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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
JANUARY 20, 1999
(Date of Report)
LNR PROPERTY CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 001-13223 65-0777234
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification Number)
760 NORTHWEST 107TH AVENUE, MIAMI, FLORIDA 33172
(Address of Principal Executive Offices) (Zip Code)
(305) 485-2000
(Registrant's Telephone Number, Including Area Code)
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ITEM 5. OTHER EVENTS
On November 25, 1998, we filed a registration statement on Form S-3
(File No. 333-67929) relating to $400,000,000 maximum aggregate offering price
of common stock, preferred stock, depositary shares, debt securities, warrants
and guarantees with the Securities and Exchange Commission. We filed Amendment
Number 1 to the registration statement on December 9, 1998, which was declared
effective by the SEC on December 10, 1998. We have completed a public offering
of $100,000,000 aggregate principal amount of 10 1/2% Senior Subordinated Notes
due 2009, pursuant to the terms of an Underwriting Agreement which we are filing
as Exhibit 1.1 to this report. The Notes are being issued pursuant to an
Indenture to be dated as of January 25, 1999 and a First Supplemental Indenture
to be dated as of January 25, 1999.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits
Exhibit No. Description of Document
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1.1 Underwriting Agreement dated January 20, 1999 by and
between LNR Property Corporation and BT Alex. Brown
Incorporated.
4.1 Form of First Supplemental Indenture dated as of
January 25, 1999 by LNR Property Corporation and The
Bank of New York, as trustee.
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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 hereunto duly authorized.
Dated: January 25, 1999
By: /s/ SHELLY RUBIN
--------------------------------
Name: Shelly Rubin
Title: Chief Financial Officer
(Principal Financial Officer)
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EXHIBIT INDEX
Exhibit No. Description of Document
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1.1 Underwriting Agreement dated January 20, 1999 by and
between LNR Property Corporation and BT Alex. Brown
Incorporated.
4.1 Form of First Supplemental Indenture dated as of
January 25, 1999 by LNR Property Corporation and The
Bank of New York, as trustee.
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LNR PROPERTY CORPORATION
$100,000,000
10 1/2% Senior Subordinated Notes due 2009
UNDERWRITING AGREEMENT
January 20, 1999
BT ALEX. BROWN INCORPORATED
NATIONSBANC MONTGOMERY SECURITIES LLC
JEFFERIES & COMPANY, INC.
c/o BT Alex. Brown Incorporated
One Bankers Trust Plaza
130 Liberty Street
New York, New York 10006
Ladies and Gentlemen:
LNR Property Corporation, a Delaware corporation (the "Company"),
proposes to issue and sell to you (collectively, the "Underwriters"), severally
and not jointly, $100,000,000 aggregate principal amount of the Company's
10 1/2% Senior Subordinated Notes due 2009 (the "Securities"). The respective
principal amounts of the Securities to be so purchased by the several
Underwriters are set forth opposite your names in Schedule I hereto. The
Securities are to be issued under an Indenture to be dated as of January 25,
1999 (the "Base Indenture") between the Company and The Bank of New York, as
trustee (the "Trustee"), as supplemented by a Supplemental Indenture to be dated
as of January 25, 1999 (the "Supplemental Indenture"). The Base Indenture as
supplemented by the Supplemental Indenture is referred to herein as the
"Indenture".
In consideration of the mutual agreements contained herein and of the
interests of the parties in the transactions contemplated hereby, the parties
hereto agree as follows:
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to each of the
Underwriters as follows:
(a) A registration statement on Form S-3 (File No. 333-67929),
including a basic prospectus relating to certain debt and equity securities to
be offered from time to time by the Company and a preliminary supplement to the
basic prospectus relating to the offering of the Securities, has been prepared
by the Company in conformity with the requirements of the Securities
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Act of 1933, as amended (the "Act"), and the Rules and Regulations (the "Rules
and Regulations") of the Securities and Exchange Commission (the "Commission")
thereunder and has been filed with the Commission. The Company has complied with
the conditions for the use of Form S-3. Copies of such registration statement,
including any amendments thereto, the preliminary prospectuses (meeting the
requirements of the Rules and Regulations) contained therein and the exhibits,
financial statements and schedules, as finally amended and revised, as well as
copies of any Preliminary Prospectuses (as defined below), have heretofore been
delivered by the Company to you. Such registration statement, which is herein
referred to as the "Registration Statement," has become effective under the Act
and no post-effective amendment to the Registration Statement has been filed as
of the date of this Agreement. The Company will hereafter file with the
Commission pursuant to Rule 424(b) a final supplement to the basic prospectus
included in the Registration Statement relating to the Securities and the
offering thereof. "Basic Prospectus" means the prospectus included in the
Registration Statement at the time it became effective under the Act.
"Prospectus" means the Basic Prospectus together with the final prospectus
supplement relating to the Securities first filed with the Commission pursuant
to Rule 424(b). Each preliminary prospectus supplement to the Basic Prospectus
which describes the Securities and the offering thereof and is used prior to the
filing of the Prospectus with the Commission, together with the Basic Prospectus
is herein referred to as a "Preliminary Prospectus." Any reference herein to the
Registration Statement, the Basic Prospectus, any Preliminary Prospectus or to
the Prospectus shall be deemed to refer to and include any documents
incorporated by reference therein, and, in the case of any reference herein to
any Prospectus, also shall be deemed to include any documents incorporated by
reference therein, and any supplements or amendments thereto, filed with the
Commission after the date of filing of the Prospectus under Rule 424(b) or 430A,
and prior to the termination of the offering of the Securities by the
Underwriters.
(b) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with
corporate or other power and authority to own or lease its properties and
conduct its business as described in the Registration Statement. Each of the
Subsidiaries (as defined below) and the Investment Affiliates (as defined below)
has been duly organized and is validly existing as a corporation or partnership,
as applicable, in good standing under the laws of the jurisdiction of its
incorporation or formation, with corporate or other power and authority to own
or lease its properties and conduct its business as described in the
Registration Statement. Each of the Company, the Subsidiaries and the Investment
Affiliates is duly qualified to transact business in all jurisdictions in which
the conduct of its business requires such qualification, except where the
failure to be so qualified would not,
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individually or in the aggregate, have a material adverse effect on the
condition, financial or otherwise, of the Company and the Subsidiaries taken as
a whole or the business, management, properties, assets, rights, operations or
prospects of the Company and the Subsidiaries taken as a whole (a "Material
Adverse Effect"). The Subsidiaries listed on Exhibit 21 to the Company's Annual
Report on Form 10-K for the year ended November 30, 1997 constitute all the
Subsidiaries at November 30, 1997 other than Subsidiaries that, if considered in
the aggregate as a single subsidiary, would not have constituted a "significant
subsidiary" of the Company at that date, within the meaning of Rule 1-02(w) of
the Commission's Regulation S-X. There are no "significant subsidiaries" of the
Company other than the Designated Subsidiaries (as defined below) and Investment
Affiliates (as defined below), and, at the date of this Agreement, the
Subsidiaries other than the Designated Subsidiaries and the Investment
Affiliates, if considered in the aggregate as a single subsidiary, would not
constitute a "significant subsidiary" of the Company. LW Real Estate
Investments, L.P. and the Land Partnership (as defined below) constitute all the
Investment Affiliates. The outstanding shares of capital stock of each of the
Subsidiaries have been duly authorized and validly issued, are fully paid and
non-assessable and are owned by the Company or another Subsidiary (except to the
extent set forth as "minority interests" on the consolidated condensed balance
sheet of LNR as of August 31, 1998 included in the Prospectus), free and clear
of all liens, encumbrances and equities and claims (other than liens created
pursuant to the Credit Agreement (as defined below)); and no options, warrants
or other rights to purchase, agreements or other obligations to issue or other
rights to convert any obligations into shares of capital stock or ownership
interests in the Subsidiaries or the Investment Affiliates are outstanding. The
Company indirectly owns a 50% interest in Lennar Land Partners, a Florida
general partnership (the "Land Partnership"). Such interest in the Land
Partnership and the Company's interests in LW Real Estate Investments, L.P. have
been duly authorized and validly issued and are owned by the Company or a
Subsidiary indirectly wholly owned by the Company, free and clear of all liens,
encumbrances and equities and claims. For purposes of this Agreement, a
"Subsidiary" means a direct or indirect "subsidiary" of the Company, as such
term is defined in Rule 405 under the Act. For purposes of this Agreement, the
following Subsidiaries are "Designated Subsidiaries": Leisure Colony Management
Corp., LNR Affordable Housing, Inc., Lennar Capital Services, Inc., Lennar
Securities Holdings, Inc., Nevada Securities Holdings, Inc., LNR Land Partners
SUB, Inc., LFS Asset Corp., Lennar Commercial Properties, Inc., Lennar MBS,
Inc., and LNR Florida Funding, Inc. For purposes of this Agreement, an
"Investment Affiliate" means any entity in which LNR, directly or indirectly,
has an ownership interest, (i) the financial results of which are not
consolidated under generally accepted accounting principles with the financial
results of LNR on the consolidated financial statements of LNR and (ii) which is
a "significant subsidiary" of LNR, as such term is defined within Rule 1-02(w)
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of the Commission's Regulations S-X. For purposes of this Agreement, the "Credit
Agreement" means the Amended and Restated Revolving Credit Agreement dated as of
March 27, 1998 among LNR, certain Subsidiaries, the parties thereto in their
capacities as lenders thereunder and Bank of America National Trust and Savings
Association, as agent, as amended.
(c) The information set forth under the caption "Capitalization" in the
Prospectus is true and correct as of its date. The outstanding shares of Common
Stock and the Company's Class B Common Stock, par value $.10 per share ("Class B
Common Stock"), have been duly authorized and validly issued and are fully paid
and non-assessable; and no preemptive rights of stockholders exist with respect
to the capital stock or any other securities of the Company or the issue and
sale thereof. Neither the filing of the Registration Statement nor the offering
or sale of the Securities as contemplated by this Agreement gives rise to any
rights, other than those which have been waived or satisfied, for or relating to
the registration of securities of the Company.
(d) The Company has all requisite corporate power and authority to
execute, deliver and perform each of its obligations under the Securities. The
Securities, when issued, will be in the form contemplated by the Indenture. The
Securities have each been duly and validly authorized by the Company and, when
executed by the Company and authenticated by the Trustee in accordance with the
provisions of the Indenture and delivered to and paid for by the Underwriters in
accordance with the terms of this Agreement, will have been duly executed,
issued and delivered and will constitute valid and legally binding obligations
of the Company (assuming the due authorization, execution and delivery of the
Indenture by the Trustee and the due authorization and delivery of the
Securities by the Trustee in accordance with the Indenture), entitled to the
benefits of the Indenture, and enforceable against the Company in accordance
with their terms, except that the enforcement thereof may be subject to (i)
bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or
other similar laws now or hereafter in effect relating to creditors' rights
generally, and (ii) general principles of equity and the discretion of the court
before which any proceeding therefor may be brought (regardless of whether such
enforcement is considered in a proceeding in equity or at law).
(e) The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under the Indenture. The Indenture
has been duly qualified under the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"). The Indenture has been duly and validly authorized by
the Company, and the Base Indenture (assuming the due authorization, execution
and delivery by the Trustee) has been duly executed and delivered and
constitutes a valid and legally binding agreement of the Company, enforceable
against the Company in accordance with its terms, except that the enforcement
thereof may be
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subject to (i) bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally and (ii) general principles of equity and the
discretion of the court before which any proceeding therefor may be brought
(regardless of whether such enforcement is considered in a proceeding in equity
or at law). When the Supplemental Indenture is executed and delivered by the
Company (assuming the due authorization, execution and delivery by the Trustee),
the Supplemental Indenture will have been duly executed and delivered and the
Indenture will constitute a valid and legally binding agreement of the Company,
enforceable against the Company in accordance with its terms, except that the
enforcement thereof may be subject to (i) bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally and (ii) general
principles of equity and the discretion of the court before which any proceeding
therefor may be brought (regardless of whether such enforcement is considered in
a proceeding in equity or at law).
(f) Each of the Indenture and the Securities conforms in all material
respects to the description thereof in the Prospectus as supplemented or
amended.
(g) The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under this Agreement and to
consummate the transactions contemplated hereby. This Agreement and the
consummation by the Company of the transactions contemplated hereby have been
duly and validly authorized by the Company. This Agreement has been duly
executed and delivered by the Company.
(h) The Commission has not issued an order preventing or suspending the
use of any Prospectus relating to the proposed offering of the Securities nor
instituted proceedings for that purpose. The Registration Statement complies,
and the Prospectus and any amendments or supplements thereto will comply, in all
material respects with the requirements of the Act and the Rules and Regulations
and the Trust Indenture Act. The documents incorporated by reference in the
Prospectus, at the time filed with the Commission complied in all material
respects with the requirements of the Securities Exchange Act of 1934 (the
"Exchange Act") or the Act, as applicable, and the rules and regulations of the
Commission thereunder. The Registration Statement and any amendment thereto do
not contain, and will not contain, any untrue statement of a material fact and
do not omit, and will not omit, to state any material fact required to be stated
therein or necessary to make the statements therein not misleading. The
Prospectus and any amendments and supplements thereto do not contain, and will
not contain, any untrue statement of material fact; and do not omit, and will
not omit, to state any material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading;
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provided, however, that the Company makes no representations or warranties as to
information contained in or omitted from the Registration Statement or the
Prospectus, or any such amendment or supplement, in reliance upon, and in
conformity with, written information furnished to the Company by or on behalf of
any Underwriter specifically for use in the preparation thereof.
(i) The consolidated financial statements of the Company and the
Subsidiaries, together with related notes and schedules, as incorporated by
reference in the Prospectus, present fairly the financial position and the
results of operations and cash flows of the Company and the consolidated
Subsidiaries, at the indicated dates and for the indicated periods. Such
financial statements and related schedules have been prepared in accordance with
generally accepted accounting principles, consistently applied throughout the
periods involved, except as disclosed therein, and all adjustments necessary for
a fair presentation of results for such periods have been made. The summary
financial and statistical data included or incorporated by reference in the
Prospectus presents fairly the information shown therein and such data has been
compiled on a basis consistent with the financial statements presented therein
and the books and records of the Company. The pro forma financial statements and
other pro forma financial information included or incorporated by reference in
the Registration Statement and the Prospectus present fairly the information
shown therein, have been prepared in accordance with the Commission's rules and
guidelines with respect to pro forma financial statements, have been properly
compiled on the pro forma bases described therein, and, in the opinion of the
Company, the assumptions used in the preparation thereof are reasonable and the
adjustments used therein are appropriate to give effect to the transactions or
circumstances referred to therein.
(j) Deloitte & Touche LLP has certified certain of the financial
statements filed with the Commission and included and incorporated by reference
in the Registration Statement and the Prospectus and is an independent public
accountant as required by the Act and the Rules and Regulations.
(k) There is no action, suit, claim or proceeding pending or, to the
knowledge of the Company, threatened against the Company, any of the
Subsidiaries or Investment Affiliates before any court or administrative agency
or otherwise which if determined adversely to the Company, any of its
Subsidiaries or Investment Affiliates might result in any material adverse
change in the earnings, business, management, properties, assets, rights,
operations, condition (financial or otherwise) or prospects of the Company and
the Subsidiaries taken as a whole or might prevent the consummation of the
transactions contemplated hereby, except as set forth in the Prospectus.
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(l) The Company, the Subsidiaries and the Investment Affiliates have
good and marketable title to all of the properties and assets reflected in the
financial statements (or as described in the Registration Statement or the
Prospectus) hereinabove described, subject to no lien, mortgage, pledge, charge
or encumbrance of any kind except those reflected in such financial statements
(or as described in the Registration Statement or the Prospectus) or which are
not material in amount. The Company, the Subsidiaries and the Investment
Affiliates occupy their leased properties under valid and binding leases
conforming in all material respects to the description thereof set forth or
incorporated by reference in the Registration Statement or the Prospectus.
(m) The Company, the Subsidiaries and the Investment Affiliates have
timely filed all Federal, State, local and foreign tax returns which have been
required to be filed (taking into account any applicable extensions) and have
paid all taxes indicated by said returns and all assessments received by them or
any of them to the extent that such taxes have become due and are not being
contested in good faith and for which an adequate reserve for accrual has been
established in accordance with generally accepted accounting principles. All tax
liabilities of the Company and the Subsidiaries have been adequately provided
for in the consolidated financial statements of the Company, and the Company
does not know of any actual or proposed additional material tax assessments.
(n) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, as it has been amended or
supplemented, there has not been any material adverse change or any development
involving a prospective material adverse change in or otherwise materially
affecting the earnings, business, management, properties, assets, rights,
operations, condition (financial or otherwise), or prospects of the Company and
its Subsidiaries taken as a whole, whether or not occurring in the ordinary
course of business, and there has not been any material transaction entered into
or any material transaction that is probable of being entered into by the
Company, the Subsidiaries or the Investment Affiliates, other than transactions
in the ordinary course of business and changes and transactions described in the
Prospectus, as it has been amended or supplemented. The Company, the
Subsidiaries and the Investment Affiliates have no material contingent
obligations which are not disclosed in the Company's financial statements which
are incorporated by reference in the Prospectus.
(o) Neither the Company, nor any of the Subsidiaries or Investment
Affiliates is or with the giving of notice or lapse of time or both, will be, in
violation of or in default under its Charter or By-Laws or other comparable
documents or under any agreement, lease, contract, indenture or other instrument
or obligation to which it is a party or by which it, or any of its properties,
is bound, which default is of material significance in
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respect of the condition, financial or otherwise, of the Company and its
Subsidiaries taken as a whole or the business, management, properties, assets,
rights, operations, condition (financial or otherwise) or prospects of the
Company and the Subsidiaries taken as a whole. The execution and delivery of
this Agreement, the Indenture and the Securities and the consummation of the
transactions herein and therein contemplated and the fulfillment of the terms
hereof and thereof will not conflict with or result in a breach of any of the
terms or provisions of, or constitute a default under (or an event which with
the giving of notice or lapse of time or both would constitute a default under),
or result in the imposition or creation of (or the obligation to create or
impose) a lien on any property or assets of the Company, any Subsidiary or
Investment Affiliate with respect to, any indenture, mortgage, deed of trust or
other agreement or instrument to which the Company, any Subsidiary or Investment
Affiliate is a party, or of the Charter or By-Laws or other comparable documents
of the Company, any Subsidiary or Investment Affiliate or any order, rule or
regulation applicable to the Company, any Subsidiary or Investment Affiliate of
any court or of any regulatory body or administrative agency or other
governmental body having jurisdiction. Any and all indebtedness incurred by the
Company or its subsidiaries subsequent to March 24, 1998, the date of original
issuance of the Company's 9-3/8% Senior Subordinated Notes due 2008, was, and
the Company covenants that any such indebtedness incurred after the date hereof
and prior to the date of original issuance of the Securities will be, incurred
in accordance with the terms of the indenture relating to such notes and did not
and will not constitute "Permitted Indebtedness" as defined under such
indenture.
(p) Each approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or other
governmental body necessary in connection with the execution and delivery by the
Company of this Agreement, the Indenture and the Securities and the consummation
of the transactions herein and therein contemplated (except such additional
steps as may be required by the Commission, the National Association of
Securities Dealers, Inc. (the "NASD") or such additional steps as may be
necessary to qualify the Securities for public offering by the Underwriters
under state securities or Blue Sky laws) has been obtained or made and is in
full force and effect.
(q) Each of the Company, the Subsidiaries and the Investment Affiliates
holds all material licenses, certificates and permits (collectively, "Permits")
from governmental authorities which are necessary to the conduct of its
businesses, and has fulfilled and performed in all material respects its
obligations with respect to the Permits; and neither the Company nor any of the
Subsidiaries or Investment Affiliates has infringed any patents, patent rights,
trade names, trademarks or copyrights, which infringement is material to the
business of the Company and the Subsidiaries taken as a whole. The Company knows
of no material infringement by others of patents, patent rights, trade names,
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trademarks or copyrights owned by or licensed to the Company or any of the
Subsidiaries or Investment Affiliates.
(r) Neither the Company, nor to the Company's knowledge, any of its
affiliates, has taken or will take, directly or indirectly, any action designed
to cause or result in, or which has constituted or which might reasonably be
expected to constitute, the stabilization or manipulation of the price of the
Securities to facilitate the sale or resale of the Securities. The Company
acknowledges that the Underwriters may engage in stabilizing transactions in the
Securities in accordance with Regulation M under the Exchange Act.
(s) Neither the Company nor any Subsidiary is an "investment company"
within the meaning of such term under the Investment Company Act of 1940, as
amended (the "Investment Company Act") and the rules and regulations of the
Commission thereunder.
(t) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are executed
in accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(u) Neither the Company nor any of the Subsidiaries nor any agent
acting on their behalf has taken or will take any action that might cause this
Agreement or the sale of the Securities to violate Regulation G, T, U or X of
the Board of Governors of the Federal Reserve System, in each case as in effect,
or as the same may hereafter be in effect, on the Closing Date.
(v) Except as described in the Prospectus or as would not have a
Material Adverse Effect, (i) each of the Company, the Subsidiaries and the
Investment Affiliates is in compliance with and not subject to liability under
applicable Environmental Laws (as defined below), (ii) each of the Company, the
Subsidiaries and the Investment Affiliates has made all filings and provided all
notices required under any applicable Environmental Law, and has and is in
compliance with all Permits required under any applicable Environmental Laws and
each of them is in full force and effect, (iii) there is no civil, criminal or
administrative action, suit, demand, claim, hearing, notice of violation,
investigation, proceeding, notice or demand letter or request for information
pending or, to the knowledge of the Company, threatened against the Company, any
Subsidiary or Investment Affiliates under any Environmental Law, (iv) no lien,
charge, encumbrance or restriction has been recorded under any Environmental Law
with respect to any assets, facility or
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property owned, operated, leased or controlled by the Company, any Subsidiary or
Investment Affiliates, (v) neither the Company, nor any Subsidiary or Investment
Affiliate has received notice that it has been identified as a potentially
responsible party under the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended ("CERCLA"), or any comparable state law
and (vi) no property or facility of the Company or any Subsidiary or Investment
Affiliates is (A) listed or, to the knowledge of the Company, proposed for
listing on the National Priorities List under CERCLA or (B) listed in the
Comprehensive Environmental Response, Compensation, Liability Information System
List promulgated pursuant to CERCLA, or on any comparable list maintained by any
state or local governmental authority.
For purposes of this Agreement, "Environmental Laws" means the common
law and all applicable federal, state and local laws or regulations, codes,
orders, decrees, judgments or injunctions issued, promulgated, approved or
entered thereunder, relating to pollution or protection of public or employee
health and safety or the environment, including, without limitation, laws
relating to (i) emissions, discharges, releases or threatened releases of
hazardous materials into the environment (including, without limitation, ambient
air, surface water, groundwater, land surface or subsurface strata), (ii) the
manufacture, processing, distribution, use, generation, treatment, storage,
disposal, transport or handling of hazardous materials, and (iii) underground
and aboveground storage tanks, and related piping, and emissions, discharges,
releases or threatened releases therefrom.
(w) There is no strike, labor dispute, slowdown or work stoppage with
the employees of the Company, the Subsidiaries or the Investment Affiliate which
is pending or, to the knowledge of the Company, threatened, which would have a
Material Adverse Effect.
(x) The Company, its Subsidiaries and the Investment Affiliates carry,
or are covered by, insurance in such amounts and covering such risks as is
adequate for the conduct of their respective businesses and the value of their
respective properties and as is customary for companies engaged in similar
industries.
(y) The Company is in compliance in all material respects with all
presently applicable provisions of the Employee Retirement Income Security Act
of 1974, as amended, including the regulations and published interpretations
thereunder ("ERISA"); no "reportable event" (as defined in ERISA) has occurred
with respect to any "pension plan" (as defined in ERISA) for which the Company
would have any liability; the Company has not incurred and does not expect to
incur liability under (i) Title IV of ERISA with respect to termination of, or
withdrawal from, any "pension plan" or (ii) Sections 412 or 4971 of the Internal
Revenue Code of 1986, as amended, including the regulations and published
interpretations thereunder (the "Code"); and each "pension plan" for which the
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Company would have any liability that is intended to be qualified under Section
401(a) of the Code is so qualified in all material respects and nothing has
occurred, whether by action or by failure to act, which would cause the loss of
such qualification.
(z) To the best of the Company's knowledge, there are no affiliations
or associations between any member of the NASD and any of the Company's
officers, directors or 5% or greater security holders, except as set forth in
the Registration Statement.
2. PURCHASE, SALE AND DELIVERY OF THE SECURITIES.
(a) On the basis of the representations, warranties and covenants
herein contained, and subject to the conditions herein set forth, the Company
agrees to sell to each Underwriter, and each Underwriter agrees, severally and
not jointly, to purchase the aggregate principal amount of Securities set forth
opposite the name of each Underwriter in Schedule I hereof, subject to
adjustments in accordance with Section 9 hereof, at a purchase price of 96.235%
of such aggregate principal amount.
(b) Payment for the Securities to be sold hereunder is to be made by
wire transfer of Federal (same day) funds to the order of the Company against
delivery of certificates therefor to the Underwriters. Such payment and delivery
are to be made through the facilities of The Depository Trust Company, New York,
New York at 10:00 a.m., New York time, on the third business day after the date
of this Agreement (or, if the Underwriters determine the price of the Securities
after 4:30 p.m., New York time, on the date hereof, the fourth business day) or
at such other time and date not later than five business days thereafter as you
and the Company shall agree upon, such time and date being herein referred to as
the "Closing Date." (As used herein, "business day" means a day on which the New
York Stock Exchange is open for trading and on which banks in New York are open
for business and are not permitted by law or executive order to be closed.) The
certificates for the Securities in definitive form will be delivered in such
denominations and in such registrations as the Underwriters request in writing
not later than the second full business day prior to the Closing Date, and will
be made available for inspection by the Underwriters at least one business day
prior to the Closing Date.
3. OFFERING BY THE UNDERWRITERS.
It is understood that the several Underwriters are to make a
public offering of the Securities as soon as the Underwriters deem it advisable
to do so. The Securities are to be initially offered to the public at the
initial public offering price set forth in the Prospectus. The Underwriters may
from time to time thereafter change the public offering price and other selling
terms.
BT Alex. Brown Incorporated ("BT Alex. Brown") will act
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as a "qualified independent underwriter" within the meaning of Rule 2720 of the
NASD's Conduct Rules with respect to the offering of the Securities.
4. COVENANTS OF THE COMPANY.
The Company covenants and agrees with the several Underwriters
that:
(a) The Company will (A) use its best efforts to prepare and timely
file with the Commission under Rule 424(b) of the Rules and Regulations a
Prospectus in a form approved by the Underwriters, and (B) not file any
amendment to the Registration Statement or supplement to the Prospectus or
document incorporated by reference therein of which the Underwriters shall not
previously have been advised and furnished with a copy or to which the
Underwriters shall have reasonably objected in writing or which is not in
compliance with the Rules and Regulations and (C) file on a timely basis all
reports and any definitive proxy or information statements required to be filed
by the Company with the Commission subsequent to the date of the Prospectus and
prior to the termination of the offering of the Securities by the Underwriters.
(b) The Company will advise the Underwriters promptly (A) when any
post-effective amendment to the Registration Statement shall have become
effective, (B) of receipt of any comments from the Commission relating to the
Registration Statement, the Prospectus or any documents incorporated by
reference therein, (C) of any request of the Commission for amendment of the
Registration Statement or for supplement to the Prospectus or for any additional
information, and (D) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the use of the
Prospectus or of the institution of any proceedings for that purpose. The
Company will use its best efforts to prevent the issuance of any such stop order
preventing or suspending the use of the Prospectus and to obtain as soon as
possible the lifting thereof, if issued.
(c) The Company will cooperate with the Underwriters in endeavoring to
qualify the Securities for sale under the securities laws of such jurisdictions
as the Underwriters may reasonably have designated in writing and will make such
applications, file such documents, and furnish such information as may be
reasonably required for that purpose, provided the Company shall not be required
to qualify as a foreign corporation or to file a general consent to service of
process in any jurisdiction where it is not now so qualified or required to file
such a consent. The Company will, from time to time, prepare and file such
statements, reports, and other documents, as are or may be required to continue
such qualifications in effect for so long a period as the Underwriters may
reasonably request for distribution of the Securities.
(d) The Company will deliver to, or upon the order of, the
Underwriters, from time to time, as many copies of any
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<PAGE> 13
Preliminary Prospectus as the Underwriters may reasonably request. The Company
will deliver to, or upon the order of, the Underwriters during the period when
delivery of a Prospectus is required under the Act, as many copies of the
Prospectus in final form, or as thereafter amended or supplemented, as the
Underwriters may reasonably request. The Company will deliver to the
Underwriters at or before the Closing Date, three copies of the Registration
Statement and all amendments thereto including all exhibits filed therewith, and
will deliver to the Underwriters such number of copies of the Registration
Statement (including such number of copies of the exhibits filed therewith that
may reasonably be requested), including documents incorporated by reference
therein, and of all amendments thereto, as the Underwriters may reasonably
request.
(e) The Company will comply with the Act and the Rules and Regulations,
and the Exchange Act, and the rules and regulations of the Commission
thereunder, so as to permit the completion of the distribution of the Securities
as contemplated in this Agreement and the Prospectus. If during the period in
which a prospectus is required by law to be delivered by an Underwriter or
dealer, any event shall occur as a result of which, in the judgment of the
Company or in the reasonable opinion of the Underwriters, it becomes necessary
to amend or supplement the Prospectus in order to make the statements therein,
in the light of the circumstances existing at the time the Prospectus is
delivered to a purchaser, not misleading, or, if it is necessary at any time to
amend or supplement the Prospectus to comply with any law, the Company promptly
will either (i) prepare and file with the Commission an appropriate amendment to
the Registration Statement or supplement to the Prospectus or (ii) prepare and
file with the Commission an appropriate filing under the Exchange Act which
shall be incorporated by reference in the Prospectus so that the Prospectus as
so amended or supplemented will not, in the light of the circumstances when it
is so delivered, be misleading, or so that the Prospectus will comply with the
law.
(f) The Company will make generally available to its security holders,
as soon as it is practicable to do so, but in any event not later than 15 months
after the effective date of the Registration Statement, an earning statement
(which need not be audited) in reasonable detail, covering a period of at least
12 consecutive months beginning after the effective date of the Registration
Statement, which earning statement shall satisfy the requirements of Section
11(a) of the Act and Rule 158 of the Rules and Regulations.
(g) Prior to the Closing Date, the Company will furnish to the
Underwriters, as soon as they have been prepared by or are available to the
Company, a copy of any unaudited interim financial statements of the Company for
any period subsequent to the period covered by the most recent financial
statements appearing in the Registration Statement and the Prospectus.
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<PAGE> 14
(h) The Company shall apply the net proceeds of its sale of the
Securities as set forth in the Prospectus.
(i) The Company shall not invest, or otherwise use the proceeds
received by the Company from its sale of the Securities in such a manner as
would require the Company or any of the Subsidiaries to register as an
investment company under the Investment Company Act.
(j) The Company will not take, directly or indirectly, any action
designed to cause or result in, or that has constituted or might reasonably be
expected to constitute, the stabilization or manipulation of the price of any
securities of the Company.
5. COSTS AND EXPENSES.
The Company will pay all costs, expenses and fees incident to
the performance of the obligations of the Company under this Agreement,
including, without limiting the generality of the foregoing, the following:
accounting fees of the Company; the fees and disbursements of counsel for the
Company; the cost of printing and delivering to, or as requested by, the
Underwriters copies of the Registration Statement, Preliminary Prospectuses, the
Prospectus and any supplements or amendments thereto, this Agreement, the
Underwriters' Invitation Letter, the Blue Sky Survey and any supplements or
amendments thereto; the filing fees of the Commission; the filing fees and
expenses (including legal fees and disbursements up to a maximum amount of
$10,000) incident to securing any required review by the NASD of the terms of
the sale of the Securities; and the expenses, including the fees and
disbursements of counsel for the Underwriters, incurred in connection with the
qualification of the Securities under State securities or Blue Sky laws. The
Company shall not, however, be required to pay for any of the Underwriters'
expenses (other than those related to qualification under NASD regulation and
State securities or Blue Sky laws) except that, if this Agreement shall not be
consummated because the conditions in Section 6 hereof are not satisfied, or
because this Agreement is terminated by the Underwriters pursuant to Section 11
hereof, or by reason of any failure, refusal or inability on the part of the
Company to perform any undertaking or satisfy any condition of this Agreement or
to comply with any of the terms hereof on its part to be performed, unless such
failure to satisfy said condition or to comply with said terms shall be due to
the default or omission of any Underwriter, then the Company shall reimburse the
several Underwriters for reasonable out-of-pocket expenses, including fees and
disbursements of counsel, reasonably incurred in connection with investigating,
marketing and proposing to market the Securities or in contemplation of
performing their obligations hereunder; but the Company shall not in any event
be liable to any of the several Underwriters for damages on account of loss of
anticipated profits from the sale by them of the Securities.
6. CONDITIONS OF OBLIGATIONS OF THE UNDERWRITERS.
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<PAGE> 15
The several obligations of the Underwriters to purchase the
Securities on the Closing Date are subject to the accuracy, as of the Closing
Date, of the representations and warranties of the Company contained herein, and
to the performance by the Company of its covenants and obligations hereunder and
to the following additional conditions:
(a) The Registration Statement and all post-effective amendments
thereto shall have become effective and any and all filings required by Rule 424
and Rule 430A of the Rules and Regulations shall have been made, and any request
of the Commission for additional information (to be included in the Registration
Statement or otherwise) shall have been disclosed to the Underwriters and
complied with to their reasonable satisfaction. No stop order suspending the
effectiveness of the Registration Statement, as amended from time to time, shall
have been issued and no proceedings for that purpose shall have been taken or,
to the knowledge of the Company, shall be contemplated by the Commission and no
injunction, restraining order, or other order of any nature by a Federal or
state court of competent jurisdiction shall have been issued as of the Closing
Date which would prevent the issuance of the Securities.
(b) The Underwriters shall have received on the Closing Date, the
opinion of Rogers & Wells LLP, counsel for the Company, dated the Closing Date,
addressed to the Underwriters (and stating that it may be relied upon by counsel
to the Underwriters) to the effect that:
(i) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, with corporate power and authority to own or lease its
properties and conduct its business as described in the Prospectus;
each of the Designated Subsidiaries and the Land Partnership has been
duly organized and is validly existing as a corporation or partnership,
as applicable, in good standing under the laws of the jurisdiction of
its incorporation or formation, with corporate or other power and
authority to own or lease its properties and conduct its business as
described in the Prospectus; the Company, each of the Designated
Subsidiaries and the Land Partnership are duly qualified to transact
business in all jurisdictions in which the conduct of their business
requires such qualification, except where such counsel has been
informed that the failure to qualify would not have a materially
adverse effect upon the business of the Company and the Subsidiaries
taken as a whole; and the outstanding shares of capital stock of each
of the Designated Subsidiaries have been duly authorized and validly
issued and are fully paid and non-assessable and are owned by the
Company or a Subsidiary; and, to the best of such counsel's knowledge,
the outstanding
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<PAGE> 16
shares of capital stock of each of the Designated Subsidiaries are
owned free and clear of all liens, encumbrances and equities and claims
(other than liens created pursuant to the Credit Agreement) and to the
best of such counsel's knowledge, except as set forth in the
Registration Statement, other than with regard to the Company's Class B
Common Stock, no options, warrants or other rights to purchase,
agreements or other obligations to issue or other rights to convert any
obligations into any shares of capital stock or of ownership interests
in the Designated Subsidiaries or the Land Partnership are outstanding.
The Company indirectly owns a 50% interest in the Land Partnership.
Such interest in the Land Partnership has been duly authorized and
validly issued and is owned by a Subsidiary which, to the best of such
counsel's knowledge, is indirectly wholly owned by the Company, free
and clear of all liens, encumbrances and equities and claims.
(ii) At August 31, 1998, the Company had authorized capital
stock as set forth under the caption "Capitalization" in the
Prospectus; the authorized shares of Common Stock and Class B Common
Stock have been duly authorized; the outstanding shares of the Common
Stock and Class B Common Stock have been duly authorized and validly
issued and are fully paid and non-assessable; and no preemptive rights
of stockholders exist with respect to the capital stock or any other
securities of the Company or the issue or sale thereof.
(iii) Except as described in the Prospectus, to the knowledge
of such counsel, no holder of any securities of the Company or any
other person has the right, contractual or otherwise, which has not
been satisfied or effectively waived, to cause the Company to sell or
otherwise issue to them, or to permit them to underwrite the sale of,
any of the Securities or the right to have any securities of the
Company included in the Registration Statement or the right, as a
result of the filing of the Registration Statement, to require
registration under the Act of any securities of the Company.
(iv) The Company has all requisite corporate power and
authority to execute, deliver and perform its obligations under the
Securities and the Indenture.
(v) The Indenture has been duly qualified under the Trust
Indenture Act; the Indenture has been duly and validly authorized,
executed and delivered by the Company, and (assuming the due
authorization, execution and delivery thereof by the Trustee)
constitutes the valid and legally binding agreement of
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<PAGE> 17
the Company, enforceable against the Company in accordance with its
terms, except that the enforcement thereof may be subject to (i)
bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally and (ii) general principles of equity and
the discretion of the court before which any proceeding therefor may be
brought (regardless of whether such enforcement is considered in a
proceeding in equity or at law).
(vi) The Securities are in the form contemplated by the
Indenture. The Securities have each been duly and validly authorized,
executed and delivered by the Company and, when paid for by the
Underwriters in accordance with the terms of this Agreement (assuming
the due authorization, execution and delivery of the Indenture by the
Trustee and due authentication and delivery of the Securities by the
Trustee in accordance with the Indenture), will constitute the valid
and legally binding obligations of the Company, entitled to the
benefits of the Indenture, and enforceable against the Company in
accordance with their terms, except that the enforcement thereof may be
subject to (i) bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally and (ii) general principles of
equity and the discretion of the court before which any proceeding
therefor may be brought (regardless of whether such enforcement is
considered in a proceeding in equity or at law).
(vii) The Company has all requisite corporate power and
authority to execute, deliver and perform its obligations under this
Agreement and to consummate the transactions contemplated hereby; this
Agreement and the consummation by the Company of the transactions
contemplated hereby have been duly and validly authorized by the
Company. This Agreement has been duly executed and delivered by the
Company.
(viii) The Indenture and the Securities conform as to legal
matters in all material respects to the descriptions thereof contained
in the Prospectus as supplemented or amended.
(ix) The Registration Statement has become effective under the
Act and, to the best of the knowledge of such counsel, no stop order
proceedings with respect thereto have been instituted or are pending or
threatened under the Act.
(x) The Registration Statement, the Prospectus
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<PAGE> 18
and each amendment or supplement thereto and document incorporated by
reference therein comply as to form in all material respects with the
requirements of the Act or the Exchange Act, as applicable, and the
applicable rules and regulations thereunder (except that such counsel
need express no opinion as to the financial statements and related
schedules included or incorporated by reference therein). The
conditions for the use of Form S-3, set forth in the General
Instructions thereto, have been satisfied.
(xi) The statements under the captions "Description of the
Notes" and "Description of Debt Securities" in the Prospectus and Item
15 of the Registration Statement, insofar as such statements constitute
a summary of documents referred to therein or matters of law, fairly
summarize in all material respects the information called for with
respect to such documents and matters.
(xii) Such counsel does not know of any contracts or documents
required to be filed as exhibits to or incorporated by reference in the
Registration Statement or described in the Registration Statement or
the Prospectus which are not so filed, incorporated by reference or
described as required, and such contracts and documents as are
summarized in the Registration Statement or the Prospectus are fairly
summarized in all material respects.
(xiii) Such counsel knows of no material legal or governmental
proceedings pending or threatened against the Company or any of the
Subsidiaries or Investment Affiliates except as set forth in the
Prospectus.
(xiv) The execution and delivery of this Agreement, the
Indenture and the Securities and the consummation of the transactions
herein and therein contemplated do not and will not conflict with or
result in a breach of any of the terms or provisions of, or constitute
a default under (or an event which with the giving of notice or lapse
of time or both would constitute a default under) or result in the
imposition or creation of (or the obligation to create or impose) a
lien on any property or assets of the Company, any Designated
Subsidiary or the Land Partnership with respect to, the Charter,
By-Laws or other comparable documents of the Company, any Designated
Subsidiary or the Land Partnership, or any material agreement or
instrument known to such counsel to which the Company, any of the
Designated Subsidiaries or the Land Partnership is a party or by which
the Company, any of the Designated Subsidiaries or the Land Partnership
may be bound or any order, rule
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<PAGE> 19
or regulation known to such counsel to be applicable to the Company,
any Designated Subsidiary or the Land Partnership of any court or of
any regulatory body or administrative agency or other governmental body
having jurisdiction.
(xv) No approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or
other governmental body is necessary in connection with the execution
and delivery of this Agreement, the Indenture and the Securities and
the consummation of the transactions herein and therein contemplated
(other than as may be required by the NASD or as required by State
securities and Blue Sky laws, as to which such counsel need express no
opinion) except such as have been obtained or made, specifying the
same.
(xvi) The Company is not, and will not become, as a result of
the consummation of the transactions contemplated by this Agreement,
and application of the net proceeds therefrom as described in the
Prospectus, required to register as an investment company under the
Investment Company Act.
(xvii) Neither the consummation of the transactions
contemplated by this Agreement nor the sale, issuance, execution or
delivery of the Securities will violate Regulation G, T, U or X of the
Board of Governors of the Federal Reserve System.
In rendering such opinion, Rogers & Wells LLP may rely as to
matters governed by the laws of states other than New York, Delaware General
Corporation Law or Federal laws on local counsel in such jurisdictions, provided
that in each case Rogers & Wells LLP shall state that they believe that they and
the Underwriters are justified in relying on such other counsel. In addition to
the matters set forth above, such opinion shall also include a statement to the
effect that nothing has come to the attention of such counsel which leads them
to believe that (i) the Registration Statement, at the time it became effective
under the Act (and at the time of filing of each document under the Exchange Act
that is incorporated by reference therein) and as of the Closing Date, 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, and (ii) the Prospectus, or any supplement thereto, on the date it
was filed pursuant to the Rules and Regulations and as of the Closing 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 the light of the
circumstances under which they were made, not misleading (except that such
counsel need express no view as to financial statements, schedules and
statistical information therein). With respect to such statement, Rogers & Wells
LLP may
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<PAGE> 20
state that their belief is based upon the procedures set forth therein,
but is without independent check and verification (except with respect to the
matters addressed in subparagraph (x)).
(c) The Underwriters shall have received from Willkie Farr & Gallagher,
counsel for the Underwriters, an opinion dated the Closing Date, with respect to
certain legal matters relating to this Agreement, and such other related matters
as the Underwriters may reasonably require. In rendering such opinion, Willkie
Farr & Gallagher shall have received and may rely upon such certificates and
other documents and information as they may reasonably request to pass upon such
matters.
(d) The Underwriters shall have received at or prior to the Closing
Date from Willkie Farr & Gallagher a memorandum or summary, in form and
substance satisfactory to the Underwriters, with respect to the qualification
for offering and sale by the Underwriters of the Securities under the State
securities or Blue Sky laws of such jurisdictions as the Underwriters may
reasonably have designated to the Company.
(e) You shall have received, on each of the date hereof and the Closing
Date, as the case may be, a letter dated the date hereof or the Closing Date, as
the case may be, in form and substance satisfactory to you, of Deloitte & Touche
LLP confirming that they are independent public accountants within the meaning
of the Act and the applicable published Rules and Regulations thereunder and
stating that in their opinion the financial statements and schedules examined by
them and incorporated by reference in the Prospectus comply as to form in all
material respects with the applicable accounting requirements of the Act and the
related published Rules and Regulations; and containing such other statements
and information as is ordinarily included in accountants' "comfort letters" to
the Underwriters with respect to the financial statements and certain financial
and statistical information contained in the Registration Statement and
Prospectus.
(f) The Underwriters shall have received on the Closing Date, a
certificate or certificates of the Chief Executive Officer and the Chief
Financial Officer of the Company to the effect that, as of the Closing Date,
each of them severally represents on behalf of the Company as follows:
(i) The Registration Statement has become effective under the
Act and no stop order suspending the effectiveness of the Registrations
Statement has been issued, and no proceedings for such purpose have
been taken or are, to his knowledge, contemplated by the Commission;
(ii) The representations and warranties of the Company
contained in Section 1 hereof are true and correct as of the Closing
Date;
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<PAGE> 21
(iii) All filings which he has been advised by counsel are
required to have been made pursuant to Rule 424 or 430A under the Act
have been made;
(iv) He or she has carefully examined the Registration
Statement and the Prospectus and, in his or her opinion, as of the
effective date of the Registration Statement, the statements contained
in the Registration Statement were true and correct, and such
Registration Statement and Prospectus did not omit to state a material
fact required to be stated therein or necessary in order to make the
statements therein not misleading, and since the effective date of the
Registration Statement, no event has occurred which should have been
set forth in a supplement to or an amendment of the Prospectus which
has not been so set forth in such supplement or amendment; and
(v) Since the respective dates as of which information is
given in the Registration Statement and Prospectus, there has not been
any material adverse change or any development involving a prospective
material adverse change in or affecting the condition, financial or
otherwise, of the Company and its Subsidiaries taken as a whole or the
earnings, business, management, properties, assets, rights, operations,
condition (financial or otherwise) or prospects of the Company and the
Subsidiaries taken as a whole, whether or not arising in the ordinary
course of business.
(g) The Company shall have furnished to the Underwriters such further
certificates and documents confirming the representations and warranties,
covenants and conditions contained herein and related matters as the
Underwriters may reasonably have requested.
(h) The Supplemental Indenture shall have been duly executed and
delivered by the Company and the Trustee, and the Securities shall have been
duly executed by the Company and duly authenticated by the Trustee.
The opinions and certificates mentioned in this Agreement
shall be deemed to be in compliance with the provisions hereof only if they are
in all material respects reasonably satisfactory to the Underwriters and to
Willkie Farr & Gallagher, counsel for the Underwriters.
If any of the conditions hereinabove provided for in this
Section 6 shall not have been fulfilled when and as required by this Agreement
to be fulfilled, the obligations of the Underwriters hereunder may be terminated
by the Underwriters by notifying the Company of such termination in writing or
by telegram at or prior to the Closing Date.
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<PAGE> 22
In such event, the Company and the Underwriters shall not be
under any obligation to each other (except to the extent provided in Sections 5
and 8 hereof).
7. CONDITIONS OF THE OBLIGATIONS OF THE COMPANY.
The obligation of the Company to sell and deliver the
Securities required to be delivered as and when specified in this Agreement are
subject to the conditions that at the Closing Date, no stop order suspending the
effectiveness of the Registration Statement shall have been issued and in effect
or proceedings therefor initiated or threatened.
8. INDEMNIFICATION.
(a) The Company agrees:
(i) to indemnify and hold harmless each Underwriter and each
person, if any, who controls any Underwriter within the meaning of the
Act, against any losses, claims, damages or liabilities to which such
Underwriter or any such controlling person may become subject under the
Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) arise out of
or are based upon (A) any untrue statement or alleged untrue statement
of any material fact contained in the Registration Statement, the Basic
Prospectus, any Preliminary Prospectus, the Prospectus or any amendment
or supplement thereto or (B) the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which
they were made, not misleading; provided, however, that the Company
will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement, or omission or alleged omission
in the Registration Statement, the Basic Prospectus, any Preliminary
Prospectus, the Prospectus, or such amendment or supplement, made in
reliance upon and in conformity with written information furnished to
the Company by or through the Underwriters specifically for use in the
preparation thereof.
(ii) to indemnify and hold harmless BT Alex. Brown and each
person, if any, who controls any BT Alex. Brown within the meaning of
the Act, against any losses, claims, damages or liabilities to which BT
Alex. Brown or any such controlling person may become subject under the
Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) arise out of
or are based upon BT Alex. Brown's acting as a "qualified independent
underwriter" within the meaning of Rule 2720
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<PAGE> 23
of the NASD's Conduct Rules with respect to the offering of the
Securities.
(iii) to reimburse each Underwriter and each such controlling
person upon demand for any legal or other out-of-pocket expenses
reasonably incurred by such Underwriter or such controlling person in
connection with investigating or defending any such loss, claim, damage
or liability, action or proceeding or in responding to a subpoena or
governmental inquiry related to the offering of the Securities, whether
or not such Underwriter or such controlling person is a party to any
action or proceeding. In the event that it is finally judicially
determined that any Underwriter was not entitled to receive payments
for legal and other expenses pursuant to this subparagraph, such
Underwriter will promptly return all sums that had been advanced
pursuant hereto.
(b) Each Underwriter severally and not jointly will indemnify and hold
harmless the Company, each of its directors and officers and each person, if
any, who controls the Company within the meaning of the Act, against any losses,
claims, damages or liabilities to which the Company or any such director,
officer, or controlling person may become subject under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of or are based upon (i) any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement, the Basic Prospectus, any Preliminary Prospectus, the
Prospectus or any amendment or supplement thereto, or (ii) the omission or the
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading in the light of the
circumstances under which they were made; and will reimburse any legal or other
expenses reasonably incurred by the Company or any such director, officer, or
controlling person in connection with investigating or defending any such loss,
claim, damage, liability, action or proceeding; provided, however, that each
Underwriter will be liable in each case to the extent, but only to the extent,
that such untrue statement or alleged untrue statement or omission or alleged
omission has been made in the Registration Statement, the Basic Prospectus, any
Preliminary Prospectus, the Prospectus or such amendment or supplement, in
reliance upon and in conformity with written information furnished to the
Company by or through the Underwriters specifically for use in the preparation
thereof. This indemnity agreement will be in addition to any liability which
such Underwriter may otherwise have.
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to this Section 8, such person (the "indemnified party") shall
promptly notify the person against whom such indemnity may be sought (the
"indemnifying
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<PAGE> 24
party") in writing. No indemnification provided for in Section 8(a) or (b) shall
be available to any party who shall fail to give notice as provided in this
Section 8(c) if the party to whom notice was not given was unaware of the
proceeding to which such notice would have related and was materially prejudiced
by the failure to give such notice, but the failure to give such notice shall
not relieve the indemnifying party or parties from any liability which it or
they may have to the indemnified party for contribution or otherwise than on
account of the provisions of Section 8(a) or (b). In case any such proceeding
shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party and
shall pay as incurred the fees and disbursements of such counsel related to such
proceeding. In any such proceeding, any indemnified party shall have the right
to retain its own counsel at its own expense. Notwithstanding the foregoing, the
indemnifying party shall pay as incurred (or within 30 days of presentation) the
fees and expenses of the counsel retained by the indemnified party in the event
(i) the indemnifying party and the indemnified party shall have mutually agreed
to the retention of such counsel, (ii) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them or
(iii) the indemnifying party shall have failed to assume the defense and employ
counsel reasonably acceptable to the indemnified party within a reasonable
period of time after notice of commencement of the action. It is understood that
the indemnifying party shall not, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the reasonable fees and
expenses of more than one separate firm for all such indemnified parties, unless
indemnity is being sought pursuant to Section 8(a)(ii), in which case, the
indemnifying party shall be liable for the reasonable fees and expenses of
separate counsel for BT Alex. Brown in addition to the reasonable fees and
expenses of the separate counsel for all other indemnified parties. Such firm
shall be designated in writing by you in the case of parties indemnified
pursuant to Section 8(a) and by the Company in the case of parties indemnified
pursuant to Section 8(b). The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent but if settled
with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judgment. In addition, the
indemnifying party will not, without the prior written consent of the
indemnified party, settle or compromise or consent to the entry of any judgment
in any pending or threatened claim, action or proceeding of which
indemnification may be sought hereunder (whether or not any indemnified party is
an actual or potential party to such claim, action or proceeding)
-24-
<PAGE> 25
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action
or proceeding.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
Section 8(a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred to therein,
then each indemnifying party shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) in such proportion as
is appropriate to reflect the relative benefits received by the Company on the
one hand and the Underwriters on the other from the offering of the Securities.
If, however, the allocation provided by the immediately preceding sentence is
not permitted by applicable law then each indemnifying party shall contribute to
such amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities, (or actions or proceedings in respect thereof),
as well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Underwriters on the other shall
be deemed to be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover page of the Prospectus as amended or
supplemented. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company on the one hand or the Underwriters on the
other and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Company and the Underwriters agree that it would not be
just and equitable if contributions pursuant to this Section 8(d) were
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this Section
8(d). The amount paid or payable by an indemnified party as a result of the
losses, claims, damages or liabilities (or actions or proceedings in respect
thereof) referred to above in this Section 8(d) shall be deemed to include 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 subsection (e), (i) no Underwriter shall
be required to contribute any amount in excess of the underwriting discounts and
commissions applicable to the Securities purchased by such Underwriter and (ii)
no person guilty
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<PAGE> 26
of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations in this Section 8(d)
to contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) In any proceeding relating to the Registration Statement, the Basic
Prospectus, any Preliminary Prospectus, the Prospectus or any supplement or
amendment thereto, each party against whom contribution may be sought under this
Section 8 hereby consents to the jurisdiction of any court having jurisdiction
over any other contributing party, agrees that process issuing from such court
may be served upon him or it by any other contributing party and consents to the
service of such process and agrees that any other contributing party may join
him or it as an additional defendant in any such proceeding in which such other
contributing party is a party.
(f) Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section 8 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 8 and the
representations and warranties of the Company set forth in this Agreement shall
remain operative and in full force and effect, regardless of (i) any
investigation made by or on behalf of any Underwriter or any person controlling
any Underwriter, the Company, its directors or officers or any persons
controlling the Company, (ii) acceptance of any Securities and payment therefor
hereunder, and (iii) any termination of this Agreement. A successor to any
Underwriter, or to the Company, its directors or officers, or any person
controlling the Company, shall be entitled to the benefits of the indemnity,
contribution and reimbursement agreements contained in this Section 8.
9. DEFAULT BY UNDERWRITERS.
If, on the Closing Date, any Underwriter shall fail to
purchase and pay for the portion of the Securities which such Underwriter has
agreed to purchase and pay for on such date (otherwise than by reason of any
default on the part of the Company), you shall use your reasonable efforts to
procure within 36 hours thereafter one or more of the other Underwriters, or any
others, to purchase from the Company in such respective amounts as may be agreed
upon and upon the terms set forth herein, the Securities which the defaulting
Underwriter or Underwriters failed to purchase. If during such 36 hours you
shall not have procured such other Underwriters, or any others, to purchase the
Securities agreed to be purchased by the defaulting Underwriter or Underwriters,
then (a) if the aggregate principal amount of Securities with respect to which
such default shall occur does not exceed 10% of the principal amount of the
Securities covered hereby, the other Underwriters shall be obligated, severally,
in
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<PAGE> 27
proportion to the respective principal amounts which they are obligated to
purchase hereunder, to purchase the Securities which such defaulting Underwriter
or Underwriters failed to purchase, or (b) if the aggregate principal amount of
Securities with respect to which such default shall occur exceeds 10% of the
principal amount of the Securities covered hereby, the Company or you will have
the right, by written notice to the parties to this Agreement, to terminate this
Agreement without liability on the part of the non-defaulting Underwriters or of
the Company except to the extent provided in Section 8 hereof. In the event of a
default by any Underwriter or Underwriters, as set forth in this Section 9, the
Closing Date may be postponed for such period, not exceeding seven days, as you
may determine in order that the required changes in the Registration Statement
or in the Prospectus or in any other documents or arrangements may be effected.
The term "Underwriter" includes any person substituted for a defaulting
Underwriter. Any action taken under this Section 9 shall not relieve any
defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
10. NOTICES.
All communications hereunder shall be in writing and, except
as otherwise provided herein, will be mailed, delivered, telecopied or
telegraphed and confirmed as follows: if to the Underwriters, to BT Alex. Brown
Incorporated, One Bankers Trust Plaza, 130 Liberty Street, New York, New York
10006, Attention: Richard W. Thaler, Jr.; with a copy to BT Alex. Brown
Incorporated, One Bankers Trust Plaza, 130 Liberty Street, New York, New York
10006, Attention: General Counsel; if to the Company, to LNR Property
Corporation, 760 N.W. 107th Avenue, Miami, Florida 33172, Attention: President.
11. TERMINATION.
(a) This Agreement may be terminated by you by notice to the
Company at any time prior to the Closing Date if any of the following has
occurred: (i) since the respective dates as of which information is given in the
Registration Statement and the Prospectus, any material adverse change or any
development involving a prospective material adverse change in or affecting the
condition, financial or otherwise, of the Company and its Subsidiaries taken as
a whole or the earnings, business, management, properties, assets, rights,
operations, condition (financial or otherwise) or prospects of the Company and
its Subsidiaries taken as a whole, whether or not arising in the ordinary course
of business; (ii) any outbreak or escalation of hostilities or declaration of
war or national emergency or other national or international calamity or crisis
or change in economic or political conditions if the effect of such outbreak,
escalation, declaration, emergency, calamity, crisis or change on the financial
markets of the United States would, in your judgment, make it impracticable or
inadvisable to market the Securities or to enforce contracts for the sale of the
Securities; (iii) suspension of
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<PAGE> 28
trading in securities generally on the New York Stock Exchange or the American
Stock Exchange or limitation on prices (other than limitations on hours or
numbers of days of trading) for securities on either such Exchange; (iv) the
enactment, publication, decree or other promulgation of any statute, regulation,
rule or order of any court or other governmental authority which in your opinion
materially and adversely affects or may materially and adversely affect the
business or operations of the Company; (v) declaration of a banking moratorium
by United States or New York State authorities; (vi) any downgrading, or
placement on any watch list for possible downgrading, in the rating of the
Company's debt securities by any "nationally recognized statistical rating
organization" (as defined for purposes of Rule 436(g) under the Act); (vii) the
suspension of trading of any securities of the Company by the New York Stock
Exchange, the Commission, or any other governmental authority; or (viii) the
taking of any action by any governmental body or agency in respect of its
monetary or fiscal affairs which in your reasonable opinion has a material
adverse effect on the securities markets in the United States; or
(b) as provided in Sections 6 and 9 of this Agreement.
12. Successors.
This Agreement has been and is made solely for the benefit of
the Underwriters and the Company and their respective successors, executors,
administrators, heirs and assigns, and the officers, directors and controlling
persons referred to herein, and no other person will have any right or
obligation hereunder. No purchaser of any of the Securities from any Underwriter
shall be deemed a successor or assign merely because of such purchase.
13. Information Provided by THE Underwriters.
The Company and the Underwriters acknowledge and agree that
the only information furnished or to be furnished by any Underwriter to the
Company for inclusion in any Prospectus or the Registration Statement consists
of the information set forth in the last paragraph on the front cover page of
the prospectus supplement that is part of the Prospectus (insofar as such
information relates to the Underwriters), any legends required by Item 502(d) of
Regulation S-K under the Act and the information under the caption
"Underwriting" in such prospectus supplement.
14. Miscellaneous.
The reimbursement, indemnification and contribution agreements
contained in this Agreement and the representations, warranties and covenants in
this Agreement shall remain in full force and effect regardless of (a) any
termination of this Agreement, (b) any investigation made by or on behalf of any
Underwriter or controlling person thereof, or by or on behalf of the Company or
its directors or officers and (c) delivery of and payment for the Securities
under this Agreement.
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<PAGE> 29
This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.
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<PAGE> 30
If the foregoing letter is in accordance with your
understanding of our agreement, please sign and return to us the enclosed
duplicates hereof, whereupon it will become a binding agreement among the
Company and the several Underwriters in accordance with its terms.
Very truly yours,
LNR PROPERTY CORPORATION
By: /s/ SHELLY RUBIN
----------------------
Name: Shelly Rubin
Title: Vice President
The foregoing Underwriting Agreement is hereby confirmed and accepted as of the
date first above written.
BT ALEX. BROWN INCORPORATED
NATIONSBANC MONTGOMERY SECURITIES LLC
JEFFERIES & COMPANY, INC.
By: BT Alex. Brown Incorporated
By: /s/ STEVEN W. PASKO
----------------------------
Authorized Officer
<PAGE> 31
SCHEDULE I
Schedule of Underwriters
<TABLE>
<CAPTION>
Principal Amount
of Securities
Underwriter to be Purchased
- ----------- ---------------
<S> <C>
BT Alex. Brown Incorporated $70,000,000
NationsBanc Montgomery Securities LLC $15,000,000
Jefferies & Company, Inc. $15,000,000
------------
Total $100,000,000
============
</TABLE>
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<PAGE> 1
LNR PROPERTY CORPORATION,
as Issuer
and
THE BANK OF NEW YORK,
as Trustee
------------------------------------
FIRST SUPPLEMENTAL INDENTURE
dated as of
January 25, 1999
to
INDENTURE
dated as of
January 25, 1999
-----------------------------------
10 1/2% Senior Subordinated Notes due 2009
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE I. DEFINITIONS AND INCORPORATION BY REFERENCE............................................................1
SECTION 1.1. Definitions. ............................................................................. 1
SECTION 1.2. Incorporation by Reference of TIA.........................................................20
SECTION 1.3. Rules of Construction.....................................................................20
ARTICLE II. THE NOTES...........................................................................................21
SECTION 2.1. Notes. ...................................................................................21
SECTION 2.2. Treasury Notes. ..........................................................................22
SECTION 2.3. Defaulted Interest........................................................................22
SECTION 2.4. Deposit of Monies.........................................................................23
SECTION 2.5. Global Securities.........................................................................23
ARTICLE III. REDEMPTION.........................................................................................25
SECTION 3.1. Notices to Trustee........................................................................25
SECTION 3.2. Selection of Notes to Be Redeemed.........................................................26
SECTION 3.3. Optional Redemption.......................................................................26
SECTION 3.4. Notice of Redemption......................................................................27
SECTION 3.5. Effect of Notice Defect...................................................................28
SECTION 3.6. Deposit of Redemption Price...............................................................28
SECTION 3.7. Notes Redeemed in Part....................................................................28
ARTICLE IV. ADDITIONAL COVENANTS................................................................................28
SECTION 4.1. Payment of Notes..........................................................................28
SECTION 4.2. Maintenance of Office or Agency...........................................................29
SECTION 4.3. Corporate Existence.......................................................................29
SECTION 4.4. Payment of Taxes and Other Claims.........................................................29
SECTION 4.5. Maintenance of Properties and Insurance...................................................30
SECTION 4.6. Compliance Certificate; Notice of Default.................................................30
SECTION 4.7. Compliance with Laws......................................................................31
SECTION 4.8. Commission Reports........................................................................31
SECTION 4.9. Waiver of Stay, Extension or Usury Laws...................................................32
SECTION 4.10. Limitation on Restricted Payments.........................................................32
SECTION 4.11. Limitation on Transactions with Affiliates................................................34
SECTION 4.12. Limitation on Incurrence of Additional Indebtedness.......................................35
SECTION 4.13. Limitation on Dividend and Other Payment Restrictions Affecting Subsidiaries..............36
SECTION 4.14. Change of Control.........................................................................37
SECTION 4.15. Limitation on Preferred Stock of Subsidiaries.............................................40
SECTION 4.16. Limitation on Liens and Guarantees........................................................40
SECTION 4.17. Conduct of Business.......................................................................40
SECTION 4.18. Prohibition on Incurrence of Senior Subordinated Debt.....................................40
ARTICLE V. SUCCESSOR CORPORATION................................................................................41
SECTION 5.1. Merger, Consolidation and Sale of Assets..................................................41
</TABLE>
<PAGE> 3
<TABLE>
<S> <C>
SECTION 5.2. Successor Corporation Substituted.........................................................42
ARTICLE VI. REMEDIES............................................................................................42
SECTION 6.1. Additional Events of Default..............................................................42
SECTION 6.2. Acceleration. ............................................................................44
SECTION 6.3. Waiver of Past Defaults...................................................................45
SECTION 6.4. Control by Majority.......................................................................45
SECTION 6.5. Limitation on Suits.......................................................................45
SECTION 6.6. Right of Holders To Receive Payment.......................................................45
SECTION 6.7. Collection Suit by Trustee................................................................45
SECTION 6.8. Trustee May File Proofs of Claim..........................................................46
SECTION 6.9. Priorities. ..............................................................................46
ARTICLE VII. DISCHARGE OF SUPPLEMENTAL INDENTURE; DEFEASANCE....................................................47
SECTION 7.1. Termination of Company's Obligations......................................................47
SECTION 7.2. Application of Trust Money................................................................49
SECTION 7.3. Repayment to the Company..................................................................50
SECTION 7.4. Reinstatement. ...........................................................................50
SECTION 7.5. Acknowledgment of Discharge by Trustee....................................................50
ARTICLE VIII. MODIFICATION OF THIS SUPPLEMENTAL INDENTURE.......................................................51
SECTION 8.1. Without Consent of Holders................................................................51
SECTION 8.2. With Consent of Holders...................................................................51
SECTION 8.3. Compliance with TIA.......................................................................52
SECTION 8.4. Revocation and Effect of Consents.........................................................52
SECTION 8.5. Notation on or Exchange of Notes..........................................................53
SECTION 8.6. Trustee to Sign Amendments, Etc...........................................................53
ARTICLE IX. SUBORDINATION.......................................................................................53
SECTION 9.1. Notes Subordinated to Senior Indebtedness.................................................53
SECTION 9.2. Suspension of Payment When Senior Indebtedness is in Default.............................54
SECTION 9.3. Notes Subordinated to Prior Payment of All Senior Indebtedness on Dissolution,
Liquidation or Reorganization of Company...............................................55
SECTION 9.4. Holders to Be Subrogated to Rights of Holders of Senior Indebtedness......................56
SECTION 9.5. Obligations of the Company Unconditional..................................................57
SECTION 9.6. Trustee Entitled to Assume Payments Not Prohibited in Absence of Notice...................58
SECTION 9.7. Application by Trustee of Assets Deposited with It........................................58
SECTION 9.8. No Waiver of Subordination Provisions.....................................................59
SECTION 9.9. Holders Authorize Trustee to Effectuate Subordination of Notes............................59
SECTION 9.10. Right of Trustee to Hold Senior Indebtedness.............................................60
SECTION 9.11. This Article IX Not to Prevent Events of Default.........................................60
SECTION 9.12. No Fiduciary Duty of Trustee to Holders of Senior Indebtedness...........................60
ARTICLE X. MISCELLANEOUS........................................................................................61
</TABLE>
-ii-
<PAGE> 4
<TABLE>
<S> <C>
SECTION 10.1. TIA Controls.............................................................................61
SECTION 10.2. Conflict with Indenture..................................................................61
SECTION 10.3. Notices..................................................................................61
SECTION 10.4. Governing Law............................................................................62
SECTION 10.5. No Personal Liability....................................................................62
SECTION 10.6. Successors...............................................................................62
SECTION 10.7. Duplicate Originals......................................................................62
SECTION 10.8. Severability.............................................................................62
SECTION 10.9. Table of Contents, Headings, etc.........................................................63
</TABLE>
-iii-
<PAGE> 5
FIRST SUPPLEMENTAL INDENTURE, dated as of January 25, 1999
(the "Supplemental Indenture"), to Indenture, dated as of January 25, 1999,
between LNR Property Corporation (the "Company") (the "Indenture"), a Delaware
corporation having its principal office at 760 N.W. 107th Avenue, Miami, Florida
33172, and The Bank of New York, a New York banking corporation (the "Trustee"),
which has its principal corporate trust office at 101 Barclay Street, 21W, New
York, New York 10286.
RECITALS OF THE COMPANY
WHEREAS, the Company has heretofore executed and delivered to
the Trustee the Indenture, providing for the issuance from time to time of its
debentures, notes and other evidences of unsecured indebtedness, to be issued in
one or more series as therein provided (the "Securities");
WHEREAS, Section 2.02 of the Indenture provides that the
Company and the Trustee, at any time and from time to time, may enter into an
indenture which supplements the Indenture to establish the terms of Securities
of any series;
WHEREAS, the Company has duly authorized the creation of an
issue of Securities to be known as the 10 1/2% Senior Subordinated Notes due
2009 (the "Notes") and the Company has duly authorized the execution and
delivery of this Supplemental Indenture; and
WHEREAS, all things necessary to make the Notes, when executed
by the Company and authenticated and delivered hereunder, the valid obligations
of the Company, and to make this Supplemental Indenture a valid agreement of the
Company, in accordance with their and its terms, have been done.
NOW, THEREFORE, THIS FIRST SUPPLEMENTAL INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of
the Notes by the Holders thereof, each party agrees for the benefit of each
other party and for the equal and ratable benefit of the Holders of the Notes,
as follows:
ARTICLE I.
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.1. Definitions. For purposes of this Supplemental
Indenture, the following terms have the meanings ascribed to them as follows:
"Acquired Indebtedness" means Indebtedness of a Person or any
of its subsidiaries existing at the time such Person
<PAGE> 6
becomes a Subsidiary of the Company or at the time it merges or consolidates
with or into the Company or any of its Subsidiaries or assumed by the Company or
any of its Subsidiaries in connection with the acquisition of assets from such
Person, and in each case not incurred by such Person or any of its Subsidiaries
in connection with, or in anticipation or contemplation of, such Person becoming
a Subsidiary of the Company or such acquisition, merger or consolidation.
"Adjusted Consolidated EBITDA" means, with respect to any
Person for any period, the sum of Consolidated EBITDA plus any non-refundable
housing tax credits used by such Person and its Consolidated Subsidiaries to
reduce the amount of income taxes that would have otherwise been payable by such
Person and its Consolidated Subsidiaries for such period.
"Affiliate" means, with respect to any specified Person, any
other Person who directly or indirectly through one or more intermediaries
controls, or is controlled by, or is under common control with, such specified
Person. The term "control" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative of the foregoing.
"Affiliate Transaction" shall have the meaning provided in
Section 4.11.
"Agent" means any Registrar, Paying Agent or co-Registrar.
"Asset Acquisition" means (a) an Investment by the Company or
any Subsidiary of the Company in any other Person pursuant to which such Person
shall become a Subsidiary of the Company, or shall be merged or consolidated
with or into the Company or any Subsidiary of the Company, or (b) the
acquisition by the Company or any Subsidiary of the Company of the assets of any
Person (other than a Subsidiary of the Company) which constitute all or
substantially all of the assets of such Person or comprise any division or line
of business of such Person or any other properties or assets of such Person
other than in the ordinary course of business.
"Asset Sale" means any direct or indirect sale, issuance,
conveyance, transfer, lease (other than operating leases entered into in the
ordinary course of business), assignment or other transfer for value by the
Company or any of its Subsidiaries (including any sale and leaseback
transaction) to any Person other than the Company or a Wholly Owned Subsidiary
of the Company of (a) any Capital Stock of any Subsidiary of the Company, or (b)
any other property or assets of the Company or any Subsidiary of the Company
other than in the ordinary course of business.
-2-
<PAGE> 7
"Bankruptcy Law" means Title 11, U.S. Code or any similar
federal, state or foreign law for the relief of debtors.
"Base Date" means March 24, 1998, the date on which the 9-3/8%
Senior Subordinated Notes were originally issued.
"Base Date Indenture" means the Indenture, dated as of March
24, 1998, between the Company and First Trust of New York, National Association,
relating to the 9-3/8% Senior Subordinated Notes.
"Blockage Period" shall have the meaning provided in Section
9.2.
"Board of Directors" means, as to any Person, the board of
directors of such Person or any duly authorized committee thereof.
"Board Resolution" means, with respect to any Person, a copy
of a resolution certified by the Secretary or an Assistant Secretary of such
Person to have been duly adopted by the Board of Directors of such Person and to
be in full force and effect on the date of such certification, and delivered to
the Trustee.
"Business Day" means any day other than a Saturday, Sunday or
any other day on which banking institutions in the City of New York are required
or authorized by law or other governmental action to be closed.
"Capitalized Lease Obligation" means, as to any Person, the
obligations of such Person under a lease that are required to be classified and
accounted for as capital lease obligations under GAAP and, for purposes of this
definition, the amount of such obligations at any date shall be the capitalized
amount of such obligations at such date, determined in accordance with GAAP.
"Capital Stock" means (i) with respect to any Person that is a
corporation, any and all shares, interests, participations or other equivalents
(however designated and whether voting or nonvoting) of corporate stock,
including each class of Common Stock and Preferred Stock of such Person and (ii)
with respect to any Person that is not a corporation, any and all partnership or
other equity interests of such Person.
"Cash Equivalents" means (i) marketable direct obligations
issued by, or unconditionally guaranteed by, the United States Government or
issued by any agency thereof and backed by the full faith and credit of the
United States, in each case maturing within one year from the date of
acquisition thereof; (ii) marketable direct obligations issued by any state of
the United States of America or any political subdivision of any such state or
any public instrumentality thereof maturing within one year from the date of
acquisition thereof and, at the
-3-
<PAGE> 8
time of acquisition, having one of the two highest ratings obtainable from
either Standard & Poor's Ratings Service ("S&P") or Moody's Investors Service,
Inc. ("Moody's"); (iii) commercial paper maturing no more than one year from the
date of creation thereof and, at the time of acquisition, having a rating of at
least A-1 from S&P or at least P-1 from Moody's; (iv) certificates of deposit or
bankers' acceptances maturing within one year from the date of acquisition
thereof issued by any bank organized under the laws of the United States of
America or any state thereof or the District of Columbia or any U.S. branch of a
foreign bank having at the date of acquisition thereof combined capital and
surplus of not less than $250,000,000; (v) repurchase obligations with a term of
not more than seven days for underlying securities of the types described in
clause (i) above entered into with any bank meeting the qualifications specified
in clause (iv) above; and (vi) money market funds which invest substantially all
their assets in securities of the types described in clauses (i) through (v)
above.
"Change of Control" means the occurrence of one or more of the
following events: (i) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all or substantially all of
the assets of the Company or Leisure Colony to any Person or group of related
Persons for purposes of Section 13(d) of the Exchange Act (a "Group"), together
with any Affiliates thereof (whether or not otherwise in compliance with the
provisions of this Supplemental Indenture), other than, in the case of Leisure
Colony, a transaction with the Company or any Wholly Owned Subsidiary of
Company; (ii) the approval by the holders of Capital Stock of the Company of any
plan or proposal for the liquidation or dissolution of the Company (whether or
not otherwise in compliance with the provisions of this Supplemental Indenture);
(iii) any Person or Group (other than Leonard Miller and any Permitted
Transferees of Leonard Miller) shall become the owner, directly or indirectly,
beneficially or of record, of shares representing more than 50% of the aggregate
ordinary voting power represented by the issued and outstanding Capital Stock of
Company; (iv) Leisure Colony shall cease being a Wholly Owned Subsidiary of
Company; or (v) a majority of the members of the Board of Directors of the
Company are persons who were not directors on the Issue Date and whose election
was not approved by a vote of at least a majority of the members of the Board of
Directors of the Company in office at the time of the election who either were
members of such Board of Directors on the Base Date or whose election as members
of such Board of Directors was previously approved by such a majority.
"Change of Control Offer" shall have the meaning provided in
Section 4.14.
"Change of Control Payment Date" shall have the meaning
provided in Section 4.14.
-4-
<PAGE> 9
"Commission" means the Securities and Exchange Commission.
"Common Stock" means, with respect to any Person, any and all
shares, interests or other participations in, and other equivalents (however
designated and whether voting or nonvoting) of such Person's common stock,
whether outstanding on the Issue Date or issued after the Issue Date, and
includes, without limitation, all series and classes of such common stock.
"Company" shall have the meaning provided in the first
paragraph hereof.
"Consolidated EBITDA" means, with respect to any Person for
any period, the sum (without duplication) of (i) Consolidated Net Income and
(ii) to the extent Consolidated Net Income has been reduced thereby, (A) all
income taxes of such Person and its Subsidiaries paid or accrued in accordance
with GAAP for such period (other than income taxes attributable to
extraordinary, unusual or nonrecurring gains or losses or taxes attributable to
sales or dispositions outside the ordinary course of business), (B) Consolidated
Interest Expense and (C) Consolidated Non-cash Charges less any non-cash items
increasing Consolidated Net Income for such period, all as determined on a
consolidated basis for such Person and its Subsidiaries in accordance with GAAP.
"Consolidated Fixed Charge Coverage Ratio" means, with respect
to any Person, the ratio of Adjusted Consolidated EBITDA of such Person during
the four full fiscal quarters (the "Four Quarter Period") ending on or prior to
the date of the transaction giving rise to the need to calculate the
Consolidated Fixed Charge Coverage Ratio (the "Transaction Date") to
Consolidated Fixed Charges of such Person for the Four Quarter Period. In
addition to and without limitation of the foregoing, for purposes of this
definition, "Consolidated EBITDA" and "Consolidated Fixed Charges" shall be
calculated after giving effect on a pro forma basis for the period of such
calculation to (i) the incurrence or repayment of any Indebtedness of such
Person or any of its Subsidiaries (and the application of the proceeds thereof)
giving rise to the need to make such calculation and any incurrence or repayment
of other Indebtedness (and the application of the proceeds thereof), other than
the incurrence or repayment of Indebtedness in the ordinary course of business
for working capital purposes pursuant to working capital facilities, occurring
during the Four Quarter Period or at any time subsequent to the last day of the
Four Quarter Period and on or prior to the Transaction Date, as if such
incurrence or repayment, as the case may be (and the application of the proceeds
thereof), occurred on the first day of the Four Quarter Period and (ii) any
Asset Sales or Asset Acquisitions (including, without limitation, any Asset
Acquisition giving rise to the need to make such calculation as a result of such
Person or one of its Subsidiaries (including any Person who becomes a Subsidiary
as a result of the Asset Acquisition) incurring, assuming or otherwise
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being liable for Acquired Indebtedness and also including any Consolidated
EBITDA (including any pro forma expense and cost reductions calculated on a
basis consistent with Regulation S-X under the Securities Act as in effect on
the Base Date) (provided that such Consolidated EBITDA shall be included only to
the extent includible pursuant to the definition of "Consolidated Net Income")
attributable to the assets which are the subject of the Asset Acquisition or
Asset Sale) occurring during the Four Quarter Period or at any time subsequent
to the last day of the Four Quarter Period and on or prior to the Transaction
Date, as if such Asset Sale or Asset Acquisition (including the incurrence,
assumption or liability for any such Acquired Indebtedness) occurred on the
first day of the Four Quarter Period. If such Person or any of its Subsidiaries
directly or indirectly guarantees Indebtedness of a third Person, the preceding
sentence shall give effect to the incurrence of such guaranteed Indebtedness as
if such Person or any Subsidiary of such Person had directly incurred or
otherwise assumed such guaranteed Indebtedness. Furthermore, in calculating
"Consolidated Fixed Charges" for purposes of determining the denominator (but
not the numerator) of this "Consolidated Fixed Charge Coverage Ratio," (1)
interest on outstanding Indebtedness determined on a fluctuating basis as of the
Transaction Date and which will continue to be so determined thereafter shall be
deemed to have accrued at a fixed rate per annum equal to the rate of interest
on such Indebtedness in effect on the Transaction Date; (2) if interest on any
Indebtedness actually incurred on the Transaction Date may optionally be
determined at an interest rate based upon a factor of a prime or similar rate, a
eurocurrency interbank offered rate, or other rates, then the interest rate in
effect on the Transaction Date will be deemed to have been in effect during the
Four Quarter Period; and (3) notwithstanding clause (1) above, interest on
Indebtedness determined on a fluctuating basis, to the extent such interest is
covered by agreements relating to Interest Swap Obligations shall be deemed to
accrue at the rate per annum resulting after giving effect to the operation of
such agreements.
"Consolidated Fixed Charges" means, with respect to any Person
for any period, the sum, without duplication, of (i) Consolidated Interest
Expense, plus (ii) the product of (x) the amount of all dividend payments on any
series of Preferred Stock of such Person (other than dividends paid in Qualified
Capital Stock) paid, accrued or scheduled to be paid or accrued during such
period times (y) a fraction, the numerator of which is one and the denominator
of which is one minus the then current effective consolidated federal, state and
local tax rate of such Person, expressed as a decimal.
"Consolidated Interest Expense" means, with respect to any
Person for any period, the sum of, without duplication: (i) the aggregate of the
interest expense of such Person and its Subsidiaries for such period determined
on a consolidated basis in accordance with GAAP, including without limitation,
(a) any
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amortization of debt discount, (b) the net costs under Interest Swap
Obligations, (c) all capitalized interest and (d) the interest portion of any
deferred payment obligation; and (ii) the interest component of Capitalized
Lease Obligations paid, accrued and/or scheduled to be paid or accrued by such
Person and its Subsidiaries during such period as determined on a consolidated
basis in accordance with GAAP, minus amortization or write off of deferred
financing costs.
"Consolidated Net Income" means, with respect to any Person
for any period, the aggregate net income (or loss) of such Person and its
Subsidiaries for such period on a consolidated basis, determined in accordance
with GAAP; provided, however, that there shall be excluded therefrom (a) gains
(and losses) on an after-tax effected basis from Asset Sales or abandonments or
reserves relating thereto, (b) items classified as extraordinary or nonrecurring
gains or losses on an after tax-effected basis, (c) the net income or loss of
any Person acquired in a "pooling of interests" transaction accrued prior to the
date it becomes a Subsidiary of the referent Person or is merged or consolidated
with the referent Person or any Subsidiary of the referent Person, (d) the net
income (but not loss) of any Subsidiary of the referent Person to the extent
that the declaration of dividends or similar distributions by that Subsidiary of
that income is restricted, directly or indirectly, by operation of the terms of
its charter or constituent documents or any agreement, instrument, judgment,
law, order, statute, rule or governmental regulation, or for any other reason
whatsoever, (e) the net income or loss of any other Person, other than a
Consolidated Subsidiary of the referent Person, except (A) to the extent (in the
case of net income) of cash dividends or distributions paid to the referent
Person, or to a Wholly Owned Subsidiary of the referent Person (other than a
Subsidiary described in clause (d) above), by such other Person or (B) that the
referent Person's share of any net income or loss of such other Person under the
equity method of accounting for Affiliates shall not be excluded, (f) any
restoration to income of any contingency reserve of an extraordinary,
nonrecurring or unusual nature, except to the extent that provision for such
reserve was made out of Consolidated Net Income accrued at any time following
the Base Date, (g) income or loss attributable to discontinued operations
(including, without limitation, operations disposed of during such period
whether or not such operations were classified as discontinued), and (h) in the
case of a successor to the referent Person by consolidation or merger or as a
transferee of the referent Person's assets, any earnings of the successor prior
to such consolidation, merger or transfer of assets.
"Consolidated Net Worth" means, with respect to any Person,
the consolidated stockholders' equity of such Person as of the end of the last
completed fiscal quarter ending on or prior to the date of the transaction
giving rise to the need to calculate Consolidated Net Worth, determined on a
consolidated basis in accordance with GAAP, less (without duplication) amounts
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attributable to (i) Disqualified Capital Stock of such Person and (ii) interests
in such Person's Consolidated Subsidiaries not owned, directly or indirectly by
such Person.
"Consolidated Non-cash Charges" means, with respect to any
Person for any period, the aggregate depreciation, amortization, and other
non-cash charges of such Person and its Subsidiaries reducing Consolidated Net
Income of such Person and its Subsidiaries for such period, determined on a
consolidated basis in accordance with GAAP (excluding any such charges which
require an accrual of or a reserve for cash charges for any future period).
"Consolidated Subsidiary" means, with respect to any Person, a
Subsidiary of such Person, the financial statements of which subsidiary are
consolidated with the financial statements of such Person in accordance with
GAAP.
"Consolidation" means, with respect to any Person, the
consolidation of the accounts of the Subsidiaries of such Person with those of
such Person, all in accordance with GAAP. The term "consolidated" has a
correlative meaning to the foregoing.
"Corporate Trust Office" means the office of the Trustee at
which at any particular time its corporate trust business shall be principally
administered, which office at the date of execution of this Supplemental
Indenture is at the location set forth in the first paragraph of this
Supplemental Indenture.
"Covenant Defeasance" shall have the meaning provided in
Section 7.1.
"Credit Agreement" means the Amended and Restated Revolving
Credit Agreement dated as of March 27, 1998 among Company, certain Subsidiaries
of Company, the lenders party thereto in their capacities as lenders thereunder
and Bank of America National Trust and Savings Association, as agent, together
with the related documents thereto (including, without limitation, any guarantee
agreements and security documents), in each case as such agreement may be
amended (including any amendment and restatement thereof), supplemented or
otherwise modified from time to time, including any agreement extending the
maturity of, refinancing, replacing or otherwise restructuring (including
increasing the amount of available borrowings thereunder (provided, however,
that such increase in borrowings is permitted by Section 4.12 other than as
Permitted Indebtedness) or adding Subsidiaries of the Company as additional
borrowers or guarantors thereunder) all or any portion of the Indebtedness under
such agreement or any successor or replacement agreement and whether by the same
or any other agent, lender or group of lenders.
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"Currency Agreement" means any foreign exchange contract,
currency swap agreement or other similar agreement or arrangement designed to
protect the Company or any Subsidiary of the Company against fluctuations in
currency values.
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"Default" means an event or condition the occurrence of which
is, or with the lapse of time or the giving of notice or both would be, an Event
of Default.
"Defeasance Payment" means any distribution from any
defeasance trust described under Section 7.1.
"Depositary" means The Depository Trust Company, its nominees
and successors.
"Designated Senior Indebtedness" means (i) Indebtedness under
or in respect of the Credit Agreement and (ii) any other Indebtedness
constituting Senior Indebtedness which, at the time of determination, has an
aggregate principal amount of at least $25.0 million and is specifically
designated in the instrument evidencing such Senior Indebtedness as "Designated
Senior Indebtedness" by Company.
"Disqualified Capital Stock" means that portion of any Capital
Stock which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable), or upon the happening of any
event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or is redeemable at the sole option of the holder
thereof (other than as a result of a Change of Control) on or prior to the final
maturity of the Notes.
"Event of Default" shall have the meaning provided in Section
6.1.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any successor statute or statutes thereto.
"Existing Indebtedness" means (i) Indebtedness under the
9-3/8% Senior Subordinated Notes and (ii) any other of the Company and its
Subsidiaries (other than Indebtedness under the Credit Agreement) in existence
on the Base Date or incurred subsequent to the Base Date and on or prior to the
Issue Date in accordance with the terms of the Base Date Indenture (other than
as "Permitted Indebtedness" thereunder), until such amounts are repaid.
"fair market value" means, with respect to any asset or
property, the price which could be negotiated in an arm's-length, free market
transaction, for cash, between a willing seller and a
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<PAGE> 14
willing and able buyer, neither of whom is under undue pressure or compulsion to
complete the transaction. Fair market value shall be determined by the Board of
Directors of the Company acting reasonably and in good faith and shall be
evidenced by a Board Resolution of the Board of Directors of Company.
"GAAP" means generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession of the United States, which are in effect on the Issue
Date.
"Global Security" means with respect to the Notes issued
hereunder, a Note or Notes executed by the Company and authenticated and
delivered by the Trustee to the Depositary or pursuant to the Depositary's
instruction, all in accordance with this Supplemental Indenture and any
supplemental indentures hereto, if any, or a certified resolution of the Board
of Directors and pursuant to a written request by Company, which shall be
registered in the name of the Depositary or its nominee and which shall
represent, and shall be denominated in an amount equal to the aggregate
principal amount of, all of the outstanding Notes or any portion thereof, in
either case having the same terms, including, without limitation, the same
original Issue Date.
"guarantee" means any obligation, contingent or otherwise, of
any Person directly or indirectly guaranteeing any Indebtedness or other
obligation of any other Person and, without limiting the generality of the
foregoing, any obligation, direct or indirect, contingent or otherwise, of such
Person (i) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Indebtedness or other obligation of such other Person (whether
arising by virtue of partnership arrangements, or by agreement to keep-well, to
purchase assets, goods, securities or services, to take-or-pay, or to maintain
financial statement conditions or otherwise) or (ii) entered into for purposes
of assuring in any other manner the obligee of such Indebtedness or other
obligation of the payment thereof or to protect such obligee against loss in
respect thereof (in whole or in part) (but if in part, only to the extent
thereof); provided, however, that the term "guarantee" shall not include (A)
endorsements for collection or deposit in the ordinary course of business and
(B) guarantees (other than guarantees of Indebtedness) by the Company in respect
of assisting one or more Subsidiaries in the ordinary course of their respective
businesses, including without limitation guarantees of trade obligations and
operating leases, on ordinary business terms. The term "guarantee" used as a
verb has a corresponding meaning.
"Holder" means any holder of Notes.
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<PAGE> 15
"incur" shall have the meaning provided in Section 4.12.
"Indebtedness" means, with respect to any Person, without
duplication, (i) all Obligations of such Person for borrowed money, (ii) all
Obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments, (iii) all Capitalized Lease Obligations of such Person,
(iv) all Obligations of such Person issued or assumed as the deferred purchase
price of property, all conditional sale obligations and all Obligations under
any title retention agreement (but excluding trade accounts payable and other
accrued liabilities arising in the ordinary course of business), (v) all
Obligations for the reimbursement of any obligor on any letter of credit,
banker's acceptance or similar credit transaction, (vi) guarantees and other
contingent obligations in respect of Indebtedness of any other Person that is
referred to in clauses (i) through (v) above and clause (viii) below, (vii) all
Obligations of any other Person of the kinds referred to in clauses (i) through
(vi) above and clause (viii) below which are secured by any lien on any property
or asset of such Person, the amount of such Obligation being deemed to be the
lesser of the fair market value of such property or asset or the amount of the
Obligation so secured, (viii) all Obligations under currency agreements and
interest swap agreements of such Person and (ix) all Disqualified Capital Stock
issued by such Person with the amount of Indebtedness represented by such
Disqualified Capital Stock being equal to the greater of its voluntary or
involuntary liquidation preference and its maximum fixed repurchase price, but
excluding accrued dividends, if any. For purposes hereof, the amount of any
guarantee or other contingent obligation in respect of Indebtedness of (A) any
other Person (other than a Subsidiary of such Person) shall be deemed to be
equal to the maximum amount of such Indebtedness, unless the liability is
otherwise limited by the terms of such guarantee or other contingent obligation
regarding such Indebtedness, in which case, the amount of such guarantee or
other obligation shall be deemed to equal the maximum amount of such liability
and (B) any Subsidiary of such Person, at the option of such Person, shall be
deemed to be either the amount determined pursuant to clause (A) or the actual
outstanding amount of such Indebtedness. For purposes hereof, the "maximum fixed
repurchase price" of any Disqualified Capital Stock which does not have a fixed
repurchase price shall be calculated in accordance with the terms of such
Disqualified Capital Stock as if such Disqualified Capital Stock were purchased
on any date on which Indebtedness shall be required to be determined pursuant to
this Supplemental Indenture, and if such price is based upon, or measured by,
the fair market value of such Disqualified Capital Stock, such fair market value
shall be determined reasonably and in good faith by the Board of Directors of
the issuer of such Disqualified Capital Stock.
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"Indenture" means the Indenture, dated as of January 25, 1999,
between the Company and the Trustee, as amended or supplemented from time to
time in accordance with the terms thereof.
"Independent Financial Advisor" means a firm (i) which does
not, and whose directors, officers and employees or Affiliates do not, have a
direct or indirect financial interest in the Company or any Subsidiary thereof
and (ii) which, in the judgment of the Board of Directors of Company, is
otherwise independent and qualified to perform the task for which it is to be
engaged.
"interest" means, when used with respect to any Note, the
amount of all interest accruing on such Note, including any applicable defaulted
interest pursuant to Section 2.3.
"Interest Payment Date" means the stated maturity of an
installment of interest on the Notes.
"Interest Swap Obligations" means the obligations of any
Person pursuant to any arrangement with any other Person, whereby, directly or
indirectly, such Person is entitled to receive from time to time periodic
payments calculated by applying either a floating or a fixed rate of interest on
a stated notional amount in exchange for periodic payments made by such other
Person calculated by applying a fixed or a floating rate of interest on a stated
notional amount and shall include, without limitation, interest rate swaps,
caps, floors, collars and similar agreements.
"Internal Revenue Code" means the Internal Revenue Code of
1986, as amended to the date hereof and from time to time hereafter.
"Investment" means, with respect to any Person, any direct or
indirect loan or other extension of credit (including, without limitation, a
guarantee) or capital contribution to (by means of any transfer of cash or other
property to others or any payment for property or services for the account or
use of others), or any purchase or acquisition by such Person of any Capital
Stock, bonds, notes, debentures or other securities or evidences of Indebtedness
issued by, any Person. "Investment" shall exclude extensions of trade credit by
the Company and its Subsidiaries on commercially reasonable terms in accordance
with normal trade practices of the Company or such Subsidiary, as the case may
be.
"Issue Date" means the date of original issuance of the Notes.
"Land Partnership" means Lennar Land Partners, a Delaware
general partnership.
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<PAGE> 17
"Legal Defeasance" shall have the meaning provided in Section
7.1.
"Leisure Colony" means Leisure Colony Management Corp. Co., a
Florida corporation, and its successors including any Subsidiary of the Company
to which all or substantially all the assets of Leisure Colony Management Corp.
Co. are sold, leased or otherwise transferred.
"Lien" means any lien, mortgage, deed of trust, pledge,
security interest, charge or encumbrance of any kind (including any conditional
sale or other title retention agreement, any lease in the nature thereof and any
agreement to give any security interest).
"Maturity Date" means January 15, 2009.
"Mortgage Subsidiary" means a Wholly Owned Subsidiary of the
Company formed after the Base Date solely for the purpose of engaging in the
mortgage banking business and incidental activities directly related thereto.
"Non-Recourse Indebtedness" means any Indebtedness 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 Indebtedness relates without recourse to the Company or any of its
Subsidiaries, (ii) advanced to a Subsidiary of the Company or 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 cross-collateralization against the assets of, the
Company or any other Subsidiary of 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
Indebtedness relates without recourse to the Company or any of its Subsidiaries.
"Notes" shall have the meaning provided in the recitals of the
Company.
"Obligations" means all obligations for principal, premium,
interest, penalties, fees, indemnifications, reimbursements, damages and other
liabilities payable under the documentation governing any Indebtedness.
"Officer" means, with respect to any Person, the Chairman of
the Board of Directors, the Chief Executive Officer, the President, any Vice
President, the Chief Financial Officer, the Treasurer, the Controller, or the
Secretary of such Person, or any other officer designated by the Board of
Directors serving in a similar capacity.
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<PAGE> 18
"Officers' Certificate" means a certificate signed by the
Chairman of the Board of Directors, the Chief Executive Officer, the President
or any Vice President and the Chief Financial Officer, Controller or any
Treasurer of the Company and otherwise complying with the requirements of
Section 12.05 of the Indenture.
"Permitted Affiliate Transaction" shall have the meaning
provided in Section 4.11.
"Permitted Indebtedness" means, without duplication, each of
the following:
(i) Indebtedness under the Notes in an aggregate principal amount not
in excess of $100,000,000;
(ii) Indebtedness incurred pursuant to the Credit Agreement in an
aggregate outstanding principal amount at any time not to exceed $220,000,000;
(iii) Interest Swap Obligations of the Company covering Indebtedness
of the Company or any of its Subsidiaries; provided, however, that such Interest
Swap Obligations are entered into to protect the Company and its Subsidiaries
from fluctuations in interest rates on Indebtedness incurred in accordance with
this Supplemental Indenture to the extent the notional principal amount of such
Interest Swap Obligation does not exceed the principal amount of the
Indebtedness to which such Interest Swap Obligation relates;
(iv) Indebtedness under Currency Agreements; provided, however, that
in the case of Currency Agreements which relate to Indebtedness, such Currency
Agreements do not increase the Indebtedness of the Company and its Subsidiaries
outstanding other than as a result of fluctuations in foreign currency exchange
rates or by reason of fees, indemnities and compensation payable thereunder;
(v) Indebtedness of a Subsidiary to the Company or to a Wholly Owned
Subsidiary of the Company for so long as such Indebtedness is held by the
Company or a Wholly Owned Subsidiary of Company, in each case subject to no
Liens held by any Person other than the Company or a Wholly Owned Subsidiary of
Company; provided, however, that if as of any date any Person other than the
Company or a Wholly Owned Subsidiary of the Company owns or holds any such
Indebtedness or holds a Lien in respect of such Indebtedness, such date shall be
deemed the incurrence of Indebtedness not constituting Permitted Indebtedness by
the issuer of such Indebtedness unless such Indebtedness is otherwise permitted
under this Supplemental Indenture;
(vi) Indebtedness of the Company to a Wholly Owned Subsidiary of the
Company for so long as such Indebtedness is held by a Wholly Owned Subsidiary of
Company, in each case
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<PAGE> 19
subject to no Lien; provided, however, that (a) any Indebtedness of the Company
to any Wholly Owned Subsidiary of the Company is unsecured and subordinated,
pursuant to a written agreement, to the Company's obligations under this
Supplemental Indenture and the Notes at least to the same extent that the Notes
are subordinated to Senior Indebtedness and (b) if as of any date any Person
other than a Wholly Owned Subsidiary of the Company owns or holds any such
Indebtedness or a Lien in respect of such Indebtedness, such date shall be
deemed the incurrence of Indebtedness not constituting Permitted Indebtedness by
the Company unless such Indebtedness is otherwise permitted under this
Supplemental Indenture;
(vii) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument inadvertently
(except in the case of daylight overdrafts) drawn against insufficient funds in
the ordinary course of business; provided, however, that such Indebtedness is
extinguished within three Business Days of incurrence;
(viii) Indebtedness of the Company or any of its Subsidiaries
represented by letters of credit for the account of the Company or such
Subsidiaries, as the case may be, in order to provide security for workers'
compensation claims, payment obligations in connection with self-insurance or
similar requirements in the ordinary course of business;
(ix) Existing Indebtedness;
(x) Non-Recourse Indebtedness of the Mortgage Subsidiary;
(xi) additional Indebtedness in an aggregate principal amount not to
exceed $50.0 million at any time outstanding; and
(xii) Refinancing Indebtedness.
"Permitted Transferee" means, with respect to any Person, (i)
that Person's spouse, (ii) a parent or lineal descendant (including an adopted
child) of a parent of that Person, or the spouse of a lineal descendant of a
parent of that Person, (iii) a trustee, guardian or custodian for, or an
executor, administrator or other legal representative of the estate of, that
Person, or a trustee, guardian or custodian for a Permitted Transferee of that
Person, (iv) the trustee of a trust (including a voting trust) for the benefit
of that Person and (v) a corporation, partnership or other entity of which that
Person and Permitted Transferees of that Person are the beneficial owners of a
majority in voting power of the equity.
"Preferred Stock" of any Person means any Capital Stock of
such Person that has preferential rights to any other Capital Stock of such
Person with respect to dividends or redemptions or upon liquidation.
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"principal" of any Indebtedness (including the Notes) means
the principal amount of such Indebtedness determined in accordance with GAAP
plus (but without the duplication) the premium, if any, on such Indebtedness.
"pro forma" means, with respect to any calculation made or
required to be made pursuant to the terms of this Indenture, a calculation in
accordance with Article 11 of Regulation S-X under the Securities Act.
"Public Equity Offering" means an underwritten public offering
of Qualified Capital Stock of the Company pursuant to an effective registration
statement filed with the Commission in accordance with the Securities Act.
"Qualified Capital Stock" means any Capital Stock that is not
Disqualified Capital Stock.
"Record Date" means the Record Dates specified in the Notes.
"Recourse Indebtedness" means all Indebtedness of the Company
and its Subsidiaries other than Non-Recourse Indebtedness.
"Redemption Date" means, when used with respect to any Note to
be redeemed, the date fixed for such redemption pursuant to this Supplemental
Indenture and the Notes.
"Redemption Price means, when used with respect to any Note to
be redeemed, the price fixed for such redemption, including principal and
premium, if any, pursuant to this Indenture and the Notes.
"Reference Date" shall have the meaning provided in Section
4.10.
"Refinance" means, in respect of any security or Indebtedness,
to refinance, extend, renew, refund, repay, prepay, redeem, defease or retire,
or to issue a security or Indebtedness in exchange or replacement for, such
security or Indebtedness in whole or in part. "Refinanced" and "Refinancing"
shall have correlative meanings.
"Refinancing Indebtedness" means any Refinancing by the
Company or any Subsidiary of the Company of Indebtedness incurred in accordance
with Section 4.12 (other than pursuant to clauses (ii), (iii), (iv), (v), (vi),
(vii), (viii), (x), (xi) or (xii) of the definition of Permitted Indebtedness),
in each case that does not (1) result in an increase in the aggregate principal
amount of Indebtedness of such Person as of the date of such proposed
Refinancing (plus the amount of any premium required to be paid under the terms
of the instrument governing such Indebtedness and plus the amount of reasonable
fees and expenses
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<PAGE> 21
incurred by the Company or such Subsidiary, as the case may be, in connection
with such Refinancing), except to the extent that any such increase in
Indebtedness is otherwise permitted by this Supplemental Indenture or (2) create
Indebtedness with (A) a Weighted Average Life to Maturity that is less than the
Weighted Average Life to Maturity of the Indebtedness being Refinanced or (B) a
final maturity earlier than the final maturity of the Indebtedness being
Refinanced; provided, however, that if such Indebtedness being Refinanced is
Indebtedness of Company, then such Refinancing Indebtedness shall be
Indebtedness solely of the Company and (x) if such Indebtedness being Refinanced
is equal in right of payment with the Notes, then such Refinancing Indebtedness
shall be equal in right of payment with or subordinate to the Notes or (y) if
such Indebtedness being Refinanced is subordinate or junior to the Notes, then
such Refinancing Indebtedness shall be subordinate to the Notes at least to the
same extent and in the same manner as the Indebtedness being Refinanced.
"Representative" means the indenture trustee or other trustee,
agent or representative in respect of any Designated Senior Indebtedness;
provided, however, that if, and for so long as, any Designated Senior
Indebtedness lacks such a representative, then the Representative for such
Designated Senior Indebtedness shall at all times constitute the holders of a
majority in outstanding principal amount of such Designated Senior Indebtedness
in respect of any Designated Senior Indebtedness.
"Restricted Payment" shall have the meaning provided in
Section 4.10.
"Securities" shall have the meaning provided in the recitals
of the Company.
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations of the Commission promulgated thereunder.
"Senior Indebtedness" means the principal of, premium, if any,
and interest (including any interest accruing subsequent to the filing of a
petition of bankruptcy at the rate provided for in the documentation with
respect thereto, whether or not such interest is an allowed claim under
applicable law) on any Indebtedness of Company, whether outstanding on the Issue
Date or thereafter created, incurred or assumed, unless, in the case of any
particular Indebtedness, the instrument creating or evidencing the same or
pursuant to which the same is outstanding expressly provides that such
Indebtedness shall not be senior in right of payment to the Notes. Without
limiting the generality of the foregoing, "Senior Indebtedness" shall also
include the principal of, premium, if any, interest (including any interest
accruing subsequent to the filing of a petition of bankruptcy at the rate
provided for in the documentation with respect thereto,
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whether or not such interest is an allowed claim under applicable law) on, and
all other amounts owing in respect of, (x) all monetary obligations (including
guarantees thereof) of every nature of the Company under the Credit Agreement,
including, without limitation, obligations to pay principal and interest,
reimbursement obligations under letters of credit, fees, expenses and
indemnities, (y) all Interest Swap Obligations (including guarantees thereof)
and (z) all obligations (including guarantees) under Currency Agreements, in
each case whether outstanding on the Issue Date or thereafter incurred.
Notwithstanding the foregoing, "Senior Indebtedness" shall not include (i) any
Indebtedness of the Company to a Subsidiary of the Company or any Affiliate of
the Company or any of such Affiliate's Subsidiaries, (ii) Indebtedness to, or
guaranteed on behalf of, any shareholder, director, officer or employee of the
Company or of any Subsidiary of the Company (including, without limitation,
amounts owed for compensation), (iii) Indebtedness to trade creditors and other
amounts incurred in connection with obtaining goods, materials or services, (iv)
Indebtedness represented by Disqualified Capital Stock, (v) any liability for
federal, state, local or other taxes owed or owing by Company, (vi) that portion
of any Indebtedness incurred in violation of Section 4.12, (vii) Indebtedness
which, when incurred and without respect to any election under Section 1111(b)
of Title 11, United States Code is without recourse to the Company and (viii)
any Indebtedness which is, by its express terms, subordinated in right of
payment to any other Indebtedness of Company.
"Senior Recourse Indebtedness" means all Senior Indebtedness
other than Senior Indebtedness that is Non-Recourse Indebtedness plus Subsidiary
Unsubordinated Indebtedness of each Subsidiary of the Company (but only to the
extent not in excess of the book value of the assets of the issuer thereof)
other than Subsidiary Unsubordinated Indebtedness of such Subsidiary that is
Non-Recourse Indebtedness.
"Subordinated Indebtedness" means all Indebtedness of the
Company and its Subsidiaries which expressly provides that such Indebtedness
shall be subordinated in right of payment to any other Indebtedness.
"Subsidiary" means, with respect to any Person, (i) any
corporation of which the outstanding Capital Stock having at least a majority of
the votes entitled to be cast in the election of directors under ordinary
circumstances shall at the time be owned, directly or indirectly, by such
Person, (ii) any other Person (other than a partnership) of which at least a
majority of the voting interest under ordinary circumstances is at the time,
directly or indirectly, owned by such Person or (iii) any partnership (a) the
sole general partner or the managing general partner of which is such Person or
a Subsidiary of such Person or (b) the only general partners of which are such
Person or one or more Subsidiaries of such Person (or any combination thereof).
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"Subsidiary Unsubordinated Indebtedness" means all
Indebtedness of a Subsidiary of the Company other than Subordinated Indebtedness
thereof.
"Surviving Entity" shall have the meaning provided in Section
5.1.
"Supplemental Indenture" means this First Supplemental
Indenture, dated as of January 25, 1999, as amended or supplemented from time to
time in accordance with the terms hereof.
"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
Supplemental Indenture, except as otherwise provided in Section 8.3.
"Trustee" means the party named as such in this Supplemental
Indenture until a successor replaces it in accordance with the provisions of
this Supplemental Indenture and thereafter means such successor.
"Trust Officer" means any officer or assistant officer of the
Trustee assigned by the Trustee to administer this Supplemental Indenture, or in
the case of a successor trustee, an officer assigned to the department, division
or group performing the corporation trust work of such successor and assigned to
administer this Supplemental Indenture.
"U.S. Government Obligations" means direct obligations of, and
obligations guaranteed by, the United States of America for the payment of which
the full faith and credit of the United States of America is pledged.
"U.S. Legal Tender" means such coin or currency of the United
States of America as at the time of payment shall be legal tender for the
payment of public and private debts.
"Unrestricted Notes" means one or more Notes that do not and
are not required to bear the Private Placement Legend, including, without
limitation, the Exchange Notes.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the then
outstanding aggregate principal amount of such Indebtedness into (b) the sum of
the total of the products obtained by multiplying (i) the amount of each then
remaining installment, sinking fund, serial maturity or other required payment
of principal, including payment at final maturity, in respect thereof, by (ii)
the number of years (calculated to the nearest one-twelfth) which will elapse
between such date and the making of such payment.
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"Wholly Owned Subsidiary" means, with respect to any Person,
any Subsidiary of such Person (i) of which all the outstanding voting securities
normally entitled to vote in the election of directors are owned by such Person
or any Wholly Owned Subsidiary of such Person (other than directors qualifying
shares or an immaterial amount of shares required to be owned by other Persons
pursuant to applicable law) or (ii) all the outstanding partnership interests
are owned by such Person or any Wholly Owned Subsidiary of such Person.
"9-3/8% Senior Subordinated Notes" means the Company's 9-3/8%
Senior Subordinated Notes due 2008.
SECTION 1.2. Incorporation by Reference of TIA. Whenever this
Supplemental Indenture refers to a provision of the TIA, such provision is
incorporated by reference in, and made a part of, this Supplemental Indenture.
The following TIA terms used in this Supplemental Indenture have the following
meanings:
"indenture securities" means the Notes.
"indenture to be qualified" means the Indenture.
"indenture trustee" means the Trustee.
"obligor" on the indenture securities means the Company or any
other obligor on the Notes.
All other TIA terms used in this Supplemental Indenture that
are defined by the TIA, defined by TIA reference to another statute or defined
by Commission rule and not otherwise defined herein have the meanings assigned
to them therein.
SECTION 1.3. Rules of Construction. Unless the context
otherwise requires:
(1) references in this Supplemental Indenture to section
numbers shall be deemed to be references to section numbers of this Supplemental
Indenture unless otherwise specified;
(2) a term shall have the meaning assigned to it and in the
case of a term defined in this Supplemental Indenture that is also defined in
the Indenture, the meaning ascribed to such term in this Supplemental Indenture
shall apply with respect to the Notes;
(3) an accounting term not otherwise defined shall have the
meaning assigned to it in accordance with GAAP of any date of determination;
(4) "or" is not exclusive;
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(5) words in the singular include the plural, and words in the
plural include the singular;
(6) "herein," "hereof" and other words of similar import refer
to this Supplemental Indenture as a whole and not to any particular Article,
Section or other subdivision; and
(7) any reference to a statute, law or regulation means that
statute, law or regulation as amended and in effect from time to time and
includes any successor statute, law or regulation; provided, however, that any
reference to the Bankruptcy Law shall mean the Bankruptcy Law as applicable to
the relevant case.
ARTICLE II.
THE NOTES
SECTION 2.1. The Notes. In accordance with Section 2.02 of the
Indenture, there is hereby created a series of Securities under the Indenture
entitled "10 1/2% Senior Subordinated Notes due 2009."
(1) The Notes and the Trustee's certificate of authentication
relating thereto 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 depository rule or usage. The Company and the Trustee shall
approve the form of the Notes and any notation, legend or endorsement on them.
Each Note shall be dated the date of its issuance and shall show the date of its
authentication.
The terms and provisions contained in the Note annexed hereto
as Exhibit A shall constitute, and are hereby expressly made, a part of this
Supplemental Indenture and, to the extent applicable, the Company and the
Trustee, by their execution and delivery of this Supplemental Indenture,
expressly agree to such terms and provisions and to be bound thereby.
(2) Subject to Section 2.02 of the Indenture and applicable
law, the aggregate principal amount of the Notes which may be issued is limited
to $100,000,000.
(3) The aggregate principal amount of the Notes shall be
payable on the Maturity Date unless earlier repaid in accordance with this
Supplemental Indenture.
(4) Interest on the Notes will accrue at the rate of 10 1/2%
per annum and will be payable in arrears on each January 15 and July 15,
commencing on July 15, 1999. The Company shall pay interest to the persons in
whose names the Notes are registered at the close of business on the fifteenth
day immediately preceding each interest payment date. Interest on the Notes will
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accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from and including the Issue Date. Interest shall be
computed on the basis of a 360-day year of twelve 30-day months and, in the case
of a partial month, the actual number of days elapsed.
(5) All amounts payable in connection with the Notes shall be
denominated and payable in the lawful currency of the United States.
(6) The Notes shall be payable, and may be presented for
registration of transfer and exchange, without service charge, at the office of
the Company maintained for such purpose in New York, New York, which shall
initially be the Corporate Trust Office of the Trustee.
(7) The Notes shall not be convertible into any class of
capital stock of the Company.
(8) There shall be no sinking fund provided for the Notes.
SECTION 2.2. Treasury Notes. Section 2.10 of the Indenture
shall be subject to this Section 2.2 of this Supplemental Indenture. In
determining whether the Holders of the required principal amount of Notes have
concurred in any direction, waiver, consent or notice, Notes owned by the
Company or an Affiliate of the Company shall be considered as though they are
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 which a Trust Officer of the Trustee has been informed in writing by the
Company to be so owned shall be so considered. The Company shall notify the
Trustee, in writing, when either it or, to its knowledge, any of its Affiliates
repurchases or otherwise acquires Notes, of the aggregate principal amount of
such Notes so repurchased or otherwise acquired and such other information as
the Trustee may reasonably request and the Trustee shall be entitled to rely
thereon.
SECTION 2.3. Defaulted Interest. The Company shall pay
interest on overdue principal from time to time on demand at the rate of
interest then borne by the Notes. The Company shall, to the extent lawful, pay
interest on overdue installments of interest (without regard to any applicable
grace periods) from time to time on demand at the rate of interest then borne by
the Notes. Interest will be computed on the basis of a 360-day year comprised of
twelve 30-day months, and, in the case of a partial month, the actual number of
days elapsed.
If the Company defaults in a payment of interest on the Notes,
it shall pay the defaulted interest, plus (to the extent lawful) any interest
payable on the defaulted interest, to the Persons who are Holders on a
subsequent special record date,
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which special record date shall be the fifteenth day next preceding the date
fixed by the Company for the payment of defaulted interest or the next
succeeding Business Day if such date is not a Business Day. 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 (a "Default Interest
Payment Date"), and at the same time the Company shall deposit with the Trustee
an amount of money equal to the aggregate amount proposed to be paid in respect
of such defaulted interest or shall make arrangements satisfactory to the
Trustee for such deposit on or prior to the date of the proposed payment, such
money when deposited to be held in trust for the benefit of the Persons entitled
to such defaulted interest as provided in this Section; provided, however, that
in no event shall the Company deposit monies proposed to be paid in respect of
defaulted interest later than 11:00 a.m. New York City time of the proposed
Default Interest Payment Date. At least 15 days before the subsequent special
record date, the Company shall mail (or cause to be mailed) to each Holder, as
of a recent date selected by Company, with a copy to the Trustee at least 20
days prior to such special record date, a notice that states the subsequent
special record date, the payment date and the amount of defaulted interest, and
interest payable on such defaulted interest, if any, to be paid. Notwithstanding
the foregoing, any interest which is paid prior to the expiration of the 30-day
period set forth in Section 6.1(1) shall be paid to Holders as of the regular
record date for the Interest Payment Date for which interest has not been paid.
Notwithstanding the foregoing, the Company may make payment of any defaulted
interest 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 2.4. Deposit of Monies. Prior to 11:00 a.m. New York
City time on each Interest Payment Date, Maturity Date, Redemption Date or
Change of Control Payment Date, the Company shall have deposited with the Paying
Agent in immediately available funds money sufficient to make cash payments, if
any, due on such Interest Payment Date, Maturity Date, Redemption Date or Change
of Control Payment Date, as the case may be, in a timely manner which permits
the Paying Agent to remit payment to the Holders on such Interest Payment Date,
maturity Date, Redemption Date or Change of Control Payment Date, as the case
may be.
SECTION 2.5. Global Securities. Section 2.08 of the Indenture
shall be subject to this Section 2.5 of this Supplemental Indenture.
(1) If the Board of Directors of the Company or any duly
authorized committee thereof shall establish that the Notes are to be issued in
whole or in part in the form of one or more Global Securities, then the Company
shall execute and the Trustee or its agent shall authenticate and deliver such
Global Security
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or Securities which (i) shall represent, and shall be denominated in an amount
equal to the aggregate principal amount of, the outstanding Notes to be
represented by such Global Security or Securities, or such portion thereof as
the Company shall specify in writing to the Trustee, (ii) shall be registered in
the name of The Depository Trust Company, New York, New York (including any
successor appointed by Company, the "Depositary") or its nominee, (iii) shall be
delivered by the Trustee or its agent to the Depositary or pursuant to the
Depositary's instruction, and (iv) shall bear a legend substantially to the
following effect:
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR THE
INDIVIDUAL NOTES REPRESENTED HEREBY, THIS GLOBAL SECURITY MAY
NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO
THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE
DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A
NOMINEE OF SUCH SUCCESSOR DEPOSITARY.
Beneficial interests in the Global Securities shall be credited by the
Depositary to the accounts of its participants only in denominations of $1,000
or integral multiples thereof.
(2) Notwithstanding any other provisions herein but subject to
the provisions of clause (3) below, unless the terms of a Global Security
expressly permit such Global Security to be exchanged in whole or in part for
individual Notes, a Global Security may be transferred, in whole but not in part
and in the manner provided in Section 2.08 of the Indenture, only to a nominee
of the Depositary for such Global Security, or to the Depositary, or a successor
Depositary for such Global Security appointed by Company, or to a nominee of
such successor Depositary.
(3) (i) If at any time the Depositary for a Global Security
notifies the Company that it is unwilling or unable to continue as Depositary
for such Global Security or if at any time the Depositary for the Notes ceases
to be a clearing agency registered under the Exchange Act or other applicable
statute or regulation, the Company shall appoint a successor Depositary with
respect to such Global Security. If a successor Depositary for such Global
Security is not appointed by the Company within 90 days after the Company
receives such notice or becomes aware of such ineligibility, the Company shall
execute, and the Trustee or its agent, upon receipt of a written request by the
Company for the authentication and delivery of individual Notes in exchange for
such Global Security, shall authenticate and deliver, individual Notes in
definitive form in an aggregate principal amount equal to the principal amount
of the Global Security in exchange for such Global Security.
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(ii) The Company may at any time and in its sole discretion
determine that the Notes or any portion thereof issued or issuable in the form
of one or more Global Securities shall no longer be represented by such Global
Security or Securities. In such event the Company shall execute, and the
Trustee, upon receipt of a written request by the Company for the authentication
and delivery of individual Notes in exchange in whole or in part for such Global
Security, shall authenticate and deliver individual Notes in definitive form in
an aggregate principal amount equal to the principal amount of such Global
Security or Securities representing such series or portion thereof in exchange
for such Global Security or Securities.
(iii) If specified by the Company with respect to Notes issued
or issuable in the form of a Global Security, the Depositary for such Global
Security may surrender such Global Security in exchange in whole or in part for
individual Notes in definitive form on such terms as are acceptable to the
Company and such Depositary. Thereupon the Company shall execute, and the
Trustee or its agent shall authenticate and deliver, without service charge, (a)
to each Person specified by such Depositary a new Note or Notes of any
authorized denomination as requested by such Person in aggregate principal
amount equal to and in exchange for such Person's beneficial interest in the
Global Security; and (b) to such Depositary a new Global Security in an
authorized denomination equal to the difference, if any, between the principal
amount of the surrendered Global Security and the aggregate principal amount of
Notes delivered to the Holders thereof.
(iv) In any exchange provided for in any of the preceding
clauses (i), (ii) and (iii), the Company shall execute and the Trustee or its
agent shall authenticate and deliver individual Notes in definitive registered
form in authorized denominations. Upon the exchange of the entire principal
amount of a Global Security for individual Notes, such Global Security shall be
canceled by the Trustee or its agent. Except as provided in the preceding clause
(iii), Notes issued in exchange for a Global Security pursuant to this Section
2.5 shall be registered in such names and in such authorized denominations as
the Depositary for such Global Security, pursuant to instructions from its
direct or indirect participants or otherwise, shall instruct the Trustee or the
Registrar. The Trustee or the Registrar shall deliver, or make available for
delivery, such Notes to the Persons in whose names such Notes are so registered.
ARTICLE III.
REDEMPTION
SECTION 3.1. Notices to Trustee. If the Company elects to
redeem Notes pursuant to Paragraph 5 of the Notes, it shall notify the Trustee
and the Paying Agent in writing of the
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Redemption Date and the principal amount of the Notes to be redeemed.
The Company shall give each notice provided for in this
Section 3.1 to the Trustee at least 45 days before the Redemption Date (unless a
shorter notice period shall be satisfactory to the Trustee for its
administrative convenience, as evidenced in a writing signed on behalf of the
Trustee), together with an Officers' Certificate stating that such redemption
shall comply with the conditions contained herein and in the Notes. Any such
notice may be canceled at any time prior to notice of such redemption being
mailed to any Holder and shall thereby be void and of no effect.
SECTION 3.2. Selection of Notes to Be Redeemed. In the event
that less than all of the Notes are to be redeemed at any time, selection of
such Notes for redemption will be made by the Trustee in compliance with the
requirements of the principal national securities exchange, if any, on which
such Notes are listed or, if such Notes are not then listed on a national
securities exchange, by lot, on a pro rata basis or by such method as the
Trustee shall deem fair and appropriate; provided, however, that no Notes of a
principal amount of $1,000 or less shall be redeemed in part; provided further,
that if a partial redemption is made with the proceeds of a Public Equity
Offering, selection of the Notes or portions thereof for redemption shall be
made by the Trustee only on a pro rata basis or on as nearly a pro rata basis as
is practicable (subject to the Depositary's procedures), unless such method is
otherwise prohibited.
SECTION 3.3. Optional Redemption. The Notes will be
redeemable, at the Company's option, in whole or in part at any time, or from
time to time, on or after January 15, 2004 upon not less than 30 nor more than
60 days' notice to the Holders, at the following Redemption Prices (expressed as
percentages of the principal amount thereof) if redeemed during the twelve-month
period commencing on January 15 of the years set forth below, plus, in each
case, accrued and unpaid interest thereon, if any, to the Redemption Date:
<TABLE>
<CAPTION>
Year Percentage
---- ----------
<S> <C>
2004........................................................ 105.375%
2005........................................................ 104.031%
2006........................................................ 102.688%
2007........................................................ 101.344%
2008 and thereafter......................................... 100.000%
</TABLE>
Notwithstanding the foregoing, at any time, or from time to
time, on or prior to January 15, 2002, the Company may, at its option, redeem,
with the net cash proceeds of one or more Public Equity Offerings, up to 35% of
the aggregate principal amount of the Notes issued and sold by the Company at a
redemption price equal to 110.750% of the principal amount
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thereof, plus accrued interest thereon, if any, to the Redemption Date; provided
that at least 65% of the aggregate principal amount of the Notes issued and sold
by the Company remain outstanding immediately following such redemption. In
order to effect the foregoing redemption with the proceeds of any Public Equity
Offering, the Company shall make such redemption not more than 60 days after the
consummation of any such Public Equity Offering.
SECTION 3.4. Notice of Redemption. At least 30 days but not
more than 60 days before a Redemption Date, the Company shall mail or cause to
be mailed a notice of redemption by first-class mail to each Holder of Notes to
be redeemed at its registered address, with a copy to the Trustee and any Paying
Agent. At the Company's request, the Trustee shall give the notice of redemption
in the Company's name and at the Company's expense. The Company shall provide
such notices of redemption to the Trustee at least five days before the intended
mailing date.
Each notice of redemption shall identify (including the CUSIP
number) the Notes to be redeemed and shall state:
(1) the Redemption Date;
(2) the Redemption Price and the amount of accrued interest,
if any, to be paid;
(3) the name and address of the Paying Agent;
(4) the subparagraph of the Notes pursuant to which such
redemption is being made;
(5) that Notes called for redemption must be surrendered to
the Paying Agent to collect the Redemption Price plus accrued interest, if any;
(6) that, unless the Company defaults in making the redemption
payment, interest on Notes or applicable portions thereof called for redemption
will cease to accrue on and after the Redemption Date, and the only remaining
right of the Holders of such Notes will be to receive payment of the Redemption
Price plus accrued interest as of the Redemption Date, if any, upon surrender to
the Paying Agent of the Notes redeemed;
(7) 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, and upon surrender of such Note, a new Note or Notes in the aggregate
principal amount equal to the unredeemed portion thereof will be issued; and
(8) if fewer than all the Notes are to be redeemed, the
identification of the particular Notes (or portions thereof) to be redeemed, as
well as the aggregate principal amount of
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Notes to be redeemed and the aggregate principal amount of Notes to be
outstanding after such partial redemption.
The Company will 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
purchase of Notes.
SECTION 3.5. Effect of Notice Defect. Once notice of
redemption is mailed in accordance with Section 3.4, such notice of redemption
shall be irrevocable and Notes called for redemption shall become due and
payable on the Redemption Date and at the Redemption Price plus accrued interest
as of such date, if any. Upon surrender to the Trustee or Paying Agent, such
Notes called for redemption shall be paid at the Redemption Price plus accrued
interest thereon to the Redemption Date, but installments of interest, the
maturity of which is on or prior to the Redemption Date, shall be payable to
Holders of record at the close of business on the relevant record dates referred
to in the Notes. Interest shall cease to accrue on or after the Redemption Date
unless the Company defaults in payment of the Redemption Price.
SECTION 3.6. Deposit of Redemption Price. On or before the
Redemption Date and in accordance with Section 2.4, the Company shall deposit
with the Paying Agent U.S. Legal Tender sufficient to pay the Redemption Price
plus accrued interest, if any, of all Notes to be redeemed on that date. The
Paying Agent shall promptly return to the Company any U.S. Legal Tender so
deposited which is not required for that purpose, except with respect to monies
owed as obligations to the Trustee pursuant to Article Seven of the Indenture.
Unless the Company fails to comply with the preceding
paragraph and defaults in the payment of such Redemption Price plus accrued
interest, if any, interest on the Notes to be redeemed will cease to accrue on
and after the applicable Redemption Date, whether or not such Notes are
presented for payment.
SECTION 3.7. Notes Redeemed in Part. Upon surrender of a Note
that is to be redeemed in part, the Trustee shall authenticate for the Holder a
new Note or Notes equal in principal amount to the unredeemed portion of the
Note surrendered.
ARTICLE IV.
ADDITIONAL COVENANTS
SECTION 4.1. Payment of Notes.
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(1) The Company shall pay the principal of, premium, if any,
and interest on the Notes on the dates and in the manner provided in the Notes
and in this Supplemental Indenture.
(2) An installment of principal of or interest on the Notes
shall be considered paid on the date it is due if the Trustee or Paying Agent
(other than the Company or any of its Affiliates) holds, prior to 11:00 a.m. New
York City time on that date, U.S. Legal Tender designated for and sufficient to
pay the installment in full and is not prohibited from paying such money to the
Holders pursuant to the terms of this Supplemental Indenture or the Notes.
(3) Notwithstanding anything to the contrary contained in this
Supplemental Indenture, the Company may, to the extent it is required to do so
by law, deduct or withhold income or other similar taxes imposed by the United
States of America from payments hereunder.
SECTION 4.2. Maintenance of Office or Agency. the Company
shall maintain the office or agency required under Section 2.05 of the
Indenture. The Company shall give prior written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company 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 address of the
Trustee set forth in Section 10.3.
SECTION 4.3. Corporate Existence. Except as otherwise
permitted by Article V, the Company shall do or cause to be done, at its own
cost and expense, all things necessary to preserve and keep in full force and
effect its corporate existence and the corporate existence of each of its
Subsidiaries in accordance with the respective organizational documents of each
such Subsidiary and the material rights (charter and statutory) and franchises
of the Company and each such Subsidiary; provided, however, that the Company
shall not be required to preserve, with respect to itself, any material right or
franchise and, with respect to any of its Subsidiaries, any such existence,
material right or franchise, if the Board of Directors of the Company shall
determine in good faith that the preservation thereof is no longer desirable in
the conduct of the business of the Company and its Subsidiaries, taken as a
whole.
SECTION 4.4. Payment of Taxes and Other Claims. The Company
shall pay or discharge or cause to be paid or discharged, before the same shall
become delinquent, (i) all material taxes, assessments and governmental charges
(including withholding taxes and any penalties, interest and additions to taxes)
levied or imposed upon it or any of its Subsidiaries or properties of it or any
of its Subsidiaries and (ii) all material lawful claims for labor, materials and
supplies that, if unpaid, might by law
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become a Lien upon the property of the Company or any of its Subsidiaries;
provided, however, that the Company shall not be required to pay or discharge or
cause to be paid or discharged any such tax, assessment, charge or claim whose
amount, applicability or validity is being contested in good faith by
appropriate negotiations or proceedings properly instituted and diligently
conducted for which adequate reserves, to the extent required under GAAP, have
been taken.
SECTION 4.5. Maintenance of Properties and Insurance.
(1) The Company shall, and shall cause each of the
Subsidiaries to, maintain all properties used or useful in the conduct of its
business in good working order and condition (subject to ordinary wear and tear)
and make all necessary repairs, renewals, replacements, additions, betterments
and improvements thereto and actively conduct and carry on its business;
provided, however, that nothing in this Section 4.5 shall prevent the Company or
any of the Subsidiaries of the Company from discontinuing the operation and
maintenance of any of its properties, if such discontinuance is (i) in the
ordinary course of business pursuant to customary business terms or (ii) in the
good faith judgment of the respective Boards of Directors or other governing
body of the Company or such Subsidiary, as the case may be, desirable in the
conduct of their respective businesses and is not disadvantageous in any
material respect to the Holders.
(2) The Company shall provide or cause to be provided, for
itself and each of the Subsidiaries of Company, insurance (including appropriate
self-insurance) against loss or damage of the kinds that, in the good faith
judgment of Company, are adequate and appropriate for the conduct of the
business of the Company and its Subsidiaries in a prudent manner, with reputable
insurers.
SECTION 4.6. Compliance Certificate; Notice of Default.
(1) The Company shall deliver to the Trustee, within 90 days
after the end of each of the Company's fiscal years, an Officers' Certificate
(provided, however, that one of the signatories to each such Officers'
Certificate shall be the Company's principal executive officer, principal
financial officer or principal accounting officer), as to such Officers'
knowledge, of the Company's compliance with all conditions and covenants under
this Indenture (without regard to any period of grace or requirement of notice
provided hereunder) and in the event any Default exists, such Officers shall
specify the nature of such Default. Each such Officers' Certificate shall also
notify the Trustee of any change in the Company's fiscal year-end.
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(2) So long as not contrary to the then current
recommendations of the American Institute of Certified Public Accountants, the
annual financial statements delivered pursuant to Section 4.8 shall be
accompanied by a written report of the Company's independent certified public
accountants (who shall be a firm of established national reputation) stating (A)
that their audit examination has included a review of the terms of this
Supplemental Indenture and the form of the Notes as they relate to accounting
matters, and (B) whether, in connection with their audit examination, any
Default or Event of Default has come to their attention and if such a Default or
Event of Default has come to their attention, specifying the nature and period
of existence thereof; provided, however, that, without any restriction as to the
scope of the audit examination, such independent certified public accountants
shall not be liable by reason of any failure to obtain knowledge of any such
Default or Event of Default that would not be disclosed in the course of an
audit examination conducted in accordance with generally accepted auditing
standards.
(3) (i) If any Default or Event of Default has occurred and is
continuing or (ii) if any Holder seeks to exercise any remedy hereunder with
respect to a claimed Default under this Supplemental Indenture or the Notes, the
Company shall deliver to the Trustee, at its address set forth in Section 10.3,
by registered or certified mail or by facsimile transmission followed by hard
copy by registered or certified mail an Officers' Certificate specifying such
event, notice or other action promptly upon the Company's becoming aware of such
occurrence.
SECTION 4.7. Compliance with Laws. The Company shall comply,
and shall cause each of its Subsidiaries to comply, with all applicable
statutes, rules, regulations, orders and restrictions of the United States of
America, all states and municipalities thereof, and of any governmental
department, commission, board, regulatory authority, bureau, agency and
instrumentality of the foregoing, in respect of the conduct of their respective
businesses and the ownership of their respective properties, except for such
noncompliances as could not singly or in the aggregate reasonably be expected to
have a material adverse effect on the financial condition or results of
operations of the Company and its Subsidiaries taken as a whole.
SECTION 4.8. Commission Reports.
(1) The Company shall file with the Commission all
information, documents and reports to be filed with the Commission pursuant to
Section 13 or 15(d) of the Exchange Act, whether or not the Company is subject
to such filing requirements so long as the Commission will accept such filings.
the Company (at its own expense) shall deliver to the Trustee within 15 days
after it files them with the Commission, copies of the quarterly and annual
reports and of the information, documents and other
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reports (or copies of such portions of any of the foregoing as the SEC may by
rules and regulations prescribe) which the Company files with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act. The Company shall also
comply with the provisions of TIA Section 314(a). Delivery of such reports,
information and documents to the Trustee is for informational purposes only and
the Trustee's receipt of such shall not constitute constructive notice of any
information contained therein or determinable from information contained
therein, including the Company's compliance with any of its covenants hereunder
(as to which the Trustee is entitled to rely exclusively on Officers'
Certificates).
(2) At the Company's expense, regardless of whether the
Company is required to furnish such reports to its stockholders pursuant to the
Exchange Act, the Company shall cause an annual report and each quarterly or
other financial report to be delivered to the Trustee and the Trustee will mail
them to the Holders at their addresses appearing in the registration books of
the Registrar.
SECTION 4.9. Waiver of Stay, Extension or Usury Laws. The
Company covenants (to the extent that it may lawfully do so) that it will not at
any time insist upon, plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law or any usury law or other law
that would prohibit or forgive the Company from paying all or any portion of the
Obligations on the Notes as contemplated herein, wherever enacted, now or at any
time hereafter in force, or which may affect the covenants or the performance of
this Supplemental Indenture; and (to the extent that it may lawfully do so) the
Company hereby expressly waives all benefit or advantage of any such law, and
covenants that it will not hinder, delay or impede the execution of any power
herein granted to the Trustee, but will suffer and permit the execution of every
such power as though no such law had been enacted.
SECTION 4.10. Limitation on Restricted Payments. The Company
shall not, and shall not cause or permit any of its Subsidiaries to, directly or
indirectly:
(1) declare or pay any dividend or make any distribution
(other than dividends or distributions made to the Company or any Subsidiary of
the Company and, if such Subsidiary is not a Wholly Owned Subsidiary, to such
Subsidiary's other stockholders or interest holders on a pro rata basis, and
other than any dividend or distribution payable solely in Qualified Capital
Stock of the Company) on or in respect of shares of the Company's Capital Stock
to holders of such Capital Stock;
(2) purchase, redeem or otherwise acquire or retire for value
any Capital Stock of the Company or any warrants, rights or options to purchase
or acquire shares of any class of such Capital Stock (other than the exchange of
such Capital Stock or any warrants, rights or options to acquire shares of any
class
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of Capital Stock of the Company for Qualified Capital Stock of the Company); or
(3) make any principal payment on, purchase, defease, redeem,
prepay, decrease or otherwise acquire or retire for value, prior to any
scheduled final maturity, scheduled repayment or scheduled sinking fund payment,
any Indebtedness of the Company or a Subsidiary that is subordinate or junior in
right of payment to the Notes or any guarantee thereof,
(each of the foregoing actions set forth in clauses (1), (2) and (3) being
referred to as a "Restricted Payment"), if at the time of such Restricted
Payment or immediately after giving effect thereto, (i) a Default or an Event of
Default shall have occurred and be continuing or (ii) the Company is not able to
incur at least $1.00 of additional Indebtedness (other than additional Permitted
Indebtedness) in compliance with Section 4.12, or (iii) the aggregate amount of
all Restricted Payments (including such proposed Restricted Payment) made
subsequent to the Base Date (the amount expended for such purposes, if other
than in cash, being the fair market value of such property as determined
reasonably and in good faith by the Board of Directors of the Company) shall
exceed the sum of: (A) 50% of the cumulative Consolidated Net Income (or if
cumulative Consolidated Net Income shall be a loss, minus 100% of such loss) of
the Company earned during the period beginning on the first day of the fiscal
quarter including the Base Date and ending on the last day of the most recent
fiscal quarter ending at least 30 days prior to the date the Restricted Payment
occurs (the "Reference Date") (treating such period as a single accounting
period); plus (B) 100% of the aggregate net cash proceeds received by the
Company from any Person (other than a Subsidiary of the Company) from the
issuance and sale subsequent to the Base Date and on or prior to the Reference
Date of Qualified Capital Stock of Company, including treasury stock; plus (C)
without duplication of any amounts included in clause (B) above, 100% of the
aggregate net cash proceeds of any equity contribution received by the Company
from a holder of the Company's Capital Stock subsequent to the Base Date and on
or prior to the Reference Date (excluding, in the case of clauses (B) and (C),
any net cash proceeds from a Public Equity Offering to the extent used to redeem
the Notes); plus (D) $42,500,000.
Notwithstanding the foregoing, the provisions set forth above
in Section 4.10 shall not prohibit:
(1) the payment of any dividend or the consummation of any
irrevocable redemption within 60 days after the date of declaration of such
dividend or the giving of such irrevocable redemption notice if the dividend or
redemption would have been permitted on the date of declaration or giving of
irrevocable redemption notice;
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(2) if no Default or Event of Default shall have occurred and
be continuing, the acquisition of any shares of Capital Stock of Company either
(i) solely in exchange for shares of Qualified Capital Stock of the Company or
(ii) through the application of net proceeds of a substantially concurrent sale
for cash (other than to a Subsidiary of the Company) of shares of Qualified
Capital Stock of Company;
(3) if no Default or Event of Default shall have occurred and
be continuing, the acquisition of any Indebtedness of the Company that is
subordinate or junior in right of payment to the Notes either (i) solely in
exchange for shares of Qualified Capital Stock of Company, or (ii) through the
application of net proceeds of a substantially concurrent sale for cash (other
than to a Subsidiary of the Company) of (A) shares of Qualified Capital Stock of
the Company or (B) Refinancing Indebtedness; and
(4) if no Default or Event of Default shall have occurred and
be continuing, the repurchase of shares of, or options to purchase shares of,
Common Stock of the Company from employees, former employees, directors or
former directors of the Company pursuant to the terms of the agreements or plans
approved by the Board of Directors of the Company under which such individuals
purchased or sold, or were granted the option to purchase or sell shares of
Common Stock), provided, however, that the aggregate amount of such repurchases
or Restricted Payments shall not exceed $250,000 any calendar year.
In determining the aggregate amount of Restricted Payments
made subsequent to the Base Date in accordance with clause (iii) of this Section
4.10, amounts expended pursuant to clauses (1), (2) and (3)(ii)(A) shall be
included in such calculation.
Not later than three Business Days before making any
Restricted Payment, the Company shall deliver to the Trustee an Officers'
Certificate stating that such Restricted Payment complies with this Indenture
and setting forth in reasonable detail the basis upon which the required
calculations were computed.
SECTION 4.11. Limitation on Transactions with Affiliates.
(1) The Company shall not, and shall not cause or permit any
of its Subsidiaries to, directly or indirectly, enter into or permit to exist
any transaction or series of related transactions (including, without
limitation, the purchase, sale, lease or exchange of any property or the
rendering of any service) with, or for the benefit of, any of its Affiliates
(each an "Affiliate Transaction"), other than (x) Permitted Affiliate
Transactions and (y) Affiliate Transactions on terms that are no less favorable
to the Company or such Subsidiary than those that
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might reasonably have been obtained or are obtainable in a comparable
transaction at such time on an arm's-length basis from a Person that is not an
Affiliate of the Company or such Subsidiary. All Affiliate Transactions (and
each series of related Affiliate Transactions which are similar or part of a
common plan) involving aggregate payments or other property with a fair market
value in excess of $5.0 million shall be approved by the Board of Directors of
the Company or such Subsidiary, as the case may be, such approval to be
evidenced by a Board Resolution stating that such Board of Directors (including
a majority of the directors who do not have any interest in the Affiliate
Transaction) has determined that such transaction complies with the foregoing
provisions. In addition, if the Company or any Subsidiary of the Company enters
into an Affiliate Transaction (or a series of related Affiliate Transactions
related to a common plan) involving aggregate payments or other property with a
fair market value in excess of $7.5 million, the Company or such Subsidiary, as
the case may be, shall, prior to the consummation thereof, obtain a favorable
opinion as to the fairness of such transaction or series of related transactions
to the Company or the relevant Subsidiary, as the case may be, from a financial
point of view, from an Independent Financial Advisor and file the same with the
Trustee.
(2) The restrictions set forth in paragraph (1) of this Section 4.11
shall not apply to (each of the following actions set forth in clauses (i),
(ii), (iii), (iv) and (v) being referred to as a "Permitted Affiliate
Transaction"): (i) reasonable fees and compensation paid to and indemnity
provided on behalf of, officers, directors, employees, consultants or agents of
the Company or any Subsidiary of the Company as determined in good faith by the
Company's Board of Directors or senior management; (ii) transactions between or
among the Company and any of its Wholly Owned Subsidiaries or between or among
such Wholly Owned Subsidiaries provided such transactions are not otherwise
prohibited under this Supplemental Indenture; (iii) any agreement as in effect
as of the Base Date or any amendment thereto or any transaction contemplated
thereby (including pursuant to any amendment thereto) or in any replacement
agreement thereto so long as any such amendment or replacement agreement is not
more disadvantageous to the Holders in any material respect than the original
agreement as in effect on the Base Date; (iv) Restricted Payments permitted by
this Supplemental Indenture; and (v) transactions between or among the Company
or any Subsidiaries of the Company and the Land Partnership, provided such
transactions are permitted by and are effected in accordance with the terms of
the Partnership Agreement of the Land Partnership and the By-laws of Company, in
each case, as in effect on the Base Date.
SECTION 4.12. Limitation on Incurrence of Additional
Indebtedness. The Company shall not, and shall not cause or permit any of its
Subsidiaries to, directly or indirectly, create, incur, assume, guarantee,
acquire, become liable,
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contingently or otherwise, with respect to, or otherwise become responsible for
payment of (collectively, "incur"), any Indebtedness (including, without
limitation, Acquired Indebtedness) other than Permitted Indebtedness.
Notwithstanding the foregoing, if no Default or Event of Default shall have
occurred and be continuing at the time of or as a consequence of the incurrence
of any such Indebtedness, the Company and its Subsidiaries may incur
Indebtedness (including, without limitation, Acquired Indebtedness) if on the
date of the incurrence of such Indebtedness, after giving effect to the
incurrence thereof:
(1) the Consolidated Fixed Charge Coverage Ratio of the
Company is greater than 1.5 to 1.0;
(2) the ratio of the aggregate amount of Recourse Indebtedness
outstanding on a consolidated basis to the Consolidated Net Worth of the Company
is less than 5.0 to 1.0;
(3) the ratio of the aggregate amount of Senior Recourse
Indebtedness outstanding on a consolidated basis to the sum of (A) the
Consolidated Net Worth of the Company and (B) the aggregate amount of the
Subordinated Indebtedness outstanding on a consolidated basis is less than 2.75
to 1.0; and
(4) the ratio of the aggregate amount of Subordinated
Indebtedness outstanding on a consolidated basis to the Consolidated Net Worth
of the Company is less than 1.0 to 1.0.
No Indebtedness incurred pursuant to the second sentence of
this Section 4.12 shall be included in calculating any limitation set forth in
the definition of Permitted Indebtedness. Neither the accrual of interest nor
the accretion of original issue discount shall be deemed an incurrence of
Indebtedness. Prior to any incurrence of Indebtedness pursuant to the second
sentence of this Section 4.12 (other than an advance under a committed
facility), the Company shall deliver to the Trustee an Officers' Certificate
setting forth the calculations by which such incurrence was determined to be
permitted. If, during any month, the Company incurs Indebtedness pursuant to the
second sentence of this Section 4.12 through advances under a committed
facility, the Company shall deliver to the Trustee on the last day of such month
an Officers' Certificate setting forth the calculations by which each such
incurrence was determined to be permitted.
SECTION 4.13. Limitation on Dividend and Other Payment
Restrictions Affecting Subsidiaries. The Company shall not, and shall not cause
or permit any of its Subsidiaries to, directly or indirectly, create or
otherwise cause or permit to exist or become effective any encumbrance or
restriction on the ability of any Subsidiary of the Company to (a) pay dividends
or make any other distributions on or in respect of its Capital Stock; (b) make
loans or advances or pay any Indebtedness or other
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obligation owed to the Company or any other Subsidiary of Company; or (c)
transfer any of its property or assets to the Company or any other Subsidiary of
Company, except for such encumbrances or restrictions existing under or by
reason of:
(1) applicable law;
(2) this Supplemental Indenture;
(3) the Credit Agreement;
(4) nonassignment provisions of any contract or any lease
governing a leasehold interest of any Subsidiary of Company;
(5) any instrument governing Acquired Indebtedness, which
encumbrance or restriction is not applicable to any Person, or the properties or
assets of any Person, other than the Person or the properties or assets of the
Person so acquired;
(6) agreements existing on the Base Date to the extent and in
the manner such agreements were in effect on the Base Date;
(7) restrictions on the transfer of assets subject to any Lien
permitted under this Supplemental Indenture to secure Non-Recourse Indebtedness
imposed by the holder of such Lien;
(8) restrictions imposed by any agreement to sell assets
permitted under this Supplemental Indenture to any Person pending the closing of
such sale;
(9) any agreement or instrument governing Capital Stock of any
Person that is acquired; or
(10) an agreement governing Indebtedness incurred to Refinance
the Indebtedness issued, assumed or incurred pursuant to an agreement referred
to in clause (2), (3), (5) or (6) above, provided, however, that the provisions
relating to such encumbrance or restriction contained in any such Indebtedness
incurred to Refinance the Indebtedness are not less favorable to the Company in
any material respect as determined by the Board of Directors of the Company in
their reasonable and good faith judgment than the provisions relating to such
encumbrance or restriction contained in agreements referred to in such clause
(2), (3), (5) or (6), respectively.
SECTION 4.14. Change of Control.
(1) Upon the occurrence of a Change of Control, each Holder
will have the right to require that the Company purchase all or a portion of
such Holder's Notes pursuant to the offer described below (the "Change of
Control Offer"), at a purchase
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price equal to 101% of the principal amount thereof plus accrued and unpaid
interest to the date of purchase.
(2) Within 30 days following the date upon which a Change of
Control occurs, the Company shall send, by first class mail, a notice to each
Holder at such Holder's last registered address, with a copy to the Trustee
provided at least five days prior to such mailing, which notice shall govern the
terms of the Change of Control Offer. Such notice shall state:
(a) that the Change of Control Offer is being made
pursuant to this Section 4.14, that all Notes tendered and not
withdrawn will be accepted for payment and that the Change of Control
Offer shall remain open for a period of 20 Business Days or such longer
period as may be required by law;
(b) the purchase price (including the amount of
accrued interest) and the purchase date (which shall be no earlier than
30 days nor later than 45 days from the date such notice is mailed,
other than as may be required by law) (the "Change of Control Payment
Date");
(c) that any Note not tendered will continue to
accrue interest;
(d) that, unless the Company defaults in making
payment therefor, any Note accepted for payment pursuant to the Change
of Control Offer shall cease to accrue interest after the Change of
Control Payment Date;
(e) that Holders electing to have a Note purchased
pursuant to a Change of Control Offer will be required to surrender the
Note, with the form entitled "Option of Holder to Elect Purchase" on
the reverse of the Note completed, to the Paying Agent at the address
specified in the notice prior to the close of business on the third
Business Day prior to the Change of Control Payment Date;
(f) that Holders will be entitled to withdraw their
election if the Paying Agent receives, not later than the second
Business Day prior to the Change of Control Payment Date, a facsimile
transmission or letter setting forth the name of the Holder, the
principal amount of the Notes the Holder delivered for purchase and a
statement that such Holder is withdrawing its election to have such
Notes purchased;
(g) that Holders whose Notes are purchased only in
part will be issued new Notes in a principal amount equal to the
unpurchased portion of the Notes surrendered; provided, however, that
each Note purchased and each new Note issued shall be in an original
principal amount of $1,000 or integral multiples thereof; and
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(h) the circumstances and relevant facts regarding
such Change of Control.
(3) In connection with any Change of Control, the Company
shall within 30 days following any Change of Control, (i) obtain the consents
under the Credit Agreement and all other Senior Indebtedness required to permit
the repurchase of the Notes pursuant to a Change of Control Offer or (ii) repay
in full all Indebtedness, and terminate all commitments, under the Credit
Agreement and all other Senior Indebtedness the terms of which would prohibit
the purchase of the Notes pursuant to a Change of Control Offer.
(4) On or before the Change of Control Payment Date, the
Company shall (i) accept for payment Notes or portions thereof tendered pursuant
to the Change of Control Offer, (ii) deposit with the Paying Agent in accordance
with Section 2.4 U.S. Legal Tender sufficient to pay the purchase price plus
accrued interest, if any, of all Notes so tendered and (iii) deliver to the
Trustee Notes so accepted together with an Officers' Certificate stating the
Notes or portions thereof being purchased by Company. Upon receipt by the Paying
Agent of the monies specified in clause (ii) of the next preceding sentence and
a copy of the Officers' Certificate specified in clause (iii) of such sentence,
the Paying Agent shall promptly mail to the Holders of Notes so accepted payment
in an amount equal to the purchase price plus accrued interest, if any, and the
Trustee shall promptly authenticate and mail to such Holders new Notes equal in
principal amount to any unpurchased portion of the Notes surrendered. For
purposes of this Section 4.14, the Trustee shall act as the Paying Agent.
(5) Neither the Board of Directors of the Company nor the
Trustee may waive the provisions of this Section 4.14 relating to the Company's
obligation to repurchase Notes upon a Change of Control.
(6) The Company will 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 pursuant to a Change of Control Offer. To the
extent that the provisions of any securities laws or regulations conflict with
the provisions of this Section 4.14, the Company shall comply with the
applicable securities laws and regulations and shall not be deemed to have
breached its obligations under the provisions of this Section 4.14 by virtue
thereof.
(7) Notwithstanding anything herein to the contrary, 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
time and otherwise in compliance with the requirements of this Section 4.14
applicable to a Change of Control Offer made by the Company and purchases
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all Notes validly tendered and not withdrawn under such Change of Control Offer.
SECTION 4.15. Limitation on Preferred Stock of Subsidiaries.
The Company shall not permit any of its Subsidiaries to issue any Preferred
Stock (other than to the Company or to a Wholly Owned Subsidiary of the Company)
or permit any Person (other than the Company or a Wholly Owned Subsidiary of the
Company) to own any Preferred Stock of any Subsidiary of Company.
SECTION 4.16. Limitation on Liens and Guarantees. The Company
shall not, and shall not cause or permit any of its Subsidiaries to, directly or
indirectly, create, incur, assume or permit or suffer to exist any Liens
securing Indebtedness of the Company that is expressly subordinate or junior in
right of payment to the Notes or is pari passu in right of payment to the Notes
against or upon any property or assets of the Company or any of its Subsidiaries
(whether owned on the Issue Date or acquired after the Issue Date), or any
proceeds therefrom, or assign or otherwise convey any right to receive income or
profits therefrom, or grant any guarantees of any such Indebtedness, unless (i)
in the case of Liens securing Indebtedness of the Company that is expressly
subordinate or junior in right of payment to the Notes, the Notes are secured by
a Lien on such property, assets or proceeds that is senior in priority to such
Liens, (ii) in case of guarantees of Indebtedness of the Company that is
expressly subordinate or junior in right of payment to the Notes, the Notes are
subject to a guarantee from the same guarantor or guarantors that is senior in
priority to such guarantees and (iii) in all other cases, the Notes are equally
and ratably secured or guaranteed as applicable.
SECTION 4.17. Conduct of Business. The Company shall, and
shall cause its Subsidiaries to, engage primarily in the businesses of
acquiring, developing, selling, owning, managing, operating, leasing, credit
enhancing and insuring commercial and multi-family residential real estate, real
estate related lending, acquiring, owning, servicing and collecting real estate
related loans and other underperforming debt securities, investing in real
estate 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.
SECTION 4.18. Prohibition on Incurrence of Senior Subordinated
Debt. The Company shall not incur or suffer to exist Indebtedness that by its
terms (or by the terms of any agreement governing such Indebtedness) is senior
in right of payment to the Notes and expressly subordinate in right of payment
to any other Indebtedness of Company.
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ARTICLE V.
SUCCESSOR CORPORATION
SECTION 5.1. Merger, Consolidation and Sale of Assets.
(1) The Company shall not, in a single transaction or series
of related transactions, consolidate or merge with or into any Person, or sell,
assign, transfer, lease, convey or otherwise dispose of all or substantially all
of the Company's assets (determined on a consolidated basis for the Company and
its Subsidiaries) unless: (i) either (a) the Company shall be the surviving or
continuing corporation or (b) the Person (if other than the Company) formed by
such consolidation or into which the Company is merged or the Person which
acquires by sale, assignment, transfer, lease, conveyance or other disposition
the properties and assets of the Company and its Subsidiaries substantially as
an entirety (the "Surviving Entity") (x) shall be a corporation organized and
validly existing under the laws of the United States or any State thereof or the
District of Columbia and (y) shall expressly assume, by Supplemental Indenture
(in form and substance satisfactory to the Trustee), executed and delivered to
the Trustee, the due and punctual payment of the principal of, premium, if any,
and interest on all of the Notes and the performance of every covenant of the
Notes and this Supplemental Indenture on the part of the Company to be performed
or observed, as the case may be; (ii) immediately after giving effect to such
transaction and the assumption contemplated by clause (i)(b)(y) above (including
giving effect to any Indebtedness and Acquired Indebtedness incurred or
anticipated to be incurred in connection with or in respect of such
transaction), the Company or such Surviving Entity, as the case may be, (a)
shall have a Consolidated Net Worth equal to or greater than the Consolidated
Net Worth of the Company immediately prior to such transaction and (b) shall be
able to incur at least $1.00 of additional Indebtedness (other than additional
Permitted Indebtedness) pursuant to Section 4.12; (iii) immediately before and
immediately after giving effect to such transaction and the assumption
contemplated by clause (i)(2)(y) above (including, without limitation, giving
effect to any Indebtedness and Acquired Indebtedness incurred or anticipated to
be incurred and any Lien granted in connection with or in respect of the
transaction), no Default or Event of Default shall have occurred or be
continuing; and (iv) the Company or the Surviving Entity, as the case may be,
shall have delivered to the Trustee an Officers' Certificate and an Opinion of
Counsel, each stating that such consolidation, merger, sale, assignment,
transfer, lease, conveyance or other disposition and, if a Supplemental
Indenture is required in connection with such transaction, such Supplemental
Indenture comply with the applicable provisions of this Supplemental Indenture
and that all conditions precedent in this Supplemental Indenture relating to
such transaction have been satisfied.
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(2) For purposes of the foregoing, the transfer (by lease,
assignment, sale or otherwise, in a single transaction or series of
transactions) of all or substantially all of the properties or assets of one or
more Subsidiaries of Company, the Capital Stock of which constitutes all or
substantially all of the properties and assets of the Company shall be deemed to
be the transfer of all or substantially all of the properties and assets of
Company.
SECTION 5.2. Successor Corporation Substituted. Upon any
consolidation, combination or merger or any transfer of all or substantially all
of the assets of the Company in accordance with Section 5.1, the successor
Person formed by such consolidation or into which the Company is merged or to
which such conveyance, lease or transfer is made shall (upon the required
assumption described in Section 5.1) succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Supplemental Indenture
and the Notes with the same effect as if such successor had been named as the
Company herein and thereafter (except in the case of a lease) the predecessor
corporation will be relieved of all further obligations and covenants under this
Supplemental Indenture and the Notes.
ARTICLE VI.
REMEDIES
SECTION 6.1. Additional Events of Default. In addition to the
applicable Events of Default set forth in Section 6.01 of the Indenture, any one
of the following events shall constitute an "Event of Default" hereunder and
thereunder whenever used with respect to the Notes in this Supplemental
Indenture:
(1) the failure to pay interest on any Notes when the same
becomes due and payable and the default continues for a period of 30 days,
whether or not such failure shall be due to compliance with Article IX of this
Supplemental Indenture or agreements with respect to any other Indebtedness or
any other reason;
(2) the failure to pay the principal on any Notes, when such
principal becomes due and payable, at maturity, upon acceleration, upon
redemption or otherwise (including the failure to make a Change of Control Offer
or make a payment to purchase Notes tendered pursuant to a Change of Control
Offer), whether or not such failure shall be due to compliance with Article IX
of this Supplemental Indenture or agreements with respect to any other
Indebtedness or any other reason;
(3) a default in the observance or performance of any other
covenant or agreement contained in this Supplemental Indenture which default
continues for a period of 30 days after
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the Company receives written notice specifying the default (and demanding that
such default be remedied) from the Trustee or the Holders of at least 25% of the
outstanding principal amount of the Notes (except in the case of a default with
respect to Section 5.1, which will constitute an Event of Default with such
notice requirement but without such passage of time requirement);
(4) the failure to pay at final maturity (giving effect to any
applicable grace periods and any extensions thereof) the principal amount of any
Recourse Indebtedness of the Company or any Subsidiary of Company, or the
acceleration of the final stated maturity of any such Recourse Indebtedness if
the aggregate principal amount of such Recourse Indebtedness, together with the
principal amount of any other such Recourse Indebtedness in default for failure
to pay principal at final maturity or which has been accelerated, aggregates
$5.0 million or more at any time;
(5) one or more judgments in an aggregate amount in excess of
$5.0 million shall have been rendered against the Company or any of its
Subsidiaries and remain undischarged, unpaid or unstayed for a period of 60 days
after such judgment or judgments become final and nonappealable.
(6) The Company or any of its Subsidiaries pursuant to or
under or within the meaning of any Bankruptcy Law:
(a) commences a voluntary case or proceeding;
(b) consents to the entry of an order for relief against
it in an involuntary case or proceeding;
(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) shall generally not pay its debts when such debts
become due or shall admit in writing its inability to
pay its debts generally; or
(7) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(a) is for relief against the Company or any Subsidiary
of the Company in an involuntary case or proceeding,
(b) appoints a Custodian of the Company or any Subsidiary
of the Company for all or substantially all of its
Properties, or
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(c) orders the liquidation of the Company or any Subsidiary
of Company,
and in each case the order or decree remains unstayed and in effect for 60
consecutive days.
The Events of Default described in clauses (4), (5), (6) and
(7) above with respect to a Subsidiary shall not apply if such Person was not a
Subsidiary at the time such event or condition occurred unless, in the case of
clause (4) or (5) above, the Company or another Subsidiary thereof assumes or
otherwise becomes liable for the liability referred to therein or the
liabilities generally of such Person.
SECTION 6.2. Acceleration.
(1) If an Event of Default (other than an Event of Default
specified in clause (6) or (7) of Section 6.1) shall occur and be continuing,
the Trustee or the Holders of at least 25% in principal amount of outstanding
Notes may declare the principal of and accrued interest on all the Notes to be
due and payable by notice in writing to the Company and, if such notice is given
by Holders, the Trustee specifying the respective Event of Default and that it
is a "notice of acceleration" (the "Acceleration Notice"), and the same (i)
shall become immediately due and payable or (ii) if there are any amounts
outstanding under the Credit Agreement, shall become immediately due and payable
upon the first to occur of an acceleration under the Credit Agreement or five
Business Days after receipt by the Company and the Representative under the
Credit Agreement of such Acceleration Notice but only if such Event of Default
is then continuing. If an Event of Default specified in clause (6) or (7) of
Section 6.1 occurs and is continuing with respect to Company, then all unpaid
Obligations on all of the outstanding Notes 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.
(2) At any time after a declaration of acceleration with
respect to the Notes as described the preceding paragraph, the Holders of a
majority in aggregate principal amount of the Notes may rescind and cancel such
declaration and its consequences (i) if the rescission would not conflict with
any judgment or decree, (ii) if all existing Events of Default have been cured
or waived except nonpayment of principal or interest that has become due solely
because of such acceleration, (iii) if interest on overdue installments of
interest (to the extent the payment of such interest is lawful) and on overdue
principal, which has become due otherwise than by such declaration of
acceleration, has been paid, (iv) if the Company has paid the Trustee its
reasonable compensation and reimbursed the Trustee for its expenses,
disbursements and advances and (v) in the event of the cure or waiver of an
Event of Default of the type described in clause (4) of Section 6.1, the Trustee
shall have
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received an Officers' Certificate and an Opinion of Counsel that such Event of
Default has been cured or waived. No such rescission shall affect any subsequent
Default or impair any right consequent thereto.
SECTION 6.3. Waiver of Existing Defaults. Section 6.04 of the
Indenture shall be in lieu of Section 316(a)(1)(B) of the TIA and such Section
316(a)(1)(B) of the TIA is hereby expressly excluded from this Supplemental
Indenture and the Notes, as permitted by the TIA.
SECTION 6.4. Control by Majority. Section 6.05 of the
Indenture shall be subject to Section 2.2 of this Supplemental Indenture and
shall be in lieu of Section 316(a)(1)(A) of the TIA, and such Section
316(a)(1)(A) of the TIA is hereby expressly excluded from this Supplemental
Indenture and the Notes, as permitted by the TIA.
SECTION 6.5. Limitation on Suits. No Holder of any Notes shall
have any right to institute any proceeding with respect to this Supplemental
Indenture or the Notes or any remedy hereunder, unless the Holders of at least
25% in aggregate principal amount of the outstanding Notes have made written
request, and offered reasonable indemnity, to the Trustee to institute such
proceeding as Trustee under the Notes and this Supplemental Indenture, the
Trustee has failed to institute such proceeding within 25 days after receipt of
such notice, request and offer of indemnity and the Trustee, within such 25-day
period, has not received directions inconsistent with such written request by
Holders of not less than a majority in aggregate principal amount of the
outstanding Notes.
The foregoing limitations shall not apply to a suit instituted
by a Holder of a Note for the enforcement of the payment of the principal of,
premium, if any, or interest on, such Note on or after the respective due dates
expressed or provided for in such Note.
A Holder may not use this Supplemental Indenture to prejudice
the rights of any other Holders or to obtain priority or preference over such
other Holders.
SECTION 6.6. Right of Holders To Receive Payment.
Notwithstanding any other provision in this Supplemental Indenture, the right of
any Holder of a Note to receive payment of the principal of, premium, if any,
and interest on such Note, on or after the respective due dates expressed or
provided for in such Note, or to bring suit for the enforcement of any such
payment on or after the respective due dates, is absolute and unconditional and
shall not be impaired or affected without the consent of the Holder.
SECTION 6.7. Collection Suit by Trustee. If an Event of
Default specified in clause (1) or (2) of Section 6.1 occurs
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and is continuing, the Trustee may recover judgment in its own name and as
trustee of an express trust against Company, or any other obligor on the Notes
for the whole amount of the principal of, premium, if any, and accrued interest
remaining unpaid, together with interest on overdue principal and, to the extent
that payment of such interest is lawful, interest on overdue installments of
interest, in each case at the rate per annum provided for by the Notes 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 6.8. Trustee May File Proofs of Claim. The Trustee may
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, counsel, accountants and experts) and the Holders allowed
in any judicial proceedings relative to the Company or Subsidiaries (or any
other obligor upon the Notes), their creditors or their property and shall be
entitled and empowered to collect and receive any monies or other property
payable or deliverable on any such claims and to distribute the same, and any
Custodian in any such judicial proceedings 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 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 agent and counsel, and any other
amounts due the Trustee under Section 7.07 of the Indenture. the Company's
payment obligations under this Section 6.8 shall be secured in accordance with
the provisions of Section 7.07 of the Indenture. 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 thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding.
SECTION 6.9. Priorities. If the Trustee collects any money
pursuant to this Article VI it shall pay out such money, subject to the
provisions of Article IX, in the following order:
First: to the Trustee for amounts due under Section 7.07 of
the Indenture;
Second: to Holders for interest accrued on the Notes, ratably,
without preference or priority of any kind, according to the amounts due and
payable on the Notes for interest;
Third: to Holders for the principal amounts (including any
premium) owing under the Notes, ratably, without preference
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or priority of any kind, according to the amounts due and payable on the Notes
for the principal (including any premium); and
Fourth: the balance, if any, to Company.
The Trustee, upon prior written notice to Company, may fix a
record date and payment date for any payment to Holders pursuant to this Section
6.10.
ARTICLE VII.
DISCHARGE OF SUPPLEMENTAL INDENTURE; DEFEASANCE
SECTION 7.1. Termination of Company's Obligations. This
Supplemental Indenture shall be discharged and shall cease to be of further
effect (except as to surviving rights or registration of transfer or exchange of
the Notes, as expressly provided for in this Supplemental Indenture) as to all
outstanding Notes when (i) either (a) all the Notes theretofore authenticated
and delivered (except lost, stolen or destroyed Notes which have been replaced
or paid and Notes for whose payment money has theretofore been deposited in
trust or segregated and held in trust by the Company and thereafter repaid to
the Company or discharged from such trust) have been delivered to the Trustee
for cancellation or (b) all Notes not theretofore delivered to the Trustee for
cancellation have become due and payable and the Company has irrevocably
deposited or caused to be deposited with the Trustee funds in an amount
sufficient to pay and discharge the entire Indebtedness on the Notes not
theretofore delivered to the Trustee for cancellation, for principal of,
premium, if any, and interest on the Notes to the date of deposit together with
irrevocable instructions from the Company directing the Trustee to apply such
funds to the payment thereof; (ii) the Company has paid all other sums payable
under this Supplemental Indenture by Company; and (iii) the Company has
delivered to the Trustee an Officers' Certificate and an Opinion of Counsel
stating that all conditions precedent under this Supplemental Indenture relating
to the satisfaction and discharge of this Supplemental Indenture have been
complied with.
The Company may, at its option and at any time, elect to have
its obligations discharged with respect to the outstanding Notes ("Legal
Defeasance"). As a result of such Legal Defeasance, the Company shall be deemed
to have paid and discharged the entire Indebtedness represented by the
outstanding Notes, except for (i) the rights of Holders to receive payments in
respect of the principal of, premium, if any, and interest on the Notes when
such payments are due, (ii) the Company's obligations with respect to the Notes
concerning issuing temporary Notes, registration, transfer and exchange of
Notes, replacement of mutilated, destroyed, lost or stolen Notes and the
maintenance of an office or agency for payments, (iii) the rights, powers,
trust, duties and immunities of the Trustee and the Company's obligations in
connection therewith and (iv) the
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Legal Defeasance provisions of this Section 7.1. In addition, the Company may,
at its option and at any time, elect to have the obligations of the Company
released with respect to Sections 4.10 through 4.18 and Article V ("Covenant
Defeasance") and thereafter any omission to comply with such obligations shall
not constitute a Default or Event of Default with respect to the Notes. In the
event of Covenant Defeasance, those events described under Section 6.1 (except
those events described in Section 6.1(1),(2) (but including matters relating to
a Change of Control Offer),(6) and (7)) will no longer constitute an Event of
Default with respect to the Notes.
In order to exercise Legal Defeasance or Covenant Defeasance:
(1) the Company must irrevocably deposit with the Trustee, in
trust, for the benefit of the Holders U.S. Legal Tender, noncallable United
States Government Obligations, or a combination thereof, in such amounts as will
be sufficient without reinvestment, in the opinion of a nationally recognized
firm of independent public accountants addressed to the Trustee, to pay the
principal of, premium, if any, and interest on the Notes on the stated dates for
payment thereof or on the applicable Redemption Date, as the case may be;
(2) the Company shall have delivered to the Trustee an Opinion
of Counsel reasonably acceptable to the Trustee concluding that such deposit
shall not cause the Trustee to have a conflicting interest as defined in and for
purposes of the TIA;
(3) in the case of Legal Defeasance, the Company shall have
delivered to the Trustee an Opinion of Counsel confirming that (A) the Company
has received from, or there has been published by, the Internal Revenue Service
a ruling or (B) since the date of this Supplemental 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
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;
(4) in the case of Covenant Defeasance, the Company shall have
delivered to the Trustee an Opinion of Counsel confirming that the Holders 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;
(5) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (after giving effect to the deposit) or,
in the case of Legal Defeasance,
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insofar as Events of Default under Section 6.1 (6) or (7) are concerned, at any
time in the period ending on the 91st day after the date of deposit (other than
a Default or Event of Default resulting from the incurrence of Indebtedness all
or a portion of the proceeds of which will be used to defease the Notes
concurrently with such incurrence);
(6) 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 to which the Company or any of its Subsidiaries is a
party or by which the Company or any of its Subsidiaries is bound;
(7) such deposit shall not result in Company, the Trustee or
the trust becoming or being deemed to be an "investment company" under the
Investment Company Act of 1940, as amended;
(8) the Holders shall have a perfected security interest under
applicable law in the U.S. Legal Tender or U.S. Government Obligations so
deposited;
(9) 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 over any other creditors of the Company or
with the intent of defeating, hindering, delaying or defrauding any other
creditors of the Company or others;
(10) The Company shall have delivered to the Trustee an
Opinion of Counsel to the effect that, after the 91st day following the deposit
(assuming that no Default or Event of Default shall have occurred and be
continuing on such 91st day insofar as Sections 6.1 (6) or (7) are concerned),
(A) the trust funds will not be subject to any rights of holders of Indebtedness
of the Company other than the Notes and (B) the deposit of the trust funds will
not be subject to avoidance under preference or similar laws; and
(11) 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 (including without limitation that no Default or Event of
Default described in Section 6.1 (6) or (7) has occurred and is continuing at
the end of the 91-day period referred to in the Opinion of Counsel referred to
in clause (10) above), as the case may be, have been complied with.
SECTION 7.2. Application of Trust Money. The Trustee or Paying
Agent shall hold in trust U.S. Legal Tender or U.S. Government Obligations
deposited with it pursuant to Section 7.1, and shall apply the deposited U.S.
Legal Tender and the money from U.S. Government Obligations in accordance with
this
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Supplemental Indenture to the payment of the principal of and premium, if any,
and interest on the Notes. The Trustee shall be under no obligation to invest
said U.S. Legal Tender or U.S. Government Obligations except as it may agree in
writing with the Company.
The Company shall pay and indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against the U.S. Legal Tender or
U.S. Government Obligations deposited pursuant to Section 7.1 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 outstanding Notes.
SECTION 7.3. Repayment to the Company. Subject to Section 7.1,
the Trustee and the Paying Agent shall promptly pay to the Company upon request
any excess U.S. Legal Tender or U.S. Government Obligations held by them at any
time and thereupon shall be relieved from all liability with respect to such
money. The Trustee and the Paying Agent shall pay to the Company upon request
any money held by them for the payment of principal, premium, if any, or
interest that remains unclaimed for one year; provided, however, that the
Trustee or such Paying Agent, before being required to make any payment, may at
the expense of the Company cause to be published once in a newspaper of general
circulation in the City of New York or mail to each Holder entitled to such
money notice that such money remains unclaimed and that after a date specified
therein which shall be at least 30 days from the date of such publication or
mailing any unclaimed balance of such money then remaining will be repaid to
Company. After payment to Company, Holders entitled to such money must look to
the Company for payment as general creditors unless an applicable law designates
another Person.
SECTION 7.4. Reinstatement. If the Trustee or Paying Agent is
unable to apply any U.S. Legal Tender or U.S. Government Obligations in
accordance with Section 7.1 by reason of any legal proceeding or by reason of
any order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, the Company's obligations
under this Supplemental Indenture and the Notes shall be revived and reinstated
as though no deposit had occurred pursuant to Section 7.1 until such time as the
Trustee or Paying Agent is permitted to apply all such U.S. Legal Tender or U.S.
Government Obligations in accordance with Section 7.1; provided, however, that
if the Company has made any payment of interest or premium on or principal of
any Notes because of the reinstatement of their obligations, the Company shall
be subrogated to the rights of the Holders of such Notes to receive such payment
from the U.S. Legal Tender or U.S. Government Obligations held by the Trustee or
Paying Agent.
SECTION 7.5. Acknowledgment of Discharge by Trustee. After (i)
the conditions of Section 7.1 have been satisfied, (ii)
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the Company has paid or caused to be paid all other sums payable hereunder by
the Company and (iii) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent referred to in clause (i) above relating to the satisfaction and
discharge of this Indenture have been complied with, the Trustee upon request
shall acknowledge in writing the discharge of the Company's obligations under
this Indenture except for those surviving obligations specified in Section 7.1.
ARTICLE VIII.
MODIFICATION OF THIS SUPPLEMENTAL INDENTURE
SECTION 8.1. Without Consent of Holders. Notwithstanding
Section 8.2, the Company and the Trustee may amend, waive or supplement this
Supplemental Indenture without notice to or consent of any Holder: (a) to cure
any ambiguity, defect or inconsistency; (b) to comply with Section 5.1 of this
Supplemental Indenture; (c) to provide for uncertificated Notes in addition to
certificated Notes; (d) to comply with any requirements of the Commission in
order to effect or maintain the qualification of the Indenture under the TIA; or
(e) to make any change that would provide any additional benefit or rights to
the Holders or that does not adversely affect the rights of any Holder in any
material respect. Notwithstanding the foregoing, the Trustee and the Company may
not make any change that adversely affects the rights of any Holder in any
material respect under this Supplemental Indenture without the consent of such
Holder. In formulating its opinion on such matters, the Trustee will be entitled
to rely on such evidence as it deems appropriate, including, without limitation,
solely on an Opinion of Counsel and an Officers' Certificate of the Company.
SECTION 8.2. With Consent of Holders. All other modifications,
waivers and amendments of this Supplemental Indenture may be made with the
consent of the Holders of a majority in principal amount of the then outstanding
Notes, except that, without the consent of each Holder of the Notes affected
thereby, no amendment or waiver may: (i) reduce the amount of Notes whose
Holders must consent to an amendment; (ii) reduce the rate of or change or have
the effect of changing the time for payment of interest, including defaulted
interest, on any Notes; (iii) reduce the principal of or change or have the
effect of changing the fixed maturity of any Notes, or change the date on which
any Notes may be subject to redemption or repurchase, or reduce the redemption
or repurchase price therefor; (iv) make any Notes payable in money other than
that stated in the Notes; (v) make any change in provisions of this Supplemental
Indenture protecting the right of each Holder to receive payment of principal of
and premium, if any, and interest on such Note on or after the due date thereof
or to bring suit to enforce such payment, or permitting Holders of a majority in
principal amount of Notes to waive Defaults or Events of Default;
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(vi) amend, change or modify in any material respect the obligation of the
Company to make and consummate a Change of Control Offer in the event of a
Change of Control or modify any of the provisions or definitions with respect
thereto; or (vii) modify or change any provision of this Supplemental Indenture
or the related definitions affecting the subordination or ranking of the Notes
in a manner which adversely affects the Holders.
After an amendment, supplement or waiver under this Section
8.2 becomes effective (as provided in Section 8.4), the Company shall mail to
the Holders affected thereby a notice briefly describing the amendment,
supplement or waiver. Any failure of the Company to mail such notice, or any
defect therein, shall not, however, in any way impair or affect the validity of
any such supplemental Indenture.
SECTION 8.3. Compliance with TIA. Every amendment, waiver or
supplement of this Supplemental Indenture or the Notes shall comply with the TIA
as then in effect; provided, however, that this Section 8.3 shall not of itself
require that the Indenture or the Trustee be qualified under the TIA or
constitute any admission or acknowledgment by any party hereto that any such
qualification is required prior to the time the Indenture and the Trustee are
required by the TIA to be so qualified.
SECTION 8.4. Revocation and Effect of Consents. Until an
amendment, waiver or supplement becomes effective, a consent to it by a Holder
is a continuing consent by the Holder and every subsequent Holder of a Note or
portion of a Note that evidences the same debt as the consenting Holder's Note,
even if notation of the consent is not made on any Note. Subject to the
following paragraph, any such Holder or subsequent Holder may revoke the consent
as to such Holder's Note or portion of such Note by notice to the Trustee or the
Company received before the date on which the Trustee receives an Officers'
Certificate certifying that the Holders of the requisite principal amount of
Notes have consented (and not theretofore revoked such consent) to the
amendment, supplement or waiver. An amendment, supplement or waiver becomes
effective upon receipt by the Trustee of such Officers' Certificate and evidence
of consent by the Holders of the requisite percentage in principal amount of
outstanding Notes.
The Company may, but shall not be obligated to, fix a Record
Date for the purpose of determining the Holders entitled to consent to any
amendment, supplement or waiver, which Record Date shall be at least 30 days
prior to the first solicitation of such consent. If a Record Date is fixed, then
notwithstanding the second sentence of the immediately preceding paragraph,
those Persons who were Holders at such Record Date (or their duly designated
proxies), and only those Persons, shall be entitled to revoke any consent
previously given, whether or not such Persons continue to be Holders after such
Record Date. No such consent
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shall be valid or effective for more than 90 days after such Record Date unless
consents from Holders of the requisite percentage in principal amount of
outstanding Notes required hereunder for the effectiveness of such consents
shall have also been given and not revoked within such 90 day period.
SECTION 8.5. Notation on or Exchange of Notes. If an
amendment, supplement or waiver changes the terms of a Note, the Trustee may
require the Holder of such Note to deliver it to the Trustee. The Trustee may
place an appropriate notation on the Note about the changed terms and return it
to the Holder. Alternatively, if the Company or the Trustee so determine, the
Company in exchange for the Note shall issue and the Trustee shall authenticate
a new Note that reflects the changed terms.
SECTION 8.6. Trustee to Sign Amendments, Etc. The Trustee
shall execute any amendment, supplement or, waiver authorized pursuant to this
Article VIII; provided, however, that the Trustee may, but shall not be
obligated to, execute any such amendment, supplement or waiver which affects the
Trustee's own rights, duties or immunities under this Supplemental Indenture. In
executing such supplement or waiver the Trustee shall be entitled to receive
indemnity reasonably satisfactory to it, and shall be fully protected in relying
upon an Opinion of Counsel and an Officers' Certificate, stating that no Default
or Event of Default shall occur as a result of such amendment, supplement or
waiver and that the execution of any amendment, supplement or waiver authorized
pursuant to this Article VIII is authorized or permitted by this Supplemental
Indenture. Such Opinion of Counsel shall not be an expense of the Trustee.
ARTICLE IX.
SUBORDINATION
SECTION 9.1. Notes Subordinated to Senior Indebtedness. The
Company covenants and agrees, and each Holder of the Notes, by its acceptance
thereof, likewise covenants and agrees, that all Notes shall be issued subject
to the provisions of this Article IX; and each Person holding any Note, whether
upon original issue or upon transfer, assignment or exchange thereof, accepts
and agrees that the payment of all Obligations on the Notes by the Company
shall, to the extent and in the manner herein set forth, be subordinated and
junior in right of payment to the prior payment in full in cash or Cash
Equivalents of all Obligations on Senior Indebtedness, including, without
limitation, the Company's obligations under the Credit Agreement; that the
subordination is for the benefit of, and shall be enforceable directly by, the
holders of Senior Indebtedness, and that each holder of Senior Indebtedness
whether now outstanding or hereafter created, incurred, assumed or guaranteed
shall be deemed to have acquired Senior Indebtedness in reliance upon the
covenants and provisions contained in this Supplemental Indenture and the Notes.
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SECTION 9.2. Suspension of Payment When Senior Indebtedness is
in Default.
(1) If any default occurs and is continuing in the payment
when due, whether at maturity, upon any redemption, by declaration or otherwise,
of any principal of, interest on, unreimbursed drawings for letters of credit
issued in respect of, or regularly accruing fees with respect to, any Senior
Indebtedness, no payment of any kind or character shall be made by or on behalf
of the Company or any Subsidiary of the Company or any obligor on the Notes or
any other Person on its or their behalf with respect to any Obligations on the
Notes or to acquire any of the Notes for cash or property or otherwise. In
addition, if any other event of default occurs and is continuing with respect to
any Designated Senior Indebtedness, as such event of default is defined in the
instrument creating or evidencing such Designated Senior Indebtedness,
permitting the holders of such Designated Senior Indebtedness then outstanding
to accelerate the maturity thereof and if the Representative for that issue of
Designated Senior Indebtedness gives written notice of the event of default to
the Trustee (a "Default Notice"), then, unless and until all events of default
with respect to that issue of Designated Senior Indebtedness have been cured or
waived or have ceased to exist or the Trustee receives written notice from the
Representative for that issue of Designated Senior Indebtedness terminating the
Blockage Period (as defined below), during the 180 days after the delivery of
such Default Notice (the "Blockage Period"), neither the Company nor any other
Person on its behalf shall (x) make any payment of any kind or character with
respect to any Obligations on the Notes or (y) acquire any of the Notes for cash
or property or otherwise. Notwithstanding anything herein to the contrary, in no
event will a Blockage Period extend beyond 180 days from the date the payment on
the Notes was due and only one such Blockage Period may be commenced with
respect to all issues of Designated Senior Indebtedness within any 360
consecutive days. No event of default which existed or was continuing on the
date of the commencement of any Blockage Period with respect to the Designated
Senior Indebtedness shall be, or be made, the basis for commencement of a second
Blockage Period by the Representative of such Designated Senior Indebtedness,
whether or not within a period of 360 consecutive days, unless such event of
default shall have been cured or waived for a period of not less than 90
consecutive days (it being acknowledged that any subsequent action, or any
breach of any financial covenants for a period commencing after the date of
commencement of such Blockage Period that, in either case, would give rise to an
event of default pursuant to any provisions under which an event of default
previously existed or was continuing shall constitute a new event of default for
this purpose).
(2) In the event that, notwithstanding the foregoing, any
payment shall be received by the Trustee or any Holder when such payment is
prohibited by Section 9.2(1), such payment shall be held in trust for the
benefit of, and shall be paid over or
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delivered to, the holders of Senior Indebtedness (pro rata to such holders on
the basis of the respective amount of Senior Indebtedness held by such holders)
or their respective Representatives, as their respective interests may appear.
The Trustee shall be entitled to rely on information regarding amounts then due
and owing on the Senior Indebtedness, if any, received from the holders of
Senior Indebtedness (or their Representatives) or, if such information is not
received from such holders or their Representatives, from the Company and only
amounts included in the information provided to the Trustee shall be paid to the
holders of Senior Indebtedness.
Nothing contained in this Article IX shall limit the right of
the Trustee or the Holders of Notes to take any action to accelerate the
maturity of the Notes pursuant to Section 6.2 or to pursue any rights or
remedies hereunder; provided that all Senior Indebtedness thereafter due or
declared to be due shall first be paid in full in cash or Cash Equivalents
before the Holders are entitled to receive any payment of any kind or character
with respect to Obligations on the Notes.
SECTION 9.3. Notes Subordinated to Prior Payment of All Senior
Indebtedness on Dissolution, Liquidation or Reorganization of Company.
(1) Upon any payment or distribution of assets of the Company
of any kind or character, whether in cash, property or securities, to creditors
upon any total or partial liquidation, dissolution, winding-up, reorganization,
assignment for the benefit of creditors or marshaling of assets of the Company
or in a bankruptcy, reorganization, insolvency, receivership or other similar
proceeding relating to the Company or its property, whether voluntary or
involuntary, all Obligations upon all Senior Indebtedness shall first be paid in
full in cash or Cash Equivalents, or such payment duly provided for to the
satisfaction of the holders of Senior Indebtedness, before any payment or
distribution of any kind or character is made on account of any Obligations on
the Notes, or for the acquisition of any of the Notes for cash or property or
otherwise. Upon any such dissolution, winding-up, liquidation, reorganization,
receivership or similar proceeding, any payment or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
which the Holders of the Notes or the Trustee under this Supplemental Indenture
would be entitled, except for the provisions hereof, shall be paid by the
Company or by any receiver, trustee in bankruptcy, liquidating trustee, agent or
other Person making such payment or distribution, or by the Holders or by the
Trustee under this Supplemental Indenture if received by them, directly to the
holders of Senior Indebtedness (pro rata to such holders on the basis of the
respective amounts of Senior Indebtedness held by such holders) or their
respective Representatives, or to the trustee or trustees under any Indenture
pursuant to which any of such Senior Indebtedness may have been issued, as their
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respective interests may appear, for application to the payment of Senior
Indebtedness remaining unpaid until all such Senior Indebtedness has been paid
in full in cash or Cash Equivalents after giving effect to any concurrent
payment, distribution or provision therefor to or for the holders of Senior
Indebtedness.
(2) To the extent any payment of Senior Indebtedness (whether
by or on behalf of Company, as proceeds of security or enforcement of any right
of setoff or otherwise) is declared to be fraudulent or preferential, set aside
or required to be paid to any receiver, trustee in bankruptcy, liquidating
trustee, agent or other similar Person under any bankruptcy, insolvency,
receivership, fraudulent conveyance or similar law, then, if such payment is
recovered by, or paid over to, such receiver, trustee in bankruptcy, liquidating
trustee, agent or other similar Person, the Senior Indebtedness or part thereof
originally intended to be satisfied shall be deemed to be reinstated and
outstanding as if such payment has not occurred.
(3) In the event that, notwithstanding the foregoing, any
payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, shall be received by any Holder when
such payment or distribution is prohibited by this Section 9.3, such payment or
distribution shall be held in trust for the benefit of, and shall be paid over
or delivered to, the holders of Senior Indebtedness (pro rata to such holders on
the basis of the respective amount of Senior Indebtedness held by such holders)
or their respective Representatives, or to the trustee or trustees under any
Indenture pursuant to which any of such Senior Indebtedness may have been
issued, as their respective interests may appear, for application to the payment
of Senior Indebtedness remaining unpaid until all such Senior Indebtedness has
been paid in full in cash or Cash Equivalents, after giving effect to any
concurrent payment, distribution or provision therefor to or for the holders of
such Senior Indebtedness.
(4) The consolidation of the Company with, or the merger of
the Company with or into, another corporation or the liquidation or dissolution
of the Company following the conveyance or transfer of all or substantially all
of its assets, to another corporation upon the terms and conditions provided in
Article V hereof and as long as permitted under the terms of the Senior
Indebtedness shall not be deemed a dissolution, winding-up, liquidation or
reorganization for the purposes of this Section 9.3 if such other corporation
shall, as a part of such consolidation, merger, conveyance or transfer, assume
the Company's obligations hereunder in accordance with Article V hereof.
SECTION 9.4. Holders to Be Subrogated to Rights of Holders of
Senior Indebtedness. Subject to the payment in full in cash or Cash Equivalents
of all Senior Indebtedness, the Holders of the Notes shall be subrogated to the
rights of the
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holders of Senior Indebtedness to receive payments or distributions of cash,
property or securities of the Company applicable to the Senior Indebtedness
until the Notes shall be paid in full; and, for the purposes of such
subrogation, no payments or distributions to the holders of the Senior
Indebtedness by or on behalf of the Company or by or on behalf of the Holders by
virtue of this Article IX which otherwise would have been made to the Holders
shall, as between the Company and the Holders of the Notes, be deemed to be a
payment by the Company to or on account of the Senior Indebtedness, it being
understood that the provisions of this Article IX are and are intended solely
for the purpose of defining the relative rights of the Holders of the Notes, on
the one hand, and the holders of the Senior Indebtedness, on the other hand.
SECTION 9.5. Obligations of the Company Unconditional. Nothing
contained in this Article IX or elsewhere in this Supplemental Indenture or in
the Notes is intended to or shall impair, as between the Company and the
Holders, the obligation of Company, which is absolute and unconditional, to pay
to the Holders the principal of and premium, if any, and interest on the Notes
as and when the same shall become due and payable in accordance with their
terms, or is intended to or shall affect the relative rights of the Holders and
creditors of the Company other than the holders of the Senior Indebtedness, nor
shall anything herein or therein prevent the Trustee or any Holder from
exercising all remedies otherwise permitted by applicable law upon default under
this Supplemental Indenture, subject to the rights, if any, under this Article X
of the holders of Senior Indebtedness in respect of cash, property or securities
of the Company received upon the exercise of any such remedy. Upon any payment
or distribution of assets or securities of the Company referred to in this
Article IX, the Trustee, subject to the provisions of Sections 7.01 and 7.02 of
the Indenture, and the Holders shall be entitled to rely upon any order or
decree made by any court of competent jurisdiction in which any liquidation,
dissolution, winding-up or reorganization proceedings are pending, or a
certificate of the receiver, trustee in bankruptcy, liquidating trustee or agent
or other Person making any payment or distribution to the Trustee or to the
Holders for the purpose of ascertaining the Persons entitled to participate in
such payment or distribution, the holders of Senior Indebtedness and other
Indebtedness of Company, the amount thereof or payable thereon, the amount or
amounts paid or distributed thereon and all other facts pertinent thereto or to
this Article IX. Nothing in this Article IX shall apply to the claims of, or
payments to, the Trustee under or pursuant to Section 7.07 of the Indenture. The
Trustee shall be entitled to rely on the delivery to it of a written notice by a
Person representing himself or itself to be a holder of any Senior Indebtedness
(or a trustee on behalf of, or other representative of, such holder) to
establish that such notice has been given by a holder of such Senior
Indebtedness or a trustee or representative on behalf of any such holder.
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In the event that the Trustee determines in good faith that
any evidence is required with respect to the right of any Person as a holder of
Senior Indebtedness to participate in any payment or distribution pursuant to
this Article IX (although it is not obligated to make any such inquiry), the
Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of Senior Indebtedness held by such
Person, the extent to which such person is entitled to participate in such
payment or distribution and any other facts pertinent to the rights of such
Person under this Article IX, and if such evidence is not furnished, the Trustee
may defer any payment to such Person pending judicial determination as to the
right of such Person to receive such payment.
Whenever a distribution is to be made or a notice given to
holders or owners of Senior Indebtedness, the distribution may be made and the
notice may be given to their Representative, if any.
SECTION 9.6. Trustee Entitled to Assume Payments Not
Prohibited in Absence of Notice. The Company shall give prompt written notice to
the Trustee of any fact known to the Company which would prohibit the making of
any payment to or by the Trustee in respect of the Notes pursuant to the
provisions of this Article IX. Regardless of anything to the contrary contained
in this Article IX or elsewhere in this Supplemental Indenture, the Trustee
shall not be charged with knowledge of the existence of any default or event of
default with respect to any Senior Indebtedness or of any other facts which
would prohibit the making of any payment to or by the Trustee unless and until
the Trustee shall have received notice in writing from Company, or from a holder
of Senior Indebtedness or a Representative therefor, together with proof
satisfactory to the Trustee of such holding of Senior Indebtedness or of the
authority of such Representative, and, prior to the receipt of any such written
notice, the Trustee shall be entitled to assume (in the absence of actual
knowledge to the contrary) that no such facts exist.
SECTION 9.7. Application by Trustee of Assets Deposited with
It. U.S. Legal Tender or U.S. Government Obligations deposited in trust with the
Trustee pursuant to and in accordance with Sections 7.1 and 7.2 shall be for the
sole benefit of the Holders of the Notes and, to the extent allocated for the
payment of Notes, shall not be subject to the subordination provisions of this
Article IX. Otherwise, any deposit of assets or securities by or on behalf of
the Company with the Trustee or any Paying Agent (whether or not in trust) for
the payment of principal of or interest on any Notes shall be subject to the
provisions of this Article IX; provided, however, that if prior to the second
Business Day preceding the date on which by the terms of this Supplemental
Indenture any such assets may become distributable for any purpose (including,
without limitation, the payment of either principal of or premium, if
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any, or interest on any Note) the Trustee or such Paying Agent shall not have
received with respect to such assets the notice provided for in Section 9.6,
then the Trustee or such Paying Agent shall have full power and authority to
receive such assets and to apply the same to the purpose for which they were
received, and shall not be affected by any notice to the contrary received by it
on or after such date. The foregoing shall not apply to the Paying Agent if the
Company or any Subsidiary or Affiliate of the Company is acting as Paying Agent.
Nothing contained in this Section 9.7 shall limit the right of the holders of
Senior Indebtedness to recover payments as contemplated by this Article IX.
SECTION 9.8. No Waiver of Subordination Provisions.
(1) No right of any present or future holder of any Senior
Indebtedness to enforce subordination as herein provided shall at any time in
any way be prejudiced or impaired by any act or failure to act on the part of
the Company or by any act or failure to act by any such holder, or by any
non-compliance by the Company with the terms, provisions and covenants of this
Supplemental Indenture, regardless of any knowledge thereof any such holder may
have or be otherwise charged with.
(2) Without limiting the generality of Section 9.8(1), the
holders of Senior Indebtedness may, at any time and from time to time, without
the consent of or notice to the Trustee or the Holders of the Notes, without
incurring responsibility to the Holders of the Notes and without impairing or
releasing the subordination provided in this Article IX or the obligations
hereunder of the Holders of the Notes to the holders of Senior Indebtedness, do
any one or more of the following: (i) change the manner, place, terms or time of
payment of, or renew or alter, Senior Indebtedness or any instrument evidencing
the same or any agreement under which Senior Indebtedness is outstanding; (ii)
sell, exchange, release or otherwise deal with any property pledged, mortgaged
or otherwise securing Senior Indebtedness; (iii) release any Person liable in
any manner for the collection or payment of Senior Indebtedness; and (iv)
exercise or refrain from exercising any rights against the Company and any other
Person.
SECTION 9.9. Holders Authorize Trustee to Effectuate
Subordination of Notes. Each Holder of the Notes by such Holder's acceptance
thereof authorizes and expressly directs the Trustee on his behalf to take such
action as may be necessary or appropriate to effect the subordination provisions
contained in this Article IX, and appoints the Trustee such Holder's
attorney-in-fact for such purpose, including, in the event of any liquidation,
dissolution, winding-up, reorganization, assignment for the benefit of creditors
or marshaling of assets of the Company tending towards liquidation or
reorganization of the business and assets of Company, the immediate filing of a
claim for the unpaid balance of such Holder's Notes in the form
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required in said proceedings and cause said claim to be approved. If the Trustee
does not file a proper claim or proof of debt in the form required in such
proceeding prior to 30 days before the expiration of the time to file such claim
or claims, then any of the holders of the Senior Indebtedness or their
Representative is hereby authorized to file an appropriate claim for and on
behalf of the Holders of said Notes. Nothing herein contained shall be deemed to
authorize the Trustee or the holders of Senior Indebtedness or their
Representative 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 thereof, or to authorize the
Trustee or the holders of Senior Indebtedness or their Representative to vote in
respect of the claim of any Holder in any such proceeding.
SECTION 9.10. Right of Trustee to Hold Senior Indebtedness.
The Trustee and any agent or Affiliate of the Trustee shall be entitled to all
the rights set forth in this Article IX with respect to any Senior Indebtedness
which may at any time be held by it in its individual or any other capacity to
the same extent as any other holder of Senior Indebtedness and nothing in this
Supplemental Indenture shall deprive the Trustee or any such agent or Affiliate
of any of its rights as such holder.
SECTION 9.11. This Article IX Not to Prevent Events of
Default. The failure to make a payment on account of principal of or premium, if
any, or interest on the Notes by reason of any provision of this Article IX will
not be construed as preventing the occurrence of an Event of Default.
Nothing contained in this Article IX shall limit the right of
the Trustee or the Holders of Notes to take any action to accelerate the
maturity of the Notes pursuant to Article VI or to pursue any rights or remedies
hereunder or under applicable law, subject to the rights, if any, under this
Article IX of the holders, from time to time, of Senior Indebtedness.
SECTION 9.12. No Fiduciary Duty of Trustee to Holders of
Senior Indebtedness. The Trustee shall not be deemed to owe any fiduciary duty
to the holders of Senior Indebtedness, and it undertakes to perform or observe
such of its covenants and obligations as are specifically set forth in this
Article IX, and no implied covenants or obligations with respect to the Senior
Indebtedness shall be read into this Supplemental Indenture against the Trustee.
The Trustee shall not be liable to any such holders (other than for its willful
misconduct or gross negligence) if it shall pay over or deliver to the Holders
of Notes or the Company or any other Person money or assets in compliance with
the terms of this Supplemental Indenture. Nothing in this Section 9.12 shall
affect the obligation of any Person other than the Trustee to hold such payment
for the
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benefit of, and to pay such payment over to, the holders of Senior Indebtedness
or their Representative.
ARTICLE X.
MISCELLANEOUS
SECTION 10.1. TIA Controls. If any provision of the Indenture
or this Supplemental Indenture limits, qualifies, or conflicts with the duties
imposed by Sections 310 through 317 of the TIA, the imposed duties shall
control.
SECTION 10.2. Conflict with Indenture. To the extent not
expressly amended or modified by this Supplemental Indenture, the Indenture
shall remain in full force and effect. If any provision of this Supplemental
Indenture relating to the Notes is inconsistent with any provision of the
Indenture, the provision of this Supplemental Indenture shall control with
regard to the Notes. If any provision of any other supplemental indenture
relating to the securities of any other series issued under the Indenture is
inconsistent with any provision of the Indenture, the provision of the
supplemental indenture relating to the securities of such other series shall
control with regard to such securities.
SECTION 10.3. Notices. Any notices or other communications
required or permitted hereunder shall be in writing, and shall be sufficiently
given if made by hand delivery, by telex, by telecopier or overnight courier
guaranteeing next-day delivery or registered or certified mail, postage prepaid,
return receipt requested, addressed as follows:
if to the Company:
LNR Property Corporation
760 N.W. 107th Avenue, Suite 300
Miami, FL 33172
Telecopier Number: (305) 229-6488
Attn: Vice President - Finance
if to the Trustee:
The Bank of New York
101 Barclay Street, 21W
New York, N.Y. 10286
Telecopier Number: (212) 815-5915/5917
Attention: Corporate Trust Administration
Each of the Company and the Trustee by written notice to the
other may designate additional or different addresses for notices to such
Person. Any notice or communication to the Company or the Trustee shall be
deemed to have been given or made as of the date so delivered if hand delivered;
when answered back, if telexed; when receipt is acknowledged, if faxed; and
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five (5) calendar days after mailing if sent by registered or certified mail,
postage prepaid (except that a notice of change of address shall not be deemed
to have been given until actually received by the addressee).
Any notice or communication mailed to a Holder shall be mailed
by first class mail, certified or registered return receipt requested, or by
overnight courier guaranteeing next day delivery to its address as it appears on
the registration books of the Registrar. Any notice or communication shall be
mailed to any Person as 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, it is duly
given, whether or not the addressee receives it.
SECTION 10.4. Governing Law. THIS SUPPLEMENTAL INDENTURE AND
THE NOTES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE AND TO BE PERFORMED WITHIN THE
STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS. Each of the
parties hereto agrees to submit to the jurisdiction of the courts of the State
of New York sitting in the County of New York, or of the United States of
America for the Southern District of New York in any action or proceeding
arising out of or relating to this Supplemental Indenture.
SECTION 10.5. No Personal Liability. No director, officer,
employee or stockholder of Company, as such, shall have any liability for any
obligations of the Company under the Notes or this Supplemental 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.
SECTION 10.6. Successors. All agreements of the Company in
this Supplemental Indenture and the Notes shall bind their successors and
permitted assigns. All agreements of the Trustee in this Supplemental Indenture
shall bind its successors and permitted assigns.
SECTION 10.7. Duplicate Originals. All parties may sign any
number of copies of this Supplemental Indenture. Each signed copy shall be an
original, but all of them together shall represent the same agreement.
SECTION 10.8. Severability. In case any one or more of the
provisions in this Supplemental Indenture or in the Notes shall be held invalid,
illegal or unenforceable, in any respect for any reason, the validity, legality
and enforceability of any
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such provision in every other respect and of the remaining provisions shall not
in any way be affected or impaired thereby, it being intended that all of the
provisions hereof shall be enforceable to the full extent permitted by law.
SECTION 10.9. Table of Contents, Headings, etc.. The table of
contents, cross-reference sheet and headings of the Articles and Sections of
this Supplemental Indenture have been inserted for convenience of reference
only. They are not to be considered a part of this Supplemental Indenture, and
will in no way modify or restrict any of the terms or provisions of this
Supplemental Indenture.
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SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed as of the date first written above.
LNR PROPERTY CORPORATION
By:
-------------------------------
Name:
Title:
THE BANK OF NEW YORK,
as Trustee
By:
-------------------------------
Name:
Title:
<PAGE> 69
EXHIBIT A
[IF GLOBAL NOTE INCLUDE THE FOLLOWING LEGEND:
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR THE INDIVIDUAL
NOTES REPRESENTED HEREBY, THIS GLOBAL SECURITY MAY NOT BE TRANSFERRED
EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR
BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF
THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR
DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.]
CUSIP No.:501940-AD-2
LNR PROPERTY CORPORATION
10 1/2% SENIOR SUBORDINATED NOTE DUE 2009
No. _ $_________
LNR PROPERTY CORPORATION, a Delaware corporation (the
"Company," which term includes any successor entities), for value received
promises to pay to ______. or registered assigns the principal sum of
______________ ($___________) on January 15, 2009.
Interest Payment Dates: January 15 and July 15, commencing
July 15, 1999.
Record Dates: January 1 and July 1.
Maturity Date: January 15, 2009.
Reference is made to the further provisions of this Note
contained herein, which will for all purposes have the same effect as if set
forth at this place.
<PAGE> 70
IN WITNESS WHEREOF, LNR Property Corporation has caused this
instrument to be duly executed under its corporate seal.
LNR PROPERTY CORPORATION
By:
_____________________________
Name:
Title:
Attest:
By:
_____________________________
Name:
Title:
[SEAL]
Dated: _____________
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
Dated: ______________
This is one of the Notes described in the
within-mentioned Indenture and Supplemental
Indenture.
THE BANK OF NEW YORK,
as Trustee
By:___________________________
Authorized Signatory
2
<PAGE> 71
(REVERSE OF SECURITY)
10 1/2% Senior Subordinated Note due 2009
Capitalized terms used and not otherwise defined herein shall
have the meanings ascribed to them in the Supplemental Indenture, dated as of
January 25, 1999, by and between LNR Property Corporation, a Delaware
corporation (the "Company"), and The Bank of New York, as trustee (the
"Trustee"), as modified, amended or supplemented from time to time (the
"Supplemental Indenture").
(1) Interest. The Company promises to pay interest on the
principal amount of this Note at the rate per annum shown above. 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 January 25, 1999. The Company will pay
interest semi-annually in arrears on each Interest Payment Date, commencing July
15, 1999. Interest will be computed on the basis of a 360-day year of twelve
30-day months and, in the case of a partial month, the actual number of days
elapsed.
The Company shall pay interest on overdue principal and, to
the extent lawful, on overdue installments of interest (without regard to any
applicable grace periods) from time to time on demand at the rate borne by the
Notes.
(2) Method of Payment. The Company shall pay interest on the
Notes (except defaulted interest) to the Persons who are the registered Holders
at the close of business on the Record Date immediately preceding the Interest
Payment Date even if the Notes are canceled on registration of transfer or
registration of exchange (including pursuant to a Change of Control Offer) after
such Record Date. Holders must surrender Notes to a Paying Agent to collect
principal payments. The Company shall pay principal and premium, if any, and
interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts ("U.S. Legal Tender"). However,
the Company may pay principal and premium, if any, and interest by check payable
in such U.S. Legal Tender. The Company may deliver any such interest payment to
the Paying Agent or to a Holder at the Holder's registered address.
(3) Paying Agent and Registrar. Initially, the Trustee will
act as Paying Agent and Registrar. The Company may change any Paying Agent,
Registrar or co-Registrar without notice to the Holders.
(4) Supplemental Indenture. The Company issued the Notes under
the Supplemental Indenture. This Note is one of a duly authorized issue of Notes
of the Company designated as its 10 1/2% Senior Subordinated Notes due 2009
(the "Notes"), limited (except as otherwise provided in the Supplemental
Indenture)
A-3
<PAGE> 72
in aggregate principal amount to $100,000,000, which may be issued under the
Supplemental Indenture.
The terms of the Notes include those stated in the
Supplemental Indenture and those made part of the Supplemental Indenture by
reference to the Trust Indenture Act of 1939 (15 U.S. Code Sections
77aaa-77bbbb) (the "TIA"), as in effect on the date of the Supplemental
Indenture. Notwithstanding anything to the contrary herein, the Notes are
subject to all such terms, and Holders of Notes are referred to the Supplemental
Indenture and the TIA for a statement of such terms. The Notes are general
unsecured obligations of Company. Each Holder, by accepting a Note, agrees to be
bound by all of the terms and provisions of the Supplemental Indenture, as the
same may be amended from time to time in accordance with its terms.
(5) Redemption. The Notes are redeemable, at the Company's
option, in whole or in part from time to time, at any time after January 15,
2004, upon not less than 30 nor more than 60 days' notice, at the following
Redemption Prices (expressed as percentages of the principal amount thereof) if
redeemed during the twelve-month period commencing on January 15 of the years
set forth below, plus, in each case, accrued and unpaid interest thereon, if
any, to the date of redemption:
<TABLE>
<CAPTION>
Year Percentage
---- ----------
<S> <C>
2004.................................... 105.375%
2005.................................... 104.031%
2006.................................... 102.688%
2007.................................... 101.344%
2008 and thereafter..................... 100.000%
</TABLE>
Notwithstanding the foregoing, at any time, or from time to
time, on or prior to January 15, 2002, the Company may, at its option, redeem,
with the net cash proceeds of one or more Public Equity Offerings by Company, up
to 35% of the aggregate principal amount of the Notes issued and sold by the
Company at a redemption price equal to 110.750% of the principal amount thereof,
plus accrued interest thereon, if any, to the date of redemption, provided, that
at least 65% of the aggregate principal amount of the Notes issued and sold by
the Company remain outstanding immediately following such redemption. In order
to effect the foregoing redemption with the proceeds of any Public Equity
Offering, the Company shall make such redemption not more than 60 days after the
consummation of any such Public Equity Offering.
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(6) Notice of Redemption. Notice of redemption will be mailed
at least 30 but not more than 60 days before the Redemption Date to each Holder
of Notes to be redeemed at its registered address. Notes in denominations larger
than $1,000 may be redeemed in part.
Except as set forth in the Supplemental Indenture, if monies
for the redemption of the Notes called for redemption shall have been deposited
with the Paying Agent for redemption on such Redemption Date then, unless the
Company defaults in the payment of such Redemption Price plus accrued interest,
if any, the Notes called for redemption will cease to bear interest from and
after such Redemption Date and the only right of the Holders of such Notes will
be to receive payment of the Redemption Price plus accrued interest, if any.
(7) Change of Control Offer. The Supplemental Indenture
provides that, upon the occurrence of a Change of Control, and subject to
further limitations contained therein, the Company will make a Change of Control
Offer to purchase the Notes in accordance with the procedures set forth in the
Supplemental Indenture.
(8) Denominations; Transfer; Exchange. The Notes are in
registered form, without coupons, in denominations of $1,000 and integral
multiples of $1,000. A Holder shall register the transfer of or exchange of
Notes in accordance with the Supplemental Indenture. The Registrar may require a
Holder, among other things, to furnish appropriate endorsements and transfer
documents and to pay certain transfer taxes or similar governmental charges
payable in connection therewith required by law or as permitted by the
Supplemental Indenture. The Registrar need not register the transfer of or
exchange of any Notes or portions thereof selected for redemption, except for
the unredeemed portion of any Note being redeemed in part.
(9) Persons Deemed Owners. The registered Holder of a Note
shall be treated as the owner of it for all purposes.
(10) Unclaimed Money. If money for the payment of principal,
premium, if any, or interest remains unclaimed for one year, the Trustee and the
Paying Agent will pay the money back to the Company. After that, all liability
of the Trustee and such Paying Agent with respect to such money shall cease.
(11) Discharge Prior to Redemption or Maturity. If the Company
at any time deposits with the Trustee U.S. Legal Tender or U.S. Government
Obligations sufficient to pay the principal of and premium, if any, and interest
on the Notes to redemption or maturity and complies with the other provisions of
the Supplemental Indenture relating thereto, the Company will be discharged from
certain provisions of the Supplemental Indenture and the Notes (including
certain covenants, but including, under certain circumstances, its obligation to
pay the principal of and
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interest on the Notes but without affecting the rights of the Holders to receive
such amounts from such deposit).
(12) Amendment; Supplement; Waiver. Subject to certain
exceptions set forth in the Supplemental Indenture, the Supplemental Indenture
or the Notes may be amended or supplemented with the written consent of the
Holders of not less than a majority in aggregate principal amount of the Notes
then outstanding, and any past Default or Event of Default or noncompliance with
any provision may be waived with the written consent of the Holders of not less
than a majority in aggregate principal amount of the Notes then outstanding.
Without notice to or consent of any Holder, the parties thereto may amend or
supplement the Supplemental Indenture or the Notes to, among other things, cure
any ambiguity, defect or inconsistency, provide for uncertificated Notes in
addition to or in place of certificated Notes, comply with any requirements of
the Commission in order to effect or maintain the qualification of the Indenture
under the TIA or comply with Section 5.1 of the Supplemental Indenture or make
any other change that does not adversely affect the rights of any Holder of a
Note in any material respect.
(13) Restrictive Covenants. The Supplemental Indenture imposes
certain limitations on the ability of the Company and its Subsidiaries to, among
other things, incur additional Indebtedness, make payments in respect of its
Capital Stock or certain Indebtedness, create or incur liens, enter into
transactions with Affiliates, create dividend or other payment restrictions
affecting Subsidiaries, issue Preferred Stock of its Subsidiaries, and on the
ability of the Company to merge or consolidate with any other Person or sell,
assign, transfer, lease, convey or otherwise dispose of all or substantially all
of the Company's and its Subsidiaries' assets or adopt a plan of liquidation.
Such limitations are subject to a number of important qualifications and
exceptions. Pursuant to the Supplemental Indenture, the Company must annually
report to the Trustee on compliance with such limitations.
(14) Subordination. The Notes are subordinated in right of
payment, in the manner and to the extent set forth in the Supplemental
Indenture, to the prior payment in full in cash or Cash Equivalents of all
Obligations on Senior Indebtedness of Company, whether outstanding on the date
of the Supplemental Indenture or thereafter created, incurred, assumed or
guaranteed. Each Holder by its acceptance hereof agrees to be bound by such
provisions and authorizes and expressly directs the Trustee, on its behalf, to
take such action as may be necessary or appropriate to effectuate the
subordination provided for in the Supplemental Indenture and appoints the
Trustee its attorney-in-fact for such purposes.
(15) Successors. When a successor assumes, in accordance with
the Supplemental Indenture, all the obligations
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of its predecessor under the Notes and the Supplemental Indenture, the
predecessor, subject to certain exceptions, will be released from those
obligations.
(16) Defaults and Remedies. Except as set forth in the
Supplemental Indenture, if an Event of Default occurs and is continuing, the
Trustee or the Holders of not less than 25% in principal amount of Notes then
outstanding may declare all the Notes to be due and payable in the manner, at
the time and with the effect provided in the Supplemental Indenture. Holders of
Notes may not enforce the Supplemental Indenture or the Notes except as provided
in the Supplemental Indenture. The Trustee is not obligated to enforce the
Supplemental Indenture or the Notes unless it has received indemnity reasonably
satisfactory to it. The Supplemental Indenture permits, subject to certain
limitations therein provided, Holders of a majority in aggregate principal
amount of the Notes then outstanding to direct the Trustee in its exercise of
any trust or power. The Trustee may withhold from Holders of Notes notice of any
continuing Default or Event of Default (except a Default in payment of
principal, premium, if any, or interest when due, for any reason or a Default in
compliance with Article V of the Supplemental Indenture) if it determines that
withholding notice is in their interest.
(17) Trustee Dealings with Company. The Trustee under the
Supplemental Indenture, in its individual or any other capacity, may become the
owner or pledgee of Notes and may otherwise deal with Company, its Subsidiaries
or their respective Affiliates as if it were not the Trustee.
(18) No Recourse Against Others. No partner, director,
officer, employee or stockholder, as such, of the Company shall have any
liability for any obligations of the Company under the Notes or the Supplemental
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.
(19) Authentication. This Note shall not be valid until the
Trustee or Authenticating Agent manually signs the certificate of authentication
on this Note.
(20) Governing Law. This Note and the Supplemental Indenture
shall be governed by and construed in accordance with the laws of the State of
New York, as applied to contracts made and performed within the State of New
York, without regard to principles of conflict of laws. Each of the parties
hereto and the Holders agree to submit to the jurisdiction of the courts of the
County of New York, State of New York or of the United States of America for the
Southern District of New York in any action or proceeding arising out of or
relating to this Note.
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(21) Abbreviations and Defined Terms. Customary abbreviations
may be used in the name of a Holder of a Note 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).
(22) CUSIP Numbers. Pursuant to a recommendation promulgated
by the Committee on Uniform Security Identification Procedures, the Company has
caused CUSIP numbers to be printed on the Notes as a convenience to the Holders
of the Notes. No representation is made as to the accuracy of such numbers as
printed on the Notes and reliance may be placed only on the other identification
numbers printed hereon.
The Company will furnish to any Holder of a Note upon written
request and without charge a copy of the Supplemental Indenture, which includes
the text of this Note. Requests may be made to: LNR Property Corporation, 760
N.W. 107th Avenue, Miami, FL 33172.
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ASSIGNMENT
For value received _____________ hereby sell(s), assign(s) and
transfer(s) unto ____________________________________________ (Please insert
name, address and zip code and social security or other Taxpayer Identification
Number of assignee) the within Note, and hereby irrevocably constitutes and
appoints __________________ attorney to transfer the said Note on the books of
the Company, with full power of substitution in the premises.
Dated:
___________________________________
Signature(s)
NOTICE: The above signatures of the
holder(s) hereof must correspond
with the name as written upon the
face of the Note in every particular
without alteration or enlargement or
any change whatever.
___________________________________
Signature Guarantee
Signature must be guaranteed by an "eligible guarantor institution," that is, a
bank, stockbroker, savings and loan association or credit union meeting the
requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934.
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<PAGE> 78
[OPTION OF HOLDER TO ELECT PURCHASE]
If you want to elect to have this Note purchased by the
Company pursuant to Section 4.14 of the Supplemental Indenture, check the box
below:
/ /
If you want to elect to have only part of this Note purchased
by the Company pursuant to Section 4.14 of the Supplemental Indenture, state the
amount you elect to have purchased:
$
----------------------
Dated:
------------------------------------
Signature(s)
NOTICE: The signature on this
assignment must correspond with the
name as it appears upon the face of
the within Note in every particular
without alteration or enlargement or
any change whatsoever and be
guaranteed.
------------------------------------
Signature Guarantee
Signature must be guaranteed by an "eligible guarantor institution," that is, a
bank, stockbroker, savings and loan association or credit union meeting the
requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934.
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