UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
July 14, 1998
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(Date of earliest event reported)
OCWEN ASSET INVESTMENT CORP.
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(Exact name of registrant as specified in its charter)
Virginia 001-14043 65-0736120
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
THE FORUM, SUITE 1000,
PALM BEACH LAKES BOULEVARD, WEST PALM BEACH, FLORIDA 33401
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(Address of principal executive offices) (Zip Code)
(561) 682-8000
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(Registrant's telephone number, including area code)
Not Applicable
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(Former name, former address and former fiscal year,
if changed since last report)
Page 1 of 111
Exhibit index located on page 4
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ITEM 5. OTHER EVENTS
Ocwen Asset Investment Corp. (the "Company") announced that it has
issued $150,000,000 principal amount of 11 1/2% Senior Notes due 2005 (the
"Notes") on July 14, 1998. The Notes will mature on July 1, 2005 and are
redeemable, at the option of the Company, in whole or in part, on or after July
1, 2002. In addition, during the first 36 months after the date of issuance of
the Notes, the Company may, on any one or more occasions, use the net proceeds
of one or more offerings of its common stock to redeem up to 25% of the
aggregate principal amount of the Notes, provided that, after any such
redemption, the aggregate principal amount of the Notes outstanding must equal
at least $112.5 million. Upon the occurrence of a change of control, the Company
is required, subject to certain conditions, to offer to purchase all of the
Notes. For additional information, reference is made to the Press Release, dated
July 15, 1998, which is included herewith as Exhibit 99 and is incorporated
herein by reference, and the other documents included herewith, which also are
incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial Statements.
Not Applicable.
(b) Pro Forma Financial Information.
Not Applicable
(c) Exhibits:
4.1 Form of Indenture between the Company and Norwest Bank
Minnesota, National Association, as Trustee thereunder
4.2 Form of Note (attached as Exhibit A to the Indenture included
as Exhibit 4.1)
4.3 Registration Rights Agreement, dated July 14, 1998, among the
Company and the Initial Purchasers of the Notes
99 Press Release, dated July 15, 1998
2
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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.
OCWEN ASSET INVESTMENT CORP.
Date: July 16, 1998 By: /s/ Mark S. Zeidman
----------------------------
Mark S. Zeidman
Senior Vice President and
Chief Financial Officer
3
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EXHIBIT INDEX
4.1 Form of Indenture between the Company and Norwest Bank
Minnesota, National Association, as Trustee thereunder
4.2 Form of Note (attached as Exhibit A to the Indenture
included as Exhibit 4.1)
4.3 Registration Rights Agreement, dated July 14, 1998, among
the Company and the Initial Purchasers of the Notes
99 Press Release, dated July 15, 1998
4
EXHIBIT 4.1
OCWEN ASSET INVESTMENT CORP.
11 1/2% SENIOR NOTES DUE 2005
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INDENTURE
Dated as of July 14, 1998
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NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
a national association
as Trustee
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CROSS-REFERENCE TABLE*
Trust Indenture
Act Section Indenture Section
310 (a)(1) ..............................................................7.10
(a)(2) ..............................................................7.10
(a)(3) ..............................................................N.A.
(a)(4) ..............................................................N.A.
(a)(5) ..............................................................7.10
(b) ............................................................7.03;7.10
(c) .................................................................N.A.
311 (a) .................................................................7.11
(b) .................................................................7.11
(c) .................................................................N.A.
312 (a) .................................................................2.05
(b) ................................................................10.03
(c) ................................................................10.03
313 (a) .................................................................7.06
(b)(1) ..............................................................N.A.
(b)(2) .........................................................7.06;7.07
(c) ...........................................................7.06;10.02
(d) .................................................................7.06
314 (a) ...........................................................4.03;10.05
(b) ..................................................................N.A
(c)(1) .............................................................10.04
(c)(2) .............................................................10.04
(c)(3) ..............................................................N.A.
.....................................................................N.A.
(e) ...............................................................10.05
.....................................................................N.A.
315 .....................................................................7.01
...............................................................7.05,10.02
(c) ................................................................7.01
(d) .................................................................7.01
(e) .................................................................6.11
316 (a)(last sentence) ..................................................2.09
(a)(1)(A) ...........................................................6.05
(a)(1)(B) ...........................................................6.04
(a)(2) ..............................................................N.A.
(b) .................................................................6.07
(c) .................................................................N.A.
317 (a)(1) ..............................................................6.08
(a)(2) ..............................................................6.09
(b) .................................................................2.04
318 ....................................................................10.01
(b) .................................................................N.A.
(c) ................................................................10.01
N.A. means not applicable.
* This Cross-Reference Table is not part of the Indenture.
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TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS AND INCORPORATION
BY REFERENCE............................... 1
SECTION 1.1 Definitions.......................................... 1
SECTION 1.2 Other Definitions.................................... 19
SECTION 1.3 Incorporation by Reference of Trust
Indenture Act..................................... 19
SECTION 1.4 Rules of Construction................................ 19
ARTICLE II
THE NOTES................................ 20
SECTION 2.1 Form and Dating...................................... 20
SECTION 2.2 Execution and Authentication......................... 20
SECTION 2.3 Registrar and Paying Agent........................... 21
SECTION 2.4 Paying Agent To Hold Money In Trust.................. 21
SECTION 2.5 Holder Lists......................................... 22
SECTION 2.6 Transfer and Exchange................................ 22
SECTION 2.7 Replacement Notes.................................... 23
SECTION 2.8 Outstanding Notes.................................... 23
SECTION 2.9 Treasury Notes....................................... 24
SECTION 2.10 Temporary Notes...................................... 24
SECTION 2.11 Cancellation......................................... 24
SECTION 2.12 Defaulted Interest................................... 24
SECTION 2.13 Restrictive Legend................................... 25
SECTION 2.14 Special Transfer Provisions.......................... 26
ARTICLE III
REDEMPTION AND PREPAYMENT........................ 30
SECTION 3.1 Notices to Trustee................................... 30
SECTION 3.2 Selection Of Notes To Be Redeemed.................... 30
SECTION 3.3 Notice of Redemption................................. 31
SECTION 3.4 Effect of Notice of Redemption....................... 31
SECTION 3.5 Deposit of Redemption or Purchase Price.............. 32
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PAGE
SECTION 3.6 Notes Redeemed or Purchased in Part.................. 32
SECTION 3.7 Optional Redemption.................................. 32
SECTION 3.8 Mandatory Redemption................................. 33
ARTICLE IV
COVENANTS................................ 33
SECTION 4.1 Payment Of Notes..................................... 33
SECTION 4.2 Maintenance Of Office Or Agency...................... 34
SECTION 4.3 Reports.............................................. 34
SECTION 4.4 Compliance Certificate............................... 34
SECTION 4.5 Taxes................................................ 35
SECTION 4.6 Limitation on Restricted Payments.................... 35
SECTION 4.7 Limitation on Incurrence Of Debt..................... 39
SECTION 4.8 Limitations on Dividends And Other
Payment Restrictions Affecting Subsidiaries....... 40
SECTION 4.9 Limitation on Transactions With Affiliates........... 41
SECTION 4.10 Offer To Repurchase Upon Change Of
Control........................................... 42
SECTION 4.11 Continued Existence.................................. 43
SECTION 4.12 Maintenance of General Partner Interest.............. 43
SECTION 4.13 Business Activities.................................. 43
ARTICLE V
SUCCESSORS................................ 44
SECTION 5.1 Merger, Consolidation, Or Sale Of Assets............. 44
SECTION 5.2 Successor Corporation Substituted.................... 44
ARTICLE VI
DEFAULTS AND REMEDIES.......................... 45
SECTION 6.1 Events Of Default.................................... 45
SECTION 6.2 Acceleration......................................... 47
SECTION 6.3 Other Remedies....................................... 47
SECTION 6.4 Waiver Of Past Defaults.............................. 47
SECTION 6.5 Control By Majority.................................. 48
SECTION 6.6 Limitation On Suits.................................. 48
SECTION 6.7 Rights Of Holders Of Notes To Receive
Payment........................................... 48
SECTION 6.8 Collection Suit By Trustee........................... 48
SECTION 6.9 Trustee May File Proofs Of Claim..................... 49
SECTION 6.10 Priorities........................................... 49
ii
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PAGE
SECTION 6.11 Undertaking For Costs................................ 50
ARTICLE VII
TRUSTEE................................. 50
SECTION 7.1 Duties Of Trustee.................................... 50
SECTION 7.2 Rights Of Trustee.................................... 51
SECTION 7.3 Individual Rights Of Trustee......................... 52
SECTION 7.4 Trustee's Disclaimer................................. 52
SECTION 7.5 Notice Of Defaults................................... 52
SECTION 7.6 Reports By Trustee To Holders Of The
Notes............................................. 52
SECTION 7.7 Compensation And Indemnity........................... 53
SECTION 7.8 Replacement Of Trustee............................... 54
SECTION 7.9 Successor Trustee By Merger, etc..................... 55
SECTION 7.10 Eligibility; Disqualification........................ 55
SECTION 7.11 Preferential Collection Of Claims Against
Company........................................... 55
ARTICLE VIII
LEGAL DEFEASANCE AND COVENANT DEFEASANCE................. 55
SECTION 8.1 Option To Effect Legal Defeasance Or
Covenant Defeasance............................... 55
SECTION 8.2 Legal Defeasance And Discharge....................... 55
SECTION 8.3 Covenant Defeasance.................................. 56
SECTION 8.4 Conditions To Legal Or Covenant
Defeasance........................................ 56
SECTION 8.5 Deposited Money And Government
Securities To Be Held In Trust; Other
Miscellaneous Provisions.......................... 58
SECTION 8.6 Repayment To Company................................. 58
SECTION 8.7 Reinstatement........................................ 59
ARTICLE IX
AMENDMENT, SUPPLEMENT AND WAIVER..................... 59
SECTION 9.1 Without Consent Of Holders Of Notes.................. 59
SECTION 9.2 With Consent Of Holders Of Notes..................... 60
SECTION 9.3 Compliance With Trust Indenture Act.................. 61
SECTION 9.4 Revocation And Effect Of Consents.................... 61
SECTION 9.5 Notation On Or Exchange Of Notes..................... 62
SECTION 9.6 Trustee To Sign Amendments, etc...................... 62
iii
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PAGE
ARTICLE X
MISCELLANEOUS.............................. 62
SECTION 10.1 Trust Indenture Act Controls......................... 62
SECTION 10.2 Notices.............................................. 62
SECTION 10.3 Communication By Holders Of Notes With
Other Holders Of Notes............................ 63
SECTION 10.4 Certificate And Opinion As To Conditions
Precedent......................................... 64
SECTION 10.5 Statements Required In Certificate Or
Opinion........................................... 64
SECTION 10.6 Rules By Trustee And Agents.......................... 64
SECTION 10.7 No Personal Liability Of Directors, Officers,
Employees And Stockholders........................ 64
SECTION 10.8 Governing Law........................................ 65
SECTION 10.9 Successors........................................... 65
SECTION 10.10 Severability......................................... 65
SECTION 10.11 Counterpart Originals................................ 65
SECTION 10.12 Table Of Contents, Headings, etc..................... 65
iv
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1
INDENTURE dated as of July 14, 1998 between Ocwen Asset Investment
Corp., a Virginia corporation (the "Company"), and Norwest Bank Minnesota,
National Association, a national association, as trustee (the "Trustee").
The Company and the Trustee agree as follows for the benefit of each
other and for the equal and ratable benefit of the Holders of the 11 1/2% Senior
Notes due 2005 of the Company:
ARTICLE I
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.1 Definitions.
"Acquired Debt" means with respect to any specified Person,
(i) Debt of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person,
including, without limitation, Debt incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person and (ii) Debt secured by a Lien
encumbering any asset acquired by such specified Person.
"Adjusted Consolidated FFO" means Consolidated FFO plus or
minus (as the case may be) (i) gains (losses) from sales of property in
the ordinary course of business, and (ii) minority interests in net
income (loss) of the Operating Partnership, adjusted by excluding,
without duplication, (a) any net after-tax extraordinary gains or losses
(less all fees and expenses relating thereto), (b) the cumulative effect
of a change in accounting principles during such period, (c) the portion
of FFO of any Person (other than the Company or a Restricted Subsidiary)
in which the Company or any Restricted Subsidiary has an ownership
interest, except to the extent of the amount of dividends or other
distributions actually paid to the Company or any Restricted Subsidiary
in cash dividends or distributions during such period, (d) the FFO of
any Person combined with the Company or any Restricted Subsidiary on a
"pooling of interests" basis attributable to any period prior to the
date of combination and (e) the FFO of any Restricted Subsidiary to the
extent that the declaration or payment of dividends or similar
distributions by such Restricted Subsidiary is not at the date of
determination permitted, directly or indirectly, by operation of the
terms of its charter or any agreement, instrument, judgment, decree,
order, statute, rule or governmental regulation applicable to such
Restricted Subsidiary or its shareholders. In the case of any
calculation of "Adjusted Consolidated FFO" which includes the first
quarter of 1998, Adjusted Consolidated FFO shall be increased by,
without duplication, $16.9 million, representing the aggregate cost
during such quarter related to the Company's portfolio of interest only
and inverse interest only classes of mortgage-related securities backed
by single-family residential loans.
"Adjusted FFO Available for Fixed Charges" is defined as the
sum of, without duplication, (1) Adjusted Consolidated FFO, plus (2)
Consolidated Interest Expense, plus (3) Consolidated Income Tax Expense.
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2
"Adjusted Fixed Charges" means the amount which is expensed
in any period for Consolidated Interest Expense of the Company and its
Restricted Subsidiaries, dividends of the Company (other than dividends
paid in shares of Capital Stock (other than Disqualified Stock))
declared and paid or payable during such period on Disqualified Stock
and dividends declared and paid or payable during such period on
Preferred Stock of the Company's Restricted Subsidiaries (other than
Preferred Stock held by the Company or another Restricted Subsidiary).
"Adjusted Senior Debt to Capital Ratio" means the ratio of
total Debt (other than Match Funded Debt and Subordinated Debt) of the
Company and its Restricted Subsidiaries on a consolidated basis to the
sum of (i) Consolidated Net Worth and (ii) Subordinated Debt of the
Company and its Restricted Subsidiaries. In the event that the Company
or any of its Restricted Subsidiaries incurs, assumes, guarantees or
redeems any Debt or issues or redeems any Capital Stock subsequent to
the end of the quarter for which the Adjusted Senior Debt to Capital
Ratio is being calculated but prior to the event for which the
calculation of Adjusted Senior Debt to Capital Ratio is made, then the
Adjusted Senior Debt to Capital Ratio shall be calculated giving pro
forma effect to such incurrence, assumption, guarantee or redemption of
Debt or such issuance or redemption of Capital Stock, and the
application of the net proceeds therefrom, as if the same had occurred
at the end of the applicable quarter (except that, in making such
computation, the amount of Debt incurred or redeemed under any revolving
credit facility shall be deemed to be the difference between (i) the
average balance of such Debt during the period commencing on the last
day of such applicable quarter and ending on the date of such
computation, and (ii) the outstanding balance of such Debt on the last
day of such applicable quarter).
"Adjusted Total Debt to Capital Ratio" means the ratio of
total Debt (other than Match Funded Debt) of the Company and its
Restricted Subsidiaries on a consolidated basis to Consolidated Net
Worth. In the event that the Company or any of its Restricted
Subsidiaries incurs, assumes, guarantees or redeems any Debt or issues
or redeems any Capital Stock subsequent to the end of the quarter for
which the Adjusted Total Debt to Capital Ratio is being calculated but
prior to the event for which the calculation of Adjusted Total Debt to
Capital Ratio is made, then the Adjusted Total Debt to Capital Ratio
shall be calculated giving pro forma effect to such incurrence,
assumption, guarantee or redemption of Debt or such issuance or
redemption of Capital Stock, and the application of the net proceeds
therefrom, as if the same had occurred at the end of the applicable
quarter (except that, in making such computation, the amount of Debt
incurred or redeemed under any revolving credit facility shall be deemed
to be the difference between (i) the average balance of such Debt during
the period commencing on the last day of such applicable quarter and
ending on the date of such computation, and (ii) the outstanding balance
of such Debt on the last day of such applicable quarter).
"Affiliate" means, with respect to any specified Person(s)
(a) any other Person directly or indirectly controlling or controlled by
or under direct or indirect common control with such specified Person or
(b) any other Person that owns, directly or indirectly, 10% or more of
such specified Person's Capital Stock or any executive officer or
director of any such specified Person or other Person. For the purposes
of this definition, "control," when used with respect to any specified
Person, means the
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3
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing. Notwithstanding the foregoing, no
Securitization Entity shall be deemed to be an Affiliate of any Person.
"Agent" means any Registrar or Paying Agent.
"Articles of Incorporation" means the Restated and Amended
Articles of Incorporation of the Company, as may be amended from time to
time in accordance with its terms and applicable law.
"Average Life" means, as of the date of determination with
respect to any Debt, the quotient obtained by dividing (a) the sum of
the products of (i) the number of years from the date of determination
to the date or dates of each successive scheduled principal payment
(including, without limitation, any sinking fund requirements) of such
Debt multiplied by (ii) the amount of each such principal payment, by
(b) the sum of all principal payments.
"Bankruptcy Law" means Title 11, U.S. Code or any similar
federal or state law for the relief of debtors.
"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.
"Business Day" means any day other than a Legal Holiday.
"Capital Lease Obligation" means, at the time any
determination thereof is to be made, the amount of the liability in
respect of a capital lease that would at such time be required to be
capitalized on a balance sheet in accordance with GAAP.
"Capital Stock" means, with respect to any Person, any and
all shares, interests, partnership interests, participations, rights in
or other equivalents (however designated) of such Person's equity,
including any Preferred Stock, and any rights (other than debt
securities convertible into or exchangeable or exercisable for such
equity), warrants or options exchangeable or exercisable for or
convertible into such equity, whether outstanding on or issued after the
Closing Date.
"Cash Equivalents" means (a) securities with maturities of
one year or less from the date of acquisition issued or fully guaranteed
or insured by the United States Government or any agency thereof; (b)
certificates of deposit, bankers acceptances and Eurodollar time
deposits with maturities of one year or less from the date of
acquisition and overnight bank deposits of any commercial bank having
capital and surplus in excess of $500,000,000; (c) commercial paper of a
domestic issuer rated at least A-1 by S&P or P-1 by Moody's; (d)
securities with maturities of one year or less from the date of
acquisition issued or fully guaranteed by any state, commonwealth or
territory of the United States, by any political subdivision or taxing
authority of any such state, commonwealth or territory or by any foreign
government, the securities of which state,
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4
commonwealth, territory, political subdivision, taxing authority or
foreign government (as the case may be) are rated at least A by S&P or
A2 by Moody's; or (e) shares of money market mutual or similar funds
which invest exclusively in assets satisfying the requirements of
clauses (a) through (d) of this definition.
"CEDEL" means Cedel, S.A.
"Change of Control" means an event or series of events by
which
(a) any "person" or "group" (as such terms are used
in Sections 13(d) and 14(d) of the Exchange Act), other than
the Permitted Holders, is or becomes after the Closing Date
the "beneficial owner" (as defined in Rules 13d-3 and 13d-5
under the Exchange Act), of more than 40% of the total voting
power of all Voting Stock of the Company then outstanding;
(b) (1) another corporation merges into the Company
or the Company consolidates with or merges into any other
corporation, or
(2) the Company and its Restricted Subsidiaries taken
as a whole, convey, transfer or lease all or substantially
all of their assets to any person or group, in one
transaction or a series of transactions, other than any
conveyance, transfer or lease between the Company and a
Wholly-Owned Subsidiary of the Company,
in the case of each of clauses (1) and (2) of this
paragraph (b), with the effect that a person or
group, other than the Permitted Holders, is or
becomes the beneficial owner of more than 40% of the
total voting power of all Voting Stock of the
surviving or transferee corporation of such
transaction or series of transactions;
(c) during any period of two consecutive years,
individuals who at the beginning of such period constituted
the Company's Board of Directors, or whose nomination for
election by the Company's shareholders was approved by a vote
of a majority of the Directors then still in office who were
either directors at the beginning of such period or whose
election or nomination for election was previously so
approved, cease for any reason to constitute a majority of
the Directors then in office;
(d) the shareholders of the Company shall approve any
plan or proposal for the liquidation or dissolution of the
Company; or
(e) the Management Agreement is terminated and is not
replaced by a similar agreement between the Company and the
Manager or another Subsidiary of Ocwen Financial.
"Closing Date" means the date on which the Original Notes are
first issued.
"Code" means the Internal Revenue Code of 1986, as amended.
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5
"Common Stock" means the Company's Common Stock, par value
$.01 per share.
"Company Order" means a written order signed in the name of
the Company by its principal executive officer, its principal financial
officer, its treasurer or its principal accounting officer, and
delivered to the Trustee.
"Consolidated FFO" for any period means the amount of FFO of
the Company and its Restricted Subsidiaries for such period determined
on a consolidated basis.
"Consolidated Income Tax Expense" for any period means the
provisions for federal, state, local and foreign income taxes of the
Company and its Restricted Subsidiaries for such period as determined on
a consolidated basis in accordance with GAAP.
"Consolidated Interest Expense" means, for any period, and
without duplication, all interest (including the interest component of
rental expenses reflected in accordance with GAAP as capitalized leases
on the consolidated balance sheet of the Company and its Restricted
Subsidiaries, letter of credit fees, Interest Rate Agreement fees,
commitment fees and other like financial charges) and all amortization
of debt discount on all Debt (including, without limitation, payment in
kind, zero coupon and other securities) of the Company and its
Restricted Subsidiaries, determined in accordance with GAAP, less
interest expense attributable to Match Funded Debt, provided that (x)
the Consolidated Interest Expense attributable to interest on any Debt
computed on a pro forma basis and (A) bearing a floating interest rate
shall be computed as if the rate in effect on the date of computation
had been the applicable rate for the entire period and (B) which was not
outstanding during the period for which the computation is being made
but which bears, at the option of the Company, a fixed or floating rate
of interest, shall be computed by applying at the option of the Company,
either the fixed or floating rate, and (y) in making such computation,
the Consolidated Interest Expense attributable to interest on any Debt
under a revolving credit facility computed on a pro forma basis shall be
computed based upon the average daily balance of such Debt during the
applicable period.
"Consolidated Net Worth" means, at any date of determination,
the sum of (i) the consolidated shareholders' equity of the Company and
its Restricted Subsidiaries, as determined on a consolidated basis in
accordance with GAAP, and, without duplication, (ii) any limited
partnership interests in the Operating Partnership owned by Persons
other than the Company and its Restricted Subsidiaries which are shown
as minority interests in consolidated subsidiary on a consolidated
balance sheet of the Company and its Restricted Subsidiaries prepared in
accordance with GAAP (and having for this purpose the value as set forth
on such consolidated balance sheet).
"Corporate Trust Office of the Trustee" shall be at the
address of the Trustee specified in Section 10.2 hereof or such other
address as to which the Trustee may give notice to the Company.
"Currency Agreement" means any foreign exchange contract,
currency swap or cap agreement or other similar agreement designed to
protect against or manage
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6
exposure to fluctuations in currency exchange rates relating to any
asset of the Company or its Restricted Subsidiaries which is denominated
in, or purchased with, a currency other than U.S. dollars.
"Custodian" means the custodian of any Global Security as
designated by the Depositary.
"Debt" of any Person means, without duplication, any
indebtedness of such Person, whether or not contingent, in respect of
(i) borrowed money evidenced by bonds, notes, debentures or similar
instruments, (ii) indebtedness secured by any mortgage, pledge, lien,
charge, encumbrance or any security interest existing on property owned
by such Person, (iii) reimbursement obligations, contingent or
otherwise, in connection with any letters of credit actually issued,
bankers acceptances or other similar instruments, or amounts
representing the balance deferred and unpaid of the purchase price of
any property or services except any such balance that constitutes an
accrued expense or trade payable, (iv) net obligations under or in
respect of Interest Rate Agreements and Currency Agreements, if and to
the extent such obligations would appear as a liability on a balance
sheet of such Person prepared in accordance with GAAP, (v) all Debt
referred to in the preceding clauses, of other persons and all dividends
of other Persons, the payment of which is secured by (or for which the
holders of such Debt have an existing right, contingent or otherwise, to
be secured by) any Lien upon or with respect to property owned by such
Person, even though such Person has not assumed or become liable for the
payment of such Debt (the amount of such obligation being deemed to be
the lesser of the fair market value of such property or asset (as
determined in good faith by the Person's Board of Directors whose
determination shall be conclusive) or the amount of the obligation so
secured), (vi) any lease of property by such Person as lessee which is
reflected in such Person's consolidated balance sheet as a capitalized
lease in accordance with GAAP, (vii) all Disqualified Stock of the
Company and Preferred Stock of any Restricted Subsidiary (other than
Preferred Stock of a Restricted Subsidiary held by the Company or
another Restricted Subsidiary) valued at the greater of its voluntary or
involuntary maximum fixed redemption, repayment or repurchase price plus
accrued and unpaid dividends (for purposes hereof, the "maximum fixed
redemption, repayment or repurchase price" of any Disqualified Stock or
Preferred Stock which does not have a fixed redemption, repayment or
repurchase price shall be calculated in accordance with the terms of
such Disqualified Stock or Preferred Stock as if such Disqualified Stock
or Preferred Stock were redeemed, repaid or repurchased on any date on
which Debt shall be required to be determined pursuant to this
Indenture, and if such price is based upon, or measured by, the fair
market value of such Disqualified Stock or Preferred Stock, such fair
market value shall be determined in good faith by the board of directors
of the issuer of such Disqualified Stock, whose determination shall be
conclusive), (viii) all guarantees by such Person of Debt referred to in
this definition of any other Person or (ix) any amendment, supplement,
modification, deferral, renewal, extension, refunding or refinancing of
any Debt of the types referred to in clauses (i) through (viii) above;
Debt of a Restricted Subsidiary of the Person existing prior to the time
it became a Restricted Subsidiary of the Person shall be deemed to be
incurred upon such Restricted Subsidiary's becoming a Restricted
Subsidiary of the Person; and Debt of a person existing prior to a
merger or consolidation of such person with the Person or any Restricted
Subsidiary of the Person in which such person is the successor to the
<PAGE>
7
Person or such Restricted Subsidiary shall be deemed to be incurred upon
the consummation of such merger or consolidation; provided, however that
the term Debt shall not include any such indebtedness that has been the
subject of an "in substance" defeasance in accordance with GAAP. The
amount of Debt of any Person at any date will be the outstanding balance
as of such date of all unconditional obligations, as described above,
and the maximum liability upon the occurrence of the contingency giving
rise to the obligation of any contingent obligation at such date.
In addition, "Debt" of any Person shall include Debt
described in the foregoing paragraph that would not appear as a
liability on the balance sheet of such Person if (1) such Debt is the
obligation of a partnership or joint venture that is not a Restricted
Subsidiary (a "Joint Venture"), (2) such Person or a Restricted
Subsidiary is a general partner of the Joint Venture (a "General
Partner") and (3) there is recourse, by contract or operation of law,
with respect to the payment of such Debt to property or assets of such
Person or a Restricted Subsidiary of such Person; and such Debt shall be
included in an amount not to exceed (x) the greater of (A) the net
assets of the General Partner and (B) the amount of such obligations to
the extent that there is recourse, by contract or operation of law, to
the property or assets of such Person or a Restricted Subsidiary of such
Person (other than the General Partner) or (y) if less than the amount
determined pursuant to clause (x) immediately above, the actual amount
of such Debt that is recourse to such Person, if the Debt is evidenced
by a writing and is for a determinable amount.
"Default" means any event that is or with the passage of time
or the giving of notice or both would be an Event of Default.
"Depositary" means, with respect to the Notes issuable or
issued in whole or in part in global form, the Person specified in
Section 2.3 hereof as the Depositary with respect to the Notes, until a
successor shall have been appointed and become such pursuant to the
applicable provision of this Indenture, and, thereafter, "Depositary"
shall mean or include such successor.
"Disinterested Director" of any Person means, with respect to
any transaction or series of related transactions, a member of the board
of directors of such Person who does not have any material direct or
indirect financial interest in or with respect to such transaction or
series of related transactions.
"Disqualified Stock" means any Capital Stock of any Person
that, by its terms (or by the terms of any security into which it is
convertible, or for which it is exchangeable, in each case at the option
of the holder thereof), or upon the happening of any event, matures or
is mandatorily redeemable, pursuant to a sinking fund obligation or
otherwise, or redeemable at the option of the Holder thereof, in whole
or in part, on or prior to the date that is 91 days after the date on
which the Notes mature; provided, however, that any Capital Stock that
would constitute Disqualified Stock solely because the holders thereof
have the right to require such Person to repurchase such Capital Stock
upon the occurrence of a Change of Control shall not constitute
Disqualified Stock if the terms of such Capital Stock provide that such
Person may not repurchase or redeem any such Capital Stock pursuant to
such provisions unless such repurchase or redemption complies with
Section 4.6 hereof.
<PAGE>
8
"DWAC" means the Depository Trust Company's Deposit/Withdraw
At Custodian system.
"Euroclear" means Morgan Guaranty Trust Company, Brussels
office, as operator of the Euroclear System.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchange Offer" has the meaning assigned to it in the
Registration Rights Agreement.
"Fair Market Value" means, with respect to any asset, the
price which could be negotiated in an arm's-length free market
transaction, for cash, between a willing seller and a willing buyer,
neither of which is under compulsion to complete the transaction as
determined by the Board of Directors of the Company, acting in good
faith, and shall be evidenced by a Board Resolution delivered to the
Trustee (which determination by the Board of Directors shall be
conclusive and binding).
"FFO" of any Person means funds from operations of such
Person (as such term is defined in the guidelines issued by the National
Association of Real Estate Investment Trusts as in effect on the Closing
Date).
"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 have been
approved by a significant segment of the accounting profession, which
are in effect on the date of this Indenture.
"Global Security" means a Security that evidences all or part
of the Notes and is authenticated and delivered to, and registered in
the name of, the Depositary for such Notes or a nominee thereof.
"Government Securities" means direct obligations of, or
obligations guaranteed by, the United States for the payment of which
guarantee or obligations the full faith and credit of the United States
is pledged.
"Guidelines" means the general guidelines for the Company's
investments, borrowings and operations established by the Company's
Board of Directors, including a majority of the Independent Directors.
"Holder" means a registered holder of Notes.
"Independent Director" means a director of the Company who
within the last two years has not, directly or indirectly, (i) owned an
interest in the Manager or any of its Affiliates, (ii) been employed by
the Manager or any of its Affiliates, (iii) been an officer or director
of the Manager or any of its Affiliates, (iv) performed services for the
Manager or (v) held any material business or professional relationship
with the Manager or any of its Affiliates; provided that if the
definition of "Independent
<PAGE>
9
Director" set forth in the Articles of Incorporation shall be changed or
amended after the Closing Date in accordance with the Virginia Stock
Corporation Act and such Articles, the definition of "Independent
Director" as used herein shall be deemed to be correspondingly changed
or amended.
"Interest Rate Agreements" means interest rate protection
agreements in the form of a swap, cap, collar, floor, rate lock or
similar agreement designed to protect against or manage exposure to
fluctuations in interest rates for the purpose of risk management and
not for speculation.
"Investment" means, with respect to any Person, any direct or
indirect advance, loan or other extension of credit or capital
contribution to (by means of a transfer of cash or other property to
others or any payment for property or services for the account or use of
others), or any purchase, acquisition or ownership by such Person of any
Capital Stock, bonds, notes, debentures or other securities or evidences
of Debt issued or owned by, any other Person and all other items that
would be classified as investments on a balance sheet prepared in
accordance with GAAP. For purposes of the "Limitation on Restricted
Payments" covenant described in Section 4.6, any property transferred to
or from any Person shall be valued at its Fair Market Value at the time
of such transfer, in each case as determined by the Board of Directors
of the Company in good faith, whose determination shall be conclusive.
"Legal Holiday" means a Saturday, a Sunday or a day on which
banking institutions in the City of New York or at a place of payment
are authorized by law, regulation or executive order to remain closed.
If a payment date is a Legal Holiday at a place of payment, payment may
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 any mortgage, charge, pledge, lien (statutory or
otherwise), security interest, hypothecation, assignment for security,
claim, or preference or priority or other encumbrance (whether or not
filed, recorded or otherwise perfected under applicable law) upon or
with respect to any property owned on the Closing Date or thereafter
acquired.
"Liquidated Damages" has the meaning assigned to it in the
Registration Rights Agreement.
"Management Agreement" means the management agreement between
the Manager and the Company.
"Manager" means Ocwen Capital Corporation, a Florida
corporation, and its successors.
"Match Funded Debt" means Debt of a special purpose,
bankruptcy remote Subsidiary of the Company or a Restricted Subsidiary
as to which no recourse exists either to the Company or any other
Restricted Subsidiary, on which (i) the aggregate principal amortization
and maturity of such Debt are based upon the principal amortization and
maturity of a like or greater amount of the funded assets, and (ii) the
interest rate of such Debt is at a fixed rate; provided however, that
the interest rate of
<PAGE>
10
such Debt may be at a floating rate if (x) the funded assets include
adjustable rate assets or (y) the funded assets have been effectively
swapped under an Interest Rate Agreement.
"Mortgage" means a mortgage or deed of trust on real property
which has been improved by a completed single or multifamily dwelling
unit or commercial real estate property.
"Mortgage Warehouse Debt" means Debt of any Person under any
warehouse line of credit, mortgage loan repurchase agreement or similar
facility or under any commercial paper program (a) that is incurred for
the purpose of funding the origination or purchase of mortgage loans or
mortgage notes that are intended to be sold to investors, (b) that in
the case of any warehouse line of credit or similar facility is, or, in
the case of any commercial paper program, the letters of credit or
revolving credit facility providing credit enhancement or liquidity
backup for such commercial paper program are, secured by mortgage loans,
mortgage notes, residential or commercial mortgage-backed securities or
any combination thereof owned by such Person, (c) the outstanding amount
of which shall not exceed 100% of the principal amount of the mortgage
loans, mortgage notes and/or residential or commercial mortgage-backed
securities securing such Debt and (d) the underlying mortgage loans,
mortgage notes and residential or commercial mortgage-backed securities
are subject to binding take-out commitments by investors or are being
accumulated by the Company with the intention of securitizing and
disposing thereof within a reasonable period of time.
"Net Cash Proceeds" means, with respect to any issuance or
sale of Capital Stock or debt securities, the proceeds of such issuance
or sale in the form of cash or Cash Equivalents, including payments in
respect of deferred payment obligations when received in the form of
cash or Cash Equivalents, net of attorney's fees, accountant's fees and
brokerage, consulting, underwriting and other fees and expenses actually
incurred in connection with such issuance or sale and net of taxes paid
or payable as a result thereof.
"New Notes" means the 11 1/2% Senior Notes due 2005 issued in
the Exchange Offer.
"Non-Recourse Debt" means any Debt of the Company or any of
its Subsidiaries that is (i)(A) specifically advanced to finance the
acquisition of investment assets and (B) secured only by the assets to
which such Debt relates without recourse to the Company or any of its
Subsidiaries, (ii) advanced to a Subsidiary of the Company or a group of
Subsidiaries of the Company formed for the sole purpose of acquiring or
holding investment assets (A) against which a loan is obtained that is
made without recourse to, and with no crosscollateralization against the
assets of, the Company or any other Subsidiary of the Company, and (B)
upon complete or partial liquidation of which the loan must be
correspondingly completely or partially repaid, as the case may be, or
(iii) specifically advanced to finance the acquisition of real property
and secured by only the real property to which such Debt relates without
recourse to the Company or any of its Subsidiaries.
<PAGE>
11
"Notes" means the Original Notes and New Notes.
"Ocwen Financial" means Ocwen Financial Corporation, a
Florida corporation, and its successors.
"Officer" means, with respect to any Person, the Chairman of
the Board, the Chief Executive Officer, the President, the Chief
Operating Officer, the Chief Financial Officer, the Treasurer, any
Assistant Treasurer, the Controller, the Secretary, any Assistant
Secretary, any Vice-President or any Assistant Vice-President of such
Person.
"Officers' Certificate" means a certificate signed on behalf
of the Company by two Officers of the Company, one of whom must be the
principal executive officer, the principal financial officer, the
treasurer or the principal accounting officer of the Company, that meets
the requirements of Section 10.5 hereof.
"Operating Partnership" means Ocwen Partnership, L.P., a
Virginia limited partnership and its successors.
"Opinion of Counsel" means an opinion from legal counsel
satisfactory to the Trustee, that meets the requirements of Section 10.5
hereof. The counsel may be counsel to the Company.
"Original Notes" means the 11 1/2% Senior Notes due 2005 not
issued pursuant to the Exchange Offer.
"Permitted Business" means acquiring, developing, selling,
owning, managing, operating and leasing real estate; acquiring,
originating, owning, servicing and collecting real estate mortgages and
related loans; investing in real estate and mortgage related securities
and securities of companies engaged primarily in real estate related
activities; and other activities related to or arising out of any of
those activities.
"Permitted Holders" means Ocwen Financial and its Affiliates.
"Permitted Indebtedness" means:
(a) Debt of the Company or any Restricted
Subsidiary outstanding on the Closing Date;
(b) Debt of a Restricted Subsidiary owing to
the Company or to another Restricted Subsidiary of
the Company; provided that any such Debt is made
pursuant to an unsubordinated intercompany
obligation; and provided, further, that (i) any
disposition, pledge or transfer of any such Debt to a
Person (other than a disposition, pledge or transfer
to the Company or another Restricted Subsidiary)
shall be deemed to be an incurrence of such Debt by
such Restricted Subsidiary not permitted by this
clause (b) and (ii) any transaction pursuant to which
any Restricted Subsidiary, which is
<PAGE>
12
owed Debt by any other Restricted Subsidiary, ceases
to be a Restricted Subsidiary shall be deemed to be
an incurrence of such Debt not permitted by this
clause (b);
(c) the endorsement of negotiable instruments
by the Company or any Restricted Subsidiary for
deposit or collection or similar transactions in the
ordinary course of business;
(d) Debt under Interest Rate Agreements or
Currency Agreements incurred by the Company or a
Restricted Subsidiary in the ordinary course of
business for the purpose of risk management and not
for the purpose of speculation;
(e) Match Funded Debt;
(f) the incurrence by the Company or any of
its Restricted Subsidiaries of Debt represented by
Capital Lease Obligations, mortgage financings or
purchase money obligations, in each case incurred for
the purpose of financing all or any part of the
purchase price or cost of construction or improvement
of property, plant or equipment used in the business
of the Company or such Restricted Subsidiary, in an
aggregate principal amount not to exceed $10.0
million at any time outstanding;
(g) Mortgage Warehouse Debt of the Company or
a Restricted Subsidiary not to exceed $150.0 million
in the aggregate at any time outstanding;
(h) additional Debt of the Company or a
Restricted Subsidiary not to exceed $50.0 million in
the aggregate at any time outstanding;
(i) the Notes and Debt of the Company or a
Restricted Subsidiary issued in exchange for or the
Net Cash Proceeds from the issuance of which are used
to fund the substantially concurrent redemption or
repayment of Notes; and
(j) any renewals, extensions, substitutions,
refinancings or replacements (each, for purpose of
this clause, a "refinancing") of any Debt described
in clause (a) of this definition, including any
successive refinancings, so long as (i) any such new
Debt shall be in a principal amount that does not
exceed the principal amount (or, if such Debt being
refinanced provides for an amount less than the
principal amount thereof to be
<PAGE>
13
due and payable upon a declaration of acceleration
thereof, such lesser amount as of the date of
determination) so refinanced, plus the amount of any
premium required to be paid in connection with such
refinancing pursuant to the terms of the Debt
refinanced or the amount of any premium actually paid
at such time to refinance the Debt as determined by
the Company in good faith (whose determination shall
be conclusive), plus, in either case, the amount of
reasonable expenses incurred in connection with such
refinancing, (ii) such new Debt has a final maturity
date which is the same or later than the final
maturity date of, and has an Average Life equal to or
greater than the Average Life of, the Debt being
extended, refinanced, renewed, replaced, defeased or
refunded and (iii) such new Debt is incurred either
by the Company or by the Restricted Subsidiary who is
the obligor on the Debt being extended, refinanced,
renewed, replaced, defeased or refunded.
"Permitted Investment" means any of the following:
(a) Investments in Cash Equivalents;
(b) Investments by the Company in real estate
or real estate related assets or in any Restricted
Subsidiary engaged in Permitted Businesses;
(c) intercompany Debt to the extent permitted
under clause (b) of the definition of Permitted
Indebtedness;
(d) negotiable instruments held for deposit
or collection in the ordinary course of business,
except to the extent that they would constitute
Investments in Affiliates;
(e) Investments in stock, obligations or
securities received in settlement of debts owing to
the Company or a Restricted Subsidiary as a result of
foreclosure, perfection or enforcement of any Lien,
in each case in the ordinary course of business;
(f) travel, moving and other advances made to
officers, employees and consultants in the ordinary
course of business;
(g) Investments by the Company or any
Restricted Subsidiary in another Person, if as a
result of such Investment (i) such other Person
becomes a
<PAGE>
14
Restricted Subsidiary or (ii) such other Person is
merged or consolidated with or into, or transfers or
conveys all or substantially all of its assets to,
the Company or a Restricted Subsidiary;
(h) Investments in any Person other than a
Subsidiary (i) which was formed for the purpose of
engaging in a Permitted Business, and (ii) the assets
of which are managed by the Company (or by the
Manager on behalf of the Company) under a management
agreement that gives the Company or the Manager (as
the case may be) control over the use, condition,
operation, improvement and disposition of all real
properties and other real-estate related assets
acquired or to be acquired by such Person; provided
that, in the event the Company or the Manager no
longer has control over such assets, any Investment
in such Person shall no longer be a Permitted
Investment and shall be deemed to have been a
Restricted Payment solely for purposes of determining
the amount of Restricted Payments that the Company
may thereafter make pursuant to the covenant
"Limitation on Restricted Payments" described in
Section 4.6;
(i) Investments in any one or more interests
in real property or mortgages on real property
(including obligations secured by or representing
pass-through interests in real property or mortgages
on real property), or such other assets or
instruments (other than Capital Stock) in which the
Company may at such time invest without impairing its
qualification as a REIT under the Code, in each case
made in the ordinary course of business; and
(j) Investments, when taken together with all
other Investments made pursuant to this clause (j),
in an amount not to exceed 2.0% of Total Assets in
any Person engaged in real estate related activities.
"Person" means any individual, corporation, limited liability
company, partnership, joint venture, association, joint-stock company,
trust, unincorporated organization or government or any agency or
political subdivision thereof.
"PORTAL" shall mean the Private Offering, Resales and Trading
through Automated Linkages Market of the National Association of
Securities Dealers, Inc.
"Preferred Stock" means Capital Stock of any class or classes
(however designated) that has a preference or priority as to the payment
of dividends or as to the
<PAGE>
15
distribution of assets upon any voluntary or involuntary liquidation or
dissolution of the issuer of such Capital Stock, over shares of Capital
Stock of any other class or classes of such corporation.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of July 14, 1998, among the Company and Lehman
Brothers Inc., Morgan Stanley & Co., Inc., J.C. Bradford & Co. and Piper
Jaffray Inc.
"Regulation S" means Regulation S under the Securities Act.
"Regulation S Global Security" means any Global Security or
Securities evidencing Notes that are to be traded pursuant to Regulation
S.
"REIT" means a real estate investment trust qualified as such
under Sections 856 through 860 of the Code (or any successor
provisions).
"Responsible Officer," when used with respect to the Trustee,
means any authorized officer within the Corporate Trust Administration
department of the Trustee (or any successor group of the Trustee) or any
other officer of the Trustee customarily performing functions similar to
those performed by any of the above designated officers, and also means,
with respect to a particular corporate trust matter, any other officer
to whom such matter is referred because of his knowledge of and
familiarity with the particular subject.
"Restricted Global Security" means any Global Security or
Securities evidencing Notes that are to be traded pursuant to Rule 144A.
"Restricted Investment" shall mean any Investment other than
a Permitted Investment.
"Restricted Security" has the meaning assigned to such term
in Rule 144(a)(3) of the Securities Act or any successor thereto.
"Restricted Subsidiary" of a Person means any Subsidiary of
the referent Person that is not an Unrestricted Subsidiary.
"Rule 144A" means Rule 144A under the Securities Act.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as
amended.
"Securitization Entity" means any pooling arrangement or
entity formed or originated for the purpose of holding and/or issuing
securities representing interests in one or more pools of mortgages,
leases, credit card receivables, home equity loan receivables,
automobile loans, leases or installment sales contracts, other consumer
receivables or other financial assets of the Company or any Subsidiary,
and shall include, without limitation, any partnership, limited
liability company, liquidating trust, grantor trust, owner trust or real
estate mortgage investment conduit.
<PAGE>
16
"Security" means any security representing an interest in the
Notes.
"Significant Subsidiary" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of
Regulation S-X, promulgated pursuant to the Securities Act, as such
Regulation is in effect on the Closing Date.
"Subordinated Debt" means Debt of the Company that is
expressly subordinated by its terms in right of payment to the Notes.
"Subsidiary" means, with respect to any Person, (i) any
corporation, association or other business entity (other than a
partnership) of which more than 50% of the total voting power of shares
of Capital Stock entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees
thereof is at the time of determination owned or controlled, directly or
indirectly, by such Person or one or more of the other Subsidiaries of
that Person or a combination thereof and (ii) any partnership, joint
venture, limited liability company or similar entity of which (x) more
than 50% of the capital accounts, distribution rights, total equity and
voting interests or general or limited partnership interests, as
applicable, are owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of that Person or a
combination thereof whether in the form of membership, general, special
or limited partnership or otherwise and (y) such Person or any other
Subsidiary of such Person is a controlling general partner or otherwise
controls such entity.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C.
Sections 77aaa-77bbbb) as amended as in effect on the date of this
Indenture.
"Total Assets" means the total assets of the Company and its
Restricted Subsidiaries on a consolidated basis determined in accordance
with GAAP, as shown on the most recently available consolidated balance
sheet of the Company and its Restricted Subsidiaries.
"Trustee" means the party named as such above until a
successor replaces it in accordance with the applicable provisions of
this Indenture and thereafter means the successor serving hereunder.
"Unrestricted Subsidiary" means (i) any Subsidiary (other
than the Operating Partnership or any successor thereto) that is
designated by the Board of Directors as an Unrestricted Subsidiary
pursuant to a Board Resolution; but only to the extent that such
Subsidiary: (a) has no Debt other than Non-Recourse Debt; (b) is not
party to any agreement, contract, arrangement or understanding with the
Company or any Restricted Subsidiary of the Company unless the terms of
any such agreement, contract, arrangement or understanding are no less
favorable to the Company or such Restricted Subsidiary than those that
might be obtained at the time from Persons who are not Affiliates of the
Company; (c) is a Person with respect to which neither the Company nor
any of its Restricted Subsidiaries has any obligation (x) to subscribe
for additional Capital Stock or (y) to maintain or preserve such
Person's financial condition or to cause such Person to achieve any
specified levels of operating results; (d) has not guaranteed or
otherwise provided credit support for any Debt of the Company or any of
<PAGE>
17
its Restricted Subsidiaries; and (e) has at least one director on its
board of directors that is not a director or executive officer of the
Company or any of its Restricted Subsidiaries and has at least one
executive officer that is not a director or executive officer of the
Company or any of its Restricted Subsidiaries. Any such designation by
the Board of Directors shall be evidenced to the Trustee by filing with
the Trustee a certified copy of the Board Resolution giving effect to
such designation and an Officers' Certificate certifying that such
designation complied with the foregoing conditions and was permitted by
the covenant described under the caption "Limitation on Restricted
Payments" in Section 4.6. If, at any time, any Unrestricted Subsidiary
would fail to meet the foregoing requirements as an Unrestricted
Subsidiary, it shall thereafter cease to be an Unrestricted Subsidiary
for purposes of this Indenture and any Debt of such Subsidiary shall be
deemed to be incurred by a Restricted Subsidiary of the Company as of
such date (and, if such Debt is not permitted to be incurred as of such
date under the "Limitation on Incurrence of Debt" covenant described in
Section 4.7, the Company shall be in default of such covenant). The
Board of Directors of the Company may at any time designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; provided that
such designation shall be deemed to be an incurrence of Debt by a
Restricted Subsidiary of the Company of any outstanding Debt of such
Unrestricted Subsidiary and such designation shall only be permitted if
(i) such Debt is permitted under the covenant "Limitation on Incurrence
of Debt," described in Section 4.7 calculated on a pro forma basis as if
such designation had occurred at the beginning of the four-quarter
reference period or end of the relevant quarter, as the case may be, and
(ii) no Default or Event of Default would be in existence following such
designation.
"Voting Stock" means any class or classes of Capital Stock
pursuant to which the holders thereof have the general voting power
under ordinary circumstances to elect at least a majority of the board
of directors, managers, trustees or other voting members of the
governing body of any Person (irrespective of whether or not, at the
time, stock of any other class or classes shall have or might have
voting power by reason of the happening of any contingency).
"Wholly-Owned Subsidiary" means a Subsidiary all of the
Capital Stock of which (other than directors' qualifying shares) is
owned by the Company or another Wholly-Owned Subsidiary.
SECTION 1.2 Other Definitions.
Term Defined in Section
"Change of Control Offer" .........................................4.10
"Change of Control Payment" .......................................4.10
"Change of Control Payment Date" ..................................4.10
"Covenant Defeasance................................................8.3
"Custodian".........................................................6.1
"DTC" ..............................................................2.3
"Event of Default ..................................................6.1
"Legal Defeasance" .................................................8.2
"Notice of Default" ................................................6.1
"outstanding" ......................................................8.2
<PAGE>
18
"Paying Agent" .....................................................2.3
"Payment Default" ..................................................6.1
"Registrar" ........................................................2.3
"Restricted Payments" ..............................................4.6
"Restricted Period" ...............................................2.14
SECTION 1.3 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the
following meanings:
"indenture securities" means the Notes;
"indenture security Holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the
Trustee;
"obligor" on the Notes means the Company and any successor
obligor upon the Notes.
All other terms used in this Indenture that are defined by
the TIA, defined by TIA reference to another statute or defined by an SEC rule
under the TIA have the meanings so assigned to them.
SECTION 1.4 Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the
plural include the singular;
(5) provisions apply to successive events and transactions;
and
(6) references to sections of or rules under the Securities
Act shall be deemed to include substitute, replacement of successor
sections or rules adopted by the SEC from time to time.
<PAGE>
19
ARTICLE II
THE NOTES
SECTION 2.1 Form and Dating.
The Notes and the Trustee's certificate of authentication
shall be substantially in the form of Exhibit A hereto. The Notes may have
notations, legends or endorsements required by law, stock exchange rule or
usage. Each Note shall be dated the date of its authentication. The Notes shall
be issuable in denominations of $1,000 and any integral multiple thereof.
The terms and provisions contained in the Notes shall
constitute, and are hereby expressly made, a part of this Indenture and the
Company and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby.
SECTION 2.2 Execution and Authentication.
One Officer shall sign the Notes for the Company by manual or
facsimile signature.
If an Officer whose signature is on a Note no longer holds
that office at the time a Note is authenticated, the Note shall nevertheless be
valid.
A Note shall not be valid until authenticated by the manual
signature of the Trustee. The signature shall be conclusive evidence that the
Note has been authenticated under this Indenture.
The Trustee shall, upon a written order of the Company signed
by two Officers, authenticate Notes for original issue up to the aggregate
principal amount stated in paragraph 4 of the Notes. The aggregate principal
amount of Notes outstanding at any time may not exceed such amount except as
provided in Section 2.7 hereof.
The Trustee may appoint an authenticating agent acceptable to
the Company to authenticate the Notes. An authenticating agent may authenticate
Notes whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with the Company.
SECTION 2.3 Registrar and Paying Agent.
The Company shall maintain an office or agency where Notes
may be presented for registration of transfer or for exchange ("Registrar") and
an office or agency where Notes may be presented for payment ("Paying Agent").
The Registrar shall keep a register of the Notes and of their transfer and
exchange. The Company may appoint one or more co-registrars and one or more
additional paying agents. The term "Registrar" includes any co-registrar and the
term "Paying Agent" includes any additional paying agent. The Company may change
any Paying Agent or Registrar without notice to any Holder. The
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20
Company shall notify the Trustee in writing of the name and address of any Agent
not a party to this Indenture. If the Company fails to appoint or maintain
another entity as Registrar or Paying Agent, the Trustee shall act as such. The
Company may act as Paying Agent or Registrar.
The Company initially appoints The Depository Trust Company
("DTC") to act as Depositary with respect to the Notes.
The Company initially appoints the Trustee to act as the
Registrar and Paying Agent.
SECTION 2.4 Paying Agent To Hold Money In Trust.
The Company shall require each Paying Agent other than the
Trustee to agree in writing that the Paying Agent will hold in trust for the
benefit of Holders or the Trustee all money held by the Paying Agent for the
payment of principal, premium, if any, or interest on the Notes, and will notify
the Trustee of any default by the Company in making any such payment. While any
such default continues, the Trustee may require a Paying Agent to pay all money
held by it to the Trustee. The Company at any time may require a Paying Agent to
pay all money held by it to the Trustee. Upon payment over to the Trustee, the
Paying Agent (if other than the Company or a Subsidiary) shall have no further
liability for the money. If the Company or a Subsidiary acts as Paying Agent, it
shall segregate and hold in a separate trust fund for the benefit of the Holders
all money held by it as Paying Agent. Upon any bankruptcy or reorganization
proceedings relating to the Company, the Trustee shall serve as Paying Agent for
the Notes.
SECTION 2.5 Holder Lists.
The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of all Holders and shall otherwise comply with TIA Section 312(a). If
the Trustee is not the Registrar, the Company shall furnish to the Trustee at
least seven Business Days before each interest payment date and at such other
times as the Trustee may request in writing, a list in such form and as of such
date as the Trustee may reasonably require of the names and addresses of the
Holders of Notes and the Company shall otherwise comply with TIA Section 312(a).
SECTION 2.6 Transfer and Exchange.
When Notes are presented by a Holder to the Registrar with a
request to register, transfer or exchange them for an equal principal amount of
Notes of other denominations, the Registrar shall register the transfer or make
the exchange if its requirements for such transactions are met; provided,
however, that any Note presented or surrendered for registration of transfer or
exchange shall be duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar and the Trustee duly executed by
the Holder thereof or by his attorney duly authorized in writing. To permit
registrations of transfer and exchanges, the Company shall issue and the Trustee
shall authenticate Notes at the Registrar's request, subject to such rules as
the Trustee may reasonably require.
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Neither the Company nor the Registrar shall be required (i)
to issue or register the transfer or exchange of Notes during a period beginning
at the opening of business on a Business Day fifteen (15) Business Days before
the day of any selection of Notes for redemption under Section 3.2 hereof and
ending at the close of business on the day of selection, (ii) to register the
transfer of or exchange any Notes so selected for redemption, in whole or in
part, except the unredeemed portion of any Note being redeemed in part or (iii)
to register the transfer or exchange of a Note between a record date and the
next succeeding interest payment date.
No service charge shall be made to any Holder for any
registration of transfer or exchange (except as otherwise expressly permitted
herein), but the Company may require payment of a sum sufficient to cover any
transfer tax or similar governmental charge payable in connection therewith
(other than such transfer tax or similar governmental charge payable upon
exchanges pursuant to Sections 2.10, 3.6 or 9.5 hereof, which shall be paid by
the Company).
Prior to due presentment for registration of transfer of any
Note, the Trustee, any Agent and the Company may deem and treat the Person in
whose name any Note is registered as the absolute owner of such Note for the
purpose of receiving payment of principal of, premium, if any, and interest on
such Note and for all other purposes whatsoever, whether or not such Note is
overdue, and neither the Trustee, any Agent, nor the Company shall be affected
by notice to the contrary.
So long as the Notes are eligible for book-entry settlement
with the Depositary, or unless otherwise required by law, all Notes to be traded
on PORTAL shall be represented by the Restricted Global Security registered in
the name of the Depositary or the nominee of the Depositary.
The transfer and exchange of beneficial interests in any
Global Security, which does not involve the issuance of a definitive Security or
the transfer of interests to another Global Security, shall be effected through
the Depositary (but not the Trustee or the Custodian) in accordance with this
Indenture (including the restrictions on transfer set forth herein) and the
procedures of the Depositary therefor. Neither the Trustee nor the Custodian (in
such respective capacities) will have any responsibility for the transfer and
exchange of beneficial interests in such Global Security that does not involve
the issuance of a definitive Security or the transfer of interests to another
Global Security.
SECTION 2.7 Replacement Notes.
If any mutilated Note is surrendered to the Trustee, or the
Company and the Trustee receives evidence to its satisfaction of the
destruction, loss or theft of any Note, the Company shall issue and the Trustee,
upon the written order of the Company signed by two Officers of the Company,
shall authenticate a replacement Note if the Trustee's requirements are met. If
required by the Trustee or the Company, an indemnity bond must be supplied by
the Holder that is sufficient in the judgment of the Trustee and the Company to
protect the Company, the Trustee, any Agent and any authenticating agent from
any loss that any of them may suffer if a Note is replaced. The Company may
charge for its expenses in replacing a Note.
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Every replacement Note is an additional obligation of the
Company and shall be entitled to all of the benefits of this Indenture equally
and proportionately with all other Notes duly issued hereunder.
SECTION 2.8 Outstanding Notes.
The Notes outstanding at any time are all the Notes
authenticated by the Trustee except for those cancelled by it, those delivered
to it for cancellation and those described in this Section 2.8 as not
outstanding. Except as set forth in Section 2.9 hereof, a Note does not cease to
be outstanding because an Affiliate of the Company holds the Note.
If a Note is replaced pursuant to Section 2.7 hereof, it
ceases to be outstanding unless the Trustee receives proof satisfactory to it
that the replaced Note is held by a bona fide purchaser.
If the principal amount of any Note is considered paid under
Section 4.1 hereof, it ceases to be outstanding and interest on it ceases to
accrue.
If the Paying Agent (other than the Company, a Subsidiary or
an Affiliate of any thereof) holds, by 10:00 a.m. Eastern Time on a redemption
date or maturity date, money sufficient to pay the Notes payable on that date,
then on and after that date such Notes shall be deemed to be no longer
outstanding and shall cease to accrue interest, if any.
SECTION 2.9 Treasury Notes.
In determining whether the Holders of the required principal
amount of Notes have concurred in any direction, waiver or consent, Notes owned
by the Company or by any Person directly or indirectly controlling or controlled
by or under direct or indirect common control with the Company, shall be
considered as though not outstanding, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Notes that the Trustee knows are so owned
shall be so disregarded. In connection with any such determination, the Company
agrees to notify the Trustee of the existence of any Notes owned by the Company
or any Person directly or indirectly controlling or controlled by or under
direct or indirect common control with the Company.
SECTION 2.10 Temporary Notes.
Until definitive Notes are ready for delivery, the Company
may prepare and the Trustee shall authenticate temporary Notes upon a written
order of the Company signed by an Officer of the Company. Temporary Notes shall
be substantially in the form of Notes but may have variations that the Company
considers appropriate for temporary Notes and as shall be reasonably acceptable
to the Trustee. Without unreasonable delay, the Company shall prepare and the
Trustee shall authenticate Notes in exchange for temporary Notes.
Holders of temporary Notes shall be entitled to all of the
benefits of this Indenture.
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23
SECTION 2.11 Cancellation.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else shall cancel all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation and shall destroy
cancelled Notes (subject to the record retention requirement of the Exchange
Act). Certification of the destruction of all cancelled Notes shall be delivered
to the Company. The Company may not issue new Notes to replace Notes that have
been paid or that have been delivered to the Trustee for cancellation.
SECTION 2.12 Defaulted Interest.
If the Company defaults in a payment of interest on the
Notes, it shall pay the defaulted interest in any lawful manner plus, to the
extent lawful, interest payable on the defaulted interest, to the Persons who
are Holders on a subsequent special record date, in each case at the rate
provided in the Notes and in Section 4.1 hereof. The Company shall notify the
Trustee in writing of the amount of defaulted interest proposed to be paid on
each Note and the date of the proposed payment. The Company shall fix or cause
to be fixed each such special record date and payment date, provided that no
such special record date shall be less than 10 days prior to the related payment
date for such defaulted interest. At least 15 days before the special record
date, the Company (or, upon the written request of the Company, the Trustee in
the name and at the expense of the Company) shall mail or cause to be mailed to
Holders a notice that states the special record date, the related payment date
and the amount of such interest to be paid. Notwithstanding the foregoing, such
interest may be paid at any time in any other lawful manner not inconsistent
with the requirements of any securities exchange on which the Notes may be
listed, and upon such notice as may be required by such exchange.
SECTION 2.13 Restrictive Legend.
(a) Each Global Security and definitive Security that
constitutes a Restricted Security shall bear a legend substantially to the
following effect (the "Private Placement Legend") on the face thereof until the
Resale Restriction Termination Date (as defined below) unless the Company
determines otherwise:
THE NOTE EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE
SECURITIES LAWS OR ANY OTHER APPLICABLE SECURITIES LAW. NEITHER THE NOTE
EVIDENCED HEREBY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE
REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.
THE HOLDER OF THE NOTE EVIDENCED HEREBY BY ITS
ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE
TRANSFER SUCH NOTE PRIOR TO THE DATE (THE "RESALE RESTRICTION
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24
TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL
ISSUANCE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY
AFFILIATE OF THE COMPANY WAS THE OWNER OF SUCH NOTE (OR ANY PREDECESSOR
OF SUCH NOTE) ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT,
(C) SO LONG AS SUCH NOTE IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A
UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON IT REASONABLY
BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A)
THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING
MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO
NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING
OF REGULATION S UNDER THE SECURITIES ACT OR (E) PURSUANT TO ANY OTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE
SECURITIES ACT, SUBJECT TO THE RIGHT OF THE COMPANY PRIOR TO ANY SUCH
OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D) OR (E) TO REQUIRE THE
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER
INFORMATION SATISFACTORY TO IT. SUCH HOLDER FURTHER AGREES THAT IT WILL
DELIVER TO EACH PERSON TO WHOM THE NOTE IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
Each Global Security that constitutes a Regulation S Global Security and
definitive Security issued pursuant to Regulation S shall bear an additional
legend substantially to the following effect unless the Company determines
otherwise:
THE NOTE EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT AND MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES
OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS UNLESS REGISTERED
UNDER THE SECURITIES ACT OR AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT IS AVAILABLE.
Any Security (or security issued in exchange or substitution
therefor) as to which such restrictions on transfer shall have expired in
accordance with their terms may, upon satisfaction of the requirements of
Section 2.13(b) and surrender of such Security for exchange to the Registrar in
accordance with the provisions of this Section 2.13, be exchanged for a new
Security or Securities, of like tenor and aggregate principal amount, which
shall not bear the restrictive legends required by this Section 2.13(a).
(b) Upon any sale or transfer of any Restricted Security
(including any interest in a Global Security) (i) that is effected pursuant to
an effective registration statement under the Securities Act or (ii) in
connection with which the Trustee receives certificates and other information
(including an opinion of counsel, if requested) reasonably acceptable to the
Company to the effect that such security will no longer be subject to resale
restrictions under federal and state securities laws, then (A) in the case of a
Restricted Security in definitive form, the Registrar shall permit the holder
thereof to exchange such Restricted Security for a
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25
Security that does not bear the legends set forth in Section 2.13(a), and shall
rescind any such restrictions on transfer and (B) in the case of Restricted
Securities represented by a Global Security, such Security shall no longer be
subject to the restrictions contained in the legends set forth in Section
2.13(a) (but still subject to the other provisions hereof). The Trustee shall
receive a certificate (a form of which is attached to the Note in Exhibit A
hereto), upon which the Trustee may conclusively rely, from the Person
transferring such Restricted Security, stating that such transferor satisfies
the requirements of this Section 2.13 and that all conditions precedent required
for such transfer have occurred.
SECTION 2.14 Special Transfer Provisions.
Any transfer of a beneficial interest in a Security in global
form which cannot be effected through book-entry settlement must be effected by
the delivery to the transferee (or its nominee) of a definitive Security or
Securities registered in the name of the transferee (or its nominee) on the
books maintained by the Trustee. With respect to any such transfer, the Trustee
will cause, in accordance with the standing instructions and procedures existing
between the Depositary and the Trustee, the aggregate principal amount of the
Security in global form to be reduced and, following such reduction, the Company
will prepare and execute and the Trustee, upon receipt of a Company Order for
the authentication, will authenticate and deliver to the transferee (or such
transferee's nominee, as the case may be), a Security or Securities in the
appropriate aggregate principal amount in the name of such transferee (or its
nominee) and bearing such restrictive legends as may be required by this
Indenture. In connection with any such transfer, the Trustee may request a
certificate (a form of which is attached to the Note in Exhibit A hereto), upon
which the Trustee may conclusively rely, containing such representations and
agreements relating to the restrictions on transfer of such Security or
Securities from such transferee (or such transferee's nominee) as the Trustee
may reasonably require.
So long as the Securities are eligible for book-entry
settlement, or unless otherwise required by law, upon any transfer of a
definitive Security to a Qualified Institutional Buyer (a "QIB") (as defined in
Rule 144A) in accordance with Rule 144A, unless otherwise requested by the
transferor, and upon receipt of the definitive Security or Securities being so
transferred, together with a certification from the transferor that the
transferor reasonably believes that the transferee is a QIB, upon which
certification the Trustee may conclusively rely, the Trustee shall make an
endorsement on the Restricted Global Security to reflect an increase in the
aggregate principal amount of the Securities represented by the Restricted
Global Security, the Trustee shall cancel such definitive Security or Securities
and cause, in accordance with the standing instructions and procedures existing
between the Depositary and the Trustee, the aggregate principal amount of
Securities represented by the Restricted Global Security to be increased
accordingly.
So long as the Securities are eligible for book-entry
settlement, or unless otherwise required by law, upon any transfer of a
definitive Security in accordance with Regulation S, if requested by the
transferor, and upon receipt of the definitive Security or Securities being so
transferred, together with a certification from the transferor that the transfer
was made in accordance with Regulation S or Rule 144 under the Securities Act,
the Trustee shall make or direct the Custodian to make, an endorsement on the
Regulation S Global Security to reflect an increase in the aggregate principal
amount of the Securities represented by the Regulation S Global Security, the
Trustee shall cancel such definitive
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26
Security or Securities and cause, or direct the Custodian to cause, in
accordance with the standing instructions and procedures existing between the
Depositary and the Custodian, the aggregate principal amount of Securities
represented by the Regulation S Global Security to be increased accordingly.
If a holder of a beneficial interest in the Restricted Global
Security wishes at any time to exchange its interest in the Restricted Global
Security for an interest in the Regulation S Global Security, or to transfer its
interest in the Restricted Global Security to a person who wishes to take
delivery thereof in the form of an interest in the Regulation S Global Security,
such holder may, subject to the rules and procedures of the Depositary and to
the requirements set forth in the following sentence, exchange or cause the
exchange or transfer or cause the transfer of such interest for an equivalent
beneficial interest in the Regulation S Global Security. Upon receipt by the
Trustee, as transfer agent, of (1) instructions given in accordance with the
Depositary's procedures from or on behalf of a holder of a beneficial interest
in the Restricted Global Security, directing the Trustee (via DWAC), as transfer
agent, to credit or cause to be credited a beneficial interest in the Regulation
S Global Security in an amount equal to the beneficial interest in the
Restricted Global Security to be exchanged or transferred, (2) a written order
given in accordance with the Depositary's procedures containing information
regarding the Euroclear or CEDEL account to be credited with such increase and
the name of such account, and (3) a certificate (a form of which is attached to
the Note in Exhibit A hereto), upon which the Trustee may conclusively rely,
given by the holder of such beneficial interest stating that the exchange or
transfer of such interest has been made pursuant to and in accordance with
Regulation S or Rule 144 under the Securities Act and that, if such transfer
occurs prior to the expiration of the Restricted Period (as defined below), the
interest transferred will be held immediately thereafter through Euroclear or
CEDEL, the Trustee, as transfer agent, shall promptly deliver appropriate
instructions to the Depositary (via DWAC), its nominee, or the custodian for the
Depositary, as the case may be, to reduce or reflect on its records a reduction
of the Restricted Global Security by the aggregate principal amount of the
beneficial interest in such Restricted Global Security to be so exchanged or
transferred from the relevant participant, and the Trustee, as transfer agent,
shall promptly deliver appropriate instructions (via DWAC) to the Depositary,
its nominee, or the custodian for the Depositary, as the case may be,
concurrently with such reduction, to increase or reflect on its records an
increase of the principal amount of such Regulation S Global Security by the
aggregate principal amount of the beneficial interest in such Restricted Global
Security to be so exchanged or transferred, and to credit or cause to be
credited to the account of the person specified in such instructions (who may be
Euroclear or CEDEL or another agent member of Euroclear or CEDEL, or both, as
the case may be, acting for and on behalf of them) a beneficial interest in such
Regulation S Global Security equal to the reduction in the principal amount of
such Restricted Global Security.
If a holder of a beneficial interest in the Regulation S
Global Security wishes at any time to exchange its interest in the Regulation S
Global Security for an interest in the Restricted Global Security, or to
transfer its interest in the Regulation S Global Security to a person who wishes
to take delivery thereof in the form of an interest in the Restricted Global
Security, such holder may, subject to the rules and procedures of Euroclear or
CEDEL and the Depositary, as the case may be, and to the requirements set forth
in the following sentence, exchange or cause the exchange or transfer or cause
the transfer of such interest for an equivalent beneficial interest in such
Restricted Global Security. Upon receipt by the
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27
Trustee, as transfer agent, of (1) instructions given in accordance with the
procedures of Euroclear or CEDEL and the Depositary, as the case may be, from or
on behalf of a beneficial owner of an interest in the Regulation S Global
Security directing the Trustee, as transfer agent, to credit or cause to be
credited a beneficial interest in the Restricted Global Security in an amount
equal to the beneficial interest in the Regulation S Global Security to be
exchanged or transferred, (2) a written order given in accordance with the
procedures of Euroclear or CEDEL and the Depositary, as the case may be,
containing information regarding the account with the Depositary to be credited
with such increase and the name of such account, and (3) prior to the expiration
of the Restricted Period (as defined below), a certificate (a form of which is
attached to the Note in Exhibit A hereto), upon which the Trustee may
conclusively rely, given by the holder of such beneficial interest and stating
that the person transferring such interest in such Regulation S Global Security
reasonably believes that the person acquiring such interest in the Restricted
Global Security is a QIB, purchasing for its own account or the account of a
QIB, and is obtaining such beneficial interest in a transaction meeting the
requirements of Rule 144A and any applicable securities laws of any state of the
United States or any other jurisdiction, the Trustee, as transfer agent, shall
promptly deliver (via DWAC) appropriate instructions to the Depositary, its
nominee, or the custodian for the Depositary, as the case may be, to reduce or
reflect on its records a reduction of the Regulation S Global Security by the
aggregate principal amount of the beneficial interest in such Regulation S
Global Security to be exchanged or transferred, and the Trustee, as transfer
agent, shall promptly deliver (via DWAC) appropriate instructions to the
Depositary, its nominee, or the custodian for the Depositary, as the case may
be, concurrently with such reduction, to increase or reflect on its records an
increase of the principal amount of the Restricted Global Security by the
aggregate principal amount of the beneficial interest in the Regulation S Global
Security to be so exchanged or transferred, and to credit or cause to be
credited to the account of the person specified in such instructions a
beneficial interest in the Restricted Global Security equal to the reduction in
the principal amount of the Regulation S Global Security. After the expiration
of the Restricted Period (as defined below), the certification requirement set
forth in clause (3) of the second sentence of the above paragraph will no longer
apply to such exchanges and transfers.
If a holder of a definitive Security wishes at any time to
exchange its Security for a beneficial interest in any Global Security (or vice
versa), or to transfer its definitive Security to a person who wishes to take
delivery thereof in the form of a beneficial interest in a Global Security (or
vice versa), such Securities and beneficial interests may be exchanged or
transferred for one another only in accordance with such procedures as are
substantially consistent with the provisions of the two preceding paragraphs
(including the certification requirements intended to ensure that such exchanges
or transfers comply with Rule 144, Rule 144A or Regulation S, as the case may
be) and as may be from time to time adopted by the Company and the Trustee.
Any beneficial interest in one of the Global Securities that
is transferred to a person who takes delivery in the form of an interest in the
other Global Security will, upon transfer, cease to be an interest in such
Global Security and become an interest in the other Global Security and,
accordingly, will thereafter be subject to all transfer restrictions and other
procedures applicable to beneficial interests in such other Global Security for
as long as it remains such an interest.
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Through and including the 40th day after the later of the
commencement of the offering of the Notes and the issue date (such period
through and including such 40th day, the "Restricted Period"), beneficial
interests in a Regulation S Global Security may only be held through Euroclear
or CEDEL (as indirect participants in DTC), unless transferred to a Person that
takes delivery through the Restricted Global Security in accordance with the
certification requirements hereof. During the Restricted Period, interests in
the Regulation S Global Security, if any, may be exchanged for interests in the
Restricted Global Security or for definitive Securities only in accordance with
the certification requirements described above.
ARTICLE III
REDEMPTION AND PREPAYMENT
SECTION 3.1 Notices to Trustee.
If the Company elects to redeem Notes pursuant to the
optional redemption provisions of Section 3.7 hereof, it shall furnish to the
Trustee, at least 45 days (unless a shorter period may be satisfactory to the
Trustee) but not more than 60 days before a redemption date, an Officers'
Certificate setting forth (i) the clause of this Indenture pursuant to which the
redemption shall occur, (ii) the redemption date, (iii) the principal amount of
Notes to be redeemed and (iv) the redemption price.
If the Company is required to make an offer to purchase Notes
pursuant to the provisions of Section 4.10 hereof, it shall furnish to the
Trustee an Officers' Certificate setting forth (i) the Section of this Indenture
pursuant to which the purchase shall occur, (ii) the purchase date, (iii) the
principal amount of Notes to be purchased, (iv) the purchase price and (v) a
statement to the effect that a Change of Control has occurred and the conditions
set forth in Section 4.10 hereof have been satisfied, as applicable.
SECTION 3.2 Selection Of Notes To Be Redeemed.
If less than all of the Notes are to be redeemed at any time,
the Trustee shall select the Notes to be redeemed among the Holders of the Notes
in compliance with the requirements of the principal national securities
exchange, if any, on which the Notes are listed or, if the Notes are not so
listed, to be redeemed among the Holders of Notes on a pro rata basis, by lot or
by such method as the Trustee deems fair and appropriate. In the event of
partial redemption by lot, the particular Notes to be redeemed shall be
selected, unless otherwise provided herein, not less than 30 nor more than 60
days prior to the redemption date by the Trustee from the outstanding Notes not
previously called for redemption.
The Trustee shall promptly notify the Company in writing of
the Notes selected for redemption and, in the case of any Note selected for
partial redemption, the principal amount thereof to be redeemed. Notes and
portions of Notes selected shall be in amounts of $1,000 or whole multiples of
$1,000; except that if all of the Notes of a Holder are to be redeemed, the
entire outstanding amount of Notes held by such Holder, even if not a multiple
of $1,000, shall be redeemed. A new Note in principal amount equal to the
unredeemed portion thereof will be issued in the name of the Holder thereof upon
cancellation of the original Note. On and after the redemption date, interest
ceases to accrue on Notes or portions of them called for redemption. Except as
provided in this Section 3.2,
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29
provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption.
SECTION 3.3 Notice of Redemption.
Subject to the provisions of Section 3.9 hereof, at least 30
days but not more than 60 days before a redemption date, the Company shall mail
or cause to be mailed, by first class mail, a notice of redemption to each
Holder whose Notes are to be redeemed at its registered address.
The notice shall identify the Notes to be redeemed and shall
state:
(a) the redemption date;
(b) the redemption price;
(c) if any Note is being redeemed in part, the portion of
the principal amount of such Note to be redeemed and that, after the
redemption date upon surrender of such Note, a new Note or Notes in
principal amount equal to the unredeemed portion shall be issued upon
cancellation of the original Note;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered
to the Paying Agent to collect the redemption price;
(f) that, unless the Company defaults in making such
redemption payment, interest on Notes called for redemption ceases to
accrue on and after the redemption date; and
(g) the paragraph of the Notes and/or Section of this
Indenture pursuant to which the Notes called for redemption are being
redeemed.
At the Company's request, the Trustee shall give the notice
of redemption in the Company's name and at its expense; provided, however, that
the Company shall have delivered to the Trustee, at least 45 days prior to the
redemption date, an Officers' Certificate requesting that the Trustee give such
notice and setting forth the information to be stated in such notice as provided
in the preceding paragraph.
SECTION 3.4 Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with
Section 3.3 hereof, Notes called for redemption become irrevocably due and
payable on the redemption date at the redemption price. A notice of redemption
may not be conditional.
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SECTION 3.5 Deposit of Redemption or Purchase Price.
One Business Day prior to 10:00 a.m., Eastern Time, on the
redemption date or purchase date, as applicable, the Company shall deposit with
the Trustee or with the Paying Agent money in immediately available funds
sufficient to pay the redemption or purchase price of and accrued interest, if
any, on all Notes to be redeemed or purchased on that date. The Trustee or the
Paying Agent shall promptly return to the Company any money deposited with the
Trustee or the Paying Agent by the Company in excess of the amounts necessary to
pay the redemption or purchase price of, and any unpaid and accrued interest on,
all Notes to be redeemed or purchased.
If Notes called for redemption or tendered in a Change of
Control Offer are paid or if the Company has deposited with the Trustee or
Paying Agent money sufficient to pay the redemption or purchase price of, and
unpaid and accrued interest, if any, on all Notes to be redeemed or purchased,
on and after the applicable redemption or purchase date, interest, if any, shall
cease to accrue on the Notes or the portions of Notes called for redemption or
tendered and not withdrawn in a Change of Control Offer (regardless whether
certificates for such Notes are actually surrendered). If a Note is redeemed or
purchased on or after an interest record date but on or prior to the related
interest payment date, then any accrued and unpaid interest, if any, shall be
paid to the Person in whose name such Note was registered at the close of
business on such record date. If any Note called for redemption or subject to a
Change of Control Offer shall not be so paid upon surrender for redemption or
purchase because of the failure of the Company to comply with the preceding
paragraph, interest shall be paid on the unpaid principal, from the redemption
date or purchase date, as applicable, until such principal is paid, and to the
extent lawful on any interest not paid on such unpaid principal, in each case,
at the rate provided in the Notes and in Section 4.1 hereof.
SECTION 3.6 Notes Redeemed or Purchased in Part.
Upon surrender of a Note that is redeemed or purchased in
part, the Company shall issue and, upon the Company's written request, the
Trustee shall authenticate for the Holder at the expense of the Company a new
Note equal in principal amount to the unredeemed or unpurchased portion of the
Note surrendered.
SECTION 3.7 Optional Redemption.
(a) The Notes are not redeemable, in whole or in part, at the
Company's option prior to July 1, 2002. The Notes may be redeemed, in whole or
in part, at the option of the Company on or after July 1, 2002, at the
redemption prices specified below (expressed as a percentage of the principal
amount thereof), in each case, together with accrued and unpaid interest, if
any, thereon to the date of redemption, upon not less than 30 nor more than 60
days' notice, if redeemed during the 12-month period beginning on July 1 of the
years indicated below:
2002 ...................................................................105.750%
2003 ...................................................................102.875
2004 and thereafter ....................................................100.000
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(b) Notwithstanding the foregoing, during the first 36 months
after the Closing Date, the Company may, on any one or more occasions, use the
net proceeds of one or more offerings of its Common Stock to redeem up to 25% of
the aggregate principal amount of the Notes at the redemption price of 111.50%
of the principal amount thereof, plus accrued and unpaid interest to the date of
redemption; provided that, after any such redemption, the aggregate principal
amount of the Notes outstanding must equal at least $112.5 million; and provided
further, that any such redemption shall occur within 90 days of the date of
closing of such offering of Common Stock of the Company.
SECTION 3.8 Mandatory Redemption.
Except as set forth under Section 4.10 hereof, the Company
shall not be required to make mandatory redemption or sinking fund payments with
respect to the Notes.
ARTICLE IV
COVENANTS
SECTION 4.1 Payment Of Notes.
The Company shall pay or cause to be paid the principal of,
premium, if any, and interest on the Notes on the dates and in the manner
provided in the Notes. Principal, premium, if any, and interest shall be
considered paid on the date due if the Paying Agent, if other than the Company,
a Subsidiary or an Affiliate of any thereof, holds as of 10:00 a.m. Eastern Time
on the due date money deposited by the Company in immediately available funds
and designated for and sufficient to pay all principal, premium, if any, and
interest then due.
In the event that the Company is obligated to pay Liquidated
Damages to Holders, the interest rate otherwise applicable to the Notes shall be
increased for the period during which the Company is obligated to pay Liquidated
Damages by the amount of such Liquidated Damages and all references herein to
interest shall include such Liquidated Damages, if any.
The Company shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue principal at the
rate equal to the then applicable interest rate on the Notes to the extent
lawful; it shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest
(without regard to any applicable grace period) at the same rate to the extent
lawful.
SECTION 4.2 Maintenance Of Office Or Agency.
The Company shall maintain in the Borough of Manhattan, the
City of New York, an office or agency (which may be an office of the Trustee or
an affiliate of the Trustee or Registrar) where Notes may be surrendered for
registration of transfer or for exchange and where notices and demands to or
upon the Company in respect of the Notes and this Indenture may be served. The
Company shall 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
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32
Company shall fail to maintain any such required office or agency or shall fail
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.
The Company may also from time to time designate one or more
other offices or agencies where the Notes 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 shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, the City of New York for such purposes. The Company shall
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.
The Company hereby designates the Corporate Trust Office of
the Trustee as one such office or agency of the Company in accordance with
Section 2.3 hereof. The Trustee may resign such agency at any time by giving
written notice to the Company no later than 30 days prior to the effective date
of such resignation.
SECTION 4.3 Reports.
Whether or not required by the rules and regulations of the
SEC, so long as any Notes are outstanding, the Company shall furnish to the
Holders of Notes (a) all quarterly and annual financial information that would
be required to be contained in a filing with the SEC on Forms 10-Q and 10-K if
the Company were required to file such Forms, including a "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and,
with respect to the annual information only, a report thereon by the Company's
certified independent accountants and (b) all current reports that would be
required to be filed with the SEC on Form 8-K if the Company were required to
file such reports. In addition, whether or not required by the rules and
regulations of the SEC, the Company shall file a copy of all such information
and reports with the SEC for public availability (unless the SEC will not accept
such a filing) and make such information available to securities analysts and
prospective investors upon request.
SECTION 4.4 Compliance Certificate.
(a) The Company shall deliver to the Trustee, within 90 days
after the end of each fiscal year, an Officers' Certificate stating that a
review of the activities of the Company and its Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether the Company has kept, observed,
performed and fulfilled its obligations under this Indenture, and further
stating, as to each such Officer signing such certificate, that to the best of
his or her knowledge the Company has kept, observed, performed and fulfilled
each and every covenant contained in this Indenture and is not in default in the
performance or observance of any of the terms, provisions and conditions of this
Indenture (or, if a Default or Event of Default shall have occurred, describing
all such Defaults or Events of Default of which he or she may have knowledge and
what action the Company is taking or proposes to take with respect thereto) and
that to the best of his or her knowledge no event has occurred and remains in
existence by reason of which payments on account of the principal of or interest
on the Notes is prohibited or if such event has occurred, a description of the
event and what action the Company is taking or proposes to take with respect
thereto.
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33
(b) The Company shall, so long as any of the Notes are
outstanding, deliver to the Trustee, forthwith upon any Officer of the Company
becoming aware of any Default or Event of Default, an Officers' Certificate
specifying such Default or Event of Default and what action the Company is
taking or proposes to take with respect thereto.
SECTION 4.5 Taxes.
The Company shall pay, and shall cause each of its
Subsidiaries to pay, prior to delinquency, all material taxes, assessments and
governmental levies, except such as are contested in good faith and by
appropriate proceedings or where the failure to effect such payment is not
adverse in any material respect to the Holders of the Notes.
SECTION 4.6 Limitation on Restricted Payments.
(a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, take any of the following
actions:
(i) declare or pay any dividend or make any payment or
distribution on account of the Company's Capital Stock or the Capital
Stock of Restricted Subsidiaries (including, without limitation, any
payment in connection with any merger or consolidation involving the
Company or any of its Restricted Subsidiaries) or make any payment or
distribution to or for the benefit of the direct or indirect holders of
the Company's Capital Stock or the Capital Stock of Restricted
Subsidiaries (other than (A) dividends or distributions payable in its
Capital Stock (other than Disqualified Stock) and (B) dividends or
distributions payable to the Company or a Restricted Subsidiary of the
Company (and if such Restricted Subsidiary is not a Wholly-Owned
Subsidiary, to its other holders of Capital Stock on a pro rata basis);
(ii) purchase, redeem or otherwise acquire or retire for
value any Capital Stock of the Company or the Capital Stock of
Restricted Subsidiaries (other than any such Capital Stock owned by the
Company or any of its Restricted Subsidiaries and other than the
acquisition of Capital Stock in Restricted Subsidiaries of the Company
solely in exchange for Capital Stock (other than Disqualified Stock) of
the Company); or
(iii) make any principal payment on, or repurchase,
redeem, defease or otherwise acquire or retire for value, prior to any
scheduled principal payment, sinking fund payment or maturity, any
Subordinated Debt; or
(iv) make any Investment in any Person other than a
Permitted Investment;
(each of the foregoing actions described in clauses (i) through (iii) above,
other than any such action that is a Permitted Payment (as defined below), is
referred to herein as a "Restricted Payment"), unless immediately after giving
effect to the proposed Restricted Payment (in the event such Restricted Payment
is made in other than cash, the amount of such Restricted Payment shall be as
determined in good faith by the Board of Directors of the Company, whose
determination shall be conclusive and evidenced by a Board Resolution), (1) no
Default or Event of Default shall have occurred and be continuing or would occur
as a consequence thereof, (2) the Company could, at the time of such Restricted
Payment and after giving pro
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34
forma effect thereto, incur at least $1.00 of additional Debt (other than
Permitted Indebtedness) pursuant to Section 4.7 and (3) the aggregate amount of
all such Restricted Payments by the Company and its Restricted Subsidiaries
declared or made after the Closing Date does not exceed the sum of:
(A) (i) so long as the Company maintains its status as a
REIT under the Code, 100% of the "real estate
investment trust taxable income" of the Company as
determined under Section 857(b)(2) of the Code or any
successor provision computed prior to taking into
account any deductions or exclusions allowed pursuant
to Section 857(b)(2) of the Code and computed after
giving effect to any net deficit in "real estate
investment trust taxable income" for prior years, to
the extent such deficit is deductible as a net
operating loss carryforward for the year of
determination, accrued on a cumulative basis during the
period commencing on July 1, 1998 and ending on the
last day of the Company's most recent fiscal quarter
ending prior to the date of such Restricted Payment or
(ii) in the event the Company no longer qualifies as a
REIT under the Code, the sum of (a) 50% of the
aggregate cumulative Adjusted Consolidated FFO (or if
such aggregate cumulative Adjusted Consolidated FFO
shall be a loss, minus 100% of such loss) accrued on a
cumulative basis during the period commencing on the
first day of the fiscal quarter following the failure
of the Company to qualify as a REIT under the Code and
ending on the last day of the Company's most recent
fiscal quarter ending prior to the date of such
Restricted Payment and (b) 100% of any cumulative
amount available under clause (i) above for the period
commencing on July 1, 1998 and ending on the last day
of the Company's most recent fiscal quarter ending
prior to the failure of the Company to qualify as a
REIT under the Code (or minus 100% of any such amount
if a deficit); plus
(B) the aggregate of the Net Cash Proceeds and the Fair
Market Value of property not constituting Net Cash
Proceeds received by the Company or the Operating
Partnership after the Closing Date from the issuance or
sale (other than to the Company or any of its
Restricted Subsidiaries) of Capital Stock (other than
Disqualified Stock) of the Company or the Operating
Partnership or other capital contributions subsequent
to the Closing Date (other than the Net Cash Proceeds
received from an issuance or sale of such Capital Stock
to an employee stock ownership plan or similar trust to
the extent such sale to an employee stock ownership
plan or similar trust is financed by loans from or
guaranteed by the Company or any Restricted Subsidiary
unless such loans have been repaid with cash on or
prior to date of determination); plus
(C) the aggregate of the Net Cash Proceeds and the Fair
Market Value of property not constituting Net Cash
Proceeds received by the Company or the Operating
Partnership after the Closing Date
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35
from the issuance or sale (other than to the Company or
any of its Restricted Subsidiaries) of Disqualified
Stock or debt securities of the Company or the
Operating Partnership that have been converted into
Capital Stock (other than Disqualified Stock) of the
Company or the Operating Partnership, plus or minus, as
applicable, the amount of cash, or other property
(other than Capital Stock) received or distributed, as
applicable, upon such conversion or exchange; plus
(D) 100% of the net reduction in Restricted Investments,
subsequent to the Closing Date, in any Person,
resulting from payments of interest on Debt, dividends,
repayments of loans or advances, or other transfers of
property (but only to the extent such interest,
dividends, repayments or other transfers of property
are not included in the calculation of "real estate
investment trust taxable income" or Adjusted
Consolidated FFO, as the case may be), in each case to
the Company or any Restricted Subsidiary from any
Person or from redesignations of Unrestricted
Subsidiaries as Restricted Subsidiaries (valued in each
case as provided in the definition of "Investments"),
not to exceed in the case of any Person the amount of
Restricted Investments in such Person which were made
subsequent to the Closing Date by the Company or any
Restricted Subsidiary and which were treated as a
Restricted Payment; plus
(E) $10.0 million.
(b) Notwithstanding paragraph (a) above, the Company and any
Restricted Subsidiary may take the following actions (each being referred to as
a "Permitted Payment"):
(i) the payment of any dividend within 60 days after
the date of declaration thereof, if at such date such declaration
complied with the provisions of paragraph (a) above and such payment
shall be deemed to have been paid on such date of declaration for
purposes of the calculation required by the foregoing paragraph (a);
(ii) the purchase, redemption or other acquisition or
retirement for value of any Capital Stock of the Company in exchange
for, or out of the Net Cash Proceeds of, a substantially concurrent
issuance and sale of other Capital Stock of the Company (other than any
Disqualified Stock);
(iii) any distribution which is necessary to maintain the
Company's status as a REIT under the Code;
(iv) make any principal payment on, or purchase, redeem,
defease or otherwise acquire or retire for value any Subordinated Debt
in exchange for, or out of the Net Cash Proceeds of, a substantially
concurrent issuance and sale (other than to a Restricted Subsidiary) of
shares of Capital Stock of the Company (other than Disqualified Stock);
and
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36
(v) make any principal payment on, or purchase, redeem,
defease or otherwise acquire or retire for value any Subordinated Debt
(referred to herein as the "Subordinated Debt being refinanced") in
exchange for, or out of the Net Cash Proceeds of a substantially
concurrent incurrence (other than to a Restricted Subsidiary) of,
Subordinated Debt of the Company so long as (A) the principal amount of
such new Subordinated Debt does not exceed the principal amount (or, if
such Subordinated Debt being refinanced provides for an amount less than
the principal amount thereof to be due and payable upon a declaration of
acceleration thereof, such lesser amount as of the date of
determination) of the Subordinated Debt being refinanced, plus the
amount of any stated premium required to be paid in connection with such
refinancing pursuant to the terms of the Subordinated Debt being
refinanced or the amount of any premium actually paid at such time to
refinance the Subordinated Debt as determined in good faith as being
necessary by the Company, or less the amount of any discount from the
principal amount of such Subordinated Notes expected to be deducted from
the amount payable to the holders of such Subordinated Debt in
connection with such refinancing, plus, in either case, the amount of
reasonable legal, accounting, printing and other similar expenses of the
Company incurred in connection with such refinancing, (B) such new
Subordinated Debt is subordinated to the Notes to the same extent as
such Subordinated Debt being refinanced and (C) (1) if the Subordinated
Debt being refinanced has an Average Life shorter than that of the Notes
or a final maturity date earlier than the final maturity date of the
Notes, such new Subordinated Debt shall have an Average Life no shorter
than the Average Life of such refinanced Subordinated Debt and a final
maturity date no earlier than the final maturity date of such refinanced
Subordinated Debt or (2) in all other cases, each maturity of principal
(or any required repurchase, redemption or sinking fund payments) of
such new Subordinated Debt shall be on or after the final maturity date
of principal of the Notes.
The actions described in clauses (i) and (iii) of this paragraph (b) shall be
Restricted Payments that shall be permitted to be taken in accordance with this
paragraph (b) but shall reduce the amount that would otherwise be available for
Restricted Payments under paragraph (a), and the actions described in clauses
(ii), (iv) and (v) of this paragraph (b) shall be Restricted Payments that shall
be permitted to be taken in accordance with this paragraph and shall not reduce
the amount that would otherwise be available for Restricted Payments under
paragraph (a).
SECTION 4.7 Limitation on Incurrence Of Debt.
The Company shall not, and shall not permit any Restricted Subsidiary
to, incur or issue any Debt (including Acquired Debt) other than Permitted
Indebtedness; provided, however, that the Company and Restricted Subsidiaries
may incur or issue Debt if at the time of such incurrence or issuance each of
the following is satisfied:
(a) the ratio of Adjusted FFO Available for Fixed Charges to
Adjusted Fixed Charges for the period consisting of the four full consecutive
fiscal quarters most recently ended prior to the date on which such additional
Debt is to be incurred or issued (after giving pro forma effect to (i) the
incurrence or issuance of such Debt and (if applicable) the application of the
net proceeds therefrom, including to refinance other Debt, as if such Debt
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37
was incurred or issued, and the application of such proceeds occurred, on the
first day of such four-quarter period, (ii) the incurrence, issuance, repayment
or retirement of any other Debt by the Company and its Restricted Subsidiaries
since the first day of such four-quarter period as if such Debt was incurred,
issued, repaid or retired on the first day of such four-quarter period (except
that, in making such computation, the amount of the Debt under any revolving
credit facility shall be computed based upon the average balance of such Debt
during such four-quarter period), and (iii) the acquisition (whether by
purchase, merger or otherwise) or disposition (whether by sale, merger or
otherwise) of any company, entity or business acquired or disposed of by the
Company or its Restricted Subsidiaries (including the operations thereof), as
the case may be, since the first day of such four-quarter period, as if such
acquisition or disposition occurred on the first day of such four-quarter
period) shall be greater than 1.25 to 1;
(b) the Company's Adjusted Total Debt to Capital Ratio as of
the end of the quarter most recently ended prior to the date of such incurrence
or issuance is less than 4.0 to 1 (after giving pro forma effect to the
incurrence or issuance of such Debt and (if applicable) the application of the
net proceeds therefrom, including to refinance other Debt, as if such Debt was
incurred or issued, and the application of such proceeds occurred, on the last
day of such quarter); and
(c) the Company's Adjusted Senior Debt to Capital Ratio as of
the end of the quarter most recently ended prior to the date of such incurrence
or issuance is less than 3.5 to 1 (after giving pro forma effect to the
incurrence or issuance of such Debt and (if applicable) the application of the
net proceeds therefrom, including to refinance other Debt, as if such Debt was
incurred or issued, and the application of such proceeds occurred, on the last
day of such quarter).
SECTION 4.8 Limitations on Dividends And Other Payment Restrictions
Affecting 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 to
become effective any consensual encumbrance or restriction on the ability of any
such Restricted Subsidiary to:
(a) pay any dividends or make any other distribution on its Capital
Stock to the Company or any of its Restricted Subsidiaries;
(b) make payments in respect of any Debt owed to the Company or any
other Restricted Subsidiary; or
(c) make loans or advances to the Company or any Restricted Subsidiary
or to guarantee Debt of the Company or any other Restricted Subsidiary;
other than, in the case of (a), (b) and (c),
(1) restrictions existing under agreements in effect on the
date of this Indenture;
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38
(2) consensual encumbrances or restrictions binding upon any
Person at the time such Person becomes a Restricted Subsidiary of the
Company so long as such encumbrances or restrictions (i) are not
created, incurred or assumed in contemplation of such Person becoming a
Restricted Subsidiary and (ii) do not encumber or restrict the Company
or any other Restricted Subsidiary of the Company;
(3) restrictions with respect to a Restricted Subsidiary
imposed pursuant to an agreement which has been entered into for the
sale or disposition of all or substantially all the assets (which term
may include the Capital Stock) of such Restricted Subsidiary;
(4) restrictions on the transfer of assets which are subject
to Liens; and
(5) restrictions existing under any agreement which
refinances or replaces any of the agreements containing the restrictions
in clauses (1) and (2); provided that the terms and conditions of any
such restrictions are not materially less favorable to the Holders than
those under the agreement evidencing or relating to the Debt or
Disqualified Stock refinanced.
SECTION 4.9 Limitation on Transactions With Affiliates.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into any transaction or series of
related transactions (including without limitation, the sale, purchase, exchange
or lease of assets, property or services) with any Affiliate of the Company
(except that the Company and any of its Restricted Subsidiaries may enter into
any transaction or series of related transactions with any Restricted Subsidiary
of the Company without limitation under this covenant) unless: (i) such
transaction or series of related transactions is on terms that are no less
favorable to the Company or such Restricted Subsidiary, as the case may be, than
would be available in a comparable transaction in an arm's length dealing with a
Person that is not such an Affiliate or, in the absence of such a comparable
transaction, on terms that the Disinterested Directors determine in good faith
(whose determination shall be conclusive) would be offered to a Person that is
not an Affiliate; (ii) with respect to any transaction or series of related
transactions involving aggregate payments in excess of $3.0 million, such
transaction or series of related transactions has been approved by a majority of
the Disinterested Directors of the Board of Directors of the Company; and (iii)
with respect to any transaction or series of related transactions involving
aggregate payments in excess of $10.0 million, (x) in the case of a transaction
involving real property, the aggregate rental or sale price of such real
property shall be the fair market value of such real property as determined in a
written opinion by an independent, nationally recognized expert with experience
in appraising the terms and conditions of the type of transaction or series of
related transactions for which approval is required and (y) in all other cases,
the Company shall have received a written opinion of an independent,
nationally-recognized expert with experience in appraising the terms and
conditions of the type of transaction or series of related transactions for
which approval is required to the effect that the transaction or series of
related transactions are fair to the Company or such Restricted Subsidiary from
a financial point of view. The limitations set forth in this paragraph will not
apply to (i) transactions entered into pursuant to any agreement already in
effect on the date of this Indenture and any renewals or extensions thereof not
involving modifications materially adverse to the Company or any Restricted
Subsidiary, (ii) normal banking
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39
relationships with an Affiliate on an arms' length basis, (iii) any employment
agreement, stock option, employee benefit, indemnification, compensation,
business expense reimbursement or other employment-related agreement,
arrangement or plan entered into by the Company or any of its Restricted
Subsidiaries either (a) in the ordinary course of business and consistent with
the past practice of the Company or such Restricted Subsidiary or (b) which
agreement, arrangement or plan was adopted by the Board of Directors of the
Company or such Restricted Subsidiary (including a majority of the Disinterested
Directors), as the case may be, (iv) any payment made in accordance with Section
4.6, (v) transactions pursuant to the Management Agreement which are in
compliance with the terms of the Management Agreement and the Guidelines as in
effect on the Closing Date and (vi) any transaction or series of related
transactions in which the total amount involved does not exceed $250,000.
SECTION 4.10 Offer To Repurchase Upon Change Of Control.
(a) Upon the occurrence of a Change of Control, each Holder of Notes
shall have the right to require the Company to repurchase all or any part (but
not, in the case of any Holder requiring the Company to purchase less than all
of the Notes held by such Holder, any Note in principal amount less than $1,000)
of such Holder's Notes pursuant to the offer described below (the "Change of
Control Offer") at an offer price in cash equal to 101% of the principal amount
thereof plus accrued and unpaid interest, if any, thereon to the date of
purchase (the "Change of Control Payment").
(b) Within 10 days following any Change of Control, the Company shall
mail a notice to each Holder, with a copy to the Trustee, stating: (1) a
description of the transaction or transactions that constitute the Change of
Control; (2) that the Change of Control Offer is being made pursuant to this
Section 4.10 and that all Notes tendered shall be accepted for payment; (3) the
purchase price and the purchase date, which shall be no later than 30 Business
Days from the date such notice is mailed (the "Change of Control Payment Date");
(4) that any Note not tendered shall continue to accrue interest; (5) that,
unless the Company defaults in the payment of the Change of Control Payment, all
Notes accepted for payment pursuant to the Change of Control Offer shall cease
to accrue interest after the Change of Control Payment Date; (6) that Holders
electing to have any Notes purchased pursuant to a Change of Control Offer shall
be required to surrender the Notes, with the form entitled "Option of Holder to
Elect Purchase" on the reverse of the Notes completed, to the Paying Agent at
the address specified in the notice prior to the close of business on the third
Business Day preceding the Change of Control Payment Date; (7) that Holders
shall be entitled to withdraw their election if the Paying Agent receives, not
later than the close of business on the second Business Day preceding the Change
of Control Payment Date, a telegram, telex, facsimile, transmission or letter
setting forth the name of the Holder, the principal amount of Notes delivered
for purchase, and a statement that such Holder is withdrawing his election to
have the Notes purchased; and (8) that Holders whose Notes are being purchased
only in part shall be issued new Notes equal in principal amount to the
unpurchased portion of the Notes surrendered, which unpurchased portion must be
equal to $1,000 in principal amount or an integral multiple thereof. The Company
shall comply with the requirements of Rule 14e-1 under the Exchange Act and any
other securities laws and regulations thereunder to the extent such laws and
regulations are applicable in connection with the repurchase of Notes in
connection with a Change of Control. To the extent that the provisions of any
securities laws or regulations conflict with the foregoing provisions of this
Indenture, the Company shall
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comply with the applicable securities laws and regulations and shall not be
deemed to have breached its obligations hereunder by virtue thereof.
(c) On or prior to 10:00 a.m. Eastern Time on the Change of Control
Payment Date, the Company shall, to the extent lawful, (1) accept for payment
all Notes or portions thereof properly tendered pursuant to the Change of
Control Offer, (2) deposit with the Paying Agent an amount equal to the Change
of Control Payment in respect of all Notes or portions thereof so tendered and
(3) deliver or cause to be delivered to the Trustee the Notes so accepted
together with an Officers' Certificate stating the aggregate principal amount of
Notes or portions thereof being purchased by the Company. The Paying Agent shall
promptly mail to each Holder of Notes so tendered the Change of Control Payment
for such Notes, and the Trustee shall promptly authenticate and mail (or cause
to be transferred by book entry) to each Holder a new Note equal in principal
amount to any unpurchased portion of the Notes surrendered, if any. The Company
shall publicly announce the results of the Change of Control Offer on or as soon
as practicable after the Change of Control Payment Date.
(d) The Company shall not be required to make a Change of Control Offer
upon a Change of Control if a third party makes the Change of Control Offer in
the manner, at the times and otherwise in compliance with the requirements set
forth in this Indenture applicable to a Change of Control Offer made by the
Company, and purchases all Notes validly tendered and not withdrawn under such
Change of Control Offer.
SECTION 4.11 Continued Existence.
Subject to Article 5 hereof, the Company shall do or cause to
be done all things necessary to preserve and keep in full force and effect (i)
its corporate existence, and the corporate, partnership or other existence of
each of its Restricted Subsidiaries, in accordance with the respective
organizational documents (as the same may be amended from time to time) of the
Company or any such Restricted Subsidiary and (ii) the rights (charter and
statutory), licenses and franchises of the Company and any of its Restrictive
Subsidiaries; provided, however, that the Company shall not be required to
preserve any such right, license or franchise, or the corporate, partnership or
other existence of any of its Restricted Subsidiaries, if the Board of Directors
shall determine that the preservation thereof is no longer desirable in the
conduct of the business of the Company and its Restricted Subsidiaries, taken as
a whole, and that the loss thereof is not adverse in any material respect to the
Holders of the Notes.
SECTION 4.12 Maintenance of General Partner Interest
The Company will at all times own, directly or indirectly
through one or more Wholly-Owned Subsidiaries which are Restricted Subsidiaries,
all of the outstanding general partnership interests in the Operating
Partnership.
SECTION 4.13 Business Activities
The Company will not, and will not permit any Restricted
Subsidiary to, engage in any businesses other than Permitted Businesses, except
to the extent as would not be material to the Company and its Restricted
Subsidiaries taken as a whole.
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ARTICLE V
SUCCESSORS
SECTION 5.1 Merger, Consolidation, Or Sale Of Assets.
The Company may not, directly or indirectly, consolidate or
merge with or into (whether or not the Company is the surviving corporation), or
assign, transfer, lease, convey or otherwise dispose of all or substantially all
of its properties or assets, in one or more related transactions, to another
corporation, person or entity unless (i) the Company is the surviving
corporation or the entity or the Persons formed by or surviving any such
consolidation or merger (if other than the Company) or to which such sale,
assignment, transfer, lease, conveyance or other deposition shall have been made
(the "Surviving Entity") is a Person organized and existing under the laws of
the United States of America, any State thereof or the District of Columbia;
(ii) if the Company is not the Surviving Entity, the Surviving Entity expressly
and unconditionally assumes by supplemental indenture, executed and delivered to
the Trustee in form reasonably satisfactory to the Trustee, all obligations of
the Company on the Notes issued and outstanding under this Indenture; (iii)
immediately after such transaction no Default or Event of Default exists; (iv)
except in the case of a merger of a Wholly-Owned Subsidiary of the Company with
or into the Company, the Company or the entity or Person formed by or surviving
any such consolidation or merger (if other than the Company), or to which such
sale, assignment, transfer, lease, conveyance or other disposition shall have
been made (A) will have a Consolidated Net Worth immediately after the
transaction equal to or greater than the Consolidated Net Worth of the Company
immediately preceding the transaction and (B) will, immediately after such
transaction after giving pro forma effect thereto and any related financing
transactions as if the same had occurred as of the end of the applicable
quarter, be permitted to incur at least $1.00 of additional Debt pursuant to
Section 4.7; and (v) the Company or the Surviving Entity, as applicable, shall
have delivered or caused to be delivered to the Trustee, in form and substance
reasonably satisfactory to the Trustee, an Officers' Certificate and an Opinion
of Counsel, each to the effect that such consolidation, merger, sale,
assignment, transfer, lease, conveyance or other disposition complies with this
Indenture and all conditions precedent provided in clauses (i) through (v) above
have been complied with.
SECTION 5.2 Successor Corporation Substituted.
Upon any consolidation or merger, or any sale, assignment,
transfer, lease, conveyance or other disposition of all or substantially all of
the properties or assets of the Company in accordance with Section 5.1 hereof,
the successor corporation formed by such consolidation or into or with which the
Company is merged or to which such sale, assignment, transfer, lease, conveyance
or other disposition is made shall succeed to, and be substituted for and may
exercise every right and power of the Company under this Indenture with the same
effect as if such successor Person had been named as the Company herein (so that
from and after the date of such consolidation, merger, sale, lease, conveyance
or other disposition, the provisions of this Indenture referring to the
"Company" shall refer instead to the successor corporation and not to the
Company), and may exercise every right and power of the Company under this
Indenture with the same effect as if such successor Person had been named as the
Company herein; provided, however, that the predecessor Company shall not be
relieved from the obligation to pay the principal of and interest on the Notes
except in
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the case of a sale of all of the Company's assets that meets the requirements of
Section 5.1 hereof.
ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.1 Events Of Default.
Each of the following constitutes an "Event of Default":
(i) a Default by the Company in the payment of interest
on the Notes when the same becomes due and payable and the Default
continues for a period of 30 days;
(ii) default by the Company in the payment of the
principal of or premium, if any, on the Notes when the same becomes due
and payable at maturity, upon redemption or otherwise;
(iii) failure by the Company to comply with the
provisions described under Section 4.10;
(iv) failure by the Company for 60 days after notice to
comply with any of its other agreements in this Indenture or the Notes;
(v) default under any mortgage, indenture or instrument
under which there may be issued or by which there may be secured or
evidenced any Debt for money borrowed by the Company or any of its
Restricted Subsidiaries (or the payment of which is guaranteed by the
Company or any of its Restricted Subsidiaries), whether such Debt or
guarantee now exists, or shall be created hereafter, which default is
caused by a failure to pay principal of or premium, if any, or interest
on such Debt prior to the expiration of the grace period provided in
such Debt on the date of such default (a "Payment Default") and the
principal amount of such Debt, together with the principal amount of any
other such Debt under which there has been a Payment Default or the
maturity of which has been so accelerated, aggregates $10.0 million or
more;
(vi) a final judgment or final judgments for the payment
of money are entered by a court or courts of competent jurisdiction
against the Company or any Restricted Subsidiary that would be a
Significant Subsidiary and such judgment or judgments remain unpaid,
undischarged or unstayed for a period of 60 days, provided that the
aggregate of all such undischarged judgments exceeds $10.0 million;
(vii) the Company, any Restricted Subsidiary that would
constitute a Significant Subsidiary or any group of Restricted
Subsidiaries that, taken together, would constitute a Significant
Subsidiary pursuant to or within the meaning of Bankruptcy Law:
(a) commences a voluntary case,
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(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,
(d) makes a general assignment for the benefit of
its creditors, or
(e) generally is not paying its debts as they
become due; or
(viii) a court of competent jurisdiction enters an order
or decree under any Bankruptcy Law that:
(a) is for relief against the Company, any Restricted
Subsidiary that would constitute a Significant Subsidiary or
any group of Restricted Subsidiaries that, taken together,
would constitute a Significant Subsidiary in an involuntary
case;
(b) appoints a Custodian of the Company, any
Restricted Subsidiary that would constitute a Significant
Subsidiary, or any group of Restricted Subsidiaries that,
taken together, would constitute a Significant Subsidiary or
for all or substantially all of the property of the Company,
any Restricted Subsidiary that would constitute a Significant
Subsidiary or any group of Restricted Subsidiaries that,
taken together, would constitute a Significant Subsidiary; or
(c) orders the liquidation of the Company, any
Restricted Subsidiary that would constitute a Significant
Subsidiary or any group of Restricted Subsidiaries that,
taken together, would constitute a Significant Subsidiary;
and the order or decree remains unstayed and in effect for 60
consecutive days.
The term "Custodian" means any receiver, trustee, assignee,
liquidator or similar official under any Bankruptcy Law.
A Default under clause (iv) is not an Event of Default until
the Trustee notifies the Company, or the Holders of at least 25% in principal
amount of the then outstanding Notes 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."
SECTION 6.2 Acceleration.
If any Event of Default (other than an Event of Default
specified in clause (vii) or (viii) of Section 6.1 hereof) occurs and is
continuing, the Trustee by notice to the Company, or the Holders of at least 25%
in principal amount of the then outstanding Notes by written notice to the
Company and the Trustee may declare all the Notes to be due and payable
immediately. Upon any such declaration, the Notes shall become due and payable
immediately. Notwithstanding the foregoing, if an Event of Default specified in
clause (vii) or (viii) of Section 6.1 hereof occurs with respect to the Company,
any Restricted Subsidiary that
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would constitute a Significant Subsidiary or any group of Restricted
Subsidiaries that, taken together, would constitute a Significant Subsidiary
occurs, such an amount shall ipso facto become and be immediately due and
payable without any declaration or other act on the part of the Trustee or any
Holder. The Holders of a majority in principal amount of the then outstanding
Notes by written notice to the Trustee may rescind an acceleration and its
consequences if the rescission would not conflict with any judgment or decree
and if all existing Events of Default (except nonpayment of principal or
interest that has become due solely because of the acceleration) have been cured
or waived.
SECTION 6.3 Other Remedies.
If an Event of Default occurs and is continuing, the Trustee
may pursue any available remedy to collect the payment of principal, premium, if
any, and interest on the Notes or to enforce the performance of any provision of
the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not
possess any of the Notes or does not produce any of them in the proceeding. A
delay or omission by the Trustee or any Holder of a Note in exercising any right
or remedy accruing upon an Event of Default shall 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 6.4 Waiver Of Past Defaults.
Holders of not less than a majority in aggregate principal
amount of the then outstanding Notes by notice to the Trustee may on behalf of
the Holders of all of the Notes waive an existing Default or Event of Default
and its consequences hereunder, except a continuing Default or Event of Default
in the payment of the principal of, premium, if any, or interest on, the Notes
(including in connection with an offer to purchase) (provided, however, that the
Holders of a majority in aggregate principal amount of the then outstanding
Notes may rescind an acceleration and its consequences, including any related
payment default that resulted from such acceleration). Upon any such waiver,
such Default shall cease to exist, and any Event of Default arising therefrom
shall be deemed to have been cured for every purpose of this Indenture; but no
such waiver shall extend to any subsequent or other Default or impair any right
consequent thereon.
SECTION 6.5 Control By Majority.
Holders of a majority in principal amount of the then
outstanding Notes may direct the time, method and place of conducting any
proceeding for exercising any remedy available to the Trustee 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 Notes or that may
involve the Trustee in personal liability.
SECTION 6.6 Limitation On Suits.
A Holder of a Note may pursue a remedy with respect to this
Indenture or the Notes only if:
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(a) the Holder of a Note gives to the Trustee written notice
of a continuing Event of Default;
(b) the Holders of at least 25% in principal amount of the
then outstanding Notes make a written request to the Trustee to pursue
the remedy;
(c) such Holder of a Note or Holders of Notes offer and, if
requested, provide to the Trustee indemnity satisfactory to the Trustee
against any loss, liability or expense;
(d) the Trustee does not comply with the request within 60
days after receipt of the request and the offer and, if requested, the
provision of indemnity; and
(e) during such 60-day period the Holders of a majority in
principal amount of the then outstanding Notes do not give the Trustee a
direction inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the rights of another
Holder of a Note or to obtain a preference or priority over another Holder of a
Note.
SECTION 6.7 Rights Of Holders Of Notes To Receive Payment.
Notwithstanding any other provision of this Indenture, the
right of any Holder of a Note to receive payment of principal, premium, if any,
and interest on the Note, on or after the respective due dates expressed in the
Note (including in connection with an offer to purchase), or to bring suit for
the enforcement of any such payment on or after such respective dates, shall not
be impaired or affected without the consent of such Holder.
SECTION 6.8 Collection Suit By Trustee.
If an Event of Default specified in Section 6.1(i) or (ii)
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 whole
amount of principal of, premium, if any, and interest remaining unpaid on the
Notes and interest on overdue principal and, to the extent lawful, interest and
such further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
SECTION 6.9 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 any claim for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel) and
the Holders of the Notes allowed in any judicial proceedings relative to the
Company (or any other obligor upon the Notes), its creditors or its property and
shall 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 shall consent to the
making of such payments
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46
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 7.7
hereof. To the extent that the payment of any such compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.7 hereof out of the estate in any such
proceeding, shall be denied for any reason, payment of the same shall be secured
by a Lien on, and shall be paid out of, any and all distributions, dividends,
money, securities and other properties that the Holders may be entitled to
receive in such proceeding whether in liquidation or under any plan of
reorganization or arrangement or otherwise. Nothing herein contained shall 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 Notes or the rights of any Holder, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.
SECTION 6.10 Priorities.
If the Trustee collects any money pursuant to this Article,
it shall pay out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts due under
Section 7.7 hereof, including payment of all compensation, expense and
liabilities incurred, and all advances made, by the Trustee and the costs and
expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the Notes for
principal, premium, if any, and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the Notes for
principal, premium, if any, and interest, respectively; and
Third: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any
payment to Holders of Notes pursuant to this Section 6.10.
SECTION 6.11 Undertaking For Costs.
If 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 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 does not apply to a suit by the Trustee, a suit by a
Holder of a Note pursuant to Section 6.7 hereof, or a suit by Holders of more
than 10% in principal amount of the then outstanding Notes.
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47
ARTICLE VII
TRUSTEE
SECTION 7.1 Duties Of Trustee.
(a) If an Event of Default has occurred and is continuing,
the Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in its 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 duties of the Trustee shall be determined solely by
the express provisions of this Indenture and the Trustee need perform
only those duties that are specifically set forth in this Indenture and
no others, and no implied covenants or obligations shall be read into
this Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions
furnished to the Trustee and conforming to the requirements of this
Indenture. However, the Trustee shall examine the certificates and
opinions to determine whether or not they conform to the requirements of
this Indenture.
(c) The Trustee may not be relieved from liabilities for its
own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of
paragraph (b) of this Section;
(ii) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it is
proven that the Trustee was negligent in ascertaining the pertinent
facts; and
(iii) the Trustee shall 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 6.5 hereof.
(d) Whether or not therein expressly so provided, every
provision of this Indenture that in any way relates to the Trustee is subject to
paragraphs (a), (b), and (c) of this Section.
(e) No provision of this Indenture shall require the Trustee
to expend or risk its own funds or incur any liability. The Trustee shall be
under no obligation to exercise any of its rights and powers under this
Indenture at the request of any Holders, unless such Holders shall have offered
to the Trustee security and indemnity satisfactory to it against any loss,
liability or expense.
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(f) The Trustee shall 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.
SECTION 7.2 Rights Of Trustee.
(a) The Trustee may conclusively rely 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.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel or both. The Trustee
shall not be liable for any action it takes or omits to take in good faith in
reliance on such Officers' Certificate or Opinion of Counsel. The Trustee may
consult with counsel and the written advice of such counsel or any Opinion of
Counsel shall be full and complete authorization and protection from liability
in respect of any action taken, suffered or omitted by it hereunder in good
faith and in reliance thereon.
(c) The Trustee may act through its attorneys and agents and
shall not be responsible for the misconduct or negligence of any agent appointed
with due care.
(d) The Trustee shall not be liable for any action it takes
or omits to take in good faith that it believes to be authorized or within the
rights or powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture,
any demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
(f) The Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders unless such Holders shall have offered to the
Trustee reasonable security or indemnity against the costs, expenses and
liabilities that might be incurred by it in compliance with such request or
direction.
SECTION 7.3 Individual Rights Of Trustee.
The Trustee in its individual or any other capacity may
become the owner or pledgee of Notes and may otherwise deal with the Company or
any Affiliate of the Company with the same rights it would have if it were not
Trustee. However, in the event that the Trustee acquires any conflicting
interest it must eliminate such conflict within 90 days, apply to the SEC for
permission to continue as trustee or resign. Any Agent may do the same with like
rights and duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof.
SECTION 7.4 Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Indenture or the Notes, it
shall not be accountable for the Company's use of the proceeds from the Notes or
any money paid to the Company or upon
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49
the Company's direction under any provision of this Indenture, it shall not be
responsible for the use or application of any money received by any Paying Agent
other than the Trustee, and it shall not be responsible for any statement or
recital herein or any statement in the Notes or any other document in connection
with the sale of the Notes or pursuant to this Indenture other than its
certificate of authentication.
SECTION 7.5 Notice Of Defaults.
If a Default or Event of Default occurs and is continuing and
if a Responsible Officer of the Trustee has actual knowledge of such Default or
Event of Default, the Trustee shall mail to Holders of Notes a notice of the
Default or Event of Default within 90 days after it occurs. Except in the case
of a Default or Event of Default in payment of principal of, or interest on, any
Note, the Trustee may withhold the notice if and so long as a committee of its
Responsible Officers in good faith determines that withholding the notice is in
the interests of the Holders of the Notes.
SECTION 7.6 Reports By Trustee To Holders Of The Notes.
Within 60 days after each May 15 beginning with the May 15
following the date of this Indenture, and for so long as Notes remain
outstanding, the Trustee shall mail to the Holders of the Notes a brief report
dated as of such reporting date that complies with TIA Section 313(a) (but if no
event described in TIA Section 313(a) has occurred within the twelve months
preceding the reporting date, no report need be transmitted). The Trustee also
shall comply with TIA Section 313(b)(2). The Trustee shall also transmit by mail
all reports as required by TIA Section 313(c).
A copy of each report at the time of its mailing to the
Holders of Notes shall be mailed to the Company and filed with the SEC and each
stock exchange on which the Notes are listed in accordance with TIA Section
313(d). The Company shall promptly notify the Trustee when the Notes are listed
on any stock exchange.
SECTION 7.7 Compensation And Indemnity.
The Company shall pay to the Trustee from time to time such
compensation for its acceptance of this Indenture and services hereunder as the
Company and Trustee have separately agreed. The Trustee's compensation shall not
be limited by any law on compensation of a trustee of an express trust. The
Company shall reimburse the Trustee promptly upon request for all reasonable
disbursements, advances and expenses incurred or made by it in addition to the
compensation for its services. Such expenses shall include the reasonable
compensation, disbursements and expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee against any and all
losses, liabilities or expenses incurred by it arising out of or in connection
with the acceptance or administration of its duties under this Indenture,
including the costs and expenses of enforcing this Indenture against the Company
(including this Section 7.7) and defending itself against any claim (whether
asserted by the Company or any Holder or any other person) or liability in
connection with the exercise or performance of any of its powers or duties
hereunder, except to the extent any such loss, liability or expense may be
attributable to its negligence or bad faith. The Trustee shall notify the
Company promptly of any claim for which it may seek
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indemnity. Failure by the Trustee to so notify the Company shall not relieve the
Company of its obligations hereunder. The Company shall defend the claim and the
Trustee shall cooperate in the defense. The Trustee may have separate counsel
and the Company shall pay the reasonable fees and expenses of such counsel. The
Company need not pay for any settlement made without its consent, which consent
shall not be unreasonably withheld.
The obligations of the Company under this Section 7.7 shall
survive the satisfaction and discharge of this Indenture.
To secure the Company's payment obligations in this Section,
the Trustee shall have a Lien prior to the Notes on all money or property held
or collected by the Trustee, except that held in trust to pay principal and
interest on particular Notes. Such Lien shall survive the satisfaction and
discharge of this Indenture.
When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.1(vii) or (viii) hereof occurs, the
expenses and the compensation for the services (including the fees and expenses
of its agents and counsel) are intended to constitute expenses of administration
under any Bankruptcy Law.
The Trustee shall comply with the provisions of TIA Section
313(b)(2) to the extent applicable.
SECTION 7.8 Replacement Of Trustee.
A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section.
The Trustee may resign in writing at any time and be
discharged from the trust hereby created by so notifying the Company. The
Holders of a majority in principal amount of the then outstanding Notes may
remove the Trustee by so notifying the Trustee and the Company in writing. The
Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) 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;
(c) a Custodian or public officer takes charge of the
Trustee or its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists
in the office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office, the
Holders of a majority in principal amount of the then outstanding Notes may
appoint a successor Trustee to replace the successor Trustee appointed by the
Company.
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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 10% in principal amount of the then
outstanding Notes may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If the Trustee, after written request by any Holder of a Note
who has been a Holder of a Note for at least six months, fails to comply with
Section 7.10, such Holder of a Note may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders of the Notes. The retiring Trustee shall promptly transfer
all property held by it as Trustee to the successor Trustee, provided all sums
owing to the Trustee hereunder have been paid and subject to the Lien provided
for in Section 7.7 hereof. Notwithstanding replacement of the Trustee pursuant
to this Section 7.8, the Company's obligations under Section 7.7 hereof shall
continue for the benefit of the retiring Trustee.
SECTION 7.9 Successor Trustee By Merger, etc.
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 shall be the
successor Trustee.
SECTION 7.10 Eligibility; Disqualification.
There shall at all times be a Trustee hereunder that is a
corporation organized and doing business under the laws of the United States of
America or of any state thereof that is authorized under such laws to exercise
corporate trustee power, that is subject to supervision or examination by
federal or state authorities and that has a combined capital and surplus of at
least $100 million as set forth in its most recent published annual report of
condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1), (2) and (5). The Trustee is subject to
TIA Section 310(b).
SECTION 7.11 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 shall be subject to TIA Section 311(a) to the extent indicated
therein.
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ARTICLE VIII
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.1 Option To Effect Legal Defeasance Or Covenant Defeasance.
The Company may, at the option of its Board of Directors
evidenced by a resolution set forth in an Officers' Certificate, at any time,
elect to have either Section 8.2 or 8.3 hereof be applied to all outstanding
Notes upon compliance with the conditions set forth below in this Article 8.
SECTION 8.2 Legal Defeasance And Discharge.
Upon the Company's exercise under Section 8.1 hereof of the
option applicable to this Section 8.2, the Company shall, subject to the
satisfaction of the conditions set forth in Section 8.4 hereof, be deemed to
have been discharged from its obligations with respect to all outstanding Notes
on the date the conditions set forth below are satisfied (hereinafter, "Legal
Defeasance"). For this purpose, Legal Defeasance means that the Company shall be
deemed to have paid and discharged the entire indebtedness represented by the
outstanding Notes, which shall thereafter be deemed to be "outstanding" only for
the purposes of Section 8.5 hereof and the other Sections of this Indenture
referred to in (a) and (b) below, and to have satisfied all of its other
obligations under such Notes and this Indenture (and the Trustee, on demand of
and at the expense of the Company, shall execute proper instruments
acknowledging the same), except for the following provisions which shall survive
until otherwise terminated or discharged hereunder: (a) the rights of Holders of
outstanding Notes to receive solely from the trust fund described in Section 8.4
hereof, and as more fully set forth in such Section, payments in respect of the
principal of, premium, if any, and interest, if any, on such Notes when such
payments are due, (b) the Company's obligations with respect to such Notes under
Article 2 and Section 4.2 hereof, (c) the rights, powers, trusts, duties and
immunities of the Trustee hereunder and the Company's obligations in connection
therewith and (d) this Article 8. Subject to compliance with this Article 8, the
Company may exercise its option under this Section 8.2 notwithstanding the prior
exercise of its option under Section 8.3 hereof.
SECTION 8.3 Covenant Defeasance.
Upon the Company's exercise under Section 8.1 hereof of the
option applicable to this Section 8.3, the Company shall, subject to the
satisfaction of the conditions set forth in Section 8.4 hereof, be released from
its obligations under the covenants contained in Sections 4.6, 4.7, 4.8, 4.9,
4.10, 4.12, 4.13 and 5.1 hereof with respect to the outstanding Notes on and
after the date the conditions set forth below are satisfied (hereinafter,
"Covenant Defeasance"), and the Notes shall thereafter be deemed not
"outstanding" for the purposes of any direction, waiver, consent or declaration
or act of Holders (and the consequences of any thereof) in connection with such
covenants, but shall continue to be deemed "outstanding" for all other purposes
hereunder (it being understood that such Notes shall not be deemed outstanding
for accounting purposes). For this purpose, Covenant Defeasance means that, with
respect to the "outstanding" Notes, 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
<PAGE>
53
covenant or by reason of any reference in any such covenant to any other
provision herein or in any other document and such omission to comply shall not
constitute a Default or an Event of Default under Section 6.1 hereof, but,
except as specified above, the remainder of this Indenture and such Notes shall
be unaffected thereby. In addition, upon the Company's exercise under Section
8.1 hereof of the option applicable to this Section 8.3, subject to the
satisfaction of the conditions set forth in Section 8.4 hereof, Sections
6.1(iii) through 6.1(vi) hereof shall not constitute Events of Default.
SECTION 8.4 Conditions To Legal Or Covenant Defeasance.
The following shall be the conditions to the application of
either Section 8.2 or 8.3 hereof to the outstanding Notes:
In order to exercise either Legal Defeasance or Covenant
Defeasance:
(a) the Company must irrevocably deposit with the Trustee, in
trust, for the benefit of the Holders of the Notes, cash in United States
dollars, non-callable Government Securities, or a combination thereof, in such
amounts as will be sufficient, in the opinion of a nationally recognized firm of
independent public accountants, to pay the principal of, premium, if any, and
interest on the outstanding Notes on the stated maturity or on the applicable
redemption date, as the case may be, and the Company must specify whether the
Notes are being defeased to maturity or to a particular redemption date;
(b) in the case of an election under Section 8.2 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel in the United
States reasonably acceptable to the Trustee confirming that (i) the Company has
received from, or there has been published by, the Internal Revenue Service a
ruling or (ii) since the date of this Indenture, there has been a change in the
applicable federal income tax law, in either case to the effect that, and based
thereon such Opinion of Counsel shall confirm that, the Holders of the
outstanding Notes will not recognize income, gain or loss for federal income tax
purposes as a result of such Legal Defeasance and will be subject to federal
income tax on the same amounts, in the same manner and at the same times as
would have been the case if such Legal Defeasance had not occurred;
(c) in the case of an election under Section 8.3 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel in the United
States reasonably acceptable to the Trustee confirming that the Holders of the
outstanding Notes will not recognize income, gain or loss for federal income tax
purposes as a 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 have been the case if such Covenant Defeasance had not occurred;
(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of Default
resulting from the borrowing of funds to be applied to such deposit) or insofar
as Sections 6.1(vii) or (viii) hereof are concerned, at any time in the period
ending on the 91st day after the date of deposit (or greater period of time in
which any such deposit of trust funds may remain subject to bankruptcy or
insolvency laws insofar as those apply to the deposit by the Company);
<PAGE>
54
(e) such Legal Defeasance or Covenant Defeasance shall not
result in a breach or violation of, or constitute a default under, any material
agreement or instrument (other than this Indenture) to which the Company or any
of its Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound;
(f) the Company shall have delivered to the Trustee an
Opinion of Counsel to the effect that, as of the date of such opinion, (i) the
trust funds will not be subject to the rights of holders of Debt other than the
Notes and (ii) assuming no intervening bankruptcy of the Company between the
date of deposit and the 91st day (or greater period of time in which any such
deposit of trust funds may remain subject to bankruptcy or insolvency laws
insofar as those apply to the deposit by the Company) following the deposit and
assuming no Holder of Notes is an insider of the Company, after the 91st day (or
later date until which any such deposit of trust funds may remain subject to
bankruptcy or insolvency laws insofar as those apply to the deposit by the
Company) following the deposit, the trust funds will not be subject to the
effects of any applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally under any applicable United States or
state law;
(g) the Company shall have delivered to the Trustee an
Officers' Certificate stating that the deposit was not made by the Company with
the intent of preferring the Holders of Notes over the other creditors of the
Company or with the intent of defeating, hindering, delaying or defrauding
creditors of the Company or others; and
(h) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent provided for or relating to the Legal Defeasance or the
Covenant Defeasance have been complied with.
SECTION 8.5 Deposited Money And Government Securities To Be Held In
Trust; Other Miscellaneous Provisions.
Subject to Section 8.6 hereof, all money and non-callable
Government Securities (including the proceeds thereof) deposited with the
Trustee (or other qualifying trustee, collectively for purposes of this Section
8.5, the "Trustee") pursuant to Section 8.4 hereof in respect of the outstanding
Notes shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as Paying Agent) as the
Trustee may determine, to the Holders of such Notes of all sums due and to
become due thereon in respect of principal, premium, if any, and interest, but
such money 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 cash or non-callable
Government Securities deposited pursuant to Section 8.4 hereof or the principal
and interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.
Anything in this Article 8 to the contrary notwithstanding,
the Trustee shall deliver or pay to the Company from time to time upon the
request of the Company any money or non-callable Government Securities held by
it as provided in Section 8.4 hereof which, in the opinion of a nationally
recognized firm of independent public accountants
<PAGE>
55
expressed in a written certification thereof delivered to the Trustee (which may
be the opinion delivered under Section 8.4(a) hereof), are in excess of the
amount thereof that would then be required to be deposited to effect an
equivalent Legal Defeasance or Covenant Defeasance.
SECTION 8.6 Repayment To Company.
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, premium,
if any, or interest on any Note and remaining unclaimed for two years after such
principal, and premium, if any, or interest has become due and payable shall be
paid to the Company on its request or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Note shall thereafter, as a
secured 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 the New York Times and The Wall Street Journal (national
edition), 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 8.7 Reinstatement.
If the Trustee or Paying Agent is unable to apply any United
States dollars or non-callable Government Securities in accordance with Section
8.2 or 8.3 hereof, as the case may be, by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, then the obligations of the Company under this Indenture and
the Notes shall be revived and reinstated as though no deposit had occurred
pursuant to Section 8.2 or 8.3 hereof until such time as the Trustee or Paying
Agent is permitted to apply all such money in accordance with Section 8.2 or
8.03 hereof, as the case may be; provided, however, that, if the Company makes
any payment of principal of, premium, if any, or interest on any Note following
the reinstatement of its obligations, the Company shall be subrogated to the
rights of the Holders of such Notes to receive such payment from the money held
by the Trustee or Paying Agent.
ARTICLE IX
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.1 Without Consent Of Holders Of Notes.
Notwithstanding Section 9.2 of this Indenture, the Company
and the Trustee may amend or supplement this Indenture or the Notes without the
consent of any Holder of a Note:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Notes in addition to or
in place of certificated Notes;
<PAGE>
56
(c) to provide for the assumption of the Company's
obligations to Holders of Notes in the case of a merger or consolidation
pursuant to Article 5 hereof, as applicable;
(d) to make any change that would provide any additional
rights or benefits to the Holders of Notes or that does not adversely affect the
legal rights hereunder of any such Holder; or
(e) to comply with the requirements of the SEC in order to
effect or maintain the qualification of this Indenture under the TIA.
Upon the request of the Company accompanied by a resolution
of the Board of Directors of the Company authorizing the execution of any such
amended or supplemental Indenture, and upon receipt by the Trustee of the
documents described in Section 7.2 hereof, the Trustee shall join with the
Company in the execution of any amended or supplemental Indenture authorized or
permitted by the terms of this Indenture and to make any further appropriate
agreements and stipulations that may be therein contained, but the Trustee shall
not be obligated to enter into such amended or supplemental Indenture that
affects its own rights, duties or immunities under this Indenture or otherwise.
SECTION 9.2 With Consent Of Holders Of Notes.
Except as provided below in this Section 9.2, the Company and
the Trustee may amend or supplement this Indenture and the Notes may be amended
or supplemented with the consent of the Holders of at least a majority in
principal amount of the Notes then outstanding (including, without limitation,
consents obtained in connection with a purchase of, or tender offer or exchange
offer for, Notes), and, subject to Sections 6.4 and 6.7 hereof, any existing
Default or Event of Default (other than a Default or Event of Default in the
payment of the principal of, premium, if any, or interest on the Notes) or
compliance with any provision of this Indenture or the Notes may be waived with
the consent of the Holders of a majority in principal amount of the then
outstanding Notes (including consents obtained in connection with a purchase of,
or tender offer or exchange offer for the Notes).
Upon the request of the Company accompanied by a resolution
of the Board of Directors of the Company authorizing the execution of any such
amended or supplemental Indenture, and upon the filing with the Trustee of
evidence satisfactory to the Trustee of the consent of the Holders of Notes as
aforesaid, and upon receipt by the Trustee of the documents described in Section
7.2 hereof, the Trustee shall join with the Company in the execution of such
amended or supplemental Indenture unless such amended or supplemental Indenture
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion, but shall not be
obligated to, enter into such amended or supplemental Indenture.
It shall not be necessary for the consent of the Holders of
Notes under this Section 9.2 to approve the particular form of any proposed
amendment or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section
9.2 becomes effective, the Company shall mail to the Holders of Notes affected
thereby a notice briefly describing the amendment, supplement or waiver. Any
failure of the Company to mail such
<PAGE>
57
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such amended or supplemental Indenture or waiver. Subject to
Sections 6.4 and 6.7 hereof, the Holders of a majority in aggregate principal
amount of the Notes then outstanding may waive compliance in a particular
instance by the Company with any provision of this Indenture or the Notes.
However, without the consent of each Holder affected, an amendment or waiver may
not (with respect to any Notes held by a non-consenting Holder):
(a) reduce the principal amount of Notes whose Holders
must consent to an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity
of any Note or alter the provisions with respect to the redemption of the Notes
(other than provisions relating to Section 4.10 hereof);
(c) reduce the rate of or change the time for payment of
interest, including default interest, on any Note;
(d) waive a Default or Event of Default in the payment of
principal of or premium, if any, or interest on the Notes (except a rescission
of acceleration of the Notes by the Holders of a majority in aggregate principal
amount of the Notes and a waiver of the payment default that resulted from such
acceleration);
(e) make any Note payable in money other than that stated
in the Notes;
(f) make any change in the provisions of this Indenture
relating to waivers of past Defaults or the rights of Holders of Notes to
receive payments of principal of or premium, if any, or interest on the Notes;
(g) waive a redemption payment with respect to any Note
(other than a payment required by the provisions of Section 4.10 hereof); or
(h) make any change in Section 6.4 or 6.7 hereof or in
the foregoing amendment and waiver provisions.
SECTION 9.3 Compliance With Trust Indenture Act.
Every amendment or supplement to this Indenture or the Notes
shall be set forth in a amended or supplemental Indenture that complies with the
TIA as then in effect.
SECTION 9.4 Revocation And Effect Of Consents.
Until an amendment, supplement or waiver becomes effective, a
consent to it by a Holder of a Note is a continuing consent by the Holder of a
Note and every subsequent Holder of a Note or portion of a Note that evidences
the same debt as the consenting Holder's Notes, even if notation of the consent
is not made on any Notes. However, any such Holder of a Note or subsequent
Holder of a Note may revoke the consent as to its Notes if the Trustee receives
written notice of revocation before the date the waiver, supplement or amendment
becomes effective. An amendment, supplement or waiver becomes effective in
accordance with its terms and thereafter binds every Holder.
<PAGE>
58
SECTION 9.5 Notation On Or Exchange Of Notes.
The Trustee may place an appropriate notation about an
amendment, supplement or waiver on any Notes thereafter authenticated. The
Company in exchange for all Notes may issue and the Trustee shall authenticate
new Notes that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or to issue new
Notes shall not affect the validity and effect of such amendment, supplement or
waiver.
SECTION 9.6 Trustee To Sign Amendments, etc.
The Trustee shall sign any amendment or supplemental
Indenture authorized pursuant to this Article 9 if the amendment or supplement
does not adversely affect the rights, duties, liabilities or immunities of the
Trustee. The Company may not sign an amendment or supplemental Indenture until
its Board of Directors approves it. If it does, the Trustee may, but need not,
sign it. In signing or refusing to sign such amendment or supplemental
Indenture, the Trustee shall be entitled to receive and, subject to Section 7.1
hereof, shall 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 X
MISCELLANEOUS
SECTION 10.1 Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or
conflicts with the duties imposed by TIA Section 318(c), the imposed duties
shall control.
SECTION 10.2 Notices.
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:
Ocwen Asset Investment Corp.
1675 Palm Beach Lakes Boulevard
West Palm Beach, Florida 33401
Telecopier No.: (610) 341-1835
Telecopier No.: (561) 682-8177
Attention: Secretary
<PAGE>
59
If to the Trustee:
Norwest Bank Minnesota, National Association
Sixth and Marquette
Minneapolis, Minnesota 55479-0069
Telecopier No.: (612) 667-9825
Telecopier No.:
Attention: Corporate Trust Department
The Company or the Trustee, by notice to the other may
designate additional or different addresses for subsequent notices or
communications.
All notices and communications (other than those sent to
Holders) shall 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,
postage prepaid, if mailed; when answered back, if telexed; when receipt is
acknowledged, if telecopied; and the next Business Day after timely delivery to
the courier, if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by
first class mail, certified or registered, return receipt requested, or by
overnight air courier guaranteeing next day delivery to its address shown on the
register kept by the Registrar. Any notice or communication shall also be so
mailed to any Person described in TIA Section 313(c), to the extent required by
the TIA. Failure to mail a notice or communication to a Holder or any defect in
it shall not affect its sufficiency with respect to other Holders.
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.
If the Company mails a notice or communication to Holders, it
shall mail a copy to the Trustee and each Agent at the same time.
SECTION 10.3 Communication By Holders Of Notes With Other Holders Of
Notes.
Holders may communicate pursuant to TIA Section 312(b) with
other Holders with respect to their rights under this Indenture or the Notes.
The Company, the Trustee, the Registrar and anyone else shall have the
protection of TIA Section 312(c).
SECTION 10.4 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 shall furnish to the
Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 10.5 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 satisfied; and
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 10.5 hereof) stating that, in the opinion of such counsel, all such
conditions precedent and covenants have been satisfied.
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60
SECTION 10.5 Statements Required In Certificate Or Opinion.
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)) shall comply with the provisions of
TIA Section 314(e) and shall include:
(a) a statement that the Person making such certificate
or opinion has read such covenant or condition;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he
or she has made such examination or investigation as is necessary to enable him
to express an informed opinion as to whether or not such covenant or condition
has been satisfied; and
(d) a statement as to whether or not, in the opinion of
such Person, such condition or covenant has been satisfied.
SECTION 10.6 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 10.7 No Personal Liability Of Directors, Officers, Employees And
Stockholders.
No past, present or future director, officer, employee,
incorporator or stockholder of the Company, as such, shall have any liability
for any obligations of the Company under the Notes, this Indenture or for any
claim based on, in respect of, or by reason of, such obligations or their
creation. Each Holder of Notes by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for issuance of
the Notes.
SECTION 10.8 Governing Law.
THE LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE AND THE NOTES.
SECTION 10.9 Successors.
All agreements of the Company in this Indenture and the Notes
shall bind its successors. All agreements of the Trustee in this Indenture shall
bind its successors.
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61
SECTION 10.10 Severability.
In case any provision in this Indenture or in the Notes shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
SECTION 10.11 Counterpart Originals.
The parties may sign two or more counterparts of this
Indenture, each of which shall be deemed to be an original, but all of which
shall constitute one and the same agreement.
SECTION 10.12 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 of this Indenture and shall
in no way modify or restrict any of the terms or provisions hereof.
<PAGE>
SIGNATURES
IN WITNESS WHEREOF, the parties have executed this Indenture
as of the date first written above.
Very truly yours,
OCWEN ASSET INVESTMENT CORP.
By: /s/ CHRISTINE A. REICH
-------------------------------------
Name: Christine A. Reich
Title: President
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION
By: /s/ RAYMOND S. HAVERSTOCK
-------------------------------------
Name: Raymond S. Haverstock
Title: Vice President
<PAGE>
EXHIBIT A
(Face of Note)
11 1/2% Senior Notes due 2005
Each Original Note shall contain legends substantially to the following effect
unless the Company determines otherwise:
THE NOTE EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE
SECURITIES LAWS OR ANY OTHER APPLICABLE SECURITIES LAW. NEITHER THE NOTE
EVIDENCED HEREBY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE
REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.
THE HOLDER OF THE NOTE EVIDENCED HEREBY BY ITS ACCEPTANCE
HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH NOTE PRIOR TO
THE DATE (THE "RESALE RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS
AFTER THE LATER OF THE ORIGINAL ISSUANCE DATE HEREOF AND THE LAST DATE
ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF
SUCH NOTE (OR ANY PREDECESSOR OF SUCH NOTE) ONLY (A) TO THE COMPANY, (B)
PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE
UNDER THE SECURITIES ACT, (C) SO LONG AS SUCH NOTE IS ELIGIBLE FOR
RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO
A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" (AS
DEFINED IN RULE 144A) THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT
THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO
OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED
STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT OR
(E) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS UNDER THE SECURITIES ACT, SUBJECT TO THE RIGHT OF THE
COMPANY PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (i) PURSUANT TO CLAUSE
(D) OR (E) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL
CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO IT. SUCH HOLDER
FURTHER AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE NOTE IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
<PAGE>
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION
("DTC"), NEW YORK, NEW YORK, 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
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.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A
SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS
OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE
WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE
REVERSE HEREOF.
Each Original Note resold in reliance on Regulation S under the
Securities Act shall contain a legend substantially to the following effect
unless the Company determines otherwise:
THE NOTE EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT AND MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES
OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS UNLESS REGISTERED
UNDER THE SECURITIES ACT OR AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT IS AVAILABLE.
A-2
<PAGE>
CUSIP:
No.
$
Ocwen Asset Investment Corp. promises to pay to Cede & Co.
or registered assigns, the principal sum of ______________ Dollars on July 1,
2005.
Interest Payment Dates: January 1 and July 1
Record Dates: December 15 and June 15
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<PAGE>
Dated: July 14, 1998
OCWEN ASSET INVESTMENT CORP.
By:
-------------------------------------
Name:
Title:
This is one of the
Notes referred to in the
within-mentioned Indenture:
Norwest Bank Minnesota, National Association,
as Trustee
By:
-----------------------------------
Authorized Officer
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<PAGE>
(Back of Note)
11 1/2% Senior Notes due 2005
Capitalized terms used herein shall have the meanings
assigned to them in the Indenture referred to below unless otherwise indicated.
The terms of the Notes set forth below are not complete and are qualified in
their entirety by reference to the Indenture.
1. Interest. Ocwen Asset Investment Corp., a Virginia
corporation (the "Company") promises to pay interest on the principal amount of
this Note at 11 1/2% per annum from the date hereof until maturity. The Company
will pay interest semi-annually on January 1 and July 1 of each year, or if any
such day is not a Business Day, on the next succeeding Business Day (each an
"Interest Payment Date"). Interest will be payable in cash. Interest on the
Notes will accrue from the most recent date to which interest has been paid or,
if no interest has been paid, from the date of issuance; provided that if there
is no existing Default in the payment of interest, and if this Note is
authenticated between a record date referred to on the face hereof and the next
succeeding Interest Payment Date, interest shall accrue from such next
succeeding Interest Payment Date. The Company shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
principal and premium, if any, from time to time on demand at a rate that is the
rate then in effect; it shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue installments of interest
(without regard to any applicable grace periods) from time to time on demand at
the same rate to the extent lawful. Interest will be computed on the basis of a
360-day year of twelve 30-day months. In the event that the Company is obligated
to pay Liquidated Damages to Holders, the interest rate otherwise applicable to
the Notes shall be increased for the period during which the Company is
obligated to pay Liquidated Damages by the amount of such Liquidated Damages and
all references herein to interest shall include such Liquidated Damages, if any.
2. Method Of Payment. The Company will pay interest on the
Notes (except defaulted interest) to the Persons who are registered Holders of
Notes at the close of business on the December 15 or June 15 next preceding the
Interest Payment Date, even if such Notes are cancelled after such record date
and on or before such Interest Payment Date, except as provided in Section 2.12
of the Indenture with respect to defaulted interest. Any such interest
installment not punctually paid or duly provided for shall forthwith cease to be
payable to the registered Holders on such Interest Payment Date, and may be paid
to the registered Holders at the close of business on a special interest payment
date to be fixed by the Company for the payment of such defaulted interest,
notice whereof shall be given to the registered Holders not less than 15 days
prior to such special interest payment date, or may be paid at any time in any
other lawful manner not inconsistent with the requirements of any securities
exchange on which the Notes may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in the Indenture. The
Notes will be payable as to principal, premium, interest, if any, at the office
or agency of the Company maintained for such purpose within or without the City
and State of New York, or, at the option of the Company, payment of interest, if
any, may be made by check mailed to the Holders at their addresses set forth in
the register of Holders, and provided that payment by wire transfer of
immediately available
A-5
<PAGE>
funds will be required with respect to principal of and interest and premium, if
any, on, all global Notes and all other Notes the Holders of which shall have
provided wire transfer instructions to the Company or the Paying Agent. Such
payment shall be in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts.
3. Paying Agent And Registrar. Initially, Norwest Bank
Minnesota, National Association, the Trustee under the Indenture, will act as
Paying Agent and Registrar. The Company may change any Paying Agent or Registrar
without notice to any Holder. The Company may act in any such capacity.
4. Issuance and Ranking. The Company issued the Notes under
an Indenture dated as of July 14, 1998 (the "Indenture") between the Company and
the Trustee. The terms of the Notes include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of
1939, as amended (15 U.S. Code Sections 77aaa-77bbbb) (the "TIA"). The Notes are
subject to all such terms, and Holders are referred to the Indenture and the TIA
for a statement of such terms. The Notes are general, unsecured obligations of
the Company limited to $150,000,000 in aggregate principal amount, on
outstanding Notes as set forth in Paragraph 2 hereof.
5. Redemption.
The Notes are not redeemable at the Company's option prior to
July 1, 2002. Thereafter, the Notes will be subject to redemption at the option
of the Company, in whole or in part, upon not less than 30 nor more than 60
days' notice, at the redemption prices (expressed as percentages of principal
amount) set forth below plus accrued and unpaid interest, if any, thereon to the
applicable redemption date, if redeemed during the twelve-month period beginning
on July 1 of the years indicated below:
Year Redemption Rate
- ---- ---------------
2002 ...................................................................105.750%
2003 ...................................................................102.875%
2004 and thereafter.....................................................100.000%
(a) Notwithstanding the foregoing, during the first 36 months
after the Closing Date, the Company may, on any one or more occasions, use the
net proceeds of one or more offerings of its Common Stock to redeem up to 25% of
the aggregate principal amount of the Notes (whether in lieu of cash interest
payments) at the redemption price of 111.50% of the principal amount thereof,
plus accrued and unpaid interest to the date of redemption; provided that, after
any such redemption, the aggregate principal amount of the Notes outstanding
must equal at least $112.5 million; and provided further, that any such
redemption shall occur within 90 days of the date of closing of such offering of
Common Stock of the Company.
A-6
<PAGE>
6. Mandatory Redemption. Except as set forth in Paragraph 7
below, the Company shall not be required to make mandatory redemption or sinking
fund payments with respect to the Notes.
7. Repurchase At Option Of Holder. Upon the occurrence of a
Change of Control, each Holder of Notes shall have the right to require the
Company to repurchase all or any part (but not, in the case of any Holder
requiring the Company to purchase less than all of the Notes held by such
Holder, any Note in principal amount less than $1,000) of such Holder's Notes
pursuant to an offer (the "Change of Control Offer") at an offer price equal to
101% of the aggregate principal amount thereof plus accrued and unpaid interest,
if any, thereon to the date of purchase (the "Change of Control Payment").
Within 10 days following any Change of Control, the Company shall mail a notice
to each Holder setting forth the procedures governing the Change of Control
Offer as required by the Indenture.
8. Notice Of Redemption. Notice of redemption will be mailed
at least 30 days but not more than 60 days before the redemption date to each
Holder whose Notes are to be redeemed at its registered address. Notes in
denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000, unless all of the Notes held by a Holder are to be
redeemed. On and after the redemption date interest ceases to accrue on Notes or
portions thereof called for redemption.
9. Denominations, Transfer, Exchange. The Notes are in
registered form without coupons in all appropriate denominations. The transfer
of Notes may be registered and Notes may be exchanged as provided in the
Indenture. The Registrar and the Trustee may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and the
Company may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture. The Company need not transfer or exchange any Note
selected for redemption, except for the unredeemed portion of any Note being
redeemed in part. Also, it need not transfer or exchange any Note for a period
of 15 Business Days before a selection of Notes to be redeemed or during the
period between a record date and the corresponding Interest Payment Date.
10. Persons Deemed Owners. The registered Holder of a Note
may be treated as its owner for all purposes.
11. Amendment, Supplement And Waiver. Subject to certain
exceptions, the Indenture or the Notes may be amended or supplemented with the
consent of the Holders of at least a majority in principal amount of the then
outstanding Notes, and, subject to Sections 6.4 and 6.7 of the Indenture, any
existing default or compliance with any provision of the Indenture or the Notes
may be waived with the consent of the Holders of a majority in principal amount
of the then outstanding Notes. Without the consent of any Holder of a Note, the
Indenture or the Notes may be amended or supplemented to cure any ambiguity,
defect or inconsistency, to provide for uncertificated Notes in addition to or
in place of certificated Notes, to provide for the assumption of the Company's
obligations to Holders of the Notes in case of a merger or consolidation, to
make any change that would provide any additional rights or benefits to the
Holders of the Notes or that does not adversely affect the
A-7
<PAGE>
legal rights under the Indenture of any such Holder, or to comply with the
requirements of the SEC in order to effect or maintain the qualification of the
Indenture under the TIA.
12. Defaults And Remedies. Events of Default include: (i) a
default by the Company in the payment of interest on the Notes when the same
becomes due and payable and the Default continues for a period of 30 days; (ii)
default by the Company in the payment of the principal of or premium, if any, on
the Notes when the same becomes due and payable at maturity, upon redemption or
otherwise; (iii) failure by the Company to comply with the provisions described
under Section 4.10 of the Indenture; (iv) failure by the Company for 60 days
after notice to comply with any of its other agreements in the Indenture or the
Notes; (v) default under any mortgage, indenture or instrument under which there
may be issued or by which there may be secured or evidenced any Debt for money
borrowed by the Company or any of its Restricted Subsidiaries (or the payment of
which is guaranteed by the Company or any of its Restricted Subsidiaries),
whether such Debt or guarantee now exists, or shall be created hereafter, which
default is caused by a failure to pay principal of or premium, if any, or
interest on such Debt prior to the expiration of the grace period provided in
such Indebtedness on the date of such default (a "Payment Default") the
principal amount of such Debt together with the principal amount of any other
such Debt under which there has been a Payment Default which has been so
accelerated, aggregates $10.0 million or more; (vi) a final judgment or final
judgments for the payment of money are entered by a court or courts of competent
jurisdiction against the Company or any Restricted Subsidiary that would be a
Significant Subsidiary and such judgment or judgments remain unpaid,
undischarged or unstayed for a period of 60 days; provided that the aggregate of
all such undischarged judgments exceeds $10.0 million; (vii) certain events of
bankruptcy or insolvency with respect to the Company, any Restricted Subsidiary
that would constitute a Significant Subsidiary or any group of Restricted
Subsidiaries that, taken together, would constitute a Significant Subsidiary. If
any Event of Default occurs and is continuing, the Trustee or the Holders of at
least 25% in principal amount of the then outstanding Notes may declare all the
Notes to be due and payable immediately. Notwithstanding the foregoing, in the
case of an Event of Default arising from certain events of bankruptcy or
insolvency, all outstanding Notes will become due and payable without further
action or notice. Holders may not enforce the Indenture or the Notes except as
provided in the Indenture. Subject to certain limitations, Holders of a majority
in principal amount of the then outstanding Notes may direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from Holders of the
Notes notice of any continuing Default or Event of Default (except a Default or
Event of Default relating to the payment of principal or interest) if it
determines that withholding notice is in their interest. The Holders of a
majority in aggregate principal amount of the Notes then outstanding by notice
to the Trustee may on behalf of the Holders of all of the Notes waive any
existing Default or Event of Default and its consequences under the Indenture
except a continuing Default or Event of Default in the payment of interest and
premium, if any, on, or the principal of, the Notes. The Company is required to
deliver to the Trustee annually a statement regarding compliance with the
Indenture, and the Company is required upon becoming aware of any Default or
Event of Default, to deliver to the Trustee a statement specifying such Default
or Event of Default.
13. Trustee Dealings With The Company. Subject to Section
7.3 of the Indenture, the Trustee, in its individual or any other capacity, may
become the owner or
A-8
<PAGE>
pledgee of Notes and may otherwise deal with the Company or any Affiliate of the
Company with the same rights it would have if it were not Trustee.
14. No Recourse Against Others. No past, present or future
director, officer, employee, incorporator or stockholder of the Company, as
such, shall have any liability for any obligations of the Company under the
Notes, the Indenture or for any claim based on, in respect of, or by reason of,
such obligations or their creation. Each Holder of Notes by accepting a Note
waives and releases all such liability. The waiver and release are part of the
consideration for the issuance of the Notes.
15. Authentication. This Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent.
16. Abbreviations. Customary abbreviations may be used in the
name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT
(= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (=
Uniform Gifts to Minors Act).
The Company will furnish to any Holder upon written request
and without charge a copy of the Indenture. Requests may be made to Investor
Relations at the executive offices of the Company.
A-9
<PAGE>
In connection with any transfer of this Note occurring prior
to the date which is two years after the later of the original issuance date and
the last date on which the Company or any "affiliate" (as defined in Rule 144
under the Securities Act of 1933, as amended) of the Company was the owner of
such Note (or any predecessor thereto) (the "Resale Restriction Termination
Date"), the undersigned confirms that it has not utilized any general
solicitation or general advertising in connection with the transfer:
[CHECK ONE]
(1) ___ to the Company or a subsidiary thereof; or
(2) ___ pursuant to and in compliance with Rule 144A under the
Securities Act of 1933, as amended; or
(3) ___ outside the United States to a "foreign person" in compliance
with Rule 904 of Regulation S under the Securities Act of
1933, as amended; or
(4) ___ pursuant to the exemption from registration provided by Rule
144 under the Securities Act of 1933, as amended; or
(5) ___ pursuant to an effective registration statement under the
Securities Act of 1933, as amended; or
(6) ___ pursuant to another available exemption from the registration
requirements of the Securities Act of 1933, as amended.
Unless one of the boxes is checked, the Trustee will refuse to register any of
the Notes evidenced by this certificate in the name of any person other than the
registered Holder thereof; provided, however, that if box (3), (4), or (6) is
checked, the Company or the Trustee may require, prior to registering any such
transfer of the Notes, in its sole discretion, such written legal opinions,
certifications (including an investment letter in the case of box (4)) and other
information as the Trustee or the Company has reasonably requested to confirm
that such transfer is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Securities Act
of 1933, as amended.
If none of the foregoing boxes is checked, the Trustee or Registrar shall not be
obligated to register this Note in the name of any person other than the Holder
hereof unless and until the conditions to any such transfer of registration set
forth herein and in Section 2.14 of the Indenture shall have been satisfied.
Dated: __________________ Signed:________________________________________
(Sign exactly as name appears on the other side
of this Security)
Signature Guarantee:_____________
A-10
<PAGE>
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing
this Note for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Dated: ________ _________________________________________________
NOTICE: To be executed by an executive officer
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<PAGE>
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we)
assign and transfer this Note to
- --------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
- --------------------------------------------------------------------------------
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
- --------------------------------------------------------------------------------
Date:
--------------------------------
Your Signature:
----------------------------------------
(Sign exactly as your name appears on
the face of this Note)
Signature Guarantee:
---------------------------
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<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the
Company pursuant to Section 4.10 of the Indenture, check the box: [ ]
If you want to elect to have only part of the Note purchased
by the Company pursuant to Section 4.10 of the Indenture, state the amount you
elect to have purchased:
$__________________
Date:_______________________
Your Signature:
_____________________________________________
(Sign exactly as your name appears
on the Note)
Tax Identification No.:
_____________________________________________
Signature Guarantee:
_____________________________________________
A-13
EXHIBIT 4.3
================================================================================
REGISTRATION RIGHTS AGREEMENT
Dated as of July 14, 1998
Among
OCWEN ASSET INVESTMENT CORP.
and
LEHMAN BROTHERS INC.
MORGAN STANLEY & CO. INC.
J.C. BRADFORD & CO.
PIPER JAFFRAY INC.
as Initial Purchasers
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
----
1. Definitions. ....................................................... 1
2. Securities Subject to This Agreement. .............................. 3
3. Registered Exchange Offer. ......................................... 3
4. Shelf Registration. ................................................ 4
5. Liquidated Damages ................................................. 6
6. Registration Procedures. ........................................... 6
7. Registration Expenses. ............................................. 16
8. Indemnification and Contribution. .................................. 16
9. Rule 144A. ......................................................... 19
10. Participation in Underwritten Registrations. ....................... 20
11. Selection of Underwriters. ......................................... 20
12. Miscellaneous. ..................................................... 20
i
<PAGE>
1
This Registration Rights Agreement (this "Agreement") is made
and entered into as of July 14, 1998 by and among Ocwen Asset Investment Corp.
(the "Company") and Lehman Brothers Inc., Morgan Stanley & Co. Inc., J.C.
Bradford & Co. and Piper Jaffray Inc. (collectively, the "Initial Purchasers").
This Agreement is entered into in connection with the Purchase
Agreement, dated as of July 9, 1998, among the Company and the Initial
Purchasers (the "Purchase Agreement"), which provides for the sale by the
Company to the Initial Purchasers of $150 million principal amount of 11.50%
Senior Notes due 2005 (the "Notes").
In order to induce the Initial Purchasers to enter into the
Purchase Agreement, the Company has agreed to provide the registration rights
set forth in this Agreement for the benefit of the Initial Purchasers and their
direct and indirect transferees and assigns. The execution and delivery of this
Agreement is a condition to the Initial Purchasers' obligations to purchase the
Notes under the Purchase Agreement. Capitalized terms used but not specifically
defined herein have the respective meanings ascribed thereto in the Purchase
Agreement.
The parties hereby agree as follows:
1. DEFINITIONS. As used in this Agreement, the following
capitalized terms shall have the following meanings:
Broker-Dealer: Any broker or dealer registered under the
Exchange Act.
Closing Date: The date on which the Notes were sold to the
Initial Purchasers.
Commission: The Securities and Exchange Commission.
Consummate: A Registered Exchange Offer shall be deemed
"Consummated" for purposes of this Agreement upon the occurrence of (i)
the filing and effectiveness under the Securities Act of the Exchange
Offer Registration Statement relating to the New Notes, (ii) the
maintenance of such Registration Statement continuously effective and
the keeping of the Exchange Offer open for a period not less than the
minimum period required pursuant to Section 3(b) hereof and (iii) the
delivery by the Company of the New Notes in the same aggregate
principal amount as the aggregate principal amount of Notes tendered by
Holders thereof pursuant to the Exchange Offer.
Damages Payment Date: With respect to the Notes, each
Distribution Date until the earlier of (i) the date on which Liquidated
Damages no longer are payable or (ii) the redemption or maturity
thereof.
<PAGE>
2
Effectiveness Target Date: As defined in Section 5.
Exchange Act: The Securities Exchange Act of 1934, as
amended.
Exchange Offer: The registration by the Company under the
Securities Act of the New Notes pursuant to a Registration Statement
pursuant to which the Company shall offer the Holders of all
outstanding Transfer Restricted Securities the opportunity to exchange
all such outstanding Transfer Restricted Securities held by such
Holders for New Notes in an aggregate principal amount equal to the
aggregate principal amount of the Notes tendered in such exchange offer
by such Holder.
Exchange Offer Registration Statement: The Registration
Statement relating to the Exchange Offer, including the Prospectus
which forms a part thereof.
Exempt Resales: The transactions in which the Initial
Purchasers propose to sell the Notes to certain "qualified
institutional buyers," as such term is defined in Rule 144A under the
Securities Act and to certain non-U.S. persons.
Holders: As defined in Section 2(b) hereof.
Indemnified Holder: As defined in Section 8(a) hereof.
Indenture: The Indenture dated as of July 14, 1998 between
the Company and the Trustee, pursuant to which the Notes are to be
issued, as such Indenture is amended or supplemented from time to time
in accordance with the terms thereof.
Initial Purchasers: As defined in the preamble hereto.
NASD: National Association of Securities Dealers, Inc.
New Notes: The Company's 11.50% Senior Notes due 2005 to
be issued pursuant to the Indenture in the Exchange Offer.
Person: An individual, partnership, corporation, limited
liability company, trust or unincorporated organization, or a
government or agency or political subdivision thereof.
Prospectus: The prospectus included in a Registration
Statement, as amended or supplemented by any prospectus supplement and
by all other amendments thereto, including post-effective amendments,
and all documents incorporated by reference into such Prospectus.
Registration Default: As defined in Section 5 hereof.
Registration Statement: Any registration statement of the
Company relating to (a) an offering of New Notes pursuant to an
Exchange Offer or (b) the
<PAGE>
3
registration for resale of Transfer Restricted Securities pursuant to
the Shelf Registration Statement, which is filed pursuant to the
provisions of this Agreement, in either case, including the Prospectus
included therein, all amendments and supplements thereto (including
post-effective amendments) and all exhibits and documents incorporated
by reference therein.
Securities Act: The Securities Act of 1933, as amended.
Shelf Filing Deadline: As defined in Section 4 hereof.
Shelf Registration: The registration contemplated in
Section 4 hereof.
Shelf Registration Statement: As defined in Section 4
hereof.
TIA: The Trust Indenture Act of 1939 (15 U.S.C. Section
77aaa-77bbbb), as amended.
Transfer Restricted Securities: Each Note until the
earliest to occur of (a) the date on which any such security has been
exchanged by a person other than a Broker-Dealer for New Notes in the
Exchange Offer, (b) following the exchange by a Broker-Dealer in the
Exchange Offer of Notes for New Notes, the date on which such new
securities are sold to a purchaser who receives from such Broker-Dealer
on or prior to the date of such sale a copy of the prospectus contained
in the Exchange Offer Registration Statement, (c) the date on which
such Notes have been effectively registered under the Securities Act
and disposed of in accordance with the Shelf Registration Statement or
(d) the date on which such Notes are distributed to the public pursuant
to Rule 144 under the Securities Act or may be sold to the public
without compliance with the requirements of such rule.
Trustee: Norwest Bank Minnesota, National Association or
any successor trustee under the Indenture.
Underwritten Registration or Underwritten Offering: A
registration in which securities of the Company are sold to an
underwriter for reoffering to the public.
2. SECURITIES SUBJECT TO THIS AGREEMENT.
(a) Transfer Restricted Securities. The securities
entitled to the benefits of this Agreement are the Transfer Restricted
Securities.
(b) Holders of Transfer Restricted Securities. A Person is
deemed to be a holder of Transfer Restricted Securities (each, a
"Holder") whenever such Person owns Transfer Restricted Securities.
<PAGE>
4
3. REGISTERED EXCHANGE OFFER
(a) Unless the Exchange Offer shall not be permissible
under applicable law or Commission policy (after the procedures set
forth in Section 6(a) below have been complied with) or one of the
events set forth in Section 4(a)(ii) has occurred, the Company shall
(i) cause to be filed with the Commission promptly after the Closing
Date, but in no event later than 90 days after the Closing Date, a
Registration Statement under the Securities Act relating to the New
Notes and the Exchange Offer, (ii) use its reasonable best efforts to
cause such Registration Statement to be declared effective by the
Commission no later than 180 days after the Closing Date, (iii) in
connection with the foregoing, file (A) all pre-effective amendments to
such Registration Statement as may be necessary in order to cause such
Registration Statement to become effective, (B) if applicable, a
post-effective amendment to such Registration Statement pursuant to
Rule 430A under the Securities Act and (C) cause all necessary filings
in connection with the registration and qualification of the New Notes
to be made under the Blue Sky laws of such jurisdictions as are
necessary to permit Consummation of the Exchange Offer, and (iv) unless
the Exchange Offer would not be permitted by applicable law or
Commission policy, the Company will commence the Exchange Offer and use
its reasonable best efforts to issue on or prior to 30 business days
after the date on which such Registration Statement was declared
effective by the Commission, New Notes in exchange for all Notes
tendered prior thereto in the Exchange Offer. The Exchange Offer shall
be on the appropriate form permitting registration of the New Notes to
be offered in exchange for the Transfer Restricted Securities and to
permit resales of the New Notes held by Broker-Dealers as contemplated
by Section 3(c) below. The 90, 180 and 30 business day periods referred
to in (i), (ii) and (iii) of this Section 3(a) shall not include any
period during which the Company is pursuing a Commission ruling
pursuant to Section 6(a)(i) below.
(b) The Company shall use its reasonable best efforts to
cause the Exchange Offer Registration Statement to be effective
continuously and shall keep the Exchange Offer open for a period of not
less than the minimum period required under applicable federal and
state securities laws to Consummate the Exchange Offer; provided,
however, that in no event shall such period be less than 20 business
days. The Company shall cause the Exchange Offer to comply in all
material respects with all applicable federal and state securities
laws. No securities other than the New Notes shall be included in the
Exchange Offer Registration Statement. The Company shall use its
reasonable best efforts to cause the Exchange Offer to be Consummated
on the earliest practicable date after the Exchange Offer Registration
Statement has become effective, but in no event later than 30 business
days thereafter.
(c) The Company shall indicate in a "Plan of Distribution"
section contained in the Prospectus contained in the Exchange Offer
Registration Statement that any Broker-Dealer who holds Transfer
Restricted Securities that were acquired for its own account as a
result of market-making activities or other trading activities (other
than Transfer Restricted Securities acquired directly from the Company
or any affiliate of the Company) may exchange such Transfer Restricted
Securities pursuant to the
<PAGE>
5
Exchange Offer; however, such Broker-Dealer may be deemed to be an
"underwriter" within the meaning of the Securities Act and must,
therefore, deliver a prospectus meeting the requirements of the
Securities Act in connection with any resales of the New Notes received
by such Broker-Dealer in the Exchange Offer, which prospectus delivery
requirement may be satisfied by the delivery by such Broker-Dealer of
the Prospectus contained in the Exchange Offer Registration Statement.
Such "Plan of Distribution" section shall also contain all other
information with respect to such resales by Broker-Dealers that the
Commission may require in order to permit such resales pursuant
thereto, but such "Plan of Distribution" shall not name any such
Broker-Dealer or disclose the amount of New Notes held by any such
Broker-Dealer except to the extent required by the Commission as a
result of a change in policy announced after the date of this
Agreement.
The Company shall use its reasonable best efforts to keep the
Exchange Offer Registration Statement continuously effective, supplemented and
amended as required by the provisions of Section 6(c) below to the extent
necessary to ensure that it is available for resales of New Notes acquired by
Broker-Dealers for their own accounts as a result of market-making activities or
other trading activities and to ensure that it conforms with the requirements of
this Agreement, the Securities Act and the policies, rules and regulations of
the Commission as announced from time to time, for a period of the earlier of
180 days from the date on which the Exchange Offer Registration Statement is
declared effective and the date the Broker-Dealers have advised the Company they
have sold all such New Notes.
The Company shall provide sufficient copies of the latest
version of such Prospectus to Broker-Dealers promptly upon request at any time
during such period in order to facilitate such resales.
4. SHELF REGISTRATION
(a) SHELF REGISTRATION. If (i) the Company is not required
to file an Exchange Offer Registration Statement or permitted to
consummate the Exchange Offer because the Exchange Offer is not
permitted by applicable law or Commission policy (after the procedures
set forth in Section 6(a) below have been complied with) or (ii) if any
Holder of Transfer Restricted Securities shall notify the Company prior
to the 20th business day following the Consummation of the Exchange
Offer (A) that such Holder is prohibited by applicable law or
Commission policy from participating in the Exchange Offer or (B) that
such Holder may not resell the New Notes acquired by it in the Exchange
Offer to the public without delivering a prospectus and that the
Prospectus contained in the Exchange Offer Registration Statement is
not appropriate or available for such resales by such Holder or (C)
that such Holder is a Broker-Dealer and owns the Notes acquired
directly from the Company or one of its affiliates, then the Company
shall in lieu of, or in the event of (ii) above, in addition to,
effecting the registration of the New Notes pursuant to the Exchange
Offer Registration Statement use its reasonable best efforts to:
(x) cause to be filed a shelf registration
statement pursuant to Rule 415 under the Securities Act, which
<PAGE>
6
may be an amendment to the Exchange Offer Registration
Statement (in either event, the "Shelf Registration
Statement"), on or prior to the earlier to occur of (1) the
90th day after the date on which the Company determines that
it is not required to file the Exchange Offer Registration
Statement or permitted to consummate the Exchange Offer as
contemplated by clause (i) above or (2) the 90th day after the
date on which the Company receives notice from a Holder of
Transfer Restricted Securities as contemplated by clause (ii)
above (such earlier date being the "Shelf Filing Deadline"),
which Shelf Registration Statement shall provide for resales
of all Transfer Restricted Securities the Holders of which
shall have provided the information required pursuant to
Section 4(b) hereof; and
(y) cause such Shelf Registration Statement to be
declared effective by the Commission on or before the 90th day
after the Shelf Filing Deadline.
The Company shall use its reasonable best efforts to keep such Shelf
Registration Statement continuously effective, supplemented and amended
as required by the provisions of Sections 6(b) and (c) hereof to the
extent necessary to ensure that it is available for resales of Notes by
the Holders of Transfer Restricted Securities entitled to the benefit
of this Section 4(a) and to ensure that it conforms with the
requirements of this Agreement, the Securities Act and the policies,
rules and regulations of the Commission as announced from time to time,
for a period ending on the second anniversary of the Closing Date (or
such shorter period as may hereafter be referred to in Rule 144(k)
under the Securities Act).
(b) PROVISION BY HOLDERS OF CERTAIN INFORMATION IN
CONNECTION WITH THE SHELF REGISTRATION STATEMENT. No Holder of Transfer
Restricted Securities may include any of its Transfer Restricted
Securities in any Shelf Registration Statement pursuant to this
Agreement unless and until such Holder furnishes to the Company in
writing, within 20 business days after receipt of a request therefor,
such information as the Company may reasonably request for use in
connection with any Shelf Registration Statement or Prospectus or
preliminary Prospectus included therein. No Holder of Transfer
Restricted Securities shall be entitled to Liquidated Damages pursuant
to Section 5 hereof unless and until such Holder shall have used its
best efforts to provide all such reasonably requested information. Each
Holder as to which any Shelf Registration Statement is being effected
agrees to furnish promptly to the Company all information required to
be disclosed in order to make the information previously furnished to
the Company by such Holder not materially misleading.
5. LIQUIDATED
(a) If (a) any of the Registration Statements required by
this Agreement is not filed with the Commission on or prior to the date
specified for such filing in this Agreement, (b) any of such Registration
Statements has not been declared effective by the
<PAGE>
7
Commission on or prior to the date specified for such effectiveness in this
Agreement (the "Effectiveness Target Date"), (c) the Exchange Offer has not been
Consummated within 30 business days after the Effectiveness Target Date with
respect to the Exchange Offer Registration Statement or (d) any Registration
Statement required by this Agreement is filed and declared effective but shall
thereafter cease to be effective or fail to be usable for its intended purpose
without being succeeded within five business days by a post-effective amendment
to such Registration Statement that cures such failure and that is itself
promptly declared effective (each such event referred to in clauses (a) through
(d), a "Registration Default"), additional cash interest ("Liquidated Damages")
shall accrue to each Holder of the Notes commencing upon the occurrence of such
Registration Default in an amount equal to $.05 per week per $1,000 principal
amount of Notes held by such Holder during the 90 day period following the
occurrence of such Registration Default. The amount of Liquidated Damages will
increase by an additional $.05 per week per $1,000 principal amount of Notes
with respect to each subsequent 90-day period until all Registration Defaults
have been cured, up to a maximum amount of Liquidated Damages for all
Registration Defaults of $.50 per week per $1,000 principal amount of Notes. All
accrued Liquidated Damages shall be paid to Holders by the Company in the same
manner as interest is made pursuant to the Indenture. Following the cure of all
Registration Defaults relating to any particular Transfer Restricted Securities,
the accrual of Liquidated Damages with respect to such Transfer Restricted
Securities will cease.
All obligations of the Company set forth in the preceding
paragraph that have accrued and are outstanding with respect to any Transfer
Restricted Security at the time such security ceases to be a Transfer Restricted
Security shall survive until such time as all such obligations with respect to
such Transfer Restricted Security shall have been satisfied in full.
(b) The Company shall notify the Trustee within one business
day after each and every date on which an event occurs in respect of which
Liquidated Damages are required to be paid (an "Event Date"). Liquidated Damages
shall be paid by depositing Liquidated Damages with the Trustee, for the benefit
of the Holders of the Notes, on or before the applicable Interest Payment Date
(as defined in the Indenture) for the Notes (whether or not any payment other
than Liquidated Damages is payable on such Notes) in immediately available funds
in sums sufficient to pay the Liquidated Damages then due to such Holders. Each
obligation to pay Liquidated Damages shall be deemed to accrue from the
applicable date of the occurrence of the Registration Default.
6. REGISTRATION
(a) EXCHANGE OFFER REGISTRATION STATEMENT. In connection
with the Exchange Offer, the Company shall comply with all of the
provisions of Section 6(c) below, shall use its reasonable best efforts
to effect such exchange to permit the sale of Transfer Restricted
Securities being sold in accordance with the intended method or methods
of distribution thereof, and shall comply with all of the following
provisions:
(i) If in the reasonable opinion of counsel to the
Company there is a question as to whether the Exchange Offer
is permitted by applicable law, the Company hereby agrees to
seek a no-action letter or other favorable
<PAGE>
8
decision from the Commission allowing the Company to
Consummate the Exchange Offer for such Notes, provided that
the Company need not pursue such no-action letter or other
decision if in the reasonable opinion of counsel to the
Company there is no reasonable prospect for success in this
regard. Subject to the foregoing, the Company hereby agrees to
pursue the issuance of such a decision to the Commission staff
level but shall not be required to take commercially
unreasonable action to effect a change of Commission policy.
Subject to the foregoing, the Company hereby agrees, however,
to (A) participate in telephonic conferences with the
Commission, (B) deliver to the Commission staff an analysis
prepared by counsel to the Company setting forth the legal
bases, if any, upon which such counsel has concluded that such
an Exchange Offer should be permitted and (C) diligently
pursue a resolution (which need not be favorable) by the
Commission staff of such submission.
(ii) As a condition to its participation in the
Exchange Offer pursuant to the terms of this Agreement, each
Holder of Transfer Restricted Securities shall furnish, upon
the request of the Company, prior to the Consummation thereof,
a written representation to the Company (which may be
contained in the letter of transmittal contemplated by the
Exchange Offer Registration Statement) to the effect that (A)
it is not an affiliate of the Company, (B) it is not engaged
in, and does not intend to engage in, and has no arrangement
or understanding with any person to participate in, a
distribution of the New Notes to be issued in the Exchange
Offer and (C) it is acquiring the New Notes in its ordinary
course of business. In addition, all such Holders of Transfer
Restricted Securities shall otherwise cooperate in the
Company's preparations for the Exchange Offer. The parties
hereto acknowledge and agree that any Broker-Dealer and any
Holder using the Exchange Offer to participate in a
distribution of the securities to be acquired in the Exchange
Offer (1) could not under Commission policy as in effect on
the date of this Agreement rely on the position of the
Commission enunciated in MORGAN STANLEY AND CO., INC.
(available June 5, 1991) and EXXON CAPITAL HOLDINGS
CORPORATION (available May 13, 1988), as interpreted in the
Commission's letter to Shearman & Sterling dated July 2, 1993,
and similar no-action letters (including BROWN & WOOD LLP
(available February 7, 1997), and any no-action letter
obtained pursuant to clause (i) above) and (2) must comply
with the registration and prospectus delivery requirements of
the Securities Act in connection with a secondary resale
transaction and that such a secondary resale transaction
should be covered by an effective registration statement
containing the selling security holder information required by
Item 507 or 508, as applicable, of Regulation S-K if the
resales are of New Notes obtained by such Holder in exchange
for Notes acquired by such Holder directly from the Company.
(iii) Prior to effectiveness of the Exchange Offer
Registration Statement, the Company shall provide a
supplemental letter to the Commission (A) stating that the
Company is registering the Exchange Offer in reliance on the
position of the Commission enunciated in EXXON CAPITAL
HOLDINGS
<PAGE>
9
CORPORATION (available May 13, 1988), MORGAN STANLEY AND CO.,
Inc. (available June 5, 1991), BROWN & WOOD LLP (available
February 7, 1997) and, if applicable, any no-action letter
obtained pursuant to clause (i) above and (B) including a
representation that the Company has not entered into any
arrangement or understanding with any Person to distribute the
New Notes to be received in the Exchange Offer and that, to
the best of the Company's information and belief and based on
the representations of Holders of Transferred Securities
pursuant to clause (ii) above, each Holder participating in
the Exchange Offer is acquiring the New Notes in its ordinary
course of business and has no arrangement or understanding
with any Person to participate in the distribution of the New
Notes received in the Exchange Offer.
(b) SHELF REGISTRATION STATEMENT. In connection with the
Shelf Registration Statement, the Company shall comply with all the
applicable provisions of Section 6(c) below and shall use its
reasonable best efforts to effect such registration to permit the sale
of the Transfer Restricted Securities being sold in accordance with the
intended method or methods of distribution thereof, and pursuant
thereto the Company will, in accordance with the terms hereof, prepare
and file with the Commission a Registration Statement relating to the
registration on any appropriate form under the Securities Act, which
form shall be available for the sale of the Transfer Restricted
Securities in accordance with the intended method or methods of
distribution thereof.
(c) GENERAL PROVISIONS. In connection with any
Registration Statement and any Prospectus required by this Agreement to
permit the sale or resale of Transfer Restricted Securities (including,
without limitation, any Registration Statement and the related
Prospectus required to permit resales of Notes by Broker-Dealers), the
Company shall:
(i) use its reasonable best efforts to keep such
Registration Statement continuously effective and provide all
requisite financial statements for the period specified in
Section 3 or 4 of this Agreement, as applicable, or such
shorter period as will terminate when all Transfer Restricted
Securities covered by such Registration Statement have been
sold; upon the occurrence of any event that would cause any
such Registration Statement or the Prospectus contained
therein (A) to contain a material misstatement or material
omission or (B) not to be effective and usable for resale of
Transfer Restricted Securities during the period required by
this Agreement, the Company shall file promptly an appropriate
amendment to such Registration Statement, in the case of
clause (A), correcting any such misstatement or omission, and,
in the case of either clause (A) or (B), use its reasonable
best efforts to cause such amendment to be declared effective
and such Registration Statement and the related Prospectus to
become usable for their intended purpose(s) as soon as
practicable thereafter;
(ii) prepare and file with the Commission such
amendments and post-effective amendments to the Registration
Statement as may be necessary to keep the Registration
Statement effective for the applicable period
<PAGE>
10
set forth in Section 3 or 4 hereof, as applicable, or such
shorter period as will terminate when all Transfer Restricted
Securities covered by such Registration Statement have been
sold; cause the Prospectus to be supplemented by any required
Prospectus supplement, and as so supplemented to be filed
pursuant to Rule 424 under the Securities Act, and to comply
fully with the applicable provisions of Rules 424 and 430A
under the Securities Act in a timely manner; and comply with
the provisions of the Securities Act with respect to the
disposition of all securities covered by such Registration
Statement during the applicable period in accordance with the
intended method or methods of distribution by the sellers
thereof set forth in such Registration Statement or supplement
to the Prospectus;
(iii) in the case of a Shelf Registration, advise the
underwriter(s), if any, and selling Holders promptly and, if
requested by such Persons, to confirm such advice in writing,
(A) when the Prospectus or any Prospectus supplement or
post-effective amendment has been filed, and, with respect to
any Registration Statement or any post-effective amendment
thereto, when the same has become effective, (B) of any
request by the Commission for amendments to the Registration
Statement or amendments or supplements to the Prospectus or
for additional information relating thereto, (C) of the
issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement under the
Securities Act or of the suspension by any state securities
commission of the qualification of the Transfer Restricted
Securities for offering or sale in any jurisdiction, or the
initiation of any proceeding for any of the preceding
purposes, or (D) of the existence of any fact or the happening
of any event as a result of which the Registration Statement,
the Prospectus, any amendment or supplement thereto or any
document incorporated by reference would include any untrue
statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not
misleading. If at any time the Commission shall issue any stop
order suspending the effectiveness of the Registration
Statement, or any state securities commission or other
regulatory authority shall issue an order suspending the
qualification or exemption from qualification of the Transfer
Restricted Securities under state securities or Blue Sky laws,
the Company shall use its reasonable best efforts to obtain
the withdrawal or lifting of such order at the earliest
possible time;
(iv) in the case of a Shelf Registration, furnish to
each of the selling or exchanging Holders and each of the
underwriter(s), if any, before filing with the Commission,
copies of any Registration Statement or any Prospectus
included therein or any amendments or supplements to any such
Registration Statement or Prospectus (including all documents
incorporated by reference after the initial filing of such
Registration Statement), which documents will be subject to
the review of such Holders and underwriter(s), if any, for a
period of at least five business days, and the Company will
not file any such Registration Statement or Prospectus or any
amendment or
<PAGE>
11
supplement to any such Registration Statement or Prospectus
(including all such documents incorporated by reference) to
which selling Holders of a majority in aggregate principal
amount of Transfer Restricted Securities covered by such
Registration Statement or the underwriter(s), if any, shall
reasonably object within five business days after the receipt
thereof. A selling Holder or underwriter, if any, shall be
deemed to have reasonably objected to such filing if such
Registration Statement, amendment, Prospectus or supplement,
as applicable, as proposed to be filed, contains a material
misstatement or material omission;
(v) in the case of a Shelf Registration, (subject
to entering into a confidentiality arrangement which is
reasonably satisfactory to the Company) (i) make available at
reasonable times for inspection by the selling Holders, any
underwriter participating in any disposition pursuant to such
Registration Statement, and any attorney or accountant
retained by such selling Holders or any of the underwriter(s),
at the offices where normally kept, during the Company's
normal business hours, all financial and other records,
pertinent corporate documents and properties of the Company
and (ii) cause the Company's officers, directors, managers and
employees to supply all relevant information reasonably
requested by any such Holder, underwriter, attorney or
accountant in connection with such Registration Statement
subsequent to the filing thereof and prior to its
effectiveness;
(vi) in the case of a Shelf Registration, if
requested by any selling Holders or the underwriter(s), if
any, promptly incorporate in any Registration Statement or
Prospectus, pursuant to a supplement or post-effective
amendment if necessary, such relevant information as such
selling Holders and underwriter(s), if any, may reasonably
request to have included therein, including, without
limitation, information relating to the "Plan of Distribution"
of the Transfer Restricted Securities, information with
respect to the principal amount of Transfer Restricted
Securities being sold to such underwriter(s), the purchase
price being paid therefor and any other terms of the offering
of the Transfer Restricted Securities to be sold in such
offering, and make all required filings of such Prospectus
supplement or post-effective amendment as soon as practicable
after the Company is notified of the matters to be
incorporated in such Prospectus supplement or post-effective
amendment;
(vii) in the case of a Shelf Registration, furnish to
each selling Holder and each of the underwriter(s), if any,
without charge, at least one copy of the Registration
Statement, as first filed with the Commission, and of each
amendment thereto, including upon request all documents
incorporated by reference therein and all exhibits (including
exhibits incorporated therein by reference);
(viii) in the case of a Shelf Registration, deliver to
each selling Holder and each of the underwriter(s), if any,
without charge, as many copies of the Prospectus (including
each preliminary prospectus) and any amendment
<PAGE>
12
or supplement thereto as such Persons reasonably may request;
the Company hereby consents to the use of the Prospectus and
any amendment or supplement thereto by each of the selling
Holders and each of the underwriter(s), if any, in connection
with the offering and the sale of the Transfer Restricted
Securities covered by the Prospectus or any amendment or
supplement thereto;
(ix) in the case of a Shelf Registration, enter into
such agreements (including an underwriting agreement) and make
such representations and warranties and take all such other
actions in connection therewith in order to expedite or
facilitate the disposition of the Transfer Restricted
Securities pursuant to any Registration Statement contemplated
by this Agreement, all to such extent as may be reasonably
requested by the Holders of a majority in aggregate principal
amount of the Transfer Restricted Securities or any
underwriter in connection with any sale or resale pursuant to
any Registration Statement contemplated by this Agreement, and
in connection with an Underwritten Registration, the Company
shall:
(A) upon request by the Holders of an
aggregate principal amount of Transfer Restricted
Securities or any underwriter, furnish to each
selling Holder and each underwriter, if any, in such
substance and scope as they may request and as are
customarily made by issuers to underwriters in
primary underwritten offerings, upon the date of the
effectiveness of the Shelf Registration Statement:
(1) a certificate, dated the date of the
effectiveness of the Shelf Registration
Statement, signed by (y) the Chairman of the
Board, its President or a Vice President and
(z) the Chief Financial Officer of the Company,
confirming, as of the date thereof, such
matters as such parties may reasonably request;
(2) an opinion, dated the date of the
effectiveness of the Shelf Registration
Statement, of counsel for the Company, covering
such matters as such parties may reasonably
request (it being agreed that the matters to be
covered by such opinion may be subject to
customary qualifications and exceptions), and
in any event including a statement to the
effect that such counsel has participated in
conferences with officers and other
representatives of the Company and
representatives of the independent public
accountants for the Company in connection with
the preparation of such Registration Statement
and the related Prospectus and have considered
the matters required to be stated therein and
the statements contained therein, although such
counsel has not independently verified the
accuracy, completeness or fairness of such
statements, and that such counsel advises that,
on the basis of the foregoing, no facts came to
such counsel's attention that caused such
counsel to
<PAGE>
13
believe that the applicable Registration
Statement, at the time such Registration
Statement or any post-effective amendment
thereto became effective, contained an untrue
statement of a material fact or omitted to
state a material fact required to be stated
therein or necessary to make the statements
therein not misleading, or that the Prospectus
contained in such Registration Statement as of
its date, contained an untrue statement of a
material fact or omitted to state a material
fact necessary in order to make the statements
therein, in light of the circumstances under
which they were made, not misleading. Without
limiting the foregoing, such counsel may state
further that such counsel assumes no
responsibility for, and has not independently
verified, the accuracy, completeness or
fairness of the financial statements, notes and
schedules and other financial and statistical
data included or omitted in any Registration
Statement contemplated by this Agreement or the
related Prospectus; and
(3) a customary comfort letter, dated
the date of the effectiveness of the Shelf
Registration Statement, from the Company's
independent public accountants, in the
customary form and covering matters of the type
customarily covered in comfort letters to
underwriters in connection with underwritten
offerings.
(B) set forth in full or incorporate by
reference in the underwriting agreement, if any, the
indemnification provisions and procedures of Section
8 hereof with respect to all parties to be
indemnified pursuant to said Section; and
(C) deliver such other documents and
certificates as may be reasonably requested by such
parties to evidence compliance with clause (A) above
and with any customary conditions contained in the
underwriting agreement or other agreement entered
into by the Company pursuant to this clause (xi), if
any.
If at any time the representations and
warranties of the Company contemplated in clause (A)(1) above
cease to be true and correct, the Company shall so advise the
Initial Purchasers and the underwriter(s), if any, and each
selling Holder promptly and, if requested by such Persons,
shall confirm such advice in writing.
(x) in the case of a Shelf Registration, prior
to any public offering of Transfer Restricted Securities,
cooperate with the selling Holders, the underwriter(s), if
any, and their respective counsel in connection with the
registration and qualification of the Transfer Restricted
Securities under the securities or Blue Sky laws of such
jurisdictions as the selling Holders or underwriter(s) may
reasonably request and do any and all other acts or things
<PAGE>
14
reasonably necessary or advisable to enable the disposition in
such jurisdictions of the Transfer Restricted Securities
covered by the Shelf Registration Statement; provided,
however, that the Company shall not be required to register or
qualify as a foreign corporation where it is not now so
qualified or to take any action that would subject it to the
service of process in suits or to taxation, other than as to
matters and transactions relating to the Registration
Statement, in any jurisdiction where it is not now so subject;
(xi) in the case of a Shelf Registration,
shall issue, upon the request of any Holder of Notes covered
by the Shelf Registration Statement, New Notes in the same
principal amount as the Notes surrendered to the Company by
such Holder in exchange therefor or being sold by such Holder,
such New Notes to be registered in the name of such Holder or
in the name of the purchaser(s) of such Notes; in return, the
Notes held by such Holder shall be surrendered to the Company
for cancellation;
(xii) in the case of a Shelf Registration,
cooperate with the selling Holders and the underwriter(s), if
any, to facilitate the timely preparation and delivery of
certificates representing Transfer Restricted Securities to be
sold and not bearing any restrictive legends regarding
securities laws and enable such Transfer Restricted Securities
to be in such denominations and registered in such names as
the Holders or the underwriter(s), if any, may request at
least two business days prior to any sale of Transfer
Restricted Securities pursuant to such Shelf Registration;
(xiii) use its reasonable best efforts to
cause the Transfer Restricted Securities covered by the
Registration Statement to be registered with or approved by
such other governmental agencies or authorities as may be
necessary to enable the Holders or the underwriter(s), if any,
to consummate the disposition of such Transfer Restricted
Securities, subject to the proviso contained in clause (x)
above;
(xiv) if any fact or event contemplated by
clause (c)(iii)(D) above shall exist or have occurred, prepare
a supplement or post-effective amendment to the Registration
Statement or related Prospectus or any document incorporated
therein by reference or file any other required document so
that, as thereafter delivered to the purchasers of Transfer
Restricted Securities, the Prospectus will not contain an
untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein not
misleading;
(xv) provide CUSIP numbers for all Transfer
Restricted Securities not later than the effective date of the
Registration Statement and provide certificates for the
Transfer Restricted Securities;
(xvi) reasonably cooperate and assist in any
filings required to be made with the NASD by any underwriter
of Transfer Restricted Securities pursuant hereto;
<PAGE>
15
(xvii) otherwise use its reasonable best
efforts to comply with all applicable rules and regulations of
the Commission, and make generally available to its security
holders, as soon as reasonably practicable, a consolidated
earnings statement meeting the requirements of Rule 158 (which
need not be audited) for the twelve-month period (A)
commencing at the end of any fiscal quarter in which Transfer
Restricted Securities are sold to underwriters in a firm or
best efforts Underwritten Offering or (B) if not sold to
underwriters in such an offering, beginning with the first
month of the Company's first fiscal quarter commencing after
the effective date of the Registration Statement;
(xviii) cause the Indenture to be qualified
under the TIA not later than the effective date of the first
Registration Statement required by this Agreement, and, in
connection therewith, cooperate with the Trustee and the
Holders to effect such changes to the Indenture as may be
required for such Indenture to be so qualified in accordance
with the terms of the TIA, and execute and use its reasonable
best efforts to cause the Trustee to execute all documents
that may be required to effect such changes and all other
forms and documents required to be filed with the Commission
to enable such Indenture to be so qualified in a timely
manner; and
(xix) provide promptly to each Holder upon
request each document filed with the Commission pursuant to
the requirements of Section 13 and Section 15 of the Exchange
Act.
Each Holder agrees by acquisition of a Transfer
Restricted Security that, upon receipt of any notice from the Company
of the existence of any fact of the kind described in Section
6(c)(iii)(D) hereof, such Holder will forthwith discontinue disposition
of Transfer Restricted Securities pursuant to the applicable
Registration Statement until such Holder's receipt of the copies of the
supplemented or amended Prospectus contemplated by Section 6(c)(xiv)
hereof, or until it is advised in writing (the "Advice") by the Company
that the use of the Prospectus may be resumed, and has received copies
of any revised Prospectus and additional or supplemental filings that
are incorporated by reference in the Prospectus. If so directed by the
Company, each Holder will deliver to the Company (at the Company's
expense) all copies, other than permanent file copies then in such
Holder's possession, of the Prospectus covering such Transfer
Restricted Securities that was current at the time of receipt of such
notice. In the event the Company shall give any such notice, the time
period regarding the effectiveness of such Registration Statement set
forth in Section 3 or 4 hereof, as applicable, shall be extended by the
number of days during the period from and including the date of the
giving of such notice pursuant to Section 6(c)(iii)(D) hereof to and
including the date when each selling Holder covered by such
Registration Statement shall have received the copies of the
supplemented or amended Prospectus contemplated by Section 6(c)(xiv)
hereof or shall have received the Advice.
<PAGE>
16
7. REGISTRATION EXPENSES.
All expenses incident to the Company's performance of or
compliance with this Agreement will be borne by the Company, regardless
of whether a Registration Statement becomes effective, including
without limitation: (i) all registration and filing fees and expenses
(including filings made by any Purchaser or Holder with the NASD (and,
if applicable, the fees and expenses of any "qualified independent
underwriter" and its counsel that may be required by the rules and
regulations of the NASD)); (ii) all fees and expenses of compliance
with federal securities and state Blue Sky or securities laws; (iii)
all expenses of printing (including printing certificates for the New
Notes to be issued in the Exchange Offer and printing of Prospectuses),
and associated messenger and delivery services and telephone expenses;
(iv) all fees and disbursements of counsel for the Company; (v) all
application and filing fees in connection with any listing of the New
Notes on a national securities exchange or automated quotation system;
and (vi) all fees and disbursements of independent certified public
accountants of the Company (including the expenses of any special audit
and comfort letters required by or incident to such performance).
The Company will, in any event, bear its internal expenses
(including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), the
expenses of any annual audit and the fees and expenses of any Person,
including special experts, retained by the Company.
Each Holder shall pay all expenses of its counsel and any
other advisors or experts, underwriting discounts and commissions and
transfer taxes, if any, relating to the sale or disposition of such
Holder's Transfer Restricted Securities pursuant to a Shelf
Registration Statement, if any.
8. INDEMNIFICATION AND CONTRIBUTION.
(a) In connection with a Shelf Registration Statement or in
connection with any delivery of a Prospectus contained in an Exchange Offer
Registration Statement by any participating Broker-Dealer or Initial Purchaser,
as applicable, who seeks to sell New Notes, the Company shall indemnify and hold
harmless each Holder of Transfer Restricted Securities included within any such
Shelf Registration Statement and each such participating Broker-Dealer or
Initial Purchaser selling New Notes and each person, if any, who controls any
such person within the meaning of Section 15 of the Securities Act (each, a
"Participant") from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof to which such Participant or
controlling person may become subject, under the Securities Act or otherwise,
insofar as such loss, claim, damage, liability or action arises out of, or is
based upon, (i) any untrue statement or alleged untrue statement of a material
fact contained (A) in any such Registration Statement or any preliminary
Prospectus or Prospectus or any amendment or supplement thereto or (B) in any
Blue Sky Application or other document prepared or executed by the Company (or
based upon any written information furnished by the Company) specifically for
the purpose of qualifying any or all of the New Notes under the securities laws
of any state or other jurisdiction (any such application, document or
information being hereinafter called a "Blue Sky Application"), or (ii) the
omission or alleged
<PAGE>
17
omission to state in any preliminary Prospectus, Registration Statement or
Prospectus, or in any amendment or supplement thereto, or in any Blue Sky
Application a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances in which they were made,
not misleading and shall reimburse each Participant promptly upon demand for any
legal or other expenses reasonably incurred by such Participant in connection
with investigating or defending or preparing to defend against any such loss,
claim, damage, liability or action as such expenses are incurred; provided,
however, that (i) the Company shall not be liable in any such case to the extent
that any such loss, claim, damage, liability or action arises out of, or is
based upon, any untrue statement or alleged untrue statement or omission or
alleged omission made in any such Registration Statement or any prospectus
forming part thereof, or in any such amendment or supplement, or in any Blue Sky
Application in reliance upon and in conformity with written information
furnished to the Company by or on behalf of any Participant specifically for
inclusion therein; and provided further that as to any preliminary Prospectus,
the indemnity agreement contained in this Section 8(a) shall not inure to the
benefit of any such Participant on account of any loss, claim, damage, liability
or action arising from the sale of the New Notes to any person by that
Participant if (A) (i) that Participant failed to send or give a copy of the
Prospectus, as the same may be amended or supplemented, to that person within
the time required by the Securities Act and (ii) the untrue statement or alleged
untrue statement of a material fact or omission or alleged omission to state a
material fact in such preliminary Prospectus was corrected in the Prospectus,
unless, in each case, such failure resulted from non-compliance by the Company
with Section 6(c) or (B) the Participant breached its obligation pursuant to the
first sentence of the last paragraph of Section 6 hereof. The foregoing
indemnity agreement is in addition to any liability which the Company may
otherwise have to any Participant or to any controlling person of that
Participant.
(b) Each Participant, severally and not jointly, shall
indemnify and hold harmless the Company, each of its directors, officers,
employees or agents and each person, if any, who controls the Company within the
meaning of Section 15 of the Securities Act, from and against any loss, claim,
damage or liability, joint or several, or any action in respect thereof, to
which the Company or any such director, officer, employee or agent or
controlling person may become subject, under the Securities Act or otherwise,
insofar as such loss, claim, damage, liability or action arises out of, or is
based upon, (i) any untrue statement or alleged untrue statement of a material
fact contained (A) in any preliminary Prospectus, Registration Statement or
Prospectus or in any amendment or supplement thereto or (B) in any Blue Sky
Application or (ii) the omission or alleged omission to state in any preliminary
Prospectus, Registration Statement or Prospectus, or in any amendment or
supplement thereto, or in any Blue Sky Application a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading, but in each case only to
the extent that the untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with written
information furnished to the Company by or on behalf of that Participant
specifically for inclusion therein, and shall reimburse the Company and any such
director, officer, employees or agents or controlling person for any legal or
other expenses reasonably incurred by the Company or any such director, officer,
employee or agent or controlling person in connection with investigating or
defending or preparing to defend against any such loss, claim, damage, liability
or action as such expenses are incurred. The foregoing indemnity agreement is in
<PAGE>
18
addition to any liability which any Participant may otherwise have to the
Company or any such director, officer, employee, agent or controlling person.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 8 except to the extent it has
been materially prejudiced by such failure and, provided further, that the
failure to notify the indemnifying party shall not relieve it from any liability
which it may have to an indemnified party otherwise than under this Section 8
(except to the extent so provided in any such other obligation). If any such
claim or action shall be brought against an indemnified party, and it shall have
notified the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it wishes, jointly with
any other similarly notified indemnifying party, to assume the defense thereof
with counsel satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
the indemnified party shall have the right to employ separate counsel to
represent jointly the indemnified party and those other Participants and their
respective officers, employees and controlling persons who may be subject to
liability arising out of any claim in respect of which indemnity may be sought
by the Participants against the indemnifying party under this Section 8 but the
fees and expenses of such counsel shall be at the expense of such indemnified
party unless, (i) the employment thereof has been specifically authorized by the
indemnifying party in writing, (ii) such indemnified party shall have been
advised by such counsel that there may be one or more legal defenses available
to it which are different from or additional to those available to the
indemnifying party and in the reasonable judgment of such counsel it is
advisable for such indemnified party to employ separate counsel or (iii) the
indemnifying party has failed to assume the defense of such action and employ
counsel reasonably satisfactory to the indemnified party, in which case, if such
indemnified party notifies the indemnifying party in writing that it elects to
employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such action
on behalf of such indemnified party. In no event shall the indemnifying parties
be liable for the fees and expenses of more than one counsel (in addition to
local counsel). Each indemnified party, as a condition of the indemnity
agreements contained in Section 8, shall use its best efforts to cooperate with
the indemnifying party in the defense of any such action or claim. No
indemnifying party shall (i) without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding or (ii) be liable for any
settlement of any such action, compromise of any action or any judgment with
respect to any action the entry of which was consented to, effected without its
<PAGE>
19
written consent, but if settled with its written consent or if there be a final
judgment of the plaintiff in any such action, the indemnifying party agrees to
indemnify and hold harmless any indemnified party, to the extent set forth
herein, from and against any loss or liability by reason of such settlement or
judgment.
(d) If the indemnification provided for in this Section 8
shall for any reason be unavailable to or insufficient to hold harmless an
indemnified party under Section 8(a) or 8(b) in respect of any loss, claim,
damage or liability, or any action in respect thereof, referred to therein, then
each indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof, in such
proportion as shall be appropriate to reflect the relative fault of the Company
on the one hand and the Participants on the other with respect to the statements
or omissions which resulted in such loss, claim, damage or liability, or action
in respect thereof, as well as any other relevant equitable considerations. The
relative fault shall be determined by reference to whether the untrue or alleged
untrue statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by the Company or the
Participants, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Participants agree that it would not be just and equitable
if contributions pursuant to this Section 8(d) were to be determined by pro rata
allocation (even if the Participants were treated as one entity for such
purpose) or by any other method of allocation which does not take into account
the equitable considerations referred to herein. The amount paid or payable by
an indemnified party as a result of the loss, claim, damage or liability, or
action in respect thereof, referred to above in this Section 8(d) shall be
deemed to include, for purposes of this Section 8(d), any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 8(d), no Participant shall be required to contribute
any amount in excess of the amount by which proceeds received by such
Participant from an offering of the Notes exceeds the amount of any damages
which such Participant has otherwise paid or become liable to pay by reason of
any untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Participants'
obligations to contribute as provided in this Section 8(d) are several and not
joint.
9. RULE 144A.
The Company hereby agrees with each Holder, for so long as
any Transfer Restricted Securities remain outstanding, to make available to any
Holder or beneficial owner of Transfer Restricted Securities in connection with
any sale thereof and any prospective purchaser of such Transfer Restricted
Securities from such Holder or beneficial owner, the information required by
Rule 144A(d)(4) under the Securities Act in order to permit resales of such
Transfer Restricted Securities pursuant to Rule 144A.
<PAGE>
20
10. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS.
No Holder may participate in any Underwritten Registration
hereunder unless such Holder (a) agrees to sell such Holder's Transfer
Restricted Securities on the basis provided in any underwriting arrangements
approved by the Persons entitled hereunder to approve such arrangements and (b)
completes and executes all reasonable questionnaires, powers of attorney,
indemnities, underwriting agreements, lock-up letters and other documents
required under the terms of such underwriting arrangements.
11. SELECTION OF UNDERWRITERS.
The Holders of Transfer Restricted Securities covered by the
Shelf Registration Statement who desire to do so may sell such Transfer
Restricted Securities in an Underwritten Offering. In any such Underwritten
Offering, the investment banker or investment bankers and manager or managers
that will administer the offering will be selected by the Holders of a majority
in aggregate principal amount of the Transfer Restricted Securities included in
such offering; provided that such investment bankers and managers must be
reasonably satisfactory to the Company.
12. MISCELLANEOUS.
(a) REMEDIES. The Company agrees that monetary damages
(including Liquidated Damages) would not be adequate compensation for
any loss incurred by reason of a breach by it of the provisions of this
Agreement and hereby agrees to waive the defense in any action for
specific performance that a remedy at law would be adequate.
(b) NO INCONSISTENT AGREEMENTS. The Company will not on
or after the date of this Agreement enter into any agreement with
respect to its securities that is inconsistent with the rights granted
to the Holders in this Agreement or otherwise conflicts with the
provisions hereof. The rights granted to the Holders hereunder do not
in any way conflict with and are not inconsistent with the rights
granted to the holders of the Company's securities under any agreement
in effect on the date hereof.
(c) ADJUSTMENTS AFFECTING THE SECURITIES. The Company
will not take any action, or permit any change to occur, with respect
to the Notes that would materially and adversely affect the ability of
the Holders to Consummate any Exchange Offer unless such action or
change is required by applicable law.
(d) AMENDMENTS AND WAIVERS. The provisions of this
Agreement may not be amended, modified or supplemented, and waivers or
consents to or departures from the provisions hereof may not be given
unless the Company has obtained the written consent of Holders of a
majority of the outstanding principal amount of Transfer Restricted
Securities. Notwithstanding the foregoing, a waiver or consent to
departure from the provisions hereof that relates exclusively to the
rights of Holders whose securities are being tendered pursuant to the
Exchange Offer and that does not affect directly or indirectly the
rights of other Holders whose securities are not being tendered
pursuant to such Exchange Offer may be given by the Holders of a
<PAGE>
21
majority of the outstanding principal amount of Transfer Restricted
Securities being tendered or registered.
(e) NOTICES. All notices and other communications
provided for or permitted hereunder shall be made in writing by
hand-delivery, first-class mail (registered or certified, return
receipt requested), telex, telecopier, or air courier guaranteeing
overnight delivery:
(i) if to a Holder, at the address of such Holder
maintained by the Registrar under the Indenture; and
(ii) if to the Company:
Ocwen Asset Investment Corp.
The Forum, Suite 1000
1675 Palm Beach Lakes Blvd.
West Palm Beach, Florida 33401
Attention: Secretary
Facsimile: (561) 681-8177
With a copy to:
Elias, Matz, Tiernan & Herrick L.L.P.
734 15th Street, N.W.
Washington, D.C. 20005
Attention: Gerard L. Hawkins, Esq.
Facsimile: (202) 347-2172
All such notices and communications shall 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,
postage prepaid, if mailed; when answered back, if telexed; when
receipt acknowledged, if telecopied; and on the next business day, if
timely delivered to an air courier guaranteeing overnight delivery.
Copies of all such notices, demands or other
communications shall be concurrently delivered by the Person giving the
same to the Trustee at the address specified in the Indenture.
(f) SUCCESSORS AND ASSIGNS. This Agreement shall inure to
the benefit of and be binding upon the successors and assigns of each
of the parties, including without limitation and without the need for
an express assignment, subsequent Holders of Transfer Restricted
Securities; provided, however, that this Agreement shall not inure to
the benefit of or be binding upon a successor or assign of a Holder
unless and to the extent such successor or assign acquired Transfer
Restricted Securities from such Holder.
<PAGE>
22
(g) COUNTERPARTS. This Agreement may be executed in any
number of counterparts and by the parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the
same agreement.
(h) HEADINGS. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect
the meaning hereof.
(i) GOVERNING LAW. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York.
(j) SEVERABILITY. In the event that any one or more of
the provisions contained herein, or the application thereof in any
circumstance, is held invalid, illegal or unenforceable, the validity,
legality and enforceability of any such provision in every other
respect and of the remaining provisions contained herein shall not be
affected or impaired thereby.
(k) ENTIRE AGREEMENT. This Agreement together with the
other transaction documents is intended by the parties as a final
expression of their agreement and intended to be a complete and
exclusive statement of the agreement and understanding of the parties
hereto in respect of the subject matter contained herein. There are no
restrictions, promises, warranties or undertakings, other than those
set forth or referred to herein with respect to the registration rights
granted by the Company with respect to the Transfer Restricted
Securities. This Agreement supersedes all prior agreements and
understandings among the parties with respect to such subject matter.
(l) REQUIRED CONSENTS. Whenever the consent or approval of
Holders of a specified percentage of Transfer Restricted Securities is
required hereunder, Transfer Restricted Securities held by the Company
or its affiliates (as such term is defined in Rule 405 under the
Securities Act) shall not be counted in determining whether such
consent or approval was given by the Holders of such required
percentage.
<PAGE>
23
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
OCWEN ASSET INVESTMENT CORP.
By: /s/ Christine A. Reich
---------------------------------
Name: Christine A. Reich
Title: President
Accepted as of the date thereof
LEHMAN BROTHERS INC.
MORGAN STANLEY & CO. INC.
J.C. BRADFORD & CO.
PIPER JAFFRAY INC.
By LEHMAN BROTHERS INC.
By: /s/ Mark H. Burton
-------------------------------
Name: Mark H. Burton
Title: Managing Director
Exhibit 99
================================================================================
Ocwen Asset Investment Corp.
1675 Palm Beach Lakes Boulevard
West Palm Beach, Fl 33401
(NYSE: OAC)
================================================================================
News release: IMMEDIATE July 15, 1998
OCWEN ASSET INVESTMENT CORP. COMPLETES PRIVATE PLACEMENT OF $150 MILLION OF
SENIOR NOTES
West Palm Beach, FL -- Ocwen Asset Investment Corp. (NYSE: OAC), a hybrid REIT,
announced today that it completed the issuance of $150 million of 11.5% Senior
Notes due 2005 under Rule 144A of the Securities Act of 1933, as amended. The
Company intends to effect an exchange offer for the Senior Notes within the next
180 days whereby the holders of the Senior Notes will receive new Senior Notes
which have been registered with the SEC. Lehman Brothers, Morgan Stanley Dean
Witter, J.C. Bradford & Co. and Piper Jaffray Inc. acted as underwriters on the
transaction.
Christine A. Reich, President of OAC, stated, "We sought this funding because we
continue to see attractive assets that meet our risk-return parameters." Between
the date of its initial public offering on May 19, 1997 and June 30, 1998, OAC
closed transactions totaling $848 million of which $781 million have been
funded.
Ocwen Asset Investment Corp. a hybrid mortgage REIT headquartered in West Palm
Beach, Florida, invests in distressed commercial real estate, subordinate
commercial mortgage-backed securities and subordinate and residual interests in
residential mortgage-backed securities. OAC generally looks for opportunities to
acquire these assets and leverage the special servicing capabilities of its
manager Ocwen Financial Corporation (NYSE: OCN) in order to realize above
average yields or wider spreads. Using a disciplined approach to real estate
investing, OAC seeks to uncover and invest in higher-yielding assets.
CERTAIN STATEMENTS CONTAINED HEREIN MAY NOT BE BASED ON HISTORICAL FACTS AND ARE
"FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES
ACT OF 1933, AS AMENDED, AND SECTION 21E OF THE SECURITIES ACT OF 1934, AS
AMENDED. ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE INDICATED IN SUCH
STATEMENTS DUE TO RISKS, UNCERTAINTIES AND CHANGES WITH RESPECT TO A VARIETY OF
MARKET AND OTHER FACTORS.
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Contact Christine A. Reich (561) 682-8569
Mark S. Zeidman (561) 682-8600
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