section 14.05 as it shall deem necessary.
<PAGE> 242
Section 14.06 Obligation to Disclose Beneficial Ownership of Securities
All Securities shall be held and owned upon the express
condition that, upon demand of any regulatory agency having jurisdiction
over the Company, and pursuant to law or regulation empowering such agency
to assert such demand, any Holder shall disclose to such agency the
identity of the beneficial owner of all Securities held by such Holder.
Section 14.07 Certificate and Opinion as to Conditions Precedent
Upon any request or application by the Company to the
Trustee to take any action under this Indenture, the Company will furnish
to the Trustee and the Trustee may rely upon, as conclusive evidence:
(i) an Officers' Certificate (which will
include the statements set forth in Section 14.08 hereof) stating
that, in the opinion of the signers, all conditions precedent and
covenants, if any, provided for in this Indenture relating to the
proposed action have been complied with; and
(ii) an Opinion of Counsel (which will include
the statements set forth in Section 14.08 hereof) stating that, in
the opinion of such counsel, all such conditions precedent and
covenants have been complied with.
Section 14.08 Statements Required in Certificate or Opinion
(a) Each certificate or opinion with respect to
compliance with a condition or covenant provided for in this Indenture
(other than a certificate provided pursuant to TIA Section 314(a)(4)) will
include:
(i) a statement that the Person making such
certificate or opinion has read such condition or covenant;
(ii) a brief statement as to the nature and
scope of the examination or investigation upon which the
statements or opinions contained in such certificate or opinion
are based;
(iii) a statement that, in the opinion of such
Person, such Person has made such examination or investigation as
is necessary to enable him or her to express an informed opinion
as to whether or not such condition or covenant has been complied
with; and
(iv) a statement as to whether or not, in the
opinion of such person, such condition or covenant has been
complied with.
<PAGE> 243
(b) Any Officers' Certificate may be based, insofar as it
relates to legal matters, upon an Opinion of Counsel, unless such Officer
knows that the opinion with respect to the matters upon which his
certificate may be based as aforesaid is erroneous, or in the exercise of
reasonable care should know that the same are erroneous. Any Opinion of
Counsel may be based, insofar as it relates to factual matters, upon the
certificate, statement or opinion of or representations by an officer or
officers of the Company, or other Persons or firms deemed appropriate by
such counsel, unless such counsel has actual knowledge that the
certificate, statement or opinion or representations with respect to the
matters upon which his certificate, statement or opinion may be based as
aforesaid are erroneous.
(c) Any Officers' Certificate, statement or Opinion of
Counsel may be based, insofar as it relates to accounting matters, upon a
certificate or opinion of or representation by an accountant (who may be an
employee of the Company), or firm of accountants, unless such Officer or
counsel, as the case may be, has actual knowledge that the certificate or
opinion or representation with respect to the accounting matters upon which
his certificate, statement or opinion may be based as aforesaid are
erroneous.
Section 14.09 Rules by Trustee and Agents
The Trustee may make reasonable rules for action by or at
a meeting of Holders. The Registrar or Paying Agent may make reasonable
rules and set reasonable requirements for its functions.
Section 14.10 No Recourse Against Others
A director, officer or employee of the Company, as such,
will have no liability for any obligations of the Company under the
Securities or this Indenture. Each Holder by accepting a Security waives
and releases all such liability.
Section 14.11 Governing Law
This Indenture and the Securities will be governed by and
construed in accordance with the laws of the State of New York, without
regard to principles of conflicts of law.
Section 14.12 No Adverse Interpretation of Other Agreements
This Indenture may not be used to interpret another
indenture, loan or debt agreement of the Company or a Subsidiary thereof.
Any such indenture, loan or debt agreement may not be used to interpret
this Indenture. This writing constitutes the entire agreement of the
parties with respect to the subject matter hereof. Unless expressly
otherwise indicated herein, an action or transaction permitted by one
provision hereof must nonetheless comply with all other applicable
provisions hereof; and any action or transaction not permitted by any
provision of this Indenture will not be permitted regardless of whether any
other provision hereof might permit such action or transaction.
<PAGE> 244
Section 14.13 Successors
All agreements of the Company in this Indenture and the
Securities will bind its successors. All agreements of the Trustee in this
Indenture will bind its successors.
Section 14.14 Severability
In case any provision in this Indenture or in the
Securities is invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions will not in any way be affected
or impaired thereby.
Section 14.15 Counterpart Originals
The parties may sign any number of copies of this
Indenture. Each signed copy will be an original, but all of them together
represent the same agreement.
Section 14.16 Trustee as Paying Agent and Registrar
The Company initially appoints the Trustee as Paying Agent
and Registrar.
Section 14.17 Table of Contents, Headings, etc.
The Table of Contents, Cross-Reference Table and Headings
of the Articles and Sections of this Indenture have been inserted for
convenience of reference only, are not to be considered a part hereof and
will in no way modify or restrict any of the terms or provisions hereof.
Section 14.18 Benefits of Indenture
Nothing in this Indenture or in the Securities, express
or implied, will give to any Person, other than the parties hereto and
their successors hereunder, 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.
<PAGE> 245
ARTICLE 15
MEETINGS OF HOLDERS OF SECURITIES
Section 15.1 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 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.
<PAGE> 246
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.
<PAGE> 247
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 are 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 of all Senior Indebtedness whether outstanding on the
Issue Date of the Securities 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
deposited with the Trustee pursuant thereto prior to any such default,
judicial proceeding or notice.
<PAGE> 248
(b) Notwithstanding Section 16.02(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 clause (ii) of such
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
<PAGE> 249
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 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 prohibit or
apply to claims of, or payments to, the Trustee under or pursuant to
Section 9.07 hereof.
<PAGE> 250
(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 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.
<PAGE> 251
(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 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.
<PAGE> 252
(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 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.
<PAGE> 253
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.
<PAGE> 254
IN WITNESS WHEREOF, the undersigned have duly executed
this Indenture as of the date first above written.
U.S. HOME CORPORATION
By: /s/ Thomas A. Napoli
--------------------
Name: Thomas A. Napoli
Title: Vice President Corporate Finance
and Treasurer
IBJ SCHRODER BANK & TRUST COMPANY,
as Trustee
By: /s/ Luis Perez
-------------------
Name: Luis Perez
Title: Vice President
<PAGE> 255
EXHIBIT 10.4
MARINE MIDLAND BANK
140 Broadway
New York, New York 10005
----------------------------------
ACKNOWLEDGMENT
OF
SATISFACTION AND DISCHARGE
Of the Indenture (the "Indenture")
dated as of November 3, 1993, between U.S. Home
Corporation, a Delaware corporation (the "Company") and
Marine Midland Bank, as Trustee (in such capacity, the
"Trustee");
This instrument of Acknowledgment of Satisfaction and
Discharge is executed this 18th day of September, 1997 by the Trustee.
The entire principal amount of the Company's 4 %
Convertible Subordinated Debentures due 2005 (the "Convertible Subordinated
Debentures") issued under the Indenture were called for redemption on
September 10, 1997 pursuant to Article 3 of the Indenture.
On September 9, 1997, the sum of $72,719,402.24 was
delivered to the Trustee for the payment of the redemption price (including
accrued and unpaid interest) on September 10, 1997 of all the Convertible
Subordinated Debentures not converted into shares of the Company's common
stock, canceled or surrendered for cancellation to the Trustee prior to the
close of business on September 9, 1997.
THEREFORE, the Trustee hereby acknowledges that the
Indenture is satisfied and, subject to the Company's and the Trustee's
continuing obligations under Sections 7.07 and 9.03 thereof, the Indenture,
and all of the Company's obligations under the Convertible Subordinated
Debentures and the Indenture are discharged as of September 10, 1997.
MARINE MIDLAND BANK,
as Trustee
By: /s/ Charles E.Bauer
---------------------------
Charles E. Bauer
Vice President
(seal)
Attest: /s/ Frank J. Godino
-------------------
Frank J. Godino
Assistant Vice President
<PAGE> 256
CERTIFICATE OF MARINE MIDLAND BANK
The undersigned, Marine Midland Bank ("Marine"), Trustee
under the Indenture dated as of November 3, 1993 (the "Indenture") of U.S.
Home Corporation (the "Company"), and Paying Agent of the Company's 4 %
Convertible Subordinated Debentures due 2005, DOES HEREBY CERTIFY as
follows:
1. Each of the Acknowledgment of
Satisfaction and Discharge of the Indenture
dated September 18, 1997 and the Acknowledgment
of Receipt of Redemption Price has been duly
executed on behalf of Marine by Charles E.
Bauer, one of its Vice Presidents, the corporate
seal of Marine has been affixed thereto and
attested by Frank J. Godino, one of its
Assistant Vice Presidents, and each of said
Acknowledgments has been delivered by Marine.
2. The signatures appearing below
opposite the names of Charles E. Bauer, Robert
A. Conrad and Frank J. Godino are the authentic
signatures, respectively, of such officers.
Name Officer Signature
Charles E. Bauer Vice President /s/ Charles E. Bauer
Robert A. Conrad Vice President /s/ Robert A. Conrad
Frank J. Godino Assistant Vice President /s/ Frank J. Godino
3. The officers of Marine referred to
above were, at the time of performing such acts,
and are, at the date hereof, duly elected or
appointed, qualified and acting officers of
Marine.
4. Attached hereto as Exhibit A is a
true and correct copy of excerpts from the
Trustee's By-laws, as amended, which at the date
hereof are in full force and effect.
<PAGE> 257
IN WITNESS WHEREOF, Marine Midland Bank has caused this
Certificate to be executed by one of its Vice Presidents this 18th day of
September, 1997.
MARINE MIDLAND BANK
By: /s/ Robert A. Conrad
----------------------
Robert A. Conrad
Vice President
Attest:
I, Frank J. Godino, Assistant Vice President of Marine
Midland Bank, DO HEREBY CERTIFY that Robert A. Conrad is Vice President of
Marine Midland Bank and that his signature appearing above is his genuine
signature.
IN WITNESS WHEREOF, I have hereunto signed my name this
18th day of September,1997.
/s/ Frank J. Godino
-------------------------
Frank J. Godino
Assistant Vice President
<PAGE> 258
EXHIBIT 10.5
SUPPLEMENTAL INDENTURE
SUPPLEMENTAL INDENTURE (the "Supplemental Indenture"),
dated as of September 23, 1997, between U.S. HOME CORPORATION, a Delaware
corporation (the "Company"), and IBJ SCHRODER BANK & TRUST COMPANY,
a banking organization organized under the laws of New York, as trustee
(the "Trustee").
WITNESSETH:
WHEREAS, in accordance with Section 10.02 of the
Indenture, relating to the 9 3/4% Senior Notes due 2003 of the Company,
dated as of June 21, 1993, between the Company and the Trustee (the
"Indenture"), the Trustee, the Company and the Holders of more than a
majority in principal amount of the Securities outstanding as of the date
hereof desire to amend certain terms of the Indenture as described below;
and
WHEREAS, the Company has solicited consents from the
Holders to the amendments contained in this Supplemental Indenture (the
"Solicitation") and the Company has received consents from Holders of more
than a majority in principal amount of the Securities outstanding as of the
date hereof; and
WHEREAS, the Board of Directors of the Company has
authorized this Supplemental Indenture; and
WHEREAS, concurrent with the Solicitation, the Company
has offered to purchase for cash on certain terms and conditions any and
all of the outstanding Securities from the Holders thereof (the "Offer");
and
WHEREAS, it is intended that this Supplemental Indenture
become effective upon acceptance for purchase by the Company pursuant to
the Offer of the Securities tendered into the Offer (the "Acceptance
Date"); and
WHEREAS, all things necessary to make this Supplemental
Indenture a valid supplement to the Indenture according to its terms and
the terms of the Indenture have been done:
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Certain Terms Defined in the Indenture.
All capitalized terms used and not otherwise defined herein shall have the
meanings ascribed to them in the Indenture.
<PAGE> 259
SECTION 2. Deletion of Certain Definitions. The
following definitions in Section 1.02 of the Indenture are hereby deleted
in their entirety:
Affiliate Transaction
Consolidated Cash Flow Available for Fixed Charges
Consolidated Fixed Charge Coverage Ratio
Consolidated Income Tax Expense
Consolidated Interest Expense
Consolidated Interest Incurred
Consolidated Net Income
Independent Financial Advisor
Permitted Investments
Permitted Liens
Refinancing Indebtedness
Restricted Payment
Restricted Investment
Successor
SECTION 3. Amendment of Certain Definitions. The
following definition in Section 1.02 of the Indenture shall be amended as
indicated:
Unrestricted Subsidiary. The text of the
definition of Unrestricted Subsidiary is hereby restated to read in its
entirety as follows:
"Unrestricted Subsidiary" means each of the
Subsidiaries of the Company so designated by a resolution adopted by the
Board of Directors of the Company as provided below and whose creditors
have no direct or indirect recourse (including, without limitation,
recourse with respect to the payment of principal or interest on
Indebtedness of such Subsidiary) to the Company or a Restricted Subsidiary.
The Board of Directors of the Company may designate an Unrestricted
Subsidiary to be a Restricted Subsidiary. 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 certified copy of the
resolution of the Board of Directors of the Company giving effect to such
designation or redesignation.
SECTION 4. Deletion of Certain Covenants. The text of
Sections 4.12 (Limitations on Restricted Payments), 4.13 (Limitations on
Additional Indebtedness), 4.14 (Restrictions on Restricted Subsidiary
Indebtedness), 4.15 (Limitations and Restrictions on Capital Stock of
Subsidiaries), 4.17 (Limitations on Transactions With Affiliates), 4.18
(Limitations on Liens) and 4.19 (Limitations on Restrictions on
Distributions from Restricted Subsidiaries) of the Indenture is hereby
deleted in its entirety and is hereby replaced, in each such Section, with
"Deleted."
<PAGE> 260
SECTION 5. Deletion of Certain Restrictions with Respect
to Mergers and Consolidations. The text of Section 5.01 (Limitations on
Mergers and Consolidations) of the Indenture is hereby deleted in its
entirety and is hereby replaced with "Deleted."
SECTION 6. Deletion of Certain Events of Default. The
text of paragraphs (a)(iv) and (a)(v) of Section 6.01 of the Indenture is
hereby deleted in its entirety and is hereby replaced with "Deleted."
SECTION 7. Deletion of Certain Cross-References. Any
reference to Section 4.12, 4.13, 4.14, 4.15, 4.17, 4.18, 4.19, 5.01,
6.01(a)(iv) or 6.01(a)(v) in the Indenture is hereby deleted.
SECTION 8. Effectiveness. This Supplemental Indenture
shall become effective upon the Acceptance Date.
SECTION 9. Governing Law. This Supplemental Indenture
shall be governed by the laws of the State of New York.
SECTION 10. Counterparts. This Supplemental Indenture
may be signed in any number of counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and hereto
were upon the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Supplemental Indenture to be duly executed as of the date first above
written.
U.S. HOME CORPORATION
By: /s/ Thomas A. Napoli
----------------------------
Name: Thomas A. Napoli
Title: Vice President - Corporate
Finance and Treasurer
IBJ SCHRODER BANK & TRUST COMPANY, as Trustee
By: /s/ Luis Perez
-----------------------------
Name: Luis Perez
Title: Assistant Vice President
<PAGE> 261
EXHIBIT 10.6
U.S. HOME CORPORATION
AMENDED AND RESTATED
RETIREMENT PLAN FOR NON-EMPLOYEE DIRECTORS
<PAGE> 262
U.S. HOME CORPORATION
RETIREMENT PLAN FOR NON-EMPLOYEE DIRECTORS
Table of Contents
Page
ARTICLE I RECITALS AND PURPOSE 1
ARTICLE II DEFINITIONS 1
ARTICLE III RETIREMENT BENEFITS 5
ARTICLE IV PAYMENT OF BENEFITS UPON DEATH,
DISABILITY OR CHANGE IN CONTROL 8
ARTICLE V PLAN BENEFITS UNFUNDED 10
ARTICLE VI PLAN ADMINISTRATION 10
ARTICLE VII AMENDMENT AND TERMINATION 11
ARTICLE VIII MISCELLANEOUS PROVISIONS 11
<PAGE> 263
ARTICLE I
RECITALS AND PURPOSE
This Amended and Restated Retirement Plan for
Non-Employee Directors is effective as of April 23, 1997 and amends and
restates the U.S. Home Corporation Retirement Plan for Non-Employee
Directors as in effect from October 13, 1994 until April 23, 1997.
The purpose of the Plan is to provide retirement benefits
to Directors of the Company who meet its eligibility requirements.
ARTICLE II
DEFINITIONS
2.1 "Base Retainer" means $24,000.
2.2 "Board of Directors" means the Board of Directors
of the Company.
2.3 "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 (including any individual or entity) or group of persons
(within the meaning of Section 13(d)(3) of the Securities Exchange Act of
1934, as amended (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% 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% 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 hereunder 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 defined
in Rule 13d-3 under the Exchange Act), directly or indirectly, of 50% 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 defined
in Rule 13d-3 under the Exchange Act), directly or indirectly, of 50% or
more of the aggregate voting power of all classes of common equity of the
Company or (b) less than 50% (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.
<PAGE> 264
2.4 "Company" means U.S. Home Corporation, a Delaware
corporation.
2.5 "Director" means a member of the Board of
Directors.
2.6 "Early Retirement" means retirement from the
Board of Directors prior to age 65.
2.7 "Eligible Director" means a Director, who was a
Director on April 23, 1997 and is not an Employee of the Company, whether or
not such Director is a Director upon retirement.
2.8 "Employee" means a person employed by the Company
or its subsidiaries in any capacity other than as a Director.
2.9 "Nominating Committee" means the Nominating
Committee of the Board of Directors.
2.10 "Normal Retirement" means retirement from the
Board of Directors at or after age 65.
2.11 "Plan" means this Amended and Restated
Retirement Plan for Non-Employee Directors.
2.12 "Present Value" shall be determined by the
Nominating Committee (whose determination shall be conclusive) using the
discount rate of interest established by the Pension Benefit Guaranty
Corporation as in effect on the date of determination.
ARTICLE III
RETIREMENT BENEFITS
3.1 Normal Retirement Benefit. (a) Each Eligible
Director shall be entitled to make a one-time, irrevocable written election
to (i) terminate participation in and surrender any and all rights to
benefits under the Plan in exchange for the issuance on January 2, 1998 of
the number of shares of common stock, par value $.01 per share (the "Common
Stock"), of the Company determined by dividing the accrued retirement
benefit of such Director as of April 23, 1997, as set forth on the books
and records of the Company, by $24.625 (the closing price of the Common
Stock on the New York Stock Exchange on April 23, 1997); provided, that
such closing price shall not be less than 95% of the Current Market Price
(as defined in the Warrant Agreement for the Company's Class B Warrants),
or (ii) continue participation in the Plan with accrued retirement benefits
through April 23, 1997, but without any further accrual of retirement
benefits after April 23, 1997. Failure to make such election prior to
September 1, 1997, shall be deemed to be an election to continue Plan
participation.
<PAGE> 265
(b) For Eligible Directors who elect or are deemed to
elect to continue participation in the Plan, an Eligible Director's annual
"Normal Retirement Benefit" under this Plan shall equal 100% of such
Eligible Director's Base Retainer payable in equal monthly installments and
continuing for the number of calendar months and days he served as a
non-Employee Director from January 1, 1985 to April 23, 1997 (whether or
not after age 65), less - in the case of directors who received accrued
retirement benefits in a lump sum payment upon termination as of December
31, 1988 of the Non-Employee Directors' Retirement Plan in effect as of
January 1, 1985 - the number of months since January 1, 1985 required to
amortize such lump sum payment at the actual rate per month of the Base
Retainer in effect from time to time since January 1, 1985.
3.2 Early Retirement Benefit. An Eligible Director
who elects Early Retirement may elect to receive an Early Retirement benefit
commencing at age 55 in an amount equal to his Normal Retirement Benefit
minus 5% for each year prior to age 65 that the Director elects early
retirement, but not more than a 50% reduction in Normal Retirement
Benefits.
3.3 Optional Lump Sum Payment. An Eligible Director
may elect to receive a lump sum payment, in lieu of his Normal Retirement
Benefit or Early Retirement benefit, payable at the time when his benefit
payments would otherwise commence, in an amount equal to the Present Value
of the benefit payments to be received.
3.4 Payments Rounded to Next Higher Dollar. Each
monthly payment which is computed in accordance with this Plan will,
if not in whole dollars, be increased to the next higher whole dollar.
3.5 Adjustment of Benefits for Increases in the Cost
of Living. Upon commencement of periodic benefit payments hereunder, such
payments shall be adjusted as of January 1 of each year for increases in
the cost of living in the preceding year, as measured by the Consumer Price
Index - U.S. City Average, as published by the Bureau of Labor Statistics
of the United States Department of Labor.
3.6 Commencement of Payments. Normal Retirement
Benefit payments hereunder shall commence in the month following the Eligible
Director's retirement or 65th birthday, whichever is later. Early Retirement
benefit payments hereunder shall commence in the month following the Eligible
Director's Early Retirement or 55th birthday, whichever is later.
<PAGE> 266
ARTICLE IV
PAYMENT OF BENEFITS UPON DEATH,
DISABILITY OR CHANGE IN CONTROL
4.1 Survivor Benefits After Payments Begin Under This
Plan. If a Director dies while receiving periodic retirement benefits
hereunder, the Company shall pay to the Director's named beneficiary or the
Director's estate a lump sum payment equal to the Present Value of the
remaining benefit payments which the Director would have received had he
lived.
4.2 Survivor Benefits Before Payments Begin Under This
Plan. If an Eligible Director dies before payments commence under this Plan
while still a Director or, if an Eligible Director dies after he has ceased
to be a Director but before benefit payments commence, the Company shall
pay to the Director's named beneficiary or the Director's estate an amount
equal to the Present Value of the benefit payment which the Director would
otherwise have received, calculated as if such Director had retired the
month preceding his death.
4.3 Disability. If an Eligible Director while still
a Director) becomes permanently and total disabled (within the meaning of
Section 22(e)(3) of the Internal Revenue Code of 1986, as amended) and
resigns from the Board of Directors prior to commencement of benefit
payments hereunder, payment of the Normal Retirement Benefit (calculated as
if such Director had retired the month preceding his disability) in equal
monthly installments shall commence the month following such disability and
resignation. In lieu thereof, such Director may elect to receive a lump sum
payment equal to the Present Value of the Normal Retirement Benefit to be
received.
4.4 Payment of Benefits Upon Change in Control. If a
Change of Control occurs, not later than the 90th day after such Change of
Control, each (i) Director who is not an Employee shall receive a lump sum
payment equal to the Present Value of such Director's Normal Retirement
Benefit, calculated as if such Director had retired the month preceding
such Change of Control, and (ii) non-Employee Director who has retired or
has become disabled and is receiving retirement benefit payments hereunder
shall receive a lump sum payment equal to the Present Value of the
remaining benefit payments as of the month preceding such Change of
Control.
ARTICLE V.
PLAN BENEFITS UNFUNDED
Benefits under this Plan shall not be funded in advance,
but shall be paid by the Company as and when they become due as provided
herein. No retirement benefit payable hereunder shall be considered
segregated funds and all such amounts shall at all times prior to the
payment of same be the property of the Company and available to satisfy the
claims of the general creditors of the Company. Directors' interests in
benefits under this Plan shall only be those of unsecured creditors of the
Company.
<PAGE> 267
ARTICLE VI.
PLAN ADMINISTRATION
The general administration of this Plan and the
responsibility for carrying out the provisions hereof shall be vested in
the Nominating Committee. The Nominating Committee may adopt such rules and
regulations as it may deem necessary for the proper administration of this
Plan, and its decision in all matters shall be final, conclusive and
binding. No Director and no employee of the Company shall be liable for any
action or omission hereunder, except in circumstances involving such
Director's or employee's bad faith or willful misconduct.
ARTICLE VII
AMENDMENT AND TERMINATION
The Board of Directors reserves in its sole and exclusive
discretion the right at any time and from time to time to amend this Plan
in any respect or terminate this Plan without restriction and without the
consent of any Director, provided, however, that no amendment or
termination of this Plan shall impair the right of any Director to receive
benefits accrued hereunder prior to such amendment or termination.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
8.1 This Plan does not in any way obligate the Company
to continue to nominate or retain a Director on the Board of Directors, nor
does this Plan limit the right of the Company to terminate a Director's
service on the Board of Directors. Termination of a Director's service on
the Board of Directors for any reason, whether by action of the Company,
its stockholders or the Director, shall immediately terminate any further
obligation of the Company, except as set forth herein.
8.2 Non-Alienation of Benefits. Other than Common
Stock, no retirement benefit payable hereunder may be assigned, pledged,
mortgaged or hypothecated and, to the extent permitted by law, no such
retirement benefit shall be subject to legal process or attachment for the
payment of any claims against any person entitled to receive the same.
8.3 Payment to Incompetents. If a Director entitled
to receive any retirement benefits hereunder is deemed by the Nominating
Committee or is adjudged by a court of competent jurisdiction to be legally
incapable of giving valid receipt and discharge for such retirement
benefit, such payments shall be paid to such person or persons as the
Nominating Committee shall designate or to the duly appointed guardian of
such Director. Such payments shall, to the extent made, be deemed a
complete discharge for such payments under this Plan.
8.4 Withholding. Payments made by the Company under
this Plan to any Director shall be subject to withholding as shall, at the
time for such payment, be required under any income tax or other law.
<PAGE> 268
8.5 Expenses. All expenses and costs in connection
with the operation of this Plan and the expenses and costs of any Director
in enforcing his rights hereunder shall be borne by the Company.
8.6 Governing Law. The provisions of this Plan will
be construed according to the laws of the State of Delaware.
8.7 Gender and Number. The masculine pronoun wherever
used herein shall include the feminine gender and the feminine the
masculine, and the singular number as used herein shall include the plural
and the plural the singular, unless the context clearly indicates a
different meaning.
8.8 Titles and Headings. The titles to articles
and headings of sections of this Plan are for convenience of reference only,
and in case of any conflict, the text of the Plan, rather than such titles
and headings, shall control.
<PAGE> 269
EXHIBIT 10.7
COMMITMENT AND ACCEPTANCE
This Commitment and Acceptance (this "Commitment and Acceptance")
dated as of October 8, 1997, is entered into among the parties listed on
the signature pages hereof. Capitalized terms used herein and not otherwise
defined herein shall have the meanings attributed to them in the Credit
Agreement (as defined below).
PRELIMINARY STATEMENTS
Reference is made to that certain Amended and Restated Credit
Agreement dated as of May 28, 1997, by and among U.S. Home Corporation, as
Borrower, The First National Bank of Chicago, as Agent, and the Lenders
that are parties thereto (as the same has been and may from time to time be
amended, modified, supplemented or restated, in whole or in part and
without limitation as to amount, terms, conditions or covenants, the
"Credit Agreement").
Pursuant to Section 2.5(b) of the Credit Agreement, the Borrower
has requested an increase in the Aggregate Commitment from $130,000,000.00
to $180,000,000.00. Such increase in the Aggregate Commitment is to become
effective on October 9, 1997 (the "Increase Date"). In connection with such
requested increase in the Aggregate Commitment, the Borrower, the Agent and
AmSouth Bank (the "Accepting Lender") hereby agree as follows:
1. ACCEPTING LENDER'S COMMITMENT. Effective as of the Increase
Date, the Accepting Lender shall become a party to the Credit Agreement as
a Lender, shall have all of the rights and obligations of a Lender
thereunder, shall agree to be bound by the terms and provisions thereof and
shall thereupon have a Commitment under and for purposes of the Credit
Agreement in an amount equal to the amount set forth opposite the Accepting
Lender's name on the signature pages hereof.
2. REPRESENTATIONS AND AGREEMENTS OF ACCEPTING LENDER. The
Accepting Lender hereby (i) confirms that it has received a copy of the
Credit Agreement, together with copies of the financial statements
requested by the Accepting Lender and such other documents and information
as it has deemed appropriate to make its own credit analysis and decision
to enter into this Commitment and Acceptance, (ii) agrees that it will,
independently and without reliance upon the Agent or any Lender and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action
under the Loan Documents, (iii) appoints and authorizes the Agent to take
such action as agent on its behalf and to exercise such powers under the
Loan Documents as are delegated to the Agent by the terms thereof, together
with such powers as are reasonably incidental thereto, (iv) agrees that it
will perform in accordance with their terms all of the obligations which by
the terms of the Loan Documents are required to be performed by it as a
Lender, (v) agrees that its payment instructions and notice instructions
are as set forth in the attachment to Schedule 1, and (vi) confirms that
none of the funds, monies, assets or other consideration being used to make
the Commitment hereunder are "plan assets" under ERISA.
<PAGE> 270
3. REPRESENTATION OF BORROWER. The Borrower hereby represents
and warrants that as of the date hereof and as of the Increase Date, no
event or condition shall have occurred and then be continuing which
constitutes a Default or Unmatured Default.
4. GOVERNING LAW. This Commitment and Acceptance shall be
governed by the internal law, and not the law of conflicts, of the State of
Illinois.
5. NOTICES. For the purpose of notices to be given under the
Credit Agreement, the address of the Accepting Lender (until notice of a
change is delivered) shall be the address set forth in Schedule 1.
IN WITNESS WHEREOF, the parties hereto have executed this
Commitment and Acceptance by their duly authorized officers as of the date
first above written.
BORROWER:
U.S. HOME CORPORATION
By: __________________________
Name:
Title:
AGENT:
THE FIRST NATIONAL BANK OF CHICAGO,
as Agent
By: ___________________________
Name:
Title:
ACCEPTING LENDER:
Commitment:
AMSOUTH BANK
$15,000,000.00 By: ___________________________
Name:
Title:
<PAGE> 271
COMMITMENT AND ACCEPTANCE
This Commitment and Acceptance (this "Commitment and Acceptance")
dated as of October 8, 1997, is entered into among the parties listed on
the signature pages hereof. Capitalized terms used herein and not otherwise
defined herein shall have the meanings attributed to them in the Credit
Agreement (as defined below).
PRELIMINARY STATEMENTS
Reference is made to that certain Amended and Restated Credit
Agreement dated as of May 28, 1997, by and among U.S. Home Corporation, as
Borrower, The First National Bank of Chicago, as Agent, and the Lenders
that are parties thereto (as the same has been and may from time to time be
amended, modified, supplemented or restated, in whole or in part and
without limitation as to amount, terms, conditions or covenants, the
"Credit Agreement").
Pursuant to Section 2.5(b) of the Credit Agreement, the Borrower
has requested an increase in the Aggregate Commitment from $130,000,000.00
to $180,000,000.00. Such increase in the Aggregate Commitment is to become
effective on October 9, 1997 (the "Increase Date"). In connection with such
requested increase in the Aggregate Commitment, the Borrower, the Agent and
The First National Bank of Chicago (the "Accepting Lender") hereby agree as
follows:
1. ACCEPTING LENDER'S COMMITMENT. Effective as of the Increase
Date, the Commitment of the Accepting Lender under the Credit Agreement
shall be increased from $30,000,000.00 to the amount set forth opposite the
Accepting Lender's name on the signature pages hereof.
2. REPRESENTATION OF BORROWER. The Borrower hereby represents and
warrants that, as of the date hereof and as of the Increase Date, no event
or condition shall have occurred and then be continuing which constitutes a
Default or Unmatured Default.
3. GOVERNING LAW. This Commitment and Acceptance shall be governed
by the internal law, and not the law of conflicts, of the State of
Illinois.
IN WITNESS WHEREOF, the parties hereto have executed this
Commitment and Acceptance by their duly authorized officers as of the date
first above written.
BORROWER:
U.S. HOME CORPORATION
By: __________________________
Name: Thomas A. Napoli
Title: Vice President
<PAGE> 272
AGENT:
THE FIRST NATIONAL BANK OF CHICAGO,
as Agent
By: ___________________________
Name: _________________________
Title: ________________________
ACCEPTING LENDER:
Commitment:
THE FIRST NATIONAL BANK OF CHICAGO
$40,000,000.00 By: ___________________________
Name: _________________________
Title: ________________________
<PAGE> 273
COMMITMENT AND ACCEPTANCE
This Commitment and Acceptance (this "Commitment and Acceptance")
dated as of October 8, 1997, is entered into among the parties listed on
the signature pages hereof. Capitalized terms used herein and not otherwise
defined herein shall have the meanings attributed to them in the Credit
Agreement (as defined below).
PRELIMINARY STATEMENTS
Reference is made to that certain Amended and Restated Credit
Agreement dated as of May 28, 1997, by and among U.S. Home Corporation, as
Borrower, The First National Bank of Chicago, as Agent, and the Lenders
that are parties thereto (as the same has been and may from time to time be
amended, modified, supplemented or restated, in whole or in part and
without limitation as to amount, terms, conditions or covenants, the
"Credit Agreement").
Pursuant to Section 2.5(b) of the Credit Agreement, the Borrower
has requested an increase in the Aggregate Commitment from $130,000,000.00
to $180,000,000.00. Such increase in the Aggregate Commitment is to become
effective on October 9, 1997 (the "Increase Date"). In connection with such
requested increase in the Aggregate Commitment, the Borrower, the Agent and
Comerica Bank (the "Accepting Lender") hereby agree as follows:
1. ACCEPTING LENDER'S COMMITMENT. Effective as of the Increase
Date, the Commitment of the Accepting Lender under the Credit Agreement
shall be increased from $15,000,000.00 to the amount set forth opposite the
Accepting Lender's name on the signature pages hereof.
2. REPRESENTATION OF BORROWER. The Borrower hereby represents and
warrants that, as of the date hereof and as of the Increase Date, no event
or condition shall have occurred and then be continuing which constitutes a
Default or Unmatured Default.
3. GOVERNING LAW. This Commitment and Acceptance shall be governed
by the internal law, and not the law of conflicts, of the State of
Illinois.
IN WITNESS WHEREOF, the parties hereto have executed this
Commitment and Acceptance by their duly authorized officers as of the date
first above written.
BORROWER:
U.S. HOME CORPORATION
By: __________________________
Name: Thomas A. Napoli
Title: Vice President
<PAGE> 274
AGENT:
THE FIRST NATIONAL BANK OF CHICAGO,
as Agent
By: ___________________________
Name: _________________________
Title: ________________________
ACCEPTING LENDER:
Commitment:
COMERICA BANK
$25,000,000.00 By: ___________________________
Name: _________________________
Title: ________________________
<PAGE> 275
COMMITMENT AND ACCEPTANCE
This Commitment and Acceptance (this "Commitment and Acceptance")
dated as of October 8, 1997, is entered into among the parties listed on
the signature pages hereof. Capitalized terms used herein and not otherwise
defined herein shall have the meanings attributed to them in the Credit
Agreement (as defined below).
PRELIMINARY STATEMENTS
Reference is made to that certain Amended and Restated Credit
Agreement dated as of May 28, 1997, by and among U.S. Home Corporation, as
Borrower, The First National Bank of Chicago, as Agent, and the Lenders
that are parties thereto (as the same has been and may from time to time be
amended, modified, supplemented or restated, in whole or in part and
without limitation as to amount, terms, conditions or covenants, the
"Credit Agreement").
Pursuant to Section 2.5(b) of the Credit Agreement, the Borrower
has requested an increase in the Aggregate Commitment from $130,000,000.00
to $180,000,000.00. Such increase in the Aggregate Commitment is to become
effective on October 9, 1997 (the "Increase Date"). In connection with such
requested increase in the Aggregate Commitment, the Borrower, the Agent and
Guaranty Federal Bank, F.S.B. (the "Accepting Lender") hereby agree as
follows:
1. ACCEPTING LENDER'S COMMITMENT. Effective as of the Increase
Date, the Commitment of the Accepting Lender under the Credit Agreement
shall be increased from $30,000,000.00 to the amount set forth opposite the
Accepting Lender's name on the signature pages hereof.
2. REPRESENTATION OF BORROWER. The Borrower hereby represents and
warrants that, as of the date hereof and as of the Increase Date, no event
or condition shall have occurred and then be continuing which constitutes a
Default or Unmatured Default.
3. GOVERNING LAW. This Commitment and Acceptance shall be governed
by the internal law, and not the law of conflicts, of the State of
Illinois.
IN WITNESS WHEREOF, the parties hereto have executed this
Commitment and Acceptance by their duly authorized officers as of the date
first above written.
BORROWER:
U.S. HOME CORPORATION
By: __________________________
Name: Thomas A. Napoli
Title: Vice President
<PAGE> 276
AGENT:
THE FIRST NATIONAL BANK OF CHICAGO,
as Agent
By: ___________________________
Name: _________________________
Title: ________________________
ACCEPTING LENDER:
Commitment:
GUARANTY FEDERAL BANK, F.S.B.
$37,500,000.00 By: ___________________________
Name: _________________________
Title: ________________________
<PAGE> 277
COMMITMENT AND ACCEPTANCE
This Commitment and Acceptance (this "Commitment and Acceptance")
dated as of October 8, 1997, is entered into among the parties listed on
the signature pages hereof. Capitalized terms used herein and not otherwise
defined herein shall have the meanings attributed to them in the Credit
Agreement (as defined below).
PRELIMINARY STATEMENTS
Reference is made to that certain Amended and Restated Credit
Agreement dated as of May 28, 1997, by and among U.S. Home Corporation, as
Borrower, The First National Bank of Chicago, as Agent, and the Lenders
that are parties thereto (as the same has been and may from time to time be
amended, modified, supplemented or restated, in whole or in part and
without limitation as to amount, terms, conditions or covenants, the
"Credit Agreement").
Pursuant to Section 2.5(b) of the Credit Agreement, the Borrower
has requested an increase in the Aggregate Commitment from $130,000,000.00
to $180,000,000.00. Such increase in the Aggregate Commitment is to become
effective on October 9, 1997 (the "Increase Date"). In connection with such
requested increase in the Aggregate Commitment, the Borrower, the Agent and
Credit Lyonnais New York Branch (the "Accepting Lender") hereby agree as
follows:
1. ACCEPTING LENDER'S COMMITMENT. Effective as of the Increase
Date, the Commitment of the Accepting Lender under the Credit Agreement
shall be increased from $30,000,000.00 to the amount set forth opposite the
Accepting Lender's name on the signature pages hereof.
2. REPRESENTATION OF BORROWER. The Borrower hereby represents and
warrants that, as of the date hereof and as of the Increase Date, no event
or condition shall have occurred and then be continuing which constitutes a
Default or Unmatured Default.
3. GOVERNING LAW. This Commitment and Acceptance shall be governed
by the internal law, and not the law of conflicts, of the State of
Illinois.
IN WITNESS WHEREOF, the parties hereto have executed this
Commitment and Acceptance by their duly authorized officers as of the date
first above written.
BORROWER:
U.S. HOME CORPORATION
By: __________________________
Name: Thomas A. Napoli
Title: Vice President
<PAGE> 278
AGENT:
THE FIRST NATIONAL BANK OF CHICAGO,
as Agent
By: ___________________________
Name: _________________________
Title: ________________________
ACCEPTING LENDER:
Commitment:
CREDIT LYONNAIS NEW YORK BRANCH
$37,500,000.00 By: ___________________________
Name: _________________________
Title: ________________________
<PAGE> 279
SCHEDULE 1
to Commitment and Acceptance
<PAGE> 280
EXHIBIT 11
(Unaudited)
U.S. HOME CORPORATION AND SUBSIDIARIES
--------------------------------------
COMPUTATION OF INCOME PER COMMON SHARE
--------------------------------------
(Dollars in Thousands, Except Per Share Data)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------------- ----------------------------
1997 1996 1997 1996
------------ ------------ ------------ ------------
Income Per Common And Common
Equivalent Share -
<S> <C> <C> <C> <C>
Income before extraordinary loss .... $ 13,028 $ 12,145 $ 34,204 $ 31,514
Extraordinary loss from early
retirement of debt, net of income
tax benefit ....................... 8,650 -- 8,650 --
------------ ------------ ------------ ------------
Net income .......................... $ 4,378 $ 12,145 $ 25,554 $ 31,514
============ ============ ============ ============
Weighted average common shares
outstanding ....................... 11,543,506 11,589,600 11,564,048 11,584,574
Effect of assumed exercise of
dilutive stock options and warrants 1,025,853 198,511 714,045 392,996
------------ ------------ ------------ ------------
Total common and common equivalent
shares ............................ 12,569,359 11,788,111 12,278,093 11,977,570
============ ============ ============ ============
Income per common and common
equivalent share -
Income before extraordinary loss .... $ 1.04 $ 1.03 2.79 $ 2.63
Extraordinary loss .................. (.69) -- (.71) --
------------ ------------ ------------ ------------
Net Income .......................... $ .35 $ 1.03 $ 2.08 $ 2.63
============ ============ ============ ============
</TABLE>
<PAGE> 281
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------------- ----------------------------
1997 1996 1997 1996
------------ ------------ ------------ ------------
Income Per Common Share, Assuming
Full Dilution -
<S> <C> <C> <C> <C>
Income before interest applicable to
4.875% convertible debentures ...... $ 13,028 $ 12,145 $ 34,208 $ 31,514
Add interest applicable to 4.875%
convertible subordinated debentures,
net of income tax effect ........... 508 613 1,803 1,840
------------ ------------ ------------ ------------
Income per common share, assuming
full dilution before extraordinary
loss ............................... 13,536 12,758 36,011 33,354
Extraordinary loss from early
retirement of debt, net of income
tax benefit ........................ 8,650 -- 8,650 --
------------ ------------ ------------ ------------
Income per common share, assuming full
dilution ........................... $ 4,886 $ 12,758 $ 27,361 $ 33,354
============ ============ ============ ============
Total common and common equivalent
shares ............................. 12,569,359 11,788,111 12,278,093 11,977,570
Assumed additional common shares from
exercise of dilutive stock options
and warrants resulting from use of
market price of common stock at end
of period .......................... 265,095 -- 560,602 --
Assumed conversion of 4.875%
convertible subordinated debentures
at $35.50 per share at date of
issuance ........................... 1,739,130 2,253,521 2,080,173 2,253,521
------------ ------------ ------------ ------------
Total common shares, assuming full
dilution ........................... 14,573,584 14,041,632 14,918,868 14,231,091
============ ============ ============ ============
Income per common share,
assuming full dilution -
Income before extraordinary loss ..... $ .93 $ .91 $ 2.41 $ 2.34
Extraordinary loss ................... (.53) -- (.58) --
------------ ------------ ------------ ------------
Net income ........................... $ .34 $ .91 $ 1.83 $ 2.34
============ ============ ============ ============
Note: See Note 5 of Notes to Consolidated Condensed Financial Statements.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This Schedule Contains Summary Financial Information Extracted From The
Consolidated Condensed Financial Statements As Of September 30, 1997 And
For The Nine Months Then Ended And Is Qualified In Its Entirety By
Reference To Such Financial Statements.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 10,855
<SECURITIES> 0
<RECEIVABLES> 130,458
<ALLOWANCES> 0
<INVENTORY> 764,252
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,047,554
<CURRENT-LIABILITIES> 0
<BONDS> 396,936
0
0
<COMMON> 119
<OTHER-SE> 406,172
<TOTAL-LIABILITY-AND-EQUITY> 1,047,554
<SALES> 0
<TOTAL-REVENUES> 993,841
<CGS> 800,535
<TOTAL-COSTS> 904,677
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 26,317
<INCOME-PRETAX> 54,291
<INCOME-TAX> 20,087
<INCOME-CONTINUING> 34,204
<DISCONTINUED> 0
<EXTRAORDINARY> (8,650)
<CHANGES> 0
<NET-INCOME> 25,554
<EPS-PRIMARY> 2.08
<EPS-DILUTED> 1.83
</TABLE>
